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EXHIBIT 10.7


AMENDMENT NO. 4




TO




CREDIT AGREEMENT




     This AMENDMENT NO. 4 TO CREDIT AGREEMENT (“Amendment No. 4”), dated as of
November 4, 2004, to the Credit Agreement dated as of May 10, 2001, as amended
(the “Credit Agreement”), is made by and among HORIZON VESSELS, INC.
(“Borrower”), HORIZON OFFSHORE CONTRACTORS, INC. (“HOC”) and HORIZON OFFSHORE,
INC. (“Parent”, and together with HOC, the “Guarantors”), and THE CIT
GROUP/EQUIPMENT FINANCING, INC. (“Lender”).



W I T N E S S E T H:




     WHEREAS, pursuant to the Credit Agreement, the Lender made available to
the Borrower a revolving loan facility of up to USD 26,840,000; and



     WHEREAS, the parties wish to amend the Credit Agreement as provided
herein.



     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and premises contained herein, together with other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto have agreed and do hereby agree as follows:



     1. Capitalized terms used in this Amendment No. 4 (including the recitals
hereof) shall have the meanings assigned to them in the Credit Agreement, as
amended by this Amendment No. 4.



     2. The Credit Agreement is hereby amended by adding the following
definition thereto:



     “Subordinated Debt” means indebtedness of the Parent incurred pursuant to
(a) that certain Purchase Agreement dated March 11, 2004, among the Parent, the
guarantors listed therein and the purchasers listed therein, pursuant to which
those certain 16% subordinated secured notes due March 31, 2007, in an
aggregated principal amount equal to $65,400,000.00 were issued, as the same
may be amended, supplemented or modified from time to time, and (b) that
certain Purchase Agreement dated May 27, 2004, among the Parent, the guarantors
listed therein and the purchasers listed therein, pursuant to which (i) those
certain 18% subordinated secured notes due March 31, 2007, in an aggregated
principal amount equal to $18,750,000.00 were issued on May 27, 2004, (ii)
those certain additional 18% subordinated secured notes due March 31, 2007, in
an aggregated principal amount equal to $5,291,865.00 were issued on September
17, 2004, and (iii) those certain additional 18% subordinated secured notes due
March 31, 2007, in an aggregated principal amount equal to $9,625,000 were
issued on November 4, 2004, as the same may be amended, supplemented or
modified from time to time.



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     3. The Credit Agreement is hereby amended by amending and restating the
following definition in its entirety:



     “Cash Interest” means, for any period, the consolidated Interest Expense
of the Parent and its subsidiaries for such period, determined in accordance
with GAAP applied consistently, less (a) interest related to the Subordinated
Debt (which is in fact paid-in-kind) and (b) all amounts included in Interest
Expense, in accordance with GAAP, for amortization of debt fees, discounts and
warrant expense.



     “EBITDA” means for the Parent 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 (including
accelerated amortization of prepaid loan fees, discounts and warrant expense,
as required by GAAP), plus (d) Interest Expense.



     “EBITDAR” means for the Parent 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 (including
accelerated amortization of prepaid loan fees, discounts and warrant expense,
as required by GAAP), plus (d) Interest Expense, plus (e) restructuring
charges, including costs of professional advisors to the Parent and its
subsidiaries (including costs of professional advisors to the Parent’s lenders
and other creditors which are required to be paid by the Parent or its
subsidiaries), provided that to the extent such restructuring charges exceed
$3,000,000, such excess may not be included for purposes of this definition.



     “Fixed Charge Coverage Ratio” means for the Parent 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, plus (B)
Cash Interest for the quarter ended September 30, 2004, plus (C) Tax Expense
for the quarter ended as of September 30, 2004, (b) as of December 31, 2004,
(i) EBITDA for the quarters ended as of 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 by two, plus (B) Cash Interest for the quarters ended
as of September 30, 2004 and December 31, 2004, plus (C) Tax Expense for the
quarters ended as of September 30, 2004 and December 31, 2004, (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) for all quarters ending
thereafter, (i) EBITDA for the four (4) quarters then ended divided by (ii) the
sum of (A) Current Maturities of Long Term Debt as of the quarter then ended,
plus (B) Cash Interest for the four (4) quarters then ended, plus (C) Tax
Expense for the four (4) quarters then ended.



     “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 Parent and its subsidiaries, including
without limitation adjustments for the addition of paid-in-



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kind interest, discounts and warrant amortization on Subordinated Debt;
provided, however, there shall be excluded from Tangible Net Worth (a) any
amount at which shares of capital stock of the Parent or any of its
subsidiaries appear as an asset on the Parent’s or such subsidiary’s balance
sheet, (b) goodwill, including any amounts, however designated, that represent
the excess of the purchase price paid for assets or stock over the value
assigned thereto, (c) patents, trademarks, trade names, and copyrights, (d)
loans and advances to any stockholder, director, officer, or employee of the
Parent or any of its subsidiaries or any Affiliate, and (e) all other assets
which are properly classified as intangible assets.




     4. Section 12.5(c) of the Credit Agreement is hereby amended and restated
in its entirety as follows:



          “(c) letters of credit, performance and bid bonds obtained by
the Borrower and the Guarantors in their ordinary course of their
business, up to an aggregate amount of USD 33,545,000.00 at any
time;”



     5. It is further understood and agreed by and among the parties hereto
that all terms and conditions of the Credit Agreement, except as herein
modified, shall remain in full force and effect.



     6. This Amendment No. 4 may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.



[Remainder of page intentionally left blank.]




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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to
be duly executed as of the day and year first above written.



	 	 	 	 	 	 	 
	BORROWER:	 	LENDER:
	 
	 	 	 	 	 	 
	HORIZON VESSELS, INC.	 	THE CIT GROUP/EQUIPMENT
FINANCING, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ David
W. Sharp	 	By:	 	/s/ William D. Robinson
	

	 	
 
	 	 	 	
 
	Name: David W.
Sharp	 	Name: William
D. Robinson
	Title: Executive
Vice President	 	Title: Vice
President
	 
	 	 	 	 	 	 
	GUARANTORS:	 	 	 	 
	 
	 	 	 	 	 	 
	HORIZON OFFSHORE, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ David W. Sharp	 	 	 	 
	

	 	
 	 	 	 	 
	Name: David W. Sharp	 		 	 
	Title: Executive Vice President	 		 	 
	 
	 	 	 	 	 	 
	HORIZON OFFSHORE CONTRACTORS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 /s/
David W. Sharp	 	 	 	 
	

	 	
 	 	 	 	 
	Name: David W.
Sharp	 	 	 	 
	Title: Executive
Vice President	 	 	 	 








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