AGREEMENT
AND PLAN OF REORGANIZATION
  among
  MEDIQUIP
HOLDINGS, INC.
  DEEP
DOWN, INC.
  and
  THE
MAJORITY SHAREHOLDERS OF DEEP DOWN, INC.
  Dated as
of November 22, 2006
    
  
  TABLE
OF CONTENTS
  PAGEARTICLE
      I THE EXCHANGE
                  1SECTION
      1.01. The Exchange
                  1SECTION
      1.02. Effective Time; Closing
                  1SECTION
      1.03. Effect of the Exchange
                  1SECTION
      1.04. Directors and Officers
                  1ARTICLE
      II DELIVERY OF SECURITIES; EXCHANGE OF CERTIFICATES
                  2SECTION
      2.01. Delivery of Securities
                  2SECTION
      2.02. Exchange of Certificates
                  2SECTION
      2.03. Stock Transfer Books
                  3ARTICLE
      III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                  3SECTION
      3.01. Organization and Qualification; Subsidiaries
                  3SECTION
      3.02. Certificate of Incorporation and By-Laws
                  4SECTION
      3.03. Capitalization
                  4SECTION
      3.04. Authority Relative to This Agreement
                  4SECTION
      3.05. No Conflict; Required Filings and Consents
                  4SECTION
      3.06. Permits; Compliance; Deep Down Products; Regulation
                  5SECTION
      3.07. Absence of Certain Changes or Events
                  5SECTION
      3.08. Absence of Litigation
                  5SECTION
      3.09. Employee Benefit Plans; Labor Matters
                  5SECTION
      3.10. Contracts
                  6SECTION
      3.11. Environmental Matters
                  6SECTION
      3.12. Trademarks, Patents and Copyrights
                  7SECTION
      3.13. Taxes
                  7SECTION
      3.14. State Takeover Statutes
                  8SECTION
      3.15. Brokers
                  8ARTICLE
      IV REPRESENTATIONS AND WARRANTIES OF MEDIQUIP
                  8SECTION
      4.01. Organization and Qualification; Subsidiaries
                  8SECTION
      4.02. Certificate of Incorporation and By-Laws
                  8SECTION
      4.03. Capitalization
                  8SECTION
      4.04. Authority Relative to This Agreement
                  9SECTION
      4.05. No Conflict; Required Filings and Consents
                  9SECTION
      4.06. Permits; Compliance
                  10SECTION
      4.07. Stock Option Plan
                  10SECTION
      4.08. Absence of Certain Changes or Events
                  10SECTION
      4.09. Absence of Litigation
                  10SECTION
      4.10. Employee Benefit Plans
                  1
      1SECTION
      4.11. Contracts
                  11SECTION
      4.12. Environmental Matters
                  1
      1SECTION
      4.13. Trademarks, Patents and Copyrights
                  12SECTION
      4.14. Taxes
                  12SECTION
      4.15. Accounting and Tax Matters
                  12SECTION
      4.16. Brokers
                  12ARTICLE
      V CONDUCT OF BUSINESSES PENDING THE REORGANIZATION
                  12SECTION
      5.01. Conduct of Business by Deep Down Pending the
Exchange
                  12SECTION
      5.02. Conduct of Business by MediQuip Pending the Exchange
                  13ARTICLE
      VI ADDITIONAL AGREEMENTS
                  15SECTION
      6.01. Filing of Form 8-K
                  15SECTION
      6.02. Preparation of Disclosure Statement
                  15SECTION
      6.03. Access to Information; Confidentiality
                  15SECTION
      6.04. Obligations of MediQuip
                  15SECTION
      6.05. Obligations of Securityholder
                  15SECTION
      6.06. Application to Standard & Poor’s
                  15SECTION
      6.06. Filing of Amended Form 8-K
                  16
 
 
 Page
i
 
 SECTION
      6.07. Further Action; Consents; Filings
                  16SECTION
      6.08. Reorganization of Deep Down
                  16SECTION
      6.09. Agreement to Deliver Shares
                  16SECTION
      6.10. Plan of Exchange
                  16SECTION
      6.11. Board of Directors of MediQuip
                  16SECTION
      6.12. Public Announcements
                  17SECTION
      6.13. Conveyance Taxes
                  17ARTICLE
      VII CONDITIONS TO THE REORGANIZATION
                  17SECTION
      7.01. Conditions to the Obligations of Each Party
                  17SECTION
      7.02. Conditions to the Obligations of MediQuip
                  17SECTION
      7.03. Conditions to the Obligations of Deep Down
                  19ARTICLE
      VIII TERMINATION, AMENDMENT AND WAIVER
                  20SECTION
      8.01. Termination
                  20SECTION
      8.02. Effect of Termination
                  20SECTION
      8.03. Amendment
                  20SECTION
      8.04. Waiver
                  21SECTION
      8.05. Expenses
                  21ARTICLE
      IX GENERAL PROVISIONS
                  21SECTION
      9.01. Non-Survival of Representations, Warranties and
      Agreements
                  21SECTION
      9.02. Notices
                  21SECTION
      9.03. Certain Definitions
                  22SECTION
      9.04. Severability
                  23SECTION
      9.05. Assignment; Binding Effect; Benefit
                  23SECTION
      9.06. Incorporation of Exhibits
                  23SECTION
      9.07. Specific Performance
                  23SECTION
      9.08. Governing Law; Forum
                  23SECTION
      9.09. Headings
                  23SECTION
      9.10. Counterparts
                  23SECTION
      9.11. Entire Agreement
                  23EXHIBITSA –
      Certificates to be ExchangedB –
      Material Contracts of Deep DownC –
      Material Contracts of MediQuipD –
      Form of Merger Agreement among SubSea, SOS and Deep DownE –
      Form of Officer’s Certificate of MediQuip concerning
    accuracyF –
      Form of Officer’s Certificate of Deep Down concerning
    accuracyG –
      Form of Investment AgreementH –
      Exceptions to Representations and Warranties of Deep Down
 Page
ii
  AGREEMENT
AND PLAN OF REORGANIZATION
  AGREEMENT
AND PLAN OF REORGANIZATION dated as of November 22, 2006 (this “Agreement”)
among MEDIQUIP HOLDINGS, INC., a Nevada corporation (“MediQuip”), DEEP DOWN,
INC., a Delaware corporation (formerly SubSea Acquisition Corporation, a Texas
corporation ) (“Deep Down”) and the undersigned majority securityholders of Deep
Down (collectively, the “Shareholder”).
  W
I T N E S S E T H
  WHEREAS,
upon the terms and subject to the conditions of this Agreement, all
securityholders of Deep Down will exchange all of the shares of Deep Down’s
common stock for a specified number of shares of MediQuip’s common stock to be
issued and MediQuip will acquire all of the issued and outstanding securities of
Deep Down, making Deep Down a wholly-owned subsidiary of MediQuip;
  WHEREAS,
the Exchange shall qualify as a transaction in securities exempt from
registration or qualification under the Securities Act of 1933, as amended, and
under the applicable securities laws of each state or jurisdiction where
securityholders of Deep Down reside;
  WHEREAS,
for federal income tax purposes, the Exchange is intended to qualify as a
reorganization under the provisions of section 368(a)(1)(B) of the United States
Internal Revenue Code of 1986, as amended (the “Code”); and
  NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, MediQuip,
Deep Down and Shareholder hereby agree as follows:
  ARTICLE
I
 THE
EXCHANGE
  SECTION
1.01. The Exchange. Upon the
terms and subject to the conditions set forth in Article VII, at the Effective
Time (as defined below in Section 1.02), as a result of the Exchange, Deep Down
will become a wholly owned subsidiary of MediQuip.
  SECTION
1.02. Effective Time; Closing.
As promptly as practicable and in no event later than the 14th day of
December, 2006 and following the satisfaction or, if permissible, waiver of the
conditions set forth in Article VII (or such other date as may be agreed in
writing by each of the parties hereto), the parties hereto shall cause the
Exchange to be consummated by Shareholder delivering to MediQuip, or its
representatives, the certificates representing all of the outstanding Deep Down
Securities (as defined below in Section 2.01 (c)), duly endorsed (or with duly
executed stock powers) so as to make MediQuip the sole owner thereof free and
clear of all claims and encumbrances except as specifically assumed by MediQuip.
The term “Effective Time” means the date and time of the Closing (or such later
time as may be agreed in writing by each of the parties hereto) to be held at
the offices of Sonfield & Sonfield, Houston, Texas (or such other place as
the parties may agree).
  SECTION
1.03. Effect of the
Exchange. At the Effective Time, the effect of the Exchange shall be Deep
Down becoming a wholly owned subsidiary of MediQuip.
  SECTION
1.04. Directors and
Officers. The initial officers and directors of MediQuip shall be the
persons designated by Deep Down immediately prior to the Effective Time, in each
case until their respective successors are duly elected or appointed and
qualified. In connection with such election, MediQuip shall have provided its
securityholders with an Information Statement pursuant to Section 14f of the
Exchange Act and Securities Exchange Commission (“SEC”) Rule 14f-1.
  1
  ARTICLE
II
 DELIVERY
OF SECURITIES; EXCHANGE OF CERTIFICATES
  SECTION
2.01. Delivery of Securities. At the Effective Time, by virtue of the
Exchange:
  (a)  (i)
85,000,000 shares of common stock, par value $0.001 per share, of MediQuip (the “MediQuip
Common Stock”) shall be issued in exchange for all outstanding shares of common
stock of Deep Down (the “Deep Down Common Stock”), (ii) 5,000 shares of Series D
Redeemable Convertible Preferred Stock and 3,000 shares of Series F Redeemable
Convertible Preferred Stock of Mediquip will be exchanged for a like number and
designation of Redeemable Convertible Preferred Stock of Deep Down issued and
outstanding immediately prior to the Effective Time, except the conversion price
will be reduced from $1.45 per share to $0.1933 per share, (iii) 5,000 shares of
Series E Redeemable Exchangeable Preferred Stock and 1,000 shares of Series G
Redeemable Exchangeable Preferred Stock will be exchanged for a like number and
designation of Redeemable Exchangeable Preferred Stock of Deep Down issued and
outstanding immediately prior to the Effective Time. The Deep Down Common Stock
and the several series of Deep Down preferred stock are collectively referred to
as the “Deep Down Securities”). Each share of Deep Down Common Stock shall be
converted, subject to Section 2.02(e), into the right to receive a ratable
portion of 85,000,000 shares (the “Exchange Ratio”) of MediQuip Common Stock;
provided, however, that, if between the date of this Agreement and the Effective
Time the outstanding shares of MediQuip Common Stock shall have been changed
from into a different number of shares or a different class, by reason of any
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the Exchange Ratio shall be correspondingly
adjusted to the extent appropriate to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares
(all such shares of MediQuip Common Stock being herein referred to as the
“MediQuip Securities” or the “Exchange Consideration”); and
  (b)  each
Share held in the treasury of Deep Down and each Share owned by MediQuip or any
direct or indirect wholly owned subsidiary of MediQuip or of Deep Down
immediately prior to the Effective Time shall be cancelled and extinguished
without any conversion thereof and no payment or distribution shall be made with
respect thereto.
  SECTION
2.02. Exchange of
Certificates.
  (a)  At the
Closing, Shareholder shall deliver to MediQuip all certificates representing
Deep Down
Securities (the “Certificates”) delivered to it (together with any stock
transfer tax stamps required by reason of the payment of the Exchange
Consideration to a person other than the registered holder of the Certificate
surrendered), together with such other customary documents as may reasonably be
required by MediQuip, in exchange for the Exchange Consideration. Certificates
representing the Exchange Consideration shall be issued to the persons and in
the amounts described in Exhibit A. Any shareholder of Deep Down whose
Certificates are not delivered at the Closing shall receive the Exchange
Consideration with respect to such Certificates upon delivery to MediQuip after
the Closing of such Certificates and the other items required pursuant to the
first sentence of this Section 2.02(a).
  (b)  No
dividends or other distributions declared or made after the Effective Time with respect
to the MediQuip Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of MediQuip Common Stock represented thereby, and no cash payment in lieu
of any fractional shares shall be paid to any such holder pursuant to Section
2.02(d), until the holder of such Certificate shall surrender such
Certificate.
  (c)  All
shares of MediQuip Common Stock issued upon conversion of Deep Down Securities in
accordance with the terms hereof (including any cash paid pursuant to Section
2.02(b) or (d)) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such Deep Down Securities.
  (d)  No
certificate or scrip representing fractional shares of MediQuip Common Stock
shall be issued
upon the surrender for exchange of Certificates, and such fractional share
interests will not entitle the owner thereof to vote or to any other rights of a
shareholder of MediQuip. Each holder of a fractional
  2
  share
interest shall be paid an amount in cash (without interest) equal to the product
obtained by multiplying (i) such fractional share interest to which such holder
(after taking into account all fractional share interests then held by such
holder) would otherwise be entitled by (ii) the average of the per share closing
prices on the OTC Bulletin Board (the “OTC “) of shares of MediQuip Common Stock
during the 20 consecutive trading days ending on (and including) the trading day
immediately preceding the date of the Effective Time. As promptly as practicable
after the determination of the amount of cash, if any, to be paid to holders of
fractional share interests, the MediQuip shall forward payments to such holders
of fractional share interests subject to and in accordance with the terms of
Sections 2.02(b).
  (e)  Neither
MediQuip nor Deep Down shall be liable to any holder of Shares for any such Shares
(or dividends or distributions with respect thereto), or cash delivered to a
public official pursuant to any abandoned property, escheat or similar
Law.
  (f)  Each of
Deep Down and MediQuip shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Shares such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by the Surviving Corporation or
MediQuip, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of Shares in
respect of which such deduction and withholding was made by the Surviving
Corporation or MediQuip, as the case may be.
  (g) If
any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by MediQuip, the posting by such person of a bond, in
such reasonable amount as MediQuip may direct, as indemnity against any claim
that may be made against it with respect to such Certificate, the MediQuip will
issue in exchange for such lost, stolen or destroyed Certificate the Exchange
Consideration, any cash in lieu of fractional shares of MediQuip Common Stock to
which the holders thereof are entitled pursuant to Section 2.02(d) and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 2.02(f).
  SECTION
2.03. Stock Transfer Books. At
the Effective Time, the stock transfer books of Deep Down shall be closed and
there shall be no further registration of transfers of Shares thereafter on the
records of Deep Down. From and after the Effective Time, the holders of
Certificates representing Shares outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares, except as
otherwise provided in this Agreement or by Law.
  ARTICLE
III
 REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
  Except as
set forth in this Agreement, Deep Down hereby represents and warrants to
MediQuip that:
  SECTION
3.01. Organization and Qualification;
Subsidiaries. Each of Deep Down and each subsidiary of Deep Down (the
“Deep Down Subsidiaries”) is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such
corporate power, have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Deep Down Material Adverse Effect (as
defined below). Each of Deep Down and Deep Down Subsidiaries is duly qualified
or licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed and
in good standing that have not had, and could not reasonably be expected to
have, individually or in the aggregate, a Deep Down Material Adverse Effect. The
term “Deep Down Material Adverse Effect” means any change in or effect on the
business of Deep Down and Deep Down Subsidiaries that is materially adverse to
the financial condition or results of operations of Deep Down and Deep Down
Subsidiaries taken as a whole, except for any such changes or effects resulting
from or arising in connection with (i) this Agreement or the
  3
  transactions
contemplated by this Agreement or the announcement hereof, (ii) any changes in
economic, regulatory or political conditions or (iii) any issue or condition
otherwise known to MediQuip prior to the date of this Agreement.
  SECTION
3.02. Certificate of Incorporation and
By-Laws. Deep Down has heretofore made available to MediQuip a complete
and correct copy of the Certificate of Incorporation and the By-Laws of Deep
Down. Such Certificate of Incorporation and By-Laws are in full force and
effect. Deep Down is not in violation of any of the provisions of its
Certificate of Incorporation or By-Laws.
  SECTION
3.03. Capitalization. Except as
indicated on Exhibit A, all Deep Down Securities will be issued and outstanding
and will be validly issued, fully paid and non-assessable and (ii) no shares are
reserved for future issuance pursuant to Deep Down Stock Options and Warrants.
All shares of Deep Down Securities subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
non-assessable. There are no outstanding contractual obligations of Deep Down or
any Deep Down Subsidiary to repurchase, redeem or otherwise acquire any shares
of Deep Down Securities or any capital stock of any Deep Down Subsidiary. Each
outstanding share of capital stock of each Deep Down Subsidiary is duly
authorized, validly issued, fully paid and non-assessable and each such share
owned by Deep Down or another Deep Down Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on Deep Down’s or such other Deep Down Subsidiary’s
voting rights, charges and other encumbrances of any nature whatsoever, except
where failure to own such shares free and clear would not, individually or in
the aggregate, have a Deep Down Material Adverse Effect. There are no material
outstanding contractual obligations of Deep Down or any Deep Down Subsidiary to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any Deep Down Subsidiary or any other
person.
  SECTION
3.04. Authority Relative to This
Agreement. Deep Down has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and
to consummate the Exchange and the other transactions contemplated by this
Agreement. The execution and delivery of this Agreement
by Deep Down and the consummation by Deep Down of the Exchange and the other
transactions contemplated by this Agreement have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Deep Down are necessary to authorize this Agreement or to
consummate the Exchange and the other transactions contemplated by this
Agreement. This Agreement has been duly and validly executed and delivered by
Deep Down and, assuming the due authorization, execution and delivery by
MediQuip, constitutes a legal, valid and binding obligation of Deep Down,
enforceable against Deep Down in accordance with its terms.
  SECTION
3.05. No Conflict; Required Filings and
Consents. (a) Except as described on Exhibit H, the execution and
delivery of this Agreement by Deep Down does not, and the performance of this
Agreement by Deep Down will not, (i) conflict with or violate the Certificate of
Incorporation or By-laws of Deep Down or any equivalent organizational documents
of any Deep Down Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 3.05(b) have been obtained
and all filings and obligations described in Section 3.05(b) have been made, to
the best knowledge of Deep Down after inquiry, conflict with or violate any
foreign or domestic law, statute, ordinance, rule, regulation, order, judgment
or decree (“Law”) applicable to Deep Down or any Deep Down Subsidiary or by
which any property or asset of Deep Down or any Deep Down Subsidiary is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any property or
asset of Deep Down or any Deep Down Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clause (iii), for any
such conflicts, violations, breaches, defaults or other occurrences that have
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Deep Down Material Adverse Effect, and that could not reasonably be
expected to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
  (b)
Except as described on Exhibit H, the execution and delivery of this Agreement
by Deep Down does
not, and the performance of this Agreement by Deep Down will not, require any
consent,
  4
  approval,
authorization or permit of, or filing with or notification to, any domestic or
foreign governmental or regulatory authority (“Governmental Entity”), except (i)
for applicable requirements, if any, of state securities or “blue sky” laws
(“Blue Sky Laws”), state takeover laws and (ii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Deep Down Material Adverse Effect, and could
not reasonably be expected to prevent or materially delay the consummation of
the transactions contemplated by this Agreement.
  SECTION
3.06. Permits; Compliance. (a)
Each of Deep Down and Deep Down Subsidiaries is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and orders of any Governmental Entity
necessary for Deep Down or any Deep Down Subsidiary to own, lease and operate
its properties or to carry on its business as it is now being conducted (the
“Deep Down Permits”), except where the failure to have, or the suspension or
cancellation of, any of Deep Down Permits has not had, and could not reasonably
be expected to have, individually or in the aggregate, a Deep Down Material
Adverse Effect, and, as of the date of this Agreement, no suspension or
cancellation of any of Deep Down Permits is pending or, to the knowledge of Deep
Down, threatened, except where the failure to have, or the suspension
or cancellation of, any of Deep Down Permits has not had, and could not
reasonably be expected to have, individually or in the aggregate, a Deep Down
Material Adverse Effect.
  (b) To
the best knowledge of Deep Down after inquiry, neither Deep Down nor any Deep Down
Subsidiary is in conflict with, or in default or violation of, (i) any Law
applicable to Deep Down or any Deep Down Subsidiary or by which any property or
asset of Deep Down or any Deep Down Subsidiary is bound or affected, (ii) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Deep Down or any Deep Down
Subsidiary is a party or by which Deep Down or any Deep Down Subsidiary or any
property or asset of Deep Down or any Deep Down Subsidiary is bound or affected
or (iii) any Deep Down Permits, except, in the case of each of (i), (ii) and
(iii), for any such conflicts, defaults or violations that have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Deep Down Material Adverse Effect.
  SECTION
3.07. Absence of Certain Changes or
Events. Since the date of its organization, except as contemplated by or
as disclosed in this Agreement, Deep Down has conducted its businesses only in
the ordinary course and in a manner consistent with past practice and, since
such date, there has not been (a) any material change by Deep Down in its
accounting methods, principles or practices, (b) any declaration, setting aside
or payment of any dividend or distribution in respect of the Commons Stock or
any redemption, purchase or other acquisition of any of Deep Down’s securities
or (c) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of Deep
Down, except in the ordinary course of business.
  SECTION
3.08. Absence of Litigation.
Except as set forth on Section 3.08 of Deep Down Disclosure Schedule, as of the
date of this Agreement, there is no litigation, suit, claim, action, proceeding
or investigation pending or, to the knowledge of Deep Down, threatened against
Deep Down, or any property or asset of Deep Down, before any court, arbitrator
or governmental entity, domestic or foreign, which (i) has had, or could
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on Deep Down or (ii) seeks to delay or prevent the consummation
of any other material transaction contemplated by this Agreement. As of the date
of this Agreement, neither Deep Down nor any property or asset of Deep Down is
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement with, or, to the knowledge of Deep Down,
continuing investigation by, any governmental entity, or any order, writ,
judgment, injunction, decree, determination or award of any governmental entity
or arbitrator having, individually or in the aggregate, a material adverse
effect on Deep Down.
  SECTION
3.09. Employee Benefit Plans; Labor
Matters. With respect to each employee benefit plan, program, arrangement
and contract (including, without limitation, any “employee benefit plan”, as
defined in section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)) maintained or contributed to by Deep Down or any Deep Down
Subsidiary, or with respect to which Deep Down or any Deep Down
  5
  Subsidiary
could incur liability under section 4069, 4212(c) or 4204 of ERISA (the “Deep
Down Benefit Plans”), Deep Down has made available to the MediQuip a true and
correct copy of (i) the most recent annual report (Form 5500) filed with the
Internal Revenue Service (the “IRS”), (ii) a complete copy of such Deep Down
Benefit Plan, (iii) each trust agreement relating to such Deep Down Benefit
Plan, (iv) the most recent summary plan description for each Deep Down Benefit
Plan for which a summary plan description is required, (v) the most recent
actuarial report or valuation relating to a Deep Down Benefit Plan subject to
Title IV of ERISA and (vi) the most recent determination letter, if any, issued
by the IRS with respect to any Deep Down Benefit Plan qualified under section
401(a) of the Code.
  SECTION
3.10. Contracts. (a) Exhibit B
lists each of the following written contracts and agreements of Deep Down (such
contracts and agreements being “Material Contracts”):
  (i)  each
contract and agreement for the purchase or lease of personal property with any
supplier or for the furnishing of services to Deep Down that in each case
involves annual payment in excess of US$50,000, or British sterling
equivalent;
  (ii)  all
broker, exclusive dealing or exclusivity, distributor, dealer, manufacturer’s representative,
franchise, agency, sales promotion and market research agreements involving
annual payments in excess of US$100,000,or British sterling equivalent, to which
Deep Down is a party or any other material contract that compensates any person
other than employees based on any sales by Deep Down;
  (iii)  all
leases and subleases of real property;
  (iv)  all
contracts and agreements relating to indebtedness for borrowed money other than
trade indebtedness of Deep Down;
  (v)  all
contracts and agreements involving annual payments in excess of $100,000 with any
Governmental Entity to which Deep Down is a party; and
  (vi)  any other
material agreement of Deep Down which is terminable upon or prohibits
a change of ownership or control of Deep Down.
  (b) Each
Material Contract: (i) is valid and binding on Deep Down and, to the knowledge
of Deep
Down, on the other parties thereto, and is in full force and effect, and (ii)
upon consummation of the transactions contemplated by this Agreement, shall
continue in full force and effect without material penalty or other material
adverse consequence. Deep Down is not in material breach of, or material default
under, any Material Contract and, to the knowledge of Deep Down, no other party
to any Material Contract is in material breach thereof or material default
thereunder.
  SECTION
3.11. Environmental Matters.
Except as would not, individually or in the aggregate, have a Deep Down Material
Adverse Effect:
  (a)  Deep Down
and Deep Down Subsidiaries (i) are in compliance with all applicable Environmental
Laws (as defined below), (ii) hold all Environmental Permits (as defined below)
and (iii) are in compliance with their respective Environmental
Permits.
  (b)  None of
Deep Down or any Deep Down Subsidiary has received any written request for information,
or been notified that it is a potentially responsible party, under CERCLA
(defined below) or any similar Law of any state, locality or any other
jurisdiction.
  (c) None
of Deep Down or any Deep Down Subsidiary has entered into or agreed to any consent
decree or order or is subject to any judgment, decree or judicial order relating
to compliance with Environmental Laws, Environmental Permits or the
investigation, sampling, monitoring, treatment, remediation, removal or cleanup
of Hazardous Materials (defined below) and, to the knowledge of
Deep
  6
  Down, no
investigation, litigation or other proceeding is pending or threatened in
writing with respect thereto.
  (d) None
of the real property owned or leased by Deep Down or any Deep Down Subsidiary is listed
or, to the knowledge of Deep Down, proposed for listing on the “National
Priorities List” under CERCLA, as updated through the date of this Agreement, or
any similar list of sites in the United States or any other jurisdiction
requiring investigation or cleanup.
  For
purposes of this Agreement:
  “CERCLA” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended as of the date
hereof.
  “Environmental Laws” means any federal, state
or local statute, law, ordinance, regulation, rule, code or order of the United
States, or any other jurisdiction and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, relating to pollution or protection of the environment or
natural resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials, as in effect as of the date of this Agreement.
  “Environmental Permits” means any permit,
approval, identification number, license and other authorization required under
any applicable Environmental Law.
  “Hazardous Materials” means (a) any petroleum,
petroleum products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (b) any chemical,
material or substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable Environmental
Law.
  SECTION
3.12. Trademarks, Patents and
Copyrights. Except as would not, individually or in the aggregate, have a
Deep Down Material Adverse Effect, Deep Down and Deep Down Subsidiaries own or
possess adequate licenses or other valid rights to use all patents, patent
rights, trademarks, trademark rights, trade names, trade dress, trade name
rights, copyrights, service marks, trade secrets, applications for trademarks
and for service marks, know-how and other proprietary rights and information
used or held for use in connection with the business of Deep Down and Deep Down
Subsidiaries as currently conducted, and Deep Down has no knowledge of any
assertion or claim challenging the validity of any of the foregoing. To the
knowledge of Deep Down, the conduct of the business of Deep Down and Deep Down
Subsidiaries as currently conducted does not and will not conflict in any way
with any patent, patent right, license, trademark, trademark right, trade dress,
trade name, trade name right, service mark or copyright of any third party that
has had, or could reasonably be expected to have, individually or in the
aggregate, a Deep Down Material Adverse Effect. To the knowledge of Deep Down,
there are no infringements of any proprietary rights owned by or licensed by or
to Deep Down or any Deep Down Subsidiary that have had, or could reasonably be
expected to have, individually or in the aggregate, a Deep Down Material Adverse
Effect.
  SECTION
3.13. Taxes. Except as for such
matters that could not reasonably be expected to have a Deep Down Material
Adverse Effect, (a) Deep Down and each of Deep Down Subsidiaries have timely
filed or will timely file all returns and reports required to be filed by them
with any taxing authority with respect to Taxes for any period ending on or
before the Effective Time, taking into account any extension of time to file
granted to or obtained on behalf of Deep Down and Deep Down Subsidiaries, (b)
all Taxes shown to be payable on such returns or reports that are due prior to
the Effective Time have been paid or will be paid, (c) as of the date of this
Agreement, no deficiency for any material amount of Tax has been asserted or
assessed by a taxing authority against Deep Down or any of Deep Down
Subsidiaries and (d) Deep Down and each of Deep Down Subsidiaries have provided
adequate reserves in their financial statements for any Taxes that have not been
paid in accordance with generally accepted accounting principles, whether or not
shown as being due on any returns. As used in this Agreement, “Taxes” shall mean
any and all taxes, fees, levies, duties, tariffs, imposts and other charges of
any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any government or
taxing authority, including, without limitation: taxes or other charges on or
with respect to income, franchises,
  7
  windfall
or other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers’ compensation, unemployment compensation or
net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added or gains taxes; license, registration and
documentation fees; and customers’ duties, tariffs and similar
charges.
  SECTION
3.14. State Takeover Statutes.
The Board of Directors of Deep Down has taken all action necessary to ensure
that any restrictions on business combinations will not apply to the Exchange
and the other transactions contemplated by this Agreement. To the knowledge of
Deep Down, no other state takeover statute is applicable to the Exchange or the
other transactions contemplated by this Agreement.
  SECTION
3.15. Brokers. No broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the Exchange or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Deep Down.
  ARTICLE
IV
 REPRESENTATIONS
AND WARRANTIES OF MEDIQUIP
  MediQuip
hereby represents and warrants to Deep Down that:
  SECTION
4.01. Organization and Qualification;
Subsidiaries. Each of MediQuip and each subsidiary of MediQuip (the
“MediQuip Subsidiaries”) is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all corporate requisite power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing or in good standing or to have such corporate power, authority and
governmental approvals have not had, and could not reasonably be expected to
have, individually or in the aggregate, a MediQuip Material Adverse Effect (as
defined below). Each of MediQuip and the MediQuip Subsidiaries is duly qualified
or licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed and
in good standing that have not had, and could not reasonably be expected to
have, individually or in the aggregate, a MediQuip Material Adverse Effect. The
term “MediQuip Material Adverse Effect” means any change in or effect on the
business of MediQuip and the MediQuip Subsidiaries that is materially adverse to
the financial condition or results of operations of MediQuip and the MediQuip
Subsidiaries taken as a whole, except for any such changes or effects resulting
from or in connection with (i) this Agreement or the transactions contemplated
by this Agreement or the announcement hereof, (ii) any changes in economic,
regulatory or political conditions or (iii) any issue or condition otherwise
known to Deep Down prior to the date of this Agreement.
  SECTION
4.02. Certificate of Incorporation and
By-Laws. MediQuip has heretofore made available to Deep Down a complete
and correct copy of the Certificate of Incorporation and the By-Laws of
MediQuip. Such Certificates of Incorporation and By-Laws are in full force and
effect. MediQuip is not violation of any of the provisions of its Certificate of
Incorporation or By-Laws.
  SECTION
4.03. Capitalization. The
authorized capital stock of MediQuip consists of (a) 490,000,000 shares of
MediQuip Common Stock, $.001 par value, and (b) 10,000,000 shares of preferred
stock, $.001 par value. As of the date of this Agreement, (i) 39,221,421 shares
of MediQuip Common Stock are issued and outstanding, and 22,000 shares of
MediQuip preferred stock are issued and outstanding, all of which are validly
issued, fully paid and non-assessable, (ii) in addition to the shares reserved
for issuance under the terms of the Plan referred to and defined in Section
4.07, no shares of MediQuip Common Stock are held in the treasury of MediQuip or
by MediQuip Subsidiaries and (iii) 4,400,000 shares are reserved for future
issuance upon conversion of the outstanding preferred stock. Immediately prior
to closing, there will exist only 7,870,171 shares of MediQuip Common Stock
issued and outstanding and 22,000 shares of MediQuip preferred stock
(convertible into a maximum of 4,400,000 shares of common stock of MediQuip)
issued and outstanding. There are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of MediQuip or any MediQuip Subsidiary or obligating
MediQuip or any MediQuip Subsidiary to issue or sell any shares of capital stock of,
or other equity interests in, MediQuip or any MediQuip Subsidiary. All shares of
MediQuip Common
  8
  Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and non-assessable. There are no
outstanding contractual obligations of MediQuip or any MediQuip Subsidiary to
repurchase, redeem or otherwise acquire any shares of MediQuip Common Stock or
any capital stock of any MediQuip Subsidiary. Each outstanding share of capital
stock of each MediQuip Subsidiary is duly authorized, validly issued, fully paid
and non-assessable and each such share owned by MediQuip or another MediQuip
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on MediQuip’s or such
other MediQuip Subsidiary’s voting rights, charges and other encumbrances of any
nature whatsoever, except where failure to own such shares free and clear would
not, individually or in the aggregate, have a MediQuip Material Adverse Effect.
There are no material outstanding contractual obligations of MediQuip or any
MediQuip Subsidiary to provide funds to, or make any investment (in the form of
a loan, capital contribution or otherwise) in, any MediQuip Subsidiary or any
other person. The shares of MediQuip Common Stock to be issued pursuant to the
Exchange in accordance with
Section 2.01 (i) will be duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights created by statute, the
MediQuip’s Certificate of Incorporation or By-Laws or any agreement to which the
MediQuip is a party or is bound and (ii) will, when issued, be exempt from
registration under the Securities Act of 1933, as amended (together with the
rules and regulations promulgated thereunder, the “Securities Act”) and the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the “Exchange Act”) and exempt from
registration under applicable Blue Sky Laws. The shares of MediQuip Common Stock
to be issued pursuant to the Exchange in accordance with Section 2.01 will bear
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such MediQuip
Securities):
  “The
Securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended. The Securities may not be sold, transferred
or assigned in the absence of an effective registration statement for the
Securities under said Act, or an opinion of counsel, in form, substance and
scope customary for opinions of counsel in comparable transactions, that
registration is not required under said Act.”
  SECTION
4.04. Authority Relative to This
Agreement. MediQuip has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and
to consummate the Exchange and the other transactions contemplated by this
Agreement. The execution and delivery of this Agreement by MediQuip and the
consummation by MediQuip of the Exchange and the other transactions contemplated
by this Agreement have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of MediQuip are
necessary to authorize this Agreement or to consummate the Exchange and the
other transactions contemplated by this Agreement. This Agreement has been duly
and validly executed and delivered by MediQuip and, assuming the due
authorization, execution and delivery by Deep Down, constitutes a legal, valid
and binding obligation of MediQuip, enforceable against MediQuip in accordance
with its terms.
  SECTION
4.05. No Conflict; Required Filings and
Consents. (a) The execution and delivery of this Agreement by MediQuip
does not, and the performance of this Agreement by MediQuip will not, (i)
conflict with or violate the Certificate of Incorporation or By-laws of
MediQuip, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 4.05(b) have been obtained and all filings and
obligations described in Section 4.05(b) have been made, conflict with or
violate any Law applicable to MediQuip or any MediQuip Subsidiary or by which
any property or asset of MediQuip or any MediQuip Subsidiary is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any property or
asset of MediQuip or any MediQuip Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clause (iii), for any
such conflicts, violations, breaches, defaults, or other occurrences that have
not had, and could not reasonably be expected to have, individually or in the
aggregate, a MediQuip Material Adverse Effect, and that could not reasonably be
expected to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
  (b) The
execution and delivery of this Agreement by MediQuip does not, and the performance
of this Agreement by MediQuip will not, require any consent, approval,
authorization or
  9
  permit
of, or filing with or notification to, any Governmental Entity, except (i) for
applicable requirements, if any, of the Exchange Act, Blue Sky Laws, the
Securities Act, the OTC, and state takeover laws; and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, has not had, and could not reasonably be expected to
have, individually or in the aggregate, a MediQuip Material Adverse Effect, and
could not reasonably be expected to prevent or materially delay the consummation
of the transactions contemplated by this Agreement.
  SECTION
4.06. Permits; Compliance. (a)
Each of MediQuip and the MediQuip Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Entity necessary for MediQuip or any MediQuip Subsidiary to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the “MediQuip Permits”), except where the failure to have, or the suspension or
cancellation of, any of MediQuip Permits has not had, and could not reasonably
be expected to have, individually or in the aggregate, a MediQuip Material
Adverse Effect, and, as of the date of this Agreement, no suspension or
cancellation of any of MediQuip Permits is pending or, to the knowledge of
MediQuip, threatened, except where the failure to have, or the suspension or
cancellation of, any of MediQuip Permits has not had, and could not reasonably
be expected to have, individually or in the aggregate, a MediQuip Material
Adverse Effect.
  (b)
Neither MediQuip nor any MediQuip Subsidiary is in conflict with, or in default
or violation
of, (i) any Law applicable to MediQuip or any MediQuip Subsidiary or by which
any property or asset of MediQuip or any MediQuip Subsidiary is bound or
affected, (ii) any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which MediQuip
or any MediQuip Subsidiary is a party or by which MediQuip or any MediQuip
Subsidiary or any property or asset of MediQuip or any MediQuip Subsidiary is
bound or affected or (iii) any MediQuip Permits, except, in the case of each of
(i), (ii) and (iii), for any such conflicts, defaults or violations that have
not had, and could not reasonably be expected to have, individually or in the
aggregate, a MediQuip Material Adverse Effect.
  SECTION
4.07. Divestiture of Westmeria Health Care Limited MediQuip shall have divested
all of its interest in its wholly owned subsidiary, Westmeria Health Care
Limited, a private limited company incorporated in England and Wales, and shall
have paid or discharged any MediQuip obligations of any kind or character,
direct or contingent, such that there are no outstanding liabilities whatsoever.
The consideration received by MediQuip for the divestiture of Westmeria shall be
the cancellation of 31,351,250 outstanding common stock equivalents of MediQuip.
Upon the closing of the divestiture of Westmeria Health Care Limited, there will
exist only 7,870,171 shares of MediQuip Common Stock issued and outstanding and
22,000 shares of MediQuip preferred stock (convertible into a maximum of
4,400,000 shares of common stock of MediQuip) issued and
outstanding.
  SECTION
4.08. Absence of Certain Changes or
Events. Since the date of the filing of the Annual Report on Form 10-KSB
(the “Annual Report”), except as contemplated by or as disclosed in this
Agreement, or as disclosed in any amendment to the Annual Report, MediQuip and
MediQuip Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since such date, there
has not been (a) any MediQuip Material Adverse Effect, (b) any material change
by MediQuip in its accounting methods, principles or practices, (c) any
declaration, setting aside or payment of any dividend or distribution in respect
of the Shares or any redemption, purchase or other acquisition of any of
MediQuip’s securities or (d) any increase in or establishment of any bonus,
insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any executive officers of
MediQuip or any MediQuip Subsidiary, except in the ordinary course of business
consistent with past practice.
  SECTION
4.09. Absence of Litigation. As
of the date of this Agreement, there is no litigation, suit, claim, action,
proceeding or investigation pending or, to the knowledge of MediQuip, threatened
against MediQuip or any MediQuip Subsidiary, or any property or asset of
MediQuip or any MediQuip Subsidiary, before any court, arbitrator or
Governmental Entity, domestic or foreign, which (i) has had, or could reasonably
be expected to have, individually or in the aggregate, a MediQuip Material
Adverse Effect or (ii) seeks to delay or prevent the consummation of the
Exchange or any other material transaction contemplated by this Agreement. As of
the date of
  10
  this
Agreement, neither MediQuip nor any MediQuip Subsidiary nor any property or
asset of MediQuip or any MediQuip Subsidiary is subject to any continuing order
of, consent decree, settlement agreement or other similar written agreement
with, or, to the knowledge of MediQuip, continuing investigation by, any
Governmental Entity, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity or arbitrator having,
individually or in the aggregate, a MediQuip Material Adverse
Effect.
  SECTION
4.10. Employee Benefit Plans.
MediQuip and MediQuip Subsidiary presently do not have any employees. MediQuip
and MediQuip Subsidiary presently do not, and have never in the past, maintained
or contributed to any employee benefit plan, program, arrangement and contract
(including, without limitation, any “employee benefit plan”, as defined in
section 3(3) of ERISA).
  SECTION
4.11. Contracts. (a) Exhibit C
lists each of the following written contracts and agreements of MediQuip (such
contracts and agreements being “Material Contracts”):
  (i)  each
contract and agreement for the purchase or lease of personal property with any
supplier or for the furnishing of services to MediQuip;
  (ii)  all
broker, exclusive dealing or exclusivity, distributor, dealer, manufacturer’s representative,
franchise, agency, sales promotion and market research agreements, to which
MediQuip is a party or any other material contract that compensates any person
other than employees based on any sales by MediQuip;
  (iii)  all
leases and subleases of real property;
  (iv)  all
contracts and agreements relating to indebtedness for borrowed money other than
trade indebtedness of MediQuip;
  (v) all
contracts and agreements involving annual payments in excess of $100,000 with any
Governmental Entity to which MediQuip is a party; and
  (iv) any
other material agreement of MediQuip which is terminable upon or prohibits
a change of ownership or control of MediQuip..
  (b) Each
Material Contract: (i) is valid and binding on MediQuip and, to the knowledge of MediQuip,
on the other parties thereto, and is in full force and effect, and (ii) upon
consummation of the transactions contemplated by this Agreement, shall continue
in full force and effect without material penalty or other material adverse
consequence. MediQuip is not in material breach of, or material default under,
any Material Contract and, to the knowledge of MediQuip, no other party to any
Material Contract is in material breach thereof or material default
thereunder.
  SECTION
4.12. Environmental Matters.
Except as disclosed in the Annual Report or as would not, individually or in the
aggregate, have a MediQuip Material Adverse Effect:
  (a)  MediQuip
and the MediQuip Subsidiaries (i) are in compliance with all applicable Environmental
Laws, (ii) hold all Environmental Permits and (iii) are in compliance with their
respective Environmental Permits.
  (b)  None of
MediQuip or any MediQuip Subsidiary has received any written request for information,
or been notified that it is a potentially responsible party, under CERCLA or any
similar Law of any state, locality or any other jurisdiction.
  (c) None
of MediQuip or any MediQuip Subsidiary has entered into or agreed to any consent decree or
order or is subject to any judgment, decree or judicial order relating to
compliance with Environmental Laws, Environmental Permits or the investigation,
sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous
Materials and, to the knowledge of MediQuip, no investigation, litigation or
other proceeding is pending or threatened in writing with respect
thereto.
  11
  (d) None
of the real property owned or leased by MediQuip or any MediQuip Subsidiary is listed
or, to the knowledge of MediQuip, proposed for listing on the “National
Priorities List” under CERCLA, as updated through the date of this Agreement, or
any similar list of sites in the United States or any other jurisdiction
requiring investigation or cleanup.
  SECTION
4.13. Trademarks, Patents and
Copyrights. Except as would not, individually or in the aggregate, have a
MediQuip Material Adverse Effect, MediQuip and the MediQuip Subsidiaries own or
possess adequate licenses or other valid rights to use all patents, patent
rights, trademarks, trademark rights, trade names, trade dress, trade name
rights, copyrights, service marks, trade secrets, applications for trademarks
and for service marks, know-how and other proprietary rights and information
used or held for use in connection with the business of MediQuip and the
MediQuip Subsidiaries as currently conducted, and MediQuip has no knowledge of
any assertion or claim challenging the validity of any of the foregoing. To the
knowledge of MediQuip, the conduct of the business of MediQuip and the MediQuip
Subsidiaries as currently conducted does not and will not conflict in any way
with any patent, patent right, license, trademark, trademark right, trade dress,
trade name, trade name right, service mark or copyright of any third party that
has had, or could reasonably be expected to have, individually or in the
aggregate, a MediQuip Material Adverse Effect. To the knowledge of MediQuip,
there are no infringements of any proprietary rights owned by or licensed by or
to MediQuip or any MediQuip Subsidiary that have had, or could reasonably be
expected to have, individually or in the aggregate, a MediQuip Material Adverse
Effect.
  SECTION
4.14. Taxes. Except for such
matters that would not have a MediQuip Material Adverse Effect, (a) MediQuip and
each of the MediQuip Subsidiaries have timely filed or will timely file all
returns and reports required to be filed by them with any taxing authority with
respect to Taxes for any period ending on or before the Effective Time, taking
into account any extension of time to file granted to or obtained on behalf of
MediQuip and the MediQuip Subsidiaries, (b) all Taxes shown to be payable on
such returns or reports that are due prior to the Effective Time have been paid
or will be paid, (c) as of the date of this Agreement, no deficiency for any
material amount of Tax has been asserted or assessed by a taxing authority
against MediQuip or any of the MediQuip Subsidiaries and (d) MediQuip and each
of the MediQuip Subsidiaries have provided adequate reserves in their financial
statements for any Taxes that have not been paid in accordance with generally
accepted accounting principles, whether or not shown as being due on any
returns.
  SECTION
4.15. Accounting and Tax
Matters. To the knowledge of MediQuip, neither MediQuip nor any of its
affiliates has taken or agreed to take any action that would prevent the
Exchange from constituting a transaction qualifying under Section 368(a) of the
Code. MediQuip is not aware of any agreement, plan or other circumstance that
would prevent the Exchange from qualifying under Section 368(a) of the
Code.
  SECTION
4.16. Brokers. No broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the Exchange or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
MediQuip.
  ARTICLE
V
 CONDUCT
OF BUSINESSES PENDING THE REORGANIZATION
  SECTION
5.01. Conduct of Business by Deep Down
Pending the Exchange. Deep Down agrees that, between the date of this
Agreement and the Effective Time, except as contemplated by any other provision
of this Agreement, unless MediQuip shall otherwise consent in
writing:
  (a) the
businesses of Deep Down and Deep Down Subsidiaries shall be conducted only in, and Deep
Down and Deep Down Subsidiaries shall not take any action except in, the
ordinary course of business and in a manner consistent with past practice;
and
  12
  (b) Deep
Down shall use its reasonable best efforts to preserve substantially intact its business
organization, to keep available the services of the current officers, employees
and consultants of Deep Down and Deep Down Subsidiaries and to preserve the
current relationships of Deep Down and Deep Down Subsidiaries with customers,
suppliers and other persons with which Deep Down or any Deep Down Subsidiary has
significant business relations.
  By way of
amplification and not limitation, except as contemplated by this Agreement,
neither Deep Down nor any Deep Down Subsidiary shall, between the date of this
Agreement and the Effective Time, directly or indirectly, do, or propose to do,
any of the following without the prior written consent of MediQuip:
  (a)  amend or
otherwise change its Certificate of Incorporation or By-Laws or equivalent organizational
documents;
  (b)  issue,
sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale,
pledge, disposition,
grant or encumbrance of, (i) any shares of its capital stock of any class, or
any options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of Deep Down or any Deep
Down Subsidiary or (ii) any material assets of Deep Down or any Deep Down
Subsidiary, except in the ordinary course of business and in a manner consistent
with past practice;
  (c)
declare, set aside, make or pay any dividend or other distribution, payable in
cash, stock, property
or otherwise, with respect to any of its capital stock;
  (d)  reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock;
  (e)  (i)acquire
(including, without limitation, by Exchange, consolidation, or acquisition
of stock or assets) any interest in any corporation, partnership, other business
organization or any division thereof or any assets, other than acquisitions of
assets in the ordinary course of business consistent with past
practice;
  (ii)  incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any person, or make any loans or advances, except for
indebtedness incurred in the ordinary course of business and consistent with
past practice;
  (iii)  enter
into any contract or agreement material to the business, results of operations
or financial condition of Deep Down and Deep Down Subsidiaries taken as a whole
other than in the ordinary course of business, consistent with past practice;
or
  (iv)
enter into or amend any contract, agreement, commitment or arrangement that, if fully
performed, would not be permitted under this Section 5.01(e);
  (f)  increase
the compensation payable or to become payable to its employees, except for increases
in accordance with past practices, or grant any severance or termination pay to,
or enter into any employment or severance agreement with, any director or
employee of Deep Down or any Deep Down Subsidiary, except for employment or
severance agreements in accordance with past practice, or establish, adopt,
enter into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director or employee;
or
  (g)  take any
action, other than reasonable and usual actions in the ordinary course of
business and
consistent with past practice, with respect to accounting policies or
procedures.
  SECTION
5.02. Conduct of Business by MediQuip
Pending the Exchange. MediQuip agrees that, between the date of this
Agreement and the Effective Time, except as contemplated by any other provision
of this
  13
  Agreement,
unless Deep Down shall otherwise consent in writing (such consent not to be
unreasonably withheld or delayed):
  (a)  the
business of the MediQuip and the MediQuip Subsidiaries shall be conducted only
in, and
MediQuip and the MediQuip Subsidiaries shall not take any action except in the
ordinary course of business and in a manner consistent with past practice;
and
  (b)  MediQuip
shall use its reasonable best efforts to preserve substantially intact its
business organization,
to keep available the services of the current officers, employees and
consultants of MediQuip and the MediQuip Subsidiaries and to preserve the
current relationships of MediQuip and the MediQuip Subsidiaries with customers,
suppliers and other persons with which MediQuip or any MediQuip Subsidiary has
significant business relations.
  By way of
amplification and not limitation, except as contemplated by this Agreement,
neither MediQuip nor any MediQuip Subsidiary shall, between the date of this
Agreement and the Effective Time, directly or indirectly, do, or propose to do,
any of the following without the prior written consent of Deep Down (such
consent not to be unreasonably withheld):
  (a)  amend or
otherwise change its Certificate of Incorporation or By-Laws or equivalent organizational
documents;
  (b)  issue,
sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale,
pledge, disposition,
grant or encumbrance of, (i) any shares of its capital stock of any class, or
any options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of MediQuip or any
MediQuip Subsidiary (except for the issuance of shares of MediQuip Common Stock
issuable pursuant to the MediQuip Stock Options outstanding on the date of this
Agreement or the issuance in the ordinary course of business and consistent with
past practice, or (ii) any material assets of MediQuip or any MediQuip
Subsidiary, except in the ordinary course of business and in a manner consistent
with past practice;
  (c)  declare,
set aside, make or pay any dividend or other distribution, payable in cash,
stock, property
or otherwise, with respect to any of its capital stock;
  (d)  reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock;
  (e) (i)
acquire (including, without limitation, by Exchange, consolidation, or acquisition
of stock or assets) any interest in any corporation, partnership, other business
organization or any division thereof or any assets, other than acquisitions of
assets in the ordinary course of business consistent with past
practice;
  (ii)  incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any person, or make any loans or advances, except for
indebtedness incurred in the ordinary course of business and consistent with
past practice;
  (iii)  enter
into any contract or agreement material to the business, results of operations
or financial condition of MediQuip and the MediQuip Subsidiaries taken as a
whole other than in the ordinary course of business, consistent with past
practice; or
  (iv)
enter into or amend any contract, agreement, commitment or arrangement that, if fully
performed, would not be permitted under this Section 5.02(e);
  (f)
increase the compensation payable or to become payable to its officers or
employees, except
for increases in accordance with past practices in salaries or wages of
employees of MediQuip or
  14
  any
MediQuip Subsidiary who are not officers of MediQuip, or grant any severance or
termination pay to, or enter into any employment or severance agreement with,
any director, officer or other employee of MediQuip or any MediQuip Subsidiary,
or establish, adopt, enter into or amend any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee; or
  (g) take
any action, other than reasonable and usual actions in the ordinary course of
business and
consistent with past practice, with respect to accounting policies or
procedures.
  ARTICLE
VI
 ADDITIONAL
AGREEMENTS
  SECTION
6.01. Filing of Form 8-K. Unless
adequately disclosed in a periodic report filed with the Securities and Exchange
Commission by MediQuip, immediately after the Effective Time, new management of
Deep Down will procure the prompt preparation and file with the Securities and
Exchange Commission appropriate notice describing this transaction on Form 8-K
or other applicable form, and otherwise comply with the provisions of the
Securities Exchange Act of 1934.
  SECTION
6.02. Preparation of Disclosure
Statement. Immediately after the Effective Time, new management of Deep
Down will procure the preparation of a disclosure statement containing the
necessary information to comply with Rule 15(c)2(11) promulgated by the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934 and file such forms with one or more firms who are members of the National
Association of Securities Dealers, Inc. (“NASD”) and with NASD as are necessary
to effect the quotation of MediQuip’s securities in the NASD Electronic Bulletin
Board System.
  SECTION
6.03. Access to Information;
Confidentiality. Except as required pursuant to any confidentiality
agreement or similar agreement or arrangement to which MediQuip or Deep Down or
any of their respective subsidiaries is a party or pursuant to applicable Law,
from the date of this Agreement to the Effective Time, MediQuip and Deep Down
shall (and shall cause their respective subsidiaries to): (i) provide to the
other (and its officers, directors, employees, accountants, consultants, legal
counsel, agents and other representatives, collectively, “Representatives”)
access at reasonable times upon prior notice to the officers, employees, agents,
properties, offices and other facilities of the other and its subsidiaries and
to the books and records thereof and (ii) furnish promptly such information
concerning the business, properties, contracts, assets, liabilities, personnel
and other aspects of the other party and its subsidiaries as the other party or
its Representatives may reasonably request.
  SECTION
6.04. Obligations of MediQuip.
MediQuip shall take all action necessary to cause MediQuip to perform its
obligations under this Agreement and to consummate the Exchange on the terms and
subject to the conditions set forth in this Agreement.
  SECTION
6.05. Obligations of
Shareholder. Shareholder, on behalf of new management of MediQuip,
unconditionally agree: (i) to refrain from the issuance of any securities
pursuant to a registration statement on Form S-8 for a period of 12 months from
and after the Effective Time (ii) not to change the number of issued or
outstanding shares of capital stock of MediQuip by a stock split, stock
dividend, combination, reclassification, reverse stock split, combination or
reclassification of shares or other similar event for a period of 12 months from
and after the Effective Time, and except as a condition to a listing of common
stock on a national exchange, in which event the limitation period will be 6
months (iii) not to issue any equity securities to any person, firm or
corporation for any purpose whatsoever for consideration less than the fair
market value applicable to the nature of the transaction of such securities, and
(iv) not to file a registration statement with the Securities and Exchange
Commission on Form SB-2 or other similar form covering secondary offering of and
class of equity securities prior to the expiration of 6 months from and after
the Effective Time.
  SECTION
6.06. Application to Standard &
Poor’s. New management of Deep Down shall promptly make application to
the Standard & Poor’s editorial board to approve your corporation for a full
description in Standard & Poor’s Standard Corporation Manual, Standard &
Poor’s Daily News Section, coverage of MediQuip as part of the
  15
  S&P
Market Access Program and coverage on Standard & Poor’s Internet Site,
www.advisorinsight.com, as well as S&P Marketscope and the S&P Stock
Guide database.
  SECTION
6.06. Filing of Amended Form
8-K. Within 4 days after the original report on Form 8-K must be filed,
new management of Deep Down will prepare and file with the SEC an amendment to
the Form 8-K described in Section 6.02 above that includes the financial
statements and pro forma financial information prepared pursuant to Regulation
S-X for the periods specified in Rule 3.05(b).
  SECTION
6.07. Further Action; Consents;
Filings. Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use its reasonable best efforts to (i) take, or cause to be
taken, all appropriate action and do, or cause to be done, all things necessary,
proper or advisable under applicable law or otherwise to consummate and make
effective the Exchange and the other transactions contemplated by this
Agreement, (ii) obtain from Governmental Entities any consents, licenses,
permits, waivers, approvals, authorizations or orders required to be obtained or
made by MediQuip or Deep Down or any of their subsidiaries in connection with
the authorization, execution and delivery of this Agreement and the consummation
of the Exchange and the other transactions contemplated by this Agreement and
(iii) make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement, the Exchange and the other
transactions contemplated by this Agreement required under (A) the Exchange Act
and the Securities Act and the rules and regulations thereunder and any other
applicable federal or state securities laws and (B) any other applicable Law.
The parties hereto shall cooperate with each other in connection with the making
of all such filings, including by providing copies of all such documents to the
non-filing party and its advisors prior to filing and, if requested, by
accepting all reasonable additions, deletions or changes suggested in connection
therewith.
  SECTION
6.08. Reorganization of Deep
Down. As soon as practicable, but in no event more than 15 days after the
execution of this Agreement Shareholder shall cause SubSea Acquisition
Corporation, a Texas corporation, (“SubSea”) to acquire all the issued and
outstanding capital stock of Deep Down, Inc., a Delaware corporation, for equity
securities of SubSea substantially on the terms set out in the agreement
executed by and among SubSea, Deep Down and their respective shareholders. At or
about the time of the consummation of the acquisition of Deep Down by SubSea,
Shareholder shall cause SubSea to acquire all the issued and outstanding capital
stock of Strategic Offshore Services Corporation, a Texas corporation (“SOS”),
for equity securities of SubSea substantially on the terms set out in the
agreement executed by and among SubSea, SOS and their respective shareholders.
Following the consummation of the acquisition of Deep Down by SubSea and the
acquisition of SOS by SubSea, SubSea and SOS shall merge with and into Deep Down
with Deep Down as the survivor of the merger as a Delaware corporation. The
merger shall be consummated substantially on the terms set out in the Agreement
and Plan of Merger attached as Exhibit D. The surviving Delaware corporation and
the majority shareholders of the surviving Delaware corporation are the parties
to this Agreement.
  SECTION
6.09. Agreement to Deliver
Shares. As the owner of a majority of the shares of Deep Down Securities,
Shareholder agrees to vote his shares of Deep Down Securities in favor of
approving this Agreement and the transactions contemplated hereby and not to
approve or support any competing transaction.
  SECTION
6.10. Plan of Exchange. This
Agreement is intended to constitute a “plan of reorganization” within the
meaning of section 1.368-2(g) of the income tax regulations promulgated under
the Code. From and after the date of this Agreement and until the Effective
Time, each party hereto shall use its reasonable best efforts to cause the
Exchange to qualify, and will not knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken which
action or failure to act could prevent the Exchange from qualifying, as a
reorganization under the provisions of section 368(a) of the Code. Following the
Effective Time, neither MediQuip nor any of its affiliates shall knowingly take
any action, cause any action to be taken, fail to take any action or cause any
action to fail to be taken, which action or failure to act could cause the
Exchange to fail to qualify as a reorganization under section 368(a) of the
Code.
  SECTION
6.11. Board of Directors of
MediQuip. Immediately after the Effective Date, the present Directors of
MediQuip shall have caused the appointment of the persons designated by the
Shareholder, to the Board of Directors of MediQuip followed by the resignation
of all other officers and directors. In connection with such election, MediQuip
shall have provided its securityholders with an Information Statement pursuant
to Section 14f of the Exchange Act and SEC Rule 14f-1.
  16
  SECTION
6.12. Public Announcements. The
initial press release relating to this Agreement shall be a joint press release
the text of which has been agreed to by each of MediQuip and Deep
Down.
  SECTION
6.13. Conveyance Taxes. MediQuip
shall be liable for and shall hold Deep Down and the holders of Deep Down
Securities who are holders of Deep Down Securities immediately prior to the
Effective Time harmless against any real property transfer or gains, sales, use,
transfer, value added, stock transfer or stamp taxes, any transfer, recording
registration, and other fees, and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement. The parties
acknowledge that this Section 6.14 is specifically intended to benefit the
holders of Deep Down Securities who are holders of Deep Down Securities
immediately prior to the Effective Time.
  ARTICLE
VII
 CONDITIONS
TO THE REORGANIZATION
  SECTION
7.01. Conditions to the Obligations of
Each Party. The obligations of Deep Down, MediQuip and Shareholder to
consummate the Exchange are subject to the satisfaction or waiver (where
permissible) of the following conditions:
  (a)  this
Agreement and the issuance of the Exchange Consideration pursuant to the terms
of the
Exchange, as the case may be, contemplated hereby shall have been approved and
adopted by the requisite affirmative vote of (i) the shareholders of Deep Down
in accordance with the General Corporation Law of Delaware and Deep Down’s
Certificate of Incorporation and (ii) the board of directors of MediQuip in
accordance with the rules of the OTC, the Nevada Revised Statutes and MediQuip’s
Articles of Incorporation;
  (b)  no
Governmental Entity or court of competent jurisdiction located or having
jurisdiction in the
United States shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, judgment, decree, executive order or award (an “Order”)
which is then in effect and has the effect of making the Exchange illegal or
otherwise prohibiting consummation of the Exchange; and
  (c) all
consents, approvals and authorizations legally required to be obtained to
consummate the
Exchange shall have been obtained from and made with all Governmental
Entities.
  SECTION
7.02. Conditions to the Obligations of
MediQuip. The obligations of MediQuip to consummate the Exchange are
subject to the satisfaction or waiver (where permissible) of the following
additional conditions:
  (a)  to the
best of Deep Down’s knowledge and belief, each of the representations and warranties
of Deep Down contained in this Agreement shall be true and correct as of the
Effective Time as though made on and as of the Effective Time, except where
failure to be so true and correct would not have a Deep Down Material Adverse
Effect, and except that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date, except where failure to be so true and correct would not have a Deep Down
Material Adverse Effect, and MediQuip shall have received a certificate of the
Managing Director of Deep Down substantially in the form of Exhibit F to such
effect;
  (b)  Deep Down
shall have performed or complied with all agreements and covenants required
by this Agreement to be performed or complied with by it on or prior to the
Effective Time, except where the failure to so comply would not have a Deep Down
Material Adverse Effect, and MediQuip shall have received a certificate of the
Managing Director of Deep Down substantially in the form of Exhibit
F;
  (c)
MediQuip shall have received an investment representation from each Deep Down Shareholder
substantially in the form of Exhibit G.
  17
 insert
 (d)  The
consummation of the transactions contemplated by this Agreement shall have been approved
at or before the Closing by the affirmative vote of the holders of not less than
a majority of Deep Down’s common stock, and shall have received any other
shareholder approval necessary to the consummation of the transactions
contemplated by this Agreement.
  (e)  MediQuip
shall have received on the Closing Date an opinion, dated the Closing Date, of counsel
for Deep Down in form and substance satisfactory to counsel for the MediQuip, to
the effect that:
  (i)  Deep Down
is a corporation validly existing and in good standing under the laws of
its jurisdiction of organization with all requisite power and authority to own,
lease, license, and use their respective properties and assets and to carry on
the business in which each is now engaged.
  (ii)  All
necessary proceedings of Deep Down have been duly taken to authorize the execution,
delivery, and performance of this Agreement by Deep Down.
  (iii)  Deep Down
has all requisite corporate power and authority to execute, deliver, and
perform this Agreement, and this Agreement has been duly authorized, executed,
and delivered by Deep Down, constitutes the legal, valid, and binding obligation
of Deep Down, and (subject to applicable bankruptcy, insolvency, and other laws
affecting the enforceability of creditors’ rights generally) is enforceable as
to Deep Down in accordance with its terms.
  (iv)  The
execution, delivery, and performance of this Agreement by Deep Down will not
violate or result in a breach of any term of Deep Down’s charter document or
by-laws; and the execution, delivery, and performance of this Agreement by Deep
Down will not violate, result in a breach of, conflict with, or (with or without
the giving of notice or the passage of time or both) entitle any party to
terminate or call a default under any terms of any agreement to which Deep Down
are a party.
  (v)  After
reasonable investigation, such counsel has no actual knowledge of any consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or other governmental
authority or any court or other tribunal which is required of Deep Down for the
execution, delivery, or performance of this Agreement by Deep Down.
  (vi)  After
reasonable investigation, such counsel has no actual knowledge of any litigation,
arbitration, governmental or other proceeding (formal or informal), or
investigation pending or threatened with respect to Deep Down, or any of its
business, properties, or assets that (i) can reasonably be expected to result in
any materially adverse change in the financial condition, results of operations,
business, properties, liabilities, or future prospects of Deep Down taken as a
whole or (ii) seeks to prohibit or otherwise challenge the consummation of the
transactions contemplated by this Agreement, or to obtain substantial damages
with respect thereto, except as disclosed in this Agreement.
  (vii) The
consummation of the transactions contemplated by this Agreement has been approved
at or before the Closing by the affirmative vote of the holders of not less than
a majority of Deep Down’s common stock, and has received any other shareholder
approval necessary to the consummation of the transactions contemplated by this
Agreement.
  In giving
such opinions counsel may state that their opinion and belief are based upon
their participation in the preparation of the Agreement and any amendments or
supplements thereto and documents incorporated therein by reference and review
and discussion of the contents thereof, but is without independent check or
verification except as specified.
  18
  SECTION
7.03. Conditions to the Obligations of
Deep Down. The obligations of Deep Down to consummate the Exchange are
subject to the satisfaction or waiver (where permissible) of the following
additional conditions:
  (a)  each of
the representations and warranties of MediQuip contained in this Agreement shall be true
and correct as of the Effective Time, as though made on and as of the Effective
Time, except where the failure to be so true and correct would not have a
MediQuip Material Adverse Effect, and except that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date, except where the failure to be so true and correct
would not have a MediQuip Material Adverse Effect, and Deep Down shall have
received a certificate of the Chief Executive Officer or Chief Financial Officer
of MediQuip substantially in the form of Exhibit E to such effect;
  (b)  MediQuip
shall have performed or complied with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time, except where the failure to comply would not have a MediQuip Material
Adverse Effect, and Deep Down shall have received a certificate of the Chief
Executive Officer or Chief Financial Officer of MediQuip substantially in the
form of Exhibit E to that effect;
  (c) Deep
Down shall have received on the Closing Date an opinion, dated the Closing Date, of
Sonfield & Sonfield, counsel for the MediQuip in form and substance
satisfactory to counsel for Deep Down, to the effect that:
  (i)  MediQuip
is a corporations validly existing and in good standing under the laws of the
States of Nevada with all requisite power and authority to own, lease, license,
and use their respective properties and assets and to carry on the business in
which each is now engaged.
  (ii)  All
necessary proceedings of MediQuip have been duly taken to authorize the execution,
delivery, and performance of this Agreement by MediQuip.
  (iii)  MediQuip
have all requisite corporate power and authority to execute, deliver, and
perform this Agreement, and this Agreement has been duly authorized, executed,
and delivered by MediQuip, constitutes the legal, valid, and binding obligation
of MediQuip, and (subject to applicable bankruptcy, insolvency, and other laws
affecting the enforceability of creditors’ rights generally) is enforceable as
to MediQuip in accordance with its terms.
  (iv)  The
execution, delivery, and performance of this Agreement by MediQuip will not
violate or result in a breach of any term of MediQuip’s certificate of
incorporation or by-laws; and the execution, delivery, and performance of this
Agreement by MediQuip will not violate, result in a breach of, conflict with, or
(with or without the giving of notice or the passage of time or both) entitle
any party to terminate or call a default under any terms of any agreement to
which MediQuip is a party.
  (v)  After
reasonable investigation, such counsel has no actual knowledge of any consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or other governmental
authority or any court or other tribunal which is required of MediQuip for the
execution, delivery, or performance of this Agreement by MediQuip.
  (vi)  After
reasonable investigation, such counsel has no actual knowledge of any litigation,
arbitration, governmental or other proceeding (formal or informal), or
investigation pending or threatened with respect to MediQuip, or any of their
respective business, properties, or assets that (i) can reasonably be expected
to result in any materially adverse change in the financial condition, results
of operations, business, properties, liabilities, or future prospects of
MediQuip taken as a whole or (ii) seeks to prohibit or otherwise challenge the
consummation of the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto, except as disclosed in this
Agreement.
  19
  (vii) the
Shares to be issued by the MediQuip hereunder have been duly authorized and, when
issued and when delivered to Deep Down Shareholders as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights;
  In giving
such opinions Sonfield & Sonfield may state that their opinion and belief
are based upon their participation in the preparation of the Agreement and any
amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but is without
independent check or verification except as specified.
  ARTICLE
VIII
 TERMINATION,
AMENDMENT AND WAIVER
  SECTION
8.01. Termination. This
Agreement may be terminated and the Exchange and the other transactions
contemplated by this Agreement may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the transactions contemplated by this Agreement, as
follows:
  (a)  by mutual
written consent duly authorized by the Boards of Directors of each of MediQuip
and Deep Down;
  (b)  by either
MediQuip or Deep Down if the Effective Time shall not have occurred on or before
December 14, 2006 provided, however, that the right to terminate this Agreement
under this Section 8.01(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before such
date;
  (c)  there
shall be any Order which is final and non-appealable preventing the consummation of the
Exchange;
  (d)  by
MediQuip upon a breach of any material representation, warranty, covenant or
a greement
on the part of Deep Down set forth in this Agreement, or if any representation
or warranty of Deep Down shall have become untrue, in either case such that the
conditions set forth in Section 7.02(a) and Section 7.02(b) would not be
satisfied (“Terminating Deep Down Breach”); provided, however, that, if such
Terminating Deep Down Breach is curable by Deep Down through the exercise of its
best efforts and for so long as Deep Down continues to exercise such best
efforts, MediQuip may not terminate this Agreement under this Section
8.01(d).
  (e) by
Deep Down upon a breach of any material representation, warranty, covenant or agreement
on the part of MediQuip set forth in this Agreement, or if any representation or
warranty of MediQuip shall have become untrue, in either case such that the
conditions set forth in Section 7.03(a) and Section 7.03(b) would not be
satisfied (“Terminating MediQuip Breach”); provided, however, that, if such
Terminating Deep Down Breach is curable by MediQuip through the exercise of its
best efforts and for so long as MediQuip continues to exercise such best
efforts, Deep Down may not terminate this Agreement under this Section
8.01(e).
  SECTION
8.02. Effect of Termination.
Except as provided in Section 9.01, in the event of termination of this
Agreement pursuant to Section 8.01, this Agreement shall forthwith become void,
there shall be no liability under this Agreement on the part of MediQuip or Deep
Down or any of their respective officers or directors, and all rights and
obligations of each party hereto shall cease, provided, however, that nothing
herein shall relieve any party from liability for the willful breach of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
  SECTION
8.03. Amendment. This Agreement
may be amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that,
  20
  after the
approval of this Agreement by the shareholders of Deep Down, no amendment may be
made which would reduce the amount or change the type of consideration into
which each Share shall be converted upon consummation of the Exchange. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
  SECTION
8.04. Waiver. At any time prior
to the Effective Time, any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto, and (c) waive compliance with any agreement
or condition contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
  SECTION
8.05. Expenses. All Expenses (as
defined below) incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Exchange or any other transaction is consummated.
“Expenses” as used in this Agreement shall include all reasonable out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement and all other matters related to the closing of
the Exchange and the other transactions contemplated by this
Agreement.
  ARTICLE
IX
 GENERAL
PROVISIONS
  SECTION
9.01. Non-Survival of Representations,
Warranties and Agreements. The representations, warranties and agreements
in this Agreement and in any certificate delivered pursuant hereto shall
terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that the agreements set
forth in Articles I and II and Sections 6.01, 6.02, 6.05, 6.06 and this Article
IX shall survive the Effective Time and those set forth in Sections 8.02 and
8.05 and this Article IX shall survive termination.
  SECTION
9.02. Notices. All notices,
requests, claims, demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly given upon receipt) by
delivery in person, by cable, telecopy, facsimile, telegram or telex or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
9.02):
  21
  if to
MediQuip:
  MediQuip,
Inc.
 Kelsey
House, 77 High Street
 Beckenham
Kent BR3 1AN
 Facsimile:
011 44 208 658 9870
  with a
copy to (which shall not constitute notice to such party):
  Loughran
& Co.
 38
Hertford Street
 London
W1Y 7TG
 Attn:
James A. Loughran, Esq.
 Facsimile:
(44) 207 355 4975
  if to
Deep Down:
  Deep
Down, Inc.
 15473
East Freeway
 Channelview,
Delaware 77530
 Attn:
John C. Siedhoff, CFO
 Facsimile:
(281) 862-2522
  with a
copy to (which shall not constitute notice to Deep Down):
  Robert L.
Sonfield, Jr., Esq.
 Sonfield
& Sonfield
 770 South
Post Oak Lane, Suite 435
 Houston,
Texas 77056-1937
 Facsimile:
(713) 877-1547
  SECTION
9.03. Certain Definitions. For
purposes of this Agreement, the term:
  (a)  “affiliate”
of a specified person means a person who directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with such
specified person;
  (b)  “control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, as trustee or executor, by
contract or credit arrangement or otherwise;
  (c)  “knowledge”
means, with respect to any matter in question, that the executive officers of Deep Down
or MediQuip, as the case may be, have actual knowledge of such
matter;
  (d)  “person”
means an individual, corporation, partnership, limited partnership, syndicate, person
(including, without limitation, a “person” as defined in section 13(d)(3) of the
Exchange Act), trust, association or entity or government, political
subdivision, agency or instrumentality of a government; and
  (e)
“subsidiary” or “subsidiaries” of any person means any corporation, partnership,
joint venture
or other legal entity of which such person (either alone or through or together
with any other subsidiary) owns, directly or indirectly, more than 50% of the
stock or other equity interests, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
  22
  SECTION
9.04. Severability. If any term
or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated by
this Agreement is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement be consummated as originally
contemplated to the fullest extent possible.
  SECTION
9.05. Assignment; Binding Effect;
Benefit. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
  SECTION
9.06. Incorporation of Exhibits.
Deep Down Disclosure Schedule, the MediQuip Disclosure Schedule and all Exhibits
attached hereto and referred to herein are hereby incorporated herein and made a
part hereof for all purposes as if fully set forth herein.
  SECTION
9.07. Specific Performance. The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity.
  SECTION
9.08. Governing Law; Forum. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware.
  SECTION
9.09. Headings. The descriptive
headings contained in this Agreement are included for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
  SECTION
9.10. Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission) in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
  SECTION
9.11. Entire Agreement. This
Agreement (including the Exhibits) constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties
hereto.
  THE
REMAINDER OF THIS PAGE INTENIONALLY LEFT BLANK
  23
  AGREEMENT
AND PLAN OF REORGANIZATION
 among
 MEDIQUIP
HOLDINGS, INC.
 DEEP
DOWN, INC.
 and
 THE
MAJORITY SHAREHOLDERS OF DEEP DOWN, INC.
  EXECUTION
PAGE
  IN
WITNESS WHEREOF, MediQuip, Shareholder and Deep Down have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
  MEDIQUIP,
      INC.Attest
      by:
                
                By:
      /s/ David Francis______________________,
      Secretary
                
                David
      Francis, PresidentDEEP
      DOWN, INC.Attest
      by: /s/ Daniel L. Ritz, Jr.
                
                By:
      /s/ Robert E. Chamberlain, Jr.Name:
      Daniel L. Ritz, Jr.
                
                Name:
      Robert E. Chamberlain, Jr.Title:
      Secretary
                
                Title:
      Chairman & CEO/s/
      Danile L. Ritz, Jr.
                
                /s/
      Robert E. Chamberlain, Jr.Daniel
      L. Ritz, Jr., Shareholder
                
                Robert
      E. Chamberlain, Jr., Shareholder/s/
      John C. SiedhoffJohn
      C. Siedhoff, Shareholder
  24
  EXHIBIT
A
  Certificates
to be Exchanged
 Pursuant
to Section 2.02
  Each
outstanding share of Deep Down Series D, Series E, Series F and Series G
Preferred Stock will be exchanged for a like number of
MediQuip Preferred Shares with identical designation and terms except the
conversion price for 2,500 shares of Series D
and 1,500 shares of Series F will change from $1.45 per share to $0.1933 per
share
  Deep
              
              MediQuip
              
              MediQuip
              
              MediQuip
              
              MediQuip
              
              MediQuipName
      & Address of Shareholder
              
              Down
              
              Series
      D
              
              Series
      E
              
              Series
      F
              
              Series
      G
              
              CommonCommon
              
              Preferred
              
              Preferred
              
              Preferred
              
              Preferred
              
              SharesShares
              
              Shares
              
              Shares
              
              Shares
              
              SharesRonald
      E. Smith
              
              
              
              1,286
              
              71415473
      East FreewayChannelview,
      Texas 77530Mary
      L. Budrunas
              
              
              
              3,214
              
              1,78615473
      East FreewayChannelview,
      Texas 77530John
      Siedhoff
              
              3,333,333
              
              
              
              2,000
              
              1,500
              
              500
              
              25,000,00015473
      East FreewayChannelview,
      Texas 77530Stanley
      Stuckey, Jr.
              
              
              
              50015473
      East FreewayChannelview,
      Texas 77530Daniel
      L. “Bo” Ritz, Jr.
              
              3,333,333
              
              
              
              
              
              1,500
              
              500
              
              25,000,0002500
      City West Blvd., Suite 700Houston,
      Texas 77042
              
              
              
              
              
              500Robert
      E. Chamberlain, Jr.
              
              3,333,333
              
              
              
              
              
              
              
              
              
              25,000,000P.O.
      Box 890125Houston,
      Texas 77289-0125Reserved
      for new investors
              
              1,333,334
              
              
              
              
              
              
              
              
              
              10,000,000Total
              
              10,333,333
              
              5,000
              
              5,000
              
              3,000
              
              1,000
              
              85,000,000
 
  Exhibit A – Page 1
  EXHIBIT
B
  Material
Contracts of Deep Down
  Pursuant
to Section 3.10
  (1)  Lease
Agreement with JUMA, L.L.C. dated September 1, 2006
  (2)  Lease
Agreement with DJK, Inc. dated August 7, 2003
  (3)  Equipment
Lease with Amegy Bank National Association dated November 25, 2005
  (4)  Equipment
Lease with Amegy Bank National Association dated April 12, 2006
  Exhibit B – Page 1
  EXHIBIT
C
   Material
Contracts of MediQuip
  Pursuant
to Section 4.11
   Exhibit C – Page 1
  EXHIBIT
D
   Form
of Merger Agreement Among SubSea, SOS and Deep Down
 Pursuant
to Section 6.08
  PLAN
AND AGREEMENT OF MERGER
  among
  SUBSEA
ACQUISITION CORPORATION
 (a
Texas corporation)
  STRATEGIC
OFFSHORE SERVICES CORPORATION
 (a
Texas corporation
  and
  DEEP
DOWN, INC.
 (a
Delaware corporation)
  PLAN AND
AGREEMENT OF MERGER entered into on November 22, 2006 by SubSea Acquisition
Corporation, a Texas corporation (“SubSea”), and approved by resolution adopted
by its board of directors and majority shareholders on said date, entered into
on November 22, 2006, by Deep Down, Inc., a Delaware corporation (“Deep Down”),
and approved by resolution adopted by its board of directors and majority
shareholders on said date and entered into on November 22, 2006, by Strategic
Offshore Services Corporation, a Texas corporation (“SOS”), and approved by
resolution adopted by its board of directors and majority shareholders on said
date.
  WHEREAS,
SubSea is a business corporation of the State of Texas;
  WHEREAS,
SOS is a business corporation of the State of Texas and a wholly owned
subsidiary of SubSea;
  WHEREAS,
Deep Down is a business corporation of the State of Delaware and a wholly owned
subsidiary of SubSea;
  WHEREAS,
the Texas Business Corporation Act permits a merger of a business corporation of
the State of Texas with and into a business corporation of another
jurisdiction;
  WHEREAS,
SubSea, SOS and Deep Down and the respective boards of directors and majority
shareholders thereof declare it advisable and to the advantage, welfare, and
best interests of said corporations and their respective stockholders to merge
SubSea and SOS with and into Deep Down pursuant to the provisions of the Texas
Business Corporation Act and pursuant to the provisions of the Delaware General
Corporation Law upon the terms and conditions hereinafter set
forth;
  NOW,
THEREFORE, in consideration of the premises and of the mutual agreement of the
parties hereto, being thereunto duly entered into by SubSea and approved by a
resolution adopted by its board of directors and majority shareholders, being
thereunto duly entered into by SOS and approved by a resolution adopted by its
board of directors and majority shareholders, and being thereunto duly entered
into by Deep Down and approved by a resolution adopted by its board of directors
and majority shareholders, the Merger and the terms and conditions thereof and
the mode of carrying the same into effect, are hereby determined and agreed upon
as hereinafter in this Plan and Agreement of Merger set forth.
  1. SubSea
shall, pursuant to the provisions of the Texas Business Corporation Act and to
the provisions of the
Delaware General Corporation Law, be merged with and into its wholly owned
subsidiary, Deep Down, which shall be the surviving corporation from and after
the effective time of the merger and which is sometimes hereinafter referred to
as the “surviving corporation”, and which shall continue to exist as said
surviving corporation under its
  Exhibit D – Page 1
  present
name pursuant to the provisions of the Delaware General Corporation Law. The
separate existence of SubSea, which is sometimes hereinafter referred to as a
“terminating corporation”, shall cease at said effective time in accordance with
the provisions of the Texas Business Corporation Act.
  2.  As a
result of the merger of SubSea into its wholly owned subsidiary, Deep Down, SOS
will be a wholly
owned subsidiary of Deep Down and shall, pursuant to the provisions of the Texas
Business Corporation Act and to the provisions of the Delaware General
Corporation Law, be merged with and into its parent, Deep Down, which shall be
the surviving corporation from and after the effective time of the merger and
which is sometimes hereinafter referred to as the “surviving corporation”, and
which shall continue to exist as said surviving corporation under its present
name pursuant to the provisions of the Delaware General Corporation Law. The
separate existence of SOS, which is sometimes hereinafter referred to as a
“terminating corporation”, shall cease at said effective time in accordance with
the provisions of the Texas Business Corporation Act.
  3.  The
present Certificate of Incorporation of Deep Down will be the Certificate of
Incorporation of the surviving
corporation and will continue in full force and effect until changed, altered,
or amended as therein provided and in the manner prescribed by the provisions of
the Delaware General Corporation Law.
  4.  The
present by-laws of Deep Down will be the by-laws of said surviving corporation
and will continue
in full force and effect until changed, altered, or amended as therein provided
and in the manner prescribed by the provisions of the Delaware General
Corporation Law.
  5.  The
directors and officers in office of SubSea at the effective time of the merger
shall be the members of the
board of directors and the officers of the surviving corporation, all of whom
shall hold their directorships and offices until the election and qualification
of their respective successors or until their tenure is otherwise terminated in
accordance with the by-laws of the surviving corporation.
  6.  Each
issued and outstanding share of the common stock of SubSea, a terminating
corporation, shall, from and
after the effective time of the merger, be converted into three thousand three
hundred and thirty three and three hundred and thirty three one-thousandth
(3,333.333) shares of the common stock of the surviving corporation. Each issued
share of the preferred stock of the terminating corporations shall, from and
after the effective time of the merger, be converted into one-share of the
identical series of preferred stock of the surviving corporation. The surviving
corporation shall not issue any certificate or script representing a fractional
share of common stock but shall instead issue one full share for any fractional
interest arising from the Merger. Pursuant to the laws of the State of Delaware,
each share of the terminating corporations may be tendered to the surviving
corporation for exchange into shares of the surviving corporation at any time
after the effective time of the merger. Upon receipt of such shares of the
terminating corporations, the surviving corporation shall issue a certificate
for the whole shares of the surviving corporation that are issuable in exchange
for the shares of the terminating corporations.
  7.  Stockholders
of the terminating corporations shall have the same rights to notices,
distributions or voting
with respect to the surviving corporations until the certificates representing
shares of the terminating corporations are tendered to the surviving corporation
for exchange.
  8.  In the
event that this Plan and Agreement of Merger shall have been fully approved and
adopted upon behalf of
the terminating corporations in accordance with the provisions of the Texas
Business Corporation Act and upon behalf of the surviving corporation in
accordance with the provisions of the Delaware General Corporation Law, the said
corporations agree that they will cause to be executed and filed and recorded
any document or documents prescribed by the laws of the State of Texas and by
the laws of the State of Delaware, and that they will cause to be performed all
necessary acts within the State of Texas and the State of Delaware and elsewhere
to effectuate the merger herein provided for.
  9.  The board
of directors and the proper officers of the terminating corporations and of the
surviving corporation
are hereby authorized, empowered, and directed to do any and all acts and
things, and to make, execute, deliver, file, and record any and all instruments,
papers, and documents which shall be or become necessary, proper, or convenient
to carry out or put into effect any of the provisions of this Plan and Agreement
of Merger or of the merger herein provided for.
  Exhibit D – Page 2
  10. The
effective time of this Plan and Agreement of Merger, and the time at which the
merger herein agreed
shall become effective in the State of Texas and the State of Delaware, shall be
on the last to occur of:
  (a)  the
approval of this Plan and Agreement of Merger by the stockholders of the
terminating corporations
in accordance with the Texas Business Corporation Act; or
  (b)  the date
this Plan and Agreement of Merger, or a certificate of merger meeting the
requirements of the Delaware
General Corporation Law, is filed with the Secretary of State of the State of
Delaware; or
  (c)  the date
this Plan and Agreement of Merger, or a certificate of merger meeting the
requirements of the Texas
Revised Statutes, is filed with the Secretary of State of the State of Texas;
or
  (d)  the
closing time of the New York Stock Exchange on the 13th day of
December 2006.
  11.
Notwithstanding the full approval and adoption of this Plan and Agreement of
Merger, the said Plan and
Agreement of Merger may be terminated at any time prior to the filing thereof
with the Secretary of State of the State of Delaware.
  12.
Notwithstanding the full approval and adoption of this Plan and Agreement of
Merger, the said Plan and
Agreement of Merger may be amended at any time and from time to time prior to
the filing thereof with the Secretary of State of the State of Texas and at any
time and from time to time prior to the filing of any requisite merger documents
with the Secretary of State of the State of Delaware except that, without the
approval of the stockholders of SubSea and the stockholders of Deep Down, no
such amendment may (a) change the rate of exchange for any shares of SubSea or
the types or amounts of consideration that will be distributed to the holders of
the shares of stock of SubSea; (b) change any term of the Articles of
Incorporation of the surviving corporation; or (c) adversely affect any of the
rights of the stockholders of SubSea or Deep Down.
  IN
WITNESS WHEREOF, this Plan and Agreement of Merger is hereby executed upon
behalf of each of the constituent corporations parties thereto.
  Dated:
      November 22, 2006
                
                SUBSEA
      ACQUISITION CORPORATIONa
      Texas corporationBy:Robert
      E. Chamberlain, Jr., President and Chief Executive
  OfficerSTRATEGIC
      OFFSHORE SERVICES CORPORATIONa
      Texas corporationBy:Daniel
      L. Ritz, Jr., President and Chief Executive OfficerDEEP
      DOWN, INC.a
      Delaware corporationBy:Ronald
      E. Smith, President and Chief Executive
Officer
  Exhibit D – Page 3
  EXHIBIT
E
   Form
of Officer’s Certificate of MediQuip Concerning Accuracy
  Pursuant
to Section 7.03
  THE
UNDERSIGNED HEREBY CERTIFIES, individually and on behalf of MediQuip, Inc., a
Nevada corporation (“MediQuip”) pursuant to Section 7.03 of an agreement (the
“Agreement”), dated November 22, 2006 that I am the duly elected and qualified
president of MediQuip, and that all representations and warranties of MediQuip
and contained in the Agreement were accurate when made and, in addition, are
accurate as of the Closing (as defined in the Agreement) as though such
representations and warranties were made as of the Closing in exactly the same
language by MediQuip and regardless of knowledge or lack thereof on the part of
MediQuip and or changes beyond their or his control, and as of the Closing
MediQuip has performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by any of
them at or before such time by the Agreement.
  IN
WITNESS WHEREOF, I have hereunto set my hand, and the seal of MediQuip and this
___ day of November 2006.
    David
Francis
  Exhibit E – Page 1
  EXHIBIT
F
  Form
of Officer’s Certificate of Deep Down Concerning Accuracy
  Pursuant
to Section 7.02
  THE
UNDERSIGNED HEREBY CERTIFIES, individually and on behalf of Deep Down, Inc., a
Delaware corporation (“Deep Down”) pursuant to Section 7.02 of the Agreement and
Plan of Exchange (the “Agreement”), dated November 22, 2006 that I am the duly
elected and qualified CEO of Deep Down, and that all representations and
warranties of Deep Down and contained in the Agreement were accurate when made
and, in addition, are accurate as of the Closing (as defined in the Agreement)
as though such representations and warranties were made as of the Closing in
exactly the same language by Deep Down and regardless of knowledge or lack
thereof on the part of
Deep Down and or changes beyond their or his control, and as of the Closing Deep
Down, has performed and complied with all covenants and agreements and satisfied
all conditions required to be performed and complied with by any of them at or
before such time by the Agreement.
  IN
WITNESS WHEREOF, I have hereunto set my hand, and the seal of MediQuip and this
___ day of November 2006.
     Robert E.
Chamberlain, Jr.
  Exhibit F – Page 1
  EXHIBIT
G
   Form
of Investment Representation
  Pursuant
to Section 7.02(c)
 David
Francis,
 President
 MediQuip,
Inc.
 5 Tansey
Circle
 Mesquite,
Texas 75149
  Dear Mr.
Francis:
  In
connection with our proposed acquisition of shares of common stock (the
“Shares”) of MediQuip, Inc., a Nevada corporation (“Mediquip”), in accordance
with the terms of the Agreement and Plan of Reorganization dated November 22,
2006 among MediQuip and Deep Down, Inc., a Delaware corporation, we confirm
that:
  1.  We are
familiar with the business and financial condition, properties, operations and prospects
of Mediquip and, at a reasonable time prior to the execution of this letter, has
been afforded the opportunity to ask questions of and received satisfactory
answers from the chief executive officer or other persons acting on Mediquip’s
behalf, concerning the business and financial condition, properties, operations
and prospects of Mediquip and concerning the terms and conditions of the
offering of the Shares and have asked such questions as we desired to ask and
all such questions have been answered to our full satisfaction.
  2.  We
understand that, unless we notify Mediquip in writing to the contrary before acceptance
of this subscription, all the representations and warranties contained in this
letter will be deemed to have been reaffirmed and confirmed as of the date of
acceptance of this subscription, taking into account all information received by
us.
  3.  We
understand that acquisition of the Shares involves various risks, including, but
not limited
to, those disclosure to us and in this letter.
  4.  All
documents, records and books pertaining to our proposed investment in the Shares which we
have requested have been made available to us.
  5.  We
understand that the issuance of the Shares of Mediquip have not been registered under the
Securities Act of 1933, as amended (the “1933 Act”). The offering is being made
in reliance upon the exemption from registration provided by section 4(2) of the
1933 Act and the provisions of Regulation D Rule 506 promulgated under the 1933
Act (“Regulation D”).
  6.  We are
(i) an “accredited investor”(as defined in Rule 50l(a) of Regulation D under the Securities
Act), and (ii) we are acquiring the Shares for our own account, for investment
purposes and not with a view to, or for offer or sale in connection with any
distribution in violation of the Securities Act and we have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Shares, and we and any accounts for
which we are acting are each able to bear the economic risk of our or its
investment.
  Exhibit G – Page 1
  Upon
transfer the Shares would be registered in the name of the beneficial owner as
follows:
  Name       
____________________________
 Address: 
____________________________
   You and
the Transfer Agent are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
  Yours
very truly,
   Name: ______________________
 Number of
Shares: _____________
 Date:
______________________
  Exhibit G – Page 2
  EXHIBIT
H
   Exceptions
to Representations and Warranties of Deep Down
  Pursuant
to Section 3.05(a) and (b)
  [NONE]
  Exhibit H
– Page 1