SECOND AMENDMENT TO CREDIT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”) is entered into as of February 13, 2009, between DEEP DOWN, INC., a Nevada corporation (“ Borrower ”), and WHITNEY NATIONAL BANK, a national banking association (the “ Lender ”).  Capitalized terms used but not defined in this Amendment have the meaning given them in the Credit Agreement (defined below).

A.           Borrower and Lender entered into that certain Credit Agreement dated as of November 11, 2008 (as amended by First Amendment to Credit Agreement dated December 18, 2008, and as further amended, restated, or supplemented, the “ Credit Agreement ”).

B.           Borrower and Lender have agreed to amend the Credit Agreement, subject to the terms and conditions of this Amendment.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned hereby agree as follows:

1.            Amendments to Credit Agreement .

(a)            Section 1.1 of the Credit Agreement is amended to delete the defined terms “ Guarantor ,” “ Loan Documents ,” “ Permitted Debt ,” and “ Permitted Liens ” in their entirety and replace them with the following:

“ Guarantor means each of, and Guarantors means all of, (a) Deep Down Inc., a Delaware corporation, ElectroWave USA, Inc., a Nevada corporation, Mako Technologies, LLC, a Nevada limited liability company, Flotation Technologies, Inc., a Maine corporation, and Deep Down International Holdings, LLC, a Nevada limited liability company, (b) any of Borrower’s other Subsidiaries, or (c) any other Person which signs a Guaranty.”

“ Loan Documents means (a) this Agreement, certificates and requests delivered under this Agreement, and exhibits and schedules to this Agreement, (b) the Notes, (c) all Guaranties, (d) the Security Documents, (e) all Swap Contracts, (f) all other agreements, documents, and instruments in favor of Lender ever delivered in connection with or under this Agreement, and (g) all renewals, extensions, amendments, modifications, supplements, restatements, and replacements of, or substitutions for, any of the foregoing.”

“ Permitted Debt means (a) the Obligation, (b) Debt arising from endorsing negotiable instruments for collection in the ordinary course of business, (c) purchase money Debt and capital lease obligations incurred in the ordinary course of business which, in the aggregate do not exceed $250,000, (d) Debt among the Companies and guaranties by any Company of Permitted Debt, (e) Debt existing on the Closing Date and described on Schedule 1.2 , (f) indemnities arising under agreements entered into by any Company in the ordinary course of business, (g) trade payables, Tax liabilities and other current liabilities incurred in the ordinary course of business, (h) any Debt approved in writing by Lender after the Closing Date, (i) if Borrower requests in writing that Lender increase the amount of its Commitment or approve additional credit extensions to Borrower and Lender declines to do so, Borrower may obtain Funded Debt from a third party in an amount equal to or less than the amount of the credit requested pursuant to such written request, and (j) the TD Bank Debt to the extent that the aggregate principal amount of the TD Bank Debt does not at any time exceed $2,500,000.

Permitted Liens means (a) Liens securing the Obligation, (b) Liens existing on the Closing Date and described on Schedule 1.2 , (c) Liens which secure purchase money Debt and capital lease obligations permitted under clause (c) of the definition of Permitted Debt, (d) easements, rights-of-way, encumbrances and other restrictions on the use of real property which do not materially impair the use thereof, (e) Liens for Taxes; provided that, (i) no amounts are due and payable and no Lien has been filed or agreed to, or (ii)  the validity or amount thereof is being contested in good faith by lawful proceedings diligently conducted, and reserve or other provision required by GAAP has been made, (f) judgments and attachments permitted by Section 11.4 , (g) pledges or deposits made to secure payment of workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits or to participate in any fund in connection with workers’ compensation, unemployment insurance, pensions or other social security programs, (h) rights of offset or statutory banker’s Liens arising in the ordinary course of business in favor of commercial banks; provided that, any such Lien shall only extend to deposits and property in possession of such commercial bank and its Affiliates, (i) good-faith pledges or deposits made in the ordinary course of business to secure (i) performance of bids, tenders, trade contracts ( other than for the repayment of borrowed money) or leases, (ii) statutory obligations, or (iii) surety or appeal bonds, or indemnity, performance or other similar bonds, which, in the aggregate under this clause (i) , do not exceed $50,000 at any time, (j) Liens ( other than for Taxes) imposed by operation of law (including Liens of mechanics, materialmen, warehousemen, carriers and landlords and similar Liens); provided that, (i) the validity or amount thereof is being contested in good faith by lawful proceedings diligently conducted, (ii) reserve or other provision required by GAAP has been made, and (iii) within 60 days after the entry thereof, levy and execution thereon have been (and continue to be) stayed or payment thereof is covered in full by insurance (subject to the customary deductible), (k) Liens which secure any Company’s obligations under any lease for equipment used by such Company in the ordinary course of its business, (l) Liens which secure the Funded Debt permitted under clause (i) of the definition of Permitted Debt, and (m) Liens arising pursuant to the TD Bank Loan Documents.”

(b)            Section 1.1 of the Credit Agreement is further amended to add the following new defined terms in the appropriate alphabetical order:

“ Deep Down International means Deep Down International Holdings, LLC, a Nevada limited liability company, which is or will become a direct wholly-owned subsidiary of Borrower.”

“ Flotation Technologies means Flotation Technologies, Inc., a Maine corporation.

Flotation Technologies Real Estate means that certain real property located at 20 Morin Street, Biddeford, Maine 04005.”

“ TD Bank means TD Bank, N.A., a national banking association.

TD Bank Debt means the indebtedness owed by Flotation Technologies to TD Bank pursuant to the TD Bank Loan Documents which (a) does not, in the aggregate principal amount, at any time exceed $2,500,000, and (b) is secured solely by the TD Bank Loan Documents.

TD Bank Loan Agreement means that certain Loan Agreement dated February 13, 2009, between Flotation Technologies, as borrower, and TD Bank.

TD Bank Loan Documents means (a) the TD Bank Loan Agreement, (b) the TD Bank Mortgage, and (c) all other documents and instruments executed in connection therewith.

TD Bank Mortgage means that certain Mortgage and Security Agreement dated February 13, 2009, from Flotation Technologies to TD Bank, pursuant to which Flotation Technologies granted a lien on the Flotation Technologies Real Estate in favor of TD Bank to secure the repayment of the TD Bank Debt.

TD Bank Negative Pledge means the prohibition on the pledge of assets by Flotation Technologies set forth in Section 23 of the TD Bank Mortgage.”

(c)            Section 6.1 of the Credit Agreement is amended to delete the second sentence thereof in its entirety and replace it with the following:

“Each Company shall execute all applicable Security Documents to pledge all of the Collateral it owns, provided that , Flotation Techn