FORM
OF CERTIFICATE OF DESIGNATIONS
  OF
  SERIES
D REDEEMABLE CONVERTIBLE PREFERRED STOCK
 OF
 MEDIQUIP
HOLDINGS, INC.
 I.
DESIGNATION AND AMOUNT
  The
designation (this "Certificate of Designation") of this series, which consists
of Five Thousand (5,000) shares of Convertible Preferred Stock of MediQuip
Holdings, Inc., a Nevada corporation (the "Company"), is the Series D Redeemable
Convertible Preferred Stock (the "Convertible Preferred Stock" or "Convertible
Preferred Shares"), and the face amount per share shall be equal to One Thousand
Dollars ($1,000), (the "Face Amount").
  II.
DIVIDENDS
  General. The Holders
of the Convertible Preferred Stock shall not be entitled to receive any
dividends.
  III.
CERTAIN DEFINITIONS
  For
purposes of this Certificate of Designation, the following terms shall have the
following meanings:
  A.  Affiliate
of any specified person means any other person directly or indirectly controlling
or controlled by or under Common control with such specified person. For
purposes of this definition, "control" when used with respect to any person
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities or otherwise;
and the term "controlling" and "controlled" having meanings correlative to the
foregoing.
  B.  "Business
Day" means any day other than a Saturday, Sunday or a day on which banks in
New York are permitted or required by law to be closed.
  C.  "Closing
Date" means the closing date as defined in the Agreement and Plan of Reorganization,
dated as of November 22, 2006, by and among the MediQuip Holdings, Inc, Deep
Down, Inc. and the majority shareholders of Deep Down, Inc.
  D.  "Common
Stock" means the common stock, $0,0001 par value, of the Company.
  E.  "Conversion
Price" means $0.1933 per share.
  F.  "Holders"
mean the initial Holders of the Convertible Preferred Stock and their transferees.
  G."Material
Adverse Change" means the occurrence of a material adverse change or
development in the business, properties, operations, financial condition,
results of operation or prospects of the Company.
  IV.
CONVERSION
  A. 
Conversion at the
Option of Holder. Beginning on the first Redemption Date (as
defined
  1
   in
Section VII D) after the Closing Date and continuing on each anniversary date
thereafter, a Holder may convert any or all of the shares of Convertible
Preferred Stock of the Holder into a number of fully paid and nonassessable
shares of Common Stock determined by dividing the aggregate Face Amount of those
shares of Convertible Preferred Shares being converted by the Conversion Price.
The Conversion Price is subject to adjustment as provided in Article
X.
  B. Mechanics of
Conversion. To convert the Convertible Preferred Shares, a Holder shall: (i) fax
(or otherwise deliver by other means resulting in notice) a copy of the fully
executed Notice of Conversion in the form of Exhibit A hereto to the Company and
(ii) within three (3) Business Days surrender or cause to be surrendered to the
Company (or satisfy the provisions of Section XIII(A), if applicable) the
certificates representing the Convertible Preferred Stock being converted (the
"Convertible Preferred Stock Certificates") accompanied by duly executed stock
powers and the original executed version of the Notice of Conversion. The date
of the Company's receipt of the Notice of Conversion described in clause (i)
shall be the "Conversion Date."
  C. Conversion Disputes.
In the caseof any dispute with respect to a conversion, the Company
shall promptly issue such number of shares of Common Stock as are not disputed
in accordance with the other provisions of this Article IV. If such dispute
involves the calculation of the Conversion Price, the Company shall submit the
disputed calculations to an independent accounting firm of national standing,
acceptable to Holder, via facsimile within two (2) Business Days of receipt of
the Notice of Conversion. The accounting firm shall audit the calculations and
notify the Company and the Holder of the results no later than two (2) Business
Days from the date it receives the disputed calculations. The accounting firm's
calculation shall be deemed conclusive, absent manifest error. The Company shall
then issue the appropriate number of shares of Common Stock in accordance with
this Article IV.
  D. Timing of Conversion.
No later than the third Business Day following the Conversion Date (the
"Delivery Period"), provided that the Company has received prior to such date
the Convertible Preferred Stock Certificates (or the Holder has satisfied the
provisions of Section XIII(A), if applicable), the Company shall deliver to the
Holder (or at its direction) (x) that number of shares of Common Stock issuable
upon conversion of the number of Convertible Preferred Shares being converted
and (y) a certificate
representing the number of Convertible Preferred Shares not being converted, if
any. The person or persons entitled to receive shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record Holder of
such shares at the close of business on the Conversion Date and such shares
shall be issued at such time, unless the Notice of Conversion is revoked as
provided in Section IV(E). The Delivery Period shall be extended until the
Business Day following the date of delivery to the Company
of the Convertible Preferred Stock Certificates to be converted or satisfaction
of the provisions of Section XIII(A), if applicable.
  E. Revocation of Notice of
Conversion. In addition to any other remedies which may be available
to the Holder, in the event the Company fails for any reason to effect delivery
to the Holder of certificates representing the shares of Common Stock receivable
upon conversion of the Convertible Preferred Shares by the Business Day
following the expiration of the Delivery Period, the Holder may revoke the
Notice of Conversion by delivering a notice to such effect to the Company. Upon
receipt by the Company of such a revocation of notice, the Company shall
immediately return the subject Convertible Preferred Stock certificates and
other conversion documents, if any, delivered by Holder, to the Holder,and the Company and the Holder shall each be restored to their respective
positions held immediately prior to delivery of the Notice of Conversion;
provided however, that the Company shall remain liable for payment of the
amounts determined pursuant to Section VI hereof for each day falling between
the trading day following the Delivery Period and the date of the revocation
notice is received by the Company, and shall also remain liable for any damages
suffered by Holder.
  2
 
   F. Stamp, Documentary and Other
Similar Taxes.The Company shall pay all
stamp, documentary,
issuance and other similar taxes which may be imposed with respect to the
issuance and delivery of the shares of Common Stock pursuant to conversion of
the Convertible Preferred Stock; provided that the Company will not be obligated
to pay stamp, transfer or other taxes resulting from the issuance of Common
Stock to any person other than the registered Holder of the Convertible
Preferred Stock.
  G. No
Fractional Shares. No fractional shares of Common Stock are to be issued
upon the conversion
of Convertible Preferred Stock, but the Company shall pay a cash adjustment in
respect of any fractional share which would otherwise he issuable in an amount
equal to the same fraction of the Closing Bid Price on the Conversion Date of a
share of Common Stock; provided that in the event that sufficient funds are not
legally available for the payment of such cash adjustment any fractional shares
of Common Stock shall be rounded up to the next whole number.
  H. 
Concerning
the Shares. The shares of Common Stock issuable upon conversion of the Convertible
Preferred Stock may not be sold or transferred unless (1) such shares are sold
pursuant to an effective registration statement under the Securities Act of 1933
(the "Act") or (ii) the Company or its transfer agent shall have been furnished
with an opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv)
such shares arc transferred to an Affiliate of the Company who agrees to sell or
otherwise transfer the shares only in accordance with this Section IV(11) and
who is an Accredited Investor (as defined in Section 5.01 of Regulation D under
the Act). Subject to the removal provisions set forth below, until such time as
the shares of Common Stock issuable upon conversion of the Preferred Stock have
been registered under the Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date
that can then be immediately sold, each certificate for shares of Common Stock
issuable upon conversion of the Convertible Preferred Stock that has not been so
included in an effective registration statement or that has not been sold
pursuant to an effective registration statement or an exemption that permits
removal of the legend, shall bear a legend substantially in the following form,
as appropriate:
  "THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER ME
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 UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S
UNDER SAID ACT."
  The
legend set forth above shall beremoved and the Company shall issue to the Holder a new certificate
therefor free of any transfer legend if (i) the Company or its transfer agent
shall have received an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that
a public sale or transfer of such Common Stock may be made without registration
under the Act and the shares are so sold or transferred, (ii) such Holder
provides the Company or its transfer agent with reasonable assurances that the
Common Stock issuable upon conversion of the Convertible Preferred Stock (to the
extent such securities are deemed to have been acquired on the same date) can be
sold pursuant to Rule 144 or (iii) the Common Stock issuable upon conversion of
the Convertible Preferred Stock is registered for sale by the Holder under an
effective registration statement filed under the Act or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of aparticular date that can then be immediately sold. Nothing in this
Certificate of Designation shall affect in any way the Holder's obligations to
comply with applicable prospectus delivery requirements upon the resale of the
securities referred to herein.
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  V.RESERVATION
OF AUTHORIZED SHARES OF COMMON STOCK
  Reservation of Common
Stock. Subject to the provisions of this Article V, the Company shall at
all times reserve and keep available out of its authorized but unissued shares
of Common Stock, solely for the purpose of effecting the conversion of the
Convertible Preferred Stock a sufficient number of shares of Common Stock to
provide for the conversion of all outstanding Convertible Preferred Shares upon
issuance of shares of Common Stock (the "Reserved Amount"). If the Reserved
Amount for any three (3) consecutive trading days (the last of such three (3)
trading days being the "Authorization Trigger Date") is less than one hundred
percent (100%) of the number of shares of Common Stock issuable on such trading
days upon conversion of the outstanding Convertible Preferred Stock (without
giving effect to any limitation on conversion or exercise thereof) then the
Company shall immediately notify the Holders of such occurrence and shall
immediately take all necessary action (including stockholder approval to
authorize the issuance of additional shares of Common Stock) to increase the
Reserved Amount to one hundred percent (100%) of the number of shares of Common
Stock issuable upon conversion of the outstanding Convertible Preferred Stock
(without giving effect to any limitation on conversion or exercise
thereof).
  VI.  FAILURETO CONVERT
  Conversion Defaults.
If, at any time, (x) the Conversion Date has occurred and the Company fails for
any reason to deliver, on or prior to the fifth Business Day following the
expiration of the Delivery Period for such conversion (said period of time being
the "Extended Delivery Period"), such number of shares of Common Stock to which
such Holder is entitled upon such conversion, or (y) the Company provides notice
(including by way of public announcement) to any Holder at any time of its
intention not to issue shares of Common Stock upon exercise by any Holder of its
conversion rights in accordance with the terms of this Certificate of
Designation (each of (x) and (y) being a "Conversion Default"), then the Company
shall pay to the affected Holder, in the case of a Conversion Default described
in clause (x) above, and to all Holders, in the case of a Conversion Default
described in clause (y) above, an amount equal to 1% of the Face Amount of the
Convertible Preferred Stock with respect to which the Conversion Default exists
(which amount shall be deemed to be the aggregate Face Amount of all outstanding
Convertible Preferred Stock in the case of a Conversion Default described in
clause (y) above) for each five days thereafter until the Cure Date. "Cure Date"
means (i) with respect to a Conversion Default described in clause (x) of its
definition, the date the Company effects the conversion of the portion of the
Convertible Preferred Stock submitted for conversion and (ii) with respect to a
Conversion Default described in clause (y) of its definition, the date the
Company undertakes in writing to issue Common Stock in satisfaction of all
conversions of Convertible Preferred Stock in accordance with the terms of this
Certificate of Designation (provided that the Company thereafter so performs
such obligations). The Company shall promptly provide each Holder with notice of
the occurrence of a Conversion Default with respect to any of the other
Holders.
  VII.
REDEMPTION
  A. 
Redemption
Fund. So long as any shares of Convertible Preferred Stock are
outstanding, within
sixty (60) calendar days following the end of each fiscal year, commencing with
the fiscal year ended December 31, 2007, the Company shall deliver to each
Holder an unaudited summary of its earnings and an unaudited balance sheet for
the year then ended, the related statements of income and retained earnings, and
the related statements of changes of financial position or cash flows, as the
case may be, for the fiscal years then ended ("the Financial Statements"). In
each case the Financial Statements will be accompanied by a certificate of the
Chief Financial Officer of the Company to the effect that all such Financial
Statements: (i) were prepared in accordance with the books and records of the
Company; (ii) fairly present the Company's financial condition and the results
of its operations as of the relevant dates thereof and for the periods covered
thereby except as otherwise indicated in such statements and subject to year end
audit adjustments; (iii) contain and reflect all necessary adjustments and
accruals for a fair presentation of the Company's financial condition and the
results of its operations for the periods covered by said Financial Statements;
and(iv) with respect to contracts and commitments for the sale ofgoods or the
provision of services by the Company, contain and reflect adequate reserves for
all reasonably
  4
  anticipated
material losses and costs and expenses in excess of expected receipts. Such
certificate shall also include a reserve equal to fifteen and six hundred
twenty-five one thousands per cent (15.625%) of net income for redemption of the
Convertible Preferred Stock (the "Redemption Fund") and state that, except as
noted, from the end of the last fiscal year through the end of the most recent
fiscal year there has been no Material Adverse Change in the condition
(financial or otherwise), assets, liabilities, business, operations or prospects
of the Company.
  B. Application of Redemption
Fund. The Redemption Fund shall be applied no later than 120 days
from the end of each fiscal year commencing with the fiscal year ending December
31, 2007 ratably to the redemption of as many outstanding shares of Convertible
Preferred Stock designated to this series as can be redeemed through the
application of funds therefrom without preference or priority as to any shares
of Convertible Preferred Stock of any Holders thereof. In the event any such
Holder declines redemption or fails to submit shares of Convertible Preferred
Stock for redemption on or before the Redemption Date, the amount of the
Redemption Fund allocated to the Declining Holder or Holders shall be
reallocated ratably to the remaining Holders who have elected to
redeem.
  C. Audited Financial
Statements. As soon as reasonably possible after the end of each fiscal year,
commencing with the fiscal year ended December 31, 2006, but no later than 120
days after the fiscal year end, the Company shall deliver to each Holder copies
of the Financial Statements that include an audit report of the Company's
independent certified public accountants to the effect that: such Financial
Statements (i) present fairly, in accordance with generally accepted accounting
principles consistently applied, the financial position of the Company as of the
fiscal year end, (ii) make full and adequate provision for all reserves,
liabilities and obligations (fixed or contingent) of the Company as of such
time, to the extent such liabilities, alone or in the aggregate, are required to
be reflected or reserved against in accordance with generally accepted
accounting principles, consistently applied; and (iii) establish the definitive
amount of the Redemption Fund as of such time.
  D. Demand for
Redemption. The Financial Statements and audit report shall be accompanied
by a form of written demand to be used by such Holder to exercise his right of
redemption (a "Demand Form") and a notice which shall disclose the right of such
Holder to require the Company to redeem such Convertible Preferred Stock
pursuant to this Section VII, and shall state the redemption date, the
redemption price, the place or places of payment, that payment will be made upon
presentation and surrender of certificates representing the shares of
Convertible Preferred Stock, the date of which such Holder must notify the
Company if it elects to require the Company to make such redemption, the then-
effective conversion rate pursuant to Section IV, and that the right of Holders
to convert shall terminate at the close of business on the fifth business day
prior to the redemption date. Each record Holder of Convertible Preferred Stock
that elects to require the Company to redeem on the redemption date all of the
shares of Convertible Preferred Stock that such Holder owns shall deliver to the
Company not later than the redemption date a completed Demand Form relating to
the Convertible Preferred Stack to be redeemed. The term "Redemption Date,"
shall mean the close of business on the 120th
day after the Company's fiscal year end.
  E. 
Notices. Any
notice by the Company which is mailed as herein provided shall be conclusively
presumed to have beenduly given whether or not the Holder of Convertible Preferred Stock
receives such notice; and failure to give such notice by mail, or any defect in
such notice, to the Holders of any shares shall not affect the validity of the
proceedings for the redemption of any other shares of Convertible Preferred
Stock. An election by a Holder of Convertible Preferred Stock to have the
Company redeem such stock pursuant to this Section Vii shall become irrevocable
on the relevant Redemption Date as stated in any notice delivered by the
Company, each Holder of the shares called for redemption shall surrender the
certificates evidencing such shares to the Company at the place designated in
such notice and shall thereupon be entitled to receive payment of the relevant
redemption price in accordance with the terms of this Section VII. If less than
all the shares represented by any such surrendered certificates are redeemed, a
new certificate shall be issued representing the unredeemed shares. If, on the
date fixed for redemption under any provision of this Section VII, funds
necessary for the redemption shall be available therefor and shall have been
reserved on the Financial Statement as required by this Section VII, then in the
case of any shares of Convertible Preferred Stock covered by a Demand Form,
after the close of business
  5
  on the
Redemption Date, notwithstanding that the certificates evidencing any shares
which the Holders thereof had elected to have redeemed shall not have been
surrendered, the Holders thereof shall cease to be stockholders, and all rights
whatsoever with respect to such shares (except the right of the Holders to
receive the relevant Redemption Price without interest upon surrender of their
certificates therefor) shall
 terminate.
  VIII.
RANK; PARTICIPATION
  A. Rank.
All shares of the Convertible Preferred Stock shall rank (i) prior to the Common
Stock; (ii) prior to any class or series of capital stock of the Company
hereafter created (unless, with the consent of a majority of the Holders
obtained in accordance with Article XII hereof, such hereaftercreated class or series of capital stock specifically, by its terms,
ranks senior to or pad passu with the Convertible Preferred Stock)
(collectively, with the Common Stock, "Junior Securities"); (iii) pari passu
with any class or series of capital stock of the Company hereafter created (with
the consent of a majority of the Holders obtained in accordance with Article XII
hereof) specifically ranking, by its terms, on parity with the Convertible
Preferred Stock (the "Pari Passu Securities"); (iv) junior to any class or
series of capital stock of the Company hereafter created (with the consent of a
majority of the Holders obtained in accordance with Article XII hereof)
specifically ranking, by its terms, senior to the Convertible Preferred Stock
(the "Senior Securities"), (v) pari passu with the Series F Redeemable
Convertible Preferred Stock of the Company, and (vi) junior to the Series E
Exchangeable Preferred Stock and the Series G Exchangeable Preferred Stock, in
each case as to distribution of assets upon liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary.
  B. Participation.
Subject to the rights of the Holders (if any) of Pari Passu Securities and
Senior Securities, the Holders shall, as such Holders, be entitled to such
dividends paid and distributions made to the Holders of Common Stock to the same
extent as if such Holders had converted their shares of Convertible Preferred
Stock into Common Stock (without regard to any limitations on conversion herein
or elsewhere contained) and had been issued such Common Stock on the day before
the record date for said dividend or distribution. Payments under the preceding
sentence shall be made concurrently with the dividend or distribution to the
holders of Common Stock.
  IX.
LIQUIDATION PREFERENCE
  A. Liquidation of the
Company. If the Company shall commence a voluntary case under the U.S.
Federal bankruptcy laws or any other applicable bankruptcy, insolvency or
similar law, or consent to the entry of an order for relief in an involuntary
case under any law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or make an assignment for the benefit
of its creditors, or admit in writing its inability to pay its debts generally
as they become due, or if a decree or order for relief in respect of the Company
shall be entered by a court having jurisdiction in the premises in an
involuntary case under the U.S. Federal bankruptcy laws or any other applicable
bankruptcy, insolvency or similar law resulting in the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequesirator (or other
similar official) of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any such decree or
order shall be unstaycd and in effect for a period of sixty (60) consecutive
days and, on account of any such event, the Company shall liquidate, dissolve or
wind up, or if the Company shall otherwise liquidate, dissolve or wind up (a
"Liquidation Event"), no distribution shall be made to the Holders of any shares
of capital stock of the Company (other than Senior Securities and, together with
the Holders of Convertible Preferred Stock the Pad Passu Securities) upon
liquidation, dissolution or winding up unless prior thereto the Holders shalt
have received the Liquidation Preference (as herein defined) with respect to
each share. lf, upon the occurrence of a Liquidation Event, the assets and funds
available for distribution among the Holders and holders of Pan Passu Securities
shall be insufficient to permit the payment to such Holders of the preferential
amounts payable thereon, then the entire assets and funds of the Company legally
available for distribution to the Convertible Preferred Stock and the Pari Passu
Securities shall be distributed ratably among such shares in proportion to the
ratio that the Liquidation Preference payable on each such share bears to the
aggregate Liquidation Preference payable on all such shares.
  6
  B. Certain Acts Not a
Liquidation. The purchase or redemption by the Company of stock of any
class, in any manner permitted by law, shall not, for the purposes hereof, be
regarded as a liquidation, dissolution or winding up of the Company. Neither the
consolidation nor merger of the Company with or into any other entity nor the
sale or transfer by the Company of less than substantially all of its assets
shall, for the purposes hereof, be deemed to be a liquidation, dissolution or
winding up of the Company.
  C. Definition of Liquidation
Preference. The "Liquidation Preference" with respect to a share of
Convertible Preferred Stock means an amount equal to the Face Amount thereof
plus any other amounts that may bedue from the Company with respect thereto pursuant to this Certificate
ofDesignation through the date of final distribution. The Liquidation
Preference with respect to any Pari Passu Securities shall be as set forth in
the Certificate of Designation filed in respect thereof.
  X.
ADJUSTMENTS TO THE CONVERSION PRICE; CERTAIN PROTECTIONS
  The
Conversion Price shall, in order toaccomplish the results
contemplated in this Certificate of Designation, be subject to adjustment from
time to time as follows:
  A. Stock Splits, Stock
Dividends, Etc. If at any time on or after the Closing Date, the number
of outstanding shares of Common Stock is increased by a stock split, stock
dividend, combination, reclassification or other similar event, the number of
shares of Common Stock issuable upon conversion of the Convertible Preferred
Stock shall be proportionately increased, or if the number of outstanding shares
of Common Stock is decreased by a reverse stock split, combination or
reclassification of shares, or other similar event, the number of shares of
Common Stock issuable upon conversion of the Convertible Preferred Stock shall
be proportionately reduced. In such event, the Company shall notify the
Company's transfer agent of such change on or before the effective date
thereof.
  B. Certain Public
Announcements. in the event that (i) the Company makes a public
announcement that it intends to consolidate or merge with any other entity
(other than a merger in which the Company is the surviving or continuing entity
and its capital stock is unchanged and there is no distribution thereof) or to
sell or transfer all or substantially all of the assets of the Company or (ii)
any person, group or entity (including the Company) publicly announces a tender
offer in connection with which such person, group or entity seeks to purchase
50% or more of the Common Stock (the date of the announcement referred to in
clause (i) or (ii) of this paragraph is hereinafter referred to as the
"Announcement Date"), then the Conversion Price shall, effective upon the
Announcement Date and continuing through the consummation of the proposed tender
offer or transaction or the Abandonment Date (as defined below), be equal to the
lesser of (x) the Conversion Price calculated as provided in Article IV and the
(y) the Conversion Price which would have been applicable for Conversion
occurring on the Announcement Date. From and after the Abandonment Date, as the
case may be, the Conversion Price shall be determined as set forth in Article
IV. The "Abandonment Date" means with respect to any proposed transaction or
tender offer for which a public announcement as contemplated by this paragraph
has been made, the date which is seven (7) trading days after the date upon
which the Company (in the case of clause (i) above) or the person, group or
entity (in the case of clause (ii) above) publicly announces the termination or
abandonment of the proposed transaction or tender offer which causes this
paragraph to become operative.
  C. Major Transactions.
If the Company shall consolidate with or merge into any corporation or
reclassify its outstanding shares of Common Stock (other than by way of
subdivision or reduction of such shares) (each a "Major Transaction"), then each
Holder shall thereafter be entitled to receive consideration, in exchange for
each share of Convertible Preferred Stock held by it, equal to the number of
shares of stock or securities or property of the Company, or of the entity
resulting from such Major Transaction (the "Major Transaction Consideration"),
to which a Holder of the number of shares of Common Stock delivered upon
conversion of such shares of Convertible Preferred Stock would have been
entitled upon such Major Transaction had the Holder's Convertible Preferred
Shares been converted (without regard to any limitations on conversion herein
contained) on the trading date immediately preceding the public announcement of
the transaction resulting in such Major Transaction and had such Common Stock
been
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  issued
and outstanding and had such Holder been the holder of record of such Common
Stock at the time of such Major Transaction, and the Company shall make lawful
provision therefore as a part of such consolidation, merger or reclassification.
No sooner than ten (10) days nor later than five (5) days prior to the
consummation of the Major Transaction, but not prior to the public announcement
of such Major Transaction, the Company shall deliver written notice ("Notice of
Major Transaction") to each Holder, which Notice of Major Transaction shall be
deemed to have been delivered one (1) Business Day after the Company's sending
such notice by telecopy (provided that the Company sends a confirming copy of
such notice on the same day by overnight courier). Such Notice of Major
Transaction shall indicate the amount and type of the Major Transaction
Consideration which such Holder would receive under clause (i) of this Section
X(C). If the Major Transaction Consideration does not consist entirely of United
States dollars, such Holder may elect to receive United States dollars in an
amount equal to the value, determined by a reputable accounting firm selected by
the Company that is reasonably acceptable to a majority of the Holders of the
Major Transaction Consideration in lieu of the Major Transaction Consideration
which does not consist entirely of United States Dollars, by delivering notice
of such election to the Company within five (5) days of the Holder's receipt of
the Notice of Major Transaction.
  D. Issuance of Other
Convertible Securities. lf, at any time after the Closing Date the
Company shall issue any securities which are convertible into or exchangeable
for Common Stock ("Convertible Securities") either (i) at a conversion or
exchange rate based on a discount from the market price of the Common Stock at
the
timeof conversion or exercise or (ii) with a fixed conversion or
exercise price less than the Conversion Price, then, at the Holder's option: (x)
in the case of clause (i), the Conversion Price in respect of any conversion of
Convertible Preferred Stock after such issuance shall be calculated utilizing
the greatest discount applicable to any such Convertible Securities, to the
extent such calculation would result in a lower Conversion Price; and (y) in the
case of clause (ii), the Conversion Price will be reduced to such lesser
conversion or exercise price, to the extent that this would result in a lower
Conversion Price.
  E. Adjustment Due to
Distribution. If at any time after the Closing Date, the Company shall
declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a partial liquidating dividend, by way of return
of capital or otherwise (including any dividend or distribution to the Company's
stockholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (i.e. a spin-off) (a "Distribution"), then the Conversion Price
shall be equitably adjusted to take account of such distribution.
  F. Purchase Rights. If
at any time after the Closing Date, the Company issues any Convertible
Securities or rights to purchase stock, warrants, securities or other property
(the "Purchase Rights") pro rata to the record holders of any class of Common
Stock, then the Holders will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which such Holder could
have acquired if such Holder had held the number of shares of Common Stock
acquirable upon complete conversion of the Convertible Preferred Stock (without
regard to any limitations on conversion or exercise herein or elsewhere
contained) immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.
  G. Notice of
Adjustments. Upon the occurrence of each adjustment or readjustment of
the Conversion Price pursuant to this Article X, the Company, atits expense, shall promptly compute such adjustment or readjustment and
prepare and furnish to each Holder a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon the written request at any time
of any Holder, furnish to such Holder a like certificate setting forth (i) such
adjustment or readjustment, (ii) the Conversion Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon conversion of a
share of Convertible Preferred Stock.
  XI.
VOTING RIGHTS
  Except as
otherwise required by law, each share of outstanding Convertible Preferred Stock
shall entitle the Holder thereof to vote on each matter submitted to a vote of
the stockholders of the Company
  8
  and tohave the number
of votes equal to the number (including any fraction) of shares of Common Stock
into which such share of Convertible Preferred Stock is then convertible
pursuant to the provisions hereof at the record date for the determination of
shareholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of
stockholders becomes effective. Except as otherwise required by law or by this
Certificate of Designation, the holders of shares of Common Stock and
Convertible Preferred Stock shall vote together and not as separate
classes.
  XII.PROTECTION
PROVISIONS
  So long
as any Convertible Preferred Shares are outstanding, the Company shall not,
without first obtaining theapproval of a
majority of the Holders: (a) alter or change the rights, preferences or
privileges of the Convertible Preferred Stock; (b) alter or change the rights,
preferences or privileges of any capital stock of the Company so as to affect
adversely the Convertible Preferred Stock; (c) create any Senior Securities; (d)
create any Pan Passu Securities; (e) increase the authorized number of shares of
Convertible Preferred Stock; (1) redeem or declare or pay any cash dividend or
distribution on any Junior Securities, or (g) do any act or thing not authorized
or contemplated by this Certificate of Designation which would result in any
taxation with respect to the Convertible Preferred Stock under Section 305 of
the Internal Revenue Code of 1986, as amended, or any comparable provision of
the Internal Revenue Code as hereafter from time to time amended, (or otherwise
suffer to exist any such taxation as a result thereof).
  XIII.MISCELLANEOUS
  A. Lost
or Stolen Certificates. Upon receipt by the Company of (i) evidence of
the loss, theft, destruction or mutilation of any Convertible Preferred Stock
Certificate(s) and (ii) (y) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to the Company, or (z) in the case of
mutilation, upon surrender and cancellation of the Convertible Preferred Stock
Certificate(s), the Company shall execute and deliver new Convertible Preferred
Stock Certificate(s) of like tenor and date. However, the Company shall not be
obligated to reissue such lost, stolen, destroyed or mutilated Convertible
Preferred Stock Certificate(s) if the Holder contemporaneously requests the
Company to convert such Convertible Preferred Stock.
  B. Payment
of Cash; Defaults. Whenever the Company is required to make any cash
payment to aHolder under this Certificate of Designation (as a Conversion Default
Payment, Redemption Amount or otherwise), such cash payment shall be made to the
Holder by the method (by certified or cashier's check or wire transfer of
immediately available funds) elected by such Holder. If such payment is not
delivered when due such Holder shall thereafter be entitled to interest on the
unpaid amount until such amount is paid in full to the Holder at a per annum
rate equal to the lower of (x) twelve percent (12%) and (y) the highest interest
rate permitted by applicable law.
  C.Remedies,
Characterizajons, Other Obligations. Breaches and Injunctive Relief. The
remedies providedin this Certificate of Designation shall be cumulative and in addition to
all other remedies available under this Certificate of Designation, at law or in
equity (including a decree of specific performance and/or other injunctive
relief), no remedy contained herein shall be deemed a waiver of compliance with
the provisions giving rise to such remedy and nothing herein shall limit a
Holder's right to pursue actual damages for any failure by the Company to comply
with the terms of this Certificate of Designation (including, without
limitation, damages incurred to effect "cover" purchase of shares of Common
Stock anticipated to be received upon a conversion hereunder and not received in
accordance with the terms hereof). Company covenants to each Holder that there
shall be no characterizationconcerningthis instrument other than as expressly provided herein; provided,
however, that the Company shall be entitled to prepare summaries of this
Certificate of Designation for purposes of complying with its disclosure
obligations and in connection with bona fide disputes as to the operations of
the provisions of this Certificate of Designation. Amounts set forth or provided
for herein with respect to payments, conversion and the like (and the
computation thereof) shall be the amounts to be received by the Holder hereof
and shall not, except as expressly provided herein, be subject to any other
obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holders of
Convertible Preferred Stock and that the remedy at
  9
   law for
any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holders shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or
other security being required.
  D. Specific Shall Not Limit
General- References to "Convertible Preferred Stock." No specific
provision contained in this Certificate of Designation shall limit or modify any
more general provision contained herein. This Certificate of Designation shall
be deemed to be jointly drafted by the Company and the Ilolders and shall not be
construed against any person as the drafter. Any reference herein to Convertible
Preferred Shares, Convertible Preferred Stock or an unspecified amount of
Convertible Preferred
Shares or Convertible Preferred Stock shall be deemed to include, without
limitation, all shares of Convertible Preferred Stock issued or then issuable as
a dividend or otherwise in satisfaction of any obligation of the Company with
respect to any Convertible Preferred Stock issued on the date
hereof.
  F. Failure or indulgencv Not
Waiver. No failure or delay on the part of a Holder in the exercise of
any power, right or privilege hereunder shall operate as a waiver thereof, not
shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, poWer or
privilege.
  10
  EXHIBIT
A
 NOTICE
OF CONVERSION
 (to be
signed only on conversion of Preferred Stock)
  TO:
SUBSEA ACQUISITION CORPORATION
  The
undersigned, the holder of the within shares of Convertible Preferred Stock,
hereby irrevocably elects to convert the shares of Convertible Preferred Stock,
and to purchase thereunder, _________ shares of
Common Stock of SubSea Acquisition Corporation and herewith requests that the certificates
for such shares be issued in the name of, and delivered to ___________________ whose
address is ______________________.
  The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon conversion of the within shares of Convertible
Preferred Stock shall be made pursuant to registration of the Common Stock under
the Securities Act of 1933, as amended (the "Securities Act") or pursuant to an
exemption from registration under the Securities Act.
  Dated: ______________________
  
 (Signature
must conform to name of holder as specified on the face of the Convertible
Preferred Stock)