Document:

exv10w38

Exhibit 10.38

UNIT AWARD AGREEMENT

     THIS UNIT AWARD AGREEMENT (the “Agreement”) is made and entered into effective as of the
24th day of June, 2008, by and between Global Water Resources, LLC, a Delaware limited
liability company (the “Company”) and Cindy M. Liles, an individual resident of Arizona (the
“Recipient”).

PREMISES

     WHEREAS, the Company has agreed to issue to the Recipient, and the Recipient desires to
accept from the Company, fifty (50) common limited liability company units in the Company (the
“Common Units”) in exchange for services performed or to be performed for the Company, on the
terms and conditions set forth in this Agreement.

     NOW THEREFORE, for and in consideration of the Premises, the Recipient’s performance of
services, and other good and valuable consideration, the receipt, adequacy and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

AGREEMENT

     1. Transfer of Common Units. In exchange for services performed or to be performed by
Recipient for the Company, the Company hereby transfers, assigns and issues to the Recipient, the
Common Units.

     2. Acknowledgment. The Recipient acknowledges that the Common Units represent solely
a profits interest in the Company and that as the holder of such Commons Units, she shall not be
entitled to any future profits, losses, income, gains, distributions, assets and other attributes
of the Company with respect to such Common Units until such time as the holders of Company
preferred units have received a complete return of their capital contributed to the Company and a
preferred return thereon, as provided in the Operating Agreement.

     3. Operating Agreement. As a condition to the issuance of the Common Units, the
Recipient agrees to be bound by the terms of the Limited Liability Company Agreement of the
Company, as amended from time to time.

     4. Execution and Delivery.

     (a) No approval, authorization, or action (that has not been given or
taken place) by any third party or any court, administrative agency or other governmental
authority is required in connection with the Company’s execution, delivery or performance
of this Agreement. This Agreement is a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.

     (b) No approval, authorization, or action (that has not been given or
taken place) by any third party or any court, administrative agency or other governmental

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authority is required in connection with the Recipient’s execution, delivery or performance of
this Agreement. This Agreement is a legal, valid and binding obligation of the Recipient
enforceable against the Recipient in accordance with its terms.

          5. Further Assurances. The Company and the Recipient shall fully cooperate at all
times from and after the date hereof with respect to the confirmation of the matters described
herein, and shall execute such further assignments, releases, or other documents as may be
reasonably requested by the other for the purpose of giving effect to the transactions evidenced
by this Agreement.

          6. Investment Representations. The Recipient hereby represents, warrants, covenants,
and agrees with the Company as follows:

     (a) The Recipient has detailed knowledge of the Company and its business, financial
condition, operating results and business prospects and has such knowledge and experience
in financial business matters that the Recipient is capable of evaluating the merits and
risks of the acquisition of the Common Units hereunder.

     (b) The Recipient has had the opportunity to consult with the Recipient’s own legal
counsel, accountants and investment advisors as the Recipient has deemed advisable with
respect to the acquisition of the Common Units hereunder and the federal, state and local
income tax consequences relating thereto. The Recipient is acquiring the Common Units
based upon the Recipient’s own independent determination of value and risk and not based
upon any discussions with the Company or any representative of the Company.

     (c) The Recipient acknowledges that the Company has not given or made, nor authorized
any person to give or make, any information or any recommendation or representations in
connection with the Recipient’s acquisition of the Common Units and neither the Company nor
its representatives have made any representations to the Recipient in connection with the
acquisition of the Common Units regarding the current value or the likely future value of
the Common Units or the Company’s business, financial condition, operating results and
business prospects.

     (d) The Recipient understands the risks associated with holding the Common Units and
understands and acknowledges that (i) the transfer or assignment of the Common Units, or
rights associated therewith, is restricted under the Operating Agreement and may be subject
to further significant restrictions under applicable law; and (ii) the Common Units are
subject to the buy/sell provisions under Article 15B of the Operating Agreement.

     (e) The Recipient is an accredited investor under Regulation D promulgated under the
Securities Act of 1933 and the provisions of the securities laws of Arizona.

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     (f) The Recipient is acquiring the Common Units for the Recipient’s own account, to
hold for investment, and with no intention of dividing her ownership with others or
reselling or otherwise participating, directly or indirectly, in a distribution of the
Common Units, or any portion thereof, and shall not make any sale, transfer or other
disposition of the Common Units, or any portion thereof, in violation of the Operating
Agreement, the Arizona Securities Act, the Delaware Securities Act and the Securities Act
of 1933, as amended, and all regulations promulgated under any of them or any other
applicable securities law. The Recipient understands that the Company is under no
obligation to register the Common Units for sale or other disposition under any of the
foregoing Acts, or take other action necessary in order to make compliance with an
exemption from registration available for sale or other disposition of the Common Units.

     (g) The Recipient’s acquisition of the Common Units is in accord with the nature and
size of the Recipient’s present investments and net worth, and the Recipient is financially
able to bear the economic risk of losing her entire investment and has the ability to hold
the Common Units for an indefinite period and has the ability to pay the federal, state and
local income taxes imposed as a result of her acquisition of the Common Units.

     (h) The Recipient is a U.S. citizen and not a nonresident alien for purposes of U.S.
income taxation.

     (i) All of the representations and information provided in this Agreement and any
additional information that the Recipient has furnished to the Company with respect to the
Recipient’s financial position, are accurate and complete as of the date of this Agreement
and the Company may rely on such information in determining the suitability of the
Recipient to acquire the Common Units in accordance with the federal and state laws.

     (j) The Recipient acknowledges that the Common Units will not be registered under any
federal or state securities laws in reliance upon exemptions from registration contained
therein, and that the Company’s reliance upon such exemptions is based in part upon the
Recipient’s acknowledgements, representations, warranties and agreements contained in this
Agreement.

     7. Restrictions on Transfer of Units. The Units are nontransferable, except in
accordance with the terms of the Operating Agreement.

     8. Headings. The section headings to this Agreement are for convenience only and
shall not limit or affect the meaning of this Agreement.

     9. Severability. In the event that any provision of this Agreement is declared
invalid, unenforceable or void to any extent by a court of competent jurisdiction, such provision
shall be modified, if possible, by reducing its duration and scope to allow enforcement of the
maximum permissible duration and scope. In any event, such

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declaration shall not affect the remaining provisions of this Agreement, and this Agreement shall
be enforced as modified, or if no modification is enforceable, as if such invalid clause had not
been included.

     10. Governing Law. This Agreement shall be governed in all respects by the laws of
the State of Arizona.

     11. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Company, the Recipient and their respective permitted heirs, successors and
assigns.

     12. Entire Agreement. This Agreement supersedes all prior agreements, communications,
representations and understandings, either oral or written, between the Company and the Recipient
with respect to the subject matter of this Agreement.

     13. Counterparts. This Agreement may be executed in counterparts, which shall be
treated as originals for all purposes, and all so executed shall constitute one agreement.

     14. Legal Counsel. The Recipient acknowledges that Powell Goldstein LLP represents the
Company in connection with this Agreement and that the Recipient has consulted or has had the
opportunity to consult with her own attorney, accountant or investment advisor as she deemed
advisable with respect to the transactions contemplated by this Agreement, and any other documents
entered into in connection with the Agreement, and the federal, state and local income tax
consequences thereof.

[Remainder of this page intentionally left blank.]

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     IN WITNESS WHEREOF, the undersigned has executed and delivered this Agreement as of the date
first above written.

	 	 	 	 	 
	 	COMPANY:

GLOBAL WATER RESOURCES, LLC

 	 
	 	By:  	/s/ Trevor T. Hill
 	 
	 	 	Name:  	Trevor T. Hill 	 
	 	 	Title:  	President and CEO 	 
	 
	 	RECIPIENT:

 	 
	 	/s/ Cindy M. Liles
 	 
	 	Cindy M. Liles 	 
	 	 	 
	 

5dd_10q-ex1004.htm

     

    EXHIBIT
10.4

    
       

       

       

       

      May 6,
2008

       

      Mr.
Robert Chamberlain, Chairman

      Deep
Down, Inc.

      15473
East Freeway

      Channelview,
TX 77530

       

      Dear Mr.
Chamberlain:

       

      This
letter agreement (including without limitation the Exhibits attached hereto,
this "Agreement") will confirm the understanding and agreement between Deep
Down, Inc. (the "Company") and Dahlman Rose & Co., LLC ("Dahlman Rose" or
"Placement Agent") as follows:

       

      1.           The
Company hereby appoints Dahlman Rose to act as its exclusive placement
agent in
connection with the sale of up to $40,000,000 of its equity or equity-linked
securities (the "Securities") to one or more financial investors, strategic
investors or others. The Company hereby authorizes Dahlman Rose, as placement
agent, to endeavor to arrange a private placement of the Securities at a price
and on terms satisfactory to the Company. The private placement of the
Securities is to be made directly by the Company to prospective investors who
purchase Securities pursuant to purchase or subscription agreements entered into
by such purchasers.

       

      2.            Prior
to the signing of any purchase agreements, officers of the Company with
responsibility
for financial affairs have been and will continue to be available to answer
inquiries from prospective investors. After the forms of the purchase agreements
and the information referred to therein have been reviewed by prospective
investors, and they have had the opportunity to address inquiries to the
Company, separate purchase agreements will be completed with each prospective
investor. It is anticipated that in connection with the private placement, the
Company shall file a registration statement (the "Registration Statement") with
respect to the possible resale, from time to time, of the Securities which have
been purchased pursuant to such purchase agreements and that the Company will
keep the Registration Statement effective until such time as the Securities
become eligible for resale by non-affiliates without restriction pursuant to
Rule 144 under the Securities Act of 1933, as amended (the "Act").

       

      3.           (a) 
The amount of Securities sold, if any, by the Company and the price at
which
they will be sold is entirely within the Company's discretion.

       

       

      142
West 57th
Street, 18th
Floor

      New
York, New York 10019

      Phone:
(212) 920-2940 Fax: (212) 920-2995

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      (b)            The
Company will not, directly or indirectly, make any offer or sale of any
of the
Securities or any securities of the same or similar class as the Securities, the
result of which would cause the offer and sale of the Securities to fail to be
entitled to the exemption from registration afforded by Section 4(2) of the Act.
The Company represents and warrants to Dahlman Rose that, except for the
privately negotiated sales listed on Exhibit A, it has not, directly or
indirectly, made any offers or sales of the Securities or securities of the same
or a similar class as the Securities during the six month period ending on the
date of this letter, and has no intention of making an offer or sale of the
Securities or securities of the same or a similar class as the Securities for a
period of six months after completion of this private placement, except for the
offering of the Securities through Dahlman Rose pursuant hereto and for offers
and sales, the result of which would not cause the offer and sale of the
Securities contemplated hereunder to fail to be entitled to the exemption from
registration afforded by Section 4(2) of the Act. As used herein, the terms
"offer" and "sale" have the meanings specified in Section 2(3) of the
Act.

       

      (c)            The
Company agrees that it will use its best efforts to cause the Company's
independent
public accountants to address and deliver to the Company and the Placement Agent
a letter or letters dated
as of the date of the Closing stating the conclusions and findings of such
accounting firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters".

       

      (d)           
The Company agrees that it will use its best efforts to cause the Company's
counsel
to address and deliver to the Company and the Placement Agent a letter dated as
of the date of the Closing containing the statements set forth in Exhibit B
hereto and addressing such additional matters as the Placement Agent shall
reasonably request. In addition, the Placement Agent shall be entitled to rely
on any opinion delivered to the purchasers by counsel to the Company in
connection with the private placement of the Securities.

       

      4.            As
compensation for Dahlman Rose' services hereunder, the Company will pay in
cash to
Dahlman Rose, at each closing ("Closing") of any sale of the Securities, a fee
equal to 7.0% of the aggregate gross proceeds received by the Company from a
sale of Securities. In addition, whether or not a sale of the Securities occurs, the
Company will reimburse Dahlman Rose upon demand for Dahlman Rose' reasonable
expenses (including fees and expenses of counsel to Dahlman Rose) incurred in
connection with its acting as placement agent hereunder and that do not exceed
$75,000.

       

      5.           The
Company and Dahlman Rose each represent to the other that there is no other
person or
entity that is or will be entitled to a finder's fee or any type of brokerage
commission in connection with the transactions contemplated by this Agreement as
a result of any agreement or understanding with it.

       

      6.           
The Company hereby represents and warrants to the Placement Agent that, during
the term
of Dahlman Rose' engagement hereunder the Company will not (i) offer any
Securities

       

       

      
        
          
          

        

        
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      for sale
to, or solicit any offers to buy from, any person or persons, whether directly
or indirectly, other than through the Placement Agent or (ii) engage in any
discussions with any person other than representatives of the Placement Agent
for the purpose of engaging, or considering the engagement of, such person as a
finder or broker in connection with the sale by the Company of the Securities
covered by this Agreement.

       

      For a
period of 90 days from the Closing, the Company will not, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be expected to,
result in the disposition by the Company at any time in the future of) any
shares of common stock of the Company ("Common Stock"), or securities
convertible into or exchangeable for Common Stock, or sell or grant options,
rights or warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than option grants to
employees pursuant to existing plans in the ordinary course of business), or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case without the prior written consent of Dahlman
Rose; and to cause each officer and director of the Company and each shareholder
of the Company identified on Exhibit D hereto (each, a "Lock-Up Party") to
furnish to Dahlman Rose, prior to the first Closing, a letter or letters, in
form and substance satisfactory to counsel for the Placement Agent, pursuant to
which each such person shall agree not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by such person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 90 days from the date of the Closing,
without the prior written consent of Dahlman Rose; provided that if the
Registration Statement is not declared effective within 60 days of the Closing,
then the Company and each Lock-Up Party will be subject to the restrictions set
forth above for an additional period of 30 days from the date the Registration
Statement is declared effective; and provided further each of the following
Lock-Up Parties, Messrs. Chamberlain, Smith and Butler, may pledge up to
2,325,000, 1,075,000 and 350,000 shares, respectively, to secure personal
indebtedness. Nothing contained above shall prevent the Company for issuing (i)
securities required to be issued pursuant to contractual obligations of the
Company in effect as of the date of this Agreement and disclosed to the
Placement Agent or its counsel prior to the Closing; (ii) securities issued on a
pro rata basis to all holders of a class of outstanding equity securities of the
Company; and (iii) equity securities issued pursuant to employee benefit or
purchase plans in effect as of the date of this Agreement.

       

       

      
        
          
          

        

        
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      7.           The
Company hereby agrees to indemnify the Placement Agent in accordance
with the
indemnification provisions set forth as Exhibit C hereto and to the other
provisions set forth in Exhibit C hereto.

       

      8.            The
Company upon reasonable request will meet with the Placement Agent to
discuss
all information relevant for disclosure in any Registration Statement covering
shares purchased from the Company by purchasers and offered by purchasers for
resale and will cooperate in any reasonable investigation undertaken by the
Placement Agent for the purpose of confirming the accuracy of the Registration
Statement, including the production of information at the Company's
offices.

       

      9.            The
Company will fully cooperate with Dahlman Rose in any due diligence investigation
reasonably requested by Dahlman Rose with respect to the offer and sale of the
Securities and will furnish Dahlman Rose with such information, including
financial statements, with respect to the business, operations, assets,
liabilities, financial condition and prospects of the Company as Dahlman Rose
may reasonably request. Dahlman Rose may rely upon the accuracy and completeness
of all such information and the Company acknowledges that Dahlman Rose has not
been retained to independently verify any of such information. The Company will
be solely responsible for the contents of its offering materials and any and all
other written or oral communications provided by or on behalf of the Company to
any actual or prospective purchaser of the Securities (collectively, the
"Offering Materials"), and the Company represents and warrants that the Offering
Materials will not, as of the date of the offer or sale of the Securities,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company's filings with the SEC will be deemed included in the
Offering Materials. The Company authorizes Dahlman Rose to provide the Offering
Materials to prospective purchasers of the Securities.

       

      If at any
time prior to the completion of the offer and sale of the Securities an event
occurs which would cause the Offering Materials (as supplemented or amended) to
contain an untrue statement of a material fact or to omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, the Company will
notify Dahlman Rose immediately of such event and Dahlman Rose will suspend
solicitations of the prospective purchasers of the Securities until such time as
the Company shall prepare a supplement or amendment to the Offering Materials
which corrects such statement or omission.

       

      10.            Dahlman
Rose will not have any rights or obligations in connection with the sale
and
purchase of the Securities contemplated by this Agreement except as expressly
provided in this Agreement. In no event shall Dahlman Rose be obligated to
purchase the Securities for its own account or for the accounts of its
customers. Notwithstanding the foregoing, Dahlman Rose will have the right, but
not the obligation, (i) to determine the allocation of the Securities among
potential purchasers, provided that such allocation is reasonably acceptable to
the Company, and

       

       

      
        
          
          

        

        
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      (ii) in
any event, to allocate up to 20% of the Securities to individual customers of
Dahlman Rose, provided that such customers are reasonably acceptable to the
Company.

       

      11.            (a) 
The appointment and authorization of Dahlman Rose under paragraph 1 of
this
Agreement shall expire at such time as may be mutually agreed upon by the
Company and Dahlman Rose. In addition, either the Company or Dahlman Rose may
terminate Dahlman Rose' engagement hereunder at any time upon at least ten days'
prior written notice to the other party, including without limitation in the
event that Dahlman Rose, in its sole judgment, is not satisfied with the results
of its due diligence investigation of the Company and its business, operations,
assets, liabilities, financial condition and prospects. Notwithstanding any such
expiration or termination, the Company shall remain responsible for the
reimbursement of Dahlman Rose' expenses under paragraph 4 of this Agreement and
the reimbursement, indemnification and contribution obligations of the Company
under Exhibit C, and the provisions of paragraphs 4, 5 and 7 through 17, of this
Agreement shall survive. Such obligations also shall survive the offer and sale
of the Securities.

       

      (b) 
If during a period of 12 months following the expiration or termination of
Dahlman
Rose' engagement hereunder, the Company sells any Securities or securities of
the same or similar class as the Securities (collectively, "Covered Securities")
to any purchaser or to any prospective investor introduced by Dahlman Rose, then
the Company shall pay to Dahlman Rose upon the closing of such sale a fee equal
to the fee which would have been payable to Dahlman Rose pursuant to paragraph 4
if the closing of such sale had occurred during the term of Dahlman Rose'
appointment and authorization hereunder.

       

      12.            (a) 
Upon consummation of a sale of Securities, Dahlman Rose may place "tombstone"
advertisements in financial and other publications and media at its own expense
describing its services to the Company hereunder.

       

      (b) 
Without the prior written consent of Dahlman Rose, the Company will not
publicly
refer to Dahlman Rose or its engagement hereunder.

       

      13.            The
benefits of this Agreement shall inure to respective successors and assigns of
the
parties hereto and of the indemnified parties, and the obligations and
liabilities assumed in this Agreement by the parties hereto shall be binding
upon their respective successors and assigns.

       

      14.            This
Agreement may not be amended or modified except in writing signed by
each of
the parties hereto and shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without regard to the
principles of conflict law thereof Any right to trial by jury with respect to
any lawsuit, claim or other proceeding arising out of or relating to this
Agreement or the services to be rendered by Dahlman Rose hereunder is expressly
and irrevocably waived.

       

       

      
        
          
          

        

        
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      15.            The
invalidity or unenforceability of any provision of this Agreement shall not
affect
the validity or enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.

       

      16.            This
Agreement may be executed in any number of counterparts, each of which
shall be
deemed to be an original and all of which together shall be deemed to be the
same agreement.

       

      If the
foregoing correctly sets forth the understanding and agreement between Dahlman
Rose and the Company, please so indicate in the space provided for that purpose
below, whereupon this letter shall constitute a binding agreement as of the date
first above written.

       

      Sincerely,

       

      DAHLMAN
ROSE & CO., LLC

       

       

      By: /s/ Robert
Brinberg

      Robert Brinberg

      Chief
Operating Officer

       

      Accepted
by:

       

      DEEP
DOWN, INC.

       

      
        By: /s/ Eugene L.
Butler

      

      Eugene L.
Butler

      
        Chief
Financial Officer

         

      

       

      
        
          
          

        

        
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        EXHIBIT
A

      
        On March
20, 2007, the Company finalized the terms of an agreement
with
Daniel L. Ritz, Jr. (shareholder and director), who agreed to surrender
25,000,000 shares of common stock for $250,000 in cash (par value).
Additionally, he surrendered 1,500 shares of Series F convertible preferred
stock and 500 shares of Series G exchangeable preferred stock to The Company for
cancellation. For these actions, Mr. Ritz received 1,250 shares of Series E
exchangeable preferred stock. In addition, Mr. Ritz kept 500 shares of Series E
exchangeable preferred stock he previously owned and agreed to tender his
resignation from the Board.

      

       

      On March
20, 2007, the Company issued 2,000 shares of Series E exchangeable
preferred stock to John C. Siedhoff (shareholder, Chief Financial Officer, and
director) for the surrender of his ownership of 1,500 shares of Series F
convertible preferred stock and 500 shares of Series G exchangeable preferred
stock, which were returned to the transfer agent for cancellation.

       

      On
September 13, 2007, The Company redeemed 2,250 shares of Series E preferred
stock owned by the Chief Executive Officer and director, and his wife, a
Vice-President of the Company. The Series E preferred shares were redeemed for
2,250,000 shares of common stock at the closing price of $0.66.

       

      On
October 2, 2007, the Company exchanged 1,250 shares ($1,250,000 aggregate face
value) of Series E Redeemable Exchangeable Preferred Stock for 1,213,592 shares
of common stock at the closing price of $1.03 per share.

       

      On
October 12, 2007, the Company closed an agreement with Iromnan Energy Capital,
L.P. for a private placement of 3,125,000 shares of common stock of the company
at $0.96 per share, or $3,000,000 in the aggregate, in an agreement reached on
October 2, 2007 when the closing price was $1.03 per share.

       

      During
October 2007, 16,500 shares of Series C convertible preferred stock were
converted into 3,300,000 shares of common stock.

       

       

      Exhibit A-1

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

       

      The
opinion of counsel to the Company shall be to the effect that the Offering
Materials, as amended and supplemented to date, (other than the financial
statements and related schedules therein, as to which it need express no
opinion) comply as to form in all material respects with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder; and nothing came to its attention
that caused it to believe that the Offering Materials, as so amended and
supplemented, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (it being understood that it need express no opinion with
respect to the financial statements, related schedules, and other financial and
statistical data therein).

       

       

       

      
        Exhibit B-1

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
C

       

      INDEMNIFICATION
AGREEMENT

       

      In
connection with the engagement (the "Engagement") by Deep Down, Inc. (the
"Company"), of Dahlman Rose, pursuant to the letter agreement between the
Company and Dahlman Rose to which this Exhibit C is attached as a part of and
incorporated into in its entirety (together, the "Agreement"), including
modifications or future additions to the Engagement and related activities prior
to this date, it is understood and agreed that the Company will, on a current
basis, indemnify and hold harmless Dahlman Rose, any of Dahlman Rose's
affiliates or their respective members, partners, directors, officers,
employees, agents or representatives or any other person controlling Dahlman
Rose or Dahlman Rose's affiliates, if any (each of the foregoing, including DRC,
being a "DRCO Indemnified
Person") to the full extent lawful, from and against any losses, expenses
(including without limitation legal fees and expenses), assessments, claims,
damages, judgments, liabilities or proceedings (hereinafter collectively
referred to as "losses")
to which any DRCO Indemnified Person may become subject under any
applicable federal or state law, or otherwise, as such losses are incurred by a
DRCO Indemnified Person, and are (i) caused by, or arising out of or in
connection with, any untrue statement or alleged untrue statement of a material
fact contained in the transaction documents or any offering materials used in
connection with any sale of Securities (including any amendments or supplements
thereto) or by any
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (other than any untrue offering statements or alleged
untrue statements in, or omissions or alleged omissions from, information
relating to a DRCO Indemnified Person furnished in writing by or on behalf of
such DRCO Indemnified Person expressly for use in such materials), (ii) related
to or otherwise arising out of the Engagement and such DRCO Indemnified Person's
performance of the services contemplated thereby, or (iii) related to the
Company's breach of any representation, warranty or covenant in the Agreement,
whether or not any pending or threatened action, claim or proceeding giving rise
to such losses is initiated or brought by or against the Company or on the
Company's behalf and whether or not in connection with any action, proceeding or
investigation in which the Company or such DRCO Indemnified Persons are a party
or parties, except to the extent that any losses solely with respect to the
foregoing clause (ii) are found in a final judgment by a court of competent
jurisdiction to have resulted solely from such DRCO Indemnified Person's bad
faith or willful misconduct. The Company will promptly reimburse each DRCO
Indemnified Person for its costs of defense (including reasonable legal fees and
expenses and the cost of any investigation and preparation) when and as they are
incurred. The Company also agrees that no DRCO Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or its security holders or creditors related to or arising out of the
Engagement or such DRCO Indemnified Person's performance of services in
connection with the Engagement except to the extent that any losses are found in
a final judgment by a court of competent jurisdiction to have resulted solely
from such DRCO Indemnified Person's bad faith or willful
misconduct.

       

      If for
any reason the foregoing indemnification is unavailable in whole or in part to a
DRCO Indemnified Person, then the Company shall contribute to any losses for
which such indemnification is unavailable (i) in such proportion as is
appropriate to reflect the relative

       

       

      
        Exhibit C-1

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      benefits
received (or anticipated to be received) by the Company on the one hand and the
DRCO Indemnified Person on the other hand from the matters contemplated by the
Engagement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the DRCO Indemnified Person with respect to such losses
and any other relevant equitable considerations. The parties agree that for the
purposes hereof, the relative benefits received (or anticipated to be received)
by Dahlman Rose and by the Company shall be deemed to be in the same proportion
as (i) the total value received (or proposed to be received) by the Company,
pursuant to the matters (whether or not consummated) for which Dahlman Rose has
been engaged bears to (ii) the cash fees actually paid to Dahlman Rose
(excluding payments or reimbursement of expenses) in connection with the
Engagement less any amounts paid or payable or other liabilities incurred by the
DRCO Indemnified Person in connection with the Engagement; provided, however,
that, to the extent permitted by applicable law, in no event shall Dahlman Rose
or any DRCO Indemnified Person be required to contribute an aggregate amount in
excess of the aggregate cash fees actually paid to Dahlman Rose under the
Agreement less any amounts paid or payable or other liabilities incurred by DRCO
Indemnified Person in connection with the Engagement. The Company agrees that it
would not be just and equitable if contribution pursuant to this paragraph were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to
above.

       

      Promptly
after receipt by a DRCO Indemnified Person of written notice of the existence or
commencement of any action, proceeding or investigation for which such DRCO
Indemnified Person may seek reimbursement or indemnification, or the assertion
in writing (and reasonable detail) of any claim for which a DRCO Indemnified
Person may seek reimbursement or indemnification, such DRCO Indemnified Person
shall notify the Company in writing thereof; provided, however, that the failure
of such DRCO Indemnified Person to so notify the Company (i) shall in no event
affect the reimbursement or indemnification rights and obligations hereunder
with respect to any other DRCO Indemnified Person and (ii) shall not affect the
reimbursement or indemnification rights or obligations hereunder with respect to
such DRCO Indemnified Person except to the extent that the failure to so provide
such notice shall actually and materially damage the Company.

       

      The
Company will not, without the DRCO Indemnified Persons' prior written consent,
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding in respect of which indemnification could
be sought hereunder (whether or not any DRCO Indemnified Persons are actual or
potential parties to such claim, action or proceeding), unless such settlement,
compromise or consent (i) includes a provision unconditionally and completely
releasing each DRCO Indemnified Person from all liability arising out of such
claim, action or proceeding, (ii) does not include any statement of fault or
culpability with respect to any DRCO Indemnified Person and (iii) does not
involve any payment of money or other value by any DRCO Indemnified Person or
any injunctive relief or factual findings or stipulations binding on any DRCO
Indemnified Person.

       

      The
foregoing shall be in addition to any rights that the parties may have at common
law or otherwise.

       

       

      
        Exhibit C-2

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      BOTH THE
COMPANY (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) AND DAHLMAN ROSE HEREBY WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT,
TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS EXHIBIT C, THE ENGAGEMENT,
OR DAHLMAN ROSE'S PERFORMANCE OF THE SERVICES REFERRED TO THEREIN.

       

      This
Exhibit C shall remain in full force and effect indefinitely, notwithstanding
the completion or termination of the Engagement. If any term, provision,
covenant or restriction contained in this Exhibit C is held by a court of
competent jurisdiction or other applicable authority to he invalid, void,
unenforceable or against relevant policy, the remainder of the terms,
provisions, covenants and restrictions contained in this Exhibit C shall remain
in full force and effect and shall in no way be impaired, invalidated or
affected.

       

      This
Exhibit C and the representations and warranties of the parties contained in the
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the respective parties, and shall survive any
termination of such Agreement or the completion of any sale of Securities and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company, Dahlman Rose and other DRCO
Indemnified Persons.

       

       

       

       

      
        Exhibit C-3

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
D

       

      Lock-Up
Parties

       

      All
officers, directors and beneficial owners of more than 5% of the Company's
common stock.

       

       

       

       

       

      Exhibit D-1

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