FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


(Mark One)
   [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 1999

                                      OR

   [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______________ to ________________

Commission file number 1-9610


                             CARNIVAL CORPORATION
            (Exact name of registrant as specified in its charter)

             Republic of Panama                           59-1562976
      (State or other jurisdiction of                (I.R.S. Employer
       incorporation or organization)                 Identification No.)


            3655 N.W. 87th Avenue, Miami, Florida     33178-2428
           (Address of principal executive offices)   (Zip code)


                                           (305) 599-2600
             (Registrant's telephone number, including area code)


                                                  None
             (Former name, former address and former fiscal year,
                        if changed since last report.)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes X     No__


     Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.

     Common Stock, $.01 par value - 613,368,768 shares as of July 9, 1999.


                             CARNIVAL CORPORATION


                                   I N D E X



                                                              Page

Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

         Consolidated Balance Sheets -
           May 31, 1999 and November 30, 1998                   1

         Consolidated Statements of Operations -
           Six and Three Months Ended May 31, 1999
           and 1998                                             2

         Consolidated Statements of Cash Flows -
           Six Months Ended May 31, 1999
           and 1998                                             3

         Notes to Consolidated Financial Statements             4

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.        12


Part II. OTHER INFORMATION

Item 1.  Legal Proceedings.                                    21

Item 4.  Submission of Matters to a Vote of Security Holders.  22

Item 5.  Other Information.                                    23

Item 6.  Exhibits and Reports on Form 8-K.                     24

PART I.    FINANCIAL INFORMATION
Item 1.    Financial Statements.

                             CARNIVAL CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                       (in thousands, except par value)



                                                    May 31,      November 30,
                                                     1999            1998
                                                           
ASSETS
CURRENT ASSETS
     Cash and cash equivalents                     $  382,640     $  137,273
     Short-term investments                           614,799          5,956
     Accounts receivable, net                         103,214         60,837
     Consumable inventories, at average cost           81,035         75,449
     Prepaid expenses and other                       100,211         90,764
          Total current assets                      1,281,899        370,279

PROPERTY AND EQUIPMENT, NET                         5,770,921      5,768,114

INVESTMENTS IN AND ADVANCES TO AFFILIATES             494,185        546,693

GOODWILL, LESS ACCUMULATED AMORTIZATION OF
    $78,982 AND $72,255                               406,708        437,464

OTHER ASSETS                                           45,595         56,773
                                                   $7,999,308     $7,179,323

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
     Current portion of long-term debt              $  33,667     $   67,626
     Accounts payable                                 180,115        168,546
     Accrued liabilities                              202,615        206,968
     Customer deposits                                822,719        638,383
     Dividends payable                                 55,193         53,590
          Total current liabilities                 1,294,309      1,135,113

LONG-TERM DEBT                                      1,240,997      1,563,014

DEFERRED INCOME AND OTHER LONG-TERM LIABILITIES        82,791         63,036

COMMITMENTS AND CONTINGENCIES (Note 5)

MINORITY INTEREST                                     138,712        132,684

SHAREHOLDERS' EQUITY
    Common Stock; $.01 par value; 960,000 shares
      authorized; 613,257 and 595,448 shares
      issued and outstanding                            6,133          5,955
    Paid-in-capital                                 1,620,848        880,488
    Retained earnings                               3,630,364      3,379,628
    Other                                             (14,846)        19,405
      Total shareholders' equity                    5,242,499      4,285,476
                                                   $7,999,308     $7,179,323


The accompanying notes are an integral part of these consolidated financial
statements.

CARNIVAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Six Months Three Months Ended May 31, Ended May 31, 1999 1998 1999 1998 REVENUES $1,544,407 $1,219,196 $796,149 $661,358 COSTS AND EXPENSES Operating expenses 848,529 669,951 432,426 362,356 Selling and administrative 216,287 163,784 105,517 84,950 Depreciation and amortization 116,815 89,266 58,911 46,258 1,181,631 923,001 596,854 493,564 OPERATING INCOME BEFORE LOSS FROM AFFILIATED OPERATIONS 362,776 296,195 199,295 167,794 LOSS FROM AFFILIATED OPERATIONS, NET (7,099) (13,034) (1,182) (2,353) OPERATING INCOME 355,677 283,161 198,113 165,441 NONOPERATING INCOME (EXPENSE) Interest income 18,362 5,885 11,475 2,148 Interest expense, net of capitalized interest (26,880) (24,735) (13,490) (12,176) Other income (expense), net 7,941 (662) 4,945 2,609 Income tax benefit 7,645 6,861 2,839 2,574 Minority interest (1,642) (540) 5,426 (12,651) 5,229 (4,845) NET INCOME $ 361,103 $270,510 $203,342 $160,596 EARNINGS PER SHARE: Basic $.59 $.45 $.33 $.27 Diluted $.59 $.45 $.33 $.27 The accompanying notes are an integral part of these consolidated financial statements.

CARNIVAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended May 31, 1999 1998 OPERATING ACTIVITIES Net income $361,103 $270,510 Adjustments Depreciation and amortization 116,815 89,266 Dividends received and loss from affiliated operations, net 19,017 23,621 Minority interest 1,642 Other 2,225 7,047 Changes in operating assets and liabilities, excluding businesses acquired and consolidated Increase in: Receivables (25,046) (4,291) Consumable inventories (5,586) (4,690) Prepaid expenses and other (9,482) (20,196) Increase (decrease) in: Accounts payable 11,569 38,109 Accrued liabilities (3,219) 2,321 Customer deposits 184,336 191,165 Net cash provided from operating activities 653,374 592,862 INVESTING ACTIVITIES (Increase) decrease in short-term investments, net (608,278) 324 Additions to property and equipment, net (112,860) (702,184) Acquisitions of consolidated subsidiaries, net 9,415 (246,097) Other, net 34,797 42,038 Net cash used for investing activities (676,926) (905,919) FINANCING ACTIVITIES Proceeds from long-term debt 7,721 1,184,588 Principal payments of long-term debt (363,799) (801,841) Dividends paid (108,764) (89,183) Proceeds from issuance of Common Stock, net 733,882 4,098 Other (121) (3,994) Net cash provided from financing activities 268,919 293,668 Net increase (decrease) in cash and cash equivalents 245,367 (19,389) Cash and cash equivalents at beginning of period 137,273 139,989 Cash and cash equivalents at end of period $382,640 $120,600 The accompanying notes are an integral part of these consolidated financial statements.

CARNIVAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS FOR PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS The financial statements included herein have been prepared by Carnival Corporation, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The accompanying consolidated balance sheet at May 31, 1999 and the consolidated statements of operations for the six and three months ended May 31, 1999 and 1998 and consolidated statements of cash flows for the six months ended May 31, 1999 and 1998 are unaudited and, in the opinion of management, contain all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation. The operations of Carnival Corporation and its consolidated subsidiaries (referred to collectively as the "Company") and its affiliates are seasonal and results for interim periods are not necessarily indicative of the results for the entire year. Certain amounts in prior periods have been reclassified to conform with the current period's presentation. NOTE 2 - PROPERTY AND EQUIPMENT Property and equipment consists of the following: May 31, November 30, 1999 1998 (in thousands) Vessels $5,770,648 $5,754,218 Vessels under construction 572,866 526,529 6,343,514 6,280,747 Land, buildings and improvements 236,554 217,597 Transportation and other equipment 348,710 322,069 Total property and equipment 6,928,778 6,820,413 Less accumulated depreciation and amortization (1,157,857) (1,052,299) $5,770,921 $5,768,114 Interest costs associated with the construction of property and equipment, consisting primarily of vessels, are capitalized during the construction period and amounted to $19.9 million and $16.0 million for the six months ended May 31, 1999 and 1998, respectively, and $9.5 million and $9.6 million for the three months ended May 31, 1999 and 1998, respectively. NOTE 3 - LONG-TERM DEBT Long-term debt consists of the following: May 31, November 30, 1999 1998 (in thousands) Commercial paper $ 54,209 $ 368,710 Unsecured 5.65% Notes Due October 15, 2000 199,876 199,833 Unsecured 6.15% Notes Due April 15, 2008 199,538 199,512 Unsecured 6.65% Debentures due January 15, 2028 199,261 199,249 Notes payable bearing interest at rates ranging from 5.1% to 8.0%, secured by vessels, maturing through 2009 151,524 174,198 Unsecured 6.15% Notes Due October 1, 2003 124,970 124,967 Unsecured 7.20% Debentures Due October 1, 2023 124,883 124,881 Unsecured 7.7% Notes Due July 15, 2004 99,941 99,936 Unsecured 7.05% Notes Due May 15, 2005 99,881 99,871 Other loans payable 20,581 39,483 1,274,664 1,630,640 Less portion due within one year (33,667) (67,626) $1,240,997 $1,563,014 NOTE 4 - SHAREHOLDERS' EQUITY In December 1998, Carnival Corporation issued 17 million shares of its Common Stock in a public offering and received net proceeds of approximately $725 million. During the six months ended May 31, 1999 and 1998, the Company declared quarterly cash dividends aggregating $.18 and $.15 per share aggregating $110.4 million and $89.2 million, respectively. Carnival Corporation's Articles of Incorporation, as amended, authorizes the Board of Directors, at its discretion, to issue up to 40 million shares of Preferred Stock. The Preferred Stock is issuable in series which may vary as to certain rights and preferences and has a $.01 par value. At May 31, 1999, no Preferred Stock had been issued. NOTE 5 - COMMITMENTS AND CONTINGENCIES Capital Expenditures A description of ships under contract for construction at May 31, 1999 is as follows (in millions, except passenger capacity data): Expected Service Passenger Total Vessel Date(1) Shipyard Capacity(2) Cost(3) Carnival Cruise Lines Carnival Triumph 7/99 Fincantieri(4) 2,758 $ 420 Carnival Victory 8/00 Fincantieri 2,758 440 Carnival Spirit 4/01 Masa-Yards 2,112 375 Carnival Pride 1/02 Masa-Yards(5) 2,112 375 Carnival Conquest 12/02 Fincantieri 2,758 450 Carnival Glory 8/03 Fincantieri 2,758 450 Total Carnival Cruise Lines 15,256 2,510 Holland America Line Volendam 11/99 Fincantieri(4) 1,440 300 Zaandam 3/00 Fincantieri(4) 1,440 300 Amsterdam 11/00 Fincantieri 1,380 300 Total Holland America Line 4,260 900 Total 19,516 $3,410 (1) The expected service date is the date the vessel is expected to begin revenue generating activities. (2) In accordance with cruise industry practice, passenger capacity is calculated based on two passengers per cabin even though some cabins can accommodate three or four passengers. (3) Estimated total cost of the completed vessel includes the contract price with the shipyard, design and engineering fees, capitalized interest, various owner supplied items and construction oversight costs. (4) These construction contracts are denominated in Italian Lira and have been fixed into U.S. dollars through the utilization of forward foreign currency contracts. (5) This construction contract is denominated in German Deutsche Marks and has been fixed into U.S. dollars through the utilization of forward foreign currency contracts. In connection with the vessels under construction, the Company has paid $573 million through May 31, 1999 and anticipates paying approximately $940 million during the twelve month period ending May 31, 2000 and approximately $1.9 billion thereafter. Litigation Several actions (collectively the "Passenger Complaints") have been filed against Carnival Cruise Lines ("Carnival") and one action has been filed against Holland America Westours on behalf of purported classes of persons who paid port charges to Carnival or Holland America Line ("Holland America"), alleging that statements made in advertising and promotional materials concerning port charges were false and misleading. The Passenger Complaints allege violations of the various state consumer protection acts and claims of fraud, conversion, breach of fiduciary duties and unjust enrichment. Plaintiffs seek compensatory damages or, alternatively, refunds of portions of port charges paid, attorneys' fees, costs, prejudgment interest, punitive damages and injunctive and declaratory relief. The actions against Carnival are in various stages of progress and are proceeding. Holland America Westours has entered into a settlement agreement for the one Passenger Complaint filed against it. The settlement agreement was approved by the court on September 28, 1998. Five members of the settlement class appealed the court's approval of the settlement. Holland America Westours has settled with four of the five members. The appeal of one member of the settlement class is likely to take between one and two years to be resolved. Unless the appeal is successful, Holland America will issue travel vouchers with a face value of $10-$50 depending on specified criteria, to certain of its passengers who are U.S. residents and who sailed between April 1992 and April 1996, and will pay a portion of the plaintiffs' legal fees. The amount and timing of the travel vouchers to be redeemed and the effects of the travel voucher redemption on revenues is not reasonably determinable. Accordingly, the Company has not established a liability for the travel voucher portion of the settlements and will account for the redemption of the vouchers as a reduction of future revenues. In 1998 the Company established a liability for the estimated distribution costs of the settlement notices and plaintiffs' legal costs. Several complaints were filed against Carnival and/or Holland America Westours (collectively the "Travel Agent Complaints") on behalf of purported classes of travel agencies who had booked a cruise with Carnival or Holland America, claiming that advertising practices regarding port charges resulted in an improper commission bypass. These actions, filed in California, Alabama, Washington and Florida, allege violations of state consumer protection laws, claims of breach of contract, negligent misrepresentation, unjust enrichment, unlawful business practices and common law fraud, and they seek unspecified compensatory damages (or alternatively, the payment of usual and customary commissions on port charges paid by passengers in excess of certain charges levied by government authorities), an accounting, attorneys' fees and costs, punitive damages and injunctive relief. These actions are in various stages of progress and are proceeding. It is not now possible to determine the ultimate outcome of the pending Passenger and Travel Agent Complaints. Management believes it has meritorious defenses to the claims. Management understands that purported class actions similar to the Passenger and Travel Agent Complaints have been filed against several other cruise lines. In the normal course of business, various other claims and lawsuits have been filed or are pending against the Company. The majority of these claims and lawsuits are covered by insurance. Management believes the outcome of any such suits, which are not covered by insurance would not have a material adverse effect on the Company's financial condition or results of operations. Ship Lease Transactions During August and December 1998, the Company entered into lease out and lease back transactions with respect to two of its vessels. The Company has effectively guaranteed certain obligations or provided letters of credit to participants in the transactions which, at May 31, 1999, total approximately $339 million. Only in the remote event of nonperformance by certain major financial institutions, which have long-term credit ratings of AAA, would the Company be required to make any payments under these guarantees. After approximately 18 years, the Company has the right to exercise purchase options that would terminate these transactions. As a result of these transactions, the Company received approximately $44 million (net) which is recorded as deferred income on the balance sheets and is being amortized to nonoperating income over approximately 18 years. NOTE 6 - COMPREHENSIVE INCOME Effective December 1, 1998, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130 establishes standards for the reporting and disclosure of comprehensive income and its components. Comprehensive income is a measure that reflects all changes in shareholders' equity, except those resulting from transactions with shareholders. Comprehensive income for the periods indicated is as follows: Six months Three months Ended May 31, Ended May,31 1999 1998 1999 1998 (in thousands) Net income $361,103 $270,510 $203,342 $160,596 Foreign currency translation adjustment (29,996) (906) (22,828) (3,383) Changes in securities valuation allowance 7 113 8 42 Total comprehensive income $331,114 $269,717 $180,522 $157,255 NOTE 7 - EARNINGS PER SHARE Earnings per share have been computed as follows (in thousands, except per share data): Six Months Three Months Ended May 31, Ended May 31, 1999 1998 1999 1998 BASIC: Net income $361,103 $270,510 $203,342 $160,596 Average common shares outstanding 611,074 594,744 613,161 594,857 Earnings per share $ .59 $ .45 $ .33 $ .27 DILUTED: Net income $361,103 $270,510 $203,342 $160,596 Effect on net income of assumed purchase of minority interest 1,642 540 Net income available assuming dilution $362,745 $270,510 $203,882 $160,596 Average common shares outstanding 611,074 594,744 613,161 594,857 Effect of dilutive securities: Additional shares issuable upon: Assumed exercise of Cunard Line Limited's minority shareholders purchase option 5,152 5,152 Various stock plans 3,760 3,404 3,621 3,663 Average common shares outstanding assuming dilution 619,986 598,148 621,934 598,520 Earnings per share $ .59 $ .45 $ .33 $ .27 On April 13, 1998, the Board of Directors approved a two-for-one split of the Company's Common Stock. The additional shares were distributed on June 12, 1998 to shareholders of record on May 29, 1998. All share and per share data presented herein have been retroactively restated to give effect to this stock split. NOTE 8 - RECENT PRONOUNCEMENTS In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was issued. SFAS No. 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Pursuant to SFAS No. 133, changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. SFAS No. 133, as amended is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000 (December 1, 2000 for the Company). The Company has not yet determined the impact that the adoption of SFAS No. 133 will have, but does not currently expect the adoption to have a material impact on its results of operations or cash flows. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Certain statements under this caption, "Management's Discussion and Analysis of Financial Condition and Results of Operations", constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). See "Part II. OTHER INFORMATION, ITEM 5 (a) Forward- Looking Statements". General The Company earns its cruise revenues primarily from (i) the sale of passenger tickets, which includes accommodations, meals, and most shipboard activities, (ii) the sale of air transportation to and from the cruise ships and (iii) the sale of goods and services on board its cruise ships, such as casino gaming, bar sales, gift shop sales and other related services. The Company also derives revenues from the tour and related operations of Holland America Westours. Selected segment and statistical information for the periods indicated is as follows: Six Months Three Months Ended May 31, Ended May 31, 1999 1998 1999 1998 (in thousands, except selected statistical information) REVENUES: Cruise $1,506,179 $1,182,061 $765,103 $631,084 Tour 46,124 45,453 38,620 38,414 Intersegment revenues (7,896) (8,318) (7,574) (8,140) $1,544,407 $1,219,196 $796,149 $661,358 OPERATING EXPENSES: Cruise $ 810,896 $ 633,826 $403,830 $335,056 Tour 45,529 44,443 36,170 35,440 Intersegment expenses (7,896) (8,318) (7,574) (8,140) $ 848,529 $ 669,951 $432,426 $362,356 OPERATING INCOME: Cruise $ 388,346 $ 319,844 $207,912 $177,420 Tour (19,484) (17,213) (7,586) (6,692) Corporate, including loss from affiliates, net (13,185) (19,470) (2,213) (5,287) $ 355,677 $ 283,161 $198,113 $165,441 SELECTED STATISTICAL INFORMATION: Passengers carried 1,058,000 923,000 541,000 497,000 Passenger cruise days (1) 6,975,000 5,931,000 3,470,000 3,104,000 Occupancy percentage 100.4% 105.6% 99.9% 105.4% (1) A passenger cruise day is one passenger sailing for a period of one day. For example, one passenger sailing on a one week cruise is seven passenger cruise days. Operations data expressed as a percentage of total revenues for the periods indicated is as follows: Six Months Three Months Ended May 31, Ended May 31, 1999 1998 1999 1998 REVENUES 100% 100% 100% 100% COSTS AND EXPENSES: Operating expenses 55 55 54 55 Selling and administrative 14 14 13 13 Depreciation and amortization 8 7 8 7 OPERATING INCOME BEFORE LOSS FROM AFFILIATED OPERATIONS 23 24 25 25 LOSS FROM AFFILIATED OPERATIONS, NET - (1) - - OPERATING INCOME 23 23 25 25 NONOPERATING INCOME (EXPENSE) - (1) 1 (1) NET INCOME 23% 22% 26% 24% Fixed costs, including depreciation, fuel, insurance and crew costs, represent more than one-third of the Company's operating expenses and do not change significantly in relation to changes in passenger loads and aggregate passenger ticket revenue. The Company's cruise and tour operations experience varying degrees of seasonality. The Company's revenue from the sale of passenger tickets for its cruise operations is moderately seasonal. Historically, demand for cruises has been greater during the summer months. The Company's tour revenues are extremely seasonal with a majority of tour revenues generated during the late spring and summer months in conjunction with the Alaska cruise season. The year over year percentage increase in average passenger capacity for the Company's cruise brands is expected to approximate 9.8% and 12.8% in the third and fourth quarters of fiscal 1999, respectively, as compared to the same periods of fiscal 1998. These increases are primarily a result of the introduction into service of Carnival's Paradise in late November 1998 and the expected introduction into service of the Carnival Triumph in July 1999 and Holland America's Volendam in November 1999. The year over year percentage increase in average passenger capacity resulting from the delivery of vessels currently under contract for construction for the fiscal years 2000 and 2001 is expected to approximate 13.0% and 10.8%, respectively. On May 28, 1998, the Company and a group of investors acquired the operating assets of Cunard, a cruise company operating five luxury cruise ships. Simultaneous with the acquisition, Seabourn Cruise Line Limited ("Seabourn"), a luxury cruise line in which the Company owned a 50% interest, was combined with Cunard. The Company owns approximately 68% of the combined entity, which is named Cunard Line Limited. The Company and Airtours plc ("Airtours"), a publicly traded leisure travel company in which the Company holds an approximate 26% interest, each own a 50% interest in Il Ponte S.p.A. ("Il Ponte"), the parent company of Costa Crociere, S.p.A. ("Costa"), an Italian cruise company. The Company records its interest in Airtours and Il Ponte using the equity method of accounting and records its portion of Airtours' and Il Ponte's consolidated operating results on a two-month lag basis. Demand for Airtours' and Costa's products is seasonal due to the nature of the European leisure travel industry and European cruise season. Typically, Airtours' and Costa's quarters ending June 30 and September 30 experience higher demand, with demand in the quarter ending September 30 being the highest. As a result of the recent military conflict in the Balkans, in April 1999 the Company announced that it had experienced a slowdown in booking patterns for its Mediterranean cruise itineraries and had changed the itineraries of certain of its Mediterranean cruises. The Company also stated that management estimated that the Balkan conflict could have a six to eight cents per share negative impact on its 1999 earnings per share, split between the third and fourth quarters of fiscal 1999. As a result of the cessation of hostilities and other developments, management currently believes that the impact on its business could be at or slightly below the low end of this range. Six Months Ended May 31, 1999 ("1999") Compared To Six Months Ended May 31, 1998 ("1998") Revenues The increase in total revenues of $325.2 million, or 26.7%, was almost entirely due to an increase in cruise revenues. Approximately $197 million of the increase was due to the acquisition and consolidation of Cunard and Seabourn and $127 million was due to increased cruise revenues from Carnival, Holland America and Windstar. The increase from Carnival, Holland America and Windstar resulted from an increase of approximately 11.5% in passenger capacity and a .8% increase in total revenue per passenger cruise day, offset slightly by a 1.5% decrease in occupancy rates. Passenger capacity increased due primarily to the introduction into service of Carnival's Paradise in November 1998, the Elation in March 1998 and Windstar Cruises' ("Windstar") Wind Surf in May 1998. In addition, the .8% increase in total revenue per passenger cruise day is net of a 1.7% decrease due to a reduction in the number of passengers electing to use the Company's air program. When a passenger elects to purchase his/her own air transportation, rather than use the Company's air program, both the Company's cruise revenues and operating expenses decrease by approximately the same amount. Cost and Expenses Operating expenses increased $178.6 million, or 26.7%. Cruise operating costs increased by $177.1 million, or 27.9% in 1999. Approximately $135.7 million of the cruise operating costs increase was due to the acquisition and consolidation of Cunard and Seabourn. Cruise operating costs, excluding Cunard and Seabourn, increased $41.3 million primarily as a result of increases in passenger capacity, partially offset by lower airfare and other costs. Excluding Cunard and Seabourn, cruise operating costs as a percentage of cruise revenues were 51.6% and 53.6% in 1999 and 1998, respectively. Selling and administrative expenses increased $52.5 million, or 32.1%, of which $38.4 million, or 23.4%, was due to the acquisition and consolidation of Cunard and Seabourn. Selling and administrative expenses, excluding Cunard and Seabourn, increased primarily as a result of increases in advertising and payroll and related costs. Excluding Cunard and Seabourn, selling and administrative expenses as a percentage of revenues were 13.2% and 13.4% in 1999 and 1998, respectively. Depreciation and amortization increased by $27.5 million, or 30.9%, to $116.8 million in 1999 from $89.3 million in 1998 primarily due to the additional depreciation associated with the increase in the size of the fleet and the acquisition and consolidation of Cunard and Seabourn. Affiliated Operations During 1999, the Company recorded $7.1 million of losses from affiliated operations as compared with $13.0 million of losses in 1998. The Company's portion of Airtours' losses increased $2.9 million to $14.2 million in 1999. The Company recorded income of $7.2 million and $2.3 million during 1999 and 1998, respectively, related to its interest in Il Ponte. The affiliated operations for 1998 include Seabourn. Nonoperating Income (Expense) Gross interest expense (excluding capitalized interest) increased $6.1 million in 1999 primarily as a result of higher average debt balances arising from the acquisition and consolidation of Cunard and Seabourn as well as investments in new vessel projects. Capitalized interest increased $3.9 million during 1999 as compared with 1998 due primarily to higher levels of investments in ship construction projects. Interest income increased $12.5 million in 1999 as a result of higher average investment balances primarily resulting from the investment of proceeds received by the Company upon the sale of its Common Stock in December 1998 (see Note 4 in the accompanying financial statements). Other income in 1999 of $7.9 million primarily relates to the Company's collection of insurance proceeds. Minority interest was $1.6 million which represents the minority shareholders' interest in Cunard Line Limited's net income. Three Months Ended May 31, 1999 Compared To Three Months Ended May 31, 1998 Revenues The increase in total revenues of $134.8 million, or 20.4%, was almost entirely due to an increase in cruise revenues. Approximately $92.6 million of the increase was due to the acquisition and consolidation of Cunard and Seabourn and $41.4 million was due to increased cruise revenues from Carnival, Holland America and Windstar. The increase from Carnival, Holland America and Windstar resulted from an increase of approximately 6.6% in passenger capacity and a 1.4% increase in total revenue per passenger cruise day, offset slightly by a 1.4% decrease in occupancy rates. Passenger capacity increased due primarily to the introduction into service of Carnival's Paradise in November 1998. In addition, the 1.4% increase in total revenue per passenger cruise day is net of a 1.6% decrease due to a reduction in the number of passengers electing to use the Company's air program. Cost and Expenses Operating expenses increased $70.1 million, or 19.3%. Cruise operating costs increased by $68.8 million, or 20.5% in the second quarter of 1999. Approximately $63.3 million of the cruise operating costs increase was due to the acquisition and consolidation of Cunard and Seabourn. Cruise operating costs, excluding Cunard and Seabourn, increased $5.5 million primarily as a result of increases in passenger capacity, partially offset by lower airfare and other costs. Excluding Cunard and Seabourn, cruise operating costs as a percentage of cruise revenues were 50.6% and 53.1% in the second quarter of 1999 and 1998, respectively. Selling and administrative expenses increased $20.6 million, or 24.2%, of which $18.5 million, or 21.8%, was due to the acquisition and consolidation of Cunard and Seabourn. Selling and administrative expenses, excluding Cunard and Seabourn, increased primarily as a result of increases in advertising and payroll and related costs. Excluding Cunard and Seabourn, selling and administrative expenses as a percentage of revenues were 12.4% and 12.8% in the second quarter of 1999 and 1998, respectively. Depreciation and amortization increased by $12.7 million, or 27.4%, to $58.9 million in the second quarter of 1999 from $46.3 million in the second quarter of 1998 primarily due to the additional depreciation associated with the increase in the size of the fleet and the acquisition and consolidation of Cunard and Seabourn. Affiliated Operations During the second quarter of 1999, the Company recorded $1.2 million of losses from affiliated operations as compared with $2.4 million of losses in the comparable 1998 period. The Company's portion of Airtours' losses increased $2.5 million to $5.7 million in the second quarter of 1999. The Company recorded income of $4.6 million and $3.3 million during the second quarter of 1999 and 1998, respectively, related to its interest in Il Ponte. The affiliated operations for the second quarter of 1998 include Seabourn. Nonoperating Income (Expense) Gross interest expense (excluding capitalized interest) increased $1.2 million in the second quarter of 1999 primarily as a result of higher average debt balances arising from the acquisition and consolidation of Cunard and Seabourn as well as investments in new vessel projects. Interest income increased $9.3 million in the second quarter of 1999 as a result of higher average investment balances primarily resulting from the investment of proceeds received by the Company upon the sale of its Common Stock in December 1998 (see Note 4 in the accompanying financial statements). Other income in the second quarter of 1999 of $4.9 million primarily relates to the Company's collection of insurance proceeds compared to other income in the comparable 1998 period of $2.6 million primarily related to the settlement of certain notes receivable and an estimated insurance recovery. Minority interest was $.5 million which represents the minority shareholders' interest in Cunard Line Limited's net income. LIQUIDITY AND CAPITAL RESOURCES Sources of Cash The Company's business provided $653.4 million of net cash from operations during the six months ended May 31, 1999, an increase of 10.2% compared to the same period in 1998. The increase was primarily due to higher net income. In December 1998, the Company issued 17 million shares of its Common Stock and received net proceeds of approximately $725 million. The Company issued this stock concurrent with the addition of the Company's Common Stock to the S&P 500 Composite Index. Uses of Cash During the first half of fiscal 1999, the Company made net expenditures of approximately $112.9 million on capital projects, of which $47.8 million was spent in connection with its ongoing shipbuilding program. The nonshipbuilding capital expenditures consisted primarily of computer equipment, vessel refurbishments, tour assets and other equipment. During the first half of fiscal 1999, the Company had net repayments of $314.5 million under its commercial paper programs. Additionally, the Company made scheduled principal payments totaling $44.7 million pursuant to various notes payable. Finally, the Company paid quarterly cash dividends aggregating $108.8 million in the first half of fiscal 1999. Future Commitments The Company has contracts for the delivery of nine new vessels over the next four years. The Company will pay approximately $940 million during the twelve months ending May 31, 2000 relating to the construction and delivery of these new ships and approximately $1.9 billion thereafter. In addition to these ship construction contracts, the Company has an option to construct one additional vessel for expected service in 2002, if the option is exercised. The Company is also in negotiations with several shipbuilding yards for a new class of vessel for Holland America and is in the initial planning phase of a new ocean liner for Cunard. No assurance can be given that the option will be exercised, that the negotiations for the Holland America vessels will be successful or that the new Cunard shipbuilding project will be continued. In the event that all these orders are placed and the option is exercised, the Company's planned shipbuilding program, including ships currently under contract, would amount to a total investment of approximately $5.7 billion through 2003. At May 31, 1999, the Company had $1.27 billion of long-term debt of which $33.7 million is due during the twelve months ended May 31, 2000. See Notes 3 and 5 in the accompanying financial statements for more information regarding the Company's debts and commitments. Funding Sources At May 31, 1999, the Company had approximately $997 million in cash, cash equivalents and short-term investments. These funds along with cash from operations are expected to be the Company's principal source of capital to fund its debt service requirements and ship construction costs. Additionally, the Company may also fund a portion of these cash requirements from borrowings under its revolving credit facilities or commercial paper programs. At May 31, 1999, the Company had approximately $1.18 billion available for borrowing under its revolving credit facilities. To the extent that the Company is required to or chooses to fund future cash requirements from sources other than as discussed above, management believes that it will be able to secure such financing from banks or through the offering of debt and/or equity securities in the public or private markets. OTHER MATTER Year 2000 The Year 2000 computer issue is primarily the result of computer programs using a two digit format, as opposed to four digits, to indicate the year. Such programs will be unable to interpret dates beyond the year 1999, which could cause a system failure or other computer errors and a disruption in the operation of such systems. State of Readiness The Company has established internally staffed project teams to address Year 2000 issues. Each team has implemented a plan that focuses on Year 2000 compliance efforts for information technology ("IT") and non-IT systems for each consolidated subsidiary. The systems include (1) information systems software and hardware (e.g. reservations, accounting and associated systems, personal computers and software and various end-user developed applications) and (2) building facilities and shipboard equipment (e.g. shipboard navigation, control, safety, power generation and distribution systems, operating systems and shipbuilding and communication systems). The Company's Year 2000 plan addresses the Year 2000 issues in multiple phases, including: (1) inventory of the Company's systems, equipment and suppliers that may be vulnerable to Year 2000 issues; (2) assessment of inventoried items to determine risks associated with their failure to be Year 2000 compliant; (3) testing of systems and/or components to determine if Year 2000 compliant, both prior and/or subsequent to remediation; (4) remediation and implementation of systems; and (5) contingency planning to assess reasonably likely worst case scenarios. Inventories have been completed for all Company shoreside software applications, hardware and operating systems. A risk assessment was then prepared based on feedback from the Company's respective business units. Most of the Company's critical internally developed software systems have been successfully remediated and tested. All of the Company's reservations systems have been remediated, tested and are in production. Remediation and integration testing of all critical shoreside software and hardware applications are estimated to be completed by August 31, 1999, except for vendor upgrades of purchased software which are estimated to be completed by September 30, 1999. Ongoing certification testing of remediated systems that corroborates prior test results and corroborates integration of remediated items with related hardware and operating systems will occur throughout 1999. Inventories have been completed for all building facilities and shipboard equipment systems. A risk assessment has also been substantially completed for these systems. In certain cases, the Company has retained third party consultants to analyze the shipboard hardware and embedded system inventories and assist the Company in testing, remediation and implementation of these applications. This process is expected to be completed by September 30, 1999. Most internally developed shipboard information systems have been remediated, tested and implemented. Modifications required as a result of testing the remaining systems have delayed full implementation on the ships until October 31, 1999. The Company is tracking the Year 2000 compliance status of its material vendors and suppliers via the Company's own internal vendor compliance effort. Year 2000 correspondence was sent to critical vendors and suppliers, with continued follow up for those who failed to respond. All vendor responses are currently being evaluated to assess any possible risk to or effect on the Company's operations. The Company has implemented additional procedures for assessing the Year 2000 compliance status of its most critical vendors and will modify its contingency plans accordingly. Risks of Company's Year 2000 Issues The Company continues to enhance its contingency plans, including the identification of its most reasonably likely worst case scenarios. Currently, the most likely sources of risk to the Company include (1) disruption of transportation channels relevant to the Company's operations, including ports and transportation vendors (airlines) as a result of a general failure of support systems and necessary infrastructure; (2) disruption of travel agency and other sales distribution systems; and (3) inability of principal product suppliers to be Year 2000 ready, which could result in delays in deliveries from such suppliers. Based on its current assessment efforts, the Company does not believe that Year 2000 issues will have a material adverse effect on its financial condition or results of operations. However, the Company's Year 2000 issues and any potential business interruptions, costs, damages or losses related thereto, are dependent, to a significant degree, upon the Year 2000 compliance of third parties, both domestic and international, such as government agencies, vendors and suppliers. Consequently, the Company is unable to determine at this time whether Year 2000 failures will materially affect the Company. The Company believes that its compliance efforts have and will reduce the impact on the Company of any such failures. Contingency Plans The Company has prepared preliminary contingency plans to identify and determine how to minimize the impact of its most reasonably likely worst case scenarios. The objective of the contingency plans is to establish procedures for the continuity of the Company's core business processes in the event of any Year 2000 problems. Comprehensive contingency plans are expected to be substantially completed by September 30, 1999 and continued refinements are expected to occur throughout the remainder of the year. Costs The Company does not expect that the costs associated with its Year 2000 efforts will be material. The Company estimates aggregate expenditures of approximately $16 million to address Year 2000 issues. These aggregate expenditures include $8 million of costs that are being charged to expense and $8 million of costs, related to the accelerated replacement of non-compliant systems due to Year 2000 issues, which will be capitalized. The total amount expended through May 31, 1999 was approximately $10.4 million, of which $6.1 million has been charged to expense and $4.3 million has been capitalized. These costs do not include costs incurred by the Company as a result of the failure of any third parties, including suppliers, to become Year 2000 compliant or costs to implement any contingency plans. The above disclosures are Year 2000 Readiness Disclosures pursuant to the Year 2000 Information and Disclosure Act. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings. Several actions collectively referred to as the "Passenger Complaints" were previously reported in the Company's Annual Report on Form 10-K for the year ended November 30, 1998 (the "1998 Form 10-K")and its Quarterly Report on Form 10-Q for the quarter ended February 28, 1999 (the "First Quarter 1999 Form 10-Q"). The following are material subsequent developments in such cases. In the action filed against Carnival in Florida in 1996 by Michelle Hackbarth, Larry Katz, Michelle A. Sutton, Pedro Rene Mier, and others, on behalf of purported nationwide classes, plaintiffs have appealed the court's denial of their motion for class certification. In addition, plaintiffs have filed a motion to enforce a purported oral settlement agreement they allege that they reached with Carnival and Carnival opposes this motion. After the parties take mutual discovery the court will hold a hearing on plaintiffs' motion. In the action filed against Carnival in Tennessee in 1997 by Brent Mezzacasa and others, on behalf of a purported nationwide class, the Tennessee Court of Appeals has affirmed the trial court's order dismissing the action on the grounds of inconvenient forum. Plaintiffs have sought leave to appeal the case further to the Tennessee Supreme Court, which has discretionary review. In the action filed against Holland America Westours in the Superior Court in King County, Washington, by Francine Pickett and others on behalf of a purported nationwide class, Holland America Westours has settled with four of the five members of the settlement class who appealed the court's approval of the settlement. One member of the settlement class continues to appeal the court's approval of the settlement. Several actions collectively referred to as the "Travel Agent Complaints" were previously reported in the 1998 Form 10-K and the First Quarter 1999 Form 10-Q and the following are the material subsequent developments in such cases. In the action filed against Holland America Westours in Washington in September 1997 by N.G.L. Travel Associates, on behalf of a purported nationwide class of travel agencies who booked cruises with Holland America Westours, the Court of Appeals refused to accept Holland America Westours' petition for discretionary review of the class certification and denial of summary judgment decisions. Consequently, the matter is back before the trial court to consider various discovery motions as well as provide specifics as to the certified class. For a description of other pending litigation, see the 1998 Form 10-K, the First Quarter 1999 Form 10-Q, and Note 5 in Part I of this Form 10-Q. Item 4. Submission of Matters to a Vote of Security Holders. The annual meeting of shareholders of the Company was held on April 19, 1999 (the "Annual Meeting"). Holders of Common Stock were entitled to elect sixteen directors. On all matters which came before the Annual Meeting, holders of Common Stock were entitled to one vote for each share held. Proxies for 512,225,356 of the 612,944,684 shares of Common Stock entitled to vote were received in connection with the Annual Meeting. The following table sets forth the names of the sixteen persons elected at the Annual Meeting to serve as directors until the next annual meeting of shareholders of the Company and the number of votes cast for, against or withheld with respect to each person. NAME OF DIRECTOR FOR AGAINST WITHHELD Micky Arison 508,122,258 -0- 4,103,098 Shari Arison 508,140,481 -0- 4,084,875 Maks L. Birnbach 508,244,481 -0- 3,980,875 Atle Brynestad 508,119,153 -0- 4,106,203 Richard G. Capen, Jr. 508,349,667 -0- 3,875,689 David Crossland 508,133,353 -0- 4,092,003 Robert H. Dickinson 508,128,970 -0- 4,096,386 James M. Dubin 508,138,340 -0- 4,087,016 Howard S. Frank 508,126,821 -0- 4,098,535 A. Kirk Lanterman 507,928,900 -0- 4,296,456 Modesto A. Maidique 508,365,885 -0- 3,859,471 William S. Ruben 508,251,028 -0- 3,974,328 Stuart S. Subotnick 506,842,374 -0- 5,382,982 Sherwood M. Weiser 508,375,098 -0- 3,850,258 Meshulam Zonis 505,158,911 -0- 7,066,445 Uzi Zucker 508,244,384 -0- 3,980,972 The following table sets forth certain additional matters which were submitted to the shareholders for approval at the Annual Meeting and the tabulation of the votes with respect to each such matter. MATTER FOR AGAINST WITHHELD Approval of an amendment to the Company's Second Amended and Restated Articles of Incorporation to increase the maximum size of the Board of Directors from 15 to 17 members: 510,171,636 1,116,360 937,360 Approval of Pricewaterhouse- Coopers as independent auditors for the Company for the fiscal year ending November 30, 1999 511,393,247 52,755 779,354 Item 5. Other Information. (a) FORWARD-LOOKING STATEMENTS Certain statements in this Form 10-Q and in the future filings by the Company with the Securities and Exchange Commission, in the Company's press releases, and in oral statements made by or with the approval of an authorized executive officer constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions which may impact levels of disposable income of consumers and pricing and passenger yields for the Company's cruise products; consumer demand for cruises, including the effects on consumer demand of armed conflicts or political instability; increases in cruise industry capacity; changes in tax laws and regulations; the ability of the Company to implement its shipbuilding program and to expand its business outside the North American market where it has less experience; delivery of new vessels on schedule and at the contracted price; weather patterns; unscheduled ship repairs and drydocking; incidents involving cruise vessels at sea; computer program Year 2000 compliance; and changes in laws and regulations applicable to the Company. ITEM 6. Exhibits And Reports On Form 8-K. (a) Exhibits 3.1 Amendment to Second Amended and Restated Articles of Incorporation of the Company. 10.1 Atle Brynestad Indemnification Agreement. 10.2 1994 Carnival Cruise Lines Key Management Incentive Plan as amended on April 12,1999. 10.3 Subscription Agreement, dated May 27, 1998, between Carnival Corporation, Seabourn Cruise Line Limited, CG Cruise Invest AS and others. 10.4 Recapitalization Agreement, dated May 27, 1998, between Carnival Corporation, Seabourn Cruise Line Limited and CG Holding AS. 10.5 1993 Outside Directors' Stock Option Plan as amended on April 6, 1998. 12 Ratio of Earnings to Fixed Charges. 27 Financial Data Schedule (for SEC use only). (b) Reports on Form 8-K. None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CARNIVAL CORPORATION Date: July 13, 1999 BY/s/ Howard S. Frank Howard S. Frank Vice Chairman of the Board of Directors and Chief Operating Officer Date: July 13, 1999 BY/s/ Gerald R. Cahill Gerald R. Cahill Senior Vice President-Finance and Chief Financial and Accounting Officer INDEX TO EXHIBITS Page No. in Sequential Numbering System Exhibits 3.1 Amendment to Second Amended and Restated Articles of Incorporation of the Company. 10.1 Atle Brynestad Indemnification Agreement. 10.2 1994 Carnival Cruise Lines Key Management Incentive Plan as amended on April 12, 1999. 10.3 Subscription Agreement, dated May 27, 1998, between Carnival Corporation, Seabourn Cruise Line Limited, CG Cruise Invest AS and others. 10.4 Recapitalization Agreement, dated May 27, 1998, between Carnival Corporation, Seabourn Cruise Line Limited and CG Holding AS. 10.5 1993 Outside Directors' Stock Option Plan as amended on April 6, 1998. 12 Ratio of Earnings to Fixed Charges. 27 Financial Data Schedule (for SEC use only).


EXHIBIT 3.1
                      CARNIVAL CORPORATION

             AMENDMENT OF SECOND AMENDED AND RESTATED
                                    ARTICLES OF INCORPORATION


     The Second Amended and Restated Articles of Incorporation (the "Articles")

of Carnival Corporation (the "Corporation") were amended at a special meeting

of stockholders of the Corporation held on April 19, 1999, at which meeting

there were present or represented by proxy 512,225,356 shares of the

Corporation, being the majority of the issued and outstanding shares of the

Corporation.  At said meeting, Article Seventh of the Articles was amended and

restated to read as follows:

          "7.  Board of Directors.  The Board of Directors shall consist of
          no less than three (3), and no more than seventeen (17) members.
          Within said minimum and maximum, the number shall be set forth by
          resolution of the stockholders or by resolution of the Board of
          Directors.  The meetings of the Board of Directors will be held
          in the Republic of Panama or in any other country, and any
          Director can be represented and vote by proxy or proxies at any
          and all Directors' meetings. The meetings may also be held by
          means of telephone conference, fax or any other means of
          electronic communication, in which the participants have been in
          direct contact. Likewise, the resolutions of the Board of
          Directors may be adopted by minutes which are circulated for
          signature by the Directors or their proxies in different dates
          and places.  The Board of Directors shall have absolute control
          and full powers of administration on all the matters of the
          Corporation, being it understood that the Board of Directors is
          empowered to contract loans or financing in general, to grant
          guarantees with respect to its properties, subsidiaries, its
          obligations and those of third parties, and to mortgage its
          properties and assets, and to sell less than all or substantially
          all of the assets of the Corporation without shareholder
          approval."




EXHIBIT 10.1



                           INDEMNIFICATION AGREEMENT


      INDEMNIFICATION AGREEMENT, dated as of the 19th day of April, 1999,
between Carnival Corporation, a Panamanian corporation (the "Company"), and
Atle Brynestad (the "Director").

      The Company, in order to induce the Director to serve on the Company's
board of directors, wishes to indemnify the Director against certain expenses
and liabilities.

      Accordingly, the parties agree as follows:

      In the event that the Director is made a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director of the Company, the Company shall
indemnify the Director against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding to the fullest extent and in
the manner set forth in and permitted by the General Corporation Law of the
Republic of Panama and any other applicable law, as from time to time in
effect.  Such right of indemnification shall not be deemed exclusive of any
other rights to which such director or officer may be entitled apart from the
foregoing provisions.

     IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by a duly authorized officer, as of the date
first above written.


                                    CARNIVAL CORPORATION


                                    By: /s/ Howard S. Frank
                                        Howard S. Frank, Vice Chairman
                                           and Chief Operating Officer



                                    By: /s/ Atle Brynestad
                                        Atle Brynestad

                                                        EXHIBIT 10.2

                          1994 CARNIVAL CRUISE LINES
                         KEY MANAGEMENT INCENTIVE PLAN

             (adopted by the Board of Directors on January 17, 1994,
              and amended on January 5, 1998 and April 12, 1999)


OBJECTIVE

The Carnival Cruise Lines 1994 Key Management Incentive Plan (the
"Plan") is designed to focus managerial attention on the objective of
maximizing the profitability of the Carnival Cruise Lines division
("CCL") of Carnival Corporation.  The Plan provides a framework within
which the participants share in the incremental earnings of CCL
achieved from applicable business operations on a fiscal year-to-year
basis.

PLAN ADMINISTRATION

The administrator of the Plan is the Compensation Committee of
Carnival Corporation (the "Committee").  The Committee may, in its
discretion, delegate administrative functions regarding the Plan to a
Vice President of CCL.  The Committee shall have sole discretion in
resolving any questions regarding the administration or terms of the
Plan not addressed in this document as well as in resolving any
ambiguities that may exist in this document.

PLAN YEAR

The "Plan Year" shall be the 12-month period ending November 30 of
each year.

PARTICIPATION

The President, Senior Vice Presidents and Vice-Presidents of CCL shall
be eligible to participate in the Plan.  The Committee may expand Plan
eligibility to include directors, managers and/or supervisors for any
Plan year.  Participation in the Plan shall be determined on an annual
basis by the Committee.  No employee will have the automatic right to
be selected as a participant for any year or, having been selected as
a participant for one year, be considered a participant for any other
year.

Only persons who are employed by CCL or one of its divisions on the
first day of the Plan Year are eligible to participate in the Plan
except that persons who commence employment following the beginning of
the Plan Year may, with the approval of the Committee, be allowed to
participate in the Plan.  Such late-entry participants will be awarded
Points (as defined below) pro-rated to the time of their entry into
the Plan, subject to the approval of the Committee.


In order to actually receive an Incentive Award (as defined below)
under the Plan, a participant must be employed by CCL or one of its
divisions on the last day of the Plan year.  The only exception to
this requirement is for participants whose employment is terminated
prior to the last day of the Plan Year as the result of death,
disability or retirement ("Early Termination Employees").

BONUS POOL

The total amount payable under the Plan for each Plan year (the "Bonus
Pool") shall be equal to two percent (2%) (the "Bonus Percentage") of
(x) the net income generated within each Plan Year by CCL and its
divisions calculated in accordance with generally accepted accounting
principals consistently applied (the "Net Income") minus (y) the
greater of (i) CCL's Net Income for the fiscal year ending November
30, 1993 or (ii) $183,000,000.  The Bonus Percentage for the fiscal
years ending November 30, 1996 and thereafter, if applicable, will be
determined by the Board of Directors within 90 days of the
commencement of each such fiscal year.

METHOD OF CALCULATING INCENTIVE AWARDS

The Committee shall, in its discretion, assign a specific number of
points (the "Points") to each participant.  The Points awarded to each
participant will be communicated to the participant during the first
ninety (90) days of each Plan Year.  Such decisions may be revised
during a Plan Year by the Committee due to major changes in position
responsibilities occurring during the Plan Year.

The Committee, in its sole discretion, shall adjust the Points
assigned to each participant by multiplying such participant's Points
by a percentage within the range set forth below corresponding to such
participant's evaluated performance for such year (the "Weighted
Points"):

          EXCELLENT PERFORMANCE         90-100%

          GOOD PERFORMANCE              75-89%

          FAIR PERFORMANCE              60-74%

          LESS THAN FAIR                0-59%
             PERFORMANCE

Each participant shall receive an Incentive Award equal to the product
of his or her Weighted Points multiplied by the "Point Value".  The
Point Value shall be equal to (i) the amount of the Bonus Pool,
divided by (ii) the aggregate Points (before adjustments) awarded to
participants for each Plan year.

Any amounts remaining in the Bonus Pool following the calculation of
the Incentive Awards pursuant to the preceding paragraph shall be
available for discretionary distribution by the Committee to
participants.

PAYMENT OF INCENTIVE AWARDS

Incentive Awards are paid on a date determined by the Committee which
is within seventy-five (75) days following the conclusion of each Plan
Year.  At the discretion of the Committee, advance partial payment of
Incentive Awards may be made based on anticipated Net Income.  At the
discretion of the Committee, special arrangements may be made for
earlier payment to Early Termination Employees.

Incentive Awards to Senior Vice Presidents and Vice Presidents shall
be payable eighty percent (80%) in cash and twenty percent (20%) in
shares of Common Stock of Carnival Corporation and Incentive Awards to
all other participants shall be payable as determined by the
Committee.  The number of shares issuable to each participant shall be
determined by dividing the dollar amount of the stock portion of the
participant's Incentive Award by the average closing price for the
Common Stock for the last ten (10) trading days of the Plan year, as
quoted on the national stock exchange on which the Common Stock is
traded.  Fractional shares of the Common Stock will not be issued.
The value of the Common Stock received by Plan participants will be
reported to governmental taxing authorities, and taxes shall be
withheld in respect of such Common Stock, in accordance with the
requirements of applicable law.

DURATION OF PLAN

The Plan will be effective for the fiscal years 1994, 1995 and 1996.
It is the intent of Carnival Corporation to make a decision on whether
or not to renew the Plan for an additional year in August of each year
in order to effect a 2-year planning horizon (e.q., decision by August
1995 as to whether or not to extend the Plan to 1997).

RESERVATION OF SHARES

Subject to adjustment as provided in the last sentence of this
paragraph, the maximum number of shares of Common Stock that shall be
authorized and reserved for issuance under the Plan shall be 400,000
shares of Common Stock.  The maximum number of shares authorized and
reserved may be increased from time to time by approval of the Board,
and, if required pursuant to Rule 16b-3 under the Exchange Act, the
stockholders of Carnival Corporation.  The shares to be issued to
participants pursuant to the Plan may be, at the election of Carnival
Corporation, either treasury shares or shares authorized but unissued,
and, if treasury shares are used, all references in the Plan to the
issuance of shares shall, for corporate law purposes, be deemed to
mean the transfer of shares from treasury.  Any shares of Common Stock
that are subject to an Incentive Award that lapses or expires shall
automatically again become available for use under the Plan.  In the
event of any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split,
combination of shares or any other change in the corporate structure
or shares of Carnival Corporation, the Committee shall make
appropriate adjustment as to the number and kind of securities subject
to and reserved under the Plan and, in order to prevent the dilution
or enlargement of the rights of participants, the number and kind of
securities subject to outstanding stock awards.

PURCHASE FOR INVESTMENT

Common Stock issued will be subject to a restriction on sale
commencing from date of issuance and continuing until, but not
including, the first trading day in the second January following the
end of the Plan year in respect of which the Common Stock was issued
(e.q., Common Stock issued in respect of the Plan year ending November
30, 1994 would be subject to a restriction on sale that would not end
until the first trading day in January, 1996).  Holders will be
eligible to receive dividends during the restriction period.

Whether or not the shares of Common Stock covered by the Plan have
been registered under the Securities Act of 1933, as amended, each
person acquiring shares of Common Stock under the Plan may be required
by the Company to give a representation in writing that such person is
acquiring such shares for investment and not with a view to, or for
sale in connection with, the distribution of any part thereof.
Carnival Corporation will endorse any necessary legend referring to
the foregoing restriction upon the certificate or certificates
representing any shares of Common Stock issued or transferred to the
Plan participants upon the grant of any shares of Common Stock under
the Plan.

AMENDMENT OF PLAN

The Board of Directors of Carnival Corporation may amend the Plan from
time to time in such respects as the Board may deem advisable;
provided, however, that no such amendment shall be effective without
approval of the stockholders of Carnival Corporation if stockholder
approval of the amendment is required pursuant to Rule 16b-3 under the
Exchange Act.

GOVERNMENTAL AND OTHER REGULATIONS

The Plan and the Common Stock awards under the Plan shall be subject
to all applicable federal and state laws, rules and regulations and
such approvals by any governmental or regulatory agency or national
securities exchange, as may be required.  Carnival Corporation shall
not be required to issue or deliver any certificates or shares of
stock prior to the completion of any registration or qualification of
such shares under any federal or state law, or any ruling or
regulations of any governmental body or national securities exchange
which Carnival Corporation shall, in its sole discretion, determine to
be necessary or advisable.




                                                        EXHIBIT 10.3












                      SUBSCRIPTION AGREEMENT


                              among


                  SEABOURN CRUISE LINE LIMITED,



                       CARNIVAL CORPORATION


                              and


                     THE PERSONS NAMED HEREIN


                       Dated:  May 27, 1998


                     _________________________


=================================================================








                         TABLE OF CONTENTS

                                                                    Page

ARTICLE 1  DEFINITIONS                                                 2
           1.1  Definitions                                            2

ARTICLE 2  SUBSCRIPTION AND ISSUE OF THE SHARES                        5
           2.1  Subscription and Issue of the Shares.                  5
           2.2  The Closing                                            5
           2.3  Post-Closing Adjustment                                6

ARTICLE 3  REPRESENTATIONS AND WARRANTIES OF THE COMPANY               7
           3.1  Due Incorporation                                      7
           3.2  Qualification                                          7
           3.3  Capital Stock                                          7
           3.4  Authorization; No Contravention                        8
           3.5  Binding Effect                                         8

ARTICLE 4  REPRESENTATIONS AND WARRANTIES OF THE INVESTORS             8
           4.1  Acquisition for Own Account.                           9
           4.2  Exemption                                              9
           4.3  Non-Registration                                       9
           4.4  Business Knowledge                                     9
           4.5  Authorization; No Contravention                       10
           4.6  Binding Effect                                        10
           4.7  Investment Limitation                                 10

ARTICLE 5  CONDITIONS TO THE OBLIGATION
           OF THE COMPANY AND THE INVESTORS TO CLOSE                  11

ARTICLE 6  LIMITATIONS ON TRANSFER                                    11
           6.1  General Restrictions on Transfer                      11
           6.2  Void Transfers                                        12
           6.3  Permitted Transfers                                   12

ARTICLE 7  TAG-ALONG AND BRING-ALONG RIGHTS                           13
           7.1  Tag-Along Rights                                      13
           7.2  Bring-Along Rights                                    16

ARTICLE 8  CORPORATE GOVERNANCE AND CERTAIN OTHER ACTIONS             18
           8.1  General                                               18
           8.2  Election of Directors                                 18
           8.3  Removal and Replacement                               19
           8.4  Company Name Change                                   19

ARTICLE 9  INITIAL PUBLIC OFFERING                                    19
           9.1  Initial Public Offering                               19
           9.2  Initial Public Offering Procedure                     20
           9.3  Customary Agreements                                  20
           9.4  Carnival Exchange                                     20
           9.5  Put Option                                            21
           9.6  No Fractional Shares                                  22
           9.7  Closing of the Carnival Exchange and the Put Option   22
           9.8  Exchange Ratio Adjustment                             23
           9.9  No Claims                                             24

ARTICLE 10  RIGHT TO PARTICIPATE IN CERTAIN ISSUANCE OF CAPITAL
            SHARES                                                    25
            10.1  Right to Participate in New Issuance                25
            10.2  Exercise of Right                                   25
            10.3  Closing                                             26

ARTICLE 11  SHARES CERTIFICATE LEGEND                                 26

ARTICLE 12  AFTER-ACQUIRED SECURITIES                                 27

ARTICLE 13  TRANSACTIONS WITH AFFILIATES                              28
            13.1  Limitation on Transactions with Affiliates          28
            13.2  Exceptions                                          28

ARTICLE 14  TERMINATION                                               29
            14.1  General                                             29
            14.2  Non-Consummation of Cunard Acquisition              29
            14.3  Return of Shares and Purchase Price                 29
            14.4  Shareholder No Longer Holds Shares                  29
            14.5  No Liability                                        30

ARTICLE 15  CONFIDENTIALITY                                           30

ARTICLE 16  MISCELLANEOUS                                             31
            16.1  Survival of Representations, Warranties,
                  Other Agreements and Undertakings                   31
            16.2  Notices                                             31
            16.3  Fees and Expenses                                   33
            16.4  Carnival Expenses.                                  33
            16.5  Third Party Beneficiaries                           33
            16.6  Successors and Assigns                              33
            16.7  Amendment and Waiver                                34
            16.8  Counterparts                                        34
            16.9  Headings                                            34
            16.10 Governing Law                                       35
            16.11 Arbitration                                         35
            16.12 Severability                                        35
            16.13 Entire Agreement                                    36
            16.14 Further Assurances                                  36






                    SUBSCRIPTION AGREEMENT


     SUBSCRIPTION AGREEMENT, dated as of May 27, 1998, among Seabourn Cruise

Lines Limited, a Bahamas International Business Corporation (the "Company"),

the persons set forth on the signature pages hereto (collectively, the

"Investors") and Carnival Corporation, a Panamanian corporation ("Carnival"

and, together with the Investors, the "Shareholders").

     WHEREAS, pursuant to an Agreement for the Sale and Purchase of the

Business of Cunard, dated April 3, 1998, among Cunard Line Limited ("Cunard")

and others as sellers and Carnival as buyer and Kvaerner ASA as guarantor (the

"Sale and Purchase Agreement"), Carnival agreed to acquire the business carried

on by affiliates of Kvaerner ASA under the name Cunard.

     WHEREAS, Carnival has assigned its rights and duties under the Sale and

Purchase Agreement to a newly-formed subsidiary ("Newco") of the Company.

     WHEREAS, the Company intends to change its name to Cunard Line Limited.

     WHEREAS, the parties hereto currently intend to consider an initial public

offering of equity securities of the Company prior to November 30, 1999 and, if

such an initial public offering is made, the parties also intend to consider

listing the equity securities of the Company on the Oslo Stock Exchange, either

as a primary or secondary listing (it being understood that any such decisions

concerning an initial public offering shall be made by Carnival in its sole

discretion).

     WHEREAS, the Company desires to issue to the Investors ordinary shares of

the Company, par value $0.10 (the "Shares"), to fund a portion of the purchase

price under the Sale and Purchase Agreement.

     WHEREAS, the Shareholders desire to set forth certain agreements among

them relating to the governance of the Company and the transfer of their

Shares.

     NOW, THEREFORE, the parties hereto agree as follows:


                          ARTICLE 1.

                         DEFINITIONS

     1.1   Definitions.  As used in this Agreement, and unless the context

requires a different meaning, the following terms have the meanings indicated:

     "Adjusted Cunard Price" means the purchase price under the Sale and

Purchase Agreement as adjusted under clause 4.2 thereof plus the actual amount

of fees and expenses of Christiania Markets ("Christiania") reimbursed under

Section 16.3 of this Agreement.

     "Affiliate" means, with respect to any Person, any other Person

controlling, controlled by or under common control with, such Person.  For

purposes of this definition, "control", when used with respect to any Person,

means the power to direct the management and policies of such Person, directly

or indirectly, whether through the ownership of voting securities, by contract

or otherwise; and the terms "controlling" and "controlled" have meanings

correlative to the foregoing.

     "Assumed Cunard Price" means US $380,444,000.

     "Assumed Investor Share Adjustment" means, with respect to each Investor,

the assumed Investor share adjustment as specified on Schedule 2.1.

     "Agreement" means this Agreement as the same may be amended, supplemented

or modified in accordance with the terms hereof.

     "Board of Directors" means the Board of Directors of the Company.

     "Business Day" means any day other than a Saturday, Sunday or public

holiday in England, Wales, the Bahamas, Bermuda and the United States.

     "Closing" has the meaning set forth in Section 2.2 of this Agreement.

     "Closing Date" means the Business Day (as defined in the Sale and Purchase

Agreement) on which all of the conditions of Completion shall have been

fulfilled or waived by the parties to the Sale and Purchase Agreement.

     "Completion" has the meaning set forth in the Sale and Purchase Agreement.

     "Initial Public Offering" means an initial public offering of equity

securities of the Company in the United States, the United Kingdom or Norway

and a related listing of such shares on a national securities exchange or

trading market in the United States, the London Stock Exchange or the Oslo

Stock Exchange, respectively.

     "Investors" has the meaning set forth in the recitals to this Agreement.

     "Investor Purchase Price Adjustment" means, with respect to each Investor,

the product of (i) the Purchase Price Adjustment Amount and (ii) the investment

percentage of such Investor as specified on Schedule 2.1.

     "Investor Share Adjustment" means with respect to each Investor, the

Investor Purchase Price Adjustment divided by US $10.00 (the per share purchase

price of the Shares).

     "Lien" means any mortgage, deed of trust, pledge, hypothecation,

assignment, encumbrance, lien (excluding those arising by operation of law) or

other security interest of any kind or nature whatsoever.

     "Person" means any individual, firm, corporation, partnership, trust,

incorporated or unincorporated association, joint venture, joint stock company,

Governmental Authority or other entity of any kind, and shall include any

successor (by merger or otherwise) of such entity.

     "Post-Closing Share Issuance Amount" means, with respect to each Investor,

either (i) the Assumed Investor Share Adjustment plus the Investor Share

Adjustment (if the Adjusted Cunard Price exceeds the Assumed Cunard Price) or

(ii) the Assumed Investor Share Adjustment minus the Investor Share Adjustment

otherwise.

     "Purchase Price Adjustment Amount" means the product of (i) 0.3 and

(ii) either (a) the Adjusted Cunard Price minus the Assumed Cunard Price (if

the Adjusted Cunard Price exceeds the Assumed Cunard Price) or (b) the Assumed

Cunard Price minus the Adjusted Cunard Price otherwise.

     "Recapitalization Agreement" means the Recapitalization Agreement, dated

as of May 27, 1998, among the Company, Carnival and CG Holding AS ("CG").

     "US $" means United States dollars, the lawful currency of the United

States of America.


                         ARTICLE 2.

            SUBSCRIPTION AND ISSUE OF THE SHARES

     2.1  Subscription and Issue of the Shares.  (a)  At the Closing, subject

to the terms and conditions of this Agreement, the Company agrees to issue to

the Investors, and the Investors agree to subscribe for and accept from the

Company, the numbers of Shares set forth by each Investor's name on

Schedule 2.1 hereto.  After the Closing, the Company shall issue additional

Shares to the Investors subject to the terms of Section 2.3.

          (b)  The purchase price payable by the Investors in the aggregate

shall be US $114,133,200, subject to adjustment in accordance with Section 2.3.

At the Closing, each Investor shall pay the amounts set forth by each

Investor's name on Schedule 2.1 hereto, which shall be held on account of the

purchase price payable hereunder.

     2.2  The Closing (a)  The subscription and issue of the Shares (other than

the additional Shares to be issued pursuant to Section 2.3) (the "Closing")

shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison in

New York, at 10:00 a.m., local time, on the Closing Date or at such other time

as the parties may mutually agree.

          (b)  At the Closing, the Company shall deliver to each Investor

certificates evidencing the number of Shares to which such Investor is entitled

under Section 2.1(a) (other than the additional Shares to be issued pursuant to

Section 2.3) registered in such Investor's name, upon payment of the funds

payable by each Investor under Section 2.1(b).  All amounts paid hereunder

shall be paid by wire transfer of immediately available funds to such account

or accounts as may be designated by the Company to the Investors.  All Shares

issued hereunder shall be validly issued, fully paid and non-assessable and

free and clear from all Liens.

     2.3  Post-Closing Adjustment.  Upon completion of the adjustment of the

purchase price under clause 4.2 of the Sale and Purchase Agreement, the Company

shall notify, in writing, each Investor of its Investor Purchase Price

Adjustment.  Within five Business Days thereafter, (i) either (a) if the

Adjusted Cunard Price does not exceed the Assumed Cunard Price, the Company

shall pay each Investor its Investor Purchase Price Adjustment (if any) by wire

transfer of immediately available funds to an account of Christiania on behalf

of such Investor as designated in writing by Christiania to the Company or (b)

otherwise, each Investor shall pay the Company its Investor Purchase Price

Adjustment by wire transfer of immediately available funds to the account

designated under Section 2.1(b), and (ii) subject to the receipt of any amounts

due under Section 2.3(i)(b), the Company shall issue to each Investor a number

of Shares equal to the Post-Closing Share Issuance Amount of such Investor.


                         ARTICLE 3.

      REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to the Investors on the date hereof

and on the Closing Date as follows:

     3.1  Due Incorporation.  The Company is an International Business

Corporation duly incorporated and validly existing under the laws of the

Bahamas and has all requisite corporate power and lawful authority to own,

lease and operate its properties and to carry on its business as now being

conducted.

     3.2  Qualification.  The Company is duly qualified or otherwise authorized

to transact business in each jurisdiction in which such qualification or

authorization is required by applicable law or in which the failure so to

qualify or be authorized would have a material adverse effect on the Company.

     3.3  Capital Stock.  (a)  As of the date hereof, the authorized share

capital of the Company is US $5,000, made up of 5,000 shares.  As of the date

hereof, 4,800 shares are issued and outstanding.  Upon the Closing, the

authorized share capital of the Company will be US $15 million, made up of 150

million shares. Except for this Agreement and the Recapitalization Agreement,

the Company has no obligations to issue any of its Shares.

          (b)  Upon the payment of the Investors of the purchase price provided

for under Section 2, the Shares issuable hereunder will be duly authorized,

validly issued, fully paid and non-assessable and free and clear from all

Liens.

     3.4  Authorization; No Contravention.  The execution, delivery and

performance by the Company of this Agreement and the transactions contemplated

hereby, including, without limitation, the sale, issuance and delivery of the

Shares (i) are within the Company's corporate power and have been duly

authorized by all necessary corporate action of the Company; (ii) do not

contravene the terms of the Memorandum and Articles of Association, or any

amendment of either thereof, or any organizational or governing documents of

the Company; and (iii) do not violate, conflict with or result in any breach or

contravention of, or the creation of any Lien under any material agreement of

the Company.

     3.5  Binding Effect.  This Agreement has been duly authorized, executed

and delivered by the Company and constitutes a legal, valid and binding

obligation of the Company, enforceable against the Company in accordance with

its terms, except as enforceability may be limited by applicable bankruptcy,

insolvency, reorganization, fraudulent conveyance or transfer, moratorium or

similar laws affecting the enforcement of creditors' rights generally and by

general principles of equity relating to enforceability.


                        ARTICLE 4.

     REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

     applicable (severally as to itself only and not jointly) to the Company on

the date hereof and on the Closing Date as follows:

     4.1  Acquisition for Own Account.  Such Investor is acquiring the Shares

for its own account, or an account with respect to which it exercises sole

investment discretion, solely for investment and not with a view to resale or

distribution thereof.

     4.2  Exemption.  Such Investor is (a) a "qualified institutional buyer"

within the meaning of Rule 144A under the United States Securities Act of 1933,

as amended (the "Securities Act"), (b) an "accredited investor" within the

meaning of Regulation D under the Securities Act, or (c) not in the United

States, within the meaning of Regulation S ("Regulation S") promulgated under

the Securities Act, and is neither a U.S. person ("U.S. person"), within the

meaning of Regulation S, nor a person acquiring the Shares for the account or

benefit of a U.S. person.

     4.3  Non-Registration.  Such Investor acknowledges that the offering and

sale of the Shares has not been and will not be registered under the Securities

Act and may not be offered or sold within the United States or to or for the

account or benefit of, U.S. persons except pursuant to an exemption from

registration or under an effective registration statement under the Securities

Act.

     4.4  Business Knowledge.  Such Investor has such knowledge and experience

in financial and business matters that it is capable of evaluating the merits

and risks of its investment in the Company as contemplated by this Agreement,

and is able to bear the economic risk of such investment for an indefinite

period of time, including a complete loss of capital.  It has been furnished

access to such information and documents as it has requested and has been

afforded the opportunity to ask questions of and receive answers from

representatives of the Company concerning the terms and conditions of this

Agreement and the proposed transactions and the purchase of the Shares

contemplated hereby.

     4.5  Authorization; No Contravention.  The execution, delivery and

performance by such Investor of this Agreement and the transactions

contemplated hereby, including, without limitation, the payment of the purchase

price (i) are within such Investor's corporate or other power and have been

duly authorized by all necessary action of such Investor; (ii) do not

contravene the terms of the certificate of incorporation and by-laws (or

comparable instruments), or any amendment of either thereof, or any

organizational or governing documents of such Investor, as applicable, and

(iii) do not violate, conflict with or result in any breach or contravention

of, or the creation of any Lien under any material agreement of such Investor.

     4.6  Binding Effect.  This Agreement has been duly authorized, executed

and delivered by such Investor and constitutes a legal, valid and binding

obligation of such Investor, enforceable against such Investor in accordance

with its terms, except as enforceability may be limited by applicable

bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,

moratorium or similar laws affecting the enforcement of creditors' rights

generally and by general principles of equity relating to enforceability.

     4.7  Investment Limitation.  Except as specifically agreed to by the

Company, as of the Closing, no Investor, its affiliates, or related persons

shall hold Shares with an aggregate purchase price in excess of US $15 million.

After the Closing, no Investor shall acquire more than 5% of the outstanding

Shares of the Company without the consent of the Company; provided however that

if any purchase by any Investor requires Carnival or the Company to make any

filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as

amended then such Investor shall reimburse Carnival or the Company, as the case

may be, for all of its out-of-pocket fees and expenses related to any such

filing.


                         ARTICLE 5.

                CONDITIONS TO THE OBLIGATION
          OF THE COMPANY AND THE INVESTORS TO CLOSE

     The obligations of the Company to issue Shares on the Closing and the

Investors to pay the amounts under Section 2.1 shall be conditioned upon:

          (i)  the waiver or satisfaction of all conditions set forth in clause

5 of the Sale and Purchase Agreement; and

          (ii)  the execution and delivery by the parties thereto of the

Recapitalization Agreement, in the form attached hereto as Exhibit A.


                          ARTICLE 6.

                    LIMITATIONS ON TRANSFER

     6.1  General Restrictions on Transfer.  Each Shareholder agrees that such

Shareholder shall not, either directly or indirectly, offer, sell, transfer,

assign, mortgage, hypothecate, pledge, create a security interest in or Lien

upon, encumber, donate, contribute, place in trust, or otherwise voluntarily or

involuntarily dispose of (any of the foregoing actions, to "Transfer" and, any

offer, sale, transfer, assignment, mortgage, hypothecation, pledge, security

interest or Lien, encumbrance, donation, contribution, placing in trust or

other disposition, a "Transfer") any Shares, or any interest therein, except in

a transaction that is specifically permitted by this Agreement.

     6.2  Void Transfers.  Any attempt to Transfer any Shares, or any interest

therein, which is not in compliance with this Agreement shall be null and void

ab initio, and the Company shall not give any effect in the Company's stock

records to such attempted Transfer.

     6.3  Permitted Transfers.  Notwithstanding Sections 6.1 and 6.2, Transfers

(including, without limitation, pledges of Shares as collateral for loans) may

be made pursuant to this Agreement if:

          (i)  such Transfer complies in all respects with the applicable

provisions of this Agreement including, without limitation, Section 7 and

applicable federal and state securities laws;

          (ii)  the transferee agrees in writing with the Company and the other

Shareholders to be bound by the terms and conditions of this Agreement with

respect to the Shares Transferred to such transferee to the same extent as the

Shareholder who originally held such Shares is or was bound hereby (whereupon

such transferee shall be entitled to the same rights as such Shareholder who

originally held such Shares had with respect to such Shares and shall be deemed

to be a Shareholder for all purposes hereunder with respect to such Shares);

          (iii)  if requested by the Company, in its sole discretion, an

opinion of counsel to such transferring Shareholder shall be supplied to the

Company, at such transferring Shareholder's expense, to the effect that such

Transfer complies with applicable United States federal and state securities

laws; and

          (iv)  except for the parties to this Agreement, such transferee is

not (i) a Person engaged, directly or indirectly, in the cruise line business,

(ii) an owner, partner or shareholder holding more than 10% of the equity

interest in such a Person or (iii) an Affiliate of a Person described in

clauses (i) and (ii).


                          ARTICLE 7.

               TAG-ALONG AND BRING-ALONG RIGHTS

     7.1  Tag-Along Rights.  (a)  If one or more Shareholders (each a "Selling

Shareholder" and, the "Selling Shareholders") shall desire to sell Shares

representing a majority of all outstanding Shares (a "Proposed Sale") to any

Person other than another Shareholder or an Affiliate of such Shareholder  (a

"Third Party Purchaser"), then such Selling Shareholders shall offer the other

Shareholders which are not Selling Shareholders (the "Tag-Along Shareholders")

the right to participate in the Proposed Sale with respect to a number of

Shares determined as provided in this Section 7.1 by sending written notice

(the "Tag-Along Notice") to the Company and the Tag-Along Shareholders, which

notice shall (i) state the number of Shares proposed to be sold in such

Proposed Sale by such Selling Shareholders (the "Proposed Sale Shares"),

(ii) state the proposed purchase price per Proposed Sale Share (the "Tag-Along

Price") and all other material terms and conditions of such Proposed Sale and

(iii) if applicable, be accompanied by any written offer from the Third Party

Purchaser; provided, however, that the Selling Shareholders shall not be

obligated to deliver a Tag-Along Notice if the Transfer (if consummated) is

made pursuant to Section 7.2.

          (b)  Each Tag-Along Shareholder shall have the right to require the

Selling Shareholder to cause the Third Party Purchaser to purchase from such

Tag-Along Shareholder at the Tag-Along Price (and otherwise upon the same terms

and conditions as those set forth in the Tag-Along Notice) a number of Shares

owned by such Tag-Along Shareholder (such Tag-Along Shareholder's "Tag-Along

Shares") not in excess of the product of (i) the total number of Proposed Sale

Shares, times (ii) a fraction, the numerator of which is the total number of

Shares owned by such Tag-Along Shareholder and the denominator of which is

equal to the sum of the total number of Shares owned by the Selling

Shareholders and the Tag-Along Shareholders and any other Persons owning Shares

entitled to participate in such Sale.  Such right of each Tag-Along Shareholder

shall be exercisable by written notice to the Selling Shareholders with copies

to the Company given within 10 Business Days after receipt of the Tag-Along

Notice (the "Tag-Along Notice Period"), which notice shall state the number of

Tag-Along Shares that such Tag-Along Shareholder elects to sell in the Proposed

Sale, if less than the maximum number of such Tag-Along Shareholder's Tag-Along

Shares; provided that, if such notice shall not state a number of Tag-Along

Shares, then such Tag-Along Shareholder will be deemed to have elected to sell

the maximum number of such Tag-Along Shareholder's Tag-Along Shares.  Failure

by a Tag-Along Shareholder to respond within the Tag-Along Notice Period shall

be regarded as a rejection of the offer made pursuant to the Tag-Along Notice.

Each Tag-Along Shareholder that elects to sell any or all of such Tag-Along

Shareholder's Tag-Along Shares is referred to in this Section 7.1 as a

"Participating Tag-Along Shareholder" and the number of Tag-Along Shares

elected, or deemed to be elected, by such Tag-Along Shareholder to be sold as

provided above is referred to in this Section 7.1 as such Tag-Along

Shareholder's "Participating Tag-Along Shares".  The number of Shares to be

sold by the Selling Shareholders in the Proposed Sale shall be reduced by the

aggregate number of Participating Tag-Along Shares to be sold pursuant to this

Section 7.1 by all Participating Tag-Along Shareholders.

          (c)  At the request of the Selling Shareholders made not less than

two Business Days prior to the proposed Transfer, a Participating Tag-Along

Shareholder shall deliver to the Selling Shareholders certificates representing

such Participating Tag-Along Shareholder's Participating Tag-Along Shares, duly

endorsed, in proper form for Transfer, together with a limited power-of-

attorney authorizing the Selling Shareholders to transfer such Participating

Tag-Along Shares to the Tag-Along Purchaser and to execute all other documents

required to be executed in connection with such transaction.

          (d)  If no Transfer of the Tag-Along Shares in accordance with the

provisions of this Section 7.1 shall have been completed within 70 Business

Days of the Tag-Along Notice, then the Selling Shareholders shall promptly

return to the Participating Tag-Along Shareholder, in proper form, all

certificates representing such Participating Tag-Along Shareholder's

Participating Tag-Along Shares and the limited power-of-attorney previously

delivered by such Participating Tag-Along Shareholder to the Selling

Shareholders.

          (e)  The closing of the sale of the Participating Tag-Along Shares by

the Participating Tag-Along Shareholders shall be held at the same place and

time as the closing of the sale by the Selling Shareholders in the Proposed

Sale.  Promptly after the consummation of the Transfer of the Participating Tag-

Along Shares pursuant to this Section 7.1, each Participating Tag-Along

Shareholder shall receive (i) the consideration with respect to the

Participating Tag-Along Shares so Transferred and (ii) such other evidence of

the completion of such Transfer and the terms and conditions (if any) thereof

as may reasonably be requested by such Participating Tag-Along Shareholder.

          (f)  The provisions of this Section 7.1 shall remain in effect,

notwithstanding any return to any Participating Tag-Along Shareholder of

Participating Tag-Along Shares as provided in Section 7.1(d).

     7.2  Bring-Along Rights.  (a)  In the event that one or more Selling

Shareholders owning at least 60% of the number of outstanding shares of the

Company receives a bona fide offer from a Third Party Purchaser (excluding

offers from Affiliates of any of the Shareholders) to purchase (including a

purchase by merger) at least a majority of the outstanding Shares, the Selling

Shareholders may send written notice (a "Buyout Notice") to the Company and the

other Shareholders notifying the other Shareholders that they will be required

to sell the same percentage of their Shares in such sale as the Selling

Shareholder propose to sell (which percentage shall be specified in such Buyout

Notice) (the "Designated Percentage").

          (b)  Upon receipt of a Buyout Notice, each Shareholder receiving such

notice shall be obligated:

               (i)  to sell the Designated Percentage of such Shareholder's

Shares in the transaction (including a sale or merger) contemplated by the

Buyout Notice on the same terms and conditions as the Selling Shareholders;

               (ii)  to provide for the payment by such Shareholder of such

shareholder's pro rata portion of all costs associated with such transaction,

in the proportion that the number of Shares owned by such Shareholder bears to

the number of outstanding Shares; and

               (iii)  otherwise to take all necessary action to cause the

consummation of such transaction, including voting its Shares in favor of such

transaction and not exercising any appraisal rights in connection therewith.

          (c)  Each Shareholder further agrees to (i) take all actions

(including executing documents) in connection with the consummation of the

proposed transaction as may reasonably be requested of it by the Selling

Shareholders and (ii) appoint the Selling Shareholders as its attorneys-in-fact

to do the same on its behalf.

          (d)  In the event a contract with respect to the transaction

contemplated by the Buyout Notice has not been entered into within the 90 days

after the date of delivery of the Buyout Notice, the obligations of the

Shareholders under this Section 7.2 with respect to such Buyout Notice shall

terminate, subject, however, to the right of the Selling Shareholders to

deliver a further Buyout Notice.


                         ARTICLE 8.

       CORPORATE GOVERNANCE AND CERTAIN OTHER ACTIONS

     8.1  General.  Each Shareholder shall vote its Shares at any regular or

special meeting of Shareholders of the Company, or in any written consent

executed in lieu of such a meeting of Shareholders, and shall take all other

actions necessary, to give effect to the provisions of this Agreement

(including, without limitation, Section 8.2 hereof), and to ensure that the

Company's Memorandum and Articles of Association and By-Laws do not, at any

time hereafter, conflict in any respect with the provisions of this Agreement.

     8.2  Election of Directors .  Each Shareholder agrees that, except as the

Shareholders may otherwise agree in writing, the number of directors

constituting the entire Board of Directors shall be seven, comprised of the

following individuals:

          (i)  five individuals designated by Carnival; and

          (ii)  two individuals designated by the Investors holding a majority

of all Shares held by the Investors (the "Majority Investors").

          The initial directors designated by Carnival shall be Atle Brynestad,

Micky Arison, Howard Frank, Paris Katsoufis and Larry Pimentel and the initial

directors designated by the Majority Investors shall be Jorgen Lund and Knut

Heje.

     8.3  Removal and Replacement.  Each of Carnival and the Majority Investors

shall be entitled at any time and for any reason (or for no reason) to

designate any or all of its designees on the Board of Directors for removal.

If at any time a vacancy is created on the Board of Directors by reason of the

death, removal or resignation of any director, then Carnival or the Majority

Investors shall, as soon as practicable thereafter, designate a replacement

director and, as soon as practicable thereafter, the Company and each of the

Shareholders shall take action, including, if necessary, the voting of its

Shares, to elect or cause the election by the Board of Directors of such

replacement director in accordance with Section 8.2(a)(i) or (ii), as the case

may be.

     8.4  Company Name Change.  Each Shareholder hereby agrees to approve the

change of the Company's name to Cunard Line Limited and to take all action

necessary, including the voting of its Shares, to effect the same.



                            ARTICLE 9.

                     INITIAL PUBLIC OFFERING

     9.1  Initial Public Offering.  It is the current intention of the parties

to complete the Initial Public Offering prior to November 30, 1999 (the "IPO

Deadline"); provided that, if market conditions do not permit the Initial Pubic

Offering prior to the IPO Deadline, the IPO Deadline may be extended at the

option of Carnival.  If the Initial Public Offering is in the United States,

the Company and the Investors shall in good faith attempt to negotiate a

registration rights agreement with customary terms and provisions to provide

the Investors (as a group) with one demand registration right and with piggy-

back registration rights.

     9.2  Initial Public Offering Procedure.  Prior to the Initial Public

Offering, the Company shall provide the Investors with written information

regarding the Initial Public Offering process and, to the extent determined by

Carnival in its sole discretion, shall invite the Investors to participate in

such Initial Public Offering.  Any Investor so invited which desires to sell

Shares in the Initial Public Offering shall, with a time limit set out by the

Company in writing, notify the Company in writing of its wish to sell and the

amount of Shares it desires to sell; provided that Carnival may require each

Investor to sell up to 50% of such Investor's Shares in the Initial Public

Offering and, upon written request from Carnival, the Investors shall sell such

Shares in the Initial Public Offering.

     9.3  Customary Agreements.  In connection with the Initial Public

Offering, each Investor agrees to enter into customary agreements (including,

without limitation, a lock-up agreement) with the Company and the

arrangers/underwriters of the Initial Public Offering.

     9.4  Carnival Exchange.  Notwithstanding Sections 9.1, 9.2 and 9.3, at the

option of Carnival, in its sole discretion, in lieu of an Initial Public

Offering, Carnival may at any time elect to purchase all of the Shares owned by

the Investors (the "Carnival Exchange") in exchange for shares of common stock

of Carnival (the "Carnival Common Stock").  Prior to effecting the Carnival

Exchange, Carnival  shall, in its sole discretion, consider first whether to

effect the Initial Public Offering.  In the Carnival Exchange, each Investor

shall be entitled to receive a number of shares equal to the product of (i) the

number of Shares owned by such Investor and (ii) the Exchange Ratio.  The

Exchange Ratio shall initially be 0.14493 and shall be subject to adjustment as

provided in Section 9.7 below.  If it elects to effect the Carnival Exchange,

Carnival shall notify each Investor in writing of the Carnival Exchange.  Such

notice shall specify the Exchange Ratio and the place and time of the closing

of the Carnival Exchange (which shall be a date within 20 Business Days of the

calculation of the Exchange Ratio).

     9.5  Put Option.  Notwithstanding Sections 9.1, 9.2, 9.3 and 9.4, if on

the third anniversary of the Closing, the Company has not completed the Initial

Public Offering and the Carnival Exchange has not occurred, each Investor

shall, from and after the third anniversary of the Closing, have the option

(the "Put Option") to put all of such Investor's Shares to Carnival in exchange

for Carnival Common Stock.  The Put Option shall be exercisable by each

Investor by delivery of written notice to Carnival (the "Put Option Notice")

within 10 Business Days after the third anniversary of the Closing.  At the

closing of the Put Option, each Investor who has exercised the Put Option shall

be entitled to receive a number of shares of Carnival Common Stock equal to the

product of (i) the number of Shares owned by such Investor and (ii) the

Exchange Ratio.  At the closing of the Put Option Carnival shall be obligated

to purchase all of the Shares owned by the Investors exercising the Put Option

in exchange for shares of Carnival Common Stock as determined in accordance

with the preceding sentence.  Carnival shall provide notice in writing to each

Investor exercising the Put Option of the Exchange Ratio and the place and time

of the closing of the Put Option (which closing date shall be within 45

Business Days after the third anniversary of the Closing).

     9.6  No Fractional Shares.  No fraction of Carnival Shares will be issued

to the Investors in connection with the Carnival Exchange or the exercise of

the Put Option.  In lieu thereof, Carnival shall pay to such Investors

otherwise entitled to a fractional share cash in an amount equal to the product

of such fraction and the closing price for the Carnival Common Stock on the New

York Stock Exchange Composite Tape on the last trading day prior to the closing

of either the Carnival Exchange or the Put Option.

     9.7  Closing of the Carnival Exchange and the Put Option.  The closing for

the purchase of the Shares pursuant to Sections 9.4 or 9.6 shall be held at

such place and time as Carnival shall designate in writing to the Investors.

At such closing, in exchange for all of the Shares held by each Investor

participating in the Carnival Exchange or the Put Option, as the case may be,

Carnival shall issue, sell and deliver to such Investor and such Investor shall

purchase, acquire and accept from Carnival, certificates evidencing the number

of Shares of Carnival Common Stock to which such Investor is entitled under

Sections 9.4 and 9.6, registered in such Investor's name, all of which, upon

issuance shall have been duly authorized, validly issued, fully paid and non-

assessable and free and clear from all Liens.  All Shares delivered by each

Investor to Carnival under this Section 9.7 shall be free and clear from all

Liens.

     9.8  Exchange Ratio Adjustment.  If Carnival or the Company shall, at any

time or from time to time, (i) declare a dividend of shares of the Carnival

Common Stock or Shares payable in Carnival Common Stock or Shares,

respectively, (ii) subdivide the outstanding shares of Carnival Common Stock or

Shares, (iii) combine the outstanding Carnival Common Stock or Shares into a

smaller number of shares, or (iv) issue any shares of Carnival Common Stock or

Shares in a reclassification of Carnival Common Stock or Shares, respectively

(including any such reclassification in connection with a consolidation or

merger in which Carnival or the Company is the surviving corporation), then in

each such case, the Exchange Ratio in effect at the time of the record date for

such dividend or of the effective date of such subdivision, combination or

reclassification, shall be proportionately adjusted so that upon the Carnival

Exchange or the closing of the Put Option each Investor shall be entitled to

receive the same aggregate number of shares of Carnival Common Stock which, if

the Carnival Exchange or the closing of the Put Option had occurred immediately

prior to such date, such Investor would have owned upon such Carnival Exchange

or the closing of the Put Option and been entitled to receive by virtue of such

dividend, subdivision, combination or reclassification.  If there occurs any

reclassification of the Carnival Common Stock, consolidation or merger of

Carnival with or into another Person (other than a merger or consolidation of

Carnival in which Carnival is the continuing corporation and which does not

result in any reclassification or change of outstanding shares of the Carnival

Common Stock) or the sale or conveyance of all or substantially all of the

assets of Carnival to another Person, then each Investor will thereafter be

entitled to receive, upon the Carnival Exchange or the closing of the Put

Option, the same kind and amounts of securities (including shares of stock) or

other assets, or both, which were issuable or distributable to the holders of

outstanding Carnival Common Stock upon such reclassification, consolidation,

merger, sale or conveyance, in respect of that number of shares of Carnival

Common Stock then deliverable upon the Carnival Exchange or the closing of the

Put Option if the Carnival Exchange or the Put Option had been exercised

immediately prior to such reclassification, consolidation, merger, sale or

conveyance. Any such adjustment of the Exchange Ratio shall become effective

immediately after the record date of such dividend or the effective date of

such subdivision, combination, reclassification, consolidation, merger, sale or

conveyance.  Such adjustment of the Exchange Ratio shall be made successively

whenever any event listed above shall occur.  If a stock dividend is declared

and such stock dividend is not paid, the Exchange Ratio shall again be adjusted

to be the Exchange Ratio in effect immediately prior to such record date.

     9.9  No Claims.  Each Investor understands and agrees that it shall have

no claim against the Company, Newco, Carnival or any of their directors,

officers or affiliates if the Initial Public Offering shall not occur or if

Carnival elects to effect the Carnival Exchange and to the fullest extent

permitted by law, waives any such claim.


                        ARTICLE 10.

  RIGHT TO PARTICIPATE IN CERTAIN ISSUANCE OF CAPITAL SHARES

     10.1  Right to Participate in New Issuance.  If the Company determines to

issue any Shares or any security convertible into or exercisable or

exchangeable for Shares, to any shareholder of the Company (including a

Shareholder) (other than capital shares to be issued (i) in connection with an

employee stock option plan or other bona fide employment compensation

arrangement that is approved by the Company's Board of Directors, (ii) pursuant

to a stock split or stock dividend, (iii) pursuant to the exercise of any

option, warrant or convertible security theretofore issued, (iv) as

consideration in connection with a bona fide acquisition by the Company or any

of its subsidiaries or (v) pursuant to the Initial Public Offering) (each such

issuance not excluded by the immediately preceding parenthetical being herein

referred to as a "New Issuance"), then the Company shall notify the

Shareholders of the proposed New Issuance.  Such notice shall specify the

number and class of securities to be issued, the rights, terms and privileges

thereof and the estimated price at which such securities will be issued.

     10.2  Exercise of Right.  By written notice to the Company given within 15

Business Days of being notified of such New Issuance, each Shareholder shall be

entitled to purchase that percentage of New Issuance determined by dividing (a)

the total number of Shares owned by such Shareholder by (b) the total number of

all outstanding Shares.  Such right shall be exercisable within 15 Business

Days following the receipt of the notice delivered pursuant to the previous

sentence.  To the extent the Shareholders do not elect to purchase all of the

securities proposed to be offered and sold in the New Issuance, the Company may

issue those securities not so subscribed for to the shareholders participating

in such issuance, provided that such sales are consummated within 120 Business

Days after the Shareholders? rights hereunder have expired or been waived.

     10.3  Closing.  The closing of the New Issuance shall be held at such time

as the Company shall designate in writing to the Shareholders that elect to

purchase securities in the new Issuance pursuant to this Article 10 not fewer

than five Business Days prior to the date of such closing, at the Company's

principal offices, or at another place designated by the Company in writing to

such Shareholders in such notice.



                           ARTICLE 11.

                  SHARES CERTIFICATE LEGEND

     The Company and Shareholders agree that each certificate representing the

Shares now or hereafter held by a Shareholder shall be endorsed with a legend

in substantially the following form:

      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
     SECURITIES LAWS OF ANY STATE.  THE SECURITIES MAY NOT BE OFFERED FOR
     SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
     REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
     LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
     REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

      THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
     DISPOSITION (EACH A "TRANSFER" AND VOTING OF ANY OF THE SECURITIES
     REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE
     SUBSCRIPTION AGREEMENT, DATED AS OF MAY 27, 1998 (THE "SUBSCRIPTION
     AGREEMENT", AMONG SEABOURN CRUISE LINE LIMITED, (THE "COMPANY",
     CARNIVAL CORPORATION AND THE PERSONS NAMED THEREIN, A COPY OF WHICH
     MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE.  THE COMPANY WILL
     NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE  BOOKS OF THE
     COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE
     WITH THE TERMS OF THE SUBSCRIPTION' AGREEMENT."


                        ARTICLE 12.

               AFTER-ACQUIRED SECURITIES

     Except as otherwise provided in Article 14, all of the provisions of this

Agreement shall apply to all of the Shares now owned or that may be issued or

transferred hereafter to a Shareholder in consequence of any additional

issuance, purchase, exchange or reclassification of any of the Shares

(including without limitation, upon the exercise of any option or warrant),

corporate reorganization, or any other form of recapitalization, consolidation,

merger, share split or share dividend, or that are acquired by a Shareholder in

any other manner, and, in the case of any such event, appropriate adjustment

shall be made to any number of Shares hereunder to take account of such event

provided, however, that, with respect to CG, only (i) Shares issued pursuant to

this Agreement and (ii) Shares issued as a result of a recapitalization,

reclassification, combination, stock dividend or otherwise with respect to

Shares issued pursuant to this Agreement shall be subject to the terms of this

Agreement.


                         ARTICLE 13.

               TRANSACTIONS WITH AFFILIATES

     13.1  Limitation on Transactions with Affiliates.  From and after the

Closing, the Company will not sell, lease, transfer or otherwise dispose of any

of its properties or assets to, or purchase any property or assets from, or

enter into or make any contract, agreement, loan, advance or guarantee with, or

for the benefit of, any Affiliate (each of the foregoing, an "Affiliate

Transaction"), unless such Affiliate Transaction is on terms no less favorable

to the Company than those that could be obtained an arm's length basis with a

third party.

     13.2  Exceptions.  The limitation under Section 13.1 does not limit, and

shall not apply to (i) any transaction or series of transactions approved by a

majority of the disinterested members of the Board of Directors; (ii) any

transaction between the Company and a wholly-owned subsidiary; (iii) the

payment of reasonable compensation to directors and officers of the Company;

(iv) reasonable loans made by the Company to its officers and directors as

approved by the Board of Directors; (v) any employment agreement with officers

entered into by the Company in the ordinary course of business of the Company.


                         ARTICLE 14.

                         TERMINATION

     14.1  General.  This Agreement shall become effective upon the execution

hereof and shall terminate upon the earlier of:

          (i)  the consummation by the Company of the Initial Public Offering

or the consummation of the Carnival Exchange; and

          (ii)  such earlier date as the Shareholders shall unanimously agree

in writing to terminate this Agreement.

     14.2  Non-Consummation of Cunard Acquisition.  This Agreement shall

terminate (i) upon the termination of the Sale and Purchase Agreement or

(ii) if acquisition of the business of Cunard is not consummated for any

reason.

     14.3  Return of Shares and Purchase Price.  If this Agreement is

terminated pursuant to Section 14.2 and the Company has issued the Shares to

the Investors under Section 2.1(a) and the Investors have paid to the Company

the purchase price under Section 2.1(b), then the Investors shall surrender to

the Company the certificates representing the Shares and upon the receipt of

such Shares, the Company shall repay to each Investor such amount as such

Investor paid under Section 2.1(b) by wire transfer of immediately available

funds to such account as may be designated by each Investor to the Company.

     14.4  Shareholder No Longer Holds Shares.  Notwithstanding Section 14.1,

this Agreement shall terminate permanently as to any Shareholder at such time

as such Shareholder no longer owns any Shares; provided that any other Person

that holds any Shares previously held by a Shareholder and has agreed to be

bound hereby in accordance with the terms hereof in connection with the

Transfer to such other Person shall continue to be bound hereby as a

Shareholder with respect to such Shares.

     14.5  No Liability.  If this Agreement is terminated as provided in

Section 14.2, no party shall have any liability or further obligation to any

other party under this Agreement.


                         ARTICLE 15.

                      CONFIDENTIALITY

     All information relating to the Company provided to any Investor shall be

kept confidential and shall not be disclosed to any third party except (a) as

has become generally available to the public (other than through disclosure by

such Investor in contravention of this Agreement), (b) to such Investor's

directors, officers, trustees, partners, employees, agents and professional

consultants on a need-to-know basis, (c) to any other Shareholder, (d) to any

Person to which such Investor offers to sell or transfer any Shares, provided

that the prospective transferee shall agree to be bound by the provisions of

this Article 15, or (e) in order to comply with any law, rule, regulation or

order applicable to such Investor.





                         ARTICLE 16.

                        MISCELLANEOUS

     16.1  Survival of Representations, Warranties, Other Agreements and

Undertakings.  All of the representations and warranties, as well as those

other agreements and undertakings made herein to be performed after the Closing

Date, shall survive the execution and delivery of this Agreement, any

investigation by or on behalf of the Investors or acceptance of the Shares.

     16.2  Notices.  All notices, demands and other communications provided for

or permitted hereunder shall be made in writing and shall be by registered or

certified first-class mail, return receipt requested, telecopier, courier

service, overnight mail or personal delivery:

          (a)   if to the Company:

                3655 N.W. 87th Avenue
                Miami, Florida  33178
                Telecopier No.:  (305) 471-4700
                Attention:  General Counsel

                with a copy to:

                Thommessen Krefting Greve Lund
                Haakon VII's gate 10, P.O. Box 1484
                0116 Oslo, Norway
                Attention: Jorgen Lund
                Telecopier No.: (47) 23 11 10 10

          (b)   if to Carnival:

                Carnival Corporation
                3655 N.W. 87th Avenue
                Miami, Florida  33178
                Telecopier No.:  (305) 471-4700
                Attention:  General Counsel

                with a copy to:

                Paul, Weiss, Rifkind, Wharton & Garrison
                1285 Avenue of the Americas
                New York, New York  10019
                Telecopy:  (212) 757-3990
                Attention:  James M. Dubin, Esq.

          (c)   if to the Investors:

                Christiania Markets
                Postboks 1166 Sentrum
                0107 Oslo, Norway
                Telecopy: (47) 22 69 08 88

                with a copy to:

                Haight, Gardner, Holland & Knight
                195 Broadway
                New York, New York 10007
                Telcopy: (212) 385-9010
                Attention: Mark A. Saunders, Esq.

     All such notices and communications shall be deemed to have been duly

given when delivered by hand, if personally delivered; when delivered by

courier, if delivered by commercial courier service; five (5) Business Days

after being deposited in the mail, postage prepaid, if mailed by airmail; and

when receipt is mechanically acknowledged, if telecopied.

     16.3  Fees and Expenses.  The Company agrees (i) to pay to Christiania a

fee equal to 2% of the purchase price paid by the Investors, under this

Agreement (up to a maximum amount of US $2,000,000) with US $1,600,000 to be

paid on the Closing Date and the remainder to be paid on the date on which the

additional Shares are issued under Section 2.3 and (ii) to reimburse

Christiania for the reasonable third-party fees and expenses incurred by

Christiania in connection with the negotiation, execution and delivery of the

Sale and Purchase Agreement and this Agreement (up to a maximum amount of US

$350,000) on the Closing Date.

     16.4  Carnival Expenses.  The Company agrees to reimburse Carnival for all

out-of-pocket expenses incurred by Carnival in connection with the transactions

contemplated by the Sale and Purchase Agreement and this Agreement and the

transactions contemplated thereby and hereby (including, without limitation,

travel, expenses and legal and accounting fees and expenses).

     16.5  Third Party Beneficiaries.  Nothing herein expressed or implied is

intended to or shall be construed to confer upon or give any person or entity,

other than the parties hereto, and their respective successors, permitted

assigns and affiliates, any rights or remedies under or by reason of this

Agreement.

     16.6  Successors and Assigns.  This Agreement shall inure to the benefit

of and be binding upon the successors and permitted assigns of the parties

hereto.  The Company may not assign any of its rights or obligations under this

Agreement, except to a successor-in-interest to the Company, without the

written consent of the Majority Investors and no Shareholder may assign any of

its rights or obligations without the consent of the Company (except for an

assignment pursuant to Section 6.3).

     16.7  Amendment and Waiver.

          (a)  Any amendment, supplement or modification of or to any provision

of this Agreement, any waiver of any provision of this Agreement, and any

consent to any departure by the parties from the terms of any provision of this

Agreement, shall be effective (i) only if it is made or given in writing and

signed by the Company, Carnival and the Majority Investors, and (ii) only in

the specific instance and for the specific purpose for which made or given.

          (b)  No failure or delay on the part of the parties in exercising any

right, power or remedy hereunder shall operate as a waiver thereof, nor shall

any single or partial exercise of any such right, power or remedy preclude any

other or further exercise thereof or the exercise of any other right, power or

remedy.  The remedies provided for herein are cumulative and are not exclusive

of any remedies that may be available to the parties at law, in equity or

otherwise.

     16.8  Counterparts.  This Agreement may be executed in any number of

counterparts and by the parties hereto in separate counterparts, each of which

when so executed shall be deemed to be an original and all of which taken

together shall constitute one and the same agreement.

     16.9  Headings.  The headings in this Agreement are for convenience of

reference only and shall not limit or otherwise affect the meaning hereof.

     16.10  Governing Law.  This Agreement shall be governed by and construed

in accordance with the laws of the State of New York applicable to agreements

made and to be performed entirely within such State.

     16.11  Arbitration.  (i)  After the Closing, any dispute, controversy, or

claim arising out of or relating to any provision of this Agreement or the

interpretation, enforceability, performance, breach, termination, or validity

hereof, including, without limitation, this Section 16.11 shall be solely and

finally settled by arbitration in New York City, the State of New York in

accordance with the Commercial Arbitration Rules and Supplementary Procedures

for International Commercial Arbitration of the American Arbitration

Association as modified by the provisions of this Article.  An award rendered

in connection with an arbitration pursuant to this Section 16.11 shall be final

and binding upon the parties, and any judgment upon such an award may be

entered and enforced in any court of competent jurisdiction.

          (ii)  Proceedings in the arbitration shall be conducted in the

English language, and all documents not in English submitted by either party

must be accompanied by a translation to English.

     16.12  Severability.  If any one or more of the provisions contained

herein, or the application thereof in any circumstance, is held invalid,

illegal or unenforceable in any respect for any reason, the validity, legality

and enforceability of any such provision in every other respect and of the

remaining provisions hereof shall not be in any way impaired, unless the

provisions held invalid, illegal or unenforceable shall substantially impair

the benefits of the remaining provisions hereof.

     16.13  Entire Agreement.  This Agreement, together with the schedules

hereto is intended by the parties as a final expression of their agreement and

intended to be a complete and exclusive statement of the agreement and

understanding of the parties hereto in respect of the subject matter contained

herein and therein.

     16.14  Further Assurances.  Each of the parties shall execute such

documents and perform such further acts (including, without limitation,

obtaining any consents, exemptions, authorizations or other actions by, or

giving any notices to, or making any filings with, any governmental authority

or any other Person) as may be reasonably required or desirable to carry out or

to perform the provisions of this Agreement.



     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement

as of the date first above written.


                              SEABOURN CRUISE LINE LIMITED



                              By:    /s/ Jorgen Lund
                                 Name:   Jorgen Lund
                                 Title:  Director


                              CARNIVAL CORPORATION



                              By:    /s/ Arnaldo Perez
                                 Name:   Arnaldo Perez
                                 Title:  Vice President


                              STOREBRAND



                              By:   /s/ Truls Evensen
                                 Name:   Truls Evensen
                                 Title:  Portfolio Manager


                              VITAL



                              By: :   /s/ Peter Hermanrud
                                 Name:   Peter Hermanrud
                                 Title:  Investment Director


                              VESTA FORSIKRING



                              By:    /s/ Robert Lingaas
                                 Name:   Robert Lingaas
                                 Title:  Portfolio Manager


                              AVANSE



                              By:   /s/ Bjorn W. Johansen
                                 Name:   Bjorn W. Johansen
                                 Title:  Inv. Director


                              INDUSTRIFINANS



                              By:   /s/Bengt Losnedal
                                 Name:   Bengt Losnedal
                                 Title:  Portfolio Manager


                              POSTBANKEN VERDIPAPIRFOND



                              By:   /s/ Dagfin Hopsdal
                                 Name:   Dagfin Hopsdal
                                 Title:  Inv. Director


                              STATOIL



                              By:    /s/ Terje Moi
                                 Name:   Terje Moi
                                 Title:  Senior Manager


                              K-HOLDING



                              By:   /s/ Birger Harneshaug
                                 Name:   Birger Harneshaug
                                 Title:  Adm. Director


                               TOLUMA (WILH.WILHELMSEN)



                               By:   /s/ Knut Wang
                                  Name:   Knut Wang
                                  Title:  Managing Director


                               K-FONDENE



                               By:  /s/ Thomas Voght
                                  Name:   Thomas Voght
                                  Title:


                               VESTA FORVALTNING



                               By:   /s/ Hogne Tyssoy
                                  Name:   Hogne Tyssoy
                                  Title:  Investment Director


                               GJENSIDIGE FORSLKRING


                               By:   /s/ Bard Johannessen
                                  Name:   Bard Johannessen
                                  Title:  Portfolio Manager


                               HAFSLUND INVEST



                               By:   /s/ Steven Kunz
                                  Name:   Steven Kunz
                                  Title:


                               CG CRUISE INVEST AS



                              By:    /s/ Jorgen Lund
                                 Name:   Jorgen Lund
                                 Title:  Attorney-in-fact


                              CHRISTIANIA BANK OG KREDITKASSE ASA



                              By:   /s/ Tom Knoff
                                 Name:   Tom Knoff
                                 Title:



Christiania irrevocably and unconditionally guarantees the due and punctual
payment of the purchase price by each Investor under Section 2.1(b) and any
Investor Purchase Price Adjustment owed by any Investor under Section 2.3.


                              CHRISTIANIA MARKETS



                              By:   /s/ Tom Knoff
                                 Name:   Tom Knoff
                                 Title:


Schedule 2.1 Subscription for Shares Initial Subscription Price To Be Shares Assumed Paid At To Be Investor Investment Closing Issued at Share Percentage (US$) Closing Adjustment ( % ) Storebrand Storebrand Liv 12,912,241 1,032,979 258,245 11.31 Helikopeterservice PK fund 53,790 4,303 1,076 0.05 Wilh.Wilhelmsen PK fund 63,751 5,100 1,275 0.06 Bergens Tidende PK fund 11,289 903 226 0.01 Bergesen d.y. PK fund 40,110 3,209 802 0.04 IBM konsern PK fund 358,601 28,688 7,172 0.31 Kraft Freia PK fund 46,485 3,719 930 0.04 Kvinherad Kom Kraft fund 80,619 6,450 1,612 0.07 Sparebankenes Sikrings fund 73,978 5,918 1,480 0.06 Forretningsbankenes Sikrings 55,118 4,409 1,102 0.05 fund Vidal Vital Forsikring 9,130,656 730,452 182,613 8.00 Vesta Forsikring Vesta Forsikring 3,968,858 317,509 79,377 3.48 Vesta Liv 2,432,526 194,602 48,651 2.13 Avanse Avanse Vekst 2,282,664 182,613 45,653 2.00 Avanse Shipping 913,066 73,045 18,261 0.80 Avanse Kapital 5,934,926 474,794 118,699 5.20 Industrifinans Industrifinans Aktiv 3,245,353 259,628 64,907 2.84 Industrifinans Aksje Norge 2,342,212 187,377 46,844 2.05 Industrifinans Stor Kunde 1,310,051 104,804 26,201 1.15 Postbanken Verdipapirfond Postbanken Aksjespar 5,441,176 435,294 108,824 4.77 Postbanken Aksjevekst 960,208 76,817 19,204 0.84 Statoil Statoil 6,401,384 512,111 128,028 5.61 K-Holding K-Holding 2,580,403 206,432 51,608 2.26 Toluma (Wilh. Wilhelmsen) Skips AS Tudor 2,647,890 211,831 52,958 2.32 AS Wingana 913,066 73,045 18,261 0.80 Katten Invest DA 91,307 7,305 1,826 0.08 K-fondene K-Avkastning 5,972,640 477,811 119,453 5.23 K-Kapital 2,328,317 186,265 46,566 2.04 K-Vekst 1,822,161 145,773 36,443 1.60 Vesta forvaltning Vesta AMS 2,257,852 180,628 45,157 1.98 Vesta Horisont 922,990 73,839 18,460 0.81 Vesta 2010 248,116 19,849 4,962 0.22 Vesta 2020 129,020 10,322 2,580 0.11 Vesta 2030 94,284 7,543 1,886 0.08 Gjensidige Forslkring Gjensidige Skade 913,066 73,045 18,261 0.80 Gjensidige Liv 3,652,262 292,181 73,045 3.20 Hafslund Invest 2,719,348 217,548 54,387 2.38 CG Cruise Invest AS GC Cruise Invest AS 26,796,490 2,143,719 535,930 23.48 Christiania Bank ASA Christiania Bank ASA 1,984,925 158,794 39,699 1.74 TOTAL 114,133,199 9,130,656 2,282,664 100.0

                                                        EXHIBIT 10.4

















                              RECAPITALIZATION AGREEMENT
                                        Among


                               SEABOURN CRUISE LINE LIMITED



                                   CARNIVAL CORPORATION




                                          and



                                      CG HOLDING AS



                                     Dated:  May 27, 1998







                                      TABLE OF CONTENTS



Page

ARTICLE 1  DEFINITIONS                                                 2
     1.1  Definitions.                                                2

ARTICLE 2  TERMS OF RECAPITALIZATION AND PURCHASE OF SHARES            6
     2.1  Articles Amendment.                                         6
     2.2  Recapitalization                                            6
     2.3  Purchase and Sale of the New Shares by Carnival             7
     2.4  The Closing                                                 8
     2.5  Recapitalization Post-Completion Adjustment                 8
     2.6  Cunard Post-Closing Adjustment                             11

ARTICLE 3  REPRESENTATIONS AND WARRANTIES OF THE COMPANY              12
     3.1  Due Incorporation                                          12
     3.2  Qualification                                              12
     3.3  Capital Stock                                              12
     3.4  Authorization; No Contravention                            12
     3.5  Binding Effect                                             13

ARTICLE 4  REPRESENTATIONS AND WARRANTIES OF THE EXISTING SHAREHOLDERS     13
     4.1  Title to Shares.                                           13
     4.2  Authorization; No Contravention                            14
     4.3  Binding Effect                                             14

ARTICLE 5  CONDITIONS TO THE OBLIGATION OF THECOMPANY AND THE
            EXISTING SHAREHOLDERS TO CLOSE                            14

ARTICLE 6  LIMITATIONS ON TRANSFER                                    15
     6.1  General Restrictions on Transfer                           15
     6.2  Void Transfers                                             15
     6.3  Permitted Transfers                                        15

ARTICLE 7  RIGHT OF FIRST OFFER, TAG-ALONG AND BRING-ALONG RIGHTS     17
     7.1  Right of First Offer                                       17
     7.2  Tag-Along Rights                                           18
     7.3  Bring-Along Rights                                         20

ARTICLE 8  CHANGE OF CONTROL BUYOUT                                   22

ARTICLE 9  CORPORATE GOVERNANCE AND CERTAIN OTHER
          ACTIONS                                                   24
     9.1  General                                                    24
     9.2  Election of Directors                                      24
     9.3  Removal and Replacement.                                   24
     9.4  Company Name Change                                        25

ARTICLE 10  INITIAL PUBLIC OFFERING                                   25
     10.1  Initial Public Offering                                   25
     10.2  Initial Public Offering Procedure                         25
     10.3  Customary Agreements                                      26
     10.4  Carnival Exchange                                         26
     10.5  Put Option                                                26
     10.6  No Fractional Shares                                      27
     10.7  Closing of the Carnival Exchange and the Put Option       27
     10.8  Exchange Ratio Adjustment                                 28
     10.9  No Claims                                                 29

ARTICLE 11  RIGHT TO PARTICIPATE IN CERTAIN ISSUANCE OF CAPITAL SHARES     30
     11.1  Right to Participate in New Issuance                      30
     11.2  Exercise of Right                                         30
     11.3  Closing                                                   31

ARTICLE 12  SHARES CERTIFICATE LEGEND                                 31

ARTICLE 13  AFTER-ACQUIRED SECURITIES                                 32

ARTICLE 14  TRANSACTIONS WITH AFFILIATES                              33
     14.1  Limitation on Transactions with Affiliates                33
     14.2  Exceptions                                                33

ARTICLE 15  TERMINATION                                               33
     15.1  General.                                                  33
     15.2  Non-Consummation of Cunard Acquisition                    34
     15.3  No Liability                                              34
     15.4  No Liability.                                             34

ARTICLE 16  TERMINATION OF JOINT VENTURE AGREEMENT                    34

ARTICLE 17  CONFIDENTIALITY                                           35

ARTICLE 18  MISCELLANEOUS                                             35
     18.1  Survival of Representations, Warranties,
            Other Agreements and Undertakings                        35
     18.2  Notices                                                   36
     18.3  Expenses                                                  37
     18.4  Third Party Beneficiaries                                 37
     18.5  Successors and Assigns                                    38
     18.6  Amendment and Waiver                                      38
     18.7  Counterparts                                              38
     18.8  Headings                                                  39
     18.9  Governing Law                                             39
     18.10 Arbitration                                               39
     18.11 Severability                                              39
     18.12 Entire Agreement                                          40
     18.13 Further Assurances                                        40


                     RECAPITALIZATION AGREEMENT


          This Recapitalization Agreement is made and entered into as of this
27th day of May, 1998 among Seabourn Cruise Line Limited, a Bahamas
International Business Corporation (the "Company"), Carnival Corporation, a
Panamanian Corporation ("Carnival") and CG Holding AS ("CG" and together with
Carnival, the "Existing Shareholders").
          WHEREAS, each of the Existing Shareholders is the legal and
beneficial owner of 2,400 of issued and outstanding shares of the Company (the
"Existing Shares").
          WHEREAS, pursuant to an Agreement for the Sale and Purchase of the
Business of Cunard, dated April 3, 1998, among Cunard Line Limited and others
as sellers and Carnival as buyer and Kvaerner ASA as guarantor (the "Sale and
Purchase Agreement"), Carnival agreed to acquire the business carried on by
affiliates of Kvaerner ASA under the name Cunard.
          WHEREAS, Carnival will assign its rights and duties under the Sale
and Purchase Agreement to a newly-formed subsidiary ("Newco") of the Company.
          WHEREAS, the Company intends to change its name to Cunard Line
Limited and contribute its assets and business to the combined entity.
           WHEREAS, the parties hereto currently intend to consider an initial
public offering of equity securities of the Company prior to November 30, 1999
and, if such an initial public offering is made, the parties will consider
listing the equity securities of the Company on the Oslo Stock Exchange, either
as primary or secondary listing (it being understood that any such decisions
concerning an initial public offering shall be made by Carnival in its sole
discretion).
          WHEREAS, prior to the acquisition of the business of Cunard Line
Limited (the "Cunard Acquisition"), the Company and the Existing Shareholders
desire to effect a recapitalization of the Company pursuant to which the
Existing Shareholders will receive ordinary shares of the Company (the "New
Shares");
          WHEREAS, at Closing (as defined herein), as part of the
recapitalization, the parties will be issued an aggregate of 11,760,000 New
Shares of Seabourn based upon an assumed purchase price of Seabourn of
US$147,000,000 and, after Closing, the parties will be issued additional New
Shares reflecting an adjustment to the assumed purchase price.
          WHEREAS, the Company wishes to issue and sell to Carnival, and
Carnival wishes to purchase from the Company, additional New Shares to finance
the Cunard Acquisition and repay the Seabourn Subordinated Loan (as defined
herein).
          NOW, THEREFORE, the parties hereby agree as follows:

                                ARTICLE 1
                               DEFINITIONS
          1.1  Definitions  As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
          "Actual Seabourn Share Issuance Amount" means with respect to each
Existing Shareholder, an amount equal to (i) the product of 0.5 and the
Adjusted Seabourn Price divided by (ii) US$10.00.
           "Adjusted Cunard Price" means the purchase price under the Sale and
Purchase Agreement as adjusted under clause 4.2 thereof plus the actual amount
of the fees and expenses of Christiania reimbursed under Section 16.3 of the
Subscription Agreement.
          "Adjusted Seabourn Price" means (i) US$310 million minus (ii) the
principal amount of the Seabourn Subordinated Loan (immediately prior to the
Closing) the amount of any long-term debt of the Company (at the Closing) and
the Company Debits (calculated in accordance with Section 2.5) plus (iii) the
Company Credits (calculated in accordance with Section 2.5).
          "Affiliate means, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person.  For
purposes of this definition, "control", when used with respect to any Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
          "Assumed Carnival Share Issuance Amount" means the assumed post-
closing share adjustment amount of Carnival set forth on Schedule A.
          "Assumed Cunard Price" means US$380,444,000.
          "Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
          "Business Day" means any day other than a Saturday, Sunday or public
holiday in England and Wales, the United States, Bermuda or the Bahamas.
           "Carnival Additional Share Adjustment Amount" means the Carnival
Purchase Price Adjustment divided by US$10.00.
          "Carnival Share Issuance Amount" the sum of (i) either (a) the
Assumed Carnival Share Issuance Amount plus the Carnival Additional Share
Adjustment Amount (if the Adjusted Cunard Price exceeds the Assumed Cunard
Price) or (b) the Assumed Carnival Share Issuance Amount minus the Carnival
Additional Share Adjustment Amount otherwise.
          "Carnival Purchase Price Adjustment" means the product of (i) 0.7 and
(ii) either (a) the Adjusted Cunard Price minus the Assumed Cunard Price (if
the Adjusted Cunard Price exceeds the Assumed Cunard Price) or (b) the Assumed
Cunard Price minus the Adjusted Cunard Price otherwise.
          "Closing" has the meaning set forth in Section 2.4 of this Agreement.
          "Closing Date" means the second Business Day (as defined in the Sale
and Purchase Agreement) after all of the conditions of Completion shall have
been fulfilled or waived by the parties to the Sale and Purchase Agreement.
          "Completion" has the meaning set forth in the Sale and Purchase
Agreement.
          "Control" means direct or indirect ownership of stock or shares
possessing more than 50 percent of the total combined voting power of all
classes of stock or shares entitled to vote.
          "Debt Repayment Amount" means (i) the outstanding principal amount
under the Seabourn Subordinated Loan at Closing divided by (ii) 10.
           "Existing Shareholders" has the meaning set forth in the recitals to
this Agreement.
          "Initial Public Offering" means an initial public offering of equity
securities of the Company in the United States, the United Kingdom or Norway
and a related listing of such shares on a national securities exchange or
trading market in the United States, the London Stock Exchange or the Oslo
Stock Exchange, respectively.
          "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (excluding those arising by operation of law) or
other security interest of any kind or nature whatsoever.
          "Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
governmental authority or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.
          "Seabourn Additional Share Issuance Amount" means, with respect to
each Existing Shareholder, the Actual Seabourn Share Issuance Amount minus the
Seabourn Base Shares.
          "Seabourn Base Shares" means, with respect to each Existing
Shareholder, the number of New Shares representing base shares as set forth
opposite such Existing Shareholder's name on Schedule A.
          "Seabourn Subordinated Loan" means the Secured Term Loan Agreement
dated February 18, 1992, by and between Seabourn, as Borrower and Carnival as
Lender, as amended by Addendum No. 1 dated February 15, 1996.
           "Subscription Agreement" means the Subscription Agreement, dated as
of the date hereof, between the Company, Carnival and the persons named
therein.
          "US$" means United States dollars, the lawful currency of the United
States of America.

                              ARTICLE 2
           TERMS OF RECAPITALIZATION AND PURCHASE OF SHARES
          2.1  Articles Amendment  Prior to the Closing, the Company and the
Existing Shareholders shall take all action necessary to adopt, file and make
effective the amendments to the Company's Memorandum and Articles of
Association attached hereto as Exhibits A and B respectively.
          2.2  Recapitalization.
               (a)  Upon the terms and subject to the conditions set forth
herein, the Company shall effect a recapitalization by way of an increase of
the share capital by a transfer to the share capital account from the paid-in
capital account to increase the par value of the Existing Shares, and a
subsequent stock split whereby the Existing Shares shall be converted into a
number of New Shares equal to the number determined under Sections 2.2(b) and
2.5.
                (b)  At the Closing, each of the Existing Shareholders, upon
presentation and surrender to the Company of the certificate representing the
Existing Shares held by such Existing Shareholder, shall be entitled to receive
a certificate representing the Seabourn Base Shares.  After the Closing, the
Company shall issue additional New Shares to the Existing Shareholders subject
to the terms of Section 2.5.
               (c)  Upon the terms and subject to the conditions herein, the
Company agrees to issue to Carnival, and Carnival agrees to subscribe for and
accept from the Company a number of New Shares equal to the Debt Repayment
Amount in repayment for the outstanding principal amount under the Seabourn
Subordinated Loan.  At the Closing, the Company shall pay to Carnival all
accrued interest and other fees and expenses on the Seabourn Subordinated Loan
through and including the Closing Date.
               (d)  At the Closing, upon delivery of the New Shares specified
in Section 2.2(c), all amounts outstanding under the Seabourn Subordinated Loan
shall be deemed repaid in accordance with terms of the agreements governing the
Seabourn Subordinated Loan.
          2.3  Purchase and Sale of the New Shares by Carnival.  (a)  At the
Closing, upon the terms and subject to the conditions set forth herein, the
Company agrees to issue to Carnival, and Carnival agrees to subscribe for and
accept from the Company, an aggregate of 26,304,864 New Shares.  After the
Closing, the Company shall issue additional New Shares to Carnival subject to
the terms of Section 2.6.
               (b)  The purchase price payable by Carnival for the New Shares
under this Section 2.3 shall be US$266,310,800, subject to adjustment in
accordance with Section 2.6.  At the Closing, Carnival shall pay to the Company
US$266,310,800, which shall be held on account for the purchase price payable
hereunder.
               2.4  The Closing.  (a)  The closing of the transactions
contemplated hereby (other than the additional New Shares to be issued pursuant
to Sections 2.5 and 2.6) (the "Closing") shall take place at the offices of
Paul, Weiss, Rifkind, Wharton and Garrison in New York, at 10 a.m., local time,
on the Closing Date or at such other time as the parties may mutually agree.
               (b)  At the Closing, (i) the Company shall deliver to each
Existing Shareholder certificates evidencing the number of Seabourn Base Shares
to which such Existing Shareholder is entitled registered in such Existing
Shareholder's name, upon presentation and surrender to the Company of the
certificate representing such Existing Shares held by such Existing
Shareholder, (ii) the Company shall deliver to Carnival certificates
representing a number of New Shares equal to the Debt Repayment Amount
registered in Carnival's name, in full satisfaction of all amounts owing under
the Seabourn Subordinated Loan and (iii) the Company shall deliver to Carnival
certificates evidencing 26,304,864 New Shares registered in Carnival's name,
upon payment of the funds payable by Carnival under Section 2.3(b).  All
amounts paid by Carnival hereunder shall be paid by wire transfer of
immediately available funds to such account as may be designated by the
Company.  Upon payment of all amounts required under Sections 2.3 and 2.6 and
the repayment of the Seabourn Subordinated Loan, all New Shares issued
hereunder shall be validly issued, fully paid and non-assessable and free and
clear from all Liens.
               2.5  Recapitalization Post-Completion Adjustment.  (a) Within 45
days of the Closing, or as otherwise agreed to by the parties to the Sale and
Purchase Agreement, the Company shall deliver to the Existing Shareholders (and
to the parties to the Subscription Agreement) a statement (the "Initial
Financial Statement") prepared by Price Waterhouse LLP ("Price Waterhouse"),
the Company's independent accountants, setting forth, as of the Closing Date
the Adjusted Seabourn Price and the Company's debits (the "Company Debits") and
credits (the "Company Credits") as described on Schedule 2.5 and itemized to
reflect each of the categories set forth on Schedule 2.5 (it being understood
that Schedule 2.5 sets forth a calculation of such amounts as of February 28,
1998 for informational purposes only).  The Initial Financial Statement should
be prepared on a basis consistent with generally accepted accounting principles
in the United States and the Company's audited financial statements.
               (b)  The calculation of the Adjusted Seabourn Price, Company
Debits and Company Credits in the Initial Financial Statement shall become
final and binding on the Company and the Existing Shareholders for all purposes
of this Agreement unless either of the Existing Shareholders shall give written
notice of its disagreement (a "Notice of Disagreement") to the Company within
20 Business Days following receipt of its Initial Financial Statement. Any such
Notice of Disagreement shall specify in all reasonable detail the nature of any
disagreements so asserted.  During a period of 10 Business Days following the
aforesaid 20 Business Day period, the Company and the Existing Shareholders
shall attempt to resolve in writing any differences they may have with respect
to any matter specified in any Notice of Disagreement.  If at the end of such
10 Business Day period, the Company and the Existing Shareholders are unable to
reach agreement with respect to all such matters, then all such matters
specified in any Notice of Disagreement as to which such written agreement has
not been reached (the "Disputed Matters")  shall be submitted to and reviewed
by an expert (the "Expert"), which shall be an independent public accounting
firm of outstanding international reputation (other than Price Waterhouse)
selected by the Company and the Existing Shareholders.  If within five Business
Days following the expiration of such 10 Business Day period, the Company and
the Existing Shareholders have failed to agree in writing upon the selection of
the Expert or any Expert selected by them has not agreed to perform the
services called for thereunder, the Company shall select the Expert by lot from
among the following independent accounting firms (Arthur Andersen LLP, Coopers
& Lybrand L.L.P. or KPMG Peat Marwick LLP).  Within 10 Business Days, the
Expert shall calculate each Disputed Matter in the Initial Financial Statement
and deliver a report to the Company and the Existing Shareholders.  Each
Existing Shareholder shall pay one-half of the Expert's reasonable costs.
          (c)  The Company shall provide to its accountants and the Expert such
access and assistance as they may reasonably require to allow them to perform
their duties under this Section 2.5 (including, without limitation, reasonable
access to all working papers, records, accounts, invoices and other documents
used by Price Waterhouse in connection with the preparation of the Initial
Financial Statement and reasonable access to such personnel of Price Waterhouse
as were involved in the preparation of the Initial Financial Statement).
           (d)  If a Notice of Disagreement is delivered in a timely manner,
the calculation of the Adjusted Seabourn Price, Company Debits and Company
Credits, as modified to reflect the resolution of Disputed Matters in
accordance with this Section 2.5, shall become final and binding on the Company
and the Existing Shareholders for all purposes of this agreement upon the
earlier of (i) the date the Company and the Existing Shareholders resolve in
writing all Disputed Matters and (ii) the date the Expert delivers its report
that resolves all Disputed Matters.
          (e)  Within five Business Days after the calculation of Company
Credits and Company Debits is determined to be final and binding under this
Section 2.5, the Company shall issue to each Existing Shareholder a number of
New Shares equal to the Seabourn Additional Share Issuance Amount.
          2.6  Cunard Post-Closing Adjustment.  Upon completion of the
adjustments of the purchase price under clause 4.2 of the Sale and Purchase
Agreement, the Company shall notify Carnival in writing of the Carnival
Purchase Price Adjustment and whether the Company or Carnival must pay such
adjustment.  Within five Business Days thereafter, (i) either (a) if the
Adjusted Cunard Price exceeds the Assumed Cunard Price, Carnival shall pay the
Carnival Purchase Price Adjustment by wire transfer of immediately available
funds to the account designated under Section 2.2 or (b) otherwise the Company
shall pay Carnival the Carnival Purchase Price Adjustment by wire transfer of
immediately available funds to an account of Carnival as designated in writing
by Carnival to the Company and (ii) subject to the receipt of any amounts due
under Section 2.6(i)(a), the Company shall issue to Carnival a number of
additional New Shares equal to the Carnival Share Issuance Amount.

                              ARTICLE 3
              REPRESENTATIONS AND WARRANTIES OF THE COMPANY
          The Company represents and warrants to the Existing Shareholders on
the date hereof and on the Closing Date as follows:
          3.1  Due Incorporation.  The Company is an International Business
Corporation duly incorporated and validly existing under the laws of the
Bahamas and has all requisite corporate power and lawful authority to own,
lease and operate its properties and to carry on its business as now being
conducted.
          3.2  Qualification.  The Company is duly qualified or otherwise
authorized to transact business in each jurisdiction in which such
qualification or authorization is required by applicable law or in which the
failure so to qualify or be authorized would have a material adverse effect on
the Company.
          3.3  Capital Stock.  (a)  As of the date hereof, the authorized share
capital of the Company is US$5,000, made up of 5,000 shares.  As of the date
hereof, 4,800 shares are issued and outstanding.  Upon the Closing, the
authorized share capital of the Company will be US$15 million, made up of 150
million shares.  Except for this Agreement and the Subscription Agreement, the
Company has no obligations to issue any of its New Shares.
               (b)  Upon the payment by Carnival of the purchase price provided
under Section 2, the New Shares issuable hereunder will be duly authorized,
validly issued, fully paid and non-assessable and free and clear of all Liens.
          3.4  Authorization; No Contravention.  The execution, delivery and
performance by the Company of this Agreement and the transactions contemplated
hereby, including, without limitation, the sale, issuance and delivery of the
New Shares (i) are within the Company's corporate power and have been duly
authorized by all necessary corporate action of the Company; (ii) do not
contravene the terms of the Memorandum and Articles of Association, or any
amendment of either thereof, or any other organizational or governing documents
of the Company; and (iii) do not violate, conflict with or result in any breach
or contravention of, or the creation of any Lien under any material agreement
of the Company.
          3.5  Binding Effect.  This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to
enforceability.

                              ARTICLE 4
                     REPRESENTATIONS AND WARRANTIES
                      OF THE EXISTING SHAREHOLDERS
          Each of the Existing Shareholders represents and warrants as
applicable (severally as to itself only and not jointly) to the Company on the
date hereof and on the Closing Date that:
          4.1  Title to Shares  Such Existing Shareholder has good and
marketable title to the Existing Shares which are to be transferred to the
Company by such Existing Shareholder pursuant hereto, free and clear of any and
all Liens.
           4.2  Authorization; No Contravention.  The execution, delivery and
performance by such Existing Shareholder of this Agreement and the transactions
contemplated hereby, including, without limitation, the payment of the purchase
price (i) are within such Existing Shareholder's corporate or other power and
have been duly authorized by all necessary action of such Existing Shareholder;
(ii) do not contravene the terms of the certificate of incorporation and by-
laws (or comparable instruments), or any amendment of either thereof, or any
organizational or governing documents of such Existing Shareholder, as
applicable, and (iii) do not violate, conflict with or result in any breach or
contravention of, or the creation of any Lien under any material agreement of
such Existing Shareholder.
          4.3  Binding Effect.  This Agreement has been duly authorized,
executed and delivered by such Existing Shareholder and constitutes a legal,
valid and binding obligation of such Existing Shareholder enforceable against
such Existing Shareholder in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability.


                             ARTICLE 5
                  CONDITIONS TO THE OBLIGATION OF THE
             COMPANY AND THE EXISTING SHAREHOLDERS TO CLOSE
          The obligations of the Company to issue New Shares on the Closing
Date and the Existing Shareholders to surrender certificates under
Section 2.2(b) and the obligation of Carnival to pay the amounts under
Section 2.3(b) and to deem the Seabourn Subordinated Loan repaid, shall be
conditioned upon the waiver or satisfaction of all conditions set forth in
clause 6 of the Sale and Purchase Agreement.

                            ARTICLE 6
                      LIMITATIONS ON TRANSFER
          6.1  General Restrictions on Transfer.  Each Existing Shareholder
agrees that such Existing Shareholder shall not, either directly or indirectly,
offer, sell, transfer, assign, mortgage, hypothecate, pledge, create a security
interest in or Lien upon, encumber, donate, contribute, place in trust, or
otherwise voluntarily or involuntarily dispose of (any of the foregoing
actions, to "Transfer" and, any offer, sale, transfer, assignment, mortgage,
hypothecation, pledge, security interest or Lien, encumbrance, donation,
contribution, placing in trust or other disposition, a "Transfer") any New
Shares, or any interest therein, except in a transaction that is specifically
permitted by this Agreement.
          6.2  Void Transfers.  Any attempt to Transfer any New Shares, or any
interest therein, which is not in compliance with this Agreement shall be null
and void ab initio, and the Company shall not give any effect in the Company's
stock records to such attempted Transfer.
          6.3  Permitted Transfers.  Notwithstanding Sections 6.1 and 6.2,
Transfers (including, without limitation, pledges of New Shares as collateral
for loans) may be made pursuant to this Agreement if:
                     (i)  such Transfer complies in all respects with the appli
     cable provisions of this Agreement including, without limitation,
     Articles 7 and/or 8 and applicable federal and state securities laws;
                    (ii)  the transferee agrees in writing with the Company and
     the other Existing Shareholders to be bound by the terms and conditions of
     this Agreement with respect to the New Shares transferred to such
     transferee to the same extent as the Existing Shareholder who originally
     held such New Shares is or was bound hereby (whereupon such transferee
     shall be entitled to the same rights as such Existing Shareholder who
     originally held such New Shares had with respect to such New Shares and
     shall be deemed to be a Existing Shareholder for all purposes hereunder
     with respect to such New Shares);
                    (iii)  if requested by the Company, in its sole discretion,
     an opinion of counsel to such transferring Existing Shareholder shall be
     supplied to the Company, at such transferring Existing Shareholder's
     expense, to the effect that such Transfer complies with applicable United
     States federal and state securities laws; and
                    (iv)  except for the parties to this Agreement, such
transferee is not (i) a Person engaged, directly or indirectly, in the cruise
line business, (ii) an owner, partner or shareholder holding more than 10% of
the equity interest in such a Person or (iii) an Affiliate of a Person
described in clauses (i) and (ii).

                            ARTICLE 7
       RIGHT OF FIRST OFFER, TAG-ALONG AND BRING-ALONG RIGHTS
          7.1  Right of First Offer.  (a)  If CG shall desire to sell all or
any portion of its New Shares to any Person other than Carnival, CG shall offer
such New Shares first to Carnival by sending written notice (the "Offering
Notice" to Carnival which shall state (a) the number of New Shares proposed to
be transferred (the "Offered Shares") and (b) the proposed purchase price per
Offered Shares which the Selling Stockholder is willing to accept (the "Offer
Price").  Upon delivery of the Offering Notice, such offer shall be irrevocable
unless and until the rights of first offer provided for herein shall have been
waived or shall have expired.
               (b)  For a period of 15 Business Days after the giving of the
Offering Notice pursuant to Section 7.1(a) (the "Carnival Option Period"),
Carnival shall have the right (the "Carnival Option") to purchase all (but not
less than all) of the Offered Shares at a purchase price equal to the Offer
Price and upon the terms and conditions set forth in the Offering Notice.  The
right of Carnival to purchase all of the Offered Shares under this
Section 7.1(b) shall be exercisable by delivering written notice of the
exercise thereof, prior to the expiration of the 15 Business Day period
referred to above, to CG.  The failure of Carnival to respond within such
15 Business Day period shall be deemed to be a waiver of Carnival's rights
under Section 7.1(a).  Carnival may waive its rights under Section 7.1(a) prior
to the expiration of the 15 Business Day period by written notice to CG.
                (c)  The closing of the purchase of the Offered Shares
subscribed for by Carnival under Section 7.1(b) shall be held at such place and
time as Carnival shall designate in writing to CG.  At such closing, CG shall
deliver the Offered Shares to Carnival upon payment of the Offer Price.  All
amounts paid hereunder shall be paid by wire transfer of immediately available
funds to such account as may be designated by CG to Carnival.  At such closing,
the Offered Shares shall be free and clear from all Liens.
          7.2  Tag-Along Rights.  (a)  If Carnival shall desire to sell New
Shares representing a majority of all outstanding New Shares (a "Proposed
Sale") to any Person other than CG or an Affiliate of Carnival (a "Third Party
Purchaser"), then Carnival shall offer CG the right to participate in the
Proposed Sale with respect to a number of New Shares determined as provided in
this Section 7.2 by sending written notice (the "Tag-Along Notice") to the
Company and CG, which notice shall (i) state the number of New Shares proposed
to be sold in such Proposed Sale by Carnival (the "Proposed Sale Shares"),
(ii) state the proposed purchase price per Proposed Sale Share (the "Tag-Along
Price") and all other material terms and conditions of such Proposed Sale and
(iii) if applicable, be accompanied by any written offer from the Third Party
Purchaser; provided, however, that Carnival shall not be obligated to deliver a
Tag-Along Notice if the Transfer (if consummated) is made pursuant to
Section 7.3
          (b)  CG shall have the right to require Carnival to cause the Third
Party Purchaser to purchase from CG at the Tag-Along Price (and otherwise upon
the same terms and conditions as those set forth in the Tag-Along Notice) a
number of New Shares owned by CG ("CG's Tag-Along Shares") not in excess of the
product of (i) the total number of Proposed Sale Shares, times (ii) a fraction,
the numerator of which is the total number of New Shares owned by CG and the
denominator of which is equal to the sum of the total number of New Shares
owned by Carnival and CG and any person owning New Shares entitled to
participate in such Proposed Sale pursuant to the Subscription Agreement.  Such
right of CG shall be exercisable by written notice to Carnival with copies to
the Company given within 10 Business Days after receipt of the Tag-Along Notice
(the "Tag-Along Notice Period"), which notice shall state the number of Tag-
Along Shares that CG elects to sell in the Proposed Sale, if less than the
maximum number of CG's Tag-Along Shares; provided that, if such notice shall
not state a number of Tag-Along Shares, then CG will be deemed to have elected
to sell the maximum number of CG's Tag-Along Shares.  Failure by CG to respond
within the Tag-Along Notice Period shall be regarded as a rejection of the
offer made pursuant to the Tag-Along Notice.  The number of Tag-Along Shares
elected, or deemed to be elected, by CG to be sold as provided above is
referred to in this Section 7.2 as CG's "Participating Tag-Along Shares".  The
number of New Shares to be sold by Carnival in the Proposed Sale shall be
reduced by the aggregate number of Participating Tag-Along Shares to be sold
pursuant to this Section 7.2 by CG.
          (c)  At the request of Carnival made not less than two Business Days
prior to the proposed Transfer, CG shall deliver to Carnival certificates
representing its Participating Tag-Along Shares, duly endorsed, in proper form
for Transfer, together with a limited power-of-attorney authorizing Carnival to
transfer such Participating Tag-Along Shares to the Third Party Purchaser and
to execute all other documents required to be executed in connection with such
transaction.
          (d)  If no Transfer of the Tag-Along Shares in accordance with the
provisions of this Section 7.2 shall have been completed within 70 Business
Days of the Tag-Along Notice, then Carnival shall promptly return to CG, in
proper form, all certificates representing CG's Participating Tag-Along Shares
and the limited power-of-attorney previously delivered by CG to Carnival.
          (e)  The closing of the sale of the Participating Tag-Along Shares by
the Participating Tag-Along Shareholders shall be held at the same place and
time as the closing of the sale by Carnival in the Proposed Sale.  Promptly
after the consummation of the Transfer of the Participating Tag-Along Shares
pursuant to this Section 7.2, CG shall receive (i) the consideration with
respect to the Participating Tag-Along Shares so Transferred and (ii) such
other evidence of the completion of such Transfer and the terms and conditions
(if any) thereof as may reasonably be requested by Carnival.
               (f)  The provisions of this Section 7.2 shall remain in effect,
notwithstanding any return to CG of Participating Tag-Along Shares as provided
in Section 7.2(d).
               7.3  Bring-Along Rights.  (a)  In the event that Carnival
receives a bona fide offer from a Third Party Purchaser (excluding offers from
Affiliates of Carnival) to purchase (including a purchase by merger) at least a
majority of the outstanding New Shares, Carnival may send written notice (a
"Buyout Notice") to the Company and CG notifying CG that it will be required to
sell the same percentage of its New Shares in such sale as the Selling
Shareholder propose to sell (which percentage shall be specified in such Buyout
Notice) (the "Designated Percentage").
               (b)  Upon receipt of a Buyout Notice, CG shall be obligated:
                    (i)  to sell the Designated Percentage of its New Shares in
     the transaction (including a sale or merger) contemplated by the Buyout
     Notice on the same terms and conditions as Carnival;
                    (ii)  to provide for the payment by CG of its pro rata
     portion of all costs associated with such transaction, in the proportion
     that the number of New Shares owned by such Existing Shareholder bears to
     the number of outstanding New Shares; and
                    (iii)  otherwise to take all necessary action to cause the
     consummation of such transaction, including voting its New Shares in favor
     of such transaction and not exercising any appraisal rights in connection
     therewith.
               (c)  CG further agrees to (i) take all actions (including
executing documents) in connection with the consummation of the proposed
transaction as may reasonably be requested of it by Carnival and (ii) appoint
Carnival as its attorneys-in-fact to do the same on its behalf.
               (d)  In the event a contract with respect to the transaction
contemplated by the Buyout Notice has not been entered into within the 90
Business Days after the date of delivery of the Buyout Notice, the obligations
of CG under this Section 7.3 with respect to such Buyout Notice shall
terminate, subject, however, to the right of Carnival to deliver a further
Buyout Notice.

                                ARTICLE 8
                        CHANGE OF CONTROL BUYOUT
                  (a)  If Atle Brynestad no longer has Control of CG (a "Loss
of Control"), then Carnival may, within 30 Business Days of such Loss of
Control, by notice in writing to CG (the "Loss of Control Notice"), offer to
purchase all (but not some) of the New Shares held by CG (the "CG Shares") at
such price per share (the "Stated Price") as shall be specified by Carnival in
the Loss of Control Notice.  At the closing contemplated under Section 8(c), CG
shall sell the CG Shares to Carnival and Carnival shall purchase the CG Shares
pursuant to the terms of this Article
                  (b)  The Loss of Control Notice shall become final and
binding on the Existing Shareholders for all purposes of this Agreement unless
CG shall, within 14 Business Days, give written notice to Carnival requesting
that the value of the CG Shares be appraised (the "Appraisal Notice").  The
appraised per share value of the CG Shares (the "Appraised Value") shall be
determined by an appraisal conducted by a committee of three appraisers (the
"Appraisal Committee").  Each of the Existing Shareholders shall, within five
Business Days of the delivery of the Appraisal Notice to Carnival, select one
of the appraisers constituting such committee and the two appointed appraisers
shall select a third.  The Company shall be responsible for their reasonable
costs of the Appraisal Committee.  If either Existing Shareholder fails within
the specified time to select an appraiser, the committee shall be comprised of
such appraiser or appraisers who have been so selected.  The Appraisal
Committee shall be instructed that the appraisal report (which shall set forth
the Appraisal Value) (the "Appraisal Report") shall be completed and delivered
to the Company and to the Existing Shareholders within 28 Business Days of the
appointment date of the Appraisal Committee.  Such appraisal shall be made on
the basis of the fair market value of the Company taking into account the value
and goodwill, if any, of the established business operations conducted by the
Company, and the Appraised Value shall be such fair market value as so
determined divided by the fully diluted number of New Shares issued and
outstanding.  In the event that the Appraisal Committee cannot agree on the
Appraised Value, the Appraised Value shall be the highest amount supported by a
majority of the appraisers.  If the Appraisal Price is determined under this
Section 8(b), then the Appraisal Price shall, notwithstanding Section 8(a), be
the Stated Price for all purposes of Article 8.  The determination of the
Appraisal Price under this Section 8(b) shall become final and binding on the
Company and the Existing Shareholders for all purposes of this Agreement.
                (c)  The closing of the sale contemplated by this Article 8
shall occur within five Business Days after the calculation of the Stated Price
is determined to be final and binding under this Article 8 and be held at such
place and time as Carnival shall designate in writing to CG.  At such closing,
CG shall deliver to Carnival certificates evidencing all of the CG Shares upon
payment by Carnival to CG of a per share price equal to the Stated Price.  All
amounts paid hereunder shall be paid by wire transfer of immediately available
funds to such account as may be designated by CG to Carnival.  All CG Shares
when delivered to Carnival shall be free and clear from all Liens.


                             ARTICLE 9
              CORPORATE GOVERNANCE AND CERTAIN OTHER ACTIONS
          9.1  General.  Each Existing Shareholder shall vote its New Shares at
any regular or special meeting of Existing Shareholders of the Company, or in
any written consent executed in lieu of such a meeting of Existing
Shareholders, and shall take all other actions necessary, to give effect to the
provisions of this Agreement (including Sections 2.1 and 9.2), and to ensure
that the Company's Memorandum and Articles of Association do not, at any time
hereafter, conflict in any respect with the provisions of this Agreement.
          9.2  Election of Directors.  Each Existing Shareholder agrees that,
except as the Existing Shareholders may otherwise agree in writing, the number
of directors constituting the entire Board of Directors shall be seven.  One of
such directors shall be designated by CG; provided that if CG ceases to own 10%
of the issued and outstanding New Shares, CG's designated director shall resign
from the Board of Directors and CG shall no longer have the right to designate
a director.  The initial director designated by CG shall be Atle Brynestad.
          9.3  Removal and Replacement. CG shall be entitled at any time and
for any reason (or for no reason) to designate its designee on the Board of
Directors for removal.  If the CG designee dies, is removed or resigns as a
director, then CG shall, as soon as practicable thereafter, designate a
replacement director and, as soon as practicable thereafter, the Company and
each of the Existing Shareholders shall take action, including, if necessary,
the voting of its New Shares, to elect or cause the election by the Board of
Directors of such replacement director in accordance with Section 9.2.
          9.4  Company Name Change.  Each Existing Shareholder hereby agrees to
approve the change of the Company's name to Cunard Line Limited and to take all
action necessary, including the voting of its New Shares, to effect the same.

                               ARTICLE 10
                        INITIAL PUBLIC OFFERING
          10.1  Initial Public Offering.  It is the current intention of the
parties to complete the Initial Public Offering prior to November 30, 1999 (the
"IPO Deadline"); provided that, if market conditions do not permit the Initial
Pubic Offering prior to the IPO Deadline, the IPO Deadline may be extended at
the option of Carnival.  If the Initial Public Offering is in the United
States, the Company and CG shall in good faith attempt to negotiate a
registration rights agreement with customary terms and provisions to provide CG
with one demand registration right and with piggy-back registration rights.
          10.2  Initial Public Offering Procedure.  Prior to the Initial Public
Offering, the Company shall provide CG with written information regarding the
Initial Public Offering process and, to the extent determined by Carnival in
its sole discretion, shall invite CG to participate in such Initial Public
Offering.  If, after being so invited, CG desires to sell New Shares in the
Initial Public Offering CG shall, within a time limit set out by the Company in
writing, notify the Company in writing of its wish to sell and the amount of
New Shares it desires to sell.
          10.3  Customary Agreements.  In connection with the Initial Public
Offering, Carnival and CG agree to enter into customary agreements (including,
without limitation, a lock-up agreement) with the Company and the
arrangers/underwriters of the Initial Public Offering.
          10.4  Carnival Exchange.  Notwithstanding Sections 10.1, 10.2
and 10.3, at the option of Carnival, in its sole discretion, in lieu of an
Initial Public Offering, Carnival may at any time elect to purchase all of the
New Shares owned by CG (the "Carnival Exchange") in exchange for shares of
common stock of Carnival (the "Carnival Common Stock").  Prior to effecting the
Carnival Exchange, Carnival shall, in its sole discretion, consider first
whether to effect the Initial Public Offering.  In the Carnival Exchange, CG
shall be entitled to receive a number of shares equal to the product of (i) the
number of New Shares owned by CG and (ii) the Exchange Ratio.  The Exchange
Ratio shall initially be 0.14493 and shall be subject to adjustment as provided
in Section 10.7 below.  If it elects to effect the Carnival Exchange, Carnival
shall notify CG in writing of the Carnival Exchange.  Such notice shall specify
the Exchange Ratio and the place and time of the closing of the Carnival
Exchange (which shall be a date within 20 Business Days of the calculation of
the Exchange Ratio).
          10.5  Put Option.  Notwithstanding Sections 10.1, 10.2, 10.3 and
10.4, if on the third anniversary of the Closing, the Company has not completed
the Initial Public Offering and the Carnival Exchange has not occurred, CG
shall, from and after the third anniversary of the Closing, have the option
(the "Put Option") to put all of CG's New Shares to Carnival in exchange for
Carnival Common Stock.  The Put Option shall be exercisable by CG by delivery
of written notice to Carnival (the "Put Option Notice") within 10 days after
the third anniversary of the Closing.  At the closing of the Put Option, CG
shall be entitled to receive a number of shares of Carnival Common Stock equal
to the product of (i) the number of New Shares owned by CG and (ii) the
Exchange Ratio.  At the closing of the Put Option Carnival shall be obligated
to purchase all of the New Shares owned by CG in exchange for shares of
Carnival Common Stock as determined in accordance with the preceding sentence.
Carnival shall provide notice in writing to CG of the Exchange Ratio and the
place and time of the closing of the Put Option (which closing date shall be
within 45 Business Days after the third anniversary of the Closing).
          10.6  No Fractional Shares.  No fraction of Carnival Shares will be
issued to CG in connection with the Carnival Exchange or the exercise of the
Put Option.  In lieu thereof, Carnival shall pay to CG cash in an amount equal
to the product of such fraction and the closing price for the Carnival Common
Stock on the New York Stock Exchange Composite Tape on the last trading day
prior to the closing of either the Carnival Exchange or the Put Option.
          10.7  Closing of the Carnival Exchange and the Put Option.  The
closing for the purchase of the New Shares pursuant to Sections 10.4 or 10.6
shall be held at such place and time as Carnival shall designate in writing to
CG.  At such closing, in exchange for all of the New Shares held by CG,
Carnival shall issue, sell and deliver to CG shall purchase, acquire and accept
from Carnival, certificates evidencing the number of shares of Carnival Common
Stock to which CG is entitled under Sections 10.4 or 10.6, registered in CG's
name, all of which, upon issuance shall have been duly authorized, validly
issued, fully paid and non-assessable and free and clear from all Liens.  All
New Shares delivered by CG to Carnival under this Section 10.7 shall be free
and clear from all Liens.
          10.8  Exchange Ratio Adjustment.  If Carnival or the Company shall,
at any time or from time to time, (i) declare a dividend of shares of the
Carnival Common Stock or New Shares payable in Carnival Common Stock or New
Shares, respectively, (ii) subdivide the outstanding shares of Carnival Common
Stock or New Shares, (iii) combine the outstanding Carnival Common Stock or New
Shares into a smaller number of shares, or (iv) issue any shares of Carnival
Common Stock or New Shares in a reclassification of Carnival Common Stock or
New Shares, respectively (including any such reclassification in connection
with a consolidation or merger in which Carnival or the Company is the
surviving corporation), then in each such case, the Exchange Ratio in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, shall be proportionately adjusted
so that upon the Carnival Exchange or the closing of the Put Option CG shall be
entitled to receive the same aggregate number of shares of Carnival Common
Stock which, if the Carnival Exchange or the closing of the Put Option had
occurred immediately prior to such date, CG would have owned upon such Carnival
Exchange or the closing of the Put Option and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.  If
there occurs any reclassification of the Carnival Common Stock, consolidation
or merger of Carnival with or into another Person (other than a merger or
consolidation of Carnival in which Carnival is the continuing corporation and
which does not result in any reclassification or change of outstanding shares
of the Carnival Common Stock) or the sale or conveyance of all or substantially
all of the assets of Carnival to another Person, then CG will thereafter be
entitled to receive, upon the Carnival Exchange or the closing of the Put
Option, the same kind and amounts of securities (including shares of stock) or
other assets, or both, which were issuable or distributable to the holders of
outstanding Carnival Common Stock upon such reclassification, consolidation,
merger, sale or conveyance, in respect of that number of shares of Carnival
Common Stock then deliverable upon the Carnival Exchange or the closing of the
Put Option if the Carnival Exchange or the Put Option had been exercised
immediately prior to such reclassification, consolidation, merger, sale or
conveyance. Any such adjustment of the Exchange Ratio shall become effective
immediately after the record date of such dividend or the effective date of
such subdivision, combination, reclassification, consolidation, merger, sale or
conveyance.  Such adjustment of the Exchange Ratio shall be made successively
whenever any event listed above shall occur.  If a stock dividend is declared
and such stock dividend is not paid, the Exchange Ratio shall again be adjusted
to be the Exchange Ratio in effect immediately prior to such record date.
          10.9  No Claims.  CG understands and agrees that it shall have no
claim against the Company, Newco, Carnival or any of their directors, officers
or affiliates if the Initial Public Offering shall not occur or if Carnival
elects to effect the Carnival Exchange and to the fullest extent permitted by
law, waives any such claim.

                            ARTICLE 11
     RIGHT TO PARTICIPATE IN CERTAIN ISSUANCE OF CAPITAL SHARES
          11.1  Right to Participate in New Issuance.  If the Company
determines to issue any Shares or any security convertible into or exercisable
or exchangeable for Shares, to any shareholder of the Company (including an
Existing Shareholder) (other than capital shares to be issued (i) in connection
with an employee stock option plan or other bona fide employment compensation
arrangement that is approved by the Company's Board of Directors, (ii) pursuant
to a stock split or stock dividend, (iii) pursuant to the exercise of any
option, warrant or convertible security theretofore issued, (iv) as
consideration in connection with a bona fide acquisition by the Company or any
of its subsidiaries or (v) pursuant to the Initial Public Offering) (each such
issuance not excluded by the immediately preceding parenthetical being herein
referred to as a  "New Issuance"), then the Company shall notify the Existing
Shareholders of the proposed New Issuance.  Such notice shall specify the
number and class of securities to be issued, the rights, terms and privileges
thereof and the estimated price at which such securities will be issued.
          11.2  Exercise of Right.  By written notice to the Company given
within 15 Business Days of being notified of such New Issuance, each Existing
Shareholder shall be entitled to purchase that percentage of New Issuance
determined by dividing (a) the total number of Shares owned by such Existing
Shareholder by (b) the total number of all outstanding Shares.  Such right
shall be exercisable within 15 Business Days following the receipt of the
notice delivered pursuant to the previous sentence.  To the extent the Existing
Shareholders do not elect to purchase all of the securities proposed to be
offered and sold in the New Issuance, the Company may issue those securities
not so subscribed for, provided that such sales are consummated within 120
Business Days after the Existing Shareholders' rights hereunder have expired or
been waived.
          11.3  Closing.  The closing of the New Issuance shall be held at such
time as the Company shall designate in writing to the Existing Shareholders
that elect to purchase securities in the New Issuance pursuant to this Article
11 not fewer than five Business Days prior to the date of such closing, at the
Company's principal offices, or at another place designated by the Company in
writing to such Existing Shareholders in such notice.

                              ARTICLE 12
                     SHARES CERTIFICATE LEGEND
          The Company and Existing Shareholders agree that each certificate
representing the New Shares now or hereafter held by an Existing Shareholder
shall be endorsed with a legend in substantially the following form:
          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
     SECURITIES LAWS OF ANY STATE.  THE SECURITIES MAY NOT BE OFFERED FOR
     SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
     REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
     LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
     REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
     THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
     DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES
     REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE
     RECAPITALIZATION AGREEMENT, DATED AS OF MAY 27, 1998 (THE
     "RECAPITALIZATION AGREEMENT"), AMONG SEABOURN CRUISE LINE LIMITED,
     (THE "COMPANY"), CARNIVAL CORPORATION AND CG HOLDING AS, A COPY OF
     WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE.  THE
     COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE
     BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN
     COMPLIANCE WITH THE TERMS OF THE RECAPITALIZATION AGREEMENT."

                                ARTICLE 13
                        AFTER-ACQUIRED SECURITIES
          All of the provisions of this Agreement shall apply to all of the New
Shares now owned or that may be issued or transferred hereafter to an Existing
Shareholder in consequence of any additional issuance, purchase, exchange or
reclassification of any of the New Shares (including without limitation, upon
the exercise of any option or warrant), corporate reorganization, or any other
form of recapitalization, consolidation, merger, share split or share dividend,
or that are acquired by an Existing Shareholder in any other manner, and, in
the case of any such event, appropriate adjustment shall be made to any number
of New Shares hereunder to take account of such event provided, however, with
respect to CG, no New Shares that are subject to the terms of the Subscription
Agreement shall be subject to the terms of this Agreement.

                             ARTICLE 14
                     TRANSACTIONS WITH AFFILIATES
          14.1  Limitation on Transactions with Affiliates.  From and after the
Closing, the Company will not sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make any contract, agreement, loan, advance or guarantee with, or
for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless such Affiliate Transaction is on terms no less favorable
to the Company than those that could be obtained on an arm's length basis with
a third party.
          14.2  Exceptions.  The limitation under Section 14.1 does not limit,
and shall not apply to (i) any transaction or series of transactions approved
by a majority of the disinterested members of the Board of Directors; (ii) any
transaction between the Company and a wholly-owned subsidiary; (iii) the
payment of reasonable compensation to directors and officers of the Company;
(iv) reasonable loans made by the Company to its officers and directors as
approved by the Board of Directors; (v) any employment agreement with officers
entered into by the Company in the ordinary course of business of the Company.

                              ARTICLE 15
                             TERMINATION
          15.1  General  This Agreement shall become effective upon the
execution hereof and shall terminate upon the earlier of:
                     (i)  the consummation by the Company of the Initial Public
     Offering or the consummation of the Carnival Exchange; and
                    (ii)  such earlier date as the Existing Shareholders shall
     unanimously agree in writing to terminate this Agreement;
          15.2  Non-Consummation of Cunard Acquisition.  This Agreement shall
terminate (i) upon the termination of the Sale and Purchase Agreement or
(ii) if acquisition of the business of Cunard is not consummated for any
reason.
          15.3  No Liability.  If this Agreement is terminated pursuant to
Article 15.2 and the Company has issued the Purchased Shares to Carnival under
Section 2.3(a) and Carnival has paid to the Company the purchase price under
Section 2.3(b), then Carnival shall surrender to the Company the certificates
representing the Purchased Shares and upon the receipt of such Purchased
Shares, the Company shall repay to Carnival such amount as Carnival paid under
Section 2.3(b) by wire transfer of immediately available funds to such account
as may be designated by Carnival to the Company.
          15.4  No Liability. If this Agreement is terminated as provided in
Section 15.2, no party shall have any liability or further obligation to any
other party under this Agreement.

                                ARTICLE 16
                  TERMINATION OF JOINT VENTURE AGREEMENT
          Each of CG, Carnival and the Company hereby consents to the
termination of the Joint Venture Agreement, dated February 18, 1992 (the "Joint
Venture Agreement"), between CG, Carnival and the Company, which shall,
effective as of the Closing Date, be terminated and of no further force and
without further obligation of any party thereunder.

                                ARTICLE 17
                            CONFIDENTIALITY
          All information relating to the Company provided to CG and its
affiliates shall be kept confidential and shall not be disclosed to any third
party except (a) as has become generally available to the public (other than
through disclosure by CG or its affiliates in contravention of this Agreement),
(b) to CG's directors, officers, trustees, partners, employees, agents and
professional consultants on a need-to-know basis, (c) to any Person to which CG
offers to sell or transfer any New Shares, provided that the prospective
transferee shall agree to be bound by the provisions of this Article 17, or
(d) in order to comply with any law, rule, regulation or order applicable to CG
or its affiliates.

                               ARTICLE 18
                              MISCELLANEOUS
          18.1  Survival of Representations, Warranties, Other Agreements and
Undertakings.  All of the representations and warranties, as well as those
other agreements and undertakings made herein to be performed after the Closing
Date, shall survive the execution and delivery of this Agreement, any
investigation by or on behalf of the Existing Shareholders or acceptance of the
New Shares.
          18.2  Notices.  All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service, overnight mail or personal delivery:
          if to the Company:

          3655 N.W. 87th Avenue
          Miami, Florida  33178
          Telecopier No.:  (305) 471-4700
          Attention:  General Counsel

          with a copy to:

          Thommessen Krefting Greve Lund
          Haakon VII?s gate 10, P.O. Box 1484
          0116 Oslo, Norway
          Attention: Jorgen Lund
          Telecopier No.: (47) 23 11 10 10

          if to Carnival, to:

          Carnival Corporation
          3655 N.W. 87th Avenue
          Miami, Florida  33178
          Attention:  General Counsel
          Telecopier No.:  (305) 471-4700

          with a copy to:

          Paul, Weiss, Rifkind, Wharton & Garrison
          1285 Avenue of the Americas
          New York, New York  10019
          Attention:  James M. Dubin, Esq.
          Telecopier No.:  (212) 757-3990

            if to CG, to:

            CG Holding AS
            Smallvollveien 65, P.O. Box 50 Bryn
            0611 Oslo, Norway
            Attention: Atle Brynestad
            Telecopier No.: (47) 22 90 88 99

            with a copy to:

            Thommessen Krefting Greve Lund AS
            Haakon VII's gate 10, P.O. Box 1484
            0116 Oslo, Norway
            Attention: Jorgen Lund
            Telecopier No.: (47) 23 11 10 10

All such notices and communications shall be deemed to have been duly given
when delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial courier service; five Business Days after being
deposited in the mail, postage prepaid, if mailed by airmail; and when receipt
is mechanically acknowledged, if telecopied.
            18.3  Expenses.  The Company agrees to reimburse each of Carnival
and CG for all out of pocket expenses incurred by such party in connection with
the transactions contemplated by the Sale & Purchase Agreement, the
Subscription Agreement and this Agreement and the transactions contemplated
thereby and hereby (including without limitation, travel expenses and legal and
accounting fees and expenses).
            18.4  Third Party Beneficiaries.  Nothing herein expressed or
implied is intended to or shall be construed to confer upon or give any person
or entity, other than the parties hereto, and their respective successors,
permitted assigns and affiliates, any rights or remedies under or by reason of
this Agreement.
            18.5  Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto.  The Company may not assign any of its rights or obligations
under this Agreement, except to a successor-in-interest to the Company, without
the written consent of the Existing Shareholders and no Existing Shareholder
may assign any of its rights or obligations without the consent of the Company
(except for an assignment pursuant to Section 6.3).
          18.6  Amendment and Waiver.
               (a)  Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the parties from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing
and signed by the Company and the Existing Shareholders, and (ii) only in the
specific instance and for the specific purpose for which made or given.
               (b)  No failure or delay on the part of the parties in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.  The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the parties at
law, in equity or otherwise.
          18.7  Counterparts.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
          18.8  Headings.  The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
          18.9  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
          18.10  Arbitration.  (i) After the Closing, any dispute, controversy,
or claim arising out of or relating to any provision of this Agreement or the
interpretation, enforceability, performance, breach, termination, or validity
hereof, including, without limitation, this Section 18.9 shall be solely and
finally settled by arbitration in New York City, the State of New York in
accordance with the Commercial Arbitration Rules and Supplementary Procedures
for International Commercial Arbitration of the American Arbitration
Association as modified by the provisions of this Article.  An award rendered
in connection with an arbitration pursuant to this Section 18.9 shall be final
and binding upon the parties, and any judgment upon such an award may be
entered and enforced in any court of competent jurisdiction.
           (ii)  Proceedings in the arbitration shall be conducted in the
English language, and all documents not in English submitted by either party
must be accompanied by a translation into English.
            18.11  Severability.  If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair
the benefits of the remaining provisions hereof.
          18.12  Entire Agreement.  This Agreement, together with the schedules
hereto is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.
          18.13  Further Assurances.  Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any governmental authority
or any other Person) as may be reasonably required or desirable to carry out or
to perform the provisions of this Agreement.




































          IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.



                         SEABOURN CRUISE LINE LIMITED


                         By:   /s/ Jorgen Lund
                            Name:   Jorgen Lund
                            Title:  Director


                         CARNIVAL CORPORATION


                         By:   /s/ Arnaldo Perez
                            Name:   Arnaldo Perez
                            Title:  Vice President


                         CG HOLDING AS


                         By:   /s/ Jorgen Lund
                            Name:   Jorgen Lund
                            Title:  Attorney-in-fact



























                                Schedule A



               Seabourn       Cunard         Assumed
               Base           Base           Carnival
               Shares(1)      Shares(2)      Share
                                             Issuance
                                             Amount

Carnival(3)    5,880,000      26,304,864     5,326,216

CG             5,880,000      --             --


(1)        Approximately 80% of the assumed number of New Shares to be issued
     based on assumed purchase price, 1,470,000 New Share are assumed to be the
     post-closing adjustment.

(2)        Approximately 80% of the assumed number of New Shares to be issued
     based on assumed price of $380,440,000 for Cunard and 5,000,000 ?option?
     New Shares. Based on the assumed purchase price, 5,326.216 New Shares are
     assumed to be the post-closing adjustment.

(3)        Does not include 1,500,000 New Shares assumed to be issued to
     Carnival in satisfaction of the Seabourn Subordinated Loan.














                      SEABOURN CRUISE LINE LIMITED
               SCHEDULE 2.5 - COMPANY CREDITS AND DEBITS
                         AS OF FEBRUARY 28, 1998


COMPANY CREDITS

          (a)  Cash                                             4,244,271
          (b)  Trade debtors                                       64,857
          (c)  Insurance claims (H&M, P&I, etc.)                  431,685
          (d)  Prepaid marketing/credit card fees               1,047,327
          (e)  Prepaid insurance/other                          1,492,188
          (f)  Inventories                                      8,623,790
          (g)  Miscellaneous debtors                            2,212,105
          (h)  Other prepayments                                2,672,918

          Total Company Credits:                               20,789,141

COMPANY DEBITS

          (a)  Trade creditors                                  3,592,945
          (b)  Bank Credit Line                                 4,200,226
          (c)  Other passage money                                225,766
          (d)  Wages and salaries                               2,441,858
          (e)  Accrued expenses                                 2,861,357
          (f)  Steiner/Other concessionaires                      226,885
          (g)  Miscellaneous creditors
          (h)  Customer prepayments                            45,139,580

          Total Company Debits:                                58,688,418

Company Credits less Company Debits:                          -37,899,275

                                                        EXHIBIT 10.5

                            CARNIVAL CORPORATION

                  1993 OUTSIDE DIRECTORS' STOCK OPTION PLAN
(adopted by the Board of Directors on July 10, 1993 and amended on April 6,
1998)


     CARNIVAL CORPORATION, a Panamanian corporation (the "Company"), hereby
formulates and adopts the following 1993 Outside Directors' Stock Option Plan
(the "Plan") for Eligible Directors of the Company and its Subsidiaries (as
defined in Paragraph 4).

     1.  Purpose.  The purpose of the Plan is to promote the interests of the
Company and its stockholders by strengthening the Company's ability to attract
and retain the services of experienced and knowledgeable nonemployee directors
and by encouraging such directors to acquire an increased proprietary interest
in the Company.

     2.  Administration.  The Plan shall be administered by the Compensation
Committee of the Board of Directors.

          Subject to the express provisions of the Plan, the Committee shall
have plenary authority to interpret the Plan, to prescribe, amend and rescind
the rules and regulations relating to it and to make all other determinations
deemed necessary and advisable for the administration of the Plan.  The
determinations of the Committee shall be conclusive.

     3.  Common Stock Subject to Options.  Subject to the adjustment provisions
of Paragraph 13 below, a maximum of 400,000 shares of Class A Common Stock, par
value $.01 per share, of the Company (the "Common Stock") may be made subject
to options granted under the Plan.  If, and to the extent that, options granted
under the Plan shall terminate, expire or be canceled for any reason without
having been exercised, new options may be granted in respect of the shares
covered by such terminated, expired or canceled options.  The granting and such
terms of such new options shall comply in all respects with the provisions of
the Plan.

          Shares sold upon the exercise of any option granted under the Plan
may be shares of authorized and unissued Common Stock, shares of issued Common
Stock held in the Company's treasury, or both.

          There shall be reserved at all times for sale under the Plan a number
of shares, of either authorized and unissued shares of Common Stock, shares of
Common Stock held in the Company's treasury, or both, equal to the maximum
number of shares which may be purchased pursuant to options granted or that may
be granted under the Plan.

     4.  Participation in Plan.  Each member of the Company's Board of
     Directors (a "Director") who is not otherwise an employee of the Company
     or any subsidiary of the Company (an "Eligible Director") shall be
     eligible to participate in the Plan.

     5.  Option Grants.

          (a)  Each Eligible Director serving in such capacity at the time of
the adoption of the Plan by the Board of Directors shall be granted an option
to purchase 10,000 shares of Common Stock.  In addition, each Eligible Director
shall receive (i) an option to purchase 10,000 shares of Common Stock for each
five year period of service as a Director prior to the adoption of the Plan and
(ii) credit (the "Prior Service Credit") for any such prior period of service
of less than five years, such credit to be added to future years of service
until a five year period is accrued.

          (b)  Any Eligible Director elected or appointed to the Board of
Directors following the adoption of the Plan shall be granted immediately upon
such election or appointment an option to purchase 10,000 shares of Common
Stock.

          (c)  An option to purchase 10,000 options shall be granted
automatically to each Director who is an Eligible Director after completion of
each five-year period of consecutive service in such capacity, taking into
account any Prior Service Credit.

          An Eligible Director receiving an option pursuant to the Plan is
hereinafter referred to as an "Optionee".

     6.  Price.  The option price of each share of Common Stock purchasable
under any option granted pursuant to the Plan shall not be less than the Fair
Market Value (as defined below) thereof at the time the option is granted.

          For purposes of the Plan, "Fair Market Value" of a share of Common
Stock means the average of the high and low sales prices of a share of Common
Stock on the New York Stock Exchange Composite Tape on the date in question.
If shares of Common Stock are not traded on the New York Stock Exchange on such
date, "Fair Market Value" of a share of Common Stock shall be determined by the
Committee in its sole discretion.

     7.  Duration of Options.  Except as set forth in the following sentence,
each option granted hereunder shall become immediately exercisable.  Any
options granted prior to the approval of the Plan by the shareholders of the
Company shall not vest or be exercisable or transferrable in any manner until
such shareholder approval is obtained at the next Annual Meeting of the
Shareholders following adoption of the Plan by the Board of Directors.  If such
shareholder approval is not obtained at such meeting, all options issued
pursuant to the Plan shall be cancelled and deemed null and void.  Each option
granted hereunder prior to April 13, 1998 shall be exercisable for a period of
five years from the date of grant and each option granted hereunder on or after
April 13, 1998 shall be exercisable for a period of ten years from the date of
grant.
     8.  Exercise of Options.  An option granted under this Plan shall be
deemed exercised when the person entitled to exercise the option (a) delivers
written notice to the Company at its principal business office, directed to the
attention of its Secretary, of the decision to exercise, (b) concurrently
tenders to the Company full payment for the shares to be purchased pursuant to
such exercise,, and (c) complies with such other reasonable requirements as the
Committee establishes pursuant to Paragraph 2 of the Plan.

          Payment for shares with respect to which an option is exercised may
be made in cash, check or money order and, subject to the Committee's consent,
by Common Stock.  No person will have the rights of a shareholder with respect
to shares subject to an option granted under this Plan until a certificate or
certificates for the shares have been delivered to him.

     9.  Nontransferability of Options.  Subject to Paragraph 7 of the Plan, no
option or any right evidenced thereby shall be transferable in any manner other
than by will or the laws of descent and distribution, and, during the lifetime
of an Optionee, only the Optionee (or the Optionee's court-appointed legal
representative) may exercise an option.  In the Committee's discretion, an
option may be transferred pursuant to a "qualified domestic relations order",
as defined in section 414(p) of the Code.

     10.  Rights of Optionee.  Neither the Optionee nor the Optionee's executor
or administrator shall have any of the rights of a stockholder of the Company
with respect to the shares subject to an option until certificates for such
shares shall actually have been issued upon the due exercise of such option. No
adjustment shall be made for any regular cash dividend for which the record
date is prior to the date of such due exercise and full payment for such shares
has been made therefor.

     11.  Right To Terminate Relationship.  Nothing in the Plan or in any
option shall confer upon any Optionee the right to continue to serve as a
Director of the Company.

     12.  Nonalienation of Benefits.  No right or benefit under the Plan shall
be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void.  To the extent permitted by
applicable law, no right or benefit hereunder shall in any manner be liable for
or subject to the debts, contracts, liabilities or torts of the person entitled
to such benefits.

     13.  Adjustment Upon Changes in Capitalization, etc.  In the event of any
stock split, stock dividend, stock change, reclassification, recapitalization
or combination of shares which changes the character or amount of Common Stock
prior to exercise of any portion of an option theretofore granted under the
Plan, such option, to the extent that it shall not have been exercised, shall
entitle the Optionee (or the Optionee's executor or administrator) upon its
exercise to receive in substitution therefor such number and kind of shares as
the Optionee would have been entitled to receive if the Optionee had actually
owned the stock subject to such option at the time of the occurrence of such
change; provided, however, that if the change is of such a nature that the
Optionee, upon exercise of the option, would receive property other than shares
of stock the Committee shall make an appropriate adjustment in the option to
provide that the Optionee (or the Optionee's executor or administrator) shall
acquire upon exercise only shares of stock of such number and kind as the
Committee, in its sole judgment, shall deem equitable; and, provided further,
that any such adjustment shall be made so as to conform to the requirements of
section 424(a) of the Code.

          In the event that any transaction (other than a change specified in
the preceding paragraph) described in section 424(a) of the Code affects the
Common Stock subject to any unexercised option, the Board of Directors of the
surviving or acquiring corporation shall make such similar adjustment as is
permissible and appropriate.

          If any such change or transaction shall occur, the number and kind of
shares for which options may thereafter be granted under the Plan shall be
adjusted to give effect thereto.

     14.  Purchase for Investment.  Whether or not the options and shares
covered by the Plan have been registered under the Securities Act of 1933, as
amended, each person exercising an option under the Plan may be required by the
Company to give a representation in writing that such person is acquiring such
shares for investment and not with a view to, or for sale in connection with,
the distribution of any part thereof.  The Company will endorse any necessary
legend referring to the foregoing restriction upon the certificate or
certificates representing any shares issued or transferred to the Optionee upon
the exercise of any option granted under the Plan.

     15.  Form of Agreements with Optionees.  Each option granted pursuant to
the Plan shall be in writing and shall have such form, terms and provisions,
not inconsistent with the provisions of the Plan, as the Committee shall
provide for such option.  The effective date of the granting of an option shall
be the date on which the Committee approves such grant.  Each Optionee shall be
notified promptly of such grant, and a written agreement shall be promptly
executed and delivered by the Company and the Optionee.

     16.  Termination and Amendment of Plan and Options.  Unless the Plan shall
theretofore have been terminated as hereinafter provided, options may be
granted under the Plan at any time, and from time to time, prior to the tenth
anniversary of the Effective Date (as defined below), on which date the Plan
will expire, except as to options then outstanding under the Plan.  Such
options shall remain in effect until they have been exercised, have expired or
have been canceled.

          The Board, without further approval of the Company's shareholders,
may amend this Plan at any time and from time to time in such respects as the
Board of Directors may deem advisable, subject to any shareholder or regulatory
approval required by law; provided that (i) any such amendment shall comply
with the applicable requirements for exemption (to the extent necessary) under
Rule 16b-3 under the Securities Exchange Act of 1934 and (ii) in no event shall
the Plan be amended more than once every six months other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules and regulations promulgated by the Securities and Exchange
Commission.

          No termination, modification or amendment of the Plan, without the
consent of the Optionee, may adversely affect the rights of such person with
respect to such option.  With the consent of the Optionee and subject to the
terms and conditions of the Plan, the Committee may amend outstanding option
agreements with any Optionee.

     17.  Effective Date of Plan.  The Plan shall become effective upon its
adoption by the Board of Directors (the "Effective Date"), subject, however, to
its approval by the Company's shareholders within 12 months after the date of
such adoption.

     18.  Government and Other Regulations.  The obligation of the Company with
respect to options granted under the Plan shall be subject to all applicable
laws, rules and regulations and such approvals by any governmental agency as
may be required, including, without limitation, the effectiveness of any
registration statement required under the Securities Act of 1933, as amended,
the rules and regulations of any securities exchange on which the Common Stock
may be listed.

     19.  Withholding.  The Company's obligation to deliver shares of Common
Stock in respect of any option granted under the Plan shall be subject to all
applicable federal, state and local tax withholding requirements.  Federal,
state and local tax withholding tax due upon the exercise of any option (or
upon any disqualifying disposition of shares of Common Stock subject to an
Incentive Option) in the Committee's sole discretion, may be paid in shares of
Common Stock (including the withholding of shares subject to an option) upon
such terms and conditions as the Committee may determine.

     20.  Separability.  If any of the terms or provision of the Plan conflict
with the requirements of Rule 16b-3 under the Exchange Act, then such terms or
provisions shall be deemed inoperative to the extent they so conflict with the
requirements of Rule 16b-3.

     21.  Exclusion from Pension and Profit-Sharing Computation.  By acceptance
of an option, each Optionee shall be deemed to have agreed that such grant is
special incentive compensation that will not be taken into account, in any
manner, as salary, compensation or bonus in determining the amount of any
payment under any pension, retirement or other employee benefit plan of the
Company or any of its Subsidiaries.  In addition, such option will not affect
the amount of any life insurance coverage, if any, provided by the Company on
the life of the Optionee which is payable to such beneficiary under any life
insurance plan covering employees of the Company or any of its Subsidiaries.

     22.  Governing Law.  The Plan shall be governed by, and construed in
accordance with, the laws of the State of Florida.








EXHIBIT 12

                                CARNIVAL CORPORATION
                         RATIO OF EARNINGS TO FIXED CHARGES
                           (in thousands, except ratios)



                                 Six Months Ended May 31,
                                 1999           1998
                                          

Net income                      $361,103         $270,510
Income tax benefit                (7,645)          (6,861)
Income before income taxes       353,458          263,649

Adjustments to Earnings:
  Minority interest                1,642
  Dividends received in
     excess of income from
     affiliates                   19,017           23,621

Earnings as adjusted             374,117          287,270

Fixed Charges:
  Interest expense                26,880           24,735
  Interest portion of rent
     expense (1)                   1,275            1,533

  Capitalized interest            19,915           15,979

Total fixed charges               48,070           42,247

Fixed charges not affecting
earnings:
    Capitalized interest         (19,915)         (15,979)

Earnings before fixed charges   $402,272          $313,538

Ratio of earnings to fixed
charges                              8.4X              7.4X




 (1) Represents one-third of rent expense, which management believes
to be representative of the interest portion of rent expense.

  

5 1000 6-MOS NOV-30-1999 MAY-31-1999 382,640 614,799 103,214 0 81,035 1,281,899 6,928,778 1,157,857 7,999,308 1,294,309 1,240,997 6,133 0 0 5,236,366 7,999,308 0 1,544,407 0 848,529 0 0 26,880 355,100 7,645 361,103 0 0 0 361,103 0.59 0.59