deepdown_10q-ex1002.htm


    
       

      
        	 TD	
                10.2

              


      

       

    

    EXHIBIT
B

     

    GUARANTY

    (Corporate)

     

    THIS
GUARANTY (as amended, supplemented, or restated, this “Guaranty”)
is executed as of November 11, 2008, by ELECTROWAVE USA, INC., a Nevada
corporation, FLOTATION TECHNOLOGIES, INC., a Maine corporation, MAKO
TECHNOLOGIES, LLC, a Nevada limited liability company, and DEEP DOWN INC., a
Delaware corporation (collectively, the “Guarantors”)
for the benefit of WHITNEY NATIONAL BANK, a national banking association (“Lender”).

     

    RECITALS

    A.           DEEP
DOWN, INC., a Nevada corporation (“Borrower”),
as borrower, and Lender, as lender, have entered into that certain Credit
Agreement dated of even date herewith (as amended, supplemented or restated, the
“Credit
Agreement”), together with certain other Loan Documents.

     

    B.           Each
Guarantor is a direct wholly-owned subsidiary of Borrower and has agreed to
enter into this Guaranty so that Borrower can receive the benefits of the
Guaranteed Obligation (as defined below).

     

    C.           In
each Guarantor’s judgment, the value of the consideration received and to be
received by it under the Loan Documents is reasonably worth at least as much as
its liability and obligation under this Guaranty, and such liability and
obligation may reasonably be expected to benefit Guarantors directly or
indirectly.

     

    D.           It
is expressly understood among Borrower, Guarantors, and Lender that the
execution and delivery of this Guaranty is a condition precedent to Lender’s
obligations to extend credit under the Credit Agreement.

     

    NOW,
THEREFORE, for valuable consideration, the receipt and adequacy of which are
hereby acknowledged, each Guarantor guarantees to Lender the prompt payment at
maturity (by acceleration or otherwise), and at all times thereafter, of the
Guaranteed Obligation, as follows:

     

    1.   Definitions.  Each
capitalized term used but not defined in this Guaranty shall have the meaning
given that term in the Credit Agreement.  The following terms shall
have the following meanings as used in this Guaranty:

     

    “Borrower”
has the meaning given in Recital A and includes, without limitation, all of
Borrower’s successors and assigns, Borrower as a debtor-in-possession, and any
receiver, trustee, liquidator, conservator, custodian, or similar party
hereafter appointed for Borrower or for all or any portion of Borrower’s assets
pursuant to any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar Debtor
Relief Law from time to time in effect.

     

    “Company
Debt” means all obligations of Borrower to any Guarantor, whether direct,
indirect, fixed, contingent, liquidated, unliquidated, joint, several, or joint
and several, now existing or arising after the date of this Guaranty, due or to
become due to any Guarantor, or held or to be held by any Guarantor, whether
created directly or acquired by assignment or otherwise, and whether or not
evidenced by written instrument including the obligation of Borrower to any
Guarantor as a subrogee of the Lender or resulting from any Guarantor’s
performance under this Guaranty.

     

    
      
        
        

      

      
        Exhibit B
- Page 1

        
          

        

      

      
        
        

      

    

     

    “Guaranteed
Obligation” means any and all existing and future indebtedness and
liabilities of every kind, nature, and character, direct or indirect, absolute
or contingent, liquidated or unliquidated, voluntary or involuntary, of Borrower
to the Lender arising under the Credit Agreement and the other Loan Documents,
including, the Obligation as defined in the Credit Agreement and any premium and
all interest (including, without limitation, interest accruing before and after
maturity, before and after a Default, and during the pendency of any bankruptcy,
receivership, insolvency or other similar proceeding under any applicable Debtor
Relief Law (regardless whether such interest is allowed in such proceeding)),
and any and all costs, attorney and paralegal fees and expenses reasonably
incurred by Lender (a) in connection with any waiver, amendment, consent or
default under the Loan Documents, or (b) to enforce Borrower’s, any Guarantor’s,
or any other obligor’s payment of any portion of the Guaranteed
Obligation.

     

    “Paid in
Full” or “Payment in
Full” means
that the Guaranteed Obligation is completely paid (including principal,
interest, fees and expenses), and all commitments to lend or issue letters of
credit under the Credit Agreement have terminated.

     

    2.    Guaranty.  Each
Guarantor hereby guarantees the prompt payment and performance of the Guaranteed
Obligation when due (at the stated maturity, upon acceleration, or otherwise)
and at all times thereafter.  This is an absolute, unconditional,
irrevocable and continuing guaranty of payment (and not of collection) of the
Guaranteed Obligation which will remain in effect until the Guaranteed
Obligation is Paid in Full.  The circumstance that at any time or from
time to time all or any portion of the Guaranteed Obligation may be paid in full
shall not affect the Guarantors’ obligation with respect to the Guaranteed
Obligation thereafter incurred.  No Guarantor may rescind or revoke
its obligations to Lender under this Guaranty with respect to the Guaranteed
Obligation.  At the Lender’s option, all payments under this Guaranty
shall be made to the office of Lender and in U.S. Dollars.

     

    3.    Default by
Borrower.  If a Default exists, Guarantors shall pay the amount
of the Guaranteed Obligation then due and payable to Lender on demand and
without (a) further notice of dishonor to any Guarantor, (b) any prior notice to
any Guarantor of the acceptance by Lender of this Guaranty, (c) any notice
having been given to any Guarantor prior to such demand of the creating or
incurring of such Debt, or (d) notice of intent to accelerate or notice of
acceleration to any Guarantor or Borrower (except as otherwise required under
the Credit Agreement).  To enforce such payment by Guarantors it shall
not be necessary for Lender to first or contemporaneously institute suit or
exhaust remedies against Borrower or others liable on such Debt, or to enforce
rights against any security or collateral ever given to secure such
Debt.

     

    4.    Amount of Guaranty and
Consideration.  The Lender’s books and records showing the
amount of the Guaranteed Obligation shall be admissible in evidence in any
action or proceeding, and shall be binding upon the Guarantors and conclusive
(absent manifest error) for the purpose of establishing the amount of the
Guaranteed Obligation.  In consummating the transactions contemplated
by the Credit Agreement, Guarantors do not intend to disturb, delay, hinder, or
defraud either any of their present or future creditors.  Each
Guarantor is familiar with, and has independently reviewed books and records
regarding, the financial condition of Borrower and is familiar with the value of
the security and support for the payment and performance of the Guaranteed
Obligation.  Based upon such examination, and taking into account the
fairly discounted value of each Guarantor’s contingent obligations under this
Guaranty and the value of the subrogation and contribution claims any Guarantor
could make in connection with this Guaranty, and assuming each of the
transactions contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantors exceeds the total obligations of
Guarantors, and each Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of
business.  Each Guarantor represents and warrants to Lender that the
value of consideration received and to be received by it is reasonably worth at
least as much as its liability under this Guaranty, and such liability may
reasonably be expected to benefit each such Guarantor, directly or
indirectly.

     

    
      
        
        

      

      
        Exhibit B
- Page 2

        
          

        

      

      
        
        

      

    

     

    5.    Avoidance
Limitation.  The obligations of Guarantors under this Guaranty
shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations under this Guaranty subject to avoidance under
Section 548 of the U.S. Bankruptcy Code or any comparable provisions of any
applicable state law.

     

    6.    Liability for Other Debt of
Borrower.  If any Guarantor becomes liable for any Debt owing
by Borrower to Lender, by endorsement or otherwise, other than under this
Guaranty, such liability shall not be impaired or affected by this Guaranty and
the rights of Lender under this Guaranty shall be cumulative of any and all
other rights that Lender may ever have against Guarantors.

     

    7.    Subordination.  Each
Guarantor hereby expressly subordinates all Company Debt to the Payment in Full
of the Guaranteed Obligation.  Each Guarantor agrees not to receive or
accept any payment from Borrower with respect to the Company Debt at any time a
Default exists and, in the event any Guarantor receives any payment on the
Company Debt in violation of the foregoing, such Guarantor shall hold any such
payment for the benefit of Lender and promptly turn it over to Lender, in the
form received (with any necessary endorsements), to be applied to the Guaranteed
Obligation.  If Lender so requests, any such Company Debt shall be
enforced and all amounts received by any Guarantor shall be received in trust
for the Lender and the proceeds thereof shall be paid over to the Lender on
account of the Guaranteed Obligation, but without reducing or affecting in any
manner the liability of Guarantors under this Guaranty.

     

    8.    Subrogation.  Until
the Guaranteed Obligation is Paid In Full, each Guarantor agrees that it will
not assert, enforce, or otherwise exercise (a) any right of subrogation to any
of the rights or liens of Lender or any other beneficiary against Borrower or
any other obligor on the Guaranteed Obligation or any Collateral or other
security, or (b) any right of recourse, reimbursement, subrogation,
contribution, indemnification, or similar right against Borrower or any other
obligor or other guarantor on all or any part of the Guaranteed Obligation
(whether such rights in clause (a) or clause (b) arise in equity,
under contract, by statute, under common law, or otherwise).

     

    9.    Enforceability of Guaranty;
No Release.

     

    (a) This
Guaranty shall not be affected by the genuineness, validity, regularity or
enforceability of the Guaranteed Obligation or any instrument or agreement
evidencing any part of the Guaranteed Obligation, or by the existence, validity,
enforceability, perfection, or extent of any Collateral securing the Guaranteed
Obligation, or by any fact or circumstance relating to the Guaranteed Obligation
which might otherwise constitute a defense to the obligations of the Guarantors
under this Guaranty.

     

    (b) Each
Guarantor agrees that the Lender may, at any time and from time to time, and
without notice to any Guarantor, make any agreement with the Borrower or with
any other person or entity liable on any of the Guaranteed Obligations or
providing collateral as security for the Guaranteed Obligations, for the
extension, renewal, payment, compromise, discharge or release of the Guaranteed
Obligations or any Collateral (in whole or in part), or for any modification or
amendment of the terms thereof or of any instrument or agreement evidencing the
Guaranteed Obligations or the provision of Collateral, all without in any way
impairing, releasing, discharging or otherwise affecting the obligations of the
Guarantors under this Guaranty.

     

    
      
        
        

      

      
        Exhibit B
- Page 3

        
          

        

      

      
        
        

      

    

     

    (c) Each
Guarantor hereby agrees its obligations under the terms of this Guaranty shall
not be released, discharged, diminished, impaired, reduced or otherwise
adversely affected by any of the following: (a) Lender’s taking or accepting of
any other security or guaranty for any or all of the Guaranteed Obligation; (b)
any release, surrender, exchange, subordination or loss of any security at any
time existing in connection with any or all of the Guaranteed Obligation; (c)
any full or partial release of the liability of any other obligor on the
Obligation; (d) the insolvency, becoming subject to any Debtor Relief Law, or
lack of corporate power of Borrower or any party at any time liable for the
payment of any or all of the Guaranteed Obligation; (e) any renewal, extension
or rearrangement of the payment of any or all of the Guaranteed Obligation,
either with or without notice to or consent of any Guarantor, or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by Lender to
Borrower, any Guarantor, or any other obligor on the Obligation; (f) any
neglect, delay, omission, failure or refusal of Lender to take or prosecute any
action for the collection of all or any part of the Guaranteed Obligation or to
foreclose or take or prosecute any action in connection with any instrument or
agreement evidencing or securing any or all of the Guaranteed Obligation; (g)
any failure of Lender to give any Guarantor notice of any of the foregoing it
being understood that Lender shall not be required to give any Guarantor any
notice of any kind under any circumstances with respect to or in connection with
the Guaranteed Obligation, other than any notice expressly required to be given
to Guarantors under this Guaranty or notices expressly required to be given to
Borrower under any Loan Document; (h) the unenforceability of all or any
part of the Guaranteed Obligation against Borrower by reason of the fact that
the Guaranteed Obligation (or the interest on the Guaranteed Obligation) exceeds
the amount permitted by Law, the act of creating the Guaranteed Obligation, or
any part thereof, is ultra
vires, or the officers creating same exceeded their authority or violated
their fiduciary duties in connection therewith; (i) any payment of the
Obligation to Lender is held to constitute a preference under any Debtor Relief
Law or if for any other reason Lender is required to refund such payment or make
payment to someone else (and in each such instance this Guaranty shall be
reinstated in an amount equal to such payment); or (j) any discharge, release,
or other forgiveness of Borrower’s personal liability for the payment of the
Guaranteed Obligation.

     

    10.    Exercise of Rights and
Waiver.

     

    (a) No
failure by Lender to exercise, and no delay in exercising, any right or remedy
under this Guaranty shall operate as a waiver thereof.  The exercise
by Lender of any right or remedy under this Guaranty under the Loan Documents,
or other instrument, or at Law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy.  The remedies
provided in this Guaranty are cumulative and not exclusive of any remedies
provided by law or in equity.  The unenforceability or invalidity of
any provision of this Guaranty shall not affect the enforceability or validity
of any other provision herein.

     

    
      
        
        

      

      
        Exhibit B
- Page 4

        
          

        

      

      
        
        

      

    

     

    (b) The
obligations of Guarantors under this Guaranty are those of primary obligor, and
not merely as surety, and are independent of the Guaranteed
Obligation.  Each Guarantor waives diligence by Lender and action on
delinquency in respect of the Guaranteed Obligation or any part thereof,
including any provisions of laws requiring Lender to exhaust any right or remedy
or to take any action against Borrower, any other Guarantor, or any other Person
before enforcing this Guaranty against Guarantors.  Each Guarantor
hereby waives all rights by which it might be entitled to require suit on an
accrued right of action in respect of any of the Guaranteed Obligation or
require suit against Borrower or others, whether arising pursuant to Section
34.02 of the Texas Business and Commerce Code, as amended (regarding Guarantors’
right to require Lender to sue Borrower on accrued right of action following
Guarantors’ written notice to Lender), Section 17.001 of the Texas Civil
Practice and Remedies Code, as amended (allowing suit against any Guarantor
without suit against Borrower, but precluding entry of judgment against any such
Guarantor prior to entry of judgment against Borrower), Rule 31 of the Texas
Rules of Civil Procedure, as amended (requiring Lender to join Borrower in any
suit against Guarantors unless judgment has been previously entered against
Borrower), or otherwise.

     

    (c) Except as
otherwise expressly required under any Loan Document, each Guarantor waives
notice of acceptance of this Guaranty, notice of any loan to which it may apply,
and waives presentment, demand for payment, protest, notice of dishonor or
nonpayment of any loan, notice of intent to accelerate, notice of acceleration,
and notice of any suit or notice of the taking of other action by Lender against
Borrower, any Guarantor, or any other person and any notice to any party liable
thereon (including Guarantors), without reducing or affecting in any manner the
liability of the Guarantors under this Guaranty.

     

    11.    Information.  Each
Guarantor agrees to furnish promptly to the Lender any and all financial or
other information regarding Guarantors or its property as the Lender may
reasonably request in writing.

     

    12.    Stay of
Acceleration.  In the event that acceleration of the time for
payment of any of the Guaranteed Obligation is stayed, upon the insolvency,
bankruptcy or reorganization of the Borrower or any other Person, or otherwise,
all such amounts shall nonetheless be payable by Guarantors immediately upon
demand by Lender.

     

    13.    Expenses.  Each
Guarantor shall pay on demand all out-of-pocket expenses (including reasonable
attorneys’ fees and expenses) in any way relating to the enforcement or
protection of the Lender’s rights under this Guaranty, including any incurred in
the preservation, protection or enforcement of any rights of the Lender in any
case commenced by or against any Guarantor under Title 11, United States Code or
any similar or successor statute.  The obligations of the Guarantors
under the preceding sentence shall survive termination of this
Guaranty.

     

    14.    Amendments.  No
provision of this Guaranty may be waived, amended, supplemented or modified,
except by a written instrument executed by Lender and Guarantors.

     

    15.    Reliance and Duty to Remain
Informed. Each Guarantor confirms that it has executed and delivered this
Guaranty after reviewing the terms and conditions of the Credit Agreement and
the other Loan Documents and such other information as it has deemed appropriate
in order to make its own credit analysis and decision to execute and deliver
this Guaranty.  Each Guarantor confirms that it has made its own
independent investigation with respect to Borrower’s creditworthiness and is not
executing and delivering this Guaranty in reliance on any representation or
warranty by Lender as to such creditworthiness.  Each Guarantor
expressly assumes all responsibilities to remain informed of the financial
condition of Borrower and any circumstances affecting (a) Borrower’s ability to
perform under the Loan Documents to which Borrower is a party or (b) any
collateral securing all or any part of the Guaranteed Obligation.

     

    
      
        
        

      

      
        Exhibit B
- Page 5

        
          

        

      

      
        
        

      

    

     

    16.    Change in any Guarantor’s
Status.  Should any Guarantor become insolvent, or fail to pay
its debts generally as they become due, or voluntarily seek, consent to, or
acquiesce in the benefit or benefits of any Debtor Relief Law or become a party
to (or be made the subject of) any proceeding provided for by any Debtor Relief
Law (other than as a creditor or claimant) that could suspend or otherwise
adversely affect the Rights of Lender granted under this Guaranty, then, in any
such event, the Guaranteed Obligation shall be, as between Guarantors and
Lender, a fully matured, due, and payable obligation of Guarantors to Lender
(without regard to whether Borrower is then in Default or whether the Guaranteed
Obligation, or any part thereof is then due and owing by Borrower to Lender),
payable in full by Guarantors to Lender upon demand, which shall be the
estimated amount owing in respect of the contingent claim created under this
Guaranty.

     

    17.    Representations and
Warranties.  Each Guarantor acknowledges that certain
representations and warranties set out in the Credit Agreement are in respect of
it, and each Guarantor reaffirms that each such representation and warranty is
true and correct.

     

    18.    Covenants.  Each
Guarantor acknowledges that certain covenants set forth in the Credit Agreement
are in respect of it or shall be imposed upon it, and each Guarantor covenants
and agrees to promptly and properly perform, observe, and comply with each such
covenant.

     

    19.    Indemnity.  Each
Guarantor shall indemnify, protect, and hold Lender and its parent,
subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the “indemnified
parties”) harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys’ fees and legal expenses), and reasonable disbursements of any kind or
nature (the “indemnified
liabilities”) that may at any time be imposed on, incurred by, or
asserted against the indemnified parties, in any way relating to or arising out
of (a) the direct or indirect result of the violation by Borrower of any
Environmental Law, (b) Borrower’s generation, manufacture, production, storage,
release, threatened release, discharge, disposal, or presence in connection with
its properties of a Hazardous Substance (including, without limitation, (i) all
damages from any use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal, or presence, or (ii) the costs of any
environmental investigation, monitoring, repair, cleanup, or detoxification and
the preparation and implementation of any closure, remedial, or other plans), or
(c) the Loan Documents or any of the transactions contemplated
therein.  However, although each indemnified party shall be indemnified
under the Loan Documents for its own
ordinary negligence, no indemnified party has the Right to be indemnified
under the Loan Documents for its own fraud, gross negligence, or willful
misconduct.  The provisions of and undertakings and indemnification
set forth in this Section 19
shall survive the Payment in Full of the Guaranteed Obligation and termination
of this Guaranty.

     

    20.    Offset
Claims.  The Guaranteed Obligation shall not be reduced,
discharged or released because or by reason of any existing or future offset,
claim or defense (except for the defense of Payment in Full of the Guaranteed
Obligation) of Borrower or any other party against Lender or against payment of
the Guaranteed Obligation, whether such offset, claim, or defense arises in
connection with the Guaranteed Obligation or otherwise.  Such claims
and defenses include, without limitation, failure of consideration, breach of
warranty, fraud, statute of frauds, bankruptcy, infancy, statute of limitations,
lender liability, accord and satisfaction, and usury.

     

    21.    Setoff.  If
and to the extent any payment is not made when due under this Guaranty, Lender
may setoff and charge from time to time any amounts so due against any or all of
any Guarantor’s accounts or deposits with Lender.

     

    
      
        
        

      

      
        Exhibit B
- Page 6

        
          

        

      

      
        
        

      

    

     

    22.    Binding
Agreement.  This Guaranty is for the benefit of Lender and its
successors and assigns.  Each Guarantor acknowledges that in the event
of an assignment of the Guaranteed Obligation or any part thereof in accordance
with the Credit Agreement, the rights and benefits under this Guaranty, to the
extent applicable to the Debt so assigned, may be transferred with such
Debt.  This Guaranty is binding on each Guarantor and its successors
and permitted assigns, provided that no Guarantor
may assign its rights or obligations under this Guaranty without the prior
written consent of Lender (and any attempted assignment without such consent
shall be void).

     

    23.    Notices.  All
notices required or permitted to be given under this Guaranty, if any, must be
in writing and shall or may, as the case may be, be given in the same manner as
notice is given under the Credit Agreement as follows:

     

    If to
Lender:

     

    Whitney
National Bank

    4265 San
Felipe, Suite 200

    Houston,
Texas  77027

    Telephone
No.: 713-951-7227

    Facsimile
No.: 713-951-7172

    Attention:  Paul
W. Cole

    


    
      with
a copy to:

    

    


    Porter
& Hedges, L.L.P.

    1000 Main
Street, 36th
Floor

    Houston,
Texas 77002

    Telephone
No.:                                713-226-6677

    Facsimile
No.: 713-226-6277

    Attention:  Nick
H. Sorensen

    


    
      If to
Borrower:

    

    


    Deep
Down, Inc.

    15473
East Freeway

    Channelview,
Texas  77530

    Telephone
No.:                                281-862-2201

    Facsimile
No.: 281-862-2522

    Attention:  Eugene
L. Butler, Chief Financial Officer

    


    
      with
a copy to:

    

    


    Looper,
Reed & McGraw

    1300 Post
Oak Blvd., Suite 2000

    Houston,
Texas 77056

    Telephone
No.: 713-986-7115

    Facsimile
No.: 713-986-7100

    Attention:  Jeff
Hopkins

    


    
      
        
        

      

      
        Exhibit B
- Page 7

        
          

        

      

      
        
        

      

    

    
       

      If to
Guarantors:

    

    


    c/o Deep
Down, Inc.

    15473
East Freeway

    Channelview,
Texas 77530

    Telephone
No.: 281-862-2201

    Facsimile
No.: 281-862-2522

    Attention:
Eugene L. Butler, Chief Financial Officer

    


    
      with
a copy to:

    

    


    Looper,
Reed & McGraw

    1300 Post
Oak Blvd., Suite 2000

    Houston,
Texas 77056

    Telephone
No.: 713-986-7115

    Facsimile
No.: 713-986-7100

    Attention:  Jeff
Hopkins

    


    Subject
to the terms of the Credit Agreement, by giving at least 10 days written notice,
any party to this Guaranty shall have the right from time to time and at any
time while this Guaranty is in effect to change its addresses or fax numbers and
each shall have the right to specify a different address or fax number within
the United States of America.  Nothing in this Section 23
shall be construed to require any notice to any Guarantor not otherwise
expressly required in this Guaranty.

     

    24.    Termination.  Subject
to Section
25 regarding reinstatement, this Guaranty shall terminate and be released
upon the earlier occurrence of the date the Guaranteed Obligation is Paid In
Full.

     

    25.    Reinstatement.  Notwithstanding
anything in this Guaranty to the contrary, this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any portion of the Guaranteed Obligations is revoked, terminated, rescinded or
reduced or must otherwise be restored or returned upon the insolvency,
bankruptcy or reorganization of the Borrower or any other Person or otherwise,
as if such payment had not been made and whether or not the Lender is in
possession of or has released this Guaranty and regardless of any prior
revocation, rescission, termination or reduction.

     

    26.    Governing
Law.  THIS
GUARANTY IS TO BE CONSTRUED — AND ITS PERFORMANCE ENFORCED — UNDER TEXAS
LAW.

     

    27.    Waiver of Jury
Trial.  Each Guarantor and Lender irrevocably and voluntarily
waive any right they may have to a trial by jury in respect of any
claim.  This provision is a material inducement for the parties
entering into this Guaranty.

     

    28.    No Oral
Agreements.  The Rights
And Obligations Of The Parties Hereto Shall Be Determined Solely From Written
Agreements, Documents, And Instruments, And Any Prior Oral Agreements Between
The Parties Are Superseded By And Merged Into Such Writings.  This
Guaranty (As Amended In Writing From Time To Time) The Credit Agreement, And The
Other Written Loan Documents Executed By Borrower, Lender, or Guarantors (Or By
Borrower Or Guarantors For The Benefit Of Lender) Represent The Final Agreement
Between Borrower, Guarantors, And Lender And May Not Be Contradicted By Evidence
Of Prior, Contemporaneous, Or Subsequent Oral Agreements By The
Parties.  There Are No Unwritten Oral Agreements Between The
Parties.

     

    


    [Signatures appear on the following
page.]

     

    
      
        
        

      

      
        Exhibit B
- Page 8

        
          

        

      

      
        
        

      

    

     

    EXECUTED
as of the date first written above.


     

    
      	 	 GUARANTORS:


    

     

    
      	 	      
              ELECTROWAVE
      USA, INC.,

              a
      Nevada corporation

            	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Eugene
      L. Butler            	 
	 	 	Eugene
      L. Butler	 
	 	 	Chief
      Financial Officer	 
	 	 	 	 


    

     

    
      
        	 	      
                FLOTATION
      TECHNOLOGIES, INC.,

                a
      Maine corporation

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Eugene
      L. Butler            	 
	 	 	Eugene
      L. Butler	 
	 	 	Chief
      Financial Officer	 
	 	 	 	 


      

    

     

    
      	 	      
              MAKO
      TECHNOLOGIES, LLC,

              a
      Nevada limited liability company

            	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Eugene
      L. Butler            	 
	 	 	Eugene
      L. Butler	 
	 	 	Chief
      Financial Officer	 
	 	 	 	 


    

     

    
      
        	 	      
                DEEP
      DOWN INC.,

                a
      Delaware corporation

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Eugene
      L. Butler            	 
	 	 	Eugene
      L. Butler	 
	 	 	Chief
      Financial Officer	 
	 	 	 	 


      

    

    


    
 

     

     

    Exhibit
B - Page 9