TERM NOTE

$1,150,000                                                      Houston, Texas December 18, 2008

FOR VALUE RECEIVED, DEEP DOWN, INC., a Nevada corporation (“ Borrower ”), hereby promises to pay to the order of WHITNEY NATIONAL BANK, a national banking association (“ Lender ”), on or before the Term Maturity Date, the principal amount of $1,150,000 or so much thereof as may then be outstanding under this note, together with interest, as described below.

This note has been executed and delivered under, and is subject to the terms of, the Credit Agreement dated November 11, 2008 (as amended by that certain First Amendment to Credit Agreement dated as of the date hereof, and as further amended, supplemented or restated, the “ Credit Agreement ”), between Borrower and Lender, and is the “ Term Note ” referred to in the Credit Agreement.  Unless defined in this note, or the context requires otherwise, capitalized terms used in this note have the meanings given to such terms in the Credit Agreement.  Reference is made to the Credit Agreement for provisions affecting this not