Document:

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                                                                    EXHIBIT 4.38

                                                                  EXECUTION COPY

                         FIRST PREFERRED FLEET MORTGAGE

                                     MADE BY

                           LOUISIANA DOCK COMPANY LLC

   A DEBTOR AND A DEBTOR-IN-POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

                                   IN FAVOR OF

                   JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
                   DOCUMENTATION AGENT AND COLLATERAL AGENT UNDER A
                   REVOLVING CREDIT AND GUARANTY AGREEMENT DATED AS
                   OF JANUARY 31, 2003 AMONG AMERICAN COMMERCIAL
                   LINES LLC, A DEBTOR AND A DEBTOR-IN-POSSESSION
                   UNDER CHAPTER 11 OF THE BANKRUPTCY CODE, AS
                   BORROWER, AMERICAN COMMERCIAL LINES HOLDINGS LLC
                   AND THE SUBSIDIARIES OF THE BORROWER NAMED
                   THEREIN, EACH A DEBTOR-IN-POSSESSION UNDER CHAPTER
                   11 OF THE BANKRUPTCY CODE, THE BANKS PARTY THERETO
                   AND JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
                   DOCUMENTATION AGENT AND COLLATERAL AGENT

                           __________________________

                   DATED AND EFFECTIVE AS OF FEBRUARY 3, 2003
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                                TABLE OF CONTENTS

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ARTICLE I             GENERAL PROVISIONS.......................................................................    3

         SECTION 1.1           Definitions.....................................................................    3

ARTICLE II            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR...............................    3

         SECTION 2.1           Payment and Performance Obligations.............................................    3

         SECTION 2.2           Organization; Authority; Enforceability.........................................    3

         SECTION 2.3           Citizenship.....................................................................    3

         SECTION 2.4           Ownership of Vessels; Warranty and Defense of Title.............................    3

         SECTION 2.5           Perfection......................................................................    4

         SECTION 2.6           Environmental Compliance........................................................    4

         SECTION 2.7           Liens...........................................................................    4

         SECTION 2.8           Notice of Mortgage..............................................................    5

         SECTION 2.9           Libel or Attachment.............................................................    5

         SECTION 2.10          Maintenance of Vessels..........................................................    5

         SECTION 2.11          Documentation; Operation of Vessels.............................................    6

         SECTION 2.12          Inspection......................................................................    7

         SECTION 2.13          Taxes, Fees, etc................................................................    7

         SECTION 2.14          Sale, Assignment, Mortgage, Charter or Other Disposition of Vessel..............    7

         SECTION 2.15          Requisition of Title or Use.....................................................    8

         SECTION 2.16          Notice of Loss, Requisition or Damage...........................................    8

         SECTION 2.17          Insurance.......................................................................    9

         SECTION 2.18          Reimbursement of Mortgagee's Costs..............................................   14

ARTICLE III           EVENTS OF DEFAULT AND REMEDIES...........................................................   14

         SECTION 3.1           Event of Default and Remedies...................................................   14

         SECTION 3.2           Application of Proceeds.........................................................   16

         SECTION 3.3           Certain Rights of Mortgagor.....................................................   17

ARTICLE IV            GENERAL POWERS OF MORTGAGEE..............................................................   17

         SECTION 4.1           Arrest or Detention of Vessel...................................................   17

         SECTION 4.2           Suits...........................................................................   18

         SECTION 4.3           Powers and Remedies Cumulative; No Waiver.......................................   18
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                                TABLE OF CONTENTS
                                   (continued)

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ARTICLE V             RELEASE OF VESSELS AND MORTGAGE OF ADDITIONAL VESSELS....................................   19

         SECTION 5.1           Definitions.....................................................................   19

         SECTION 5.2           Release of Vessels..............................................................   19

         SECTION 5.3           Mortgage of Additional Vessels..................................................   19

         SECTION 5.4           Costs...........................................................................   20

ARTICLE VI            SUNDRY PROVISIONS........................................................................   20

         SECTION 6.1           Amount of Fleet Mortgage........................................................   20

         SECTION 6.2           Counterparts....................................................................   20

         SECTION 6.3           Currency........................................................................   20

         SECTION 6.4           Assignment; Successors..........................................................   20

         SECTION 6.5           Agents of Mortgagee.............................................................   21

         SECTION 6.6           Severability....................................................................   21

         SECTION 6.7           Amendments; Supplements.........................................................   21

         SECTION 6.8           Governing Law...................................................................   21

         SECTION 6.9           Recordation of Mortgage.........................................................   21

         SECTION 6.10          No Waiver of Preferred Status...................................................   21

         SECTION 6.11          Waiver..........................................................................   21

         SECTION 6.12          Further Assurances..............................................................   21

         SECTION 6.13          Notices.........................................................................   22
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                         FIRST PREFERRED FLEET MORTGAGE

                  FIRST PREFERRED FLEET MORTGAGE, made effective this 3rd day of
February, 2003, by LOUISIANA DOCK COMPANY LLC, a Delaware limited liability
company whose address is 1701 E. Market Street, P.O. Box 610, Jeffersonville,
Indiana 47130-0610, (the "Mortgagor"), a debtor and a debtor-in-possession in a
case pending under Chapter 11 of the Bankruptcy Code, to JPMORGAN CHASE BANK, a
New York banking corporation, whose address is 270 Park Avenue, New York, New
York 10017, as administrative agent, documentation agent and collateral agent
under the Revolving Credit and Guaranty Agreement defined below (the
"Mortgagee").

                  WHEREAS:

                  A.     On January 31, 2003, American Commercial Lines LLC and
the Guarantors (as defined in the Revolving Credit and Guaranty Agreement
defined below), including the Mortgagor, filed voluntary petitions with the
Bankruptcy Court initiating the Cases (as defined in the Revolving Credit and
Guaranty Agreement defined below) and have continued in the possession of their
assets and in the management of their business pursuant to Sections 1107 and
1108 of the Bankruptcy Code.

                  B.     The Mortgagor is the sole owner of the whole (100%) of
each of the vessels identified in Schedule I hereof and more fully described in
the Granting Clause hereof.

                  C.     For purposes of 46 U.S.C. Section 31321(b)(3), the
amount of the direct or contingent obligations that are or may be secured by
this Fleet Mortgage (excluding interest, expenses and fees) is $75,000,000 plus
interest, expenses, fees, indemnities and costs of performance of the covenants
contained in this Fleet Mortgage, the Revolving Credit and Guaranty Agreement
defined below and in the other Loan Documents (as defined in the Revolving
Credit and Guaranty Agreement defined below).

                  D.     The Mortgagor is executing and delivering this Fleet
Mortgage pursuant to a Revolving Credit and Guaranty Agreement dated as of
January 31, 2003 (as at any time amended, the "Revolving Credit and Guaranty
Agreement"), among the Mortgagor as borrower, American Commercial Lines Holdings
LLC ("Holdings"), and certain of the direct or indirect subsidiaries of the
Mortgagor signatory hereto (together with Holdings, each a "Guarantor" and
collectively, the "Guarantors"), JPMorgan Chase Bank, each of the other
financial institutions from time to time party thereto (together with JPMorgan
Chase Bank, the "Banks") and JP Morgan Chase Bank, as Administrative Agent,
Documentation Agent and Collateral Agent, pursuant to which (i) the Tranche A
Banks, severally, have agreed to make Tranche A Loans to the Mortgagor in an
aggregate principal amount of up to $25,000,000, from time to time during the
period commencing on the Closing Date and ending on the Termination Date and
(ii) the Tranche B Banks, severally, have agreed to make available Tranche B
Loans to the Mortgagor in an aggregate principal amount of up to $50,000,000 in
accordance with the Revolving Credit and Guaranty Agreement, a copy of which
Revolving Credit and Guaranty Agreement (without exhibits) is attached hereto as
Annex A and made a part hereof.

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                  E.     In order to secure (a) the due and punctual payment by
the Mortgagor of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Mortgagor under the
Revolving Credit and Guaranty Agreement in respect of any Letter of Credit, when
and as due, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral and (iii) all other
monetary obligations, including reasonable fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Mortgagor to the Banks and the
Mortgagee under the Revolving Credit and Guaranty Agreement, this Fleet Mortgage
and the other Loan Documents to which the Mortgagor is or is to be a party, (b)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Mortgagor under or pursuant to the Revolving Credit and
Guaranty Agreement, this Fleet Mortgage and the other Loan Documents to which
the Mortgagor is or is to be a party, (c) the due and punctual performance of
all covenants, agreements, obligations and liabilities of each Guarantor under
or pursuant to the Loan Documents and (d) all other Obligations (as defined in
the Revolving Credit and Guaranty Agreement)(all the obligations referred to in
the preceding clauses (a) through (d) being referred to collectively, as the
"Secured Obligations"), the Mortgagor has duly authorized the execution and
delivery of this First Preferred Fleet Mortgage under and pursuant to Chapter
313 of Title 46 of the United States Code, as amended ("Chapter 313").

                  F.     The Mortgagor is hereby granting to the Mortgagee this
Fleet Mortgage covering the whole of each of the vessels identified on Schedule
I hereof. By a supplement or supplements to this Fleet Mortgage, this Fleet
Mortgage may hereafter cover one or more additional vessels, as shall be
described in such supplement or supplements.

                  NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt of which is hereby acknowledged,
and to secure the due and punctual payment and performance of the Secured
Obligations, the Mortgagor, for itself, its successors and assigns does by these
presents:

                  GRANT, CONVEY, MORTGAGE, PLEDGE AND CONFIRM UNTO THE
MORTGAGEE, its successors and assigns, the whole of each of the vessels
identified on Schedule I hereof, each of which is duly documented in the name of
the Mortgagor under the laws and flag of the United States of America,
including, without being limited to, all of the boilers, engines, machinery,
masts, spars, rigging, boats, pumps, anchors, cables, chains, tackle, apparel,
furniture, fittings, equipment and other appurtenances appertaining or belonging
thereto, whether now owned or hereafter acquired, and all additions,
improvements, and replacements hereafter made in or to any vessel, or any part
thereof whether on board or not, including all items and appurtenances aforesaid
and all rents, charters, charter parties, freights, sub-freights, cargoes,
operating profits, and proceeds of the foregoing (each such vessel and all items
thereof above enumerated being included in the term "Vessel" as used in this
Fleet Mortgage);

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                  TO HAVE AND TO HOLD the same unto and for the proper use and
benefit of the Mortgagee, its successors and assigns, forever, upon the terms
herein set forth;

                  PROVIDED, HOWEVER, and these presents are upon the condition
that, if the Mortgagor or its successors and assigns shall duly and punctually
pay in full and perform in full the Secured Obligations, then this Fleet
Mortgage and the rights hereunder shall cease, determine and be void, otherwise
to be and remain in full force and effect;

                  PROVIDED, FURTHER that any Vessel may be separately discharged
from this Fleet Mortgage by the Mortgagee in accordance with Section 5.2 hereof;
and

                  FURTHER COVENANT, DECLARE AND AGREE with the Mortgagee and its
successors and assigns, that the Vessels are to be held subject to the further
representations, warranties, covenants, terms and conditions hereinafter set
forth.

                                   ARTICLE I

                               GENERAL PROVISIONS

         SECTION 1.1 Definitions. Capitalized terms used but not defined herein
shall have the same meanings set forth with respect thereto in the Revolving
Credit and Guaranty Agreement.

                                   ARTICLE II

           REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR

         SECTION 2.1 Payment and Performance Obligations. The Mortgagor will
duly and punctually pay or cause to be paid and duly perform, observe and comply
with the Secured Obligations.

         SECTION 2.2 Organization; Authority; Enforceability. The Mortgagor was
duly organized and is now validly existing and in good standing as a limited
liability company under the laws of the State of Delaware and shall so remain
during the life of this Fleet Mortgage and so long as any of the Secured
Obligations shall remain outstanding. The Mortgagor has all requisite authority,
power and legal right to own and operate the Vessels, to mortgage the Vessels to
the Mortgagee pursuant to this Fleet Mortgage, and to execute and deliver this
Fleet Mortgage. All action necessary and required by law for the execution and
delivery by the Mortgagor of this Fleet Mortgage has been duly and effectively
taken, and this Fleet Mortgage is and will continue to be the valid and binding
obligation of the Mortgagor enforceable in accordance with its terms. All
consents and approvals required in respect of this Fleet Mortgage have been
obtained and are in full force and effect.

         SECTION 2.3 Citizenship. The Mortgagor warrants that the Mortgagor
meets, and shall continue for the term of this Fleet Mortgage and until all of
the Secured Obligations are paid and performed in full to meet, all citizenship
requirements necessary for each of the Vessels to be eligible for documentation
as a vessel of the United States, under the flag of the United States, pursuant
to Title 46, Section 12102 of the United States Code.

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         SECTION 2.4 Ownership of Vessels; Warranty and Defense of Title. The
Mortgagor warrants that it is the true, lawful and sole owner of the whole of
each of the Vessels, and that its ownership of each Vessel is free and clear of
all Liens except such Liens which arose prior to the date of this Fleet Mortgage
that are incident to current operations or created by that certain First
Preferred Fleet Mortgage, dated and effective as of June 30, 1998 (the "Existing
Mortgage"), granted by the Mortgagor to The Chase Manhattan Bank, as collateral
agent and security trustee (the "Existing Mortgagee") pursuant to a Credit
Agreement dated as of June 30, 1998, as amended and restated as of April 11,
2002 and amended as of September 27, 2002, among the Mortgagor, the secured
lenders from time to time party thereto and the Existing Mortgagee (the
"Existing Agreement"); none of the Vessels are subject to a demise charter or to
a time or voyage charter other than demise charters or time charters entered in
the ordinary course of business and consistent with standard marine practice
that are listed on Schedule 2.14 to this Fleet Mortgage; and that the Mortgagor
will forever warrant and defend its title and possession of each Vessel for the
benefit of the Mortgagee against any and all claims and demands.

         SECTION 2.5 Perfection. The Mortgagor shall comply with and satisfy all
applicable formalities and provisions of the laws and regulations of the United
States of America, including but not limited to the provisions of Chapter 313,
as amended, in order to perfect, establish, record and maintain this Fleet
Mortgage, and any supplement or amendment thereto, upon each of the Vessels and
upon all renewals, as a first preferred fleet mortgage thereunder and on all
additions, improvements and replacements made in or to each of the Vessels and
shall do such other acts and execute all such other instruments, deeds,
conveyances, mortgages and assurances as the Mortgagee may reasonably require in
order to subject each of the Vessels to the Lien of this Fleet Mortgage as
aforesaid.

         SECTION 2.6 Environmental Compliance. The Mortgagor has complied with
the representations and warranties in Section 3.07 of the Revolving Credit and
Guaranty Agreement in respect to each of the Vessels and shall comply with
Section 4.01(l) of the Revolving Credit and Guaranty Agreement regarding
compliance with environmental laws and regulations in respect to each of the
Vessels.

         SECTION 2.7 Liens. The Mortgagor represents and agrees that it has not
granted and will not grant any charterer, the master of any of the Vessels or
any other person, and none thereof has or shall have, any right, power or
authority to create, incur or permit to be placed or imposed upon the Vessels,
or any of them, any Liens, other than the Lien of this Fleet Mortgage, Liens for
crew's wages, wages for stevedores when employed directly by the Mortgagor or
the master of the applicable Vessel and general average and salvage (including
contract salvage), Liens created in the ordinary course of the Vessels' current
operations which are for "necessaries" within the meaning of 46 U.S.C. Section
31301(4) and the Lien of the Existing Mortgage provided that such Liens are
subordinate to the Lien of this Fleet Mortgage. The Mortgagor further agrees
that it will not permit to be continued any Lien upon the Vessels, or any of
them (other than this Fleet Mortgage and the Lien of the Existing Mortgage), for
a period in excess of forty-five (45) days after the same becomes due and
payable except for any Lien that is being contested by the Mortgagor in good
faith by appropriate proceedings diligently conducted which are effective to
stay the execution or other enforcement of such Lien and the Mortgagor shall
have set aside on its books adequate reserves in accordance with GAAP with
respect to such Lien.

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         SECTION 2.8 Notice of Mortgage. The Mortgagor shall at all times keep a
properly certified copy of this Fleet Mortgage and any amendments and
supplements hereto and any assignments hereof (i) at its address set forth above
and (ii) in the case of a Vessel that is a self-propelled Vessel, with the
ship's papers on board such Vessel and such papers shall be exhibited, on
demand, to any person having business with such Vessel which might give rise to
a maritime Lien on such Vessel, or to any representative of the Mortgagee; and a
notice, reading as follows, printed in plain type of such size that the
paragraph of reading matter shall cover a space not less than six inches wide by
nine inches high, framed under glass, shall be placed and kept prominently
displayed in the chart room and in the master's cabin of each of the Vessels
that is a self-propelled Vessel:

                               "NOTICE OF MORTGAGE

                           This Vessel is owned by Louisiana Dock Company LLC
         (the "Mortgagor") and is subject to a First Preferred Fleet Mortgage,
         dated February 3, 2003, as the same may be amended or supplemented, in
         favor of JPMorgan Chase Bank, as administrative agent, documentation
         agent and collateral agent, pursuant to the provisions of Chapter 313
         of Title 46 of the United States Code, as amended, and under the terms
         of said Fleet Mortgage the Mortgagor hereby gives notice that it has
         not granted any charterer, the master of this Vessel or any other
         person, and none thereof has, the right, power or authority to create,
         incur or permit to exist upon this Vessel any liens or encumbrances
         whatsoever, other than the lien of said Fleet Mortgage, liens for
         crew's wages, wages of stevedores when employed directly by the
         Mortgagor or the master of this Vessel and general average or salvage
         (including contract salvage). Any such right, power or authority is
         also prohibited under the terms of said Fleet Mortgage."

         SECTION 2.9 Libel or Attachment. If a libel or complaint shall be filed
against the Vessels, or any of them, or if the Vessels, or any of them, shall be
levied upon or taken into custody, or detained by any proceeding in any court or
tribunal or by any government or other authority, the Mortgagor, within ten (10)
days thereafter, will cause such Vessel or Vessels to be released and any Lien
thereon, other than the Lien of this Fleet Mortgage or of the Existing Mortgage,
to be discharged. In the event the Vessels, or any of them, are levied upon or
taken into custody or detained by any authority whatsoever, the Mortgagor agrees
forthwith to notify the Mortgagee thereof by telex, confirmed by letter. The
Mortgagor shall reimburse the Mortgagee for any amount paid by the Mortgagee,
whether in settlement of a claim or in satisfaction of a judgment, and such
amounts shall be Mortgagee's Costs, as defined in and in accordance with Section
2.18 hereof.

         SECTION 2.10 Maintenance of Vessels. (a) The Mortgagor will at all
times, without cost or expense to the Mortgagee, maintain and preserve the
Vessels in all material respects, and cause the Vessels in all material respects
to be tight, staunch, strong and well and sufficiently tackled, appareled,
victualed, fitted, manned, furnished and equipped and to be maintained and
preserved, in good running order and repair so that the Vessels in all material
respects shall be well equipped and seaworthy, in good working order, repair and
operating condition, ordinary wear

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and tear excepted. At all times, at its own cost and expense, the Mortgagor will
exercise due diligence to maintain and preserve the Vessels in all material
respects in as good condition, working order and repair as at the time of the
execution of this Fleet Mortgage, ordinary wear and tear and depreciation
excepted, and will maintain the Vessels in all material respects in accordance
with good marine maintenance practice and procedures and applicable legal or
regulatory requirements for the service in which they then are or will be
engaged, and in such condition as will enable the Vessels in all material
respects to pass such inspection as may be required by marine underwriters as a
condition of their writing such insurance and in such amounts as is required
under this Fleet Mortgage. Furthermore, the Mortgagor will cause each Vessel to
be periodically inspected, drydocked and recoated (hull paint), and its
machinery overhauled in accordance with normal marine practices or as may be
required by the United States Coast Guard. At the request of the Mortgagee, the
Mortgagor shall cause a marine surveyor satisfactory to the Mortgagee to perform
a survey, inspection or other actions as may be necessary on a representative
sample of the Vessels (the number or location of such Vessels included in such
representative sample to be determined by the Mortgagee in its discretion), to
prove or establish that the Vessels in all material respects have been
maintained and preserved in accordance with the provisions of this Section
2.10(a). In addition, the Mortgagor shall provide at the end of each six-month
period commencing six weeks following the date hereof to the Mortgagee a
certificate of the chief marine operations officer (currently James J. Farley,
Senior Vice President Transportation Services) of the Mortgagor stating that the
Vessels have been maintained and preserved in accordance with the requirements
of this Section 2.10(a).

                  (b)    The Mortgagor may make structural changes, alterations
or additions to the Vessels, or any of them, but only to the extent that any
such change, alteration or addition is made at the Mortgagor's expense and risk
and does not diminish the value, utility, capacity, operating condition and
seaworthiness of the applicable Vessel.

                  (c)    The Mortgagor shall certify as often as required by the
Mortgagee that all wage and other claims which give rise to Liens have been
paid.

                  (d)    The Mortgagor shall furnish the Mortgagee within
fifteen (15) days after receipt by the Mortgagor, copies of all Certificates of
Inspection delivered by the United States Coast Guard.

                  (e)    At the request of the Mortgagee, the Mortgagor shall at
its expense deliver to the Mortgagee an appraisal of the current charter-free
fair market value (determined on the basis of a willing buyer and willing
seller) in Dollars of each Vessel by an independent valuer acceptable to the
Mortgagee.

         SECTION 2.11 Documentation; Operation of Vessels. (a) The Mortgagor
will keep each vessel duly documented as a Vessel of the United States, under
the flag of the United States, and will not cause or permit any Vessel to be
operated in any manner prohibited by any law, regulation or contract applicable
to such Vessel, and shall have on board as and when required thereby valid
certificates showing compliance therewith. The Mortgagor will not cause or
permit the Vessels, or any of them, to engage in any unlawful trade or carry any
cargo that will expose the Vessels, or any of them, to penalty, forfeiture or
capture, and will not do, or suffer or permit to be done, anything which can or
may injuriously affect the registration or enrollment or flag of the Vessels, or
any of them, under the laws and regulations of the United States.

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                  (b)   The Mortgagor will (and will cause any charterer of the
Vessels, or any of them, to) comply with and satisfy all of the provisions of
any applicable law, regulation, proclamation or order concerning financial
responsibility for liabilities imposed on the Mortgagor or the Vessels, or any
of them, with respect to pollution by any state or nation or political
subdivision thereof, including but not limited to the United States Federal
Water Pollution Control Act and the United States Oil Pollution Act of 1990, as
any of the foregoing may at any time be amended, and will (and will cause any
charterer of the Vessels, or any of them, to) maintain all certificates or other
evidence of financial responsibility as may be required by any such law,
regulation, proclamation or order with respect to the trade in which the
Vessels, or any of them, is from time to time engaged and the cargo carried
thereby.

         SECTION 2.12 Inspection. The Mortgagor will permit representatives of
the Mortgagee to inspect or survey the Vessels, at the Mortgagor's expense, to
ascertain the condition of such Vessel or Vessels and whether such Vessel or
Vessels are being properly repaired and maintained. Such inspection or survey
shall be made on reasonable notice and at reasonable times and places so as not
to interfere with the safe, efficient and normal operation of such Vessel or
Vessels. The Mortgagor will cause to be made all such repairs as shall be
required by this Fleet Mortgage, without expense to the Mortgagee, its
successors and assigns or any of its authorized representatives, as such
inspection or survey or an inspection or survey conducted pursuant to Section
2.10(a) may show to be required. The Mortgagor shall also permit the Mortgagee
to inspect the logs and papers of the Vessels, or any of them, and any and all
other contracts and other papers relating to the same, whether on board or not,
whenever requested, on reasonable notice.

         SECTION 2.13 Taxes, Fees, etc. The Mortgagor will pay and discharge, or
cause to be paid and discharged, when due and payable from time to time, all
taxes, assessments, governmental charges, fines and penalties lawfully imposed
on the Vessels, or any of them; provided that the Mortgagor shall not be
required to pay any such tax, assessment or charge if the validity or amount
thereof is concurrently being contested in good faith by appropriate proceedings
and if the Mortgagor shall have set aside on its books reserves deemed by it
adequate with respect to such tax, assessment or charge. Notwithstanding the
foregoing, the Mortgagor will pay or cause to be paid all such taxes,
assessments or charges forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor.

         SECTION 2.14 Sale, Assignment, Mortgage, Charter or Other Disposition
of Vessel. The Mortgagor will not in any manner change the flag of the Vessels,
or any of them, sell, transfer or mortgage the Vessels, or any of them, or enter
into any charter party other than (a) charters permitted by the Revolving Credit
and Guaranty Agreement, (b) the Existing Mortgage or the Existing Agreement, (c)
charters to Guarantors, (d) charters for a period of one year or less under
terms that are common and customary for a charter party used by prudent owners
and operators who charter vessels similar to the Vessels and engaged in trades
similar to the trades in which the Vessels are engaged, or with the prior
written consent of the Mortgagee, any charters in excess of one year, and (e)
charters for vessels listed on Schedule 2.14 to this Fleet Mortgage; provided
that no such charter allowed in this Section 2.14 will relieve the Mortgagor of
its obligations under this Fleet Mortgage, or change the flag of the Vessels, or
any of them. Any written consent given for any one of the foregoing transactions
shall not be construed to be a waiver of this provision in respect of any such
other transaction. Any such transaction with

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respect to the Vessels, or any of them, shall be subject to the provisions of
this Fleet Mortgage and the Lien it creates.

         SECTION 2.15 Requisition of Title or Use. In the event that the title
to or ownership of the Vessels, or any of them, or the use of the Vessels, or
any of them (whether on a bareboat or time charter basis or any other basis),
shall be requisitioned, purchased or taken by, or the Vessels, or any of them,
shall be seized by or forfeited to any government of any country or any
department, agency or representative thereof pursuant to any present or future
law, proclamation, decree, order or otherwise, or to any other person or
persons, whether or not acting under color of governmental authority, and the
compensation, purchase price, reimbursement or award for such requisition,
purchase, seizure, forfeiture or other taking of such title, ownership or use
shall be an amount equal to or greater than (i) $750,000 (but only if the
Mortgagor fails within 270 days after the date of such event of requisition to
have or to have made commitments to have one or more Eligible Vessels (as
defined in 5.1 hereof), collectively with an aggregate fair market value at
least equal to the amount of such compensation (as evidenced by delivery to the
Mortgagee of an appraisal in form and substance satisfactory to the Mortgagee),
subjected to this Fleet Mortgage pursuant to the provisions of Section 5.3
hereof, or (ii) $25,000,000, then such event shall be deemed a "Condemnation"
and the compensation shall be deemed to be "Condemnation Proceeds" to be applied
by the Mortgagor to prepay outstanding Obligations in accordance with Section
2.26 of the Revolving Credit and Guaranty Agreement; provided however, if an
Event of Default shall have occurred and be continuing, any amount received in
the event of a requisition described above shall be applied by the Mortgagor to
prepay outstanding Obligations in accordance with Section 2.26 of the Revolving
Credit and Guaranty Agreement. To the extent that any Condemnation Proceeds are
payable to the Mortgagee, the Mortgagor hereby constitutes and appoints the
Mortgagee and its successors and assigns, its true and lawful attorney, for it
and in its name, place and stead, to collect, receipt for, acknowledge the
payment of, sue for and execute any documentation or writing that may be
necessary or required in order to obtain payment of said compensation, purchase
price, reimbursement or award, giving and granting to said attorney full power
and authority to do and perform every act and thing whatsoever requisite or
necessary to be done as fully and to all intents and purposes as it, the
Mortgagor, might or could do if personally present at the doing thereof, with
full power of substitution, hereby ratifying and confirming all that its said
attorney or substitute shall do or cause to be done by virtue hereof, and the
Mortgagor shall promptly execute and deliver to the Mortgagee such documents and
shall promptly do and perform such acts as in the opinion of the Mortgagee may
be necessary or useful to facilitate or expedite the collection by the Mortgagee
of such compensation, purchase price, reimbursement or award.

         SECTION 2.16 Notice of Loss, Requisition or Damage. In the event of (a)
actual loss of any Vessel, (b) any event referred to in Section 2.15 hereof with
respect to any Vessel or (c) any casualty, accident or damage to any Vessel
involving an amount in excess of $750,000, the Mortgagor shall forthwith give
written notice thereof (containing full particulars) to the Mortgagee.
Furthermore, the Mortgagor will provide to the Mortgagee, at the end of each
six-month period commencing six months following the date hereof, a written
report stating each casualty, accident or damage to any Vessel involving an
amount in excess of $50,000 that occurred in the prior six month period with
full particulars.

                                       8
<PAGE>
         SECTION 2.17 Insurance. (a) The Mortgagor shall at all times while this
Fleet Mortgage shall remain in effect maintain at its own expense the following
insurance:

                           (i)      protection and indemnity insurance with
respect to each of the Vessels in such amounts, subject to such deductible or
retention amounts, against such risks and under such forms as are then common or
customary with respect to vessels similar to the Vessels and engaged in trades
similar to the trades in which the Vessels are engaged by other prudent owners
and operators of such vessels, provided that such protection and indemnity
insurance (including excess policies) shall in all events:

                                    (w) provide limits of liability of not less
                           than $250,000,000 per occurrence (and contain no
                           annual limits on liability);

                                    (x) provide for deductible or retained
                           amounts not exceeding $4,000,000 of annual aggregate
                           deductible with respect to all vessels owned or
                           chartered by the Mortgagor plus $50,000 per
                           occurrence;

                                    (y) provide protection on an "occurrence"
                           basis (rather than on a "claims made" basis); and

                                    (z) provide protection against liabilities
                           arising out of pollution or the spillage or leakage
                           of cargo with a $1,000,000 per occurrence deductible;

                           (ii)      marine, hull and machinery and, if any
Vessel or Vessels are operated outside of the United States, war risks insurance
on each of the Vessels under the latest (at the time of issue of the policies in
question) forms of American or London Institute of Marine Underwriters, provided
that such marine, hull and machinery and war risks insurance shall in all
events:

                                    (x) be in an amount with respect to each
                           Vessel that is not less than the full commercial
                           value thereof;

                                    (y) with respect to an accident, occurrence
                           or event that does not result in an actual or
                           constructive total loss of a Vessel or Vessels or an
                           agreed or compromised total loss of a Vessel or
                           Vessels, provide for deductible or retained amounts
                           that do not exceed $4,000,000 of annual aggregate
                           deductible with respect to all vessels owned or
                           chartered by the Mortgagor plus $50,000 per
                           occurrence; and

                                    (z) with respect to an accident, occurrence
                           or event that results in an actual or constructive
                           total loss of a Vessel or Vessels or an agreed or
                           compromised total loss of a Vessel or Vessels,
                           provide for deductible or retained

                                       9
<PAGE>
                           amounts that do not exceed $4,000,000 of annual
                           aggregate deductible with respect to all vessels
                           owned or chartered by the Mortgagor with no per
                           occurrence deductible;

                           (iii)    Insurance protecting against claims under
the Longshoremen's and Harbor Workers Compensation Act, Workmen's Compensation
and public liability;

                           (iv)     Wreck removal and fire insurance with
underwriters and under policy forms and in amounts satisfactory to the
Mortgagee; and

                           (v)      Such other insurances that become
customarily obtained by prudent operators of vessels similar to the Vessels and
engaged in trades similar to the trades in which the Vessels are engaged or as
may be reasonably required by the Mortgagee from time to time.

                  (b)      At the Mortgagee's request, to obtain coverage
against Mortgagee's Additional Perils (Pollution) Insurance on each of the
Vessels, the Mortgagor shall reimburse the Mortgagee for all premiums and other
amounts paid by the Mortgagee in connection with such coverage. The Mortgagor
shall reimburse the Mortgagee for such costs as Mortgagee's Costs, as defined in
and in accordance with Section 2.18 hereof.

                  (c)      All insurance policies required under paragraph (a)
of this Section 2.17 shall:

                           (i)      name the Mortgagee, in its individual
capacity and as administrative agent, documentation agent and collateral agent,
as additional insured and as loss payee in accordance with the provisions of
paragraph (i) below;

                           (ii)     provide that in respect of the interest of
the Mortgagee in such policies the insurance shall not be invalidated by any
action or inaction of the Mortgagor or any other person (other than the
Mortgagee) and shall insure the Mortgagee regardless of any breach or violation
of any warranty, declaration or condition contained in such policies by the
Mortgagor or any other person (other than the Mortgagee);

                           (iii)    provide that if such insurance is canceled
by the insurers for any reason whatsoever, or such insurance is allowed to lapse
for non-payment of premium, or such insurance coverage is reduced or any other
material change is made with respect thereto, then such cancellation, lapse,
reduction or change shall not be effective as to the Mortgagor or the Mortgagee
for 30 days after receipt by the Mortgagor or the Mortgagee, respectively, of
written notice by such insurers of such cancellation, lapse, reduction or
material change; and

                           (iv)     provide that there shall be no recourse
against the Mortgagee for the payment of premiums, commissions, club calls,
assessments or advances.

Each insurance policy with respect to protection and indemnity insurance shall:

                           (i)      be primary without right of contribution
from any other insurance which is carried by the Mortgagee and

                                       10
<PAGE>
                           (ii)     expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured.

                  (d)     The Mortgagor shall not permit the Vessels, or any of
them, to undertake any voyage or participate in any venture or transport any
cargo which is not permitted by the insurance then in effect or which would
limit such insurance or render it unavailable in whole or in part.

                  (e)      All insurance required under this Fleet Mortgage
shall be placed and kept with such insurance companies or other insurance
underwriters as shall be reasonably acceptable to the Mortgagee and the
Mortgagor.

                  (f)      The Mortgagor shall deliver to the Mortgagee copies
of all certificates and, if requested by the Mortgagee, copies of all binders
and policies with respect to insurance from time to time carried on the Vessels
pursuant to this Section 2.17. In addition, on the Closing Date and on or before
February 3rd in each year commencing February 3, 2004, the Mortgagor shall
furnish or cause to be furnished to the Mortgagee a signed report by independent
marine insurance brokers, selected by the Mortgagor and acceptable to the
Mortgagee, describing in reasonable detail the insurance pursuant to this
Section 2.17 and stating that in the opinion of such brokers such insurance
complies in all material respects with the terms of this Section 2.17 and is
common and customary for types of insurances and coverage generally required by
mortgagee lenders from prudent owners and operators of vessels similar to the
Vessels and engaged in trades similar to the trades in which the Vessels are
engaged.

                  (g)      The Mortgagor shall, at its own expense, have the
duty and responsibility to make all proofs of loss and take all other steps
necessary to collect from underwriters, insurance companies or funds any loss
under any insurance with respect to the Vessels, or any of them, obtained by the
Mortgagor as required by this Section 2.17.

                  (h)      Nothing in this Section 2.17 shall prohibit the
Mortgagee from placing additional insurance on or with respect to the Vessels at
its expense, or any of them, or the operation thereof, unless such insurance
would conflict with insurance that is carried by the Mortgagor. In the event
that the Mortgagor shall fail to maintain any insurance which it is required to
maintain pursuant to this Section 2.17, the Mortgagee may, but shall not be
obligated to, arrange for such insurance and, in such event, the Mortgagor
shall, upon demand, reimburse the Mortgagee for the costs thereof as Mortgagee's
Costs, as defined in and in accordance with Section 2.18 hereof, without waiver
of any other additional rights the Mortgagee may have.

                  (i)      Any sums payable as a result of a loss under
insurance on the Vessels, or any of them, with respect to protection and
indemnity risks, including liability arising out of pollution or the spillage or
leakage of cargo or collision or tower's liability, may be paid directly to the
person to whom any liability covered by such insurance has been incurred or, if
the liability insured against has been discharged, to the Mortgagee or the
Mortgagor to reimburse it or them for any loss, damage or expense incurred by it
or them and covered by such insurance. Each policy of insurance maintained under
clause (ii) of paragraph (a) of this Section 2.17 shall provide that any payment
that is to be made under such policy (other than with respect to any

                                       11
<PAGE>
protection and indemnity risks covered thereby) shall be made solely to the
Mortgagee if such payment (i) is in respect of losses equal to or greater than
$750,000 (but only if the Mortgagor fails within 270 days after the date of such
loss (x) to have or to have made commitments to have any Vessel subject to a
loss fully repaired and restored or (y) in respect of an actual or constructive
total loss of a Vessel or an agreed or compromised total loss of a Vessel to
subject or to have made commitments to subject one or more Eligible Vessels (as
defined in Section 5.1 hereof), collectively with an aggregate fair market value
at least equal to the amount of such insurance proceeds (as evidenced by
delivery to the Mortgagee of an appraisal in form and substance satisfactory to
the Mortgagee), to this Fleet Mortgage pursuant to the provisions of Section 5.3
hereof), (ii) is in respect to losses equal to or greater than $25,000,000 or
(iii) without regard to the amount or character of the loss, is made after the
insurer has received notice from the Mortgagee that an Event of Default has
occurred and is continuing, and before such notice is rescinded. Any insurance
recoveries to which the Mortgagee shall be so entitled pursuant to the
proceeding sentence shall be applied as follows:

                           (1)     In the event that insurance becomes payable
         to the Mortgagee on account of an accident, occurrence or event
         involving a Vessel or Vessels that does not result in an actual or
         constructive total loss or an agreed or compromised total loss of such
         Vessel or Vessels,

                           (A)     If no Event of Default shall have occurred
                  and be continuing, the Mortgagee shall, upon the written
                  request of the Mortgagor, (i) apply the proceeds of insurance
                  to pay, or consent that the underwriters pay, directly for
                  repairs, liabilities, salvage claims or other charges and
                  expenses (including labor charges due or paid by the
                  Mortgagor) with respect to such Vessel or Vessels that are
                  covered by the policies, or (ii) to the extent that the
                  Mortgagor shall have repaired the damage to such Vessel or
                  Vessels and paid the cost thereof or discharged or paid such
                  liabilities, salvage claims or other charges and expenses with
                  respect to such Vessel or Vessels (such fact having been
                  certified to in a certificate of an authorized officer of the
                  Mortgagor ("Officer's Certificate") delivered to the
                  Mortgagee, accompanied by written confirmation by the
                  underwriter, a surveyor, an adjuster or a marine insurance
                  broker), apply the proceeds or insurance to reimburse, or
                  consent that the underwriters reimburse, the Mortgagor
                  therefor, and in either case, after all known damages with
                  respect to the particular loss shall have been repaired,
                  except to the extent the Mortgagor with the written consent of
                  the Mortgagee deems the said repair inadvisable, in which case
                  such event shall be deemed a Casualty and all insurance
                  proceeds shall be deemed Casualty Proceeds to be applied by
                  the Mortgagor to prepay outstanding Obligations in accordance
                  with Section 2.26 of the Revolving Credit and Guaranty
                  Agreement, and all known costs, liabilities, salvage claims,
                  charges and expenses with respect to such Vessel or Vessels
                  that are covered by the policies shall have been discharged or
                  paid, such fact having been certified to by

                                       12
<PAGE>
                  an Officer's Certificate delivered to the Mortgagee,
                  accompanied by written confirmation by the underwriter, a
                  surveyor, an adjuster or a marine insurance broker, pay, or
                  consent that the underwriters pay, any balance of the proceeds
                  of insurance to the Mortgagor; or

                           (B)     if an Event of Default shall have occurred
                  and be continuing such loss shall be deemed a Casualty and all
                  related insurance proceeds shall be deemed Casualty Proceeds
                  to be applied by the Mortgagor to prepay outstanding
                  Obligations in accordance with Section 2.26 of the Revolving
                  Credit and Guaranty Agreement or at the election of the
                  Mortgagee applied for the purposes stated in clause (A)(i) of
                  this subparagraph (1);

                           (2)      In the event that insurance becomes payable
         to the Mortgagee on account of an accident, occurrence or event
         involving a Vessel or Vessels that results in an actual or constructive
         total loss or an agreed or compromised total loss of such Vessel or
         Vessels such loss shall be deemed a Casualty and all related insurance
         proceeds shall be deemed Casualty Proceeds to be applied by the
         Mortgagor to prepay outstanding Obligations in accordance with Section
         2.26 of the Revolving Credit and Guaranty Agreement .

                  (j)      During the continuance of a taking, requisition or
charter of the use of the Vessels, or any of them, by the United States of
America, the provisions of this Section 2.17 shall be deemed to have been
complied with in all respects as to such Vessel or Vessels if the United States
Government shall have agreed (i) to reimburse the Mortgagee and the Mortgagor
for loss or damage resulting from the risks indicated in paragraph (a) of this
Section 2.17, or (ii) that the Mortgagee and the Mortgagor shall be entitled to
just compensation therefor. In the event of any taking, requisition or charter
of the Vessels, or any of them, contemplated by this paragraph (j), the
Mortgagor shall promptly furnish to the Mortgagee an Officer's Certificate
stating that such taking, requisition or charter has occurred and that the
United States Government has agreed (i) to reimburse the Mortgagee and the
Mortgagor for loss or damage resulting from the risks indicated in paragraph (a)
of this Section 2.17 or (ii) that the Mortgagee and the Mortgagor are entitled
to just compensation therefor.

                  (k)      In the event that any claim or Lien is asserted
against the Vessels, or any of them, for loss, damage or expense which is
covered by insurance hereunder and it is necessary for the Mortgagor to obtain a
bond or supply other security to prevent the arrest of such Vessel or Vessels,
or to obtain the release of such Vessel or Vessels from arrest on account of
said claim or Lien, the Mortgagee, upon the written request of the Mortgagor,
may, but shall not be required to, assign all or any part of its right, title
and interest in and to said insurance covering such loss, damage or expense, to
any person executing a surety or guaranty bond or other agreement to save or
release such Vessel or Vessels from such arrest as collateral security to
indemnify against liability under said bond or other agreement.

         SECTION 2.18 Reimbursement of Mortgagee's Costs. (a) The Mortgagor
shall promptly pay or reimburse to the Mortgagee all amounts the Mortgagee
determines constitute

                                       13
<PAGE>
claims, liabilities, losses, taxes, duties, charges, costs, fees and expenses
("Mortgagee's Costs") incurred or made by the Mortgagee in exercising,
protecting or pursuing rights or remedies under this Fleet Mortgage, the
Revolving Credit and Guaranty Agreement or the other Loan Documents (including
but not limited to (i) amounts paid by the Mortgagee pursuant to Section 2.9,
(ii) costs incurred by the Mortgagee pursuant to Section 2.17(b) or (h), Section
5.4, Section 6.9 or Section 6.12 and (iii) expenses of any sale or taking of the
Vessels, or any of them, attorneys' fees and court costs) or resulting from the
release of the Vessels, or any of them, from the security created by this Fleet
Mortgage or resulting from supplementing this Fleet Mortgage to add additional
Vessels, with interest thereon at the rate provided in Section 2.09 of the
Revolving Credit and Guaranty Agreement.

                  (b)      If the Mortgagor shall default in the observance or
performance of any of the covenants, conditions or agreements in this Fleet
Mortgage on its part to be performed or observed, the Mortgagee may in its
discretion do all acts and make all expenditures necessary to remedy such
default, including, but not limited to, the procurement of insurance on the
Vessels, or any of them, making repairs, discharge or purchase of Liens and
payment of taxes, dues, assessments, governmental charges, fines, penalties and
attorneys' fees; provided, however, that the Mortgagee shall be under no
obligation to the Mortgagor to do such acts or make any such expenditures nor
shall the doing or making thereof relieve the Mortgagor of any default in that
respect. All costs, fees and expenses of such acts and expenditures shall
constitute Mortgagee's Costs.

                  (c)      All Mortgagee's Costs and interest thereon shall be
debts due from the Mortgagor to the Mortgagee payable on demand, and shall
constitute Secured Obligations and be secured by the Lien of this Fleet
Mortgage.

                                  ARTICLE III

                         EVENTS OF DEFAULT AND REMEDIES

         SECTION 3.1 Event of Default and Remedies. An Event of Default as
defined in the Revolving Credit and Guaranty Agreement shall be an Event of
Default hereunder.

                  Upon the occurrence and during the continuance of an Event of
Default, this Fleet Mortgage shall be in default, and the Mortgagee shall have
the right to exercise one or more of the following remedies:

                           (1)      the Mortgagee may exercise all of the rights
and remedies in foreclosure and otherwise given to mortgagees by the provisions
of Chapter 313 or by any other applicable laws and exercise all of its rights
and remedies as attorney-in-fact or otherwise under this Fleet Mortgage;

                           (2)      the Mortgagee may bring suit at law, in
equity or in admiralty in any court to foreclose, including foreclosure by
seizure, arrest and sale of the Vessels, or any of them, or to recover judgment
for the Secured Obligations, and collect the same out of any and all property of
the Mortgagor whether covered by this Fleet Mortgage or otherwise;

                                       14
<PAGE>
                           (3)      the Mortgagee may take the Vessels, or any
of them, wherever the same may be, without legal process and without being
responsible for loss or damage; and the Mortgagor or other person in possession
thereof shall forthwith upon demand of the Mortgagee surrender to the Mortgagee
possession of the Vessels, or any of them, and the Mortgagee may hold, lay up,
lease, charter, operate or otherwise use the Vessels, or any of them, for such
time and upon such terms as they may deem to be for their best advantage,
accounting only for the net profits, if any, arising from the use of such Vessel
or Vessels or from the sale thereof, by court proceedings or pursuant to clause
(4) below, net of all costs, expenses, charges, damages or losses by reason of
such use;

                           (4)      the Mortgagee may sell the Vessels, or any
of them, free from any claim of or by the Mortgagor in admiralty, in equity, at
law or by statute and upon such terms and conditions as the Mortgagee
determines, at public or private sale, by sealed bids or otherwise, by first
publishing notice of any such public sale for ten (10) consecutive days in a
newspaper published in the City of New York, State of New York, and if the place
of sale should not be the City of New York, then also by publication of similar
notice in a daily newspaper, if any, published at the place of sale, and by
mailing notice of such sale, whether public or private, addressed to the
Mortgagor at its respective last known address fourteen (14) days prior to the
date fixed for entering into the contract of sale; in the event that the
Vessels, or any of them, shall be offered for sale by private sale, no newspaper
publication of notice shall be required, nor notice of adjournment of sale; sale
may be held at such place and at such time as the Mortgagee by notice may have
specified, or may be adjourned by the Mortgagee from time to time by
announcement at the time and place appointed for such sale or for such adjourned
sale, and without further notice or publication the Mortgagee may make any such
sale at the time and place to which the same shall be so adjourned; and any sale
may be conducted without bringing the Vessels, or any of them, to the place
designated for such sale and in such manner as the Mortgagee may deem to be for
its advantage; or

                           (5)      demand and receive all freights, hires,
charter hires, earnings, issues, revenues, income or profits of the Vessels, or
any of them, due or to become due from any person whomsoever.

                  Any sale of the Mortgagor's interest in the Vessels, or any of
them, made pursuant to this Fleet Mortgage, whether under the power of sale
hereby granted or any judicial proceedings, shall operate to divest all right,
title and interest of any nature whatsoever of the Mortgagor therein and
thereto, and shall forever bar the Mortgagor, its successors and assigns, and
all persons claiming by, through or under them. No purchaser shall be bound to
inquire whether notice has been given, or whether any default has occurred, or
as to the propriety of the sale, or as to the application of the proceeds
thereof. In case of any such sale, the Mortgagee, or any other person, firm or
corporation to whom the Secured Obligations secured by this Fleet Mortgage are
otherwise due or owing, may bid for and purchase the Vessels, or any of them, or
other property of the Mortgagor and shall be entitled for the purpose of making
settlement or payment for the property so purchased, to use and apply the unpaid
balance of their portion of the Secured Obligations due and owing, or which may
become due or owing, as a credit against the purchase price of the Vessels, or
any of them, up to the amount represented by the ratable share of the net
proceeds of sale (after allowing for the costs and expenses of sale and other
charges) payable to such Mortgagee or such person.

                                       15
<PAGE>
                  The Mortgagor hereby irrevocably appoints the Mortgagee and
its successors and assigns, with full power of substitution, the true and lawful
attorney or attorneys of the Mortgagor, in its name and stead, upon the
happening and during the continuance of an Event of Default, to make all
necessary transfers of the Vessels, or any of them, and for that purpose the
Mortgagee and its successors and assigns may execute all necessary instruments
of assignment and transfer, the Mortgagor hereby ratifying and confirming all
that its said attorney or attorneys shall do by virtue hereof. Nevertheless, the
Mortgagor shall, if so requested by the Mortgagee, ratify and confirm such sale
by executing and delivering to the purchaser of such Vessel or Vessels such
proper bill of sale, conveyance, instrument of transfer and release as may be
designated in such request.

                  The Mortgagor hereby irrevocably appoints the Mortgagee and
its successors and assigns, with full power of substitution, the true and lawful
attorney or attorneys of the Mortgagor, in its name and stead, upon the
happening and during the continuance of an Event of Default, to demand, collect,
receive, compromise and sue for, so far as may be permitted by law, the
Mortgagor's interest in all freights, hire, earnings, issues, revenues, income
and profits of the Vessels, or any of them, and the Mortgagor's interest in all
amounts due from the underwriters under any insurance thereon as payments of
losses or as return premiums or otherwise, salvage awards and recoveries in
general average or otherwise, and the Mortgagor's interest in all other sums,
due or to become due at or after the time of the happening of any Event of
Default, in respect of the Vessels, or any of them, or in respect of any
insurance thereon from any person whomsoever, and to make, give and execute in
the name of the Mortgagor acquittances, receipts, releases or other discharges
for the same, whether under seal or otherwise, and to endorse and accept in the
name of the Mortgagor all checks, notes, drafts, warrants, agreements and all
other instruments in writing with respect to the foregoing.

                  The Mortgagor covenants and agrees that in addition to any and
all other rights, powers and remedies elsewhere in this Fleet Mortgage granted
to and conferred upon the Mortgagee, the Mortgagee in any suit to enforce any of
its rights, powers or remedies shall be entitled as a matter of right and not as
a matter of discretion (i) to the appointment of a receiver or receivers of the
Mortgagor's interest in the Vessels, or any of them, and the Mortgagor's
interest in the hire, earnings, issues, revenues, freights, incomes and profits
due or to become due and arising from the operation thereof, and (ii) to a
decree ordering and directing the sale and disposal of the Vessels, or any of
them.

         SECTION 3.2 Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of the sale of the Vessels, or
any of them, the proceeds of any judgment collected by the Mortgagee for any
default hereunder, and the net earnings from any management, charter or other
use of the same by the Mortgagee under any of the powers specified in Section
3.1, and any and all other moneys held by or received by the Mortgagee pursuant
to or under the terms of this Fleet Mortgage, the application of which has not
elsewhere herein been specifically provided for, shall be applied by the
Mortgagee as follows:

                           FIRST: To the payment of all Mortgagee's Costs,
         including the expenses of any sale or any taking of the Vessels, or any
         of them, attorneys' fees and court costs,

                                       16
<PAGE>
         together with interest as provided herein, and to provide adequate
         indemnity to the Mortgagee against Liens claiming priority over or
         equality with this Fleet Mortgage;

                           SECOND: To the payment of interest on, and then in
         such order as the Mortgagee may determine, the principal of, the Loans
         under the Revolving Credit and Guaranty Agreement;

                           THIRD: To the payment of the remaining Secured
         Obligations due and owing and all other sums secured by or payable
         hereunder whether due or not together with interest thereon as provided
         herein, and of all damages, liquidated or otherwise, including without
         limitation all other unpaid items, costs or expenses; and

                           FOURTH: To the payment of any surplus thereafter
         remaining to the Mortgagor or to whomsoever may be entitled thereto.

In the event that the proceeds are insufficient to pay the amounts specified in
paragraphs "FIRST", "SECOND" and "THIRD" above, the Mortgagee shall be entitled
to collect the balance from the Mortgagor, or any other person liable therefor.

         SECTION 3.3 Certain Rights of Mortgagor. In the absence of an Event of
Default, the Mortgagor shall (a) be permitted to retain actual possession and
use of the Vessels and (b) have the right, from time to time, in its discretion
and without application to the Mortgagee and without a release thereof by the
Mortgagee, to dispose of, free from the Lien hereof, its interest in any
boilers, engines, machinery, masts, spars, rigging, boats, anchors, cables,
chains, tackle, capstans, outfit, tools, pumps and pumping equipment, apparel,
furniture, fittings, equipment or any other appurtenances of the Vessels, or any
of them, that are no longer useful, necessary, profitable or advantageous in the
operation of such Vessel or Vessels, first or simultaneously replacing the same
by such new items of substantially equal value, which shall forthwith become
subject to the Lien of this Fleet Mortgage as a first preferred mortgage
thereon. Notwithstanding the foregoing, the Mortgagor shall not be required to
replace covers at the end of their useful lives for any Vessel or Vessels that
have been converted to a use that does not require a cover.

                                   ARTICLE IV

                           GENERAL POWERS OF MORTGAGEE

         SECTION 4.1 Arrest or Detention of Vessel. In the event that the
Vessels, or any of them, shall be arrested or detained by a marshal or other
officer of any court of law, equity or admiralty jurisdiction or by any
government or other authority and shall not be released from arrest or detention
within ten (10) days from the date of arrest or detention, the Mortgagor does
hereby authorize and empower the Mortgagee and its successors and assigns, in
the name of the Mortgagor, or its successors or assigns, and does hereby
irrevocably appoint the Mortgagee and its successors and assigns, with full
power of substitution, the true and lawful attorney or attorneys of the
Mortgagor, in its name and stead, to apply for and receive possession of and to
take possession of such Vessel or Vessels with all the rights and powers that
the Mortgagor, or its successors or assigns, might have, possess or exercise in
any such event.

                                       17
<PAGE>
         SECTION 4.2 Suits. The Mortgagor also hereby irrevocably appoints the
Mortgagee and its successors and assigns, with full power of substitution, the
true and lawful attorney of the Mortgagor, in its name and stead, to appear in
the name of the Mortgagor, its successors or assigns, in any court where a suit
is pending against the Vessels, or any of them, because of or on account of any
alleged Lien against such Vessel or Vessels from which such Vessel or Vessels
have not been released and to take such proceedings as the Mortgagee reasonably
may deem proper towards the defense of such suit and the purchase or discharge
of such Lien, and all expenditures made or incurred by the Mortgagee for the
purpose of such defense or discharge shall constitute Mortgagee's Costs.

                  The Mortgagor hereby expressly and irrevocably consents to the
jurisdiction of any court in any jurisdiction whatsoever wherein any Vessel may
at any time be located outside of the continental United States for the sole
purposes of the foreclosure of this Fleet Mortgage, the sale of the Mortgagor's
interest in such Vessel or the enforcement of any other remedy or right
hereunder, and hereby expressly and irrevocably submits the person of the
Mortgagor and its interest in such Vessel to the jurisdiction of any such court
in any such action or proceeding.

         SECTION 4.3 Powers and Remedies Cumulative; No Waiver. Each and every
power and remedy herein specifically given to the Mortgagee or otherwise
available pursuant to this Fleet Mortgage shall be cumulative and shall be in
addition to every other power and remedy herein specifically given or now or
hereafter existing at law, in equity, in admiralty or by statute, and each and
every power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and as often and in such order as may be
determined by the Mortgagee and the exercise or the beginning of the exercise of
any power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other power or remedy. No notice to
or demand on the Mortgagor in any instance shall entitle the Mortgagor to any
other or further notice or demand in similar or other circumstances. No delay or
omission by the Mortgagee in the exercise of any right or power or in pursuance
of any remedy occurring upon an Event of Default shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of the
Mortgagor or to be an acquiescence therein, nor shall the acceptance by the
Mortgagee of any security or of any payment of or on account of any advances
after any past Event of Default or of any payment on account of any past Event
of Default be construed to be a waiver of any right to take advantage of any
future Event of Default or of any past Event of Default not completely cured
thereby.

                                   ARTICLE V

                         RELEASE OF VESSELS AND MORTGAGE
                              OF ADDITIONAL VESSELS

         SECTION 5.1 Definitions. For purposes of this Article V, the following
terms shall have the respective meanings set forth below:

                  "Eligible Vessel" shall mean any inland river barge or towboat
which is duly documented pursuant to the laws of the United States as a vessel
of the United States under the United States flag, the whole of which vessel is
lawfully owned and lawfully possessed by the Mortgagor, free from any Lien other
than the Liens permitted by Section 2.7 hereof.

                                       18
<PAGE>
                  "Release" shall mean a release, substantially in the form of
Annex B (with such changes as shall be required in order to enable such release
to be filed and recorded in accordance with the provisions of Chapter 313), of
one or more Vessels from the Lien of this Fleet Mortgage executed by the
Mortgagee and delivered to the Mortgagor.

                  "Release Request" shall mean a request delivered by the
Mortgagor to the Mortgagee pursuant to and in accordance with the requirements
of Section 5.2 hereof.

                  "Supplement" shall mean a supplement to this Fleet Mortgage,
substantially in the form of Annex C hereto (with such changes as shall be
required in order to enable such supplement to be filed and recorded in
accordance with the provisions of Chapter 313) that subjects one or more
Eligible Vessels to the Lien of this Fleet Mortgage, executed by the Mortgagor
and delivered to the Mortgagee pursuant to and in accordance with the
requirements of Section 5.3 hereof.

         SECTION 5.2 Release of Vessels. (a) The Mortgagor may deliver a
Release Request to the Mortgagee at any time prior to any sale or disposition of
a Vessel or Vessels by the Mortgagor permitted by Section 6.11 of the Revolving
Credit and Guaranty Agreement (a "Permitted Sale"). Any Release Request shall be
in writing, be signed on behalf of the Mortgagor, certify that such Permitted
Sale will be in accordance with the Revolving Credit and Guaranty Agreement,
identify the Vessel or Vessels to be released and be accompanied by a form of
Release respecting such Vessel or Vessels for execution by the Mortgagee.

                  (b)     After receiving a Release Request that satisfies the
requirements of the preceding paragraph (a) and provided no Event of Default has
occurred and is continuing, the Mortgagee shall deliver to the Mortgagor a
Release covering the Vessel or Vessels designated in such Release Request. Upon
recordation, the Mortgagor shall deliver to the Mortgagee evidence thereof.

         SECTION 5.3 Mortgage of Additional Vessels. (a) If the Mortgagor
acquires any Eligible Vessel or Eligible Vessels during any calendar month, on
or before the thirtieth (30th) day following the close of such calendar month,
the Mortgagor shall prepare, execute and deliver to the Mortgagee a Supplement
with respect to such Eligible Vessel or Eligible Vessels. Upon execution of the
Supplement by the Mortgagee, the Mortgagor shall cause such Supplement to be
recorded and shall otherwise take all steps necessary in order to subject the
Eligible Vessel or Eligible Vessels named therein to the Lien of this Fleet
Mortgage, subject to all of the terms and provisions hereof. At the time of the
execution and recordation of such Supplement, (i) the Mortgagor shall deliver to
the Mortgagee a copy of the Supplement, together with evidence of recordation,
(ii) the Mortgagor shall deliver to the Mortgagee certificates of insurance or
other evidence reasonably satisfactory to the Mortgagee that the Mortgagor has
insured the Vessel or Vessels covered by such Supplement in accordance with the
requirements set forth in Section 2.17 of this Fleet Mortgage, (iii) the
Mortgagor shall deliver to the Mortgagee an opinion of counsel reasonably
satisfactory to the Mortgagee, substantially in the form of Annex D hereto and
(iv) the Mortgagor shall deliver to the Mortgagee such other documents and take
such other steps as may be reasonably requested by the Mortgagee.

                                       19
<PAGE>
                  (b)      If any Subsidiary of the Mortgagor acquires any
Eligible Vessel or Eligible Vessels during a calendar month, on or before the
thirtieth (30th) day following the close of such calendar month, the Mortgagor
shall cause such Subsidiary to subject such Eligible Vessel or Eligible Vessels
to a first preferred mortgage, substantially in the form of this Fleet Mortgage,
in favor of the Mortgagee, or if applicable, a mortgage supplement in the same
manner as described in this Section 5.3.

         SECTION 5.4 Costs. The Mortgagor shall, promptly upon receiving
invoices therefor, pay all costs and expenses incurred by the Mortgagor and the
Mortgagee in connection with the matters contemplated by this Article V
(including, without limitation, the costs of negotiating, preparing, duplicating
and delivering documents, all filing and recording fees and similar charges and
the fees and disbursements of counsel) and reimburse the Mortgagee for any such
costs and expenses paid by them, which amounts shall constitute Mortgagee's
Costs.

                                   ARTICLE VI

                                SUNDRY PROVISIONS

         SECTION 6.1 Amount of Fleet Mortgage. For purposes of 46 U.S.C. Section
31321(b)(3), the amount of the direct or contingent obligations that are or may
be secured by this Fleet Mortgage (excluding interest, expenses and fees) is
$75,000,000 plus interest, expenses, fees, indemnities and costs of performance
of the covenants contained in this Fleet Mortgage, the Revolving Credit and
Guaranty Agreement and in the other Loan Documents.

         SECTION 6.2 Counterparts. This Fleet Mortgage and any amendment hereof
may be executed in any number of counterparts and all such counterparts executed
and delivered each as an original shall constitute but one and the same
instrument.

         SECTION 6.3 Currency. The terms "Dollars" and "$" as used herein shall
mean any coin or currency of the United States of America which at the time of
payment shall be legal tender for public and private debts.

         SECTION 6.4 Assignment; Successors. All the covenants, promises,
stipulations and agreements of the Mortgagor in this Fleet Mortgage contained
shall bind the Mortgagor and its successors and assigns and shall inure to the
benefit of the Mortgagee and its successors and assigns. The Mortgagor
acknowledges that the Mortgagee may assign its interest, in whole or in part, in
this Fleet Mortgage, to any third party and, for such purpose, the Mortgagor
waives all right to notice or consent. The Mortgagor may not assign any of its
rights or obligations hereunder without the prior written consent of the
Mortgagee.

         SECTION 6.5 Agents of Mortgagee. Wherever and whenever herein any
right, power or authority is granted or given to the Mortgagee, such right,
power and authority may be exercised in all cases by the Mortgagee through such
agent or agents or official or officials as it or they may appoint or authorize,
and the act or acts of such agent or agents or official or officials when taken
shall constitute the act of the Mortgagee.

         SECTION 6.6 Severability. If any word, phrase, sentence, paragraph,
provision or section of this Fleet Mortgage shall be held, declared, or
pronounced void, voidable, invalid,
                                       20
<PAGE>
unenforceable or inoperative for any reason by any court of competent
jurisdiction, such holding, declaration or pronouncement shall not adversely
affect any other word, phrase, sentence, paragraph, provision or section of this
Fleet Mortgage which will otherwise remain in full force and effect and be
enforced in accordance with its terms, and the effect of such holding,
declaration or pronouncement shall be limited to the territory or the
jurisdiction in which made.

         SECTION 6.7 Amendments; Supplements. This Fleet Mortgage may not be
amended or supplemented except in writing by the Mortgagor and the Mortgagee.
The provisions of this Fleet Mortgage may not be waived except in writing by the
Mortgagee.

         SECTION 6.8 Governing Law. To the extent not governed by the laws of
the United States, this Fleet Mortgage shall be governed by the laws of the
State of New York.

         SECTION 6.9 Recordation of Mortgage. The cost and expense of recording
this Fleet Mortgage, and the cost and expense of obtaining certified copies of
this Fleet Mortgage, shall be paid by the Mortgagor, and the Mortgagor agrees to
pay the same or reimburse the Mortgagee, as the case may be, within 10 days
after demand. If such sums are not so paid, and if they are borne or paid by the
Mortgagee, such sums shall be Mortgagee's Costs.

         SECTION 6.10 No Waiver of Preferred Status. Nothing contained herein
shall be construed as a waiver by the Mortgagee of the preferred status of this
Fleet Mortgage, and any provision which would otherwise constitute such a waiver
shall to such extent be of no force or effect.

         SECTION 6.11 Waiver. The Mortgagor agrees that it will not at any time
or in any manner whatever claim or take any benefit of any stay, extension or
moratorium law which may affect the terms of this Fleet Mortgage; nor claim or
take any benefit of any law providing for the valuation or appraisal of the
Vessels, or any of them, prior to any sale thereof; and the Mortgagor hereby
expressly waives all benefit or advantage of any such law, and covenants not to
hinder, delay, or impede the execution of any power or remedy herein granted or
available at law or in equity to the Mortgagee, but to suffer and permit the
execution of every power and remedy as though no such law existed.

         SECTION 6.12 Further Assurances. At the request of the Mortgagee, from
time to time the Mortgagor will execute, on its own behalf, such other and
further instruments and documents as in the opinion of the Mortgagee or special
counsel to the Mortgagee may be required, useful or desirable to subject each
Vessel more effectually to the Lien of this Fleet Mortgage or to obtain or
maintain the full benefits of this Fleet Mortgage. Upon the failure of the
Mortgagor so to do, the Mortgagee may execute any and all such other and further
assurances and documents for and in the name of the Mortgagor, and the Mortgagor
hereby irrevocably appoints the Mortgagee the agent and attorney-in-fact of the
Mortgagor so to do, and any expense of the Mortgagee in connection therewith
shall constitute Mortgagee's Costs.

         SECTION 6.13 Notices. Notices and other communications provided for
herein shall be given as provided in the Revolving Credit and Guaranty
Agreement.

                                       21
<PAGE>
                  IN WITNESS WHEREOF, the Mortgagor has executed this Fleet
Mortgage effective the day and year first above written.

                                        LOUISIANA DOCK COMPANY LLC

                                        By
                                           ---------------------------------
                                           Name:
                                           Title:

                                       22
<PAGE>
STATE OF INDIANA  )
                  : ss.:
COUNTY OF CLARK   )

                  On this __ day of February, 2003, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
______________ of LOUISIANA DOCK COMPANY LLC, the limited liability company
described in and which executed the foregoing instrument; that she/he signed his
name thereto pursuant to authority granted to her/him by the Board of Managers
of said limited liability company.

                                                 -----------------------
                                                      Notary Public

                                       1
<PAGE>
                                   SCHEDULE I

                                 LIST OF VESSELS

          NAME                                          OFFICIAL NUMBER
          ----                                          ---------------

                                       1
<PAGE>
                                  SCHEDULE 2.14

                                EXISTING CHARTERS

                                       1
<PAGE>
                                     ANNEX A

                 FORM OF REVOLVING CREDIT AND GUARANTY AGREEMENT

                                       1
<PAGE>
                                     ANNEX B

            FORM OF PARTIAL RELEASE OF FIRST PREFERRED FLEET MORTGAGE

         JPMORGAN CHASE BANK, a New York banking corporation, as administrative
agent, documentation agent and collateral agent pursuant to the Revolving Credit
and Guaranty Agreement, located at 270 Park Avenue, New York, New York 10017
(the "Mortgagee"), does hereby certify that the [vessel/vessels] listed on
Attachment A attached hereto and made a part hereof that were mortgaged to the
Mortgagee under that First Preferred Fleet Mortgage, dated February __, 2003 (as
previously supplemented, the "Fleet Mortgage") [any amendments or supplements],
made and executed by Louisiana Dock Company LLC, a Delaware limited liability
company, with its address at [__________________________], to secure payment to
the Mortgagee of the total principal amount of US$75,000,000, plus interest,
expenses, fees, indemnities and the costs of performance of mortgage and other
covenants, which mortgage was filed at the United States Coast Guard, National
Vessel Documentation Center on February __, 2003, at [time] and recorded in Book
[____], Instrument [____] [recording information of amendments or supplements]
on the whole of the vessels listed on Schedule I therein, [is/are] hereby
released from the lien of the Fleet Mortgage. All other vessels listed on
Schedule I to the Fleet Mortgage but not listed on Attachment A remain subject
to the lien of the Fleet Mortgage.

         IN WITNESS WHEREOF, the Mortgagee has caused this Partial Release of
First Preferred Fleet Mortgage to be executed this _____ day of ____________,
[year].

                                            JPMORGAN CHASE BANK, a New York
                                            banking corporation, as
                                            administrative agent, documentation
                                            agent and collateral agent

                                            By:
                                                -------------------------------
                                                Name:
                                                Title:

                                       1
<PAGE>
STATE OF _________________ )
                           ) ss:
COUNTY OF ________________ )

                  On this ___ day of _____________, 200_, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
____________ of JPMORGAN CHASE BANK, the banking corporation described in and
which executed the foregoing instrument; that she/he signed his name thereto
pursuant to authority granted to her/him by the Board of Directors of said
corporation.

                                               -----------------------
                                                    Notary Public

                                       1
<PAGE>
                                     ANNEX C

                               SUPPLEMENT NO. ____

                                       to

                         FIRST PREFERRED FLEET MORTGAGE

                  THIS SUPPLEMENT NO. ___, dated and effective as of the _____
day of ____________________, (this "Supplement") to that First Preferred Fleet
Mortgage dated and effective as of February __, 2003, is entered into between
LOUISIANA DOCK COMPANY LLC, a Delaware limited liability company (the
"Mortgagor"), and JPMORGAN CHASE BANK, as administrative agent, documentation
agent and collateral agent (the "Mortgagee") under a Revolving Credit and
Guaranty Agreement dated as of February __, 2003 (the "Revolving Credit and
Guaranty Agreement") among the Mortgagor, American Commercial Lines Holdings
LLC, the Banks party thereto (the "Banks"), and JPMorgan Chase Bank, as
administrative agent, documentation agent and collateral agent.

                              W I T N E S S E T H:

                                    RECITALS

                  A.      This Supplement supplements that certain First
Preferred Fleet Mortgage dated February __, 2003 made and given by the Mortgagor
to the Mortgagee, and filed in the Office of the United States Coast Guard
National Vessel Documentation Center at [TIME] on [DATE] and recorded in Book
No. ____, Instrument No. ____ (said First Preferred Fleet Mortgage, as the same
has heretofore been and may hereafter be amended, supplemented and restated, is
herein called the "Fleet Mortgage") on the Vessels identified on Schedule I
attached hereto.

                  B.      This is a supplement that covers the whole of the
[vessel/vessels] listed on Schedule II attached hereto as more fully described
in the Granting Clause hereof. [Such vessel/each of such vessels] has been duly
documented in the name of the Mortgagor or for which an application for such
[vessel/vessels] to be duly documented in the name of the Mortgagor has been
filed at the United States Coast Guard National Vessel Documentation Center that
is in substantial compliance with the requirements of chapter 121 of Title 46 of
the United States Code, as amended, and the regulations prescribed under that
chapter under the laws and flag of the United States. The Mortgagor is the true,
lawful and sole owner of the whole of each of the [vessel/vessels] identified on
Schedule II.

                  C.       The full name and address of the Mortgagor is:

                           Louisiana Dock Company LLC
                           1701 E. Market Street
                           P.O. Box 610
                           Jeffersonville, Indiana 47130-0610

                                       1
<PAGE>
                           Attention:  General Counsel

                  D.       The full name and address of the Mortgagee is:

                           JPMorgan Chase Bank, as administrative agent,
                           documentation agent and collateral agent under the
                           Revolving Credit and Guaranty Agreement,

                           270 Park Avenue
                           New York, New York 10017
                           Attention: Craig H. Fuehrer (telecopy: 646-534-1755)

                  E.       For purposes of 46 U.S.C. Section 31321(b)(3), the
amount of the direct or contingent obligations that are or may be secured by
this Supplement (excluding interest, expenses and fees) is $75,000,000 plus
interest, expenses, fees, indemnities and costs of performance of the covenants
contained in this Supplement, the Fleet Mortgage, the Revolving Credit and
Guaranty Agreement and in the other Loan Documents.

                  F.       The Mortgage was granted by the Mortgagor to secure
the payment of the Secured Obligations.

                  G.       Pursuant to the provisions of Section 5.3 of the
Fleet Mortgage, the Mortgagor is now required to subject [an] additional
[vessel/vessels] to the Lien of the Fleet Mortgage by executing and delivering
to the Mortgagee this Supplement.

                                 GRANTING CLAUSE

                  NOW, THEREFORE, in consideration of the premises and of other
valuable consideration, the receipt and sufficiency of which the Mortgagor
hereby acknowledges, and in order to secure the timely payment in full and the
full performance of all Secured Obligations, the Mortgagor has granted,
conveyed, mortgaged, pledged, assigned, transferred, set over and confirmed and
subjected to the Lien of the Fleet Mortgage, and by these presents the Mortgagor
does grant, convey, mortgage, pledge, assign, transfer, set over and confirm and
subject to the Lien of the Fleet Mortgage, unto the Mortgagee and its successors
and assigns, the whole of the [vessel/vessels] identified in Recital B above,
[each of] which is duly documented in the name of the Mortgagor or for which an
application for such [vessel/vessels] to be duly documented in the name of the
Mortgagor has been filed at the United States Coast Guard National Vessel
Documentation Center that is in substantial compliance with the requirements of
chapter 121 of Title 46 of the United States Code, as amended, and the
regulations prescribed under that chapter, under the laws and flag of the United
States of America, including, without being limited to, all of the boilers,
engines, machinery, masts, spars, rigging, boats, pumps, anchors, cables,
chains, tackle, apparel, furniture, fittings, equipment and other appurtenances
appertaining or belonging thereto, whether now owned or hereafter acquired, and
all additions, improvements and replacements hereafter made in or to any vessel,
or any part thereof whether on board or not, including all items and
appurtenances aforesaid and all rents, charters, charter parties, freights,
sub-freights, cargoes, operating profits, and proceeds of the foregoing ([each]

                                       2
<PAGE>
such vessel and all items thereof above enumerated being included in the term
"Vessel" as used in this Fleet Mortgage);

                  TO HAVE AND TO HOLD the same unto and for the proper use and
benefit of the Mortgagee, its successors and assigns, forever, upon the terms of
the Fleet Mortgage. [The/each] Vessel identified herein shall be subjected to
the Lien of the Fleet Mortgage by this Supplement.

                                    ARTICLE I

                               GENERAL PROVISIONS

                  SECTION 1.1 Definitions. Capitalized terms used but not
defined herein shall have the same meanings set forth with respect thereto in
the Fleet Mortgage.

                  SECTION 1.2 Schedule I. Schedule I to the Fleet Mortgage is
hereby supplemented by the inclusion thereon of the Vessels listed in Schedule
II hereto with the effect that such Vessels shall hereafter be included as
"Vessels" for all purposes of the Fleet Mortgage.

                                   ARTICLE II

                 REPRESENTATIONS OR WARRANTIES OF THE MORTGAGOR

                  SECTION 2.1 Restatement and Incorporation of Representations
or Warranties. The Mortgagor hereby confirms the accuracy of each of the
representations and warranties of the Fleet Mortgage as of the date hereof with
respect to each Vessel identified herein.

                                   ARTICLE III

                            RELATIONSHIP TO MORTGAGE

                  SECTION 3.1 Part of the Mortgage. This Supplement supplements
the Fleet Mortgage and shall, from and after the date hereof, constitute a part
of the Fleet Mortgage for all purposes.

                  SECTION 3.2 Ratification of the Mortgage. The Fleet Mortgage
remains in full force and effect and, except as expressly supplemented by this
Supplement, the Fleet Mortgage and each of its provisions is hereby in all
respects ratified and confirmed.

                                   ARTICLE IV

                                SUNDRY PROVISIONS

                  SECTION 4.1 Counterparts. This Supplement may be executed in
any number of counterparts, each of which shall for all purposes be deemed to be
an original and such counterparts taken together shall be deemed to constitute
one and the same instrument.

                  SECTION 4.2 Governing Law. To the extent not governed by the
laws of the United States, this Supplement shall be governed by the laws of the
State of New York.

                                       3
<PAGE>
                  SECTION 4.3 Recordation of Supplement. The cost and expense of
recording this Supplement, and the cost and expense of obtaining certified
copies of this Supplement, shall be paid by the Mortgagor, and the Mortgagor
agrees to pay the same or reimburse the Mortgagee, as the case may be, within 10
days after demand, If such sums are not so paid, and if they are borne or paid
by the Mortgagee, such sums shall be Mortgagee's Costs.

                  SECTION 4.4 Further Assurances. At the request of the
Mortgagee, from time to time the Mortgagor will execute, on its own behalf, such
other and further instruments and documents as in the opinion of the Mortgagee
or special counsel to the Mortgagee may be required, useful or desirable to
subject each Vessel more effectually to the Lien of the Fleet Mortgage or to
obtain or maintain the full benefits of the Fleet Mortgage. Upon the failure of
the Mortgagor so to do, the Mortgagee may execute any and all such other and
further assurances and documents for and in the name of the Mortgagor, and the
Mortgagor hereby irrevocably appoints the Mortgagee the agent and
attorney-in-fact of the Mortgagor so to do, and any expense of the Mortgagee in
connection therewith shall constitute Mortgagee's Costs.

                                       4
<PAGE>
                  IN WITNESS WHEREOF, the Mortgagor and the Mortgagee have
caused this Supplement No. ___ to First Preferred Fleet Mortgage to be duly
executed and delivered as of the day and year first above written.

                                            LOUISIANA DOCK COMPANY LLC

                                            By
                                               --------------------------------
                                               Title:

                                            JPMORGAN CHASE BANK, as
                                            administrative agent, documentation
                                            agent and collateral agent

                                            By
                                               --------------------------------
                                               Title:

                                       5
<PAGE>
STATE OF [               ] )
                           : ss.:
COUNTY OF [              ] )

                  On this ___ day of _____________, 200_, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
____________ of LOUISIANA DOCK COMPANY LLC, the limited liability company
described in and which executed the foregoing instrument; that she/he signed his
name thereto pursuant to authority granted to her/him by the Board of Managers
of said limited liability company.

                                                  -----------------------
                                                        Notary Public

                                       6
<PAGE>
STATE OF [               ] )
                           : ss.:
COUNTY OF [              ] )

                  On this ___ day of _____________, 200_, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
____________ of JPMORGAN CHASE BANK, the New York banking corporation described
in and which executed the foregoing instrument; that she/he signed his name
thereto pursuant to authority granted to her/him by the Board of Directors of
said corporation.

                                                -----------------------
                                                     Notary Public

                                       1
<PAGE>
                         SCHEDULE I TO SUPPLEMENT NO. __

                       LIST OF VESSELS FROM FLEET MORTGAGE

         Name                                          Official Number
         ----                                          ---------------

                                       1
<PAGE>
                        SCHEDULE II TO SUPPLEMENT NO. __

                       LIST OF VESSELS ADDED BY SUPPLEMENT

         Name                                          Official Number
         ----                                          ---------------

                                       2
<PAGE>
                                     ANNEX D

                              Form of Legal Opinion

                                     [date]

JPMorgan Chase Bank,
as administrative agent, documentation agent and collateral agent
270 Park Avenue
New York, New York  10017

Gentlemen:

         We have acted as special maritime counsel to Louisiana Dock Company
LLC, a Delaware limited liability company (the "Mortgagor"), in connection with
that Supplement No. __ dated _________, ____ (the "Mortgage Supplement") to that
First Preferred Ship Mortgage dated _____________, ____, (the "Fleet Mortgage")
given by the Mortgagor, as mortgagor, to JPMorgan Chase Bank, as administrative
agent, documentation agent and collateral agent, as Mortgagee (the "Mortgagee").

         In connection with this opinion, we have examined (a) an executed copy,
certified or otherwise identified to our satisfaction, of the Mortgage
Supplement, (b) such other agreements, documents, certificates and corporate
records of the Mortgagor and official records, affidavits and other instruments
and (c) such laws and regulations, as we deemed appropriate for the purposes of
this opinion. As to factual matters, we have, in certain instances, examined and
relied upon certificates of corporate officers of the Mortgagor, copies of which
are delivered to you simultaneously herewith and have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals and the conformity with the originals of
all documents submitted to us as copies. For purposes of this opinion, we have
assumed that the Mortgage Supplement has been duly and validly authorized,
executed and delivered and constitutes the legal, valid and binding obligation
of the Mortgagor, enforceable in accordance with its terms under the laws of the
State of New York.

         Based upon the foregoing and subject to the further limitations,
assumptions and qualifications set forth herein, we are of the opinion that:

         1.    The Mortgagor is the sole owner of the whole of [the vessel/each
of the vessels] identified on Schedule 1 to the Mortgage Supplement (the "[New
Vessel/Vessels]"). [The/each] New Vessel is free and clear of any claim, lien,
mortgage or other encumbrance of any character of record except for the Fleet
Mortgage and the Existing Mortgage, as defined in the Fleet Mortgage, and except
as set forth on Exhibit A attached hereto. To the extent that this opinion
relates to ownership and freedom and clearance of claims, liens, mortgages or
other encumbrances on the [New Vessel/Vessels], we have relied upon the
certificates as to such matters, dated the date above, of the Mortgagor and
records of the United States Coast Guard National Vessel Documentation Center.

                                       3
<PAGE>
         2.    [The New Vessel/each of the New Vessels] is eligible for
documentation and is duly documented under the laws of the United States under
46 U.S.C. Chapter 121.

         3.    The Mortgage Supplement has been duly filed and recorded at the
National Vessel Documentation Center (the only office in which such filing and
recording are necessary), and constitutes a fully perfected "preferred" mortgage
on each of the New Vessels in favor of the Mortgagee having the effect and with
the priority provided by 46 U.S.C. Section 31301 et seq., and subject to no
other lien or encumbrance of record.

         The foregoing opinion is subject to the following qualifications:

         (a)   Enforcement of the Mortgage Supplement may be (i) limited by
               applicable bankruptcy, insolvency, moratorium, reorganization or
               similar laws affecting the enforcement of creditors' rights
               generally, (ii) subject to general principles of equity
               (regardless of whether such enforcement is considered in a
               proceeding in equity or at law) and (iii) subject to the fact
               that some of the provisions of the Mortgage Supplement may be
               rendered void or unenforceable in whole or in part by the laws of
               certain jurisdictions in which enforcement may be sought, but
               that fact will not materially interfere with the practical
               realization of the benefits of the security provided by the
               Mortgage Supplement, and the inclusion of such provisions does
               not affect the validity of the Mortgage Supplement and without
               which provisions the Mortgage Supplement contains adequate
               provisions for enforcing payment of the Secured Obligations (as
               such term is defined in each Fleet Mortgage) and realizing upon
               the security provided by the Mortgage Supplement;

         (b)   No opinion is expressed as to the specific remedy, if any, that
               any court, other governmental authority or arbitrator may grant,
               impose or render; and

         (c)   We do not purport to be expert on, and express no opinion with
               respect to, the law of any jurisdiction other than the federal
               laws of the United States of America.

         This opinion is given as of the date hereof and is intended solely for
your benefit and is not to be made available to or relied upon by other persons
or entities without the undersigned's prior written consent.

                                               Very truly yours,

                                       4<PAGE>
                                                                   Exhibit 10.14

                              SEPARATION AGREEMENT

      This Separation Agreement (hereinafter the "Agreement") is made and
entered into this 12th day of August, 2003 by and between MICHAEL C. HAGAN
(hereinafter "Hagan"), and AMERICAN COMMERCIAL LINES LLC, a Delaware limited
liability company with a business address of 1701 East Market Place,
Jeffersonville, Indiana 47130, as debtor and debtor in possession, and all of
its parent, related, affiliated and subsidiary companies, and all their
predecessors, successors, employees, officers, directors, board of managers,
members, interest holders, representatives, assigns, agents, insurers and
employee benefit programs, and the trustees, administrators, fiduciaries and
insurers of such employee benefit programs (collectively, the "the Company").

                                    RECITALS

      1.    As of the date hereof, Hagan is employed by the Company as President
and Chief Executive Officer and also serves as a member of the Board of Managers
of the Company.

      2.    Hagan has announced his intention to retire from the Company. Hagan
and the Company have agreed that Hagan's retirement date will be October 31,
2003, unless the parties mutually agree to an earlier date.

      3.    Hagan and the Company wish to resolve all outstanding matters
between them in a mutually acceptable way.

      4.    The Company has offered to provide benefits to Hagan in exchange for
Hagan's execution of this Agreement, the Releases contained herein and the
Consulting Agreement defined below.

      5.    Hagan desires to waive certain claims or potential claims Hagan may
have or could claim to have against the Company in order to receive these
benefits.

      6.    Hagan and the Company wish to enter into a consulting arrangement
pursuant to a consulting agreement (the "Consulting Agreement") to be executed
contemporaneous herewith for certain services of Hagan following his retirement.

         NOW THEREFORE, in exchange for the good and valuable consideration
provided herein, the receipt and sufficiency of which is hereby acknowledged,
Hagan and the Company hereby agree as follows:

      (1)   CONCLUSION OF EMPLOYMENT

      Hagan's active engagement as an employee of the Company will end on
October 31, 2003, or such earlier date as the parties may mutually agree
(hereinafter the "Retirement Date"). Hagan promises that on or before the
Retirement Date, he will return all files, records, credit cards, keys,
identification, computers, computer records, cell phones, pagers, or other
Company property which is in Hagan's possession or

                                  Page 1 of 12
<PAGE>
control, except for such items as Hagan may be instructed to retain until the
conclusion of the Consulting Period as defined below. In the event that Hagan
retains or receives the Company property during the Consulting Period, Hagan
covenants to return all such property on or before the conclusion of the
Consulting Period.

      (2)   NON-DISPARAGEMENT, NON-SOLICITATION, NON-COMPETITION, CONSULTING AND
PUBLIC DISCLOSURE

      (a)   Non-Disparagement and Non-Solicitation by Hagan. Beginning on the
date hereof, Hagan agrees and acknowledges that he will not:

            (i)    disparage the Company in any manner;

            (ii)   disclose any confidential information, proprietary
            information, trade secrets, or other information which is not
            disseminated publicly (hereinafter collectively "Confidential
            Information") which Hagan learned while employed by the Company;

            (iii)  through the end of the Non-Compete Period (as defined below)
            solicit or help anyone solicit any employees of the Company to cease
            employment with the Company; or

            (iv)   through the end of the Non-Compete Period (as defined below)
            solicit or help anyone to solicit any customers or vendors of the
            Company to cease dealing with the Company.

      (b)   Non-Disparagement by the Company. Beginning on the date hereof, the
Company agrees and acknowledges that it shall not disparage Hagan in manner, and
shall not directly or indirectly, publicly or privately, make, publish or
solicit or encourage others to make, publish or solicit any disparaging
statements, comments, announcements or remarks concerning Hagan.

      (c)   Non-Competition by Hagan. From the Retirement Date through June 30,
2004 (the "Non-compete Period"), Hagan shall not accept employment with or
otherwise work or act for or on behalf of any person or entity engaged in the
transportation of cargo by barge on the Inland Waterway System of the United
States in competition with American Commercial Barge Line LLC

      (3)   COMPENSATION AND BENEFITS

      (a)   Base Salary. From the date hereof, through and including the
Retirement Date, the Company shall continue to pay Hagan his Base Salary,
pursuant to the terms of the employment agreement between Hagan and the Company
dated as of May 29, 2002 (the "Hagan Employment Agreement"), including all
earned or accrued vacation pay.

      (b)   Compensation. In consideration of the Claims to be released by
Hagan, the agreements of Hagan set forth herein (including, but not limited to
the Non-Competition

                                  Page 2 of 12
<PAGE>
Agreement, and the Consulting Services to be provided by Hagan, as set forth
below, the Company shall pay to Hagan: (i) an initial payment (the "Initial
Payment") of $275,000.00 in cash, within three (3) business days after the
Release (as defined below) becomes irrevocable; and (ii) a consulting fee (the
"Consulting Fee"), of $25,000 per month, payable to Hagan (or to his estate if
he should die during the Consulting Period) in advance on or before the first
business day of each month. Pursuant to Section 16, hereof, the Company shall
use its best efforts to ensure that the Initial Payment and the Consulting Fees
are granted administrative priority status pursuant to Section 503(b) of the
Bankruptcy Code.

      (c)   Welfare Plans and Benefits Programs. Beginning on the commencement
date of the Consulting Period, Hagan shall continue to participate in the
Company's group medical and dental insurance plans for two (2) years, at a cost
to Hagan that is no greater than the cost of such benefit programs to active
employees. During this period, if Hagan becomes eligible to receive medical or
dental benefits from any benefit plan (a "Primary Coverage Plan") maintained by
any other person, then the benefits offered by the Company's plans shall become
secondary to the benefits offered under the Primary Coverage Plan. Following the
expiration of these benefits, Hagan shall have the right to any continued
coverage required by federal law under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") and will receive an appropriate COBRA notice
setting forth Hagan's rights and obligations. Nothing in this paragraph shall
alter the Company's reserved right to change or discontinue any benefit plan at
any time.

      (d)   Qualified Benefit Plans. As of the date hereof, Hagan is a
participant in the American Commercial Lines LLC Pension Plan (the "ACL Pension
Plan") and the American Commercial Lines LLC 401(k) Plan (the "ACL 401(k) Plan"
and, together with the ACL Pension Plan, the "Qualified Benefit Plans"). Hagan's
participation in the Qualified Benefit Plans shall in all respects continue to
be governed by the specific terms of the Qualified Benefit Plans.

      (e)   Non-Qualified Benefit Plans. As of the date hereof, Hagan is a
participant in the following non-qualified benefit plans offered by the Company
(collectively the "Non-Qualified Benefit Plans"): (i) American Commercial Lines
LLC Amended and Restated Salary Continuation Plan; (ii) Supplemental Savings
Plan for Eligible Executives of American Commercial Lines LLC; and (iii) Special
Retirement Plan of American Commercial Lines LLC. Notwithstanding the specific
terms of the Non-Qualified Benefit Plans, Hagan's participation in the
Non-Qualified Benefit Plans shall terminate on the Retirement Date, and any
claims Hagan may have for payment of funds pursuant to the Non-Qualified Benefit
Plans shall be treated in accordance with Section 5 hereof.

      (4)   CONSULTING SERVICES

      (a)   Consulting Period. As used herein, the term "Consulting Period"
shall mean the period of time beginning one day after the Retirement Date and
continuing through, and including June 30, 2004.

                                  Page 3 of 12
<PAGE>
      (b)   Consulting Services. During the Consulting Period, Hagan shall
provide, at the request of the Company's Chief Executive Officer, on an
as-needed basis, not to exceed 50 hours per month the services (the "Consulting
Services") specified below and in the Consulting Agreement:

            (i)   meetings with customers and vendors on behalf of the Company;

            (ii)  working with senior management of the Company on strategic
                  planning;

            (iii) working with senior management of the Company and the
                  Company's advisors with respect to asset dispositions, if any,
                  that the Company may choose to pursue;

            (iv)  working with senior management of the Company and the
                  Company's advisors to develop a plan or reorganization in
                  connection with the Company's Chapter 11 Case;

            (v)   assisting the Company's executive management during any
                  transition period following the Retirement Date; and

            (vi)  such other senior management level tasks as the Company may
                  reasonably request.

      (5)   HAGAN RELEASE

      In exchange for, and subject to the receipt of, the consideration set
forth herein, Hagan shall grant to the Company the following releases
(collectively the "Releases"):

      (a)   General Release. In consideration of the payments and benefits
received hereunder, Hagan agrees to release and waive all claims he may have
against the Company. Hagan's release includes all claims that are related to (i)
Hagan's employment with the Company; (ii) the voluntary or involuntary
separation from that employment; (iii) the design or administration of any
employee benefit program; (iv) any rights Hagan has to severance or similar
benefits under any program, policy or procedure of the Company other than the
payments recited in Section 3 of this Agreement; (v) any rights Hagan may have
to the continued receipt of benefits, other than as recited in Section 3 of this
Agreement; and (vi) any other claims or demands Hagan may have which arise under
any contract or law or on any other basis, including, but not limited to, claims
or demands under any severance plan or the Hagan Employment Agreement,
Restricted Stock Agreement, Stock Option Agreement, or any other agreement. This
release does not give up Hagan's rights to continued health insurance under
COBRA as set forth above.

      (b)   Federal and State Law Release. Hagan also releases any rights or
claims he may have under the Americans with Disabilities Act, which prohibits
employers from discriminating against any qualified individual with a
disability; Age Discrimination in

                                  Page 4 of 12
<PAGE>
Employment Act, which prohibits age discrimination in employment; Title VII of
the Civil Rights Act of 1964, which prohibits discrimination in employment based
on race, color, national origin, religion or sex; the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; Older Workers'
Benefit Protection Act, which prohibits discrimination in employee benefits;
state laws, which prohibit discrimination in employment based on, inter alia,
race, color, religion, age, national origin, handicap, sex, or ancestry; any
other federal, state or local laws or regulations prohibiting employment
discrimination, restricting an employer's right to terminate employees, or
otherwise regulating employment; any claims for wrongful discharge and all
claims for alleged physical or personal injury, or emotional distress; any
claims under the Worker Adjustment and Retraining Act or any similar law, which
requires, among other things, that advance notice be given of certain work force
reductions; and all claims under the Employee Retirement Income Security Act,
such as claims relating to pension or health plan benefits. This release covers
both claims that Hagan knows about and those he may not know about. Hagan
expressly waives all rights afforded him by any statute that limits the effect
of a release with respect to unknown claims to the maximum extent such statutes
permit such waiver. This release and waiver by Hagan is on behalf of Hagan and
his spouse (if any) and child or children (if any), heirs, beneficiaries,
devisees, executors, administrators, attorneys, personal representatives,
successors and assigns.

      (c)   Release of Non-Qualified Benefit Plan Claims. Without limiting the
generality of the foregoing, Hagan shall also release all claims he has to
payment of funds from (i) the Non-Qualified Benefit Plans, (ii) the Severance
Payments set forth in Section 9 of the Hagan Employment Agreement, and (iii) the
Key Employee Retention Agreement implemented by the Company as a part of its
Chapter 11 Case.

      (6)   NON-ADMISSION OF LIABILITY

      Hagan understands and agrees that the Company's willingness to make
payments and pay benefits to him under this Agreement is not an admission of
liability, or obligation to provide such consideration in the absence of Hagan
signing this Agreement.

      (7)   RELEASE OF AGE DISCRIMINATION CLAIMS; PERIODS FOR REVIEW AND
RECONSIDERATION

      (a)   Release of Age Discrimination Claims. Hagan understands and agrees
that this document includes a release of claims arising under the Age
Discrimination in Employment Act or comparable state law including but not
limited to all claims relating to Hagan's separation from employment with the
Company. Hagan understands and acknowledges that he has been given a period of
twenty-one (21) days to review and consider this Agreement. Hagan further
understands and acknowledges that he may use as much or all of this 21 day
period as Hagan wishes before signing, and that Hagan has done so.

      (i)   Hagan again understands and acknowledges that Hagan is receiving
            additional consideration from the Company, in part, in exchange for
            the

                                  Page 5 of 12
<PAGE>
            release of age discrimination claims potentially arising under the
            Age Discrimination in Employment Act or comparable state law. Hagan
            further understands and acknowledges that the additional
            consideration given to Hagan by the Company in exchange for the
            release of age discrimination claims potentially arising under the
            Age Discrimination in Employment Act or comparable state law is more
            than the Company is required to pay under its normal policies and
            procedures.

      (b)   Encouragement to Consult with Attorney. Hagan understands and
acknowledges that he is hereby advised to consult with an attorney prior to
executing this Agreement. By signing below, Hagan warrants that he has had the
opportunity to consult with an attorney prior to any execution of this
Agreement, and to be fully and fairly advised by that legal counsel as to the
terms of the Release set forth in this Agreement.

      (c)   Periods for Review and Reconsideration. Hagan understands that he
has seven (7) days after signing this Agreement to revoke it by notice in
writing delivered to AMERICAN COMMERCIAL LINES LLC; ATTN: Lisa L. Fleming -
Revocation of Severance Release; 1701 Market Street, Jeffersonville, Indiana
47131-0610. The Releases set forth in this Agreement shall be binding,
effective, and enforceable upon the expiration of this seven-day revocation
period without such revocation being received, but not before such time. Hagan
understands and agrees that the Initial Payment will not be paid prior to the
expiration of this seven-day revocation period. In the event Hagan revokes this
Agreement during the revocation period, the Company reserves the right to
suspend the continuation of any wage or benefit as provided in Section 3 of this
Agreement. Should the Company do so, Hagan will receive a COBRA Notice setting
forth the effect of such cessation on Hagan's right to continued health care
coverage.

      (8)   NO FUTURE LAWSUITS, NON-RELEASE OF FUTURE CLAIMS

      (a)   No Future Lawsuits. By signing this Agreement, Hagan promises never
to file or pursue a claim, lawsuit or any other complaint or charge asserting
any of the claims, lawsuits, complaints or charges that are released in this
Agreement.

      (b)   Non-Release of Future Claims. This Agreement does not waive or
release any rights or claims that Hagan may have under the Age Discrimination in
Employment Act which may arise after the later of the date Hagan signs this
Agreement, the Retirement Date, or the expiration of the Consulting Period.

      (9)   REPAYMENT OF BENEFITS BASED ON SUBSEQUENT ASSERTION OF CLAIM;
INDEMNIFICATION FOR COSTS INCURRED BY THE COMPANY; NO LIMITATION ON COVENANT
NOT TO SUE

      (a)   Repayment of Benefits Based on Subsequent Assertion of Claim. Hagan
understands and agrees that he may not pursue any claim, lawsuit, or other
charge or complaint released by the literal terms of this Agreement. Hagan
further understands and agrees that if he should breach this covenant not to
sue, and if a Court should, for any

                                  Page 6 of 12
<PAGE>
reason, find his release of claims, as set forth in this Agreement, void,
voidable, imperfect, or incomplete in any respect, he may be liable for the
repayment of some or all of the compensation and benefits received hereunder,
including but not limited to the value of any other benefits Hagan received
pursuant to the terms of this Agreement. Statutes of limitations will run on all
claims without regard to Hagan's execution of this Agreement. In addition, if
Hagan breaches his covenant not to sue, as set forth in Section 8, Hagan shall
forfeit all right to future benefits, if any.

      (b)   Indemnification for Costs Incurred by the Company. Hagan
acknowledges and agrees that if he breaks his covenant not to sue or promise not
to assert claims against the Company in the future, by filing a claim, lawsuit
or other complaint against the Company or any other entity released under the
terms of this Agreement, and a Court finds Hagan's actions to be in breach of
the terms of this Agreement, Hagan will pay the Company's costs and reasonable
attorneys' fees in defending such claim, lawsuit, or other complaint.

      (c)   No Limitation on Covenant Not to Sue. Nothing in this Section shall
be construed to limit Hagan's covenant not to sue or promise not to assert
claims, as set forth above.

      (10)  GOVERNING LAW

      Except for matters subject to the jurisdiction of the Bankruptcy Court or
subject to the Bankruptcy Code, this Agreement shall be governed and construed
in all respects in accordance with the laws of the State of Indiana without
regard to the conflict of laws rules contained therein. Any litigation arising
from the employment relationship or any termination of employment, shall be
brought in state or federal Court sitting in Clark County or Floyd County,
Indiana respectively.

      (11)  SEVERABILITY AND CONSEQUENCES OF INVALID TERMS

      Except as otherwise specified herein, if any portion of this Agreement is
found void or unenforceable for any reason by any Court, the Court should
enforce all portions of this Agreement to the maximum extent which would have
been enforceable in the original Agreement. If such portion cannot be modified
to be enforceable, the unenforceable portion will be severed from the remaining
portions of this Agreement, which shall otherwise remain in full force and
effect.

      (12)  RELEASE OF HAGAN, INDEMNITY, INSURANCE

      (a)   Hagan Released Claims. In agreeing to grant the Releases contained
herein, the Company and Hagan hereby expressly acknowledge that Hagan is
relinquishing good and valuable rights to receive payments pursuant to the terms
and conditions of (i) the Hagan Employment Agreement, (ii) the Key Employee
Retention Program, and (iii) the Non-Qualified Benefit Plans. The Company and
Hagan further acknowledge that the Releases constitute good and valuable
consideration for the

                                  Page 7 of 12
<PAGE>
compensation and benefits that Hagan will receive pursuant to the terms of this
Agreement.

      (b)   Chapter 11 Release. In consideration of the Releases, the Company
shall use its best efforts to cause Hagan to be released by the Company, the
Company's creditors, and any other third party, all in connection with the
consummation of the Company's Chapter 11 plan of reorganization to the same
extent, and by the same releasing parties, if any, that current officers in good
standing are released in such Chapter 11 plan of reorganization (such a release
is referred to herein as a "Chapter 11 Release"). Hagan acknowledges that
neither the form nor timing of a Chapter 11 Release has been determined and that
the Company's ability to grant such releases is subject to the approval of the
Bankruptcy Court. Hagan further acknowledges that any such Chapter 11 Release
shall not limit or otherwise impair or affect any liability of Hagan for any
breach of the representations and warranties set forth in this Agreement.

      (c)   Continuing Indemnity Obligation. Subject to applicable bankruptcy
law, to the extent that any suit is brought against Hagan by any party, for acts
or occurrences taking place during, and allegedly arising out of, Hagan's
employment by the Company that would have given rise to an obligation of the
Company to defend, indemnify or hold Hagan harmless, pursuant to its
organizational documents or any agreement or undertaking to which the Company is
a party if Hagan were an active employee, officer or director, then the Company
shall defend, indemnify and hold Hagan harmless to the fullest extent permitted
by such organizational document, agreement or undertaking.

      (d)   Directors & Officers Liability Coverage. The Company hereby
represents and warrants that, as of the date hereof it has in full force and
effect an Officers and Directors Liability Policy (the "D&O Policy") which
covers Hagan in his capacity as an officer and/or director of the Company. As
additional consideration for the Releases set forth herein, which has been
specifically bargained for, the Company hereby agrees that it will:

      (i)   provide Hagan with a copy of an insurance certificate evidencing the
            D&O Policy;

      (ii)  following the date hereof, provide Hagan with a copy of any material
            correspondence relating to the D&O Policy, including, but not
            limited to, any notice of cancellation or nonrenewal of the D&O
            Policy;

      (iii) not take any action to limit or impair Hagan's access to such D&O
            Policy;

      (iv)  upon any cancellation or nonrenewal of the D&O Policy, exercise its
            right to extend the claim period for a one-year "discovery period"
            and pay such premiums required thereunder; and

      (v)   to the extent any claim is made against Hagan that would entitle him
            to coverage under the D&O Policy (as the same may be

                                  Page 8 of 12
<PAGE>
            extended or renewed, or during any discovery period coverage), give
            Hagan direct access to the coverage provide by the D&O Policy, and
            pay any deductible required by the D&O Policy.

      (13)  COOPERATION

      In addition to providing Consulting Services as described herein,
following the Retirement Date, Hagan agrees to cooperate with the Company upon
reasonable request of the Board of Directors of the Company (the "Board") or its
designee, and to be reasonably available to the Company with respect to matters
arising out of Hagan's services to the Company. To the extent permitted by law,
Hagan agrees (i) not to voluntarily assist or otherwise cooperate voluntarily
with any non-government person or entity in any claim against the Company and
(ii) to notify the Company in writing immediately upon learning that he is to be
or is likely to be compelled to provide testimony, documents or any form of
assistance in any claim against the Company. Notwithstanding any other provision
of this Section, Hagan shall give truthful testimony in any investigations,
proceedings or legal actions relating to the Company.

      (14)  REPRESENTATIONS AND WARRANTIES

      (a)   Hagan Representations and Warranties. Hagan represents and warrants
to the Company that:

      (i)   He has not, with respect to any transaction or state of facts
existing prior to the Retirement Date, filed any claims, complaints, charges or
lawsuits against the Company with any governmental agency, court or tribunal.

      (ii)  He has disclosed all necessary information to the Board in
connection with the satisfaction of his duties owed to the Company.

      (iii) He is not aware of (i) any material claims that could be brought
by the Company or any of its subsidiaries or affiliates against any person or
entity (including, without limitation, himself), (ii) any material claims that
could be brought by any person or entity (including, without limitation,
himself) against the Company; or (iii) any information that could give rise to
such claim(s), that have not been disclosed to the Board or a committee of the
Board.

      (iv)  His execution, delivery and performance of this Agreement does not
and shall not conflict with, or result in the breach of or a violation of, any
other agreement, instrument, order, judgment or decree to which he is a party or
by which he is bound.

         The Hagan Representations and Warranties set forth in this Section
shall survive any release of Hagan in connection with the consummation of the
Company's Chapter 11 plan of reorganization and shall remain in full force and
effect until the expiration of any applicable limitations period.

      (b)   Company Representations and Warranties. The Company hereby
represents and warrants to Hagan that:

                                  Page 9 of 12
<PAGE>
      (i)   Subject to Section 16 hereof, the Company has received the
requisite corporate authority to execute and deliver this Agreement, and perform
its obligations hereunder.

      (ii)  This Agreement has been executed by a duly authorized officer of
the Company and, subject to Section 16 hereof, constitutes the valid, binding
and legal obligation of the Company, enforceable against the Company pursuant to
the terms hereof.

      (iii) The execution, delivery and performance of this Agreement by the
Company will not violate any term or provision of article of incorporation or
organization, by-law or other organizational document of the Company.

      (iv)  The execution, delivery and performance of this Agreement by the
Company does not and shall not conflict with, or result in the breach of or a
violation of, any other material agreement, instrument, order, judgment or
decree to which the Company is a party or by which the Company is bound.

      (v)   Except for the approval of the Bankruptcy Court, as set forth in
Section 16 hereof, the Company is not required to obtain any other consent,
approval or authorization as a condition to the effectiveness of, or its
performance of, this Agreement.

      (15)  ENTIRE AGREEMENT

      This Agreement contains the entire agreement between the Company and Hagan
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous oral and written agreements and understandings in connection
therewith, including but not limited to any Employment Agreement or Stock
Agreement. There are no oral or written promises affecting this Agreement.

      (16)  COURT APPROVAL CONTINGENCY

      The Company and Hagan acknowledge and agree that this Agreement is being
entered into by the Company as a debtor and debtor in possession as the result
of the Company's filing a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code on or about January 31, 2003 (as used herein, the "Chapter 11
Case"), in the United States Bankruptcy Court for the Southern District of
Indiana (the "Bankruptcy Court") under case number 03-90305 9 (BHL) (jointly
administered). The parties further agree as follows:

      (a)   this Agreement and all of the parties' obligations hereunder are
subject to the approval of the Bankruptcy Court after notice and a hearing. If
the Bankruptcy court does not approve this Agreement, this Agreement shall be
void in its entirety, and no party shall have any rights or obligations
hereunder;

      (b)   that, within 15 days following the execution of this Agreement by
Hagan and the Company, the Company shall submit a motion (the "Motion") to the
Bankruptcy

                                 Page 10 of 12
<PAGE>
Court seeking approval of this Agreement. The Motion shall specifically request
that the payment to Hagan of the Initial Payment, the Consulting Fees, and any
other payments that may be required pursuant to the terms of this Agreement be
Allowed (as that term is used in the Bankruptcy Code) as an administrative
expense against the Company pursuant to Section 503(b) of the Bankruptcy Code.
The Motion shall be noticed pursuant to the provisions of Sections 363(b), 365
and 503(b) of the Bankruptcy Code and Bankruptcy Rule 9019;

      (c)   the Company shall use its best efforts (i) to obtain, prior to
filing the Motion, from the Official Unsecured Creditors Committee appointed in
this case, consent to the Motion, this Agreement and the transactions
contemplated herein; and (ii) to the extent there are any objections to the
Motion, resolve the objections prior to any hearing on the Motion; and

      (d)   shall provide to Hagan and his counsel, if any, prior to filing the
Motion, a copy of the Motion and the proposed order (the "Approval Order"),
seeking approval of this Agreement. Both the Motion and the Approval Order shall
be in a form and in substance satisfactory to by Hagan or his counsel, if any.

      PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF KNOWN AND
UNKNOWN CLAIMS.

      BY SIGNING BELOW, I ACKNOWLEDGE THAT I HAVE READ THIS RELEASE, THAT I
UNDERSTAND IT; AND THAT I AM ENTERING INTO IT VOLUNTARILY.

                                 Page 11 of 12
<PAGE>
         IN WITNESS WHEREOF, and intending to be legally bound, Hagan and the
Company have each executed this Agreement, after a due reading of the whole.

                                         MICHAEL C. HAGAN

                                         ------------------------------------

                                         Dated:
                                                -----------------------------

                                         AMERICAN COMMERCIAL LINES LLC, as a
                                         debtor and debtor in possession

                                         By:
                                             --------------------------------
                                         Title:

                                         Dated:
                                                -----------------------------

Checks and subsequent correspondence should be sent to (fill in address):

------------------------------------

------------------------------------

------------------------------------

Please note that checks and subsequent correspondence may be sent via certified
mail, return receipt requested.

                                 Page 12 of 12

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