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Agreement and Promissory Notes

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN
AGREEMENT AND PROMISSORY NOTES

This THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND PROMISSORY NOTES (the Amendment), executed to be effective as of June 29, 2006 (the Closing Date) is entered into by and among Horizon Vessels, Inc., a Delaware corporation, Horizon Offshore, Inc., a Delaware corporation, and Horizon Offshore Contractors, Inc., a Delaware corporation (referred to, jointly and severally, as the Borrower) and General Electric Capital Corporation, a Delaware corporation, successor-in-interest to SouthTrust Bank (the Bank). All capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Loan Agreement (as hereinafter defined).

WHEREAS, the Borrower and the Bank are parties to that certain Amended and Restated Loan Agreement dated as of June 29, 2001 (as amended by that certain First Amendment to Amended and Restated Loan Agreement dated November 4, 2004 and that certain Second Amendment to Amended and Restated Loan Agreement dated March 31, 2005, the Loan Agreement), wherein Borrower obtained a single advance term loan in the original principal amount of $6,000,000 (the $6,000,000 Loan) and a single advance term loan in the amount of $1,680,000 (the $1,680,000 Loan, together with the $6,000,000 Loan, the Loans). In connection with the Loans, Borrower executed certain instruments and documents evidencing, securing, governing, guaranteeing and/or pertaining to the Loans including but not limited to the following (collectively, the Loan Documents):

(1) the real estate promissory note (the June 2001 Note) dated June 29, 2001, in the original principal amount of $6,000,000.00, executed by the Borrower and payable to the order of SouthTrust Bank, predecessor-in-interest to the Bank, bearing interest and due and payable as therein provided;

(2) the real estate promissory note (the August 2001 Note together with the June 2001 Note, the Notes) dated August 31, 2001, in the original principal amount of $1,680,000.00, executed by the Borrower and payable to the order of SouthTrust Bank, predecessor-in-interest to the Bank, bearing interest and due and payable as therein provided;

(3) the deed of trust (with security agreement, assignment of leases, assignment of rents, and financing statement) (the June 2001 Deed of Trust) dated June 29, 2001, executed by the Borrower, for the benefit of SouthTrust Bank, predecessor-in-interest to Bank, securing the $6,000,000 Loan; and

(4) the deed of trust (with security agreement, assignment of leases, assignment of rents, and financing statement) (the August 2001 Deed of Trust) dated August 31, 2001, executed by the Borrower, for the benefit of SouthTrust Bank, predecessor-in-interest to Bank, securing the $1,680,000 Loan.

WHEREAS, Borrower has requested that the Bank (i) extend the maturity date of the Notes and (ii) amend the Loan Agreement and the Notes in accordance with the terms and conditions described herein, and

WHEREAS, the Bank has agreed to do so, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Loan Agreement. The Loan Agreement is hereby amended as follows:

(a) Annex I attached hereto is hereby added to the end of the Loan Agreement as Annex I and the terms and provisions contained in Annex I are incorporated by reference into the Loan Agreement as if fully set forth therein.

(b) Section 5 of the Loan Agreement is hereby deleted in its entirety and the following is substituted therefor:

5. Affirmative Covenants. Until (i) the Notes and other obligations and liabilities of Borrower under this Loan Agreement and the other Loan Documents are fully paid and satisfied, and (ii) the Bank has no further commitment to lend hereunder, Borrower agrees and covenants that it will, unless the Bank shall otherwise consent in writing:

(a) Maintenance of Corporate Existence. Preserve and maintain (a) its legal existence and good standing under the laws of the jurisdiction of its incorporation or organization and (b) its rights (charter and statutory), privileges franchises and Permits necessary or desirable in the conduct of its business, except, in the case of this clause (b), where the failure to do so would not, in the aggregate, have a Material Adverse Effect.

(b) Compliance with Laws, Etc. Comply with all applicable Requirements of Law, Contractual Obligations and Permits, except for such failures to comply that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(c) Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all of its Charges and other obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower and none of the Collateral is or could reasonably be expected to become subject to any Lien or forfeiture or loss as a result of such contest.

(d) Maintenance of Property. Maintain and preserve (a) in all material respects in good working order and condition the Collateral and all other of its property reasonably necessary in the conduct of its business in each case, ordinary wear and tear excepted, and (b) all material rights, permits, licenses, approvals and privileges (including all Permits) necessary, used or useful, whether because

of its ownership, lease, sublease or other operation or occupation of property or other conduct of its business, and shall make all necessary or appropriate filings with, and give all required notices to, Government Authorities.

(e) Maintenance of Insurance. Maintain insurance, including but not limited to, fire insurance, comprehensive property damage, public liability, workers compensation, business interruption and other insurance deemed necessary or otherwise required by Bank. With respect to the insurance policy for the Port Arthur Property (as described in the Deeds of Trust) General Electric Capital Corporation shall be named as additional insured and loss payee.

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