LOAN AGREEMENT

Exhibit 10.22

LOAN AGREEMENT

THIS LOAN AGREEMENT is dated this 13th day of February, 2009, by and among Flotation Technologies, Inc., a Maine corporation having its principal place of business at Biddeford, Maine, and a mailing address of 20 Morin Street, Biddeford, Maine 04005, (hereinafter called "Borrower" or "Debtor"); Deep Down Inc., (hereinafter called "Parent Company"), and TD BANK, N.A. a corporation organized under the laws of the United States of America with a place of business at One Portland Square, Portland, Maine, and a mailing address of P.O. Box 9540, Portland, Maine 04112-9540 (hereinafter called "Lender" or the "Bank").

WHEREAS, the Borrower has requested that the Bank make available to Borrower, in accordance with the terms hereof, a loan in the principal amount of $2,160,000.00 (the “Loan”); and

WHEREAS, Bank has agreed, subject to the terms and conditions hereof, to make the Loan available to Borrower; and

WHEREAS, as a condition of making the Loan the Bank has required that the Bank receive and accept confirmation of approval from Whitney National Bank; and

WHEREAS, as a condition of making the Loan the Bank has required that a default in any obligation of Parent Company to Whitney National Bank shall constitute a default under the Loan; and

WHEREAS, the Loan will be secured by a first priority Mortgage and Security Agreement and a first priority Collateral Assignment of Leases and Rents on the Borrower’s premises at 20 Morin Street, Biddeford, Maine, (the “Project”), and

WHEREAS, as a condition of making the Loan the Bank has required a pledge from the Borrower that it will not grant or permit any security interest or other encumbrance of Borrower’s assets, except the existing security interest granted to Whitney National Bank and the security granted to the Bank as provided herein;

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth, Borrower and Lender agree as follows:

SECTION 1. DEFINITIONS

As used herein, unless otherwise specifically defined, the following capitalized words and phrases shall have the following meanings:

1.1           " Loan " shall mean all advances made by Lender to Borrower from time to time pursuant to the Loan referenced above.

1.2           " Loan Documents " means this Agreement, the Note issued to evidence the Loan, and any and all instruments, documents and agreements evidencing, governing or otherwise relating to the Obligations, whether executed contemporaneously herewith or executed at any time in the future, including without limitation the documents listed in the Closing Agenda attached hereto, as the same may be amended, extended, renewed, restated or otherwise modified from time to time.

1.3           " Note " means the Commercial Note of even date herewith executed by the Borrower to the Bank to evidence the loan in the amount of $2,160,000.00, together with any and all amendments and modifications thereto, substitutions therefor and renewals and extensions thereof.

1.4            "Obligations ” means any and all notes (including without limitation the Note, together with any amendments thereto, extensions or renewals thereof or substitutions therefor), liabilities, advances, loans, sums due or to become due under any letters of credit and indebtedness of Borrower to Bank of every kind, nature and description (whether or not evidenced by any note or other instrument, and whether or not for the payment of money), direct or indirect, absolute or contingent, primary or secondary, joint or several, secured or unsecured, due or to become due, now existing or hereafter arising, regardless of how they arise or were acquired, any liability of Borrower to Bank as a guarantor or surety of the indebtedness or liabilities of others, obligations to perform acts and refrain from taking action as well as obligations to pay money, and all interest, fees, charges and expenses (including reasonable attorneys' fees) paid or incurred by Bank at any time in connection with the commitment for, preparation, execution, delivery, amendment, review, perfection, administration and/or enforcement of this Agreement and any other of the Loan Documents and any and all obligations of Borrower to Bank pursuant to the Loan Documents.

1.5            “Project” means and includes the real estate and all appurtenances, equipment, fixtures and other personal property of the Borrower located at or near 20 Morin Street, Biddeford, Maine.

1.6           The singular form of any word used herein, including any of the terms defined above, shall include the plural, and vice versa.  The use herein of a word of any gender shall include both genders.

1.7           The headings or titles of several sections to this Agreement shall be solely for convenience of reference and shall not affect the meaning, construction or effect of the provisions hereof.

SECTION 2.  ESTABLISHMENT OF CREDIT FACILITIES

2.1            Establishment of Credit .  Lender agrees to loan to Borrower an amount not to exceed in the aggregate Two Million One Hundred Sixty Thousand Dollars ($2,160,000.00), subject to the terms of this Agreement and a certain $2,160,000.00 Commercial Note of even date herewith.

2.2            Loan Advances .  The Loan shall be used for working capital, to support increased inventory, purchase of new equipment and completion of building renovations.  At closing the Bank will advance the sum of $1,840,000.00.  Upon completion of construction of the building renovations and issuance of a certificate of occupancy by the City of Biddeford, the Bank will advance the balance of the Loan in the amount of $320,000.00.  Upon disbursement of the second advance, the Bank will recalculate the monthly payment amount on the Note to an amount that will fully amortize the then outstanding principal balance over a term ending 20 years from the date of the Note.

SECTION 3.  REPRESENTATIONS AND WARRANTIES

3.1            General .  Borrower represents, warrants and covenants that the execution, delivery and performance of this Agreement, and any other documents required by Lender relating to this loan transaction are not a violation of, or contrary to, any covenants, warranties or agreements of Borrower with any other persons or parties.  This Agreement evidences a loan for business and commercial purposes, and not for personal, family or household purposes.

3.2            Organization, Standing, Authority, etc .  The Borrower is a corporation duly organized and validly existing under the laws of the State of Maine, and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted, to enter into this Agreement, and all other documents to be executed by it in connection with the transactions contemplated hereby, to issue the Note and to carry out the terms hereof and thereof.  Parent Company is a corporation duly organized and validly existing under the laws of the State of Texas, and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted, to enter into this Agreement, and all other documents to be executed by it in connection with the transactions contemplated hereby, to issue the Debt Subordination and Standby Agreement and to carry out the terms hereof and thereof.

3.3            Litigation, etc .  There is no action, proceeding or investigation of any sort pending or, to the knowledge of the Borrower and Parent Company, threatened (or any basis therefor known to the Borrower and Parent Company) which questions the validity of this Agreement, the Note, the Debt Subordination and Standby Agreement, or the other documents executed in connection herewith, or an action taken or to be taken pursuant hereto, or which might result, either in any case or in the aggregate, in any material adverse change in the business operations, affairs or condition of the Borrower or Parent Company or of their respective properties or in any material liability on the part of the Borrower or Parent Company.

3.4            Authorization; Compliance with Other Instruments .  The execution, delivery and performance of this Agreement and the Note, the Security Instruments and the Debt Subordination and Standby Agreement have been duly authorized by all necessary action on the part of the Borrower and Parent Company, will not result in any violation of or be in conflict with any term of the Borrower’s and Parent Company’s Organizational Documents, including their respective Articles of Organization, Bylaws, or of any material agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to the Borrower or Parent Company, or result in the creation of any mortgage, lien, charge or encumbrance upon any of the properties or assets of the Borrower or Parent Company pursuant to any such term.  Neither the Borrower nor Parent Company is in violation of any term of its Organizational Documents, or of any term of any material agreement or instrument to which it is a party, or, of any judgment, decree, order, statute, rule or governmental regulation applicable to it, the non-compliance with which would have a material adverse effect on the Borrower or Parent Company or their respective properties.

SECTION 4. AFFIRMATIVE COVENANTS

Borrower covenants that from and after the date hereof and so long as this Agreement is in effect or any amounts remain unpaid on account of the Loan,

4.1            Financial Reporting .

(a)           Borrower will provide the following to Lender within 120 days after the end of each fiscal year:

(i) balance sheets and operating statements with respect to the Project and any other property that serves as collateral for the Loan;

(ii) complete federal income tax returns of Borrower, including complete tax returns on any partnerships, corporations or other entities