ACKNOWLEDGMENT AND CONSENT
                                  OF GUARANTOR
                                        
                                        
       THIS ACKNOWLEDGMENT AND CONSENT OF GUARANTOR is made as of this 1st day
of September, 1995, by AMERICAN PRESIDENT COMPANIES, LTD., a Delaware
corporation (the "Guarantor"), with reference to the following facts and
circumstances:

                                    RECITALS
                                        
       A.      Reference is made to that certain Amended and Restated Guarantee
dated as of May 19, 1995 by the Guarantor in favor of Kreditanstalt fur
Wiederaufbau, Commerzbank AG, Hamburg and the banks listed in Schedule 1
attached thereto (the "Guarantee"). Capitalized terms used herein and not
otherwise defined have the meanings provided therefor in the Guarantee.

       B.      Concurrently herewith, the Obligees, the Transferees and APL are
entering into (i) that certain Amendment No. 2 to Loan Agreement of even date
herewith (the "Loan Amendment"), which shall modify certain provisions of, and
certain Exhibits to, the Loan Agreement referenced in the Guarantee, and (ii)
that certain Second Amended and Restated Agreement to Acquire and Charter dated
as of September 1, 1995 (the "AAC Amendment"), which shall amend and restate in
its entirety the Agreement to Acquire and Charter referred to in the Loan
Agreement.

       C.      To induce the Obligees to enter into the Loan Amendment and the
AAC Amendment, the Guarantor wishes to confirm (i) its consent to the Loan
Amendment and the AAC Amendment and the transactions contemplated thereby and
(ii) that the Guarantee remains in full force and effect.

       NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby acknowledges
and agrees for the benefit of the Obligees as follows:

       1.      The Guarantee is amended to reflect that:  (a) from and after the
date hereof, as used in the Guarantee the term "Loan Agreement" means the Loan
Agreement referred to in the Guarantee, as the same has been amended by the Loan
Amendment, and as the same may be further amended or supplemented from time to
time in accordance with its terms, and (b) as of the date hereof, the Amended
and Restated Agreement to Acquire and Charter referred to in the first "WHEREAS"
clause of the Guarantee has been amended and restated in its entirety pursuant
to the AAC Amendment.

       2.      The Guarantor hereby consents to the Loan Amendment, the AAC
Amendment and each of the transactions contemplated thereby.

       3.      The Guarantor hereby confirms and reaffirms the full force,
continuing effect and ongoing applicability of its obligations under the
Guarantee.

       IN WITNESS WHEREOF, the Guarantor has executed this Acknowledgment and
Consent of Guarantor as of the date and year first above written.


                                     AMERICAN PRESIDENT COMPANIES, LTD.



                                     By:__/s/____________________________
                                        Name:  Peter A. V. HYegel
                                        Title: Assistant Secretary