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                                                                   Exhibit 10.49

                                 LOAN AGREEMENT
                             (Amended and Restated)

                                  June 29, 2001

Horizon Vessels, Inc.
Horizon Offshore, Inc., and
Horizon Offshore Contractors, Inc.
2500 Citywest Blvd., Suite 2200
Houston, Texas 77042

RE: Loans by SouthTrust Bank to Horizon Vessels, Inc., a Delaware Corporation,
Horizon Offshore, Inc., a Delaware Corporation and Horizon Offshore Contractors,
Inc., a Delaware Corporation, in the original principal amount of $6,000,000.00,
dated June 29, 2001, and in the original principal amount of $1,680,000.00 dated
August 31, 2001, secured respectively by Deeds of Trust dated June 29, 2001 and
August 31, 2001, and recorded in the Official Public Records of Real Property of
Jefferson County, Texas under File No. 2001024037 and 2001032447.

     This amended and restated Loan Agreement (the "Loan Agreement") sets forth
the revised terms of certain financing transactions between 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 "Borrower"), and SouthTrust Bank (the "Bank"):

1. LOAN. The Bank has made to Borrower a loan in a separate, single advance on
June 29, 2001 (the "Effective Date") for $6,000,000 subject to the provisions of
a Loan Agreement dated effective on the Effective Date (the "$6,000,000 Loan").
In addition on August 31, 2001, the Bank made to Borrower a loan in a separate,
single advance of $1,680,000 (the "$1,680,000 Loan"). The $6,000,000 Loan and
the $1,680,000 Loan are collectively referred to as the "Loans."and both of the
Loans are secured by certain real property and personal property (the "Real and
Personal Property") described in the Deeds of Trust (with combined Security
Agreements) identified above. The purposes of this amended and restated Loan
Agreement is to revise and restate the terms of the Loan Agreement and to
expressly include the $1,680,000 Loan under the Loan Agreement. The
modifications made pursuant to this amended and restated Loan Agreement are
expressly conditioned on the execution of the 2004 Subordinated Notes (defined
below) and on the funding of the loans evidenced by the 2004 Subordinated Notes.
The original Loan Agreement and this amended and restated Loan Agreement, and
the other agreements, instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to either of the Loans (including both the
$6,000,000 Loan and the $1,680,000 Loan), as defined


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either in this amended and restated Loan Agreement or in the original Loan
Agreement are collectively referred to as the "Loan Documents". All references
in any Loan Document to the "Loan Agreement" shall be deemed to refer to
original Loan Agreement for any act, omission, occurrence, event, or default
during any period from the Effective Date to March ___, 2004, the date of this
amended and restated Loan Agreement and shall be deemed to refer to this amended
and restated Loan Agreement for any act, omission, occurrence, event, or default
commencing on March ____, 2004, the date of this Amended and restated Loan
Agreement. Notwithstanding anything to the contrary in the Loan Documents, the
Bank hereby consents to Horizon Vessels, Inc. granting a mortgage to Elliott
Associates, L.P. in the Real and Personal Property securing the 2004
Subordinated Notes, that shall be inferior to the Deeds of Trust in favor of the
Bank.

2.   PROMISSORY NOTES. The Loans shall be evidenced by one or more promissory
     notes (whether one or more, together with any renewals, extensions and
     increases thereof, the "Notes") duly executed by Borrower and payable to
     the order of Bank, in form and substance acceptable to Bank. Interest on
     the Notes shall accrue at the rate(s) determined under the Notes. Principal
     and interest on the Notes shall be due and payable in accordance with the
     provisions set forth in the Notes and in this Loan Agreement.

3.   COLLATERAL. As collateral and security for the indebtedness evidenced by
     the Notes and any and all other indebtedness or obligations from time to
     time owing by Borrower to Bank, Borrower shall grant, and hereby grants, to
     Bank, its successors and assigns, a first and prior lien and security
     interest in and to the property described below, together with any and all
     PRODUCTS AND PROCEEDS thereof (the "Collateral"):

          a. Being 21.2284 acres of land, more or less, being all of Tracts No.
          8, 9, 10, 11 and 12, out of what is commonly referred to as Pleasure
          Islet and being out of that certain 92.563 acre tract of land
          heretofore conveyed unto Pleasure Islet Associates duly authorized by
          resolution No. 81-188 dated July 13, 1981 of the City Council of the
          City of Port Arthur and being out of that certain 1,877.94 acre tract
          of land heretofore conveyed to the City of Port Arthur, Texas, by the
          State of Texas by patent as recorded in Vol 1014, Page 476, Deed
          Records of Jefferson County, Texas; said 21.2284 acre tract being all
          of Tract Nos. 8, 9, 10, 11 and 12 that was conveyed to Coastal Marine
          Service of Texas, Inc. by Joe Lyday on October 4, 1994 by Special
          Warranty Deed and recorded in County Clerk's File No. 9432540 Official
          Public Records of Real Property of Jefferson County, Texas, together
          with all improvements, fixtures, equipment and other appurtenances
          attached thereto, more particularly described in the Deed of Trust
          executed in connection with the Loan Agreement, such real property
          being more particularly described in the Deed of Trust recorded under
          File No. 2001024037 of the Official Public Records of Real Property of
          Jefferson County, Texas, and in the Deed of Trust recorded under File
          No. 2001032447 of the Official Public Records of Real Property of
          Jefferson County, Texas..


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          b. All equipment and fixtures of whatsoever kind and character now or
          hereafter possessed, held, acquired, leased or owned by Borrower and
          used or usable in Borrower's business, located at or on the real
          property subject to such Deed of Trust identified above, together with
          all replacements, accessories, additions, substitutions and accessions
          to all of the foregoing.

     The term "Collateral" shall also include all records and data relating to
     any of the foregoing (including, without limitation, any computer software
     on which such records and data may be located). Borrower agrees to execute
     such security agreements, assignments, deeds of trust and other agreements
     and documents as Bank shall deem appropriate and otherwise require from
     time to time to more fully create and perfect Bank's lien and security
     interests in the Collateral.

4.   REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants,
     and upon each request for an advance under the Loan, further represents and
     warrants, to Bank as follows:

     a.   Existence. Borrower is a corporation duly organized, validly existing
          and in good standing under the laws of the State of Delaware and all
          other states where it is doing business, and has all requisite power
          and authority to execute and deliver the Loan Documents.

     b.   Binding Obligations. The execution, delivery, and performance of this
          Loan Agreement and all of the other Loan Documents by Borrower have
          been duly authorized by all necessary action by Borrower, and
          constitute legal, valid and binding obligations of Borrower,
          enforceable in accordance with their respective terms, except as
          limited by bankruptcy, insolvency or similar laws of general
          application relating to the enforcement of creditors' rights and
          except to the extent specific remedies may generally be limited by
          equitable principles.

     c.   No Consent. The execution, delivery and performance of this Loan
          Agreement and the other Loan Documents, and the consummation of the
          transactions contemplated hereby and thereby, do not (i) conflict
          with, result in a violation of, or constitute a default under (A) any
          provision of its articles or certificate of incorporation or bylaws,
          if Borrower is a corporation, or its partnership agreement, if
          Borrower is a partnership, or any agreement or other instrument
          binding upon Borrower, or (B) any law, governmental regulation, court
          decree or order applicable to Borrower, or (ii) require the consent,
          approval or authorization of any third party.

     d.   Financial Condition. Each financial statement of Borrower supplied to
          the Bank truly discloses and fairly presents Borrower's financial
          condition as of the date of each such statement. There has been no
          material adverse change in such financial


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          condition or results of operations of Borrower subsequent to the date
          of the most recent financial statement supplied to the Bank.

     e.   Litigation. There are no actions, suits or proceedings, pending or, to
          the knowledge of Borrower, threatened against or affecting Borrower or
          the properties of Borrower, before any court or governmental
          department, commission or board, which, if determined adversely to
          Borrower, would have a material adverse effect on the financial
          condition, properties, or operations of Borrower.

     f.   Taxes; Governmental Charges. Borrower has filed all federal, state and
          local tax reports and returns required by any law or regulation to be
          filed by it and has either duly paid all taxes, duties and charges
          indicated due on the basis of such returns and reports, or made
          adequate provision for the payment thereof, and the assessment of any
          material amount of additional taxes in excess of those paid and
          reported is not reasonably expected.

5.   AFFIRMATIVE COVENANTS. Until (i) the Notes and all 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 Bank shall otherwise consent in writing:

     a.   Accounts and Records. Maintain its books and records in accordance
          with generally accepted accounting principles.

     b.   Right of Inspection. Permit Bank to visit its properties and
          installations and to examine, audit and make and take away copies or
          reproductions of Borrower's books and records, at all reasonable
          times.

     c.   Right to Additional Information. Furnish Bank with such additional
          information and statements, lists of assets and liabilities, tax
          returns, and other reports with respect to Borrower's financial
          condition and business operations as Bank may request from time to
          time.

     d.   Compliance with Laws. Conduct its business in an orderly and efficient
          manner consistent with good business practices, and perform and comply
          with all statutes, rules, regulations and/or ordinances imposed by any
          governmental unit upon Borrower its businesses, operations and
          properties (including without limitation, all applicable environmental
          statutes, rules, regulations and ordinances).

     e.   Taxes. Pay and discharge when due all of its indebtedness and
          obligations, including without limitation, all assessments, taxes,
          governmental charges, levies and liens, of every kind and nature,
          imposed upon Borrower or its properties, income, or profits, prior to
          the date on which penalties would attach, and all


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          lawful claims that, if unpaid, might become a lien or charge upon any
          of Borrower's properties, income, or profits; provided, however,
          Borrower will not be required to pay and discharge any such
          assessment, tax, charge, levy, lien or claim so long as (i) the
          legality of the same shall be contested in good faith by appropriate
          judicial, administrative or other legal proceedings, and (ii) Borrower
          shall have established on its books adequate reserves with respect to
          such contested assessment, tax, charge, levy, lien or claim in
          accordance with generally accepted accounting principles, consistently
          applied.

     f.   Insurance. Maintain insurance, including but not limited to, fire
          insurance, comprehensive property damage, public liability, worker's
          compensation, business interruption and other insurance deemed
          necessary or otherwise required by Bank.

     g.   Notice of Indebtedness. Promptly inform Bank of the creation,
          incurrence or assumption by Borrower of any actual or contingent
          liabilities not permitted under this Loan Agreement.

     h.   Notice of Litigation. Promptly after the commencement thereof, notify
          Bank of all actions, suits and proceedings before any court or any
          governmental department, commission or board affecting Borrower or any
          of its properties.

     i.   Notice of Material Adverse Change. Promptly inform Bank of (i) any and
          all material adverse changes in Borrower's financial condition, and
          (ii) all claims made against Borrower which could materially affect
          the financial condition of Borrower.

     j.   Additional Documentation. Execute and deliver, or cause to be executed
          and delivered, any and all other agreements, instruments or documents
          which Bank may reasonably request in order to give effect to the
          transactions contemplated under this Loan Agreement and the other Loan
          Documents.

6.   NEGATIVE COVENANTS. Until (i) the Notes and all 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 will not, without the prior written
     consent of Bank make any material change in the nature of its business as
     carried on as of the Effective Date and will not violate or fail to comply
     with any covenants or agreements regarding other debt which will or would
     with the passage of time or upon demand cause the maturity of any other
     debt to be accelerated.

7.   FINANCIAL COVENANTS. Unless otherwise specified, all accounting and
     financial terms and covenants set forth in this agreement are to be
     determined according to generally accepted accounting principles,
     consistently applied. Until (i) the Notes and all other obligations and
     liabilities of Borrower under this Loan Agreement and the other Loan


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     Documents are fully paid and satisfied, and (ii) the Bank has no further
     commitment to lend hereunder, Borrower will maintain the following
     financial covenants:

     a.   During the period from the Date of the Note to December 31, 2003, the
          following subsections 1 - 6 shall apply:

          1.   Working Capital. Borrower will maintain, at all times, its
               current assets (excluding prepaid expenses), less its current
               liabilities at an amount not less than $10,000,000.00.

          2.   Current Ratio. Borrower will maintain, at all times, a ratio of
               (a) current assets (excluding prepaid expenses), to (b) current
               liabilities of not less than 1.0 to 1.0.

          3.   Tangible Net Worth. Borrower will maintain, at all times, its
               Tangible Net Worth at not less than $125,000,000.00.

          4.   Liabilities/Tangible Net Worth. Borrower will maintain, at all
               times, a ratio of (a) total liabilities to (b) Tangible Net Worth
               of not greater than 1.5 to 1.0.

          5.   Debt Service. Borrower will maintain, as of the last day of each
               fiscal year, a ratio of (a) net income after taxes plus
               depreciation, amortization and other non-cash expenses for the 12
               month period ending with such fiscal year, less any Distributions
               during such 12 month period to (b) current maturities of
               long-term debt and long-term leases for such 12 month period, of
               not less than 1.3 to 1.0.

          6.   EBIDA. Borrower will not permit the ration of its funded debt to
               EBIDA to exceed 3.6x.

     b.   Except for subsection 4, which will apply from December 31, 2003
          through December 31, 2004 only, during the period from December 31,
          2003 through maturity of the Notes, the following subsections 1 - 17
          shall apply:

          1.   Current Ratio. Borrower will maintain, at all times, a CURRENT
               RATIO of not less than the amount required by the following
               schedule:

                         A. .90x, during each of the fiscal quarters ending on
                    March 31, 2004, and ending on June 30, 2004;

                         B. 1.05x, during the fiscal quarter ending September
                    30, 2004;

                         C. 1.10x, during the fiscal quarter ending December 31,
                    2004;


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                         D. 1.0x, for all fiscal quarters beginning after
                    December 31, 2004.

               The Current Ratio shall be calculated and tested quarterly as of
               the last day of each fiscal quarter of Borrower commencing with
               the fiscal quarter ending March 31, 2004

          2.   Minimum Tangible Net Worth. Borrower will at all times maintain
               Tangible Net Worth in an amount not less than the sum of (a)
               $110,000,000.00, plus (b) seventy-five percent (75%) of Net
               Income for each fiscal quarter of the Company and its
               Subsidiaries which has been completed as of the date of
               calculation, commencing with the fiscal quarter ending March 31,
               2004, provided, however, that in the event that Net Income of the
               Company and its Subsidiaries is not greater than zero for any
               fiscal quarter, an amount equal to zero shall be added to the
               calculation of Tangible Net Worth for such fiscal quarter, plus
               (c) ninety percent (90%) of the net proceeds of any common stock
               or other equity issued by the Company or any of its Subsidiaries
               (on a consolidated basis) after December 31, 2003. Tangible Net
               Worth shall be calculated and tested quarterly as of the last day
               of each fiscal quarter of the Company commencing with the fiscal
               quarter ending March 31, 2004. Any audit adjustment for fiscal
               year ended December 31, 2003 that results in an adjustment to the
               equity accounts in excess of $53,416,000, will adjust the minimum
               Tangible Net Worth requirement on a dollar for dollar basis.

          3.   Fixed Charge Coverage. Borrower will maintain, as of the end of
               each fiscal quarter, a FIXED CHARGE COVERAGE RATIO of not less
               than the amount required by the following schedule:

               A.    1.50x, during the fiscal quarter ending September 30, 2004;
                     and

               B.    1.40x, during the fiscal quarter ending December 31, 2004.

               C.    1.20x, for all fiscal quarters beginning after December 31,
                     2004.

     [No fixed charge coverage ratio requirement in first or second quarter
2004.]

          4.   Minimum EBITDAR. Borrower shall achieve EBITDAR of not less than
               the amount required by the following schedule:

               A.   -$2,500,000.00 for the fiscal quarter ending on March 31,
                    2004;

               B.   -$4,500,000.00, combined, for the preceding two fiscal
                    quarters ending on June 30, 2004;

               C.   $8,000,000.00, combined, for the preceding three fiscal
                    quarters ending September 30, 2004; and

               D.   $20,000,000.00, combined, for the preceding four fiscal
                    quarters ending December 31, 2004.

     [EBITDAR to be calculated on a cumulative basis beginning in first quarter
2004.]


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          5.   The term "CURRENT RATIO" means, at any particular date, (a)
               Current Assets as of such date divided by (b) Current Liabilities
               as of such date.

          6.   The term "CURRENT ASSETS" means all amounts which, in conformity
               with GAAP, would be included as current assets on a consolidated
               balance sheet of Horizon Offshore, Inc. (the "Company") and its
               subsidiaries.

          7.   The term "CURRENT LIABILITIES" means all amounts which, in
               conformity with GAAP, would be included as current liabilities on
               a consolidated balance sheet of the Company and its subsidiaries,
               excluding all revolving facilities and any balloon payment due in
               the next twelve (12) months.

          8.   The term "NET INCOME" means, for any period, with respect to the
               Company and its Subsidiaries, the consolidated net income (or
               loss) of the Company and its Subsidiaries for such period,
               determined in accordance with GAAP applied consistently,
               (excluding any extraordinary items during such period).

          9.   The term "TANGIBLE NET WORTH" means, at any particular date, all
               amounts which, in conformity with GAAP, would be included as
               stockholder's equity on a consolidated balance sheet of the
               Company and its subsidiaries; provided, however, there shall be
               excluded there from (a) any amount at which shares of capital
               stock of the Company or any Subsidiary appear as an asset on the
               Company's or such Subsidiary's balance sheet, (b) goodwill,
               including any amounts, however designated, that represent the
               excess of purchase price paid for assets or stock over the value
               assigned thereto, (c) patents, trademarks, trade names, and
               copyrights, (d) deferred expenses, (e) loans and advances to any
               stockholder, director, officer, or employee of the Company or any
               Subsidiary or any Affiliate, (f) all other assets which are
               properly classified as intangible assets; and (g) any
               paid-in-kind interest on the 2004 Subordinated Notes.

          10.  The term "FIXED CHARGE COVERAGE RATIO" means for the Company and
               its Subsidiaries, on a consolidated basis,

               (a) as of September 30, 2004, (i) EBITDA for the quarter ended as
               of September 30, 2004 divided by (ii) the sum of (A) Current
               Maturities of Long Term Debt as of September 30, 2004 divided by
               four (4), plus (B) Cash Interest for the quarter ended September
               30, 2004, plus (C) Tax Expense for the quarter ended September
               30, 2004, and

               (b) as of December 31, 2004, (i) EBITDA for the quarters ended
               September 30, 2004 and December 31, 2004 divided by (ii) the sum
               of (A) Current Maturities of Long Term Debt as of December 31,
               2004 divided


                                     Page 8
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               by two (2), plus (B) Cash Interest for the quarters ended
               September 30, 2004 and December 31, 2004, plus (C) Tax Expense
               for the quarters ended September 30, 2004 and December 31, 2004,
               and

               (c) as of March 31, 2005, (i) EBITDA for the quarters ended
               September 30, 2004, December 31, 2004, and March 31, 2005 divided
               by (ii) the sum of (A) Current Maturities of Long Term Debt as of
               March 31, 2005 times .75 (seventy-five percent), plus (B) Cash
               Interest for the quarters ended September 30, 2004 , December 31,
               2004, and March 31, 2005, plus (C) Tax Expense for the quarters
               ended September 30, 2004 , December 31, 2004, and March 31, 2005,
               and

               (d) as of June 30, 2005 and all quarter ending thereafter, (i)
               EBITDA for the four (4) quarters there ended divided by (ii) the
               sum of (A) Current Maturities of Long Term Debt as of the quarter
               there ended, plus (B) Cash Interest for the four (4) quarters
               there ended, plus (C) Tax Expense for the four (4) quarters there
               ended.

          11.  The term "EBITDA" means for the Company and its Subsidiaries, on
               a consolidated basis, for any period, the sum of (a) Net Income
               before gains and losses on sales of assets (to the extent such
               gains and losses are included in earnings), plus (b) TAX EXPENSE,
               plus (c) depreciation and amortization, plus (d) Interest
               Expense.

          12.  The term "CASH INTEREST" means, for any period, the consolidated
               interest expense of the Company and its Subsidiaries for such
               period, determined in accordance with GAAP applied consistently,
               less the interest related to the Subordinated Debt which is in
               fact paid in kind.

          13.  The term "CURRENT MATURITIES OF LONG TERM DEBT" means for the
               Company and its Subsidiaries on a consolidated basis, the
               principal amount due and payable during the next succeeding
               twelve month period on Total Funded Debt of the Company and its
               Subsidiaries which has a final maturity more than twelve months
               from the date of calculation, excluding all revolving facilities
               and any balloon payment due in the next twelve (12) months.

          14.  The term "INTEREST EXPENSE" means, for any period, the
               consolidated interest expense of the Company and its Subsidiaries
               for such period, determined in accordance with GAAP applied
               consistently.

          15.  The term "TAX EXPENSE" means, for any period, for the Company and
               its Subsidiaries, on a consolidated basis, the sum of all tax
               expense of the Company and its Subsidiaries for such period
               determined in accordance with GAAP applied consistently.


                                     Page 9
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          16.  The term "EBITDAR" means for the Company and its Subsidiaries, on
               a consolidated basis, for any period, the sum of (a) Net Income
               before gains and losses on sales of assets (to the extent such
               gains and losses are included in earnings), plus (b) Tax Expense,
               plus (c) depreciation and amortization, plus (d) Interest
               Expense, plus (e) restructuring charges, including costs of
               professional advisors to the Borrowers (for the professional
               advisors to the Borrowers, the Lenders or other creditors) not to
               exceed $1,600,000 for the fiscal year ended December 31, 2004.

          17.  The term "2004 Subordinated Notes" means the subordinated notes
               of Horizon Offshore, Inc., issued pursuant to the Purchase
               Agreement dated as of March __, 2004, and all related liens and
               security documents.

8.   REPORTING REQUIREMENTS. Until (i) the Notes and all 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 will, unless Bank shall otherwise
     consent in writing, furnish to Bank:

     a.   Interim Financial Statements. As soon as available, and in any event
          within forty-five (45) days after the end of each fiscal quarter of
          each fiscal year of Borrower, a balance sheet and income statement of
          Borrower as of the end of such fiscal quarter together with a copy of
          all filings with the Securities and Exchange Commission, all in form
          and substance and in reasonable detail satisfactory to Bank and duly
          certified (subject to year-end review adjustments) by the President
          and/or Chief Financial Officer of Borrower (i) as being true and
          correct in all material aspects to the best of his or her knowledge
          and (ii) as having been prepared in accordance with generally accepted
          accounting principles, consistently applied, and in each case audited
          by independent public accountants of recognized standing acceptable to
          Bank.

     b.   Annual Financial Statements. As soon as available and in any event
          within ninety (90) days after the end of each fiscal year of Borrower,
          a balance sheet and income statement of Borrower as of the end of such
          fiscal year together with a copy of all filings with the Securities
          and Exchange Commission, all in form and substance and in reasonable
          detail satisfactory to Bank and duly certified (subject to year-end
          review adjustments) by the President and/or Chief Financial Officer of
          Borrower (i) as being true and correct in all material aspects to the
          best of his or her knowledge and (ii) as having been prepared in
          accordance with generally accepted accounting principles, consistently
          applied, and in each case audited by independent public accountants of
          recognized standing acceptable to Bank.


                                    Page 10
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9. EVENTS OF DEFAULT. Each of the following shall constitute an "Event of
Default" under this Loan Agreement:

     a.   The failure, refusal or neglect of Borrower to pay when due any part
          of the principal of, or interest on, the Notes or any other
          indebtedness or obligations owing to Bank by Borrower from time to
          time.

     b.   The failure of Borrower or any Obligated Party (as defined below) to
          timely and properly observe, keep or perform any covenant, agreement,
          warranty or condition required in this Loan Agreement or in any of the
          other Loan Documents.

     c.   The occurrence of an event of default under any of the other Loan
          Documents or under any other agreement now existing or hereafter
          arising between Bank and Borrower.

     d.   Any representation contained in this Loan Agreement or in any of the
          other Loan Documents made by Borrower or any Obligated Party is false
          or misleading in any material respect.

     e.   The occurrence of any event which permits the acceleration of the
          maturity of any indebtedness owing by Borrower to any third party
          under any agreement or understanding.

     f.   If Borrower or any Obligated Party: (i) becomes insolvent, or makes a
          transfer in fraud of creditors, or makes an assignment for the benefit
          of creditors, or admits in writing its inability to pay its debts as
          they become due; (ii) generally is not paying its debts as such debts
          become due; (iii) has a receiver, trustee or custodian appointed for,
          or take possession of, all or substantially all of the assets of such
          party, either in a proceeding brought by such party or in a proceeding
          brought against such party and such appointment is not discharged or
          such possession is not terminated within sixty (60) days after the
          effective date thereof or such party consents to or acquiesces in such
          appointment or possession; (iv) files a petition for relief under the
          United States Bankruptcy Code or any other present or future federal
          or state insolvency, bankruptcy or similar laws (all of the foregoing
          collectively referred to as "Applicable Bankruptcy Law") or an
          involuntary petition for relief is filed against such party under any
          Applicable Bankruptcy Law and such involuntary petition is not
          dismissed within sixty (60) days after the filing thereof, or an order
          for relief naming such party is entered under any Applicable
          Bankruptcy Law, or any composition, rearrangement, extension,
          reorganization or other relief of debtors now or hereafter existing is
          requested or consented to by such party; (v) fails to have discharged
          within a period of thirty (30) days any attachment, sequestration or
          similar writ levied upon any property


                                    Page 11
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          of such party; or (vi) fails to pay within thirty (30) days any final
          money judgment against such party.

     g.   If Borrower or any Obligated Party is an entity, the liquidation,
          dissolution, merger or consolidation of any such entity or, if
          Borrower or any Obligated Party is an individual, the death or legal
          incapacity of any such individual.

     h.   The entry of any judgment against Borrower or the issuance or entry of
          any attachment or other lien against any of the property of Borrower
          for an amount in excess of $300,000.00, to the extent not covered by
          insurance, if undischarged, unbonded or undismissed within thirty (30)
          days after such entry.

Nothing contained in this Loan Agreement shall be construed to limit the events
of default enumerated in any of the other Loan Documents and all such events of
default shall be cumulative. The term "Obligated Party", as used in this Loan
Agreement, shall mean any party other than Borrower who secures, guarantees
and/or is otherwise obligated to pay all or any portion of the indebtedness
evidenced by the Notes.

10.  REMEDIES. Upon the occurrence of any one or more of the foregoing Events of
     Default, (a) the entire unpaid balance of principal of the Notes, together
     with all accrued but unpaid interest thereon, and all other indebtedness
     owing to Bank by Borrower at such time shall, at the option of Bank, become
     immediately due and payable without further notice, demand, presentation,
     notice of dishonor, notice of intent to accelerate, notice of acceleration,
     protest or notice of protest of any kind, all of which are expressly waived
     by Borrower, and (b) Bank may, at its option, cease further advances under
     any of the Notes; provided, however, concurrently and automatically with
     the occurrence of an Event of Default under subparagraph (f) in the
     immediately preceding paragraph (i) further advances under the Notes shall
     cease, and (ii) the Notes and all other indebtedness owing to Bank by
     Borrower at such time shall, without any action by Bank, become due and
     payable, without further notice, demand, presentation, notice of dishonor,
     notice of acceleration, notice of intent to accelerate, protest or notice
     of protest of any kind, all of which are expressly waived by Borrower. All
     rights and remedies of Bank set forth in this Loan Agreement and in any of
     the other Loan Documents may also be exercised by Bank, at its option to be
     exercised in its sole discretion, upon the occurrence of an Event of
     Default.

11.  RIGHTS CUMULATIVE. All rights of Bank under the terms of this Loan
     Agreement shall be cumulative of, and in addition to, the rights of Bank
     under any and all other agreements between Borrower and Bank (including,
     but not limited to, the other Loan Documents), and not in substitution or
     diminution of any rights now or hereafter held by Bank under the terms of
     any other agreement.

12.  WAIVER AND AGREEMENT. Neither the failure nor any delay on the part of Bank
     to exercise any right, power or privilege under any of the Loan Documents
     shall operate as a


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<PAGE>
     waiver thereof, nor shall any single or partial exercise of such right,
     power or privilege preclude any other or further exercise thereof or the
     exercise of any other right, power or privilege. No waiver of any provision
     in this Loan Agreement or in any of the other Loan Documents and no
     departure by Borrower therefrom shall be effective unless the same shall be
     in writing and signed by Bank, and then shall be effective only in the
     specific instance and for the purpose for which given and to the extent
     specified in such writing. No modification or amendment to this Loan
     Agreement or to any of the other Loan Documents shall be valid or effective
     unless the same is signed by the party against whom it is sought to be
     enforced.

13.  BENEFITS. This Loan Agreement shall be binding upon and inure to the
     benefit of Bank and Borrower, and their respective successors and assigns,
     provided, however, that Borrower may not, without the prior written consent
     of Bank, assign any rights, powers, duties or obligations under this Loan
     Agreement or any of the other Loan Documents.

14.  NOTICES. All notices, requests, demands or other communications required or
     permitted to be given pursuant to this Agreement shall be in writing and
     given by (i) personal delivery, (ii) expedited delivery service with proof
     of delivery, or (iii) United States mail, postage prepaid, registered or
     certified mail, return receipt requested, sent to the intended addressee at
     the address set forth on the signature page hereof and shall be deemed to
     have been received either, in the case of personal delivery, as of the time
     of personal delivery, in the case of expedited delivery service, as of the
     date of first attempted delivery at the address and in the manner provided
     in this Loan Agreement, or in the case of mail, upon deposit in a
     depository receptacle under the care and custody of the United States
     Postal Service. Either party shall have the right to change its address for
     notice hereunder to any other location within the continental United States
     by notice to the other party of such new address at least thirty (30) days
     prior to the effective date of such new address.

15.  CONSTRUCTION. This Loan Agreement and the other Loan Documents have been
     executed and delivered in the State of Texas, shall be governed by and
     construed in accordance with the laws of the State of Texas, and shall be
     performable by the parties hereto in the county in Texas where the Bank's
     address set forth on the signature page hereof is located.

16.  INVALID PROVISIONS. If any provision of this Loan Agreement or any of the
     other Loan Documents is held to be illegal, invalid or unenforceable under
     present or future laws, such provision shall be fully severable and the
     remaining provisions of this Loan Agreement or any of the other Loan
     Documents shall remain in full force and effect and shall not be affected
     by the illegal, invalid or unenforceable provision or by its severance.

17.  USURY DISCLAIMED. It is agreed by Lender and Borrower to be their joint
     intent at all times to comply with the usury and all other laws relating to
     this Loan Agreement, the Note and all Loan Documents, now or hereafter in
     effect in the United States and the


                                    Page 13
<PAGE>
     State of Texas. If the laws of the United States or the State of Texas are
     ever revised, repealed or judicially interpreted, or any other
     circumstances should occur, and the same causes sums constituting interest
     and called for herein or under the Note or any document executed in
     connection herewith or contracted for, charged or received with respect to
     the Loan, to be in excess of the amount (the "Maximum Amount") or produce a
     rate in excess of the rate (the "Maximum Rate") of interest that Lender may
     contract for, charge and collect pursuant to the provisions of applicable
     laws and in regard to which Borrower would be prevented successfully from
     raising the claim or defense of usury, then it is Borrower's and Lender's
     express intent that all amounts in excess of the Maximum Amount theretofore
     collected by Lender be, at the option of Lender, either refunded to
     Borrower forthwith or credited on the unpaid principal amount of the Note,
     and the provisions hereof and of the Note shall be immediately deemed
     reformed and amounts thereafter collectable hereunder and thereunder
     reduced, without the necessity of the execution of any new document, so as
     to comply with the then applicable law but so as to permit the recovery of
     the Maximum Rate and Maximum Amount of interest which may be collected
     under said law. In addition, in the event that the maturity of the Note is
     accelerated by reason of an election by Lender hereunder or under the Note
     or the Loan Documents, earned interest may never include more that the
     amount calculated pursuant to the Maximum Rate, and if unearned interest is
     provided for herein or in the Note, then Borrower and any other party
     obligated hereon and thereon hereby agree to accept as their sole remedy
     under such circumstances either (i) the cancellation of said unearned
     interest, or (ii) if theretofore paid, either the return to Borrower or the
     crediting of said unearned interest on the principal amount of the Note,
     whichever remedy may be elected by Lender. Borrower and Lender further
     agree that if any amounts constituting interest are collected hereunder or
     under the Note, or any Loan Documents, which produce a rate in excess of
     the Maximum Rate, that such amounts collected will have been and will be
     deemed to have been the result of a mathematical error on the part of the
     Borrower and Lender.

18.  EXPENSES. Borrower shall pay all costs and expenses (including, without
     limitation, reasonable attorneys' fees) in connection with (i) any action
     required in the course of administration of the indebtedness and
     obligations evidenced by the Loan Documents, and (ii) any action in the
     enforcement of Bank's rights upon the occurrence of Event of Default.

19.  PARTICIPATION OF THE LOAN. Borrower agrees that Bank may, at its option,
     sell interests in the Loan and its rights under this Loan Agreement to a
     financial institution or institutions and, in connection with each such
     sale, Bank may disclose any financial and other information available to
     Bank concerning Borrower to each perspective purchaser.

20.  ENTIRE AGREEMENT. This Loan Agreement (together with the other Loan
     Documents) contains the entire agreement among the parties regarding the
     subject matter hereof and supersedes all prior written and oral agreements
     and understandings among the parties hereto regarding same.


                                    Page 14
<PAGE>
21.  CONFLICTS. In the event any term or provision hereof is inconsistent with
     or conflicts with any provision of the other Loan Documents, the terms and
     provisions contained in this Loan Agreement shall be controlling.

22.  COUNTERPARTS. This Loan Agreement may be separately executed in any number
     of counterparts, each of which shall be an original, but all of which,
     taken together, shall be deemed to constitute one and the same instrument.
23.  THE WRITTEN LOAN AGREEMENT FOR THE LOAN OR OTHER EXTENSION OF CREDIT
     DESCRIBED ABOVE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, AND MAY
     NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
     ORAL AGREEMENTS BETWEEN THE PARTIES

     If the foregoing correctly sets forth our mutual agreement, please so
acknowledge by signing and returning this Loan Agreement to the undersigned.

                               Very truly yours,

                                        SOUTHTRUST BANK

                                        By:
                                        Name:
                                        Title:

Bank's Address:
P.O. Box 1027
Groves,  Texas 77619


                                    Page 15
<PAGE>
ACCEPTED as of the date first
written above.

BORROWER:

HORIZON VESSELS, INC. a Delaware Corporation

BY:           /s/ David W. Sharp
    -------------------------------------
    NAME:       DAVID W. SHARP
    TITLE: EXECUTIVE VICE PRESIDENT AND
             CHIEF FINANCIAL OFFICER

HORIZON OFFSHORE, INC., a Delaware Corporation

BY:           /s/ David W. Sharp
    -------------------------------------
    NAME:       DAVID W. SHARP
    TITLE: EXECUTIVE VICE PRESIDENT AND
             CHIEF FINANCIAL OFFICER

HORIZON OFFSHORE CONTRACTORS, INC., a Delaware Corporation

BY:           /s/ David W. Shar
    -------------------------------------
    NAME:       DAVID W. SHARP
    TITLE: EXECUTIVE VICE PRESIDENT AND
             CHIEF FINANCIAL OFFICER

Borrower's Address:
2500 Citywest Blvd., Suite 2200
Houston, Texas 77042


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