UNITED STATES
                                  -------------
                       SECURITIES AND EXCHANGE COMMISSION
                       ----------------------------------
                             Washington, D.C. 20549
                             ----------------------

                          ____________________________


                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

         Date of Report (Date of earliest event reported):  October 24, 2002


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




Republic of Panama                 1-9610                    59-1562976
(State or other jurisdiction       (Commission               (I.R.S. Employer
 of incorporation)                 File Number)              Identification No.)


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


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



Item 5.   Other Events and Regulation FD Disclosure.

          On October 24, 2002, Carnival Corporation (the "Registrant") issued a
press release relating to its pre-conditional proposal to enter into a dual
listed company structure with P&O Princess Cruises plc ("P&O Princess"), which
will be coupled with an offer to exchange up to 20% of P&O Princess' issued
Ordinary Shares for shares of the Common Stock of Carnival. The press release
relating to the proposal is attached as Exhibit 99.1 to this report and is
incorporated in this item by reference.

Item 7.   Financial Statements and Exhibits.

          (c)    Exhibits

Exhibit       Exhibit Description
- -------       -------------------

99.1          Press Release of the Registrant dated October 24, 2002.
99.2          Form of Offer and Implementation Agreement between the Registrant
              and P&O Princess.
99.3          Form of Third Amended and Restated Articles of Incorporation of
              the Registrant.
99.4          Form of Amended and Restated Bylaws of the Registrant.
99.5          Form of Memorandum of Association of P&O Princess.
99.6          Form of Articles of Association of P&O Princess.
99.7          Form of Equalization and Governance Agreement between the
              Registrant and P&O Princess.
99.8          Form of Carnival Deed Poll Guarantee by the Registrant in favor of
              creditors.
99.9          Form of P&O Princess Deed Poll Guarantee by P&O Princess in favor
              of creditors.
99.10         Form of Carnival Deed Poll by the Registrant in favor of P&O
              Princess Shareholders.
99.11         Form of SVC Special Voting Deed.

                                       2



                                   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 hereunto duly authorized.

Date: October 24, 2002


                                        CARNIVAL CORPORATION



                                        By: /s/ Gerald R. Cahill
                                            ------------------------------------
                                            Gerald R. Cahill
                                            Senior Vice President Finance and
                                            Chief Financial Officer



                                  Exhibit List

Exhibit                                Description
- -------                                -----------

99.1         Press Release of the Registrant dated October 24, 2002.
99.2         Form of Offer and Implementation Agreement, between the Registrant
             and P&O Princess.
99.3         Form of Third Amended and Restated Articles of Incorporation of the
             Registrant.
99.4         Form of Amended and Restated Bylaws of the Registrant.
99.5         Form of Memorandum of Association of P&O Princess.
99.6         Form of Articles of Association of P&O Princess.
99.7         Form of Equalization and Governance Agreement between the
             Registrant and P&O Princess.
99.8         Form of Carnival Deed Poll Guarantee by the Registrant in favor of
             creditors.
99.9         Form of P&O Princess Deed Poll Guarantee by P&O Princess in favor
             of creditors.
99.10        Form of Carnival Deed Poll by the Registrant in favor of P&O
             Princess Shareholders.
99.11        Form of SVC Special Voting Deed.



                                                                    EXHIBIT 99.1

  NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA OR
                                     JAPAN

                                                                24 October 2002

                              CARNIVAL CORPORATION

         PRE-CONDITIONAL CARNIVAL DLC PROPOSAL WITH PARTIAL SHARE OFFER

Micky Arison, the Chairman and Chief Executive of Carnival, said:

"As a result of very constructive meetings with P&O Princess, we are thrilled to
be in a position to offer a DLC structure to P&O Princess shareholders. Our DLC
not only provides P&O Princess shareholders with the superior economic terms of
our increased offer, but also enables them to retain their UK listed shares and
to participate in the only dual listed company that will be included in both the
FTSE 100 and the S&P 500. We value the DLC structure and the benefits it will
provide both the shareholders of Carnival and P&O Princess. We are satisfied
that we have developed a DLC structure which is effective from tax and legal
points of view.

We intend to invite representatives of P&O Princess to join the Carnival board
and believe there will be significant benefits in sharing the best practices of
the two management teams across our combined enterprise. P&O Princess and
Carnival shareholders can both participate in the future of a combined business,
which will be one of the most exciting and dynamic in the leisure industry. We
believe our DLC proposal provides a superior economic alternative for P&O
Princess shareholders to the Royal Caribbean proposal. We therefore expect the
P&O Princess board to withdraw its recommendation for the Royal Caribbean
proposal and, in due course, recommend Carnival's DLC."

SUMMARY

     .  Following negotiations with P&O Princess, the Carnival Board announces a
        pre-conditional proposal to enter into a DLC structure with P&O
        Princess. The combination of Carnival and P&O Princess will create a
        leading global vacation and leisure group.

     .  Under the Carnival DLC Proposal, the Equalisation Ratio will be one
        Carnival Share for every 3.3289 P&O Princess Shares, which is equivalent
        to 0.3004 Carnival Shares for each P&O Princess Share, the same economic
        terms as those of Carnival's Increased Offer announced on 7 February
        2002. The "look through" value of the Carnival DLC is 504 pence per P&O
        Princess Share and values the entire existing issued share capital of
        P&O Princess at approximately (pound)3.5 billion. Carnival Shareholders
        will hold approximately 74 per cent. and P&O Princess Shareholders will
        hold approximately 26 per cent. of the equity of the Carnival DLC.

     .  The Carnival DLC Proposal includes the Partial Share Offer. The Partial
        Share Offer will enable P&O Princess Shareholders to exchange P&O
        Princess Shares for New Carnival Shares on the basis of 0.3004 New
        Carnival Shares for each P&O Princess Share up to, in aggregate, a
        maximum of 20 per cent. of P&O Princess' issued share capital.

     .  Under the Carnival DLC, the boards of Carnival and P&O Princess will be
        identical and the Carnival DLC will be managed by a unified executive
        management team. Representatives of P&O Princess will be invited to join
        the Carnival Board. The DLC Documents between the two companies will
        align their economic interests and enable them to operate as a single
        economic enterprise.

     .  The existing primary listings of Carnival on the NYSE and P&O Princess
        on the London Stock Exchange will be maintained and the existing full
        index participations of Carnival in the S&P 500 and of P&O Princess in
        the FTSE 100 are expected to be retained.



     .  The Carnival DLC Proposal is subject to certain Pre-conditions set out
        below and to the Conditions set out in Appendix I. If the Pre-conditions
        are satisfied or waived, Carnival's Increased Offer will not be made
        except in circumstances described in paragraph 8 of the full text of
        this announcement.

     .  Carnival expects that the earliest date on which P&O Princess would
        recommend the Carnival DLC is in early January 2003, and that completion
        would then occur during the first quarter of 2003.

Carnival DLC Proposal

..        The Carnival Board announces the terms of a pre-conditional proposal to
         enter into a DLC structure with P&O Princess. The Carnival DLC Proposal
         includes Carnival entering into the Implementation Agreement, the form
         of which has been negotiated with P&O Princess, under which, and
         subject to certain Conditions summarised in this announcement, the
         companies will agree to enter into agreements and modify their
         constitutional documents (the form of which have been negotiated with
         P&O Princess) in order to implement the Carnival DLC. Carnival is
         satisfied that the Carnival DLC is effective from tax and legal points
         of view.

..        Under the Carnival DLC, the Equalisation Ratio will be one Carnival
         Share for every 3.3289 P&O Princess Shares, which is equivalent to
         0.3004 Carnival Shares for each P&O Princess Share, the same economic
         terms as those of Carnival's Increased Offer announced on 7 February
         2002. On implementation of the Carnival DLC Proposal it is intended
         that the P&O Princess Shares will be reorganised such that one P&O
         Princess Share will be equivalent to one Carnival Share. Carnival
         Shareholders will hold approximately 74 per cent. and P&O Princess
         Shareholders will hold approximately 26 per cent. of the equity of the
         Carnival DLC.

..        The Carnival DLC Proposal includes the Partial Share Offer for up to 20
         per cent. of the P&O Princess Shares. If the aggregate amount of
         elections under the Partial Share Offer exceeds 20 per cent. of P&O
         Princess' issued share capital when the Partial Share Offer is made,
         they will be scaled down.

..        If the Partial Share Offer is taken up in full, approximately 79 per
         cent. of the equity of the Carnival DLC will be held by Carnival
         Shareholders (including approximately 5 per cent. held by those P&O
         Princess Shareholders who have elected for the Partial Share Offer) and
         approximately 21 per cent. by P&O Princess Shareholders who have
         retained their P&O Princess Shares. The Equalisation Ratio will not be
         affected by the level of the take-up of the Partial Share Offer.

..        The "look through" value per P&O Princess Share under the Carnival DLC,
         based on the closing price of $26.00 per Carnival Share on 23 October
         2002, is 504 pence. This represents:

         .   a premium of 59.1 per cent. to the closing middle-market price of
             317 pence per P&O Princess Share on 19 November 2001, the last
             business day prior to the announcement of the Royal Caribbean
             Proposal; and

         .   a premium of 10.8 per cent. to the closing middle-market price of
             455 pence per P&O Princess Share on 23 October 2002, the last
             business day prior to the date of this announcement.

..        Following completion of the Carnival DLC, it is intended that the
         regular dividend payments received by P&O Princess Shareholders will be
         consistent with Carnival's regular quarterly dividend. Had the Carnival
         DLC been in place for the last four quarters, the dividends received by
         P&O Princess Shareholders would have been approximately 5 per cent.
         higher.

..        Under the Carnival DLC, the boards of Carnival and P&O Princess will be
         identical, and the Carnival DLC will be managed by a unified executive
         management team. Representatives of P&O Princess will be invited to
         join the Carnival Board. The DLC Documents between the two
         companies will align their economic interests, allow them to pursue
         common interests and enable them to operate as a single economic
         enterprise.



..        Although they will be operated as a single economic enterprise, P&O
         Princess and Carnival will retain separate corporate identities and
         will maintain separate stock exchange listings. Carnival will continue
         to have a primary listing on the NYSE. P&O Princess will continue to
         have a primary listing on the London Stock Exchange and is expected to
         remain eligible for full participation in the FTSE series of indices,
         including the FTSE 100. Carnival is expected to retain its existing
         index participations, including its participation in the S&P 500.

Pre-conditions and Conditions to the Carnival DLC Proposal

The signing of the Implementation Agreement by Carnival relating to the Carnival
DLC and the making of the Partial Share Offer are subject to the following
Pre-conditions, which Carnival may waive at its discretion:

..        P&O Princess withdrawing its recommendation of the Royal Caribbean
         Proposal within 48 hours of this announcement and not subsequently
         reinstating such recommendation;

..        P&O Princess Shareholders not passing the resolutions to approve the
         Royal Caribbean Proposal or the Royal Caribbean Proposal being
         otherwise abandoned;

..        P&O Princess having given a termination notice under Section 9.01 (c)
         of the Joint Venture Agreement or the Joint Venture Agreement having
         been terminated, at no cost (excluding the existing termination amount
         set out in the Implementation Agreement between P&O Princess and Royal
         Caribbean, dated as of 19 November 2001) under Section 9.01 (a); and

..        P&O Princess signing the Implementation Agreement with Carnival and
         recommending the Carnival DLC by no later than 10 January 2003.

In addition, the Panel has ruled that Carnival may not withdraw its Increased
Offer unless holders of not less than 10 per cent. of P&O Princess Shares
confidentially, and in terms acceptable to the Panel, confirm to the Panel that
they would not intend to accept the Increased Offer if Carnival has confirmed to
the Panel that such an offer would be made with a non-waivable 90 per cent.
acceptance condition and a non-extendable first closing date and in
circumstances where: (i) it would not be recommended by the P&O Princess Board;
and (ii) if it were to lapse, Carnival would be obliged to proceed with the
Carnival DLC Proposal. On the basis that such P&O Princess Shareholder
confirmations are received, the Panel has accepted that if the Increased Offer
were made in such circumstances, it could not become unconditional because the
acceptance condition would not be satisfied and has therefore ruled that the
Increased Offer may be withdrawn subject to reinstatement as set out in
paragraph 8 of the full text of this announcement.

If the confirmations referred to above are not received by the Panel prior to 10
January 2003, the Carnival DLC Proposal will be withdrawn and Carnival will be
obliged to proceed with its Increased Offer. The Carnival DLC Proposal may be
withdrawn, and the Increased Offer may be reinstated, before, on or after 10
January 2003, in the circumstances set out in paragraph 8 below. Any
reinstatement of the Increased Offer will allow Carnival the normal flexibility
to reduce the 90 per cent. acceptance condition and to extend it beyond the
first closing date.

The Carnival DLC Proposal will be subject to the Conditions set out in Appendix
I.

Benefits of the proposed combination of Carnival and P&O Princess

..        A combination of Carnival and P&O Princess will create a leading global
         vacation and leisure company with a wide portfolio of complementary
         brands, both by geography and product offering, and will include some
         of the best known and respected cruise brands globally. The combination
         will allow the Carnival DLC to offer a wider range of vacation choices
         for its customers and will enhance its ability to attract customers
         from land-based vacations to cruise vacations.



..        Under the Carnival DLC the economic interests and incentives of
         Carnival and P&O Princess will be aligned under a unified executive
         management team and identical boards. Carnival believes that there will
         be significant benefits in sharing the best practices of the management
         teams across the combined enterprise.

..        Carnival expects that the Carnival DLC will generate significant
         synergies to the benefit of both shareholders and customers. These
         savings are expected to come from the sharing of best practices to
         achieve efficiencies from, inter alia, purchasing, marketing and also
         from rationalising support operations in locations served by both
         companies. Carnival and P&O Princess have not yet discussed synergies
         in detail and, accordingly, Carnival has not revised its previously
         announced cost saving estimate of at least $100 million on an
         annualised basis, in the first full financial year following completion
         of the transaction. Carnival has conducted an update of its analysis to
         reconfirm this estimate, further details of which are set out in
         Appendix III.

..        The Carnival DLC will benefit from the financial flexibility of a
         strong operating cash flow and modest leverage, resulting in a strong
         balance sheet and investment grade credit rating.

Approvals required by regulatory authorities

..        Carnival, P&O Princess and their respective advisers have had detailed
         discussions with the Panel regarding the Carnival DLC Proposal. The
         Panel has consented to the making of this announcement. The Panel has
         confirmed that, on the basis of information currently available to it,
         following establishment of the proposed Carnival DLC, neither P&O
         Princess nor Carnival will be a company to which the Takeover Code
         applies. Certain of the protections which would apply to shareholders
         under the Takeover Code will be reflected in provisions in the DLC
         Documents.

..        Carnival and its advisers have had detailed discussions with the UKLA
         regarding the Carnival DLC Proposal. Carnival understands that P&O
         Princess has also had similar discussions with the UKLA. Based on these
         discussions, Carnival believes, that subject to normal document review,
         the UKLA will approve the issue by P&O Princess of the circular to P&O
         Princess Shareholders convening the P&O Princess EGM.

..        Carnival has received clearance from the EC and the FTC for the
         combination of its business with that of P&O Princess, pursuant to the
         Increased Offer. Carnival has been advised that the FTC clearance is
         also applicable to a combination accomplished pursuant to the Carnival
         DLC Proposal and, therefore, that Carnival is not required to undergo
         any further regulatory process in the US in relation to the Carnival
         DLC Proposal. Carnival may be required to submit to the EC a further
         filing for clearance of the combination pursuant to the Carnival DLC
         Proposal. Carnival has been advised that there is no reason why the
         EC's appraisal of the Carnival DLC Proposal would in any way differ
         from its appraisal of the Increased Offer. Accordingly, Carnival
         expects to receive a clearance decision from the EC during the first
         quarter of 2003.

Shareholder approval process and timetable

..        Carnival expects that the earliest date on which P&O Princess would
         recommend the Carnival DLC is in early January 2003, and that
         completion would then occur during the first quarter of 2003.

..        The implementation of the Carnival DLC requires the approval of the
         shareholders of Carnival and of P&O Princess. Carnival expects that
         once the Pre-conditions have been satisfied or waived, appropriate
         documentation will be sent to both P&O Princess Shareholders and
         Carnival Shareholders, which will include further information on the
         proposed combination and which will seek their approval for the
         combination. The documents will also include a form enabling P&O
         Princess Shareholders to elect for Carnival Shares under the Partial
         Share Offer.

..        Micky Arison and certain entities related to the Arison family have
         entered into undertakings under which they will be required to cause
         shares representing approximately 45 per cent. of the voting rights in
         Carnival to vote in favour of the resolutions to implement the Carnival
         DLC at the requisite



         Carnival shareholder meeting. Such undertakings are irrevocable except
         in circumstances where the Carnival DLC Proposal is withdrawn or
         lapses.

Existing Increased Offer

..        Carnival has received consent from the Panel that it will no longer be
         obliged to, and will not, post its Increased Offer to P&O Princess
         Shareholders if the Pre-conditions to the Carnival DLC Proposal are
         satisfied or waived by 10 January 2003, except in specific
         circumstances that have been agreed with the Panel and which are set
         out in paragraph 8 of the full text of this announcement. Carnival
         will, however, be obliged to proceed with its Increased Offer if the
         Pre-conditions to the Carnival DLC Proposal are neither satisfied nor
         waived by 10 January 2003 or if the confirmations referred to above
         have not been received by the Panel prior to, 10 January 2003.

This summary should be read in conjunction with the full text of this
announcement.

Enquiries:

Carnival                                         Telephone: +44 20 7831 3113
Micky Arison
Howard Frank

Merrill Lynch                                    Telephone: +44 20 7628 1000
Philip Yates
Mark Brooker
Stuart Faulkner
Rachel Monk

UBS Warburg                                      Telephone: +44 20 7567 8000
Tom Cooper
Alistair Defriez
Philip Ellick

Financial Dynamics                               Telephone: +44 20 7831 3113
Nic Bennett



The directors of Carnival accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Carnival (who have taken all reasonable care to ensure such is the case), the
information contained herein for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information except that the only responsibility accepted by them for the
information in this announcement relating to P&O Princess and Royal Caribbean
which has been compiled from published sources is to ensure that the information
has been correctly and fairly reproduced and presented.

Merrill Lynch International and UBS Warburg Ltd., a subsidiary of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the Increased Offer and Carnival DLC
Proposal and will not be responsible to anyone other than Carnival for providing
the protections afforded to clients respectively of Merrill Lynch International
and UBS Warburg Ltd. as the case may be or for providing advice in relation to
the Increased Offer and Carnival DLC Proposal.

SHAREHOLDER DISCLOSURE OBLIGATIONS

Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of P&O Princess or Carnival, owns or controls, or become the owner or
controller, directly or indirectly of one per cent. or more of any class of
securities of P&O Princess or Carnival is generally required under the
provisions of Rule 8 of the City Code to disclose to a Regulated Information
Service ("RIS") and the Panel of every dealing in such securities during the
period from 16 December 2001, the date of the announcement of the original
Offer, until the date of the P&O Princess EGM or, if the Increased Offer is
made, until the first closing date of the Increased Offer (or, if later, the
date on which the Increased Offer becomes, or is declared, unconditional as to
acceptances or lapses). Dealings by Carnival or P&O Princess or by their
respective "associates" (within the definitions set out in the City Code) in any
class of securities of Carnival or P&O Princess must also be disclosed. Please
consult your financial advisor immediately if you believe this rule may be
applicable to you.

Disclosure should be made on an appropriate form before 12 noon (London time) on
the business day following the date of the dealing transaction. These
disclosures should be registered with a RIS (e.g. the Company Announcements
Office of the London Stock Exchange (fax number: +44 20 7588 6057)) and to the
Panel (fax number: +44 20 7256 9386).

CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the US Private Securities Litigation Reform Act of 1995.
Carnival Corporation has tried, wherever possible, to identify such statements
by using words such as "anticipate," "assume,", "believe," "expect," "forecast,"
"future," "intend," "plan" and words and terms of similar substance in
connection with any discussion of future operating or financial performance.
These forward-looking statements, including those which may impact the
forecasting of Carnival's net revenue yields, booking levels, pricing, occupancy
or business prospects, involve known and unknown risks, uncertainties and other
factors, which may cause Carnival's actual results, performances or achievements
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 the net revenue yields for
Carnival's cruise products; consumer demand for cruises and other vacation
options; other vacation industry competition; effects on consumer demand of
armed conflicts, political instability, terrorism, adverse media publicity and
the availability of air service; shifts in consumer booking patterns; increases
in vacation industry capacity, including cruise capacity; continued availability
of attractive port destinations; changes in tax laws and regulations; changes
and disruptions in equity, financial and insurance markets; Carnival's financial
and contractual counterparties' ability to perform; Carnival's ability to
implement its brand strategy; Carnival's ability to implement its shipbuilding
program and to continue to expand its business worldwide; Carnival's ability to
attract and retain shipboard crew; changes in foreign currency and interest
rates and increases in security, food, fuel, and insurance costs; delivery of
new ships on schedule and at the contracted prices; weather patterns and natural
disasters; unscheduled ship repairs and drydocking; incidents involving cruise
ships; impact of pending or threatened litigation; Carnival's ability to
implement successfully cost improvement plans; the continuing financial
viability and/or consolidation of Carnival's travel agent distribution system;
Carnival's ability to integrate successfully business acquisitions and changes
in laws and regulations applicable to Carnival.

These risks may not be exhaustive. Carnival operates in a continually changing
business environment, and new risks emerge from time to time. Carnival cannot
predict such risks nor can it assess the impact, if any, of such risks on its
business or the extent to which any risk, or combination of risks may cause
actual results to differ from those projected in any forward-looking statements.
Accordingly, forward-looking statements should not be relied upon as a
prediction of actual results. Carnival undertakes no obligation publicly to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

CARNIVAL PLANS TO FILE A REGISTRATION STATEMENT ON FORM S-4, A PROXY STATEMENT
ON SCHEDULE 14A AND A STATEMENT ON SCHEDULE TO WITH THE US SECURITIES AND
EXCHANGE COMMISSION IN CONNECTION WITH COMMENCEMENT OF ITS CARNIVAL DLC PROPOSAL
TO ACQUIRE P&O PRINCESS CRUISES PLC. THE FORM S-4 WILL CONTAIN A PROSPECTUS AND
OTHER DOCUMENTS RELATING TO THE CARNIVAL DLC PROPOSAL. CARNIVAL PLANS TO MAIL
THE PROSPECTUS CONTAINED IN THE FORM S-4 TO SHAREHOLDERS OF P&O PRINCESS AFTER
THE FORM S-4 HAS BEEN DECLARED EFFECTIVE BY the SEC. CARNIVAL PLANS TO MAIL THE
PROXY STATEMENT TO ITS SHAREHOLDERS AT OR ABOUT THE SAME TIME. THE FORM S-4, THE
PROSPECTUS, THE PROXY STATEMENT AND THE SCHEDULE TO WILL CONTAIN IMPORTANT
INFORMATION ABOUT CARNIVAL, P&O PRINCESS, THE CARNIVAL DLC PROPOSAL AND RELATED
MATTERS. INVESTORS AND STOCKHOLDERS SHOULD READ THE FORM S-4, THE PROSPECTUS,
THE PROXY STATEMENT, THE SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC
IN CONNECTION WITH THE CARNIVAL DLC PROPOSAL CAREFULLY BEFORE THEY MAKE ANY
DECISION WITH RESPECT TO THE CARNIVAL DLC PROPOSAL. THE FORM S-4, THE
PROSPECTUS, THE PROXY STATEMENT, THE SCHEDULE TO AND ALL OTHER DOCUMENTS FILED
WITH THE SEC IN CONNECTION WITH THE INCREASED OFFER AND/OR CARNIVAL DLC PROPOSAL
WILL BE AVAILABLE WHEN FILED FREE OF CHARGE AT THE SEC'S WEB SITE, AT
WWW.SEC.GOV. IN ADDITION, THE PROSPECTUS AND ALL OTHER DOCUMENTS FILED WITH THE
SEC IN CONNECTION WITH THE INCREASED OFFER AND/OR CARNIVAL DLC PROPOSAL WILL BE
MADE AVAILABLE TO INVESTORS FREE OF CHARGE BY WRITING TO TIM GALLAGHER AT
CARNIVAL CORPORATION, CARNIVAL PLACE, 3655 N.W. 87 AVENUE, MIAMI, FLORIDA,
33178-2428.



IN ADDITION TO THE FORM S-4, The prospectus, THE PROXY STATEMENT, THE SCHEDULE
TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE CARNIVAL
DLC PROPOSAL, CARNIVAL IS OBLIGATED TO FILE ANNUAL, QUARTERLY AND CURRENT
REPORTS, PROXY STATEMENTS AND OTHER INFORMATION WITH THE SEC. PERSONS MAY READ
AND COPY ANY REPORTS, STATEMENTS AND OTHER INFORMATION FILED WITH THE SEC AT THE
SEC'S PUBLIC REFERENCE ROOM AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549.
PLEASE CALL THE SEC AT 1-800-732-0330 FOR FURTHER INFORMATION ON THE PUBLIC
REFERENCE ROOM. FILINGS WITH THE SEC ARE ALSO AVAILABLE TO THE PUBLIC FROM
COMMERCIAL DOCUMENT-RETRIEVAL SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC
AT WWW.SEC.GOV.

THE IDENTITIES OF THE PARTICIPANTS IN THE SOLICITATION OF CARNIVAL SHAREHOLDERS
FOR PURPOSES OF RULE 14a-12(a)(1) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND
THEIR INTERESTS IN THE OFFER AND THE TRANSACTIONS RELATED TO IT ARE SET FORTH IN
APPENDIX VI TO THE FULL TEXT OF THIS ANNOUNCEMENT.



  NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA OR
                                      JAPAN

                                                                 24 October 2002

                              CARNIVAL CORPORATION
         PRE-CONDITIONAL CARNIVAL DLC PROPOSAL WITH PARTIAL SHARE OFFER

1.       Introduction

Following negotiations with P&O Princess, the Carnival Board announces the terms
of a pre-conditional proposal to enter into a DLC structure with P&O Princess.
The proposal includes Carnival entering into an Implementation Agreement, the
form of which has been negotiated with P&O Princess, under which, and subject to
certain Pre-conditions and Conditions described in this announcement, the
companies will enter into agreements and modify their constitutional documents
(the form of which has also been negotiated with P&O Princess) in order to
implement the Carnival DLC Proposal. In addition, the Carnival DLC Proposal
includes an option for P&O Princess Shareholders to exchange a proportion of
their P&O Princess Shares for New Carnival Shares if the dual listed combination
is completed. Carnival is satisfied that the Carnival DLC is effective from tax
and legal points of view.

2.       Carnival DLC Proposal

The Equalisation Ratio in the Carnival DLC will initially be one Carnival Share
for every 3.3289 P&O Princess Shares, which is equivalent to 0.3004 Carnival
Shares for each P&O Princess Share, the same economic terms as those of
Carnival's Increased Offer announced on 7 February 2002. On implementation of
the Carnival DLC, it is intended that the P&O Princess Shares will be
reorganised such that one P&O Princess Share will be equivalent to one Carnival
Share. Carnival Shareholders will hold approximately 74 per cent. of the equity
of the Carnival DLC, and P&O Princess Shareholders will hold approximately 26
per cent. The Conditions of the Carnival DLC are set out in Part A of Appendix
I.

The Carnival DLC Proposal includes the Partial Share Offer for up to 20 per
cent. of the P&O Princess Shares. The Partial Share Offer enables P&O Princess
Shareholders to elect to exchange P&O Princess Shares for New Carnival Shares on
the basis of 0.3004 New Carnival Shares for each P&O Princess Share. P&O
Princess Shareholders can elect to accept the Partial Share Offer in respect of
all or a portion of their P&O Princess shareholdings. If the aggregate amount of
elections under the Partial Share Offer exceeds 20 per cent. of P&O Princess'
issued share capital when the Partial Share Offer is made, acceptances will be
scaled down.

If the Partial Share Offer is taken up in full, approximately 79 per cent. of
the equity of the Carnival DLC will be held by Carnival Shareholders (including
approximately 5 per cent. held by those P&O Princess Shareholders who have
elected for the Partial Share Offer) and approximately 21 per cent. by P&O
Princess Shareholders who have retained their P&O Princess Shares. The
Equalisation Ratio will not be affected by the level of the take-up of the
Partial Share Offer.

The Partial Share Offer will be open for acceptance for at least 20 business
days. The Partial Share Offer is conditional on, and will close on,
implementation of the Carnival DLC, which is expected to be shortly after the
P&O Princess EGM. The Carnival DLC and the Partial Share Offer are
inter-conditional.

P&O Princess Shares acquired under the Partial Share Offer will be acquired free
from all liens, charges and encumbrances and with all rights attached thereto.
P&O Princess Shareholders will be entitled to retain all dividends paid or
payable on such P&O Princess Shares in respect of the period from the date of
this announcement until the date the Partial Share Offer becomes wholly
unconditional.

The New Carnival Shares will be issued credited as fully paid and will rank pari
passu in all respects with the existing Carnival Shares. Fractions of New
Carnival Shares will not be issued.



Further information on the Partial Share Offer is set out in paragraph 9 below.
The Conditions of the Partial Share Offer are set out in Part B of Appendix I.

The "look through" value per P&O Princess Share under the Carnival DLC, based on
the closing price of $26.00 per Carnival Share on 23 October 2002, is 504 pence.
This represents:

    .    a premium of 59.1 per cent. to the closing middle-market price of 317
         pence per P&O Princess Share on 19 November 2001, the last business day
         prior to the announcement of the Royal Caribbean Proposal; and

    .    a premium of 10.8 per cent. to the closing middle-market price of 455
         pence per P&O Princess Share on 23 October 2002, the last business day
         prior to the date of this announcement.

The signing of the Implementation Agreement by Carnival relating to the Carnival
DLC and the making of the Partial Share Offer are subject to the following
Pre-conditions, which Carnival may waive at its discretion:

    .    P&O Princess withdrawing its recommendation of the Royal Caribbean
         Proposal within 48 hours of this announcement and not subsequently
         reinstating such recommendation;

    .    P&O Princess Shareholders not passing the resolutions to approve the
         Royal Caribbean Proposal or the Royal Caribbean Proposal being
         otherwise abandoned;

    .    P&O Princess having given a termination notice under Section 9.01 (c)
         of the Joint Venture Agreement or the Joint Venture Agreement having
         been terminated, at no cost (excluding the existing termination amount
         set out in the Implementation Agreement between P&O Princess and Royal
         Caribbean, dated as of 19 November 2001) under Section 9.01 (a); and

    .    P&O Princess signing the Implementation Agreement with Carnival and
         recommending the Carnival DLC by no later than 10 January 2003.

In addition, the Panel has ruled that Carnival may not withdraw its Increased
Offer unless holders of not less than 10 per cent. of P&O Princess Shares
confidentially, and in terms acceptable to the Panel, confirm to the Panel, that
they would not intend to accept the Increased Offer if Carnival has confirmed to
the Panel that such an offer would be made with a non-waivable 90 per cent.
acceptance condition and a non-extendable first closing date and in
circumstances where: (i) it would not be recommended by the P&O Princess Board;
and (ii) if it were to lapse, Carnival would be obliged to proceed with the
Carnival DLC Proposal. On the basis that such P&O Princess Shareholder
confirmations are received, the Panel has accepted that if the Increased Offer
were made in such circumstances, it could not become unconditional because the
acceptance condition would not be satisfied and has therefore ruled that the
Increased Offer may be withdrawn subject to reinstatement as set out in
paragraph 8 below.

If the confirmations referred to above are not received by the Panel prior to 10
January 2003, the Carnival DLC Proposal will be withdrawn and Carnival will be
obliged to proceed with its Increased Offer. The Carnival DLC Proposal may be
withdrawn, and the Increased Offer may be reinstated, before, on or after 10
January 2003, in the circumstances set out in paragraph 8 below. Any
reinstatement of the Increased Offer will allow Carnival the normal flexibility
to reduce the 90 per cent. acceptance condition and to extend it beyond the
first closing date.

The Carnival DLC Proposal will be subject to the Conditions set out in Appendix
I.



3.       Key features of the proposed Carnival DLC

3.1      Separate entities and listings

The companies' economic interests and incentives will be aligned and they will
pursue common interests with identical boards and a unified executive management
team. Through the Carnival DLC, Carnival and P&O Princess will be managed and
operated as a single economic enterprise.

Although they will be operated as a single economic enterprise, P&O Princess and
Carnival will remain separate corporations and will maintain separate stock
exchange listings. Carnival will continue to have a primary listing on the NYSE.
P&O Princess will continue to have a primary listing on the London Stock
Exchange and is expected to remain eligible for full participation in the FTSE
series of indices, including the FTSE 100. Carnival is expected to retain its
existing index participations, including its participation in the S&P 500.

3.2      No transfer of assets

The implementation of the Carnival DLC Proposal will not involve any transfer of
assets between the Carnival Group and the P&O Princess Group. After
implementation of the Carnival DLC, management of the Carnival DLC will
determine whether assets will be owned by Carnival or P&O Princess as is most
efficient and appropriate under the then prevailing circumstances. The Carnival
DLC will comprise all of the assets held by P&O Princess and Carnival
immediately prior to the implementation of the Carnival DLC.

3.3      Rights of Carnival Shareholders and P&O Princess Shareholders

Carnival Shareholders will continue to hold their shares in Carnival. P&O
Princess Shareholders will continue to hold their shares in P&O Princess and/or
may acquire shares in Carnival under the Partial Share Offer. P&O Princess
Shareholders will continue to receive dividends from P&O Princess, and Carnival
Shareholders will continue to receive dividends from Carnival. However, the
economic and voting interests of Carnival Shareholders and P&O Princess
Shareholders will effectively be in the Carnival DLC as a whole as a result of
the arrangements described in this announcement.

3.4      Common economic interests

Agreements between Carnival and P&O Princess will align the economic interests
of the two companies to ensure that they will be operated as a single economic
enterprise under a DLC structure. Carnival Shareholders and P&O Princess
Shareholders will have equalised rights to income and capital distributions from
the Carnival DLC. The economic interests represented by an individual share in
one company relative to the economic interests of an individual share in the
other company will be determined by reference to the Equalisation Ratio. The
Equalisation Ratio will initially be one Carnival Share for every 3.3289 P&O
Princess Shares. However, on implementation of the Carnival DLC, it is intended
that there will be a reorganisation of P&O Princess Shares such that the
Equalisation Ratio will become one Carnival Share for each P&O Princess Share.
This reorganisation is intended to ease the comparison between P&O Princess and
Carnival Shares following completion and does not affect the economic terms of
the Carnival DLC. Accordingly, one Carnival Share will have rights to income and
capital equivalent to that of one P&O Princess Share. There will be
consequential adjustments to the P&O Princess ADSs.

If one company has insufficient profits or is otherwise unable to pay a
dividend, Carnival and P&O Princess will, as far as practicable, enter into such
balancing transactions as are necessary to enable both companies to pay
dividends in accordance with the Equalisation Ratio. This may take the form of a
payment from one company to the other or a dividend payment on an equalisation
share.



Dividends will be equalised according to the Equalisation Ratio (and any
balancing transactions between the companies will be determined and made) before
deduction of any amounts in respect of the tax required to be deducted or
withheld and excluding the amounts of any tax credits or other tax benefits. In
recent quarters, Carnival has paid quarterly dividends of 10.5 cents per
Carnival Share, which, based on the Equalisation Ratio, equates to approximately
3.15 cents per P&O Princess Share. In recent quarters, P&O Princess has paid
quarterly dividends of 3.0 cents per P&O Princess Share. Following completion of
the Carnival DLC it is intended that dividends received by P&O Princess
Shareholders will be made to be consistent with Carnival's regular quarterly
dividend. Accordingly, had the Carnival DLC been in place for the last four
quarters, the dividends received by P&O Princess Shareholders would have been
approximately 5 per cent. higher.

P&O Princess Shareholders will continue to have the option to elect to receive
dividends in US dollars or pounds sterling in according with P&O Princess'
existing procedures.

There will be no interruption to the entitlement of quarterly dividends for
shareholders of either company as a result of the Carnival DLC Proposal.

3.5      Unified board and management

Carnival and P&O Princess will be operated and managed as a single economic
enterprise. As Carnival and P&O Princess will remain separate corporate
entities, each will continue to have its own board of directors, but the boards
and senior executive management of each company will comprise the same people.
Micky Arison will be the Chairman and Chief Executive Officer and Howard S.
Frank will be the Chief Operating Officer of both companies in the Carnival DLC.
The headquarters of the Carnival DLC will be in Miami, with a significant
corporate office in the UK. In addition to their duties to the relevant company,
in managing the Carnival DLC, the directors will have regard to the interests of
both Carnival and P&O Princess.

Resolutions relating to the appointment, removal and re-election of directors
after completion will be considered as a joint electorate action and voted upon
by the shareholders of each company effectively voting together as a single
decision making body. Representatives of P&O Princess will be invited to join
the Carnival Board.

Carnival and P&O Princess comply with, and the Carnival DLC will comply with,
the applicable corporate governance requirements of the Sarbanes-Oxley Act of
2002 and of the rules of the NYSE, which contain corporate governance provisions
substantially comparable to those of the Combined Code of the UKLA.

3.6      Voting arrangements

Under the terms of the DLC Documents, the Carnival articles of incorporation and
by-laws and the P&O Princess memorandum and articles of association will be
amended to provide for special voting arrangements to be implemented so that in
most cases the shareholders of both companies effectively vote together as a
single decision-making body on matters requiring the approval of shareholders of
either company. The voting interests represented by an individual share in one
company relative to the voting interests of an individual share in the other
company will be determined by reference to the Equalisation Ratio. Accordingly,
after the reorganisation of P&O Princess Shares following the completion of the
Carnival DLC, one Carnival Share will have voting rights equivalent to those of
one P&O Princess Share. Certain provisions designed to preserve the structure of
the Carnival DLC will be subject to the separate approvals of both P&O Princess
Shareholders and Carnival Shareholders, further details of which are set out in
Appendix II.

These voting arrangements are proposed to be implemented by entrenching them in
the constitutional documents of the two companies and through the Equalisation
and Governance Agreement and rights attaching to a specially created Special
Voting Share to be issued by each company.



Under the Articles of P&O Princess, P&O Princess Shares held by Carnival will
have no voting rights at any general meeting of P&O Princess unless the total
holding of P&O Princess Shares by Carnival equals or exceeds 90 per cent. of the
P&O Princess Shares then in issue.

3.7      Cross guarantees

Upon completion of the Carnival DLC, P&O Princess and Carnival will each execute
a Deed Poll Guarantee for the purpose of guaranteeing contractual monetary
amounts owed by the other company which are incurred on or after the
implementation of the Carnival DLC. Future creditors of Carnival and P&O
Princess entitled to the benefit of the Deed Poll Guarantees will, to the extent
possible, be placed in the same position as if the relevant debts were also owed
by the other company.

3.8      Restrictions on takeovers

The Panel has confirmed that, on the basis of information currently available to
it, following establishment of the proposed Carnival DLC, neither P&O Princess
nor Carnival will be a company to which the Takeover Code applies. The Takeover
Code provides a number of protections for shareholders, particularly in relation
to mandatory offers where a person or group of persons acting in concert
acquires in excess of 30 per cent. of the voting rights of a company.

Provisions are intended to be inserted in the constitutional documents of
Carnival and P&O Princess which would apply to any person, or group of persons
acting in concert, that acquires shares in the Carnival DLC which would trigger
a mandatory offer obligation as if the Takeover Code applied to the Carnival DLC
on a combined basis. To the extent that the resulting shareholding exceeds one
of the limits in Rule 9 of the Takeover Code, such shares would be
disenfranchised unless an offer for all shares in the Carnival DLC at a price
equivalent to that applicable to the acquisition has been made. A Buy-back will
not trigger these provisions. There are certain exceptions to these provisions
in the case of the Arison family and certain related entities which together
will hold approximately 35 per cent. of the equity of the Carnival DLC. Under
the DLC Documents, the Arison family and certain related entities can acquire
shares in the Carnival DLC without triggering these provisions provided that, as
a result, their aggregate holdings do not increase by more than one per cent. of
the voting power of the Carnival DLC in any period of 12 consecutive months,
subject to their combined holdings not exceeding 40 per cent. of the voting
power of the Carnival DLC. However, these parties may acquire additional shares
or voting power without being subject to these restrictions if they comply with
the offer requirement described above.

3.9      Buy-backs of Carnival DLC shares

Each of Carnival and P&O Princess may purchase shares in the other and P&O
Princess may acquire its own shares, or reduce its issued share capital, subject
to the provisions of the Companies Act 1985. Carnival may also purchase Carnival
Shares. Under the terms of the DLC Documents, no Buy-backs of P&O Princess
Shares shall be made in the two year period following the date on which the
Carnival DLC is implemented. After expiration of the initial two year period,
for each of the next three years no Buy-backs of P&O Princess Shares shall be
made in excess of 5 per cent. per year of the issued P&O Princess Shares
(calculated as at the first day in such annual period). Thereafter, there shall
be no restriction on the number of P&O Princess Shares which may be the subject
of a Buy-back. These restrictions may be varied by a Class Rights Action as
described in Appendix II. There will be no restrictions in the DLC Documents on
the number of Carnival Shares which may be the subject of Buy-backs.

3.10     Termination amount

The Implementation Agreement will include a provision for a termination amount
equal to 1 per cent. of P&O Princess' market capitalisation (on the date the
Implementation Agreement is executed) to be paid by Carnival or P&O Princess in
certain circumstances. Further details are set out in Appendix II.



4.     Benefits of the proposed combination of Carnival and P&O Princess

A combination of Carnival and P&O Princess will create a leading global vacation
and leisure company with a wide portfolio of complementary brands, both by
geography and product offering, and will include some of the best known and
respected cruise brands globally. This will allow the Carnival DLC to offer a
wider range of vacation choices for its customers and will enhance its ability
to attract customers from land-based vacations to cruise vacations.

Under the Carnival DLC the economic interests and incentives of Carnival and P&O
Princess will be aligned under a unified executive management team and identical
boards. Carnival believes that there will be significant benefits in sharing the
best practices of the two management teams across the combined enterprise.

Carnival expects that the Carnival DLC will generate significant synergies to
the benefit of both shareholders and customers. These savings are expected to
come from the sharing of best practices to achieve efficiencies from, inter
alia, purchasing, marketing and also from rationalising support operations in
locations served by both companies. Carnival and P&O Princess have not yet
discussed synergies in detail and, accordingly, Carnival has not revised its
previously announced cost saving estimate of at least $100 million on an
annualised basis, in the first full financial year following completion of the
transaction. Carnival has conducted an update of its analysis to reconfirm this
estimate, further details of which are set out in Appendix III.

The Carnival DLC will benefit from the financial flexibility of a strong
operating cash flow and modest leverage, resulting in a strong balance sheet and
investment grade credit rating.

5.     Employees

The combination of Carnival and P&O Princess will offer employees exciting
career prospects. Employees of the Carnival DLC will benefit from a larger
operating platform and a business of greater international size and scope.
Carnival confirms that the existing employment rights, including pension rights,
of P&O Princess employees will be fully safeguarded. Carnival does not expect
that there will be significant redundancies arising from the implementation of
the Carnival DLC Proposal.

6.     Approvals required by regulatory authorities

Carnival, P&O Princess and their respective advisers have had detailed
discussions with the Panel regarding the Carnival DLC Proposal. The Panel has
consented to the making of this announcement. The Panel has confirmed that, on
the basis of information currently available to it, following establishment of
the proposed Carnival DLC, neither P&O Princess nor Carnival will be companies
to which the Takeover Code applies. Certain of the protections which would apply
to shareholders under the Takeover Code will be reflected in provisions in the
DLC Documents, further details of which are contained in paragraph 3.8 above.

Carnival and its advisers have had detailed discussions with the UKLA regarding
the Carnival DLC Proposal. Carnival understands that P&O Princess has also had
similar discussions with the UKLA. Based on these discussions, Carnival believes
that, subject to normal document review, the UKLA will approve the issue by P&O
Princess of the circular to P&O Princess Shareholders convening the P&O Princess
EGM.

Carnival has received clearance from the EC and the FTC for the combination of
its business with that of P&O Princess, pursuant to the Increased Offer.
Carnival has been advised that the FTC clearance is also applicable to a
combination accomplished pursuant to the Carnival DLC Proposal and, therefore,
that Carnival is not required to undergo any further regulatory process in the
US in relation to the Carnival DLC Proposal. Carnival may be required to submit
to the EC a further filing for clearance of the combination pursuant to the
Carnival DLC Proposal. Carnival has been advised that there is no reason why the
EC's appraisal of the Carnival DLC Proposal would in any way differ from its
appraisal of the Increased Offer. Accordingly, Carnival expects to receive a
clearance decision from the EC during the first quarter of 2003.



7.     Shareholder approval process and timetable

Carnival expects that the earliest date on which P&O Princess would recommend
the Carnival DLC is in early January 2003, and that completion would then occur
during the first quarter of 2003.

The implementation of the Carnival DLC requires the approval of the shareholders
of Carnival and of P&O Princess. Carnival expects that once the Pre-conditions
have been satisfied or waived, appropriate documentation will be sent to both
P&O Princess Shareholders and Carnival Shareholders, which will include further
information on the proposed combination and which will seek their approval for
the combination. The documents will also include a form enabling P&O Princess
Shareholders to elect for Carnival Shares under the Partial Share Offer.

Micky Arison and certain entities related to the Arison family have entered into
undertakings under which they will be required to cause shares representing
approximately 45 per cent. of the voting rights in Carnival to vote in favour of
the resolutions required to implement the Carnival DLC at the requisite Carnival
shareholder meeting. Such undertakings are irrevocable except in circumstances
where the Carnival DLC proposal is withdrawn or lapses.

8.     Existing Increased Offer

Carnival has received consent from the Panel that it will no longer be obliged
to, and will not, post its Increased Offer to P&O Princess Shareholders if the
Pre-conditions to the Carnival DLC Proposal are satisfied or waived by 10
January 2003. Carnival will, however, be obliged to proceed with its Increased
Offer if the Pre-conditions to the Carnival DLC Proposal are neither satisfied
nor waived by 10 January 2003 or if the confirmations from P&O Princess
Shareholders referred to in paragraph 2 have not been received by the Panel
prior to 10 January 2003.

In addition, Carnival will be entitled to withdraw the Carnival DLC Proposal if
prior to 10 January 2003 (i) a Competing Proposal is announced; (ii) the P&O
Princess Board recommends a competing offer (including a DLC offer); or (iii)
the P&O Princess Board announces that it does not intend to recommend the
Carnival DLC. If Carnival withdraws the Carnival DLC Proposal in any of the
circumstances described above, Carnival will, and will be obliged to, proceed
with its Increased Offer.

If the Pre-conditions are satisfied or waived by 10 January 2003, Carnival will
enter into the Implementation Agreement, and will not be obliged to, and will
not, proceed with the Increased Offer. However, if the Implementation Agreement
is terminated thereafter, Carnival will proceed with the Increased Offer, unless
the termination has been as a result of (i) P&O Princess Shareholders voting
against the resolutions required to implement the Carnival DLC Proposal at an
EGM of P&O Princess; or (ii) a condition of the Implementation Agreement being
invoked which Carnival notifies the Panel it would invoke in relation to the
conditions of the Increased Offer, such invocation requiring the consent of the
Panel in accordance with Note 2 to Rule 13 of the Takeover Code. In particular,
Carnival will proceed with its Increased Offer where the Implementation
Agreement has been terminated by Carnival as a result of the P&O Princess Board
withdrawing or adversely modifying its recommendation of the Carnival DLC or
because a Competing Proposal is announced.

9.     Conditions of the Partial Share Offer

The conditions of the Partial Share Offer are set out in Part B of Appendix I.
In particular, the Partial Share Offer is conditional upon completion of the
Carnival DLC. A P&O Princess Shareholder will be able to elect for the Partial
Share Offer, whether or not such shareholder has voted in favour of the
resolutions to implement the Carnival DLC. Application will be made for the New
Carnival Shares to be issued under the Partial Share Offer to be admitted to
listing on the New York Stock Exchange.

10.    Interests in P&O Princess Shares

Neither Carnival, nor any of the directors of Carnival, nor, so far as Carnival
is aware, any other party acting in concert with Carnival, owns or controls any
P&O Princess Shares or holds any option to purchase any



P&O Princess Shares or has entered into any derivatives referenced to P&O
Princess Shares, except that Mr A. Kirk Lanterman, a director and executive
officer of Carnival, owns approximately 10,000 P&O Princess Shares.

11.    Other

The establishment of the Carnival DLC Proposal is subject to the applicable
provisions of the Takeover Code. In particular, in accordance with Rule 13 of
the Takeover Code, neither Carnival nor P&O Princess may rely on a condition to
the Implementation Agreement as a reason not to proceed with completion of the
Carnival DLC, without prior consent from the Panel. Termination of the
Implementation Agreement by Carnival on the grounds that a Competing Proposal
has been announced will not be subject to the prior consent of the Panel.

Following implementation of the Carnival DLC it is intended to conform the
financial year ends of both P&O Princess and Carnival.

Certain additional details relating to the structure of the Carnival DLC are set
out in Appendix II. The definitions used in this announcement are contained in
Appendix IV. The sources and bases of information used in this announcement are
contained in Appendix V.

The Carnival DLC will be implemented by the DLC Documents being entered into or
becoming effective. Copies of the negotiated form of the DLC Documents will be
available as soon as practicable following this announcement on Carnival's
website at www.carnivalcorp.com and at the website maintained by the SEC at
www.sec.gov. In addition, copies may be inspected from the date of this
announcement during usual business hours on any weekday at the offices of
Herbert Smith, Exchange House, Primrose Street, London, EC2A 2HS.

This announcement does not constitute an offer or an invitation to acquire
shares or securities.

Enquiries:

Carnival                                         Telephone: +44 20 7831 3113
Micky Arison
Howard Frank

Merrill Lynch                                    Telephone: +44 20 7628 1000
Philip Yates
Mark Brooker
Stuart Faulkner
Rachel Monk

UBS Warburg                                      Telephone: +44 20 7567 8000
Tom Cooper
Alistair Defriez
Philip Ellick

Financial Dynamics                               Telephone: +44 20 7831 3113
Nic Bennett



The directors of Carnival accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Carnival (who have taken all reasonable care to ensure such is the case), the
information contained herein for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information except that the only responsibility accepted by them for the
information in this announcement relating to P&O Princess and Royal Caribbean
which has been compiled from published sources is to ensure that the information
has been correctly and fairly reproduced and presented.

Merrill Lynch International and UBS Warburg Ltd., a subsidiary of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the Increased Offer and Carnival DLC
Proposal and will not be responsible to anyone other than Carnival for providing
the protections afforded to clients respectively of Merrill Lynch International
and UBS Warburg Ltd. as the case may be or for providing advice in relation to
the Increased Offer and Carnival DLC Proposal.

SHAREHOLDER DISCLOSURE OBLIGATIONS

Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of P&O Princess or Carnival, owns or controls, or become the owner or
controller, directly or indirectly of one per cent. or more of any class of
securities of P&O Princess or Carnival is generally required under the
provisions of Rule 8 of the City Code to disclose to a Regulated Information
Service ("RIS") and the Panel of every dealing in such securities during the
period from 16 December 2001, the date of the announcement of the original
Offer, until the date of the P&O Princess EGM or, if the Increased Offer is
made, until the first closing date of the Increased Offer (or, if later, the
date on which the Increased Offer becomes, or is declared, unconditional as to
acceptances or lapses). Dealings by Carnival or P&O Princess or by their
respective "associates" (within the definitions set out in the City Code) in any
class of securities of Carnival or P&O Princess must also be disclosed. Please
consult your financial advisor immediately if you believe this rule may be
applicable to you.

Disclosure should be made on an appropriate form before 12 noon (London time) on
the business day following the date of the dealing transaction. These
disclosures should be registered with a RIS (e.g. the Company Announcements
Office of the London Stock Exchange (fax number: +44 20 7588 6057)) and to the
Panel (fax number: +44 20 7256 9386).

CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the US Private Securities Litigation Reform Act of 1995.
Carnival Corporation has tried, wherever possible, to identify such statements
by using words such as "anticipate," "assume,", "believe," "expect," "forecast,"
"future," "intend," "plan" and words and terms of similar substance in
connection with any discussion of future operating or financial performance.
These forward-looking statements, including those which may impact the
forecasting of Carnival's net revenue yields, booking levels, pricing, occupancy
or business prospects, involve known and unknown risks, uncertainties and other
factors, which may cause Carnival's actual results, performances or achievements
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 the net revenue yields for
Carnival's cruise products; consumer demand for cruises and other vacation
options; other vacation industry competition; effects on consumer demand of
armed conflicts, political instability, terrorism, adverse media publicity and
the availability of air service; shifts in consumer booking patterns; increases
in vacation industry capacity, including cruise capacity; continued availability
of attractive port destinations; changes in tax laws and regulations; changes
and disruptions in equity, financial and insurance markets; Carnival's financial
and contractual counterparties' ability to perform; Carnival's ability to
implement its brand strategy; Carnival's ability to implement its shipbuilding
program and to continue to expand its business worldwide; Carnival's ability to
attract and retain shipboard crew; changes in foreign currency and interest
rates and increases in security, food, fuel, and insurance costs; delivery of
new ships on schedule and at the contracted prices; weather patterns and natural
disasters; unscheduled ship repairs and drydocking; incidents involving cruise
ships; impact of pending or threatened litigation; Carnival's ability to
implement successfully cost improvement plans; the continuing financial
viability and/or consolidation of Carnival's travel agent distribution system;
Carnival's ability to integrate successfully business acquisitions and changes
in laws and regulations applicable to Carnival.

These risks may not be exhaustive. Carnival operates in a continually changing
business environment, and new risks emerge from time to time. Carnival cannot
predict such risks nor can it assess the impact, if any, of such risks on its
business or the extent to which any risk, or combination of risks may cause
actual results to differ from those projected in any forward-looking statements.
Accordingly, forward-looking statements should not be relied upon as a
prediction of actual results. Carnival undertakes no obligation publicly to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

CARNIVAL PLANS TO FILE A REGISTRATION STATEMENT ON FORM S-4, A PROXY STATEMENT
ON SCHEDULE 14A AND A STATEMENT ON SCHEDULE TO WITH THE US SECURITIES AND
EXCHANGE COMMISSION IN CONNECTION WITH COMMENCEMENT OF ITS CARNIVAL DLC PROPOSAL
TO ACQUIRE P&O PRINCESS CRUISES PLC. THE FORM S-4 WILL CONTAIN A PROSPECTUS AND
OTHER DOCUMENTS RELATING TO THE CARNIVAL DLC PROPOSAL. CARNIVAL PLANS TO MAIL
THE PROSPECTUS CONTAINED IN THE FORM S-4 TO SHAREHOLDERS OF P&O Princess AFTER
THE Form S-4 HAS BEEN DECLARED EFFECTIVE BY the SEC. CARNIVAL PLANS TO MAIL THE
PROXY STATEMENT TO ITS SHAREHOLDERS AT OR ABOUT THE SAME TIME. THE FORM S-4, THE
PROSPECTUS, THE PROXY STATEMENT AND THE SCHEDULE TO WILL CONTAIN IMPORTANT
INFORMATION ABOUT CARNIVAL, P&O PRINCESS, THE CARNIVAL DLC PROPOSAL AND RELATED
MATTERS. INVESTORS AND STOCKHOLDERS SHOULD READ THE FORM S-4, THE PROSPECTUS,
THE PROXY STATEMENT, the Schedule TO AND THE OTHER DOCUMENTS FILED WITH THE SEC
IN CONNECTION WITH THE CARNIVAL DLC PROPOSAL CAREFULLY BEFORE THEY MAKE ANY
DECISION WITH RESPECT TO THE CARNIVAL DLC PROPOSAL. THE FORM S-4, THE
PROSPECTUS, THE PROXY STATEMENT, the Schedule TO AND ALL OTHER DOCUMENTS FILED
WITH THE SEC IN CONNECTION WITH THE INCREASED OFFER AND/OR CARNIVAL DLC PROPOSAL
WILL BE AVAILABLE WHEN FILED FREE OF CHARGE AT THE SEC'S WEB SITE, AT
WWW.SEC.GOV. IN ADDITION, THE PROSPECTUS AND ALL OTHER DOCUMENTS FILED WITH THE
SEC IN CONNECTION WITH THE INCREASED OFFER AND/OR CARNIVAL DLC PROPOSAL WILL BE
MADE AVAILABLE TO INVESTORS FREE OF CHARGE BY WRITING TO TIM GALLAGHER AT
CARNIVAL CORPORATION, CARNIVAL PLACE, 3655 N.W. 87 AVENUE, MIAMI, FLORIDA,
33178-2428.



IN ADDITION TO THE FORM S-4, The prospectus, THE PROXY STATEMENT, THE SCHEDULE
TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE CARNIVAL
DLC PROPOSAL, CARNIVAL IS OBLIGATED TO FILE ANNUAL, QUARTERLY AND CURRENT
REPORTS, PROXY STATEMENTS AND OTHER INFORMATION WITH THE SEC. PERSONS MAY READ
AND COPY ANY REPORTS, STATEMENTS AND OTHER INFORMATION FILED WITH THE SEC AT THE
SEC'S PUBLIC REFERENCE ROOM AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549.
PLEASE CALL THE SEC AT 1-800-732-0330 FOR FURTHER INFORMATION ON THE PUBLIC
REFERENCE ROOM. FILINGS WITH THE SEC ARE ALSO AVAILABLE TO THE PUBLIC FROM
COMMERCIAL DOCUMENT-RETRIEVAL SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC
AT WWW.SEC.GOV.

THE IDENTITIES OF THE PARTICIPANTS IN THE SOLICITATION OF CARNIVAL SHAREHOLDERS
FOR PURPOSES OF RULE 14a-12(a)(1) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND
THEIR INTERESTS IN THE OFFER AND THE TRANSACTIONS RELATED TO IT ARE SET FORTH IN
APPENDIX VI TO THIS ANNOUNCEMENT.



                                   APPENDIX I

                     PART A. CONDITIONS OF THE CARNIVAL DLC

Implementation of the Carnival DLC will be subject to the conditions set out in
the Implementation Agreement being satisfied or waived by 30 September 2003 and
which are summarised below:

1.       Shareholder approvals

         (a)      The approval, at an extraordinary general meeting of P&O
                  Princess, of the resolutions required to implement the
                  Carnival DLC by not less than three-quarters of the votes
                  attaching to P&O Princess Shares that are cast at that
                  meeting; and

         (b)      The approval, at a meeting of Carnival Shareholders, of the
                  resolutions required to implement the Carnival DLC by not less
                  than a majority of the votes attaching to the outstanding
                  Carnival Shares.

2.       Approval of P&O Princess circular by UKLA

         The UKLA approving the circular to P&O Princess Shareholders convening
         the P&O Princess EGM.

3.       Effectiveness of all registration statements

         All registration statements required by the SEC in connection with the
         Carnival DLC Proposal being declared effective by the SEC and remaining
         effective and not being the subject of a stop order or other proceeding
         by the SEC to suspend their effectiveness.

4.       Regulatory approvals

         If required, approval of the Carnival DLC Proposal by the EC pursuant
         to EC Merger Regulation 4064/89.

5.       No change in law or order restricting the Carnival DLC

         The absence of action, or threatened action, by any governmental
         enterprise of competent jurisdiction that restrains, enjoins or
         otherwise prohibits the completion or performance of, or materially
         adversely affects, the Carnival DLC and the other transactions
         contemplated by the Implementation Agreement.

6.       Effectiveness of each company's new constitutional documents

         (a)      The new P&O Princess memorandum and articles of association to
                  be adopted pursuant to the resolutions referred to in
                  paragraph 1(a) above having become effective; and

         (b)      The new Carnival articles and by-laws to be adopted pursuant
                  to the resolutions referred to in paragraph 1(b) above having
                  become effective.

7.       Partial Share Offer

         The Partial Share Offer becoming unconditional (save for Condition 1 of
         the Partial Share Offer regarding the completion of the Implementation
         Agreement).



P&O Princess' obligation to complete the Carnival DLC is also subject to the
satisfaction or waiver of the following conditions precedent:

1.       Representations and warranties and covenants of Carnival

         The representations and warranties of Carnival set out in the
         Implementation Agreement, as qualified therein by applicable
         materiality thresholds, being true and correct as of the date of the
         Implementation Agreement and as of the effective time of Completion,
         and Carnival having performed in all material respects its obligations
         under the Implementation Agreement, and P&O Princess having received an
         officer's certificate of Carnival to such effect. The representations
         and warranties cover amongst other things share capital structure,
         authority to enter into agreements, accuracy of published financial
         information, litigation and absence of material change.

2.       Carnival third party consents

         Carnival having obtained all third party consents or approvals
         necessary to complete the Carnival DLC, other than those the failure of
         which to obtain such consent or approval is not reasonably likely to
         have a material adverse effect on Carnival or the completion of the
         transactions contemplated by the Implementation Agreement.

3.       Carnival Special Voting Share

         Carnival having issued the Carnival Special Voting Share.

4.       DLC Documents

         Each of the agreements required for the implementation of the Carnival
         DLC having been executed and delivered by the parties thereto (other
         than P&O Princess) in the form agreed by the parties pursuant to the
         Implementation Agreement.

Carnival's obligation to complete the Carnival DLC is also subject to the
satisfaction or waiver of the following conditions precedent:

1.       Representations and warranties and covenants of P&O Princess

         The representations and warranties of P&O Princess set out in the
         Implementation Agreement, as qualified therein by applicable
         materiality thresholds, being true and correct as of the date of the
         Implementation Agreement and as of the effective time of Completion,
         and P&O Princess having performed in all material respects its
         obligations under the Implementation Agreement, and Carnival having
         received an officer's certificate of P&O Princess to such effect. The
         representations and warranties of P&O Princess cover the same matters
         as the Carnival representations and warranties referred to above.

2.       P&O Princess third party consents

         P&O Princess having obtained all third party consents or approvals
         necessary to consummate the Carnival DLC, other than those the failure
         of which to obtain such consent or approval is not reasonably likely to
         have a material adverse effect on P&O Princess or the completion of the
         transactions contemplated by the Implementation Agreement.

3.       P&O Princess Special Voting Share

         P&O Princess having issued the P&O Princess Special Voting Share.

4.       DLC Documents



       Each of the agreements required for the implementation of the Carnival
       DLC having been executed and delivered by the parties thereto (other than
       Carnival) in the form agreed by the parties pursuant to the
       Implementation Agreement.



                  PART B. CONDITIONS OF THE PARTIAL SHARE OFFER

The Partial Share Offer will be conditional on:

1.    the Carnival DLC having been completed under the terms of the
      Implementation Agreement;

2.    all registration statements required by the SEC in connection with the
      Carnival DLC Proposal being declared effective by the SEC and remaining
      effective and not being the subject of a stop order or other proceeding by
      the SEC to suspend their effectiveness;

3.    the New York Stock Exchange agreeing to list the New Carnival Shares,
      subject only to official notice of issuance;

4.    there not being outstanding any governmental action or court order which
      would or might make the Partial Share Offer or the acquisition of any P&O
      Princess Shares void, illegal or unenforceable or materially and adversely
      affect the assets, business, profits or prospects of any member of the
      wider Carnival Group or of any member of the wider P&O Princess Group; and

5.    all authorisations, orders, recognitions, grants, consents, licences,
      confirmations, clearances, permissions and approvals ("Authorisations")
      necessary in any jurisdiction for, or in respect of, the Partial Share
      Offer having been obtained, in terms and in a form reasonably satisfactory
      to Carnival, from all necessary governmental entities and from any
      relevant persons or bodies with whom any member of the wider Carnival
      Group or the wider P&O Princess Group has entered into contractual
      arrangements and all such Authorisations remaining in full force and
      effect at the time at which the Partial Share Offer becomes unconditional
      in all respects.

Carnival reserves the right to waive, in whole or in part, either or both of
Conditions 4 and 5.

Invocation of Conditions 4 and 5 of the Partial Share Offer will be subject to
the approval of the Panel under Note 2 to Rule 13 of the Takeover Code.



                                   APPENDIX II

                   CERTAIN TERMS OF THE CARNIVAL DLC PROPOSAL

1.    Joint Electorate and Class Rights Actions

      Under the terms of the DLC Documents, special voting arrangements will be
      implemented so that the shareholders of Carnival and P&O Princess will
      vote together as a single decision making body on Joint Electorate Actions
      which will be all matters submitted to a shareholder vote other than those
      designated as Class Rights Actions or resolutions on procedural or
      technical matters. The relative voting rights of the P&O Princess Shares
      and Carnival Shares will be determined by the Equalisation Ratio. Based on
      an Equalisation Ratio of 1:1, each Carnival Share will have the same
      voting rights as one P&O Princess Share on Joint Electorate Actions. Joint
      Electorate Actions will include (i) the appointment, removal or
      re-election of any director of Carnival or P&O Princess or both of them;
      (ii) if required by law, the receipt or adoption of the annual accounts of
      both companies; (iii) the appointment or removal or the auditors of either
      company; (iv) a change of name by P&O Princess or Carnival, or both of
      them; or (v) the implementation of a Mandatory Exchange described in
      section 2 below.

      In the case of certain actions in relation to which the two bodies of
      shareholders may have divergent interests, to be known as Class Rights
      Actions, the company wishing to carry out the Class Rights Action would
      require the prior approval of shareholders in both companies each voting
      separately as a class. The matters which will require approval as a Class
      Rights Action will be (i) the voluntary liquidation, dissolution or
      winding up of either company for which shareholder approval is required,
      (other than as part of the liquidation of both companies at or around the
      same time provided that such liquidation is not for the purpose of
      reconstituting the business in one or more successor entities); (ii) the
      adjustment to the Equalisation Ratio, other than in accordance with the
      Equalisation and Governance Agreement; (iii) the sale, lease, exchange or
      other disposition of all or substantially all of the assets of either
      company other than a bona fide commercial transaction for valid business
      purposes and at fair market value and not as part of a proposal, the
      primary purpose of which is to collapse or unify the Carnival DLC
      structure; (iv) any amendment, removal or alteration of any of the
      provisions of P&O Princess' articles of association and Carnival's by-laws
      and articles which entrench certain core provisions of the Carnival DLC
      structure; (v) any amendment or termination of the principal agreements
      pursuant to which the Carnival DLC is implemented; (vi) any change to the
      tax related provisions of the Carnival articles that would be likely to
      trigger a Mandatory Exchange as described in 2 below; and (vii) anything
      which the boards of both companies agree should be approved as a Class
      Rights Action.

      These voting arrangements will be implemented by embedding them in the DLC
      Documents and through the issue of a Special Voting Share by each company.

2.    Mandatory Exchange

      In certain limited circumstances (described in (a) or (b) below) following
      implementation of the Carnival DLC, P&O Princess Shares, other than those
      held by Carnival, may be subject to a mandatory exchange for Carnival
      Shares at the then prevailing Equalisation Ratio.

      (a) If there is a change in applicable tax laws, rules or regulations or
          their application or interpretation, and, based on a legal opinion and
          after using commercially reasonable efforts to explore available
          alternatives, and the P&O Princess Board shall have reasonably
          determined that:

         .    the change is reasonably likely to have a material adverse effect
              on the Carnival DLC;

         .    it is reasonably likely that the material adverse effect would be
              eliminated or substantially reduced by a mandatory exchange; and



         .   the material adverse effect would not be substantially eliminated
             by any commercially reasonable alternative to a mandatory exchange;

     then, with the approval of 66 2/3 per cent. of the shareholders of P&O
     Princess and Carnival (voting on a Joint Electorate Action) the mandatory
     exchange will occur.

     (b)     In addition, if:

         .   there is a change in the applicable non-tax laws, rules or
             regulations or their application or interpretation, as a result of
             which the P&O Princess Board has reasonably determined and having
             received a legal opinion, that it is reasonably likely that all or
             a substantial portion of the DLC Documents are unlawful, illegal or
             unenforceable; or

         .   a court or other governmental entity has issued a ruling,
             judgement, decree or order, which has been appealed to the extent
             the P&O Princess Board deems reasonably appropriate, holding that
             all or a substantial portion of the DLC Documents are unlawful,
             illegal or unenforceable;

     and the P&O Princess Board, based on a legal opinion and after using
     commercially reasonable efforts to explore the available alternatives to
     the mandatory exchange, has reasonably determined that:

     .   the legal basis for the illegality or unenforceability would be
         eliminated by a mandatory exchange;

     .   the illegality or unenforceability could not be eliminated by
         amendments to the DLC Documents that would not materially and adversely
         affect the rights of the shareholders of P&O Princess and Carnival,
         taken together or in relation to each other; and

     .   the change in law or the ruling, judgment, decree or order is
         reasonably likely to be enforced in a way that will have a material
         adverse effect on the Carnival DLC;

     then, if the P&O Princess Board decide, the mandatory exchange will occur.

3.   Termination amount

     If the Implementation Agreement is terminated:

     .   by either Carnival or P&O Princess because of the failure of P&O
         Princess Shareholders to approve the Carnival DLC Proposal and a
         third-party acquisition proposal for P&O Princess exists at the time of
         the P&O Princess Shareholders meeting; or

     .   by Carnival because:

         .   the P&O Princess Board has withdrawn or adversely modified its
             recommendation of the Carnival DLC or has resolved to take any such
             action or failed to reconfirm that recommendation upon request by
             Carnival; or

         .   P&O Princess or the P&O Princess Board has recommended a superior
             third-party acquisition proposal for P&O Princess; or

         .   P&O Princess has breached its obligations under the Implementation
             Agreement not to solicit another acquisition proposal for P&O
             Princess;

     then P&O Princess will be required to pay a termination amount to Carnival
     equal to 1 per cent. of P&O Princess' market capitalisation (on the date
     the Implementation Agreement is executed) if a



         third-party acquisition proposal with respect to P&O Princess is
         completed within 18 months of the date of the Implementation Agreement.

         If the Implementation Agreement is terminated:

         .   by either Carnival or P&O Princess because of the failure of
             Carnival Shareholders to approve the Carnival DLC Proposal and a
             third-party acquisition proposal for Carnival exists at the time of
             the Carnival Shareholders meeting; or

         .   by P&O Princess because:

             .   the Carnival Board has withdrawn or adversely modified its
                 recommendation of the Carnival DLC or has resolved to take any
                 such action or failed to reconfirm that recommendation upon
                 request by P&O Princess;

             .   Carnival or the Carnival Board has recommended a superior
                 third-party acquisition proposal for Carnival; or

             .   Carnival has breached its obligations under the Implementation
                 Agreement not to solicit another acquisition proposal for
                 Carnival;

         then Carnival will be required to pay a termination amount to P&O
         Princess equal to 1 per cent. of P&O Princess' market capitalisation
         (on the date the Implementation Agreement is executed) if a third party
         acquisition proposal with respect to Carnival is completed within 18
         months of the date of the Implementation Agreement.



                                  APPENDIX III

                           ESTIMATED COST SAVINGS FROM
                        CARNIVAL'S DLC WITH P&O PRINCESS

Carnival has conducted an update of its analysis to reconfirm its statement of
estimated cost savings announced and reported on 24 January 2002.

In estimating these cost savings, Carnival has not had access to P&O Princess'
non-public financial information. However, Carnival's senior management has
conducted an assessment of P&O Princess' business relative to Carnival and has
identified areas of likely productivity differences between Carnival and P&O
Princess.

Carnival expects its combination with P&O Princess through the Carnival DLC will
result in cost savings of at least $100 million on an annualised basis, in the
first full financial year following completion of the transaction.

Carnival expects that these cost savings will be generated principally through
the application of Carnival's proven best practices to P&O Princess and does not
anticipate that significant revenue synergies will be available. One time cash
costs of achieving these synergies are expected to be approximately $30 million.

Sources of synergies

Carnival expects that the majority of cost savings will come from the following
areas:

1.   Cost of sales and procurement - the application of Carnival's procurement
     practices to enhance the Carnival DLC's purchasing rates, particularly in
     respect of food and beverage, hotel supplies, concessions, excursions and
     port calls;

2.   Rationalisation of Alaskan land based assets - a reduction in duplicated
     costs from the combined support infrastructure of P&O Princess' and
     Carnival's Alaskan land based operations; and

3.   Selling, general and administrative costs - includes savings from
     insurance, advertising, payroll and other administrative costs.

These savings will be generated for the benefit of both shareholders and
customers. Carnival believes that the opportunities for employees will be
enhanced within the combined group and does not anticipate that there will be
significant redundancies as a result of this rationalisation.

The above estimate by Carnival has been reported on under the Takeover Code by
Ernst & Young and Carnival's financial advisers (Merrill Lynch and UBS Warburg),
as set out in this Appendix III.

The above statement of estimated cost savings should be read in conjunction with
the notes below.



                  NOTES TO STATEMENT OF ESTIMATED COST SAVINGS

(i)      The estimated cost savings in the announcement should not be
         interpreted to mean that the earnings per share of either company in
         the Carnival DLC for the current or future financial years will
         necessarily match or exceed their respective historical published
         earnings per share;

(ii)     In arriving at this estimate, the Carnival Board has assumed that there
         are comparable operations, processes and procedures within P&O Princess
         as within Carnival, except where publicly available information clearly
         indicates otherwise. In addition to Carnival management information,
         Carnival has used the following sources of information in arriving at
         this statement:

         .  P&O Princess' annual report and accounts and the annual report and
            accounts of its former parent, P&O ;

         .  P&O Princess' quarterly results;

         .  P&O Princess' presentations to analysts and investors;

         .  documents and statements issued by P&O Princess in connection with
            its proposed merger with Royal Caribbean and in connection with its
            defence against the Carnival offer;

         .  brokers' research;

         .  other public information; and

         .  Carnival's knowledge of the industry and of P&O Princess.

(iii)    In arriving at this estimate set out above, the Carnival Board has
         assumed that there will be no significant impact on the business of the
         Carnival DLC arising from any decisions made by competition
         authorities;

(iv)     The Carnival Board has not had access to the information provided to
         Royal Caribbean by P&O Princess, nor has it been able to discuss the
         reasonableness of the assumptions supporting this estimate of cost
         savings with P&O Princess' management. Therefore there remain inherent
         risks in this forward-looking estimate; and

(iv)     Due to this inequality of information and the scale of the combined
         Carnival and P&O Princess operations, there may be additional changes
         to the operating procedures of the Carnival DLC. As a result, and the
         fact that the changes relate to the future, the resulting cost savings
         may be materially greater or less than those estimated.



                            LETTER FROM ERNST & YOUNG

Set out below is the text of a letter from Ernst & Young relating to the
Carnival statement of estimated cost savings above:

                                                         Ernst & Young
                                                         Becket House
                                                         1 Lambeth Palace Road
                                                         London
                                                         SE1 7EU

The Directors
Carnival Corporation
Carnival Place
3655 Northwest 87th Avenue
Miami
FL 33178-2428

UBS Warburg Ltd.
1 Finsbury Avenue
London
EC2M 2PP

Merrill Lynch International
2 King Edward Street
London
EC1A 1HQ

24 October 2002

Dear Sirs

ANNOUNCEMENT IN CONNECTION WITH THE PRE-CONDITIONAL CARNIVAL DLC PROPOSAL TO
FORM A DUAL LISTED COMPANY WITH P&O PRINCESS CRUISES PLC ("P&O PRINCESS") (THE
"TRANSACTION")

We refer to the statement regarding the estimate of cost savings (the
"Statement") made by Carnival Corporation ("Carnival") set out in this
announcement.

Responsibility

The Statement is the responsibility of the Directors of Carnival (the
"Directors"). It is our responsibility and that of UBS Warburg Ltd. ("UBSW") and
Merrill Lynch International ("Merrill Lynch") to form respective opinions, as
required by Note 8(b) to Rule 19.1 of the City Code on Takeovers and Mergers
(the "Takeover Code"), as to whether the Statement has been made by Carnival
with due care and consideration.

Basis of opinion

We conducted our work in accordance with the Statements of Investment Circular
Reporting Standards issued by the Auditing Practices Board.

We have reviewed the relevant bases of belief (including sources of information)
and calculations underlying the Statement. We have discussed the Statement
together with the relevant bases of belief (including sources of information)
with the Directors and those officers and employees of Carnival who developed
the underlying plans and with UBSW and Merrill Lynch. Our work did not involve
any independent examinations of any of the financial or other information
underlying the Statement.

We do not express any opinion as to the achievability of the cost savings
identified by the Directors.



Opinion

In our opinion, based on the foregoing, the Statement has been made with due
care and consideration, in the context in which it was made.

Our work in connection with the Statement has been undertaken solely for the
purposes of reporting under Note 8(b) to Rule 19.1 of the Takeover Code to the
Directors, to UBSW and to Merrill Lynch. We accept no responsibility to P&O
Princess or its shareholders or any other person (other than the Directors, UBSW
and Merrill Lynch) in respect of, arising out of or in connection with that
work.

Yours faithfully




Ernst & Young LLP



                    LETTER FROM MERRILL LYNCH AND UBS WARBURG

Set out below is the text of a letter from Merrill Lynch and UBS Warburg
relating to the Carnival statement of estimated cost savings above:

Merrill Lynch International                                UBS Warburg Ltd.
2 King Edward Street                                       1 Finsbury Avenue
London                                                     London
EC1A 1HQ                                                   EC2M 2PP
Registered in England                                      Registered in England
No. 2312079                                                No. 2035362

The Directors
Carnival Corporation
Carnival Place
3655 Northwest 87th Avenue
Miami FL 33178-2428

24 October 2002

Dear Sirs

PRE-CONDITIONAL CARNIVAL DLC PROPOSAL TO FORM A DUAL LISTED COMPANY WITH P&O
PRINCESS CRUISES PLC ("P&O PRINCESS")

We refer to the statement of estimated cost savings (the "Statement") made by
Carnival Corporation ("Carnival") set out in this announcement for which the
Directors of Carnival are solely responsible.

We have discussed the Statement, together with the relevant bases of belief
(including sources of information), with the Directors of Carnival and those
officers and employees of Carnival who developed the underlying plans. We have
also reviewed the work carried out by Ernst & Young and have discussed with them
the conclusions stated in their letter of 24 October 2002 addressed to
yourselves and ourselves on this matter.

We have relied upon the accuracy and completeness of all the financial and other
information reviewed by us and have assumed such accuracy and completeness for
the purposes of rendering this letter.

We do not express any opinion as to the achievability of the estimated cost
savings identified by Carnival.

This letter is provided solely to the Directors of Carnival in connection with
Note 8 (b) of Rule 19.1 of the City Code on Takeovers and Mergers and for no
other purpose. We accept no responsibility to P&O Princess or its shareholders
or any other person other than the Directors of Carnival in respect of this
letter.

On the basis of the foregoing, we consider that the Statement, for which the
Directors of Carnival are solely responsible, has been made with due care and
consideration in the context in which it was made.

Yours faithfully

For and on behalf of                                     For and on behalf of
Merrill Lynch International                              UBS Warburg Ltd.

Kevin J. Smith                                           Mihiri Jayaweera
Managing Director                                        Executive Director

                                                         Hugo Robinson
                                                         Director



                                   APPENDIX IV

                                   DEFINITIONS

"Board"                                      the board of directors of Carnival
                                             or P&O Princess as the context may
                                             require

"Buy-back"                                   a purchase by Carnival of P&O
                                             Princess Shares, or a purchase by
                                             P&O Princess of Carnival Shares or
                                             a purchase by P&O Princess of its
                                             own shares or a reduction by P&O
                                             Princess of its issued share
                                             capital

"Carnival"                                   Carnival Corporation

"Carnival Board"                             the board of directors of Carnival

"Carnival DLC"                               the proposed combination of
                                             Carnival and P&O Princess under a
                                             dual listed company structure

"Carnival DLC Proposal"                      Carnival's proposal to form a dual
                                             listed company structure with P&O
                                             Princess and to make the Partial
                                             Share Offer

"Carnival Group"                             Carnival, its subsidiaries and its
                                             subsidiary undertakings

"Carnival Shareholders"                      holders of Carnival Shares

"Carnival Shares"                            shares of common stock of Carnival
                                             of $0.01 each

"Class Rights Actions"                       actions specified as such due to
                                             the divergent interests of
                                             shareholders and which accordingly
                                             require the prior approval of
                                             shareholders in both companies,
                                             each voting as a separate class

"Competing Proposal"                         the announcement by a third party
                                             of a firm intention (whether or not
                                             subject to a pre-condition) to make
                                             an offer, in accordance with the
                                             Takeover Code, for P&O Princess
                                             (including a proposal for a DLC
                                             with P&O Princess) which offer, in
                                             Carnival's reasonable opinion,
                                             acting in good faith and after
                                             consultation with its financial
                                             advisers, the nature of such advice
                                             having been communicated to P&O
                                             Princess, is likely to be more
                                             attractive to P&O Princess
                                             Shareholders than the Carnival DLC
                                             Proposal

"Completion"                                 the time at which the steps in the
                                             Implementation Agreement to
                                             implement the Carnival DLC have
                                             been completed

"Conditions"                                 the conditions set out in Part A or
                                             Part B of Appendix I of this
                                             announcement as the case may be

"DLC"                                        dual listed company

"DLC Documents"                              the documents required to implement
                                             the Carnival DLC Proposal which
                                             will include the Implementation
                                             Agreement, the Equalisation and
                                             Governance Agreement, deed poll
                                             guarantees, the special voting
                                             deed, the Carnival voting
                                             agreement, the amended memorandum
                                             and amended articles of association
                                             of P&O Princess, the third amended
                                             and restated articles of
                                             incorporation of Carnival and the
                                             amended and restated by-laws of
                                             Carnival

"EC"                                         the European Commission

"Equalisation and Governance Agreement"      the agreement to be entered into
                                             between P&O Princess and Carnival
                                             pursuant to the Implementation
                                             Agreement specifying the
                                             Equalisation Ratio and various
                                             other matters relating to the
                                             Carnival DLC

"Equalisation Ratio"                         the ratio of (i) one Carnival share
                                             to (ii) that number of P&O Princess
                                             Shares that have the same rights to
                                             distributions of income and capital
                                             and voting rights as 3.3289 P&O
                                             Princess Shares. Taking into
                                             account the effect of the proposed
                                             reorganisation of P&O Princess
                                             Shares, the Equalisation Ratio upon
                                             Completion will be 1:1, such that
                                             one Carnival Share will have rights
                                             to income and capital and voting
                                             rights equivalent to those of one
                                             P&O Princess Share

"FTC"                                        the US Federal Trade Commission

"Implementation Agreement"                   the proposed agreement between
                                             Carnival and P&O Princess to
                                             implement the Carnival DLC

"Increased Offer"                            the pre-conditional offer for P&O
                                             Princess announced by Carnival on 7
                                             February 2002

"Joint Venture Agreement"                    the joint venture agreement entered
                                             into between P&O Princess, Royal
                                             Caribbean and JOEX Limited on 19
                                             November 2001

"London Stock Exchange"                      London Stock Exchange plc

"Merrill Lynch"                              Merrill Lynch International

"New Carnival Shares"                        Carnival Shares to be issued in
                                             connection with the Partial Share
                                             Offer

"NYSE"                                       the New York Stock Exchange, Inc.



"Panel"                                            the Panel on Takeovers and
                                                   Mergers

"Partial Share Offer"                              the proposed partial offer to
                                                   be made to acquire up to 20
                                                   per cent. of P&O Princess'
                                                   share capital on the basis of
                                                   0.3004 New Carnival Shares
                                                   for each P&O Princess Share

"P&O Princess"                                     P&O Princess Cruises plc

"P&O Princess ADSs"                                American depositary shares,
                                                   each representing four
                                                   underlying P&O Princess
                                                   Shares

"P&O Princess Board"                               the board of directors of P&O
                                                   Princess

"P&O Princess EGM"                                 the extraordinary general
                                                   meeting of P&O Princess to be
                                                   convened for the purpose of
                                                   approving the Carnival DLC
                                                   Proposal

"P&O Princess Group"                               P&O Princess, its
                                                   subsidiaries and its
                                                   subsidiary undertakings

"P&O Princess Shareholders"                        holders of P&O Princess
                                                   Shares

"P&O Princess Shares"                              the existing unconditionally
                                                   allotted or issued and fully
                                                   paid ordinary shares of
                                                   US$0.50 each in the capital
                                                   of P&O Princess (including
                                                   those represented by P&O
                                                   Princess ADSs but not, for
                                                   avoidance of doubt, such
                                                   ADSs) and any further such
                                                   shares which are
                                                   unconditionally allotted or
                                                   issued and fully paid before
                                                   Completion (or such earlier
                                                   date(s) as Carnival may,
                                                   subject to the Takeover Code,
                                                   determine), including any
                                                   such shares so
                                                   unconditionally allotted or
                                                   issued pursuant to the
                                                   exercise of options granted
                                                   under the P&O Princess
                                                   employee share incentive
                                                   plans

"Pre-conditions"                                   the pre-conditions to the
                                                   posting of the documents to
                                                   P&O Princess Shareholders
                                                   relating to the Carnival DLC
                                                   Proposal set out in this
                                                   announcement

"Royal Caribbean"                                  Royal Caribbean Cruises Ltd

"Royal Caribbean Proposal"                         the proposed dual listed
                                                   company transaction between
                                                   P&O Princess and Royal
                                                   Caribbean described in the
                                                   circular from P&O Princess to
                                                   its shareholders dated 27
                                                   December 2001

"SEC"                                              the United States Securities
                                                   and Exchange Commission

"Special Voting Share"                             the special voting shares to
                                                   be issued by each of P&O
                                                   Princess and Carnival to
                                                   enable P&O Princess
                                                   Shareholders and Carnival
                                                   Shareholders to vote on a
                                                   combined basis at meetings of
                                                   both companies

"Takeover Code"                                    the City Code on Takeovers
                                                   and Mergers

"UBS Warburg"                                      UBS AG, acting through its
                                                   business group UBS Warburg
                                                   or, where appropriate, its
                                                   subsidiary, UBS Warburg Ltd.

"UKLA"                                             the United Kingdom Listing
                                                   Authority

"UK" or "United Kingdom"                           the United Kingdom of Great
                                                   Britain and Northern Ireland

"US"  or "United States"                           the United States of America,
                                                   its territories and
                                                   possessions, any state of the
                                                   United States of America and
                                                   the District of Columbia and
                                                   all other areas subject to
                                                   its jurisdiction

"wider Carnival Group"                             Carnival and any of its
                                                   subsidiary undertakings or
                                                   any associated undertaking or
                                                   company of which 20 per cent.
                                                   or more of the voting capital
                                                   is held by the Carnival Group
                                                   or any partnership, joint
                                                   venture, firm or company in
                                                   which any member of the
                                                   Carnival Group may be
                                                   interested

"wider P&O Princess Group"                         P&O Princess and any of its
                                                   subsidiary undertakings or
                                                   any associated undertaking or
                                                   company of which 20 per cent.
                                                   or more of the voting capital
                                                   is held by the P&O Princess
                                                   Group or any partnership,
                                                   joint venture, firm or
                                                   company in which any member
                                                   of the P&O Princess Group may
                                                   be interested

"(Pound)" or "pounds sterling" or "pence" or "p"   the lawful currency of the
                                                   United Kingdom

"$" or "US dollars" or "cents"                     the lawful currency of the
                                                   United States of America



                                   APPENDIX V

                        SOURCES AND BASES OF INFORMATION

Unless otherwise stated: (i) information relating to Carnival has been extracted
from the relevant published audited financial statements and SEC filings of
Carnival; and (ii) information relating to P&O Princess has been extracted from
the relevant published annual reports and accounts, interim reports and SEC
filings of P&O Princess.

Share prices for Carnival and P&O Princess are taken from Bloomberg.

The (Pound)1:$1.5487 exchange rate is World Market Rate as published in the
Financial Times on 23 October 2002.

The Carnival DLC "look through" value is based upon the Carnival closing price
on 23 October 2002 of $26.00 and the 693,008,745 50 cent ordinary shares in
issue as per the P&O Princess blocklisting interim review dated 21 May 2002.

The holdings of the equity in the Carnival DLC are based on 586,776,338 one cent
Carnival ordinary shares in issue as per the 10Q of Carnival dated 31 August
2002 and the 693,008,745 50 cent ordinary shares in issue as per the P&O
Princess blocklisting interim review dated 21 May 2002.



                                   APPENDIX VI

                      PARTICIPANTS INVOLVED IN SOLICITATION

The participants in the solicitation of Carnival Shareholders include the
following directors of: Micky Arison (also Chairman of the Board of Directors
and Chief Executive Officer of the Company), Shari Arison, Maks L. Birnbach,
Richard G. Capen, Jr., Robert H. Dickinson (also President and Chief Operating
Officer of Carnival Cruise Lines), Arnold W. Donald, James M. Dubin, Howard S.
Frank (also Vice-Chairman of the Board of Directors and Chief Operating Officer
of the Company), A. Kirk Lanterman (also Chairman and Chief Executive Officer of
Holland America Line-Westours, Inc.), Modesto A. Maidique, Stuart Subotnick,
Sherwood M. Weiser, Meshulam Zonis and Uzi Zucker.

In addition, the following persons may be participating in the solicitation:
Gerald R. Cahill (Senior Vice President Finance and Chief Financial Officer of
the Company), Kenneth D. Dubbin (Vice President, Corporate Development of the
Company), Lowell Zemnick (Vice President and Treasurer of the Company), Arnaldo
Perez (Senior Vice President, General Counsel and Secretary of the Company),
Elizabeth Roberts (Director Investor Relations of the Company) and Tim Gallagher
(Vice President of Public Relations of Carnival Cruise Lines).

As of the date of this communication:

..        Micky Arison beneficially owns approximately 38.7 per cent. of the
         outstanding common stock, par value $0.01 per share ("Common Stock"),
         of the Company;

..        James M. Dubin, by virtue of being the sole shareholder of JMD
         Delaware, Inc. (the trustee of the Continued Trust for Shari Arison
         Dorsman, the Continued Trust for Micky Arison, the Continued Trust for
         Michael Arison, the MA 1997 Holdings Trust, the Marylin B. Arison
         Irrevocable Delaware Trust, and the 1999 Irrevocable Delaware Trust for
         Michael Arison), JMD Protector, Inc. (the protector of the Ted Arison
         1994 Irrevocable Trust for Shari No.1 and the Ted Arison 1992
         Irrevocable Trust for Lin No. 2) and Balluta Limited (the trustee of
         the Shari Arison Irrevocable Guernsey Trust), may be deemed to own
         beneficially approximately 25.2 per cent. of the outstanding Common
         Stock, as to which he disclaims beneficial ownership; and

..        No other possible participant in the solicitation listed above
         beneficially owns greater than 1 per cent. of the outstanding Common
         Stock.



                                                                 [Proposed Form]

                       OFFER AND IMPLEMENTATION AGREEMENT

                                     Between

                              Carnival Corporation

                                       and

                            P&O Princess Cruises plc

                        Dated as of [        ], 200[2][3]



                                TABLE OF CONTENTS
                                -----------------

Page ---- ARTICLE I Definitions........................................................... 2 ARTICLE II Closing; Equalization Ratio.......................................... 9 2.1 Closing................................................................. 9 ------- 2.2 Transactions to be Effected and Documents to be Exchanged............... 9 --------------------------------------------------------- 2.2.1 Equalization and Governance Agreement........................... 9 ------------------------------------- 2.2.2 SVC Special Voting Deed......................................... 9 ----------------------- 2.2.3 Carnival Amendments............................................. 9 ------------------- 2.2.4 P&O Princess Amendments......................................... 9 ----------------------- 2.2.5 P&O Princess Special Share...................................... 10 -------------------------- 2.2.6 Carnival Special Share.......................................... 10 ---------------------- 2.2.7 Mutual Directors................................................ 10 ---------------- 2.2.8 Officers........................................................ 10 -------- 2.2.9 Deed Poll Guarantees............................................ 10 -------------------- 2.2.10 Carnival Corporation Deed Poll.................................. 10 ------------------------------ 2.2.11 Other Documents................................................. 10 --------------- 2.3 Equalization Ratio...................................................... 10 ------------------ ARTICLE III Representations and Warranties...................................... 11 3.1 Representations and Warranties of Carnival and P&O Princess............. 11 ----------------------------------------------------------- 3 .1.1 Organization, Good Standing and Qualification................... 11 --------------------------------------------- 3 .1.2 Capital Structure............................................... 12 ----------------- 3 .1.3 Corporate Authority; Approval and Fairness...................... 13 ------------------------------------------ 3 .1.4 Governmental Filings; No Violations............................. 14 ----------------------------------- 3 .1.5 Reports; Financial Statements................................... 15 ----------------------------- 3 .1.6 Absence of Certain Changes...................................... 17 -------------------------- 3 .1.7 Litigation and Liabilities...................................... 18 -------------------------- 3 .1.8 Brokers and Finders............................................. 18 ------------------- 3 .1.9 Ownership of Other Party's Common Stock......................... 18 --------------------------------------- 3 .1.10 Taxes........................................................... 19 ----- 3 .1.11 Carnival Common Stock to be Issued in the Offer................. 19 ----------------------------------------------- ARTICLE IV Covenants............................................................ 20 4 .1 Interim Operations...................................................... 20 ------------------ 4.1.1 Ordinary Course................................................. 20 --------------- 4.1.2 Governing Documents; Share Capital; Dividends................... 20 --------------------------------------------- 4.1.3 Issuance of Securities; Indebtedness; Acquisitions and ------------------------------------------------------ Dispositions.................................................... 21 ------------ 4.1.4 Employee Benefits............................................... 21 ----------------- 4.1.5 Representations and Warranties.................................. 21 ------------------------------ 4.1.6 Non-Competition Agreements...................................... 21 -------------------------- 4.1.7 Satisfaction of Closing Conditions.............................. 22 ---------------------------------- 4.1.8 No Related Actions.............................................. 22 ------------------
Page ---- 4.2 Acquisition Proposals................................................... 22 --------------------- 4.2.1 No Shop......................................................... 22 ------- 4.2.2 Notifications................................................... 23 ------------- 4.2.3 Compliance with Exchange Act, Exchange Regulations and ------------------------------------------------------ City Code....................................................... 23 --------- 4.3 Information Supplied.................................................... 24 -------------------- 4.3.1 Carnival Circular............................................... 24 ----------------- 4.3.2 Joint Transaction Circular, Offer Documents and Schedule -------------------------------------------------------- 14D-9........................................................... 24 ----- 4.4 Shareholders Meetings................................................... 25 --------------------- 4.5 Filings; Other Actions; Notification.................................... 25 ------------------------------------ 4.5.1 Filings......................................................... 25 ------- 4.5.2 Cooperation..................................................... 26 ----------- 4.5.3 Furnishing Information.......................................... 26 ---------------------- 4.5.4 Status.......................................................... 27 ------ 4.5.5 Consultation; Participation..................................... 27 --------------------------- 4.5.6 Cooperation in Defense of Claim................................. 27 ------------------------------- 4.6 Access.................................................................. 27 ------ 4.7 Publicity............................................................... 28 --------- 4.8 Benefits and Other Matters.............................................. 28 -------------------------- 4.8.1 Director and Officer Liability.................................. 28 ------------------------------ 4.8.2 Directors of Carnival and P&O Princess.......................... 29 -------------------------------------- 4.8.3 Executive Officers.............................................. 29 ------------------ 4.9 Expenses................................................................ 30 -------- 4.10 Other Actions by Carnival and P&O Princess.............................. 30 ------------------------------------------ 4.10.1 Dividends....................................................... 30 --------- 4.10.2 Integration Planning............................................ 30 -------------------- 4.11 Carnival Offer to Exchange.............................................. 30 -------------------------- 4.11.1 Offer to Exchange............................................... 30 ----------------- 4.11.2 Modification of the Offer, Fractional Shares.................... 30 -------------------------------------------- 4.11.3 Expiration and Extension of the Offer........................... 31 ------------------------------------- 4.11.4 Acceptances by Carnival......................................... 31 ----------------------- 4.11.5 Offer Registration Statement.................................... 31 ---------------------------- 4.11.6 P&O Princess Shareholder Information............................ 32 ------------------------------------ 4.11.7 Schedule 14D-9.................................................. 32 -------------- 4.11.8 Termination of the Offer........................................ 32 ------------------------ 4.11.9 Adjustment of the Offer Exchange Ratio.......................... 32 -------------------------------------- ARTICLE V Conditions to the Closing............................................. 33 5.1 Conditions to Each Party's Obligation to Effect the Closing............. 33 ----------------------------------------------------------- 5.1.1 Shareholder Approvals........................................... 33 --------------------- 5.1.2 Regulatory Consents............................................. 33 ------------------- 5.1.3 Laws and Orders................................................. 34 --------------- 5.1.4 Carnival Amendments and P&O Princess Amendments................. 34 ----------------------------------------------- 5.1.5 Approval of Joint Transaction Circular.......................... 34 -------------------------------------- 5.1.6 Offer........................................................... 34 ----- 5.1.7 Registration Statements......................................... 34 -----------------------
-ii-
Page ---- 5.1.8 European Commission............................................. 34 ------------------- 5.2 Conditions to Obligations of P&O Princess to Effect the Closing......... 35 --------------------------------------------------------------- 5.2.1 Representations and Warranties of Carnival...................... 35 ------------------------------------------ 5.2.2 Performance of Obligations of Carnival.......................... 35 -------------------------------------- 5.2.3 Consents Under Agreements....................................... 35 ------------------------- 5.2.4 Carnival Special Share.......................................... 35 ---------------------- 5.2.5 Other DLC Documents............................................. 35 ------------------- 5.3 Conditions to Obligations of Carnival................................... 36 ------------------------------------- 5.3.1 Representations and Warranties of P&O Princess.................. 36 ---------------------------------------------- 5.3.2 Performance of Obligations of P&O Princess...................... 36 ------------------------------------------ 5.3.3 Consents Under Agreements....................................... 36 ------------------------- 5.3.4 P&O Princess Special Share...................................... 36 -------------------------- 5.3.5 Other DLC Documents............................................. 36 ------------------- 5.3.6 Termination of Joint Venture Agreement.......................... 36 -------------------------------------- ARTICLE VI Termination.......................................................... 37 6.1 Termination by Mutual Consent........................................... 37 ----------------------------- 6.2 Termination by Either P&O Princess or Carnival.......................... 37 ---------------------------------------------- 6.3 Termination by Carnival................................................. 37 ----------------------- 6.4 Termination by P&O Princess............................................. 38 --------------------------- 6.5 Effect of Termination and Abandonment................................... 38 ------------------------------------- 6.5.1 Effect of Termination........................................... 38 --------------------- 6.5.2 Carnival Break Fee.............................................. 38 ------------------ 6.5.3 P&O Princess Break Fee.......................................... 39 ---------------------- ARTICLE VII Miscellaneous and General........................................... 39 7.1 Survival................................................................ 39 -------- 7.2 Modification or Amendment............................................... 40 ------------------------- 7.3 Waiver of Conditions.................................................... 40 -------------------- 7.4 Failure or Indulgence Not Waiver; Remedies Cumulative................... 40 ----------------------------------------------------- 7.5 Counterparts............................................................ 40 ------------ 7.6 Governing Law And Venue; Waiver Of Jury Trial........................... 40 --------------------------------------------- 7.6.1 Governing Law And Venue......................................... 40 ----------------------- 7.6.2 Waiver Of Jury Trial............................................ 41 -------------------- 7.7 Notices................................................................. 41 ------- 7.8 Entire Agreement........................................................ 43 ---------------- 7.9 Severability............................................................ 43 ------------ 7.10 Interpretation.......................................................... 43 -------------- 7.11 Assignment.............................................................. 44 ---------- 7.12 No Partnership.......................................................... 44 -------------- 7.13 Special Shares.......................................................... 44 ------------------------------------------------------------------------
EXHIBIT A Agreed form of Equalization and Governance Agreement EXHIBIT B Agreed form of SVC Special Voting Deed EXHIBIT C Agreed form of Carnival Amended Articles EXHIBIT D Agreed form of Carnival Amended By-Laws EXHIBIT E Agreed form of P&O Princess Amended Memorandum -iii-
Page ---- EXHIBIT F Agreed form of P&O Princess Amended Articles EXHIBIT G Agreed form of Carnival Deed Poll Guarantee EXHIBIT H Agreed form of P&O Princess Deed Poll Guarantee EXHIBIT I Agreed form of Carnival SVC Constitution EXHIBIT J Agreed form of P&O Princess SVC Constitution EXHIBIT K Agreed form of Carnival Corporation Deed Poll Annex 1 Offer Conditions
-iv- OFFER AND IMPLEMENTATION AGREEMENT (hereinafter called this "Agreement"), dated as of [ ], 200[2][3], between Carnival Corporation, a corporation organized under the laws of the Republic of Panama, having its principal place of business at 3655 N.W. 87th Avenue, Miami, FL 33178-2428 ("Carnival"), and P&O Princess Cruises plc, a public limited company incorporated in England and Wales (Registered No. 4039524) having its registered office at 77 New Oxford Street, London WC1A 1PP ("P&O Princess"). RECITALS WHEREAS, on the terms and subject to the conditions provided herein Carnival and P&O Princess (each, a "Party" and, together, the "Parties") intend to establish a dual listed company structure for the purposes of conducting their businesses together, treating their shareholders as owning an interest in a combined enterprise and creating certain rights for the Carnival Shareholders and the P&O Princess Shareholders in respect of their indirect interests in the combined enterprise; WHEREAS, on the terms and subject to the conditions herein, Carnival also wishes to offer to P&O Princess shareholders the opportunity to exchange their P&O Princess Ordinary Shares for shares of Carnival Common Stock, pursuant to the Offer; WHEREAS, the board of directors of each Party has determined that it is in the best interest of their respective companies and shareholders to enter into transactions (collectively, the "Transactions") contemplated by this Agreement, including the Offer; WHEREAS, in furtherance of such determination, the board of directors of each Party has approved this Agreement and the Transactions, including, (i) the execution and delivery by each of Carnival and P&O Princess of an Equalization and Governance Agreement (the "Equalization and Governance Agreement") in the Agreed Form, (ii) the issue by Carnival of one share of special voting stock (the "Carnival Special Share") and the issue by P&O Princess of one special voting share (the "P&O Princess Special Share"), to a newly organized special purpose entity wholly owned, in the case of the Carnival Special Share, by an entity designated by P&O Princess and reasonably acceptable to Carnival that is not an Affiliate of P&O Princess or Carnival (such special purpose entity, the "Carnival SVC") and, in the case of the P&O Princess Special Share, by an entity designated by Carnival and reasonably acceptable to P&O Princess that is not an Affiliate of P&O Princess or Carnival (such special purpose entity, the "P&O Princess SVC") and in each case subject to the terms of a voting agreement (the "SVC Special Voting Deed") in the Agreed Form, (iii) the election of the same individuals as members of the board of directors of Carnival and P&O Princess, and -1- (iv) the implementation of the corporate governance arrangements contained in the Agreed Form of the Carnival Amendments and the P&O Princess Amendments; and WHEREAS, it is intended that this Agreement and the DLC Transactions will not for any legal, tax or other purpose (i) alter the status of P&O Princess and Carnival as separate independent entities, (ii) result in any of Carnival, P&O Princess, their respective Subsidiaries, or their respective shareholders being treated as creating an entity or otherwise entering into any partnership, joint venture, association or agency relationship, or (iii) give either Party (or its respective Subsidiaries or shareholders) any legal or beneficial ownership interest in the assets or income of the other Party, and shall not be construed as having such effect; WHEREAS, as an inducement to P&O Princess's willingness to enter into this Agreement and the Transactions, the Carnival Major Stockholders each entered into a separate deed poll (respectively the "Arison Deed Poll", the "JMD Delaware, Inc. Deed Poll" and the "JMD Protector, Inc. Deed Poll") covering the shares of Carnival Common Stock listed in Exhibit A to each deed poll (collectively the "Stockholders Deed Polls"). WHEREAS, Carnival and P&O Princess desire to make certain representations, warranties, covenants and agreements in connection with this Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, the Parties agree as follows: ARTICLE I Definitions "Affiliate" of any specified Person shall have the meaning assigned to such term in Rule 12b-2 promulgated under the Exchange Act. "Agreed Form" means, with respect to any DLC Document, the form of such DLC Document agreed by the Parties on or prior to the Closing; provided, however, that the Agreed Form of the Equalization and Governance Agreement, the Deed Poll Guarantees, the SVC Special Voting Deed, the Carnival Amended Articles, the Carnival Amended By-Laws, the P&O Princess Amended Memorandum, the P&O Princess Amended Articles, the Carnival Corporation Deed Poll, the Carnival SVC constituent documents and the P&O Princess SVC constituent documents shall be the forms attached to this Agreement, together with such changes thereto as the Parties may agree prior to the Closing. "Business Day" means any day other than a Saturday, Sunday or day on which banking institutions in The City of New York or London are authorized or -2- obligated by law or executive order to close in the United States or England (or on which such banking institutions are open solely for trading in euros). "Carnival Announcement" means Carnival's press release with respect to a "Pre-conditional Carnival DLC proposal with Partial Share Offer for P&O Princess" dated 24 October 2002. "Carnival Common Stock" means the common stock, par value $0.01 per share, of Carnival, excluding the Carnival Special Share. "Carnival Circular" means the circular to be sent to Carnival shareholders in connection with the Carnival Shareholders Meeting, as amended or supplemented, containing (i) a notice convening the Carnival Shareholders Meeting, (ii) information relating to the approval by Carnival shareholders of the Carnival Amended Articles (iii) such other information (if any) as may be required by the City Code, the Takeover Panel, the SEC or the NYSE and (iv) such other information as P&O Princess and Carnival shall agree to include therein, and any supplements thereto and any other circulars or documents issued to shareholders or employees of Carnival. "Carnival Deed Poll Guarantee" means the deed whereby Carnival agrees to guarantee certain obligations of P&O Princess for the benefit of certain future creditors of P&O Princess, in the Agreed Form. "Carnival Group" means Carnival, its subsidiaries and its subsidiary undertakings. "Carnival Major Stockholders" means Micky Arison, JMD Delaware, Inc. and JMD Protector, Inc. "City Code" means the United Kingdom City Code on Takeovers and Mergers. "Companies Act" means the Companies Act 1985 of the United Kingdom, as amended. "Compensation and Benefit Plans" means, with respect to Carnival or P&O Princess, any bonus, deferred compensation, pension, retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock, stock option, employment, termination, severance, compensation, medical, health or other plan, agreement, policy or arrangement that covers employees, directors, former employees or former directors of it and its Subsidiaries. "Deed Poll Guarantees" means each of the P&O Princess Deed Poll and the Carnival Deed Poll Guarantee. "DLC Documents" means the Equalization and Governance Agreement, the SVC Special Voting Deed, the Carnival Amended Articles, the Carnival Amended -3- By-Laws, the P&O Princess Amended Memorandum, the P&O Princess Amended Articles, the Carnival SVC constituent documents, the P&O Princess SVC constituent documents, the Deed Poll Guarantees, the Carnival Corporation Deed Poll, and any other document or instrument the parties agree is a DLC Document. "DLC Transactions" means the Transactions other than those relating to the Offer and other transactions incidental to the Offer. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended; "Governmental Entity" means a court of competent jurisdiction or any government or any governmental, regulatory, self-regulatory or administrative authority, agency, commission, body or any other governmental entity and shall include any relevant competition authorities, the Takeover Panel, the European Commission, the London Stock Exchange, the UKLA, the U.S. Securities and Exchange Commission and the NYSE. "IRC" means the United States Internal Revenue Code of 1986, as amended. "Joint Transaction Circular" means the circular to be sent to P&O Princess shareholders in connection with (a) the P&O Princess Shareholders Meeting to approve the DLC Transactions and (b) the Offer, as amended or supplemented, containing (i) a notice convening the P&O Princess Shareholders Meeting, (ii) such other information (if any) as may be required by the City Code, the Takeover Panel, the UKLA, the SEC, the NYSE or the London Stock Exchange, (iii) all information required by applicable Law relating to the DLC Transactions and the Offer and (iv) such other information as P&O Princess and Carnival shall agree to include therein, and any supplements thereto and any other circulars or documents issued to shareholders or employees of P&O Princess. "Joint Venture Agreement" means the Joint Venture Agreement among P&O Princess, Royal Caribbean Cruises Ltd. and JOEX Limited, dated as of November 19, 2001. "Law" means any law, statute, ordinance, rule, regulation, judgment, order, injunction, decree, arbitration award, agency requirement, franchise, license or permit of any Governmental Entity, including the City Code. "Lien" shall mean any mortgage, pledge, lien, deed of trust, hypothecation, claim, security interest, title defect, encumbrance, burden, tax lien (as used in Section 6321 of the IRC or similarly by any state, local, or foreign tax authority), charge, or other similar restriction, title retention agreement, option, easement, covenant, encroachment or other adverse claim. "London Listing Rules" means the listing rules of the UKLA. -4- "London Stock Exchange" means the London Stock Exchange plc. "Material Adverse Change" means, with respect to any Party, any change, effect, event or occurrence which has had or could reasonably be expected to have a Material Adverse Effect with respect to such Party other than any changes, effects, events or occurrences attributable to any one or more of the following: (i) any changes after the date of this Agreement in generally accepted accounting principles or interpretations thereof that applies to such Party, (ii) the announcement and performance of this Agreement and compliance with the covenants and obligations set forth herein, and (iii) the economy or financial markets relevant to such Party in general or in general to the industries in which such Party operates and not having a materially disproportionate effect relative to the other Party on, such Party. "Material Adverse Effect" means, with respect to any Party, a material adverse effect on (i) the financial condition, results of operations, assets or business of such Party and its Subsidiaries, taken as a whole, (ii) the ability of such Party to perform without delay or restrictions its obligations under this Agreement or the transactions contemplated on its part hereby or (iii) the consummation or implementation of the Transactions. "NYSE" means the New York Stock Exchange, Inc. "Offer" means a partial offer to exchange up to 20% of the outstanding P&O Princess Ordinary Shares (whether or not held in the form of P&O Princess ADSs) as of the Effective Time for validly issued, fully paid and non-assessable shares of Carnival Common Stock at the Offer Exchange Ratio as such offer may be amended from time to time as permitted under this Agreement and by applicable law upon the terms and subject to the conditions set forth in this Agreement. "Offer Documents" means the Offer Registration Statement and the Schedule TO and any other ancillary documents. "Offer Exchange Ratio" means 0.3004 shares of Carnival Common Stock for each P&O Princess Ordinary Share. "Offer Registration Statement" means the registration statement under the Securities Act relating to the Offer, as amended or supplemented, which shall include transmittal and acceptance documents and the Joint Transaction Circular as a prospectus. "Person" means a natural person, a corporation, a limited liability company, a general or limited partnership, a trust, an estate, a joint venture, any Governmental Entity, or any other entity or organization. "P&O Princess ADSs" means the American Depositary Shares of P&O Princess, each of which represents four P&O Princess Ordinary Shares, which are listed on the NYSE. -5- "P&O Princess Deed Poll Guarantee" means the agreement whereby P&O Princess agrees to guarantee certain obligations of Carnival for the benefit of certain future creditors of Carnival, in the Agreed Form. "P&O Princess Group" means P&O Princess, its subsidiaries and its subsidiary undertakings. "P&O Princess Ordinary Shares" means the ordinary shares (including the Ordinary Shares underlying P&O Princess' American Depositary Shares) of P&O Princess, excluding the P&O Princess Special Share. "PGCL" means Law 32 of the Corporation Law of 1927 of the Republic of Panama, as amended. "Schedule TO" means a Tender Offer Statement on Schedule TO promulgated under the Exchange Act with respect to the Offer, as amended or supplemented, which shall contain or incorporate by reference all or part of the Offer Registration Statement. "Securities Act" means the United States Securities Act of 1933, as amended. "Significant Subsidiary" of any specified Person shall have the meaning assigned to such term in Rule 1-02(w) of the Regulation S-X promulgated under the Exchange Act. "Subsidiary" means, with respect to a Party, any entity, whether incorporated or unincorporated, in which such Party owns, directly or indirectly, a majority of the securities or other ownership interests having by their terms ordinary voting power to elect a majority of the directors or other persons performing similar functions, or the management and policies of which such Party otherwise has the power to direct. "Takeover Panel" means the UK Panel on Takeovers and Mergers. "US GAAP" means United States generally accepted accounting principles. "UK GAAP" means United Kingdom generally accepted accounting principles. "UKLA" means the Financial Services Authority in its capacity as competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000. "Wider Carnival Group" means Carnival and any of its subsidiary undertakings or any associated undertaking or company of which 20 per cent. or more of -6- the voting capital is held by the Carnival Group or any partnership, joint venture, firm or company in which any member of the Carnival Group may be interested. "Wider P&O Princess Group" means P&O Princess and any of its subsidiary undertakings or any associated undertaking or company of which 20 per cent. or more of the voting capital is held by the P&O Princess Group or any partnership, joint venture, firm or company in which any member of the P&O Princess Group may be interested. Each of the following terms is defined in the Section set forth opposite such term: SCHEDULE OF DEFINED TERMS
Defined Term Section - ------------ ------- Acquisition Proposal............................................... 4.2.1 Agreement.......................................................... Recitals Arison Deed Poll................................................... Recitals Audit Date......................................................... 3.1.5.2 Bankruptcy and Equity Exception.................................... 3.1.3.1 Carnival........................................................... Recitals Carnival Amended Articles.......................................... 2.2.3 Carnival Amended By-Laws........................................... 2.2.3 Carnival Amendments................................................ 2.2.3 Carnival Audit Date................................................ 3.1.5.1 Carnival Circular.................................................. 4.3.1 Carnival Disclosure Letter......................................... 3.1 Carnival Officers.................................................. 3.1.7.1 Carnival Preferred Stock........................................... 3.1.2.1 Carnival Reports................................................... 3.1.5.1 Carnival Required Consents......................................... 3.1.4.1 Carnival Requisite Vote............................................ 3.1.3.1 Carnival Shareholders Meeting...................................... 4.4 Carnival Special Share............................................. Recitals Carnival SVC....................................................... Recitals Carnival Stock Plans............................................... 3.1.2.1 Carnival Termination Amount........................................ 6.5.2 Closing............................................................ 2.1 Closing Date....................................................... 2.1 Confidentiality Agreement.......................................... 4.6 Contracts.......................................................... 3.1.4.2 Disclosure Letter.................................................. 3.1 DLC Documents...................................................... Article I Effective Time..................................................... 2.1 Equalization and Governance Agreement.............................. Recitals Equalization Ratio................................................. 2.3
-7- SCHEDULE OF DEFINED TERMS Defined Term Section - ------------ ------- FSMA ............................................................ 4.3.2 FSA ............................................................. 4.3.2 FTA ............................................................. 4.5.1 Governmental Consents ........................................... 5.1.2 HSR Act ......................................................... 3.1.4.1 Indemnitees ..................................................... 4.8.1.2 Integration Committee ........................................... 4.10.2 JMD Delaware, Inc. Deed Poll .................................... Recitals JMD Protector, Inc. Deed Poll ................................... Recitals Joint Transaction Circular ...................................... 4.3.2 Mutual Directors ................................................ 4.8.2 Offer Conditions ................................................ 4.11.1 Order ........................................................... 5.1.3 Parties ......................................................... Recitals Party ........................................................... Recitals Permits ......................................................... 3.1.7.2 P&O Princess .................................................... Recitals P&O Princess Amended Articles ................................... 2.2.4 P&O Princess Amended Memorandum ................................. 2.2.4 P&O Princess Amendments ......................................... 2.2.4 P&O Princess Audit Date ......................................... 3.1.5.2 P&O Princess Disclosure Letter .................................. 3.1 P&O Princess Officers ........................................... 3.1.7.1 P&O Princess Option Plans ....................................... 3.1.2.2 P&O Princess Reports ............................................ 3.1.5.2 P&O Princess Required Consents .................................. 3.1.4.1 P&O Princess Requisite Vote ..................................... 3.1.3.2 P&O Princess Shareholders Meeting ............................... 4.4 P&O Princess Special Share ...................................... Recitals P&O Princess SVC ................................................ Recitals P&O Princess Termination Amount ................................. 6.5.3 P&O Princess UK Reports ......................................... 3.1.5.2 P&O Princess US Reports ......................................... 3.1.5.2 Qualifying Acquisition Proposal ................................. 4.2.1 Reports ......................................................... 3.1.5.2 Representatives ................................................. 4.2.1 Schedule 14D-9 .................................................. 4.11.7 Scheduled Provisions ............................................ Article I SEC ............................................................. 3.1.5.1 Stockholders Deed Polls ......................................... Recitals Superior Proposal ............................................... 4.2.1 SVC Special Voting Deed ......................................... Recitals Tax ............................................................. 3.1.10 -8- SCHEDULE OF DEFINED TERMS Defined Term Section - ------------ ------- Tax Return ...................................................... 3.1.10 Termination Date ................................................ 6.2 Transactions .................................................... Recitals ARTICLE II Closing; Equalization Ratio 2.1 Closing. The closing and completion (the "Closing") of the DLC Transactions shall take place simultaneously (i) at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York, 10019 and at the offices of Herbert Smith, Exchange Square, Primrose Street, London, EC2A 2HS, not later than the third Business Day after the first day on which all of the conditions set forth in Article V are satisfied or waived by the Party or Parties entitled thereto in accordance with this Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or (ii) at such other places and time and/or on such other date as Carnival and P&O Princess may agree in writing (the "Closing Date"). All transactions to be effected at the Closing shall be effected simultaneously, and no transaction shall be complete or effective until such time as all such transactions are complete and effective (the "Effective Time"). 2.2 Transactions to be Effected and Documents to be Exchanged. At or prior to the Closing: 2.2.1 Equalization and Governance Agreement. Each of P&O Princess and Carnival shall execute and deliver to the other the Equalization and Governance Agreement in the Agreed Form; 2.2.2 SVC Special Voting Deed. Carnival, P&O Princess, Carnival SVC, P&O Princess SVC and [_] shall execute and deliver the SVC Special Voting Deed in the Agreed Form; 2.2.3 Carnival Amendments. The second amended and restated articles of incorporation of Carnival shall be amended and restated in the Agreed Form (the "Carnival Amended Articles") and shall be filed with the Companies Registry of the Republic of Panama in accordance with the provisions of the PGCL, and the amended and restated By-Laws of Carnival shall be amended and restated in the Agreed Form (the "Carnival Amended By-Laws" and, collectively with the Carnival Amended Articles, the "Carnival Amendments"), and shall become effective; 2.2.4 P&O Princess Amendments. An amendment to each of the memorandum and articles of association of P&O Princess, in the Agreed Form (such -9- memorandum as so amended, the "P&O Princess Amended Memorandum", such articles, as so amended, the "P&O Princess Amended Articles" and, collectively with the P&O Princess Amended Memorandum, the "P&O Princess Amendments") shall become effective; 2.2.5 P&O Princess Special Share. P&O Princess shall issue and allot the P&O Princess Special Share to P&O Princess SVC, register P&O Princess SVC as the holder of the P&O Princess Special Share and issue a share certificate or holding statement for the P&O Princess Special Share to P&O Princess SVC; 2.2.6 Carnival Special Share. Carnival shall issue the Carnival Special Share to Carnival SVC, register Carnival SVC as the holder of the Carnival Special Share and issue a share certificate or a book statement for the Carnival Special Share to Carnival SVC; 2.2.7 Mutual Directors. To the extent that they are not already effective, (i) the election of the Mutual Directors designated pursuant to Section 4.8.2 as directors of each of Carnival and P&O Princess, comprising the entire board of directors of each of Carnival and P&O Princess, shall become effective, and (ii) the resignation of each director of Carnival or P&O Princess who is not designated as a Mutual Director shall become effective; 2.2.8 Officers. The appointment or election of the individuals identified as officers pursuant to Section 4.8.3 as officers of each of Carnival and P&O Princess shall become effective; 2.2.9 Deed Poll Guarantees. Each Party shall execute and deliver to the other the Deed Poll Guarantees; 2.2.10 Carnival Corporation Deed Poll. Carnival executing and delivering the Carnival Corporation Deed Poll; and 2.2.11 Other Documents. Each Party shall deliver to the other such other documents, instruments and certificates as the other Party may reasonably request in connection with the Transactions and the Closing. 2.3 Equalization Ratio. Subject to adjustment as set forth below in this Section 2.3, the Equalization Ratio to be set forth in the Equalization and Governance Agreement shall, as of the Effective Time, be one share of Carnival Corporation Stock [to 3.3289] P&O Princess Ordinary Shares, such that the voting rights and the rights to distributions (of income and capital) of one share of Carnival Corporation Stock shall be equivalent to the voting rights and the rights to distributions of 3.3289 P&O Princess Ordinary Shares. If the Parties agree that the Equalization Ratio shall instead be 1:1, then they shall make such subdivisions and/or combinations of Carnival Common Stock and/or P&O Princess Ordinary Shares, or other such actions, as they mutually agree are necessary to achieve that result. In either case, the Equalization Ratio (i) shall be adjusted, in the manner -10- provided in the Equalization and Governance Agreement, for all actions occurring on or after the date hereof and at or before the Effective Time that would require an automatic adjustment to the Equalization Ratio pursuant to the terms of the Equalization and Governance Agreement as if such agreement were effective during such period, and (ii) subject to any such adjustment, shall be the Equalization Ratio as of the Effective Time; provided, however, that the Equalization Ratio shall not be adjusted for regular dividends declared prior to the Effective Time and permitted pursuant to Section 4.1.2. Such Equalization Ratio, as so adjusted from time to time, is referred to herein as the "Equalization Ratio". ARTICLE III Representations and Warranties 3.1 Representations and Warranties of Carnival and P&O Princess. Except as set forth in the corresponding sections or subsections of the disclosure letter, dated the date of the Carnival Announcement, as amended to the date hereof solely to reflect updates thereto resulting from circumstances or events arising after the date of the Carnival Announcement and signed by an authorized officer, delivered by Carnival to P&O Princess or by P&O Princess to Carnival (each a "Disclosure Letter" and the "Carnival Disclosure Letter" and the "P&O Princess Disclosure Letter", respectively), as the case may be, Carnival (except for subparagraphs 3.1.2.2, 3.1.3.2, 3.1.5.2, 3.1.8(ii), and 3.1.9.2 below and references in Section 3.1.1 below to documents made available by P&O Princess to Carnival) hereby represents and warrants to P&O Princess, and P&O Princess (except for subparagraphs 3.1.2.1, 3.1.3.1, 3.1.5.1, 3.1.8(i), and 3.1.9.1 below and references in Section 3.1.1 below to documents made available by Carnival to P&O Princess), hereby represents and warrants to Carnival, that: 3.1.1 Organization, Good Standing and Qualification. Each of it and its Significant Subsidiaries is a corporation or other organization duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the laws of its respective jurisdiction of incorporation or organization and has all requisite corporate or similar power and authority, and has been duly authorized by all necessary approvals and orders, to own, operate and lease its properties and assets and to carry on its business as presently conducted and is duly qualified to do business and is in good standing in each jurisdiction where the ownership, operation or leasing of its assets or properties or conduct of its business requires such qualification, except for any such failures to be so organized, qualified or in good standing, or to have such power or authority, which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to it. Carnival has made available to P&O Princess complete and correct copies of its articles of incorporation and by-laws, and P&O Princess has made available to Carnival complete and correct copies of its memorandum and articles of association, in all cases as amended to date. Such articles of incorporation and by-laws or memorandum and articles of association, as the case may be, as so made available are in full force and effect. -11- 3.1.2 Capital Structure. 3.1.2.1 The authorized capital stock of Carnival consists of 960,000,000 shares of Carnival Common Stock, of which 586,776,338 shares were issued and outstanding as of the close of business on October 16, 2002, and 40,000,000 shares of Preferred Stock, par value $0.01 per share ("Carnival Preferred Stock") none of which is outstanding as of the date hereof. All of the outstanding shares of Carnival Common Stock have been duly authorized and validly issued and are paid and non-assessable. Carnival has no shares of Carnival Common Stock or Carnival Preferred Stock reserved for or otherwise subject to issuance, except that as of the close of business on October 16, 2002, there were no more than 56,804,852 shares of Carnival Common Stock subject to issuance pursuant to the plans of Carnival identified in paragraph 3.1.2.1 of the Carnival Disclosure Letter as being the only Compensation and Benefit Plans or agreements pursuant to which Carnival Common Stock may be issued (the "Carnival Stock Plans"). Each of the outstanding shares of capital stock or other ownership interests of each of Carnival's Significant Subsidiaries is duly authorized, validly issued, fully paid and non-assessable and owned by Carnival or a direct or indirect wholly owned Subsidiary of Carnival, in each case free and clear of any Lien. Except as set forth above or as contemplated by this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind which obligate Carnival or any of its Subsidiaries to issue or sell any shares of capital stock or other securities of Carnival or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire from Carnival or any of its Subsidiaries, any securities of Carnival or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Except as described in the Carnival Disclosure Letter, Carnival does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders of Carnival on any matter. 3.1.2.2 The authorized share capital of P&O Princess is $375 million divided into 750,000,000 P&O Princess Ordinary Shares. As of the close of business on October 22, 2002, the allotted and issued share capital of P&O Princess consisted of 693,168,355 P&O Princess Ordinary Shares. All of those P&O Princess Ordinary Shares have been duly authorized and validly issued and are fully paid or credited as fully paid. P&O Princess has no P&O Princess Ordinary Shares reserved for or otherwise subject to issuance, except that, as of the close of business on October 22, 2002, there were no more than 10,000,000 P&O Princess Ordinary Shares and no more than 2,000,000 P&O Princess ADSs subject to issuance pursuant to the plans of P&O Princess identified in subparagraph 3.1.2.2 of the P&O Princess Disclosure Letter as being the only Compensation and Benefit Plans or agreements pursuant to which P&O Princess Ordinary Shares may be issued (the "P&O Princess Option Plans"). Each of the outstanding shares of capital stock or other ownership interests of each of P&O Princess' Significant Subsidiaries is duly authorized, validly issued, fully paid and non-assessable and owned by P&O Princess or a direct or indirect wholly owned Subsidiary of P&O -12- Princess, in each case free and clear of any Lien. Except as set forth above or as contemplated by this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind which obligate P&O Princess or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of P&O Princess or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire from P&O Princess or any of its Subsidiaries, any securities of P&O Princess or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. P&O Princess does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders of P&O Princess on any matter. 3.1.3 Corporate Authority; Approval and Fairness. 3.1.3.1 Carnival has all requisite corporate power and authority and has taken all corporate action necessary in order to authorize, execute, deliver and perform its obligations under this Agreement and to consummate the Transactions, subject only to the approval of the Transactions (including the Carnival Amended Articles by the vote of the holders of not less than 50% of the outstanding shares of Carnival Common Stock entitled to vote thereon (the "Carnival Requisite Vote") and the adoption of the Carnival Amended By-Laws by the board of directors of Carnival. Assuming the due authorization, execution and delivery of this Agreement by each party thereto other than Carnival or any of its Subsidiaries, this Agreement constitutes, and at the Effective Time each DLC Document to which Carnival will be or is a party will constitute, a valid and binding agreement of Carnival enforceable against Carnival in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles (the "Bankruptcy and Equity Exception"). The Board of Directors of Carnival has approved this Agreement (including the Exhibits hereto) and the Transactions. 3.1.3.2 P&O Princess has all requisite corporate power and authority and has taken all corporate action necessary in order to authorize, execute, deliver and perform its obligations under this Agreement and to consummate the Transactions, subject only to the approval of the Transactions (including the P&O Princess Amendments) by, on a show of hands, not less than 75% of the holders of the outstanding P&O Princess Ordinary Shares present in person or, on a poll, by the holders of not less than 75% of the votes attaching to the P&O Princess Ordinary Shares who vote in person or by proxy at the P&O Princess Shareholders Meeting at which a quorum is present and acting throughout (the "P&O Princess Requisite Vote"). Assuming the due authorization, execution and delivery of this Agreement by each party thereto other than P&O Princess or any of its Subsidiaries, this Agreement constitutes, and at the Effective Time each DLC Document to which P&O Princess will be or is a party will constitute, a valid and binding agreement of P&O Princess, enforceable against P&O Princess in accordance with its terms, subject to the Bankruptcy and Equity Exception. The Board of -13- Directors of P&O Princess (A) has approved this Agreement (including the Exhibits hereto), and the Transactions and (B) has received the opinions of its financial advisor, Schroder Salomon Smith Barney, to the effect that, as of the date of this Agreement, the Equalization Ratio is fair from a financial point of view to the holders of P&O Princess Ordinary Shares. 3.1.4 Governmental Filings; No Violations. 3.1.4.1 Other than the filings, consents, notices, approvals, confirmations, declarations and/or decisions listed in Section 3.1.4.1 of each Party's Disclosure Letter (all such filings, consents, notices, approvals, confirmations, declarations and/or decisions to be made, given or obtained by Carnival being the "Carnival Required Consents", and by P&O Princess being the "P&O Princess Required Consents") no filings, notices, approvals, confirmations, and/or declarations are required to be made by it or any of its Subsidiaries with, nor are any approvals, consents or other confirmations required to be obtained by it or any of its Subsidiaries from, any Governmental Entity, in connection with the execution and delivery by it of this Agreement and the consummation by it of the Transactions, except those the failure of which to make, give or obtain, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect with respect to it. 3.1.4.2 The execution, delivery and performance of this Agreement by it does not, and the consummation by it of the Transactions will not, constitute or result in (A) a breach or violation of, or a default under, its articles of incorporation or by-laws, in the case of Carnival, or memorandum or articles of association, in the case of P&O Princess, or the comparable governing instruments of any of the Significant Subsidiaries of Carnival and P&O Princess, (B) subject to making, giving or obtaining all Carnival Required Consents or P&O Princess Required Consents, as applicable, and all other necessary third-party consents as set forth in Section 3.1.4.2 of its Disclosure Letter, a breach or violation of, or a default under, or the termination, amendment, cancellation or acceleration of any obligations or penalties or the creation of a Lien, charge, "put" or "call" right, right of purchase or other encumbrance on the assets of it or any of its Subsidiaries (with or without notice, lapse of time or both) pursuant to any agreement, lease, license, insurance contract, contract, note, mortgage, loan, indenture, arrangement (including, without limitation, any financing arrangement) or other obligation ("Contracts") binding upon it or any of its Subsidiaries or any Law or governmental or non-governmental permit or license to which it or any of its Subsidiaries is or any of its or their assets is subject or bound, (C) any change in the rights or obligations of either Party under any of its Contracts, or (D) any employee of it or its Subsidiaries being entitled to severance pay under, acceleration of the time of payment or vesting or triggering of any payment of compensation or benefits under, increasing the amount payable or triggering of any other obligation pursuant to, any of the Compensation and Benefit Plans involving in any such case an amount or value greater than $2.5 million for any individual or $10 million in the aggregate or any breach or violation of, or a default under, any of the Compensation and Benefit Plans, except, in the case of clause (B) or (C) above, for any breach, violation, default, termination, amendment, cancellation, acceleration, creation or change that, individually or in the -14- aggregate, is not reasonably likely to have a Material Adverse Effect with respect to it. Neither Party nor any of its Subsidiaries is in violation of, or default under, or with the lapse of time or giving of notice or both would be in violation of, or default under, any provision of any agreement, instrument or arrangement pursuant to which it has borrowed money or otherwise incurred indebtedness where the resulting acceleration of all the borrowed money or indebtedness under all such agreements, instruments and arrangements would be greater than $100 million. 3.1.5 Reports; Financial Statements. 3.1.5.1 Carnival has made available to P&O Princess copies of (A) each registration statement, report, or other document prepared by it or its Subsidiaries and filed with the United States Securities and Exchange Commission (the "SEC") since November 30, 2001 (the "Carnival Audit Date"), including Carnival's Annual Report on Form 10-K for the year ended November 30, 2001 and Quarterly Reports on Form 10-Q for the quarters ended February 28, 2002, May 31, 2002 and August 31, 2002, each in the form (including exhibits, annexes and any amendments thereto) filed with the SEC (collectively, including any such registration statement, report, or other document filed with the SEC subsequent to the date hereof, the "Carnival Reports") and (B) all circulars, reports and other documents distributed by Carnival to its shareholders since the Carnival Audit Date. As of their respective dates, the Carnival Reports did not, and any Carnival Reports filed with the SEC subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each of the consolidated balance sheets included in or incorporated by reference into the Carnival Reports (including the related notes and schedules) fairly presents, or in the case of those filed with the SEC after the date hereof will fairly present, in all material respects, the consolidated financial position of Carnival and its Subsidiaries as of its date and each of the related consolidated statements of operations, shareholders' equity and cash flows included in or incorporated by reference into the Carnival Reports (including any related notes and schedules) fairly presents, or in the case of those filed with the SEC after the date hereof will fairly present, in all material respects, the consolidated results of operations, retained earnings and changes in cash flows, as the case may be, of Carnival and its consolidated Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that are not expected to be material in amount or effect), in each case in accordance with US GAAP consistently applied during the periods involved except as may be noted therein. All of the Carnival Reports, as of their respective dates (and as of the date of any amendment to the respective Carnival Report), complied, or in the case of those filed with the SEC after the date hereof will comply, as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act. Except as disclosed in the Carnival Reports filed prior to the date hereof, Carnival and its consolidated Subsidiaries have not incurred any liabilities that are of a nature that would be required to be disclosed on a balance sheet of Carnival and its consolidated Subsidiaries or the footnotes thereto prepared in conformity with US GAAP, other than (A) liabilities incurred in the ordinary course of business consistent with past practice, (B) liabilities incurred in accordance -15- with Section 4.1, (C) liabilities for Taxes in respect of income, profits or gains earned in the ordinary course of business or (D) liabilities that, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to Carnival. 3.1.5.2 P&O Princess has made available to Carnival copies of (A) each registration statement, report or other document prepared by it or its Subsidiaries and filed with, or furnished to, the SEC since December 31, 2001 (the "P&O Princess Audit Date", with the P&O Princess Audit Date and the Carnival Audit Date each being referred to herein as the relevant Party's "Audit Date"), including P&O Princess' Annual Report on Form 20-F for the year ended December 31, 2001 and interim financial Reports on Form 6-K for the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, each in the form (including exhibits, annexes and any amendments thereto) filed with, or furnished to, the SEC (collectively, including any such registration statement, report or other document filed with, or furnished to, the SEC subsequent to the date hereof, the "P&O Princess US Reports"); and (B) all circulars, reports and other documents distributed by P&O Princess to its shareholders since the P&O Princess Audit Date. As of their respective dates, the P&O Princess US Reports did not, and any P&O Princess US Report filed with, or furnished to, the SEC subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the P&O Princess US Reports, as of their respective dates (and as of the date of any amendment to the respective P&O Princess US Reports), complied, or in the case of those filed with, or furnished to, the SEC after the date hereof will comply, as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act. All documents notified by P&O Princess to, or filed by P&O Princess with, the UKLA since the P&O Princess Audit Date, including any documents notified by P&O Princess to, or filed by P&O Princess with, the UKLA subsequent to the date hereof (the "P&O Princess UK Reports", collectively with the P&O Princess US Reports, the "P&O Princess Reports", with the Carnival Reports and the P&O Princess Reports each being referred to as the relevant Party's "Reports") complied, or in the case of those notified or filed by P&O Princess subsequent to the date hereof will comply, as to form, in all material respects with the applicable provisions, of the London Listing Rules and the Companies Act. As of their respective dates, the P&O Princess UK Reports did not, and any P&O Princess UK Report notified by P&O Princess to, or filed by P&O Princess with, the UKLA subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading in any material respect. Each of the consolidated balance sheets included in or incorporated by reference into the P&O Princess Reports (including the related notes and schedules) fairly presents, or will fairly present, in all material respects, the consolidated financial position of P&O Princess and its Subsidiaries as of its date, and each of the related consolidated statements of profit and loss accounts, changes in shareholders' funds, total recognized gains and losses and cash flows included in or incorporated by reference into the P&O Princess Reports (including any related notes and schedules) fairly presents, or, in the case of those filed with or furnished to, the SEC after -16- the date hereof, will fairly present, in all material respects, the consolidated results of operations, retained earnings and cash flows of P&O Princess and its consolidated Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that are not expected to be material in amount or effect), in each case in accordance with UK GAAP consistently applied during the periods involved except as may be noted therein. The related notes to the P&O Princess US Reports filed with the SEC reconciling such consolidated balance sheet, consolidated statement of income, statement of changes in shareholders' interest, and statement of cash flows comply in all material respects with the requirements of the SEC applicable to such reconciliation to US GAAP. Except as disclosed in the P&O Princess Reports filed prior to the date hereof, P&O Princess and its consolidated Subsidiaries have not incurred any liabilities that are of a nature that would be required to be disclosed on a balance sheet of P&O Princess and its consolidated Subsidiaries or the footnotes thereto prepared in conformity with UK GAAP, other than (A) liabilities incurred in the ordinary course of business consistent with past practice, (B) liabilities incurred in accordance with Section 4.1, (C) liabilities for Taxes in respect of income, profits or gains earned in the ordinary course of business or (D) liabilities that, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to P&O Princess. 3.1.6 Absence of Certain Changes. Except as disclosed in its Reports filed or furnished prior to the date hereof, or as expressly contemplated by this Agreement, since its Audit Date it and its Significant Subsidiaries have conducted their respective businesses only in, and have not engaged in any material transaction ("material" being construed in the context of the Party and its Subsidiaries taken as a whole) other than according to, the ordinary and usual course of such businesses, and there has not been (i) any Material Adverse Change with respect to it; (ii) declaration, setting aside or payment of any dividend or other distribution in cash, stock or property in respect of its capital stock, except for dividends or other distributions on its capital stock publicly announced prior to the date hereof and except as expressly permitted hereby; (iii) any split in its capital stock, combination, subdivision or reclassification of any of its capital stock or issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except as expressly contemplated hereby or (iv) any change by it in accounting principles, practices or methods except as required by changes in US GAAP or UK GAAP, as the case may be. Since its Audit Date, except as provided for herein or as disclosed in its Reports filed or furnished prior to the date hereof, there has not been any increase in the compensation payable or that could become payable by it or any of its Subsidiaries to officers or key employees, or any amendment of, or acceleration of the time of payment or vesting under, any of its Compensation and Benefit Plans or agreements, other than increases or amendments in the ordinary course of business consistent with past practice that are not, individually or aggregate, material ("material" being construed in the context of the Party and its Subsidiaries taken as a whole) or that are contemplated by this Agreement. -17- 3.1.7 Litigation and Liabilities. 3.1.7.1 Except as disclosed in its Reports filed or furnished prior to the date hereof, there are no (i) civil, criminal or administrative actions, suits, claims, hearings, investigations or proceedings existing, pending or, to the knowledge of, in the case of Carnival, its Chief Executive Officer, Chief Financial Officer or General Counsel (the "Carnival Officers") and, in the case of P&O Princess, its Chief Executive Officer, Chief Financial Officer or General Counsel (the "P&O Princess Officers") threatened, against it or any of its Subsidiaries or (ii) obligations or liabilities, whether or not accrued, contingent or otherwise and whether or not required to be disclosed, or any other facts or circumstances of which, in the case of Carnival, the Carnival Officers, and, in the case of P&O Princess, the P&O Princess Officers, have knowledge that would reasonably be expected to result in any claims against, or obligations or liabilities of, it or any of its Subsidiaries, except, in each case, for those that, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to it. 3.1.7.2 Except as disclosed in its Reports filed or furnished prior to the date hereof it and its Subsidiaries hold all permits, licenses, franchises, variances, exemptions, orders and approvals of Governmental Entities which are necessary for the operation of the businesses as now being conducted by it and its Subsidiaries, taken as a whole (as to each Party, its "Permits"), no suspension or cancellation of any of its Permits is pending or, to the knowledge of the Carnival Officers in the case of Carnival or the P&O Princess Officers in the case of P&O Princess, threatened and it and its Subsidiaries are in compliance with the terms of its Permits, except for any such failures to hold, suspensions or cancellations of, or failures to comply with, such Permits that, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to it. Neither it nor its Subsidiaries is in violation with respect to any Laws of any Governmental Entity, except for any such violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to it. 3.1.8 Brokers and Finders. Neither it nor any of its Subsidiaries, officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders' fees in connection with the execution and delivery of this Agreement or the Transactions, except that (i) Carnival has retained Merrill Lynch International and UBS Warburg Ltd. as its financial advisors and disclosed its arrangements with such financial advisors to P&O Princess prior to the date hereof and (ii) P&O Princess has retained Schroder Salomon Smith Barney as its financial advisors and disclosed its arrangements with such financial advisor to Carnival prior to the date hereof. 3.1.9 Ownership of Other Party's Common Stock. 3.1.9.1 Carnival and its Subsidiaries do not "beneficially own" (as such term is defined in Rule 13d-3 under the Exchange Act) any P&O Princess Ordinary Shares or P&O Princess American Depositary Shares. -18- 3.1.9.2 P&O Princess and its Subsidiaries do not "beneficially own" (as such term is defined in Rule 13d-3 under the Exchange Act) any shares of Carnival Common Stock or any debt of Carnival that is convertible into such shares. 3.1.10 Taxes. Except for any such matters that, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to it, it and each of its Subsidiaries (i) have prepared in good faith and duly and timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate in all material respects; (ii) have paid all Taxes that are required to have been paid including any Taxes which it or any of its Subsidiaries are obligated to withhold from amounts owing to any employee, creditor or third party, except with respect to matters contested in good faith; (iii) have not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency and (iv) have no liability with respect to Taxes that accrued on or before November 30, 2001 (in the case of Carnival) or December 31, 2001 (in the case of P&O Princess) in excess of the amounts accrued with respect thereto that are reflected in the financial statements included in the Reports filed or furnished on or prior to the date hereof. Except for any such matters that, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect with respect to it, there are no pending or, to the knowledge of the P&O Princess Officers or the Carnival Officers (as appropriate) threatened in writing, any audits, examinations, investigations or other proceedings in respect of Taxes and Tax matters or any unresolved questions or claims concerning its or any of its Subsidiaries' Tax liability. As used in this Agreement, (i) the term "Tax" (including, with correlative meaning, the terms "Taxes", and "Taxable") includes all national, federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock, capital gains, severance, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value added, occupancy and other taxes, duties or assessments of any nature whatsoever whether levied in the United Kingdom, Panama, the United States or any other country, together with all interest, penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions, and (ii) the term "Tax Return" includes all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes. 3.1.11 Carnival Common Stock to be Issued in the Offer. All of the shares of Carnival Common Stock to be issued in the Offer in accordance with this Agreement will be, when so issued, duly authorized, validly issued, fully paid and non-assessable and free of preemptive rights. -19- ARTICLE IV Covenants 4.1 Interim Operations. Each of Carnival and P&O Princess covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the Effective Time (unless the other Party shall otherwise approve in writing and except as otherwise expressly contemplated by or provided in this Agreement, or as required by applicable Law): 4.1.1 Ordinary Course. The businesses of it and its Subsidiaries (taken as a whole) shall be conducted in the usual, regular and ordinary course consistent with past practice and, to the extent consistent therewith, it and each of its Significant Subsidiaries shall use its reasonable best efforts to preserve its business organization and present lines of business materially intact and maintain its commercially reasonable insurance (taking into account industry practice and market conditions) and material rights and franchises and preserve its existing material relations with third parties. Notwithstanding anything in this Agreement to the contrary, none of the following actions by any Party and/or its Subsidiaries after the date of this Agreement shall be prohibited by this Agreement: (i) any internal reorganizations and related actions pursuant thereto involving such Party and/or its Subsidiaries that do not have and are not reasonably likely to have a Material Adverse Effect on such Party, (ii) any purchase, sale or charters of any vessels or any amendment to, or termination of, new-building contracts, (iii) any other acquisitions or investments for consideration not exceeding in the aggregate $500 million plus the net proceeds of any divestments referred to in the next clause, and (iv) any divestments the net proceeds of which do not exceed $500 million in the aggregate; 4.1.2 Governing Documents; Share Capital; Dividends. It shall not (i) amend its articles of incorporation or by-laws, in the case of Carnival, or its memorandum and articles of association, in the case of P&O Princess (except for any amendments made solely to preserve its tax position to the extent necessary or desirable); (ii) split, combine, subdivide or reclassify its outstanding shares of capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock other than (A) in the case of Carnival, regular quarterly cash dividends consistent with past practice and (B) in the case of P&O Princess, regular quarterly cash dividends consistent with past practice; or (iv) reduce, cancel, repurchase, redeem or otherwise acquire or permit any of its Subsidiaries to reduce, cancel, purchase or otherwise acquire (except for repurchases, redemptions or acquisitions required by (A) the terms of its capital stock or securities outstanding on the date hereof or (B) the respective terms as of the date hereof of, or in connection with, any Carnival Stock Plans, in the case of Carnival, or P&O Princess Option Plans, in the case of P&O Princess, or any dividend reinvestment plans as in effect on the date hereof in the ordinary course of the operation of such plans), any shares of the capital stock of P&O Princess or Carnival, as the case may be, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock; -20- 4.1.3 Issuance of Securities; Indebtedness; Acquisitions and Dispositions. Neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind to acquire, the capital stock of P&O Princess or Carnival, as the case may be, of any class other than (x) in the case of Carnival, shares of Carnival Common Stock issuable pursuant to options outstanding on the date hereof under the Carnival Stock Plans, additional options or rights to acquire shares of Carnival Common Stock granted under the terms of any Carnival Stock Plan as in effect on the date hereof in the ordinary course of the operation of such Carnival Stock Plan or pursuant to Carnival's convertible debt securities outstanding as of the date hereof, (y) in the case of P&O Princess, P&O Princess Ordinary Shares issuable or transferable pursuant to options outstanding on the date hereof under the P&O Princess Option Plans and additional options or rights to acquire P&O Princess Ordinary Shares granted under the terms of any P&O Princess Option Plans as in effect on the date hereof in the ordinary course of the operation of such P&O Princess Option Plan and (z) issuances of securities in connection with grants or awards of stock-based compensation made in accordance with paragraph 4.1.4 hereof), or (ii) incur or modify any significant indebtedness or other liability except in the ordinary and usual course of business consistent with past practice or pursuant to the financial plans communicated to the other Party in writing prior to the date hereof. Neither it nor any of its Significant Subsidiaries will merge or consolidate with any Person; 4.1.4 Employee Benefits. Neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under, accelerate the time of payment or vesting under, amend or otherwise modify any Compensation and Benefit Plan or agreement or increase the salary, wage, bonus or other compensation of any directors, officers or employees except for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans, agreements or otherwise in each case in the normal and usual course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases); 4.1.5 Representations and Warranties. Neither it nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties not to satisfy the condition set forth in Section 5.2.1 or 5.3.1, as applicable, as of the Closing Date; 4.1.6 Non-Competition Agreements. Neither Party shall enter into or renew any non-compete, exclusivity or similar agreement that would restrict or limit, in any material respect as of the Effective Time (material being construed in the context of the Party and its Subsidiaries taken as a whole), its operations; -21- 4.1.7 Satisfaction of Closing Conditions. Neither Party shall take any action or omit to take any action for the purpose of preventing, delaying or impeding the consummation of the Transactions; and 4.1.8 No Related Actions. Neither it nor any of its Subsidiaries shall authorize or enter into an agreement to do any of the foregoing. 4.2 Acquisition Proposals. 4.2.1 No Shop. Each of Carnival and P&O Princess agrees that, subject to Section 4.2.3 and except as expressly contemplated by this Agreement, neither it nor any of its Subsidiaries nor any of the officers or directors of it or its Subsidiaries shall, and that it shall direct and use its reasonable best efforts to cause its and its Subsidiaries' officers, directors, employees, investment bankers, attorneys, accountants, financial advisors, agents or other representatives (collectively, with respect to each of Carnival and P&O Princess, such Person's "Representatives") not to, directly or indirectly, initiate, solicit, encourage or otherwise facilitate any inquiries or the making of any proposal or offer by a third party with respect to a merger, takeover, reorganization, share exchange, scheme of arrangement, dual-holding company transaction, consolidation or similar transaction involving Carnival or P&O Princess, or any purchase of or joint venture (or similar arrangement) involving, or offer to purchase or enter into a joint venture (or similar arrangement) involving, all or 15% or more of the equity securities of Carnival or P&O Princess, as the case may be, or of its and its Subsidiaries' assets taken as a whole (any such proposal or offer being hereinafter referred to as an "Acquisition Proposal"). Each of Carnival and P&O Princess further agrees that neither it nor any of its Subsidiaries nor any of its or its Subsidiaries' officers or directors shall, and that it shall direct and use its reasonable best efforts to cause its Representatives not to, directly or indirectly, have any discussions with or provide any confidential information or data to any Person relating to an Acquisition Proposal or engage in any negotiations concerning an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; provided, however, that nothing contained in this Agreement shall prevent either Carnival or P&O Princess or its board of directors from (i) negotiating with or furnishing information to any Person who has made a bona fide unsolicited written Acquisition Proposal which did not result from a breach of this Section 4.2.1 (or any action that would have constituted such a breach if the Representatives of such Party were bound by this Section to the same extent as such Party) or Section 6 of, or any comparable no-shop provision in, the Stockholders Deed Polls (or any action that would have constituted a breach if the Representatives (as defined in the Stockholders Deed Polls) were bound by such Section to the same extent as the Carnival Major Stockholders) (each, a "Qualifying Acquisition Proposal") or (ii) recommending a Qualifying Acquisition Proposal to its shareholders, if and only to the extent that, in each case, the board of directors of such Party determines in good faith after consultation with outside legal counsel that the failure to take such action would result in a breach of the fiduciary duties of the Board of Directors and such Qualifying Acquisition Proposal is a Superior Proposal. For purposes of this Agreement, a "Superior Proposal" means in respect of Carnival or P&O Princess, as applicable, any Qualifying Acquisition Proposal by a third party (x) on terms which the board of directors of such -22- Party determines in its good faith judgment to be more favorable from a financial point of view to its shareholders than the Transactions after consultation with its financial advisors (which advice shall be communicated to the other Party) and after giving the other Party at least ten Business Days to respond to such third party Qualifying Acquisition Proposal, (y) which the board of directors of such Party determines in its good faith judgment to constitute a transaction that is reasonably likely to be consummated on the terms set forth, taking into account all legal, financial, regulatory and other aspects of such proposal and (z) which relates to at least a majority of the consolidated assets by value or the securities by voting power of such Party. Each of Carnival and P&O Princess agrees that it will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person conducted heretofore with respect to any Acquisition Proposal. Each of Carnival and P&O Princess also agrees that if it has not already done so, it will promptly request each Person, if any, that has heretofore executed a confidentiality agreement within the 12 months prior to the date hereof in connection with its consideration of any Acquisition Proposal to return or destroy all confidential information heretofore furnished to such Person by or on behalf of it or any of its Subsidiaries. 4.2.2 Notifications. Each of Carnival and P&O Princess agrees that it will take the necessary steps promptly to inform its Subsidiaries and its and its Subsidiaries' Representatives of the obligations undertaken in this Section 4.2. Each of Carnival and P&O Princess agrees that it will notify the other promptly if any inquiries, proposals or offers relating to or constituting an Acquisition Proposal are received by, any information is requested from, or any such discussions or negotiations are sought to be initiated or continued with, it, any of its Subsidiaries or any of its or its Subsidiaries' Representatives indicating, in connection with such notice, the name of such Person and the material terms and conditions of any proposals or offers and thereafter shall keep the other informed, on a current basis, of the status and material terms of any such proposals or offers, including providing the other Party with copies of any information provided to such other Person. 4.2.3 Compliance with Exchange Act, Exchange Regulations and City Code. Nothing contained in this Agreement shall prohibit a Party from taking and disclosing to its shareholders a position contemplated by Rule 14e-2(a) under the Exchange Act with respect to an Acquisition Proposal by means of a tender or exchange offer or taking such action and making such recommendations as its board of directors shall determine, in good faith after consultation with outside legal counsel, is required in order to comply with any obligations imposed on it by the SEC, the NYSE, the City Code, the Takeover Panel, the London Stock Exchange or the UKLA in relation to any Acquisition Proposal (provided that it is hereby acknowledged, for the avoidance of doubt, that no provision of the City Code requires P&O Princess or its directors to solicit or initiate any Acquisition Proposal). If the SEC, the NYSE, the Takeover Panel, UKLA or London Stock Exchange, as applicable, requests or directs a Party to take any course of action in connection with, or which would have any effect on, the Transactions, then such Party agrees, solely to the extent practicable (having regard to the time available and the nature and urgency of such request or direction), to (i) notify the other Party of this -23- fact and (ii) consult with the other Party prior to taking any action with respect to such request or direction. 4.3 Information Supplied. 4.3.1 Carnival Circular. Each of Carnival and P&O Princess each agrees, as to itself and its Subsidiaries that: 4.3.1.1 It shall provide such information for inclusion in the Carnival Circular, such that the Carnival Circular shall contain all particulars relating to Carnival and P&O Princess required to comply in all material respects with all applicable Laws, including the PGCL, the City Code, the Securities Act, the Exchange Act and the rules and regulations of the SEC and the NYSE; 4.3.1.2 The information provided by such Party for inclusion in the Carnival Circular shall not, at the date of mailing to shareholders and at the time or times of the Carnival Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and 4.3.1.3 If at any time prior to the Carnival Shareholders Meeting any information relating to Carnival or P&O Princess, or any of their respective Affiliates, officers or directors, should be discovered by Carnival or P&O Princess which should be set forth in a supplement to the Carnival Circular, so that such document would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect, the Party which discovers such information shall promptly notify the other Party and, to the extent required by Law, an appropriate amendment or supplement describing such information shall be promptly disseminated to the Carnival shareholders. 4.3.2 Joint Transaction Circular, Offer Documents and Schedule 14D-9. Each of Carnival and P&O Princess agrees, as to itself and its Subsidiaries, that: 4.3.2.1 It shall provide such information for inclusion in (a) the Joint Transaction Circular, (b) the Offer Documents and (c) the Schedule 14D-9, such that, in each case, such documents shall contain all particulars relating to Carnival and P&O Princess required to comply in all material respects with all applicable Laws, including, without limitation, the Companies Act, the City Code and the Financial Services and Markets Act 2000 (and the rules and regulations thereunder), the requirements of the London Stock Exchange, the Securities Act, the Exchange Act and the rules and regulations of the SEC and the NYSE; 4.3.2.2 All such information provided by such Party for inclusion in such documents will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make -24- the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and 4.3.2.3 If at any time prior to the P&O Princess Shareholders Meeting any information relating to Carnival or P&O Princess, or any of their respective Affiliates, officers or directors, should be discovered by Carnival or P&O Princess which should be set forth in a supplement to the Joint Transaction Circular, any Offer Document or the Schedule 14D-9, so that such document would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect, the Party which discovers such information shall promptly notify the other Party and, to the extent required by Law, an appropriate amendment or supplement describing such information shall be promptly disseminated to the P&O Princess shareholders. 4.4 Shareholders Meetings. Carnival and P&O Princess will each respectively take all action necessary to convene a meeting of the holders of Carnival Common Stock to obtain the Carnival Requisite Vote (the "Carnival Shareholders Meeting") and the holders of P&O Princess Ordinary Shares to obtain the P&O Princess Requisite Vote (the "P&O Princess Shareholders Meeting") to approve the Transactions, as soon as possible after the date hereof, and the Parties shall liaise to ensure that the Carnival Shareholders Meeting will be held two days prior to the P&O Princess Shareholders Meeting; provided that if either Party elects to hold its meeting on an earlier date, it may do so. Subject to fiduciary obligations and the requirements of applicable Law, the board of directors of each of P&O Princess and Carnival shall recommend to its respective shareholders the approval of, in the case of Carnival, the Carnival Amended Articles and, in the case of P&O Princess, the P&O Princess Amendments, and in each case, this Agreement and the DLC Transactions, which recommendation shall be set forth in the Carnival Circular and the Joint Transaction Circular, respectively, and shall take all lawful action to solicit such approval. The Carnival Shareholders Meeting and the P&O Princess Shareholders Meeting will be held regardless of any failure to make such recommendation or any change in such recommendation. Carnival shall take all action necessary to adopt the Carnival Amended By-Laws on or prior to Closing. 4.5 Filings; Other Actions; Notification. 4.5.1 Filings. As promptly as practicable after the execution of this Agreement, Carnival and P&O Princess shall cooperate in the preparation of all necessary filings and notifications to any Governmental Entity required to implement the DLC Transactions, the Carnival Circular, the Joint Transaction Circular, the Offer Documents and the Schedule 14D-9. Carnival and P&O Princess shall cooperate to conform the content of the Carnival Circular and the Joint Transaction Circular, to the extent reasonably practicable. Carnival and P&O Princess each shall use reasonable best efforts to have the Carnival Circular cleared by the SEC, for dispatch to the Carnival shareholders as promptly as practicable and permitted by Law, and promptly thereafter to mail such Carnival Circular, together with forms of proxy, to the shareholders of Carnival. P&O Princess and Carnival each shall use all reasonable best efforts to have -25- the Joint Transaction Circular and the Offer Documents cleared by the SEC and the UKLA for dispatch to the shareholders of P&O Princess and promptly thereafter to mail the Joint Transaction Circular, together with forms of proxy, to the shareholders of P&O Princess. Carnival shall promptly prepare and file a supplemental listing application with the NYSE with respect to the shares of Carnival Common Stock to be issued in the Offer and shall use its reasonable best efforts to have such shares of Carnival Common Stock approved for listing by the NYSE, subject only to official notice of issuance. 4.5.2 Cooperation. Carnival and P&O Princess shall each cooperate with the other and (i) use (and shall cause their respective Subsidiaries to use) all their respective reasonable best efforts promptly to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable under this Agreement and applicable Laws to consummate and make effective the Transactions as soon as practicable, including preparing and filing as promptly as practicable all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents, (ii) use (and shall cause their respective Subsidiaries to use) all their respective reasonable best efforts to obtain as promptly as practicable all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any third party (other than Carnival Required Consents and P&O Princess Required Consents) necessary, proper or advisable to consummate the Transactions, and (iii) use (and shall cause their respective Subsidiaries to use) their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable to obtain the Carnival Required Consents or P&O Princess Required Consents, as the case may be; provided that neither Party shall be required by this Section 4.5.2(ii) or (iii) to accept or agree to any conditions, terms or restrictions in connection with any such Carnival Required Consent or P&O Princess Required Consent, as the case may be, which, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect on P&O Princess and/or Carnival after the Effective Time (it being understood that, for this purpose, materiality shall be considered with reference to the total equity market value of P&O Princess and Carnival as a unified commercial enterprise). Subject to applicable Laws relating to the exchange of information, Carnival and P&O Princess shall have the right to review in advance, and to the extent practicable each will consult the other on, all the information relating to Carnival and its Subsidiaries or P&O Princess and its Subsidiaries, as the case may be, that appears in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the Transactions. In exercising the foregoing right, each of Carnival and P&O Princess shall act reasonably and as promptly as practicable. 4.5.3 Furnishing Information. Carnival and P&O Princess each shall, upon request by the other, furnish the other with all information concerning itself, its Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with the Carnival Circular, the Joint Transaction Circular, the Offer Documents or any other necessary or appropriate filing, notice, statement, registration, submission of information or application made by or on behalf of Carnival or P&O Princess or any of their respective Subsidiaries to any third party and/or any Governmental Entity in connection with the Transactions. -26- 4.5.4 Status. Carnival and P&O Princess each shall keep the other apprised of the status of matters relating to completion of the Transactions, including promptly furnishing the other with copies of notices or other communications received by Carnival or P&O Princess, as the case may be, or any of its Subsidiaries, from any third party and/or any Governmental Entity with respect to the Transactions. Carnival and P&O Princess each shall give prompt notice to the other of any change that is reasonably likely to result in a Material Adverse Effect on it or of any failure of any condition set forth in Article V to the other Party's obligations to effect the Transactions. 4.5.5 Consultation; Participation. Prior to making any filing, notice, petition, statement, registration, submission of information or application to or with any third party and/or Governmental Entity (including any securities exchange) in connection with the consummation of the Transactions and except as may be required by Law or by obligations pursuant to any listing agreement with or rules of any securities exchange, each Party shall make all reasonable efforts to consult with the other Party with respect to the content of such filing, notice, petition, statement, registration, submission of information or application and to provide the other Party with copies of the proposed filing, notice, petition, statement, registration, statement of information or application. Carnival and P&O Princess each shall not agree to participate in any meeting with any Governmental Entity in respect of any filings, investigation or other inquiry relating to the Transactions unless it consults with the other Party in advance and, to the extent practicable and permitted by such Governmental Entity, gives the other Party the opportunity to attend and participate thereat. The foregoing requirements of Section 4.5.5 shall not apply to P&O Princess' discussions and meetings with the UK Inland Revenue with respect to tonnage taxes and amendments to existing tonnage tax elections; provided that P&O Princess shall notify Carnival of any such discussions and meetings, and to the extent practicable, consult with Carnival with respect thereto. 4.5.6 Cooperation in Defense of Claim. In the event any claim, action, suit investigation or other proceeding by any Governmental Entity or other Person or other legal or administrative proceeding is commenced that questions the validity or legality of this Agreement or any of the Transactions or claims damages in connection therewith, the Parties agree to cooperate and use their reasonable best efforts, subject to the limitations set forth in Section 4.5.2, to defend against and respond thereto. 4.6 Access. In order to facilitate consummation of the Transactions, the Parties hereby agree that upon reasonable request to an executive officer of P&O Princess or Carnival, as the case may be, designated for the purpose, and except as may otherwise be required by applicable Law, each Party shall (and shall cause its Subsidiaries to) afford the other Party's Representatives access, during normal business hours throughout the period prior to the Effective Time, to its properties, books, contracts and records and, during such period, each shall (and shall cause its Subsidiaries to) furnish promptly to the other all information concerning its business, properties and personnel as may be requested by the other Party which it reasonably requires in order to investigate and confirm the accuracy of such Party's representations and warranties and the satisfaction of the conditions to Closing relating thereto; provided that no receipt of information pursuant to this Section shall affect or be deemed to modify any -27- representation or warranty made by Carnival or P&O Princess hereunder; and provided, further that the foregoing shall not require Carnival or P&O Princess to permit any inquiry, or to disclose any information, that in the reasonable judgment of Carnival or P&O Princess, as the case may be, would (i) violate any antitrust or competition Law or (ii) result in the disclosure of any trade secrets of third parties or violate any of its obligations with respect to confidentiality to third parties if Carnival or P&O Princess, as the case may be, shall have used reasonable efforts to obtain the consent of such third party to such inspection or disclosure. All such information shall be governed by the terms of the Confidentiality Agreement, dated October 11, 2002, between the Parties (the "Confidentiality Agreement"), including without limitation all such information disclosed in the Disclosure Letters. 4.7 Publicity. The initial press release concerning this Agreement and the Transactions shall be a joint press release agreed between, and initialed by, the Parties and such press release shall be released by both Parties on or around the same date and time, and thereafter Carnival and P&O Princess shall to the extent practicable (i) consult with each other and, except as may be required by Law or by obligations pursuant to any listing agreement with or rules of any national securities exchange or as required by the Takeover Panel, mutually agree on the content prior to issuing any press releases or otherwise making public announcements with respect to the Transactions and (ii) consult with each other prior to issuing any press releases or otherwise making public announcements which could materially affect the Transactions. 4.8 Benefits and Other Matters. 4.8.1 Director and Officer Liability. 4.8.1.1 P&O Princess and Carnival each agree that all rights to indemnification and all limitations on liability existing in favor of any Indemnitee (as defined below) in respect of acts or omissions of such Indemnitee on or prior to the Effective Time as provided in the articles of incorporation and by-laws, in the case of Carnival, or memorandum and articles of association, in the case of P&O Princess, or an agreement between an Indemnitee and it or its Subsidiaries in effect as of the date hereof shall continue in full force and effect in accordance with the terms thereof. 4.8.1.2 For six years after the Effective Time, P&O Princess or Carnival, as the case may be, shall indemnify and hold harmless the individuals who on or prior to the Effective Time were officers or directors of either Party or either Party's Subsidiaries (the "Indemnitees") to the same extent as set forth in Section 4.8.1.1 above. In the event any claim in respect of which indemnification is available pursuant to the foregoing provisions is asserted or made within such six-year period, all rights to indemnification shall continue until such claim is disposed of or all judgments, orders, decrees or other rulings in connection with such claim are duly satisfied. -28- 4.8.1.3 For six years after the Effective Time, P&O Princess and Carnival shall provide officers' and directors' liability insurance in respect of acts or omissions occurring prior to the Effective Time covering each such Person currently covered by its officers' and directors' liability insurance policy on terms with respect to coverage and in amounts no less favorable than those of such policy in effect on the date hereof; provided, however, that during such period, Carnival and P&O Princess shall be required to maintain or procure as much coverage as can be obtained for the remainder of such period for an annual premium not in excess of 200% of the current annual premium paid by P&O Princess or Carnival, as the case may be, for its existing coverage. 4.8.1.4 The obligations of P&O Princess and Carnival under this Section 4.8.1 shall not be terminated or modified in such a manner as to adversely affect any Indemnitee to whom this Section 4.8.1 applies without the consent of such affected Indemnitee (it being expressly agreed that the Indemnitees to whom this Section 4.8.1 applies shall be third party beneficiaries of this Section 4.8.1). 4.8.1.5 Each Party (the "Providing Party") shall indemnify and hold harmless, to the fullest extent permissible under applicable Law, the officers and directors of the other party in respect of all losses, claims, damages, costs, expenses and liabilities arising from or in connection with the information provided by such Providing Party for use in the Carnival Circular or the Joint Transaction Circular pursuant to Section 4.3 which contains any untrue statement of a material fact or an omission to state any material fact required to be stated therein, in light of the circumstances under which they were made, in order to make the statements therein, not misleading. 4.8.2 Directors of Carnival and P&O Princess. At the Effective Time, the board of directors of each of Carnival and P&O Princess shall consist of [17] directors, [_] of which shall be directors designated prior to the Effective Time by P&O Princess, of which [_] shall be non-executive directors, and [_] of which shall be directors designated by Carnival, of which [_] shall be non-executive directors, and such Carnival and P&O Princess director designees shall be the "Mutual Directors". Such Mutual Directors shall be the directors of each of Carnival and P&O Princess from and after the Effective Time until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with P&O Princess' memorandum and articles and Carnival's restated articles of incorporation and by-laws, in each case as then in effect. Carnival and P&O Princess agree to procure such resignations of their respective directors as may be necessary so that at the Effective Time the Mutual Directors are the only directors of Carnival and P&O Princess. 4.8.3 Executive Officers. At the Effective Time, Micky Arison shall be elected or appointed as Chairman and Chief Executive Officer of Carnival and P&O Princess, and Howard S. Frank shall be elected or appointed as Chief Operating Officer of Carnival and P&O Princess, to serve in such capacities until their respective successors are elected or appointed and shall have qualified in accordance with the P&O Princess' memorandum and articles and Carnival's restated articles of incorporation and by-laws, in each case as then in effect. If at or immediately prior to the Effective Time, -29- either of such individuals shall be unwilling or unable to serve, a person to fill such position shall be designated by the chief executive officer of Carnival at such time. 4.9 Expenses. Except as otherwise provided in Section 6.5, whether or not the Transactions are consummated, all costs and expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring such expense. 4.10 Other Actions by Carnival and P&O Princess. 4.10.1 Dividends. Carnival and P&O Princess shall coordinate the declaration, setting of record dates and payment dates of dividends on Carnival Common Stock and P&O Princess Ordinary Shares so that the respective holders of Carnival Common Stock and P&O Princess Ordinary Shares do not receive two dividends in respect of the calendar quarter in which the Effective Time occurs or fail to receive a dividend in respect of the calendar quarter in which the Effective Time occurs. 4.10.2 Integration Planning. To the extent permitted by applicable Law, promptly following the date of this Agreement, the Parties will establish an integration planning committee (the "Integration Committee") to address and agree upon integration issues. The Chief Executive Officer of each of Carnival and P&O Princess shall determine which of their respective officers shall serve on the Integration Committee and such Committee shall be comprised of an equal number of persons from Carnival and P&O Princess. 4.11 Carnival Offer to Exchange. Section 4.11 is subject to applicable Law. 4.11.1 Offer to Exchange. Provided that this Agreement shall not have been terminated, and subject to the provisions of this Agreement, Carnival shall commence, within the meaning of Rule 14d-2 under the Exchange Act, the Offer, not later than ten business days after the effective date of the Offer Registration Statement or earlier if required by the City Code. The Offer shall be subject only to the conditions (the "Offer Conditions") set forth in Annex 1 hereto (including, without limitation, the occurrence of the Closing), of which conditions 4 and 5 may be waived in whole or in part by Carnival in its sole discretion. The Joint Transaction Circular shall state that P&O Princess shareholders may (i) vote to approve the DLC Transactions; and/or (ii) accept the Offer, subject to the terms and conditions set forth therein. Subject to the terms and conditions of the Offer and this Agreement (including, without limitation, Section 4.11.4), Carnival shall acquire all P&O Princess Ordinary Shares validly tendered and not withdrawn pursuant to the Offer in compliance with the obligations respecting prompt payment pursuant to Rule 14e-1(c) under the Exchange Act and Rule 31.8 of the City Code. 4.11.2 Modification of the Offer, Fractional Shares. Subject to the City Code, Carnival expressly reserves the right to modify the terms of the Offer, except that, without the prior written consent of P&O Princess, Carnival shall not (i) decrease -30- the Offer Exchange Ratio, (ii) impose any conditions to the Offer in addition to the Offer Conditions or modify the Offer Conditions (other than to waive any Offer Conditions to the extent permitted by this Agreement), (iii) except as provided in Section 4.11.3, extend the Offer, (iv) change the form of consideration payable in the Offer or (v) make any other change or modification in any of the terms of the Offer in any manner that is adverse to the holders of P&O Princess Ordinary Shares. Notwithstanding anything to the contrary set forth herein, no certificates representing fractional shares of Carnival Common Stock shall be issued in connection with the exchange of Carnival Common Stock for P&O Princess Ordinary Shares upon consummation of the Offer, and in lieu thereof each tendering shareholder who would otherwise be entitled to a fractional share of Carnival Common Stock in the Offer will be paid an amount in cash equal to either: (i) the product obtained by multiplying (A) the fractional share interest to which such holder would otherwise be entitled by (B) the closing price of the Carnival Common Stock on the NYSE (as reported in The Wall Street Journal or, if not reported therein, any other authoritative source) on the date the Offer becomes unconditional; or (ii) the pro rata entitlement of such member to the net proceeds of the sale of the aggregate fractional entitlements to Carnival Common Stock which shall be sold in the market at the best price reasonably obtainable by Carnival; provided always that Carnival shall be able to choose whether to apply the procedure referred to in (i) or (ii) above, shall not be obliged to give any reasons for such choice and such choice shall be conclusive and binding on all persons concerned and shall not be open to challenge on any grounds whatsoever. 4.11.3 Expiration and Extension of the Offer. The Offer shall initially expire on the 20/th/ Business Day after the date of commencement of the Offer unless it is terminated in accordance with Section 4.11.8. Notwithstanding the foregoing, Carnival may, without the consent of P&O Princess, extend the Offer at any time and from time to time: (i) if, at the scheduled or extended expiration date of the Offer, any of the Offer Conditions shall not have been satisfied or waived, until such conditions are satisfied or waived; (ii) for any period required by any Law applicable to the Offer; and (iii) for any period required by any applicable Law in connection with an increase in the consideration to be paid pursuant to the Offer. In addition to the foregoing, Carnival may provide for a "subsequent offering period" as provided in Rule 14d-11 under the Exchange Act after the exchange of Carnival Common Stock pursuant to the Offer if required to do so by any applicable Governmental Entity. 4.11.4 Acceptances by Carnival. The terms of the Offer shall provide that if the number of P&O Princess Ordinary Shares as to which the Offer is accepted represents more than 20% of the outstanding P&O Princess Ordinary Shares, only that number of P&O Princess Ordinary Shares representing 20% of the outstanding P&O Princess Ordinary Shares shall be acquired by Carnival, and acceptances shall be scaled back in the manner prescribed by Rule 36.7 of the City Code. 4.11.5 Offer Registration Statement. As promptly as practicable after the date of this Agreement, Carnival shall file with the SEC the Offer Registration Statement, and P&O Princess shall use its reasonable best efforts to cooperate with Carnival in making such filing. On the date of commencement of the Offer, Carnival shall file with the SEC a Schedule TO. P&O Princess and its counsel shall be given -31- reasonable opportunity to review and comment upon the Offer Documents prior to their filing with the SEC or dissemination to P&O Princess's shareholders. Carnival shall provide P&O Princess and its counsel with copies of any comments Carnival or its counsel may receive from the SEC or its Staff with respect to the Offer Documents promptly after the receipt of such comments, and Carnival and P&O Princess shall cooperate (and shall cause their respective counsel to cooperate) reasonably in responding promptly and appropriately to such comments. 4.11.6 P&O Princess Shareholder Information. In connection with the Offer, P&O Princess shall cause its registrar to furnish Carnival promptly with mailing labels containing the names and addresses of the record holders of P&O Princess Ordinary Shares as of a recent date and of those persons becoming record holders subsequent to such date, together with copies of all lists of shareholders, security position listings and computer files and all other information in P&O Princess's possession or control regarding the beneficial owners of P&O Princess Ordinary Shares and any securities convertible into P&O Princess Ordinary Shares, and shall furnish to Carnival such information and assistance (including updated lists of shareholders, security position listings and computer files) as Carnival may reasonably request in communicating the Offer to P&O Princess's shareholders. P&O Princess shall cooperate with Carnival to communicate the Offer to the holders of the P&O Princess ADSs. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents, Carnival and its affiliates, associates and agents shall hold in confidence the information contained in any such labels, listings and files, will use such information only in connection with the Offer and, if this Agreement shall be terminated, will promptly, upon request, deliver, and will use reasonable efforts to cause its affiliates, associates and agents to deliver, to P&O Princess all copies of such information then in their possession or control. 4.11.7 Schedule 14D-9. In accordance with the Exchange Act, P&O Princess shall file with the SEC a Statement on Schedule 14D-9 with respect to the Offer (such document, as amended from time to time, the "Schedule 14D-9"). P&O Princess and shall promptly disseminate the Schedule 14D-9 to the shareholders of the Company to the extent required by the Exchange Act. P&O Princess shall give Carnival and its counsel an opportunity to review and comment upon the Schedule 14D-9 prior to the filing thereof with the SEC. P&O Princess shall provide Carnival and its counsel with copies of any comments P&O Princess or its counsel may receive from the SEC or its Staff with respect to the Schedule 14D-9 promptly after the receipt of such comments, and Carnival and P&O Princess shall cooperate (and shall cause their respective counsel to cooperate) reasonably in responding promptly and appropriately to such comments. 4.11.8 Termination of the Offer. The Offer may be terminated by Carnival if, at the expiration date of the Offer, any of the Offer Conditions has not been met. 4.11.9 Adjustment of the Offer Exchange Ratio. Subject to the City Code, in the event that, other than pursuant to the Transactions, Carnival changes or establishes a record date for changing the number of shares of Carnival Common Stock -32- issued and outstanding as a result of a stock split, stock dividend, recapitalization, subdivision, reclassification, combination or similar transaction with respect to the outstanding shares of Carnival Common Stock and the record date therefor shall be prior to the Effective Time, the Offer Exchange Ratio, and any other calculations based on or relating to the shares of Carnival Common Stock shall be appropriately adjusted to reflect such stock split, stock dividend, recapitalization, subdivision, reclassification, combination or similar transaction. In the event that other than pursuant to the Transactions, P&O Princess changes or establishes a record date for changing the number of P&O Princess Ordinary Shares issued and outstanding as a result of a stock split, stock dividend, recapitalization, subdivision, reclassification, combination or similar transaction with respect to the outstanding P&O Princess Ordinary Shares and the record date therefor shall be prior to the Effective Time, the Offer Exchange Ratio, and any other calculations based on or relating to the P&O Princess Ordinary Shares shall be appropriately adjusted to reflect such stock split, stock dividend, recapitalization, subdivision, reclassification, combination or similar transaction. ARTICLE V Conditions to the Closing 5.1 Conditions to Each Party's Obligation to Effect the Closing. The respective obligations of P&O Princess and Carnival to effect the Closing and the DLC Transactions are subject to the satisfaction or waiver of each of the following conditions: 5.1.1 Shareholder Approvals. This Agreement and the DLC Transactions (including the Carnival Amended Articles) shall have been duly approved by holders of Carnival Common Stock constituting the Carnival Requisite Vote and this Agreement, and the DLC Transactions (including the P&O Princess Amendments) shall have been duly approved by the shareholders of P&O Princess constituting the P&O Princess Requisite Vote. 5.1.2 Regulatory Consents. All Carnival Required Consents and P&O Princess Required Consents from or with any Governmental Entity (collectively, "Governmental Consents") in connection with the consummation of the DLC Transactions, other than those Governmental Consents described in Section 5.1.8 below, which are subject to satisfaction or waiver in accordance with such section, shall have been made or obtained, and such Governmental Consents shall not contain any terms or impose any condition or restriction relating or applying to, or requiring changes in or limitations on, (i) the operation of any asset or businesses of Carnival, P&O Princess or any of their respective Subsidiaries which term, condition or restriction, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect on P&O Princess or Carnival after the Effective Time (it being understood that, for this purpose, materiality shall be considered with reference to the total equity market value of P&O Princess and Carnival as a unified commercial enterprise), or (ii) the P&O Princess Amended Memorandum, the P&O Princess Amended Articles, the Carnival Amended Articles, the Carnival Amended By-Laws, the Equalization and Governance Agreement, -33- the ability to vote the P&O Princess Special Share or P&O Princess Ordinary Shares or the ability to vote the Carnival Special Share or Carnival Common Stock (other than, in each case, terms, conditions or restrictions that would not materially frustrate the express intent and purposes of this Agreement or the Equalization and Governance Agreement). 5.1.3 Laws and Orders. No Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits the consummation or performance of, or materially adversely affects, the DLC Transactions (collectively, an "Order"), and no Governmental Entity shall have instituted or threatened any proceeding challenging the DLC Transactions or seeking any such Order or taken any action or decision to revoke or materially amend any consent, clearance or approval of the combination of P&O Princess and Carnival. 5.1.4 Carnival Amendments and P&O Princess Amendments. The Carnival Amended Articles shall have been filed with the Companies Registry of the Republic of Panama and the Carnival Amended Articles and Carnival Amended By-laws shall have become effective and the P&O Princess Amended Memorandum and the P&O Princess Amended Articles shall have become effective. 5.1.5 Approval of Joint Transaction Circular. The UKLA approving the Joint Transaction Circular convening the P&O Princess Shareholders Meeting. 5.1.6 Offer. The Offer becoming unconditional (save for the condition regarding the completion of the DLC Transactions). 5.1.7 Registration Statements. All registration statements required by the SEC in connection with the Transactions being declared effective by the SEC and remaining effective and not being the subject of a stop order or other proceeding by the SEC to suspend their effectiveness. 5.1.8 European Commission. 5.1.8.1 Insofar as the DLC Transactions constitute a concentration which is required to be notified to the European Commission pursuant to Article 4(1) of Council Regulation (EEC) No. 4064/89 (as amended) (the "Merger Regulation"), and subject to Clause 5.1.8.2, either, (i) the European Commission having adopted in relation to the DLC Transactions a decision under either Article 6(1)(a), Article 6(1)(b) or Article 8(2) of the Merger Regulation, or (ii) the DLC Transactions being deemed compatible with the common market in accordance with Article 10(6) of the Merger Regulation. 5.1.8.2 In the event that a decision (or decisions) has been taken under Article 9(3) of the Merger Regulation (or is deemed to have been taken pursuant to Article 9(5) of the Merger Regulation) or Article 6(1) of Protocol 24 to the Agreement to establish the European Economic Area (the "EEA Agreement") to refer the -34- whole or part of the DLC Transactions to the competent authorities of one or more European Union or relevant EFTA state, decisions having been taken by all such competent authorities to permit the DLC Transactions, provided that if any such competent authority should have failed to publish its report or the announcement of the findings of its examination, or to complete its review, of the DLC Transactions within four months of the last date on which the European Commission could have issued a decision in relation to the DLC Transactions pursuant to Article 6 of the Merger Regulation, this Condition to Closing shall be deemed to have been satisfied in respect of that competent authority. 5.2 Conditions to Obligations of P&O Princess to Effect the Closing. The obligation of P&O Princess to effect the Closing and the DLC Transactions is also subject to the satisfaction or waiver by P&O Princess prior to the Effective Time of the following conditions: 5.2.1 Representations and Warranties of Carnival. The representations and warranties of Carnival set forth in this Agreement (i) to the extent qualified by Material Adverse Effect or any other materiality qualification shall be true and correct and (ii) to the extent not qualified by Material Adverse Effect or any other materiality qualification shall be true and correct (provided that this clause (ii) shall be deemed satisfied so long as any failures of such representations and warranties to be true and correct, taken together, do not have a Material Adverse Effect on Carnival) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent any such representation or warranty expressly speaks as of an earlier date), and P&O Princess shall have received a certificate signed on behalf of Carnival by a Carnival Officer to such effect. 5.2.2 Performance of Obligations of Carnival. Carnival shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and P&O Princess shall have received a certificate signed on behalf of Carnival by a Carnival Officer to such effect. 5.2.3 Consents Under Agreements. Carnival shall have obtained the consent or approval of each Person whose consent or approval shall be required in order to consummate the DLC Transactions under any Contract to which Carnival or any of its Subsidiaries is a party or by which any of its or their assets are bound, except those the failure of which to obtain such consent or approval, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect on Carnival or prevent the consummation of, or materially adversely affect, the DLC Transactions by Carnival. 5.2.4 Carnival Special Share. Carnival shall have issued the Carnival Special Share to Carnival SVC. 5.2.5 Other DLC Documents. Each DLC Document that is required to be executed and delivered by the parties thereto shall have been so executed and delivered in the Agreed Form by all such parties other than P&O Princess and its Subsidiaries. -35- 5.3 Conditions to Obligations of Carnival. The obligation of Carnival to effect the Closing and the DLC Transactions contemplated by this Agreement is also subject to the satisfaction or waiver by Carnival prior to the Effective Time of the following conditions: 5.3.1 Representations and Warranties of P&O Princess. The representations and warranties of P&O Princess set forth in this Agreement (i) to the extent qualified by Material Adverse Effect or any other materiality qualification shall be true and correct; and (ii) to the extent not qualified by Material Adverse Effect or any other materiality qualification shall be true and correct (provided that this clause (ii) shall be deemed satisfied so long as any failures of such representations and warranties to be true and correct, taken together, do not have a Material Adverse Effect on P&O Princess) as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except to the extent any such representation and warranty expressly speaks as of an earlier date), and Carnival shall have received a certificate signed on behalf of P&O Princess by a P&O Princess Officer to such effect. 5.3.2 Performance of Obligations of P&O Princess. P&O Princess shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and Carnival shall have received a certificate signed on behalf of P&O Princess by a P&O Princess Officer to such effect. 5.3.3 Consents Under Agreements. P&O Princess shall have obtained the consent or approval of each Person whose consent or approval shall be required in order to consummate the DLC Transactions under any Contract to which P&O Princess or any of its Subsidiaries is a party or by which any of its or their assets are bound, except those the failure of which to obtain such consent or approval, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect on P&O Princess or prevent the consummation of, or materially adversely affect, the DLC Transactions by P&O Princess. 5.3.4 P&O Princess Special Share. P&O Princess shall have issued the P&O Princess Special Share to P&O Princess SVC. 5.3.5 Other DLC Documents. Each DLC Document that is required to be executed and delivered by the parties thereto shall have been so executed and delivered in the Agreed Form by all such parties other than Carnival and its Subsidiaries. 5.3.6 Termination of Joint Venture Agreement. P&O Princess shall have given a termination notice under Section 9.01(c) of the Joint Venture Agreement or the Joint Venture Agreement shall have been terminated without any cost to P&O Princess (excluding any existing termination amount set forth in the Implementation Agreement between P&O Princess and Royal Caribbean Cruises Ltd., dated as of November 19, 2001) under Section 9.01(a) thereof. -36- ARTICLE VI Termination 6.1 Termination by Mutual Consent. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Effective Time, whether before or after the approvals by shareholders of Carnival and P&O Princess referred to in paragraph 5.1.1, by mutual written consent of Carnival and P&O Princess by action of their respective boards of directors. 6.2 Termination by Either P&O Princess or Carnival. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Effective Time by action of the board of directors of either P&O Princess or Carnival if (i) the Closing and the Transactions shall not have been consummated by September 30, 2003, whether such date is before or after the date of approval by the shareholders of Carnival or P&O Princess (the "Termination Date"), (ii) any Order (which the terminating Party shall have used its reasonable best efforts to resist, resolve or lift, as applicable, in accordance with Section 4.5) permanently restraining, enjoining or otherwise prohibiting the consummation of, or materially adversely affecting, the Transactions shall have become final and non-appealable, whether before or after the approval by the shareholders of Carnival or P&O Princess, (iii) the Carnival Requisite Vote shall not have been obtained at the duly held Carnival Shareholders Meeting, including any adjournments or postponements thereof or, in any event by the date that is five Business Days prior to the Termination Date, or (iv) the P&O Princess Requisite Vote shall not have been obtained at the duly held P&O Princess Shareholders Meeting, including any adjournments or postponements thereof or, in any event by the date that is five Business Days prior to the Termination Date; provided that the right to terminate this Agreement shall not be available to a Party that has breached in any material respect its obligations under this Agreement in any manner that shall have proximately contributed to the failure of the Transactions to be consummated. 6.3 Termination by Carnival. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Effective Time, whether before or after the approval by shareholders of Carnival referred to in paragraph 5.1.1, by action of the board of directors of Carnival, if (i) the board of directors of P&O Princess shall have withdrawn or adversely modified its approval or recommendation to shareholders of this Agreement and the Transactions or shall have resolved to take any such action or failed to reconfirm such approval or recommendation within five Business Days after a written request by Carnival to do so; or (ii) P&O Princess or its board of directors shall take any of the actions described in clause (ii) of the proviso to Section 4.2.1; or (iii) there shall be a breach by P&O Princess of any representation, warranty, covenant or agreement contained in this Agreement, or any event or circumstance shall occur as a result of which any such representation and warranty shall not be true as of, and as if made on, any date after the date hereof, which, in each case, would result in a failure of a condition set forth in paragraph 5.3.1 or 5.3.2 and cannot be or is not cured prior to the Termination Date; or (iv) a third party announces a firm intention (whether or not subject to a pre-condition) to make an offer or Acquisition -37- Proposal for P&O Princess (including an offer to form a dual-listed company) which offer is (x) either subject to the City Code or is otherwise legally binding and (y) in Carnival's reasonable opinion, acting in good faith and after consultation with its financial advisers, the nature of such advice to be communicated to P&O Princess, is likely to be more attractive to P&O Princess Shareholders than the DLC Transactions. 6.4 Termination by P&O Princess. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Effective Time, whether before or after the approval by the shareholders of P&O Princess referred to in paragraph 5.1.1, by action of the board of directors of P&O Princess, if (i) the board of directors of Carnival shall have withdrawn or adversely modified its approval or recommendation to shareholders of this Agreement and the Transactions, or shall have resolved to take any such action or failed to reconfirm such approval or recommendation within five Business Days after a written request by P&O Princess to do so; or (ii) Carnival or its board of directors shall take any of the actions described in clause (ii) of the proviso to Section 4.2.1; or (iii) there shall be a breach by Carnival of any representation, warranty, covenant or agreement contained in this Agreement, or any event or circumstance shall occur as a result of which any such representation and warranty shall not be true as of, and as if made on, any date after the date hereof, which, in each case, would result in a failure of a condition set forth in paragraph 5.2.1 or 5.2.2 and cannot be or is not cured prior to the Termination Date. 6.5 Effect of Termination and Abandonment. 6.5.1 Effect of Termination. In the event of termination of this Agreement and the abandonment of the Transactions pursuant to this Article VI, this Agreement (other than as set forth in Section 7.1) shall become void and of no effect with no liability on the part of either Party (or of any of its Representatives); provided, however, that, subject to Section 7.1, no such termination shall relieve either Party of any liability for damages resulting from any breach of this Agreement or from any obligation to pay, if applicable, the Carnival Termination Amount (as defined below) or the P&O Princess Termination Amount (as defined below), as the case may be, pursuant to Section 6.5.2 or 6.5.3. 6.5.2 Carnival Break Fee. In the event that (i) this Agreement is terminated by either Carnival or P&O Princess pursuant to Section 6.2(iii) and at the time of the Carnival Shareholders Meeting an Acquisition Proposal exists with respect to Carnival; or (ii) this Agreement is terminated by P&O Princess pursuant to Section 6.4(i), 6.4(ii) or 6.4(iii) (solely with respect to a breach of Section 4.2), then if any Acquisition Proposal involving Carnival is implemented or completed on or before the day which is 18 months after the date of this Agreement, Carnival shall promptly, but in no event later than two days after the date of such implementation or completion, pay to P&O Princess a termination payment equal to the Carnival Termination Amount, which amount shall be exclusive of any expenses to be paid pursuant to Section 4.9, payable by wire transfer of same day funds. The term "Carnival Termination Amount" shall mean 1 per cent. of the market capitalisation of P&O Princess on the date of this Agreement. Carnival acknowledges that the agreements contained in this Section 6.5.2 are an integral part of -38- the Transactions, and that, without these agreements, P&O Princess would not enter into this Agreement; accordingly, if Carnival fails promptly to pay any amount due pursuant to this Section 6.5.2, and, in order to obtain such payment, P&O Princess commences a suit which results in a judgment against Carnival for the payment set forth in this Section 6.5.2, Carnival shall pay to P&O Princess its costs and expenses (including attorneys' fees) in connection with such suit, together with interest on the Carnival Termination Amount from each date for payment until the date of such payment at the prime rate of Citibank N.A. in effect on the date such payment was required to be made plus 2 percent. 6.5.3 P&O Princess Break Fee. In the event that (i) this Agreement is terminated by either Carnival or P&O Princess pursuant to Section 6.2(iv) and at the time of the P&O Princess Shareholders Meeting an Acquisition Proposal exists with respect to P&O Princess; or (ii) this Agreement is terminated by Carnival pursuant to Section 6.3(i), 6.3(ii) or 6.3(iii) (solely with respect to a breach of Section 4.2 then if any Acquisition Proposal involving P&O Princess is implemented or completed on or before the day which is 18 months after the date of this Agreement, P&O Princess shall promptly, but in no event later than two days after the date of such implementation or completion, pay to Carnival a termination payment equal to the P&O Princess Termination Amount, which amount shall be exclusive of any expenses to be paid pursuant to Section 4.9, payable by wire transfer of same day funds. The term "P&O Princess Termination Amount" shall mean 1 per cent. of the market capitalisation of P&O Princess on the date of this Agreement. P&O Princess acknowledges that the agreements contained in this Section 6.5.3 are an integral part of the Transactions, and that, without these agreements, Carnival would not enter into this Agreement; accordingly, if P&O Princess fails promptly to pay any amount due pursuant to this Section 6.5.3, and, in order to obtain such payment, Carnival commences a suit which results in a judgment against P&O Princess for the payment set forth in this Section 6.5.3, P&O Princess shall pay to Carnival its costs and expenses (including attorneys' fees) in connection with such suit, together with interest on the P&O Princess Termination Amount from each date for payment until the date of such payment at the prime rate of Citibank N.A. in effect on the date such payment was required to be made plus 2 percent. ARTICLE VII Miscellaneous and General 7.1 Survival. This Article VII and the agreements of Carnival and P&O Princess contained in Sections 4.8 (Benefits and Other Matters) and 4.9 (Expenses) shall survive the Effective Time. This Article VII (other than Section 7.2 (Modification or Amendment), Section 7.3 (Waiver of Conditions) and Section 7.11 (Assignment)), the representations and warranties contained in Section 3.1.3 (Corporate Authority; Approval and Fairness), the agreements of Carnival and P&O Princess contained in Section 4.9 (Expenses), Section 6.5 (Effect of Termination and Abandonment) and the last sentence of Section 4.6 (Access) and Section 4.11.7 and 4.11.8 shall survive the termination of this Agreement. All other representations, warranties, agreements and covenants in this -39- Agreement shall not survive the Effective Time or the termination of this Agreement. Notwithstanding the foregoing, no termination of this Agreement shall relieve any Party from liability for any breach by it of its covenants and agreements in this Agreement prior to such termination; provided that the sole remedy of any Party for any breach by the other Party of any representation or warranty in this Agreement other than those in Section 3.1.3 (Corporate Authority; Approval; and Fairness) shall be the right (if any) to terminate this Agreement pursuant to clause (iii) of Section 6.3 or Section 6.4, as applicable. 7.2 Modification or Amendment. This Agreement may be modified or amended by agreement of the Parties, by action taken or authorized by their respective boards of directors, at any time prior to the Effective Time; provided, however, that, after approval by shareholders of the matters presented at the Carnival Shareholders Meeting or the P&O Princess Shareholders Meeting, no modification or amendment shall be made which under applicable Law requires further approval by such shareholders without such further approval. This Agreement may not be modified or amended except by an instrument in writing executed and delivered by duly authorized officers of each of the Parties. 7.3 Waiver of Conditions. Any provision of this Agreement may be waived prior to the Effective Time if, and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. For the purposes of Article V, P&O Princess may waive any condition contained in Section 5.2 and Carnival may waive any condition contained in Section 5.3. 7.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise herein provided, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law. 7.5 Counterparts. This Agreement may be executed in any number of counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. 7.6 Governing Law And Venue; Waiver Of Jury Trial. 7.6.1 Governing Law And Venue. This Agreement shall be deemed to be made in, and in all respects shall be interpreted, construed and governed by and in accordance with the laws of the State of New York applicable to contracts to be performed wholly in such state. The Parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the Borough of Manhattan, New York State solely (or, if such jurisdiction is refused by such Federal courts, the Supreme Court of the State of New York, located in the Borough of Manhattan) in respect of the interpretation and enforcement of the provisions of this Agreement and in respect of the Transactions and thereby waive, and agree not to assert, -40- as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts, and the Parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a Federal court. The Parties hereby consent to and grant any such court jurisdiction over the person of such Parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7.7 (Notices), or in such other manner as may be permitted by Law, shall be valid and sufficient service thereof. 7.6.2 Waiver Of Jury Trial. Each Party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each such Party hereby irrevocably and unconditionally waives any right such Party may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this agreement or the "transactions." Each Party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such Party understands and has considered the implications of this waiver, (iii) each such Party makes this waiver voluntarily, and (iv) each such Party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 7.6. 7.7 Notices. Notices, requests, instructions or other documents to be given under this Agreement shall be in writing and shall be deemed given, (i) when sent if sent by facsimile, provided that the facsimile is promptly confirmed by telephone confirmation thereof or (ii) when delivered, if delivered personally to the intended recipient or sent by overnight delivery via a national courier service, and in each case, addressed to a Party at the following address for such Party: if to Carnival: Carnival Corporation 3655 N.W. 87/th/ Avenue Miami, Florida 33l78-2428 Attention: Chairman and Chief Executive Officer Facsimile: (305) 477-1740 with copies to Carnival Corporation 3655 N.W. 87/th/ Avenue Miami, Florida 33178-2428 Attention: General Counsel Facsimile: (305) 477-1740 -41- and James M. Dubin, Esq. Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019-6064 Facsimile: (212) 757-3990 and Anthony Macaulay Herbert Smith Exchange Square Primrose Street London EC2A 2HS Facsimile: (44) 20-7374 0888 if to P&O Princess: P&O Princess Cruises plc 77 New Oxford Street London WC1A 1PP Attention: Chief Executive Officer Facsimile: (44) 20-7805-1240 with copies to P&O Princess Cruises plc 77 New Oxford Street London WC1A 1PP Attention: General Counsel Facsimile: (44) 20-7805-1240 Duncan C. McCurrach, Esq. Sullivan & Cromwell 125 Broad Street New York, New York 10004 Facsimile: (212) 558-3588 and Mark Rawlinson Freshfields Bruckhaus Deringer 65 Fleet Street London EC4Y 1HS Facsimile: (44) 20-7832-7001 -42- or to such other Persons or addresses as may be designated in writing by the Party to receive such notice as provided above. 7.8 Entire Agreement. This Agreement (including the exhibits and schedules hereto), the Carnival Disclosure Letter, the P&O Princess Disclosure Letter, the Stockholder Voting Agreement and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties both written and oral, between the Parties with respect to the subject matter hereof. References herein to this Agreement shall for all purposes be deemed to include references to the Carnival Disclosure Letter and the P&O Princess Disclosure Letter. Except as set forth in Section 4.8.1, this Agreement is not intended to confer upon any Person other than the Parties any rights or remedies hereunder except the individuals who were directors of either Party on or prior to the Effective Time shall be deemed third party beneficiaries with respect to Section 4.3, as applicable. No employee or former employee of Carnival or P&O Princess who is not a director of Carnival or P&O Princess shall be deemed a third party beneficiary with respect to any provision of this Agreement. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT OR ANY OTHER AGREEMENT CONTEMPLATED HEREBY, NEITHER CARNIVAL NOR P&O PRINCESS MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT, OR THE "TRANSACTIONS", NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING. 7.9 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision unless the substitution of such provision would materially frustrate the express intent and purposes of this Agreement or the Equalization and Governance Agreement and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 7.10 Interpretation. The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. Where a reference in -43- this Agreement is made to a Section or Exhibit, such reference shall be to a Section of or Exhibit to this Agreement unless otherwise indicated. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." As used herein with respect to any Party, a matter shall be deemed to be "material" only if it is material to the Party and its Subsidiaries taken as a whole. A reference to any agreement or document is to that agreement or document as amended, novated, supplemented, varied or replaced from time to time, except to the extent prohibited by this Agreement. A reference to any legislation (including any listing rules of a stock exchange or voluntary codes) or to any provision of any legislation includes any modification or re-enactment of it, any legislative provision substituted for it and all rules and regulations and statutory instruments promulgated and issued under it. Nothing in this Agreement or the DLC Documents will mean or be taken to imply that P&O Princess or Carnival have agreed to dispose of or to acquire any interest in the assets or undertakings of either of them. The parties hereto acknowledge that this Agreement (including the Exhibits and Schedules hereto) has been drafted jointly by the parties hereto and agree that this Agreement will not be construed against any party as a result of any role such party may have had in the drafting process. 7.11 Assignment. This Agreement shall not be assignable by operation of law or otherwise, and any purported assignment in violation of this provision shall be void. 7.12 No Partnership. Neither this Agreement nor the DLC Transactions are intended for any legal, tax or other purpose to (i) alter the status of P&O Princess and Carnival as separate, independent entities (taxed respectively and exclusively as a United Kingdom and a Panamanian non-resident corporation), (ii) result in any of Carnival, P&O Princess, their respective Subsidiaries, or their respective shareholders being treated as creating an entity or otherwise entering into any partnership, joint venture, association or agency relationship, or (iii) give either Party (or its respective Subsidiaries or shareholders) any legal or beneficial ownership interest in the assets or income of the other Party, and shall not be construed as having such effect. 7.13 Special Shares. The parties agree for all United States federal income tax purposes to treat both the Carnival Special Share and the P&O Princess Special Share as not constituting stock or any other equity interest in Carnival or P&O Princess or any other entity. -44- IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of Carnival and P&O Princess as of the date hereof. CARNIVAL CORPORATION By:_______________________________________ Name: Micky Arison Title: Chairman & Chief Executive Officer P&O PRINCESS CRUISES PLC By:_______________________________________ Name: Peter Ratcliffe Title: Chief Executive Officer -45- EXHIBIT A AGREED FORM OF EQUALIZATION AND GOVERNANCE AGREEMENT -46- EXHIBIT B AGREED FORM OF SVC SPECIAL VOTING DEED -47- EXHIBIT C AGREED FORM OF CARNIVAL AMENDED ARTICLES -48- EXHIBIT D AGREED FORM OF CARNIVAL AMENDED BY-LAWS -49- EXHIBIT E AGREED FORM OF P&O PRINCESS AMENDED MEMORANDUM -50- EXHIBIT F AGREED FORM OF P&O PRINCESS AMENDED ARTICLES -51- EXHIBIT G AGREED FORM OF CARNIVAL DEED POLL GUARANTEE -52- EXHIBIT H AGREED FORM OF P&O PRINCESS DEED POLL GUARANTEE -53- EXHIBIT I AGREED FORM OF CARNIVAL SVC CONSTITUTION -54- EXHIBIT J AGREED FORM OF P&O PRINCESS SVC CONSTITUTION -55- EXHIBIT K AGREED FORM OF CARNIVAL CORPORATION DEED POLL -56- Annex 1 CONDITIONS OF THE PARTIAL SHARE OFFER The Partial Share Offer will be conditional on: 1. the Carnival DLC having been completed under the terms of the Implementation Agreement; 2. all registration statements required by the SEC in connection with the Carnival DLC Proposal being declared effective by the SEC and remaining effective and not being the subject of a stop order or other proceeding by the SEC to suspend their effectiveness; 3. the New York Stock Exchange agreeing to list the New Carnival Shares, subject only to official notice of issuance; 4. there not being outstanding any governmental action or court order which would or might make the Partial Share Offer or the acquisition of any P&O Princess Shares void, illegal or unenforceable or materially and adversely affect the assets, business, profits or prospects of any member of the wider Carnival Group or of any member of the wider P&O Princess Group; and 5. all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals ("Authorisations") necessary in any jurisdiction for, or in respect of, the Partial Share Offer having been obtained, in terms and in a form reasonably satisfactory to Carnival, from all necessary governmental entities and from any relevant persons or bodies with whom any member of the wider Carnival Group or the wider P&O Princess Group has entered into contractual arrangements and all such Authorisations remaining in full force and effect at the time at which the Partial Share Offer becomes unconditional in all respects. Carnival reserves the right to waive, in whole or in part, either or both of Conditions 4 and 5. Invocation of Conditions 4 and 5 of the Partial Share Offer will be subject to the approval of the Panel under Note 2 to Rule 13 of the Takeover Code. Capitalised terms used in this Annex have the meanings given to them in the Press Release "Pre-conditional Carnival DLC Proposal With Partial Share Offer" dated 24 October 2002. 1


                                                                 [Proposed Form]


                           THIRD AMENDED AND RESTATED

                            ARTICLES OF INCORPORATION

                                       OF

                              CARNIVAL CORPORATION


          We the undersigned, Micky Arison, Chairman of the Board of Directors
and Chief Executive Officer, and Arnaldo Perez, Senior Vice President, General
Counsel and Secretary, of Carnival Corporation, a corporation organized and
existing in accordance with the laws of the Republic of Panama (the
"Corporation"), do hereby certify that the Articles of Incorporation of said
corporation are hereby amended and restated as follows:

                                    ARTICLE I
                                 Corporate Name

          The name of the Corporation is: "Carnival Corporation."

                                   ARTICLE II
                                    Duration

          The duration of the Corporation shall be perpetual, but it may
previously be dissolved pursuant to Panamanian law.

                                   ARTICLE III
                              Corporation Purposes

          The purposes of the Corporation are:

          (a) To make, purchase, barter, charter, acquire dominion upon or use
of, operate as owner, charteror or operator, to manage, equip and fit out all
kinds of ships and vessels of all types and kinds of propelling systems.

          (b) To make all kinds of buildings and structures related to any kind
of legitimate maritime commercial business, merchandise warehousing, shipping
and transportation.



          (c) To act as shipbroker, customs and maritime insurance broker, and
to administer the properties and assets and investments that maritime trade and
shipowners' business and ship exploitation may require.

          (d) To act as principal and agent in all negotiations related to
maritime trade to such extent as the purposes of this Corporation may permit it.

          (e) To solicit from the Government of the Republic of Panama or any
other government where it may be necessary and through such proceedings as may
be required by law, navigation licenses for ships and permits to enroll crewmen
for, and port clearance of, the ships in care of the Corporation.

          (f) To perform transactions through negotiable instruments and real
estate related to maritime trade and shipowners' business and exploitation of
ships.

          (g) To deal in patents and improvements on patented methods related to
the business of maritime trade.

          (h) To purchase and sell and deal in general with the shares of its
own capital stock pursuant to instructions from the Board of Directors. To
acquire, purchase, guarantee, hold, sell, assign, transfer, mortgage, pledge or
otherwise dispose of, deal in shares of the capital stock of, or bonds,
securities or other certificates of indebtedness created by other corporations.

          (i) The Corporation shall have the power without any requirement to
obtain prior shareholder approval to give guarantees of the indebtedness or
obligations of related or unrelated persons deemed by the Board of Directors to
be in furtherance of its corporate purpose and to secure any such guarantee or
any other obligations by the creation of any security interest in all or any
part of its property or any interest therein (and for these purposes, the
corporate purposes of the Corporation shall include any and all lawful acts and
activities for which corporations may be organized under the Corporation Law),
and it shall not be necessary to seek or obtain the authorization of the
shareholders of the Corporation for the giving of any guarantee, indemnity or
security in furtherance of any of its corporate purposes.

          (j) To purchase, sell, lease, mortgage, set up easements and
encumbrances upon real estate and in general upon all kinds of properties
related to the business of the Corporation.

          (k) To sell, mortgage, encumber or otherwise charge its assets and to
perform any and all kinds of legitimate commercial transactions and any other
that may be permitted in the future pursuant to Panamanian laws.

          (l) To borrow money from any persons, firms, banks or corporations as
may be necessary for its business and to guarantee such loans as the law may
permit and to loan money secured or unsecured to any persons, firms or
corporations as the law may permit and in general to engage in any legitimate
commercial undertaking in any country.

                                                                               2



          (m) To engage in the general business of travel and tour services,
both domestic and foreign; to dispense travel and tour information and to act as
agent for all transportation companies, including without limitation airline
companies, passenger cruise line companies, steamship companies, railroad
companies, bus companies, car rental companies and any other mode of travel or
transportation or touring companies, both local and foreign; to engage in the
preparation of travel and tour itineraries, including without limitation hotel
and motel accommodations and sightseeing; and, in general, to engage in the
business of all forms and types of travel services.

          (n) To dispense travel and tour counseling services, sell railroad,
airline, passenger cruise line, steamship and bus transportation; to sell
accommodations for hotels, resorts, sightseeing and feature attractions
throughout the United States, Canada, Mexico, Europe and every country
throughout the world; to create, plan, sell and carry through escorted vacation
tours; to own, operate, lease or otherwise acquire such real and personal
property suitable, useful or necessary in connection with any of the objects
aforementioned; to enter into, make, perform and carry out contracts of every
kind in connection with the sale and distribution of the aforementioned items or
services; to acquire, use, own, lease and dispose of trademarks, copyrights and
licenses.

          (o) To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage or otherwise dispose of letters patent of the United States
or any foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks, service marks and trade
names relating or useful in connection with any business of the Corporation.

          (p) To carry on the business of hotel, resort, casino, restaurant,
refreshment room and lodging-housekeepers, caterers for public amusements
generally, hairdressers, barbers, perfumers, proprietors, laundries, reading,
writing and newspaper room, libraries, places of amusements, recreation and
entertainment of all kinds, sport, theatrical and musical box office
proprietors, entrepreneurs and general agents, and any other business which can
be conveniently carried on in connection therewith.

          (q) To take all such actions as the Board of Directors shall determine
are necessary or desirable to carry out the transactions contemplated by the
Equalization Agreement, the SVC Special Voting Deed and the Carnival Deed Poll
Guarantee.

          (r) To engage in, carry on and conduct any lawful act or activity for
which corporations may be organized under the Corporation Law.

          The foregoing clauses shall be construed both as objects and powers,
and it is hereby expressly provided that the foregoing enumeration of specific
powers shall not limit or restrict in any manner the powers of the Corporation,
and are in furtherance of, and in addition to, and not in limitation of the
general powers conferred by the laws of the Republic of Panama.

                                                                               3



                                   ARTICLE IV
                                Registered Agent

          The Registered Agent of the Corporation in Panama City, until the
Board of Directors may provide otherwise, shall be the law firm of Tapia,
Linares y Alfaro, Plaza 2000, Calle 50, Apartado 7412, Panama 5, Republic of
Panama.

                                    ARTICLE V
                                 Capitalization

          The total number of shares of all classes of stock which the
Corporation shall have authority to issue is . registered shares comprised of .
shares of nominative common stock, par value US$.01 per share ("Common Stock"),
.. shares of preferred stock, par value US$.01 per share ("Preferred Stock"), one
(1) share of special voting stock, par value US$.01 per share (such share of
special voting stock, the "Carnival Special Voting Share"), and one (1) share of
special stock, par value US$.01 per share (such share of special stock, the
"Equalization Share"). Subject to the provisions of these Articles of
Incorporation and except as otherwise provided by law, the stock of the
Corporation, regardless of class, may be issued for such consideration and for
such corporate purposes as the Board of Directors may from time to time
determine.

          The preferences, limitations and relative rights of the Common Stock,
the Preferred Stock and the Carnival Special Voting Share are as follows:

          (a) Common Stock.

               (1) All shares of the Common Stock shall have the same rights,
powers, preferences and privileges and shall rank equally, share ratably and be
identical in all respects as to all matters, including rights upon liquidation
and distribution of the assets of the Corporation and in respect of rights to
dividends and other distributions, when and as declared. The holders of shares
of Common Stock shall be entitled in accordance with the Equalization Agreement,
to the exclusion of the holders of shares of Preferred Stock of any and all
series, to receive such dividends as from time to time may be declared by the
Board of Directors, except as otherwise provided by the resolution or
resolutions providing for the issue of any series of shares of Preferred Stock.
In the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, after payment shall have been made to the
holders of shares of Preferred Stock of the full amount to which they shall be
entitled pursuant to the resolution or resolutions providing for the issue of
any series of shares of Preferred Stock, the holders of shares of Common Stock
shall be entitled, to the exclusion of the holders of shares of Preferred Stock
of any and all series, to share, ratably according to the number of shares of
Common Stock held by them, in all remaining assets of the Corporation available
for distribution to its stockholders.

               (2) Subject to the provisions of any applicable law, these
Articles of Incorporation or of the By-laws, with respect to the closing of the
transfer books or the fixing of a record date for the determination of
stockholders entitled to vote and except as

                                                                               4



otherwise provided by law or by the resolution or resolutions providing for the
issue of any series of shares of Preferred Stock, the holders of outstanding
shares of Common Stock shall exclusively possess voting power for the election
of directors and for all other purposes, each holder of record of shares of
Common Stock being entitled to one vote for each share of Common Stock standing
in his or her name on the books of the Corporation.

          (b) Preferred Stock. The Board of Directors may authorize by
resolution or resolutions from time to time the issuance of one or more classes
or series of Preferred Stock and fix the designations, powers, preferences and
relative, participating, optional or other rights (including, without
limitation, rights respecting conversion, exchange or redemption) and the
qualifications, limitations or other restrictions thereof (including
restrictions respecting conversion, exchange or redemption) with respect to each
such class or series of Preferred Stock, and the number of shares constituting
each such class or series. Unless otherwise provided in any such resolution or
resolutions, the number of shares of Preferred Stock of any such series to which
such resolution or resolutions apply may be increased (but not above the total
number of authorized shares of the class) or decreased (but not below the number
of shares thereof then outstanding) by a resolution or resolutions likewise
adopted by the Board of Directors, and the Board of Directors may otherwise
increase or decrease the number of shares of any such class or series to the
extent permitted by the Corporation Law. Any of the voting powers, designations,
preferences, rights and qualifications, limitations or restrictions of any such
series of Preferred Stock may be made dependent upon facts ascertainable outside
of the resolution or resolutions providing for the issue of such Preferred Stock
adopted by the Board pursuant to the authority vested in it by this Article V,
provided that the manner in which such facts shall operate upon the voting
powers, designations, preferences, rights and qualifications, limitations or
restrictions of such series of Preferred Stock is clearly and expressly set
forth in the resolution or resolutions providing for the issue of such Preferred
Stock. The term "facts" as used in the next preceding sentence shall have the
meaning given to it under Panamanian law. Shares of Preferred Stock of any
series that have been redeemed (whether through the operation of a sinking fund
or otherwise) or that if convertible or exchangeable, have been converted into
or exchanged for shares of any other class or classes shall have the status of
authorized and unissued shares of Preferred Stock of the same series and may be
reissued as a part of the series of which they were originally a part or may be
reclassified and reissued as part of a new series of shares of Preferred Stock
to be created by resolution or resolutions of the Board of Directors or as part
of any other series of shares of Preferred Stock, all subject to the conditions
or restrictions on issuance set forth in the resolution or resolutions adopted
by the Board of Directors providing for the issue of any series of shares of
Preferred Stock.

          (c) Carnival Special Voting Share.

                (1) The Carnival Special Voting Share shall confer on the holder
of such share the relevant rights and obligations set out in these Articles of
Incorporation and the By-Laws. The Carnival Special Voting Share shall cease to
confer any right to attend or vote at any meeting of the shareholders of the
Corporation if either the

                                                                               5



Equalization Agreement is terminated or if a resolution to terminate the SVC
Special Voting Deed is approved as a Class Rights Action.

               (2) The Carnival Special Voting Share shall have the following
voting rights:

               (A) In relation to a resolution of the Corporation to approve a
     Joint Electorate Action at any meeting of the shareholders of the
     Corporation, the Carnival Special Voting Share shall carry:

                      (i)    such number of votes in favor of the resolution as
          were cast in favor of the Equivalent Resolution at the Parallel
          Shareholder Meeting of P&O Princess by holders of P&O Princess
          Ordinary Shares and Other Voting Shares of P&O Princess;

                      (ii)   such number of votes against the resolution as were
          cast against the Equivalent Resolution at the Parallel Shareholder
          Meeting of P&O Princess by holders of P&O Princess Ordinary Shares and
          Other Voting Shares of P&O Princess; and

                      (iii)  such number of abstentions as were recorded as
          abstentions from the Equivalent Resolution at the Parallel Shareholder
          Meeting of P&O Princess by holders of P&O Princess Ordinary Shares and
          Other Voting Shares of P&O Princess;

     in each case multiplied by the Equalization Fraction in effect at the time
     such meeting of the shareholders of the Corporation is held and in each
     case rounded up to the nearest whole number, such votes to be cast by the
     holder of the Carnival Special Voting Share in accordance with the above
     provisions.

               (B) In relation to a resolution of the Corporation to approve a
     Class Rights Action at any meeting of the shareholders of the Corporation,
     the Carnival Special Voting Share shall carry:

                      (i)    if the Equivalent Resolution is approved by the
          requisite majority (as determined in accordance with the P&O Princess
          Articles and Applicable Regulations) of the holders of P&O Princess
          Ordinary Shares and Other Voting Shares of P&O Princess at the
          Parallel Shareholder Meeting of P&O Princess, no votes; and

                      (ii)   if the Equivalent Resolution is not approved by the
          requisite majority (as determined in accordance with the P&O Princess
          Articles and Applicable Regulations) of the holders of P&O Princess
          Ordinary Shares and Other Voting Shares of P&O Princess at the
          Parallel Shareholder Meeting of P&O Princess, (x) if the resolution
          needs to be passed by a Majority Resolution, then the Carnival Special
          Voting Share shall vote to cast such number of votes, representing the
          largest whole percentage that is less than the percentage of the
          number of votes as would

                                                                               6



          be necessary to defeat a Majority Resolution if the total votes
          capable of being cast by the outstanding Carnival Common Stock and
          Other Voting Shares entitled to vote pursuant to Applicable
          Regulations and/or the Carnival Articles and By-Laws (including the
          Carnival Special Voting Share) were cast in favour of the resolution
          at the meeting of the Corporation's shareholders; and (y) if the
          resolution needs to be passed by a Supermajority Resolution, then the
          Carnival Special Voting Share shall vote to cast such number of votes,
          representing the largest whole percentage that is less than the
          percentage of the number of votes as would be necessary to defeat a
          Supermajority Resolution if the total votes capable of being cast by
          the outstanding Carnival Common Stock and Other Voting Shares of
          Carnival that are entitled to vote pursuant to Applicable Regulations
          and/or the Carnival Articles and By-Laws (including the Carnival
          Special Voting Share) were cast in favour of the resolution at the
          meeting.

               (C) Except as set forth above, the Carnival Special Voting Share
     shall not be entitled to vote on any matter submitted to the shareholders
     of the Corporation.

               (3) The rights and obligations attaching to the Carnival Special
Voting Share may be amended or modified by a resolution approved as a Class
Rights Action; provided that where the proposed amendment or modification
increases the obligations of the holder of the Carnival Special Voting Share,
such amendment or modification shall also require the consent of the holder of
the Carnival Special Voting Share.

               (4) Notwithstanding anything to the contrary in these Articles of
Incorporation, the By-Laws or any other agreement, under no circumstances shall
the Carnival Special Voting Share be entitled to any rights upon Liquidation and
distribution of assets of the Corporation or rights with respect to dividends or
other Distributions by the Corporation to its shareholders.

               (d) The Equalization Share. The Equalization Share shall:

               (1) have no rights to receive notice of, attend or vote at any
meeting of the Corporation;

               (2) have rights to dividends as declared and paid by the Board in
accordance with Article XVI; and

               (3) in the event of a voluntary or involuntary Liquidation, rank
after all other holders of shares with respect to a Liquidation Distribution
paid in accordance with Article XVII.

               (e) Disenfranchised Carnival Common Stock. All Carnival Common
     Stock acquired by any member of the P&O Princess Group shall automatically
     be converted on the day that such shares are registered in the name

                                                                               7



         of or such member of the P&O Princess Group in the record of registered
         shareholders of the Corporation into disenfranchised Carnival Common
         Stock ("Disenfranchised Carnival Common Stock") which, save that the
         rights attached to such stock shall not entitle the member holding such
         stock:

                       (1)  to attend or vote at any general meeting or class
meeting of the Corporation, unless at the relevant date the P&O Princess Group,
is interested in 90 per cent. or more of the Carnival Common Stock (including
for the purpose of such calculation the Disenfranchised Carnival Common Stock);
or

                       (2)  to receive a Liquidation Distribution,

         such Disenfranchised Carnival Common Stock shall otherwise rank pari
passu in all other respects with the Carnival Common Stock. Following the
Transfer of any Disenfranchised Carnival Common Stock from a member of the P&O
Princess Group to a person who is not a member of the Combined Group, such
Disenfranchised Carnival Common Stock shall automatically be converted on the
day that such shares are registered in the register of members of the
Corporation into Carnival Common Stock.

                                   Article VI
                              No Preemptive Rights

                  No holder of shares shall have any right, preemptive or other,
to subscribe for or to purchase from the Corporation any of the shares of the
Corporation hereinafter issued or sold.

                                   ARTICLE VII
                            Address of Incorporators

                  The name and mailing address of each signatory to the original
Articles of Incorporation and the number of shares which each such signatory
agreed to take care is as follows:

                                                       No. of Shares of
         Name               Post Office Address     Common Stock Subscribed
- -----------------------  -------------------------  -----------------------
   Mariano J. Oteiza       No. 8 Aquilino de la                1
                           Guardia Street
                           Panama, R. of P.

   Domingo Diaz A.         No. 8 Aquilino de la                1
                           Guardia Street
                           Panama, R. of P.

                                                                               8



                                  ARTICLE VIII

                               Board of Directors

         (a) The Board of Directors shall consist of no less than three (3), and
no more than twenty-five (25) 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. Directors shall be
elected as provided in the By-Laws. All directors shall have equal standing and
have equal voting powers.

         (b) Each director of the Corporation shall also consent to serve, and
be properly appointed, as a director of P&O Princess in order to qualify to
serve as a director of the Corporation. Directors may be of any nationality and
need not be residents or citizens of Republic of Panama or shareholders. No
corporation may be appointed or elected a director of the Corporation.

         (c) The Board of Directors are authorized to operate and carry into
effect the Equalization Agreement, the SVC Special Voting Deed and the Carnival
Deed Poll Guarantee. Subject to Applicable Regulations, nothing done by any
director in good faith pursuant to such authority and obligations shall
constitute a breach of the fiduciary duties of such director to the Corporation
or its shareholders. In particular, the directors shall, in addition to their
duties to the Corporation, be entitled to have regard to interests of the
holders of the Carnival Common Stock and P&O Princess Ordinary Shares as if the
Corporation and P&O Princess were a single entity.

         (d) At all meetings of the Board of Directors the presence, in person
or by proxy, of at least one-third of the total number of directors shall
constitute a quorum for the transaction of business except as may be otherwise
specifically provided by Applicable Regulations, the Articles of Incorporation
or By-Laws. The act of a simple majority of the directors present in person or
by proxy at any meeting at which there is a quorum shall be the act of the Board
of Directors, except as may be otherwise specifically provided by Applicable
Regulations, the Articles of Incorporation or By-Laws.

         (e) Authority of the Board of Directors. The Board of Directors shall
have the authority to exercise all rights and powers granted to or vested in the
Board of

                                                                               9



Directors or the Corporation under Articles XII, XIII, XIV and XV and to take
any action as it deems necessary or advisable to give effect to the provisions
of Articles XII, XIII, XIV and XV, including the right and power to interpret
the provisions of Articles XII, XIII, XIV and XV and to make all determinations
deemed necessary or advisable to give effect to the provisions of Articles XII,
XIII, XIV and XV. Without limiting the generality of the foregoing, the
Corporation shall expressly have the right to effect or procure a transfer of
Carnival Common Stock (including Excess Shares and Combined Group Excess Shares)
as described in Articles XII, XIII, XIV and XV. In the case of ambiguity in the
application of any of the provisions of Articles XII, XIII, XIV and XV, the
Board of Directors shall, in its absolute discretion, have the power to
determine the application of such provisions with respect to any situation based
on the facts known to them, including, without limitation, any rulings,
regulations or waivers under, or amendments to, any Applicable Regulations or
that affect provisions of the City Code that are analogous to Articles XIV and
XV. All such actions, calculations, interpretations and determinations which are
done or made by the Board of Directors in good faith shall be final, conclusive
and binding on the Corporation and all other parties. No director shall be
liable for any act or omission pursuant to these Articles XII, XIII, XIV and XV
if such action was taken in good faith. Any one or more directors may act as the
attorney(s) of any holder of Carnival Common Stock (including any holder of
Excess Shares or Combined Group Excess Shares) with respect to the execution of
documents and other actions required to be taken for the sale or transfer of
Excess Shares pursuant to Article XIII or Combined Group Excess Shares pursuant
to Article XIV.

                                   ARTICLE IX
                                    Officers

               The Board of Directors, as soon as possible after the annual
election of directors, may choose a Chairman of the Board, a Vice-Chairman of
the Board, a President, a Chief Executive Officer, a Chief Operating Officer, a
Secretary, a Treasurer, and one or more Vice Presidents, all of whom shall hold
their offices until their successors are chosen and qualify. More than one
office may be held by the same person. The Board of Directors may from time to
time choose such other officers and agents as are necessary, who shall hold
their offices for such terms as are determined by the Board of Directors. Any
officer or agent chosen by the Board of Directors may be removed at any time
with or without cause by the affirmative vote of a majority of the members of
the Board of Directors then in office. Until the Board of Directors provides
otherwise, the legal representative of the Corporation shall be the President
and, in his absence, the Corporation shall be represented by the Chairman of the
Board.

                                    ARTICLE X
               Amendments to Articles of Incorporation and By-Laws

               (a) Subject to subsections (b) and (c) of this Article X, any
amendment to these Articles of Incorporation shall require approval as a Joint
Electorate Action;

                                                                              10



provided that no amendment to these Articles of Incorporation may be effected
unless a majority of all votes entitled to be cast with respect thereto
(including votes entitled to be cast by the Carnival Special Voting Share) have
been voted in favor of such amendment at a meeting of the shareholders of the
Corporation.

               (b) Any amendment to the Carnival Entrenched Articles shall
require approval as a Class Rights Action; provided that no amendment to these
Articles of Incorporation may be effected unless a majority of all votes
entitled to be cast with respect thereto (including votes entitled to be cast by
the Carnival Special Voting Share) have been voted in favor of such amendment at
a meeting of the shareholders of the Corporation.

               (c) Notwithstanding the foregoing, any amendment of these
Articles of Incorporation (1) to specify or change the location of the office or
registered agent of the Corporation, or (2) to make, revoke or change the
designation of a registered agent, or to specify or change the registered agent,
may be approved and effected by the Board of Directors without the approval of
the shareholders of the Corporation or the shareholders of P&O Princess.

               (d) Any amendment to or repeal of the Carnival Entrenched
By-Laws shall require approval as a Class Rights Action.

               (e) Any amendment to or repeal of any By-Law of the Corporation
other than any of the Carnival Entrenched By-Laws may be approved and effected
by the Board of Directors without the approval of the shareholders of the
Corporation or the shareholders of P&O Princess.

               (f) Notwithstanding the provisions of this Article X, upon
completion of a Mandatory Exchange, the Articles of Incorporation and the
By-Laws shall be automatically amended without any further action of the
Corporation or the shareholders of the Corporation as set forth in Appendices I
and II hereto, respectively.

                                   ARTICLE XI
                                Indemnification

               (a) A director of the Corporation shall not be liable to the
Corporation, P&O Princess or their respective shareholders for monetary damages
for breach of fiduciary duty as a director.

               (b) (1) Each person (and the heirs, executors or administrators
of such person) who was or is a party to 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 such
person is or was a director or an officer of the Corporation or P&O Princess or
is or was serving at the request of the Corporation or P&O Princess as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified and held harmless by the Corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in

                                                                              11



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 Corporation Law, and any other applicable law, as from time
to time in effect. The foregoing provisions of this Article XI shall be deemed
to be a contract between the Corporation and each director and officer who
serves in such capacity at any time while this Article XI and the relevant
provisions of the Corporation Law and other applicable law, if any, are in
effect.

                   (2) The Corporation may, by action of the Board of Directors,
provide indemnification to such of the employees and agents of the Corporation,
P&O Princess or any person who is or was serving at the request of the
Corporation or P&O Princess as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, 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 such extent and to such effect as the Board of Directors shall
determine to be appropriate and permitted by the Corporation Law, and any other
applicable law, as from time to time in effect.

           (c) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation or P&O Princess, or is or was serving at the request of
the Corporation or P&O Princess as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss incurred by such person in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of this Article XI or under the Corporation Law or any other
provision of law.

           (d) The rights and authority conferred in this Article XI shall not
be exclusive of any other right which any person may otherwise have or hereafter
acquire.

           (e) Neither the amendment nor repeal of this Article XI nor the
adoption or any provision of the Articles of Incorporation or the By-Laws of the
Corporation, nor, to the fullest extent permitted by the Corporation Law and any
other applicable law, any modification or repeal of law, shall affect any rights
or obligations then existing with respect to any state of facts then or
theretofore existing or any action, suit or proceeding theretofore or thereafter
brought or threatened based in whole or in part upon any such state of facts.

           (f) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article XI shall, unless otherwise provided when
authorized or ratified under subsection (b)(2) hereof, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.

           (g) A member of the Board of Directors, or a member of any committee
designated by the Board of Directors, shall, in the performance of his duties,
be fully

                                                                              12



protected in relying in good faith upon the records of the Corporation or P&O
Princess and upon such information, opinions, reports or statements presented to
the Corporation by any of the Corporation's or P&O Princess' officers or
employees, or committees of the Board of Directors, or by any other person as to
matters the member reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Corporation. In discharging their duties, directors and
officers, when acting in good faith, may rely upon financial statements of the
Corporation or P&O Princess represented to them to be correct by the chief
financial officer or the controller or other officer of the Corporation or P&O
Princess having charge of its books or accounts, or stated in a written report
by an independent public or certified public account or firm of such accountants
fairly to reflect the financial condition of the Corporation or P&O Princess.

                                  ARTICLE XII
                            Restrictions on Transfer

                   (a) Restriction of Transfers and Other Events. Except as
provided in section (g) hereof, from the Section 883 Amendment Date until the
Restriction Termination Date: (1) no Person (other than an Existing Holder)
shall Beneficially Own Shares in excess of the Ownership Limit; (2) any Transfer
that, if effective, would result in any Person (other than an Existing Holder)
Beneficially Owning Shares in excess of the Ownership Limit shall be void ab
initio as to the Transfer of that number of Shares which would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit and the
intended transferee shall acquire no rights in such Shares in excess of the
Ownership Limit; and (3) any Transfer of Shares that, if effective, would result
in the Corporation being "closely held" within the meaning of Section 883 of the
Code and the regulations promulgated thereunder shall be void ab initio as to
the Transfer of that number of Shares which would cause the Corporation to be
"closely held" within the meaning of Section 883 of the Code and the regulations
promulgated thereunder and the intended transferee shall acquire no rights in
such Shares.

                   (b) Excess Shares.

                          (1) If, notwithstanding the other provisions contained
in these Articles of Incorporation, at any time from the Section 883 Amendment
Date until the Restriction Termination Date, there is a purported Transfer or
other event such that any Person (other than an Existing Holder) would
Beneficially Own Shares in excess of the Ownership Limit, then, except as
otherwise provided in section (g) hereof, such Shares which would be in excess
of the Ownership Limit (rounded up to the nearest whole share), shall
automatically be designated as Excess Shares (without reclassification), as
further described in subsection (b)(2) hereof. The designation of such Shares as
Excess Shares shall be effective as of the close of business on the business day
prior to the date of the Transfer or other event. If, after designation of such
Shares owned directly by a Person as Excess Shares, such Person still owns
Shares in excess of the applicable Ownership Limit, Shares Beneficially Owned by
such Person constructively in excess of the Ownership Limit shall be designated
as Excess Shares until such Person does not own Shares in excess of the
applicable Ownership Limit. Where such Person owns Shares

                                                                              13



constructively through one or more Persons and the Shares held by such other
Persons must be designated as Excess Shares, the designation of Shares held by
such other Persons as Excess Shares shall be pro rata.

                       (2) If, notwithstanding the other provisions contained in
these Articles of Incorporation, at any time from the Section 883 Amendment Date
until the Restriction Termination Date, there is a purported Transfer which, if
effective, would cause the Corporation to become "closely held" within the
meaning of Section 883 of the Code and regulations promulgated thereunder, then,
except as otherwise provided in section (g) hereof, the Shares being Transferred
and which would cause, when taken together with all other Shares, the
Corporation to be "closely held" within the meaning of Section 883 of the Code
and the regulations promulgated thereunder (rounded up to the nearest whole
share) shall automatically be designated as Excess Shares (without
reclassification). The designation of such Shares as Excess Shares shall be
effective as of the close of business on the business day prior to the date of
the Transfer. If, after designation of such Shares owned directly by a Person as
Excess Shares, such Person still owns Shares in excess of the applicable
Ownership Limit, Shares Beneficially Owned by such Person constructively in
excess of the Ownership Limit shall be designated as Excess Shares until such
Person does not own Shares in excess of the applicable Ownership Limit. Where
such Person owns Shares constructively through one or more Persons and the
Shares held by such other Persons must be designated as Excess Shares, the
designation of Shares held by such other Persons as Excess Shares shall be pro
rata.

                 (c) Remedies for Breach. If the Board of Directors or their
designees shall at any time determine in good faith that a purported Transfer or
other event has taken place in violation of section (a) hereof or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
Shares in violation of section (a) hereof, the Board of Directors or their
designees may take such action as they deem advisable to refuse to give effect
to or to prevent such Transfer or other event, including, but not limited to,
refusing to give effect to such Transfer or other event on the books of the
Corporation or instituting proceedings to enjoin such Transfer or other event or
transaction; provided, however, that any Transfers or attempted Transfers (or,
in the case of events other than a Transfer, Beneficial Ownership) in violation
of section (a) hereof shall be void ab initio and automatically result in the
designation and treatment described in section (b) hereof, irrespective of any
action (or non-action) by the Board of Directors or their designees.

                 (d) Notice of Restricted Transfer. Any Person who acquires or
attempts to acquire Shares in violation of section (a) hereof, or any Person who
is a purported transferee such that Excess Shares result under section (b)
hereof, shall immediately give written notice to the Corporation of such
Transfer, attempted Transfer or other event and shall provide to the Corporation
such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer or other event on the
Corporation's status as qualifying for exemption from taxation on gross income
from the international operation of a ship or ships within the meaning of
Section 883 of the Code.

                                                                              14



                 (e) Exclusion. The restrictions set forth in section (a) shall
not apply to any Shares with respect to which such restrictions are prohibited
pursuant to applicable provisions of the corporation laws of the Republic of
Panama.

                 (f) Remedies Not Limited. Subject to section (j) hereof,
nothing contained in these Articles of Incorporation shall limit the authority
of the Board of Directors to take such other action as they deem necessary or
advisable to protect the interests of the Corporation's shareholders by
preservation of the Corporation's status as exempt from taxation on gross income
from the international operation of a ship or ships within the meaning of
Section 883 of the Code and to ensure compliance with the Ownership Limit.

                 (g) Exception. The Board of Directors upon receipt of a ruling
from the Internal Revenue Service or an opinion of tax counsel, satisfactory to
them in their sole and absolute discretion, in each case to the effect that the
Corporation's status as exempt from taxation on gross income from the
international operation of a ship or ships within the meaning of Section 883 of
the Code will not be jeopardized or worsened, may exempt a Person (or may
generally exempt any class of Persons) or any class of Shares from the Ownership
Limit if the Board of Directors, in its sole discretion, ascertains that such
Person's (or Persons') Beneficial Ownership of Shares or the Beneficial
Ownership of such class of Shares will not jeopardize or worsen the
Corporation's status as exempt from taxation on gross income from the
international operation of a ship or ships within the meaning of Section 883 of
the Code. The Board of Directors may require representations and undertakings
from such Person or Persons as are necessary to make such determination.

                 (h) Legend.  After the Section 883 Amendment Date, and prior to
the Restriction Termination Date, each certificate for the Shares shall bear the
following legend:

         The Shares represented by this certificate are subject to restrictions
         on transfer. Unless excepted by the Board of Directors or exempted by
         the terms of the Articles of Incorporation of Carnival Corporation, no
         Person may (1) Beneficially Own Shares in excess of 4.9% of the
         outstanding Shares, by value, vote or number, determined as provided in
         the Articles of Incorporation of Carnival Corporation, and computed
         with regard to all outstanding Shares and, to the extent provided by
         the Code, all Shares issuable under existing options and exchange
         rights that have not been exercised; or (2) Beneficially Own Shares
         which would result in the Corporation being "closely held." Unless so
         excepted, any acquisition of Shares and continued holding of ownership
         constitutes a continuous representation of compliance with the above
         limitations, and any Person who attempts to Beneficially Own Shares in
         excess of the above limitations has an affirmative obligation to notify
         the Corporation immediately upon such attempt. If the restrictions on
         transfer are violated, the transfer will be void ab initio and the
         Shares represented hereby will be designated and treated as Excess
         Shares that will be held in trust. Excess Shares may not be transferred
         at a profit and may be purchased by the Corporation. In addition,
         certain Beneficial

                                                                              15



         Owners must give written notice as to certain information on demand and
         on exceeding certain ownership levels. All terms not defined in this
         legend have the meanings provided in the Articles of Incorporation of
         Carnival Corporation. The Corporation will mail without charge to any
         requesting shareholder a copy of the Articles of Incorporation,
         including the express terms of each class and series of the authorized
         Shares of the Corporation, within five (5) days after receipt by the
         Secretary of the Corporation of a written request therefor.

          (i) Severabilty. If any provision of Article XII or XIII or any
application of any such provision is determined to be invalid by any Panamanian
court or United States federal or state court having jurisdiction over the
issues, the validity of the remaining provisions shall not be affected, and
other applications of such provision shall be affected only to the extent
necessary to comply with the determination of such court.

          (j) New York Stock Exchange Transactions. Nothing in these Articles of
Incorporation shall preclude the settlement of any transaction entered into
through the facilities of the New York Stock Exchange. The fact that the
settlement of any transaction occurs shall not negate the effect of any other
provision of these Articles of Incorporation and any transferee in such a
transaction shall be subject to all the provisions and limitations set forth in
these Articles of Incorporation.

          (k) Owners Required to Provide Information. After the Amendment Date
and prior to the Restriction Termination Date: (1) Every Beneficial Owner of
three percent (3%) or more, by vote, value or number, or such lower percentages
as required pursuant to regulations under the Code, of the outstanding Shares
shall promptly after becoming such a three percent (3%) Beneficial Owner, give
written notice to the Corporation stating the name and address of such
Beneficial Owner, the general ownership structure of such Beneficial Owner, the
number of shares of each class of Shares Beneficially Owned, and a description
of how such Shares are held. (2) Each Person who is a Beneficial Owner of Shares
and each Person (including the shareholder of record) who is holding Shares for
a Beneficial Owner shall provide on demand to the Corporation such information
as the Corporation may request from time to time in order to determine the
Corporation's status as exempt from taxation on gross income from the
international operation of a ship or ships within the meaning of Section 883 of
the Code and to ensure compliance with the Ownership Limit.

                                  ARTICLE XIII
                                  Excess Shares

          (a) Ownership in Trust. Upon any purported Transfer or other event
that results in Excess Shares pursuant to section (b) of Article XII hereof,
such Excess Shares shall be deemed to have been transferred to the Excess Share
Trustee, as trustee of the Excess Share Trust, for the benefit of the Charitable
Beneficiary effective as of the close of business on the business day prior to
the date of the Transfer or other event. Excess Shares so held in trust shall be
issued and outstanding shares of the Corporation. The Purported Record
Transferee or Purported Record Holder shall have no rights in such Excess
Shares. The Purported Beneficial Transferee or Purported Beneficial Holder shall

                                                                              16



have no rights in such Excess Shares except as provided in section (c) or (e) of
Article XIII. The Excess Share Trustee may resign at any time so long as the
Corporation shall have appointed a successor trustee. The Excess Share Trustee
shall, from time to time, designate one or more charitable organization or
organizations as the Charitable Beneficiary.

          (b) Dividend Rights. Excess Shares shall be entitled to the same
dividends determined as if the designation of Excess Shares had not occurred.
Any dividend or distribution paid prior to the discovery by the Corporation that
the Shares have been designated as Excess Shares shall be repaid to the Excess
Share Trust upon demand. Any dividend or distribution declared but unpaid shall
be paid to the Excess Share Trust. All dividends received or other income earned
by the Excess Share Trust shall be paid over to the Charitable Beneficiary.

          (c) Rights Upon Liquidation. Upon liquidation, dissolution or winding
up of the Corporation, the Purported Beneficial Transferee or Purported
Beneficial Holder shall receive, for each Excess Share, the lesser of (1) the
amount per share of any distribution made upon liquidation, dissolution or
winding up or (2) (x) in the case of Excess Shares resulting from a purported
Transfer, the price per share of the Shares in the transaction that created such
Excess Shares (or, in the case of the devise, gift or other similar event, the
Market Price of such Shares on the date of such devise, gift or other similar
event) or (y) in the case of Excess Shares resulting from an event other than a
purported Transfer, the Market Price of the Shares on the date of such event.
Any amounts received in excess of such amount shall be paid to the Charitable
Beneficiary.

          (d) Voting Rights. The Excess Share Trustee shall be entitled to vote
the Excess Shares on behalf of the Charitable Beneficiary on any matter. Subject
to Panamanian law, any vote cast by a Purported Record Transferee with respect
to the Excess Shares prior to the discovery by the Corporation that the Excess
Shares were held in trust will be rescinded ab initio; provided, however, that
if the Corporation has already taken irreversible action with respect to a
merger, reorganization, sale of all or substantially all the assets, dissolution
of the Corporation or other action by the Corporation, then the vote cast by the
Purported Record Transferee shall not be rescinded. The purported owner of the
Excess Shares will be deemed to have given an irrevocable proxy to the Excess
Share Trustee to vote the Excess Shares for the benefit of the Charitable
Beneficiary.

          Notwithstanding the provisions of these Articles of Incorporation,
until the Corporation has received notification that Excess Shares have been
transferred into an Excess Share Trust, the Corporation shall be entitled to
rely on its share transfer and other shareholder records for purposes of
preparing lists of shareholders entitled to vote at meetings, determining the
validity and authority of proxies and otherwise conducting votes of
shareholders.

          (e) Restrictions on Transfer; Designation of Excess Share Trust
Beneficiary. Excess Shares shall be transferable only as provided in this
section (e) of Article XIII. At the direction of the Board of Directors, the
Excess Share Trustee shall

                                                                              17



transfer the Excess Shares held in the Excess Share Trust to a Person or Persons
(including, without limitation, the Corporation under section (f) below) whose
ownership of such Shares shall not violate the Ownership Limit or otherwise
cause the Corporation to become "closely held" within the meaning of Section 883
of the Code within 180 days after the later of (i) the date of the Transfer or
other event which resulted in Excess Shares and (ii) the date the Board of
Directors determines in good faith that a Transfer or other event resulting in
Excess Shares has occurred, if the Corporation does not receive a notice of such
Transfer or other event pursuant to section (d) hereof. If such a transfer is
made, the interest of the Charitable Beneficiary shall terminate, the
designation of such Shares as Excess Shares shall thereupon cease and a payment
shall be made to the Purported Beneficial Transferee, Purported Beneficial
Holder and/or the Charitable Trustee as described below. If the Excess Shares
resulted from a purported Transfer, the Purported Beneficial Transferee shall
receive a payment from the Excess Share Trustee that reflects a price per share
for such Excess Shares equal to the lesser of (A) the price per share received
by the Excess Share Trustee and (B) (x) the price per share such Purported
Beneficial Transferee paid for the Shares in the purported Transfer that
resulted in the Excess Shares, or (y) if the Purported Beneficial Transferee did
not give value for such Excess Shares (through a gift, devise or other similar
event) a price per share equal to the Market Price of the Shares on the date of
the purported Transfer that resulted in the Excess Shares. If the Excess Shares
resulted from an event other than a purported Transfer, the Purported Beneficial
Holder shall receive a payment from the Excess Share Trustee that reflects a
price per share of Excess Shares equal to the lesser of (A) the price per share
received by the Excess Share Trustee and (B) the Market Price of the Shares on
the date of the event that resulted in Excess Shares. Prior to any transfer of
any interest in the Excess Share Trust, the Corporation must have waived in
writing its purchase rights, if any, under section (f) below. Any funds received
by the Excess Share Trustee in excess of the funds payable to the Purported
Beneficial Holder or the Purported Beneficial Transferee shall be paid to the
Charitable Beneficiary. The Corporation shall pay the costs and expenses of the
Excess Share Trustee.

          Notwithstanding the foregoing, if the provisions of this section (e)
are determined to be void or invalid by virtue of any legal decision, statute,
rule or regulation, then the Purported Beneficial Transferee or Purported
Beneficial Holder of any shares of Excess Shares may be deemed, at the option of
the Corporation, to have acted as an agent on behalf of the Corporation in
acquiring or holding such Excess Shares and to hold such Excess Shares on behalf
of the Corporation.

          (f) Purchase Right in Excess Shares. Excess Shares shall be deemed to
have been offered for sale by the Excess Share Trustee to the Corporation, or
its designee, at a price per Excess Share equal to (i) in the case of Excess
Shares resulting from a purported Transfer, the lesser of (A) the price per
share of the Shares in the transaction that created such Excess Shares (or, in
the case of devise, gift or other similar event, the Market Price of the Shares
on the date of such devise, gift or other similar event), or (B) the lowest
Market Price of the class of Shares which resulted in the Excess Shares at any
time after the date such Shares were designated as Excess Shares and prior to
the date the Corporation, or its designee, accepts such offer or (ii) in the
case of Excess Shares resulting from an event other than a purported Transfer,
the lesser of (A) the

                                                                              18



Market Price of the Shares on the date of such event or (B) the lowest Market
Price for Shares which resulted in the Excess Shares at any time from the date
of the event resulting in such Excess Shares and prior to the date the
Corporation, or its designee, accepts such offer. The Corporation shall have the
right to accept such offer for a period of ninety (90) days after the later of
(i) the date of the Transfer or other event which resulted in such Excess Shares
and (ii) the date the Board of Directors determines in good faith that a
Transfer or other event resulting in Excess Shares has occurred, if the
Corporation does not receive a notice of such Transfer or other event pursuant
to section (d) hereof.

          (g) Underwritten Offerings. The Ownership Limit shall not apply to the
acquisition of Shares or rights, options or warrants for, or securities
convertible into, Shares by an underwriter in a public offering or placement
agent in a private offering, provided that the underwriter makes a timely
distribution of such Shares or rights, options or warrants for, or securities
convertible into, Shares.

                                  ARTICLE XIV
                      Combined Group Ownership Restrictions

          (a) Triggering Acquisition. From the Amendment Date: Subject to
section (b) below, if any person (an "Acquiring Person") acquires additional
Ordinary Shares or voting control over additional Ordinary Shares and, after
giving effect to such acquisition (or, if the Corporation is subject to the City
Code, acquires Ordinary Shares or voting control over Ordinary Shares) such
Acquiring Person, whether solely or together with any person or persons Acting
in Concert with such Acquiring Person, holds or exercises voting control over
Ordinary Shares which equal or are in excess of the Combined Group City Code
Limit (such acquisition of Ordinary Shares or voting control over Ordinary
Shares, a "Triggering Acquisition"), then all (x) Ordinary Shares held by the
Acquiring Person or over which the Acquiring Person exercises voting control,
and (y) Ordinary Shares held by any party or parties Acting in Concert with such
Acquiring Person or over which any party or parties Acting in Concert with such
Acquiring Person exercise(s) voting control (the "Acquiring Person Attributable
Shares") shall automatically be designated as "Combined Group Restricted Shares"
for the purposes of Articles XIV and XV. A Triggering Acquisition can occur more
than once, and the provisions set forth in Articles XIV and XV shall apply to
every separate Triggering Acquisition or series of Triggering Acquisitions.

          (b) Qualifying Takeover Offer. Notwithstanding the provisions of
section (a) above, if:

               (1) prior to or simultaneously with a Triggering Acquisition,
such Acquiring Person has made a Qualifying Takeover Offer (and, in the event
that the Qualifying Takeover Offer was made prior to the Triggering Acquisition,
such Qualifying Takeover Offer has not been withdrawn, abandoned or terminated
prior to or simultaneously with the Triggering Acquisition), or

                                                                              19



               (2) the circumstances described in clause (1) have not occurred,
and such Acquiring Person (x) within 10 days after the date on which the
applicable Triggering Acquisition occurs, makes a binding public announcement to
commence a Qualifying Takeover Offer, and (y) within 28 days after making the
public announcement referred to in the preceding clause (x), commences a
Qualifying Takeover Offer,

then the Acquiring Person Attributable Shares shall not be designated Combined
Group Restricted Shares for the purposes of Articles XIV and XV hereof until the
earliest to occur (if at all) of (i) a withdrawal, abandonment or termination of
such Qualifying Takeover Offer other than in accordance with its terms, or (ii)
any amendment, modification or supplement to the terms of either offer
comprising the Qualifying Takeover Offer such that, as amended, modified or
supplemented, the offers would not constitute a Qualifying Takeover Offer;
provided, that immediately upon the earliest to occur of the events described in
clause (i) or (ii), such Acquiring Person Attributable Shares shall be
automatically designated as Combined Group Restricted Shares.

          (c) Determination of Combined Group Excess Shares. In the event that
any Ordinary Shares are designated Combined Group Restricted Shares pursuant to
section (a) or (b):

               (1) If the Combined Group Restricted Shares (A) consist entirely
of Carnival Common Stock, and (B) are held by or subject to the voting control
of a single person, then all Carnival Common Stock held by such person or over
which such person exercises voting control which cause the Combined Group City
Code Limit to be equaled or exceeded, shall automatically be designated as
Combined Group Excess Shares for the purposes of Article XV.

               (2) If the Combined Group Restricted Shares (A) consist of both
Carnival Common Stock and P&O Princess Ordinary Shares, and (B) are held by or
subject to the voting control of a single person, then:

               (A) if, after giving effect to the Equalization Ratio, (x) the
     number of votes represented by such Carnival Common Stock that could be
     cast with respect to a Joint Electorate Action exceeds (y) the number of
     votes represented by such P&O Princess Ordinary Shares that could be cast
     with respect to a Joint Electorate Action, then all Carnival Common Stock
     held by such person or over which such person exercises voting control
     which cause the Combined Group City Code Limit to be equaled or exceeded
     shall automatically be designated as Combined Group Excess Shares for the
     purposes of Article XV; and

               (B) if, after giving effect to the Equalization Ratio, (x) the
     number of votes represented by such Carnival Common Stock that could be
     cast with respect to a Joint Electorate Action is less than or equal to (y)
     the number of votes represented by such P&O Princess Ordinary Shares that
     could be cast with respect to a Joint Electorate Action, such Carnival
     Common Stock shall be automatically be designated as Combined Group Excess
     Shares for the purposes of Article XV only to the extent that such Carnival
     Common Stock would give such person

                                                                              20



     ownership or voting control equal to or in excess of the Combined Group
     City Code Limit, as if determined without regard to any P&O Princess
     Ordinary Shares held or subject to the voting control of such person.

               (3) If the Combined Group Restricted Shares are held by or
subject to the voting control of two or more persons Acting in Concert, where:

               (A) all or a part of such Combined Group Restricted Shares would
     all have been designated as Combined Group Excess Shares pursuant to
     subsection (c)(1) hereof had they been held by or subject to the voting
     control of a single person; or

               (B) all or a part of such Combined Group Restricted Shares would
     have been designated as Combined Group Excess Shares pursuant to subsection
     (c)(2) hereof had they been held by or subject to the voting control of a
     single person,

then such automatic designation as Combined Group Excess Shares for the purposes
of Article XV shall be made with respect to the same number of Carnival Common
Stock held by or subject to the voting control of such persons Acting in Concert
as if they had been held by or subject to the voting control of a single person,
such designation to be made on a pro rata basis based on the number of Carnival
Common Stock each such person holds or over which each such person exercises
voting control.

          (d) Notice.

               (1) Any person whose acquisition of Ordinary Shares or voting
control over Ordinary Shares would or does result in any Ordinary Shares being
constituted as Combined Group Restricted Shares pursuant to section (a) or (b)
hereof shall immediately give written notice to the Corporation of such event
and shall provide to the Corporation such other information as the Corporation
may request in order to determine (i) whether any acquisition of Ordinary Shares
or voting control over Ordinary Shares has resulted or could result in any
Ordinary Shares being designated as Combined Group Restricted Shares under this
Article XIV, and/or (ii) to what extent any Combined Group Restricted Shares
should be designated as Combined Group Excess Shares pursuant to section (c)
hereof.

               (2) The Corporation will, as soon as practicable after the Board
of Directors has knowledge thereof, notify in writing any Person who holds any
Combined Group Restricted Shares; provided that failure by the Corporation to
give any such notification shall in no way invalidate any of the provisions of
Article XIV and XV. Upon receipt of such notice from the Corporation, such
Person shall immediately provide to the Corporation such information described
in subsection (d)(1) hereof as the Corporation shall request.

          (e) Exclusion. The restrictions set forth in Article XIV shall not
apply to:

                                                                              21



     (1) any Carnival Common Stock to the extent that such restrictions are
     prohibited pursuant to Applicable Regulations.

     (2) any acquisition of Ordinary Shares or voting control over Ordinary
     Shares by any member of the Arison Group if, as a result, the aggregate of
     the voting rights of the P&O Princess Ordinary Shares and of the Carnival
     Common Stock held by the Arison Group and of the P&O Princess Ordinary
     Shares and of the Carnival Common Stock over which the Arison Group, after
     giving effect to the Equalization Ratio, exercises voting control does not
     thereby (i) increase by one per cent. or more in any period of twelve
     consecutive months and (ii) after giving effect to the Equalization Ratio,
     equal or exceed forty per cent. of the aggregate voting rights attached to
     the whole of the issued P&O Princess Ordinary Shares and the outstanding
     Carnival Common Stock. For the avoidance of doubt, (x) a shareholder shall
     not be deemed to have acquired Ordinary Shares or voting control over
     Ordinary Shares if solely as a result of a share buyback, cancellation or
     reduction of share capital, disenfranchisement of voting rights or any
     other procedure which has the effect of reducing the share capital or the
     voting share capital of the Corporation or of P&O Princess the percentage
     holding of such person is increased; (y) the transfer of Ordinary Shares or
     voting control over Ordinary Shares among members of the Arison Group shall
     not be deemed to be a Triggering Acquisition.

     (3) any acquisition pursuant to a Mandatory Exchange.

     (4) any acquisition by the Corporation or any of its Subsidiaries from time
     to time of any Ordinary Shares.

     (5) any acquisition by any member of the P&O Princess Group of any Ordinary
     Shares.

               (f) Legend. After the Amendment Date, each certificate for
Carnival Common Stock shall bear the following legend:

     The shares represented by this certificate are subject to certain
     restrictions on ownership of shares of Carnival Corporation and P&O
     Princess Cruises plc. Under the terms of the Articles of Incorporation of
     the Corporation, if any person acquires Carnival Common Stock and/or P&O
     Princess Ordinary Shares or voting control over such shares, and after
     giving effect to such acquisition, such person, together with any person or
     persons Acting in Concert with such acquiring person, holds or exercises
     voting control over Carnival Common Stock and/or P&O Princess Ordinary
     Shares which is equal to or in excess of such number of shares which, in
     aggregate, represent the right to cast 30% or more of the votes on a Joint
     Electorate Action, such shares which cause that ownership limit to be
     equaled or exceeded may be designated as Combined Group Excess Shares. In
     addition, any additional acquisition of Carnival Common Stock and/or P&O
     Princess Ordinary Shares by a person that, together with any person or
     persons Acting in Concert, holds or has voting control over Carnival Common
     Stock

                                                                              22



     and/or P&O Princess Ordinary Shares representing the right to cast not less
     than 30% and not more than 50% of the votes on a Joint Electorate Action,
     may result in certain shares being designated as Combined Group Excess
     Shares. Any Carnival Common Stock that are designated as Combined Group
     Excess Shares will be transferred to a trustee, and the prior holder
     thereof will have no right to vote such shares or receive dividends or
     other distributions with respect thereto. A person may exceed the ownership
     limits described above if such person makes a Qualifying Takeover Offer
     with respect to all Carnival Common Stock and P&O Princess Ordinary Shares.
     Holders may be required to provide written notice and other information to
     the Corporation if such ownership levels are equaled or exceeded. The
     foregoing is only a summary of the applicable restrictions and is qualified
     in its entirety by reference to the Articles of Incorporation of the
     Corporation. The Corporation will mail without charge to any requesting
     shareholder of the Corporation a copy of the Articles of Incorporation,
     within five (5) days after receipt by the Secretary of the Corporation of a
     written request therefor. All terms not defined in this legend have the
     meanings provided in the Articles of Incorporation of Carnival Corporation.

          (g) Severability. If any provision of Articles XIV or XV or any
application of any such provision is determined to be invalid by any Panamanian
court or United States federal or state court having jurisdiction over the
issues, the validity of the remaining provisions shall not be affected, and
other applications of such provision shall be affected only to the extent
necessary to comply with the determination of such court.

          (h) New York Stock Exchange Transactions. Nothing in these Articles of
Incorporation shall preclude the settlement of any transaction entered into
through the facilities of the New York Stock Exchange. The fact that the
settlement of any transaction occurs shall not negate the effect of any other
provision of these Articles of Incorporation and any transferee in such a
transaction shall be subject to all the provisions and limitations set forth in
these Articles of Incorporation.

                                   ARTICLE XV
                          Combined Group Excess Shares

          (a) Ownership in Trust. Upon the designation of any Carnival Common
Stock as Combined Group Excess Shares pursuant to section (c) of Article XIV
hereof, such Combined Group Excess Shares shall be transferred by or on behalf
of the Combined Group Excess Share Holder to the Excess Share Trustee, as
trustee of the Excess Share Trust, for the benefit of the Charitable
Beneficiary. Until such transfer to the Excess Share Trustee, the Combined Group
Excess Shares shall be held by the Combined Group Excess Share Holder in trust
for the benefit of the Charitable Beneficiary in accordance with the terms of
these Articles of Incorporation. From the date that such Carnival Common Stock
are designated as Combined Group Excess Shares, the Combined Group Excess Share
Holder shall have no rights in such Combined Group Excess Shares, except as
provided in section (c), (e) or (f) below. The Excess

                                                                              23



Share Trustee may resign at any time so long as the Corporation shall have
appointed a successor trustee. The Excess Share Trustee shall, from time to
time, designate one or more charitable organization or organizations as the
Charitable Beneficiary. More than one Excess Share Trustee may be appointed to
hold the Combined Group Excess Shares in trust for one or more Charitable
Beneficiaries.

          (b) Dividend Rights. Combined Group Excess Shares shall be entitled to
the same dividends and other distributions determined as if the designation of
Combined Group Excess Shares had not occurred. Any dividend or distribution made
or paid on or after the date such Carnival Common Stock are designated as
Combined Group Restricted Shares and prior to the designation of such Carnival
Common Stock as Combined Group Excess Shares shall be repaid to the Excess Share
Trust upon demand. Any dividend or distribution declared but unpaid or not made
shall be paid to the Excess Share Trust. All dividends received or other income
earned by the Excess Share Trust shall be paid over to the Charitable
Beneficiary.

          (c) Rights Upon Liquidation. Notwithstanding the fact that Combined
Group Excess Shares are held in trust for a Charitable Beneficiary, upon
Liquidation of the Corporation, the Combined Group Excess Share Holder shall
receive (if it has not already received consideration for such shares pursuant
to section (e) or (f) below), for each Combined Group Excess Share, the amount
per share of any distribution made upon Liquidation with respect to Carnival
Common Stock generally, less any costs and expenses incurred by the Corporation,
the Excess Share Trustee and the Charitable Beneficiary in connection with the
transfer of the Combined Group Excess Shares to the Excess Share Trustee and the
holding of such shares by the Excess Share Trustee.

          (d) Voting Rights.

               (1) The Excess Share Trustee shall be entitled, but shall not be
required, to vote the Combined Group Excess Shares on behalf of the Charitable
Beneficiary on any matter. Subject to Panamanian law, any vote cast by a
Combined Group Excess Share Holder with respect to the Combined Group Excess
Shares prior to the designation of such shares as Combined Group Restricted
Shares will be rescinded ab initio; provided, however, that if the Corporation
has already taken irreversible action with respect to a merger, reorganization,
sale of all or substantially all the assets, dissolution of the Corporation or
other action by the Corporation, then the vote cast by the Combined Group Excess
Share Holder shall not be rescinded. The purported owner of the Combined Group
Excess Shares will be deemed to have given an irrevocable proxy to the Excess
Share Trustee to vote the Combined Group Excess Shares for the benefit of the
Charitable Beneficiary.

               (2) Notwithstanding the provisions of these Articles of
Incorporation, until the Corporation has received notification that Combined
Group Excess Shares have been transferred into an Excess Share Trust, the
Corporation shall be entitled to rely on its share transfer and other
shareholder records for purposes of preparing lists of shareholders entitled to
vote at meetings, determining the validity and authority of proxies and
otherwise conducting votes of shareholders.

                                                                              24



          (e) Transfer of Combined Group Excess Shares.

               (1) Combined Group Excess Shares shall be transferable only as
provided in this section (e). At the direction of the Board of Directors, the
Excess Share Trustee shall transfer the Combined Group Excess Shares held in the
Excess Share Trust to a person or persons (including, without limitation, the
Corporation under section (f) below) whose ownership of such Carnival Common
Stock would not result in a designation of any Carnival Common Stock as Combined
Group Restricted Shares pursuant to section (a) or (b) of Article XIV, within
180 days after the later of (i) the date of the event that resulted in such
shares being designated as Combined Group Restricted Shares pursuant to section
(a) or (b) of Article XIV, and (ii) the date that the Board of Directors
determines or is notified that an event resulting in Combined Group Restricted
Shares has occurred. If such a transfer is made, the interest of the Charitable
Beneficiary shall terminate, the designation of such Carnival Common Stock as
Combined Group Excess Shares shall thereupon cease and a payment shall be made
to the Combined Group Excess Share Holder as described below. The Combined Group
Excess Share Holder shall receive a payment from the Excess Share Trustee that
reflects a price per share of Combined Group Excess Shares equal to the price
per share received by the Excess Share Trustee upon such transfer, less any
costs and expenses incurred by the Corporation, the Excess Share Trustee upon
such transfer and the Charitable Beneficiary in connection with the transfer of
the Combined Group Excess Shares to the Excess Share Trustee, the holding of
such shares by the Excess Share Trustee and the transfer of such shares in
accordance with this section (e).

               (2) Notwithstanding the foregoing, if the provisions of this
section (e) are determined to be void or invalid by virtue of any applicable
law, then the Combined Group Excess Share Holder may be deemed, at the option of
the Corporation, to have acted as an agent on behalf of the Corporation in
acquiring or holding such Combined Group Excess Shares and to hold such Combined
Group Excess Shares on behalf of the Corporation.

          (f) Purchase Right in Combined Group Excess Shares. Combined Group
Excess Shares shall be deemed to have been offered for sale by the Excess Share
Trustee to the Corporation, or its designee, at a price per Combined Group
Excess Share equal to the Market Price of the Carnival Common Stock on the date
that the Corporation acquires the Combined Group Excess Shares, less any costs
and expenses incurred by the Corporation, the Excess Share Trustee and the
Charitable Beneficiary in connection with the transfer of the Combined Group
Excess Shares to the Excess Share Trustee, the holding of such shares by the
Excess Share Trustee and the transfer of such shares in accordance with this
section (f). The Corporation shall have the right to accept such offer for a
period of ninety (90) days after the later of (i) the date of the event that
resulted in such shares being designated as Combined Group Restricted Shares
pursuant to section (a) or (b) of Article XIV, and (ii) the date the Board of
Directors determines in good faith that an event resulting in Combined Group
Restricted Shares has occurred, if the Corporation does not receive a notice of
such Transfer or other event pursuant to section (d) of Article XIV.

                                                                              25



          (g) Underwritten Offerings. The provisions of Articles XIV and XV
shall not apply to the acquisition of Carnival Common Stock or rights, options
or warrants for, or securities convertible into, Carnival Common Stock by an
underwriter in a public offering or placement agent in a private offering;
provided, that the underwriter or placement agent makes a timely distribution of
such Carnival Common Stock or rights, options or warrants for, or securities
convertible into, Carnival Common Stock such that, after the distribution, such
underwriter or placement agent does not hold or exercise voting control over
Ordinary Shares equal to or in excess of the Combined Group City Code Limit.

          (h) Applicability of Ownership Limit and Combined Group City Code
Limit. Notwithstanding anything in these Articles to the contrary, in the event
of any occurrence that results in Carnival Common Stock being designated as both
Excess Shares pursuant to Article XII and Combined Group Restricted Shares
pursuant to Article XIV, such Shares shall be designated as Excess Shares and
not Combined Group Excess Shares.

          (i) Voting Control. For purposes of Articles XIV and XV, (i)
references to holding or acquiring shares will also be deemed to include holding
or acquiring voting control over shares, (ii) a person will be deemed to have
voting control over shares if such person has the power to direct the voting of
such shares, and (iii) a person will be deemed to acquire shares upon the
occurrence of any event which results in such person Acting in Concert with
another person with respect to such other person's shares.

                                  ARTICLE XVI
                           Dividends and Distributions

          (a) Subject to the Equalization Agreement and the provisions of these
Articles of Incorporation, the Corporation shall not pay or make any
Distribution in cash unless P&O Princess also pays or makes a Distribution in
cash at approximately the same time and the ratio of the Equalized Distribution
Amount so paid or made by the Corporation to the Equalized Distribution Amount
so paid or made by P&O Princess (converted, if applicable, at the Applicable
Exchange Rate for such Distributions and rounded to five decimal places) equals
the Equalization Ratio in effect on the Distribution Determination Date for such
Distributions (each, an "Equivalent Distribution").

          (b) The Corporation shall not declare or otherwise become obligated to
pay or make a Distribution in cash unless (i) on the date on which such
declaration is made or such obligation is created, P&O Princess has sufficient
Distributable Reserves to make an Equivalent Distribution with respect to such
Distribution or (ii) the Corporation agrees to pay, and does pay, to P&O
Princess (before P&O Princess pays or makes such Distribution) the minimum
amount required by P&O Princess so that it will have sufficient Distributable
Reserves to pay or make such an Equivalent Distribution. Notwithstanding
compliance with the preceding sentence, if P&O Princess shall have declared or
otherwise become obligated to pay or make an Equivalent Distribution and does
not have sufficient Distributable Reserves to pay or make such Equivalent
Distribution when due, then the Corporation shall pay to P&O Princess the
minimum

                                                                              26



amount required by P&O Princess so that P&O Princess will have sufficient
Distributable Reserves to pay or make such Equivalent Distribution; provided,
however, that if the Corporation does not have sufficient Distributable Reserves
to pay or make in full both the Equivalent Distribution that it declared or
became obligated to make and the payment required by this sentence, then (i) the
Corporation shall only pay or make the portion of that Equivalent Distribution
(and any related payment that would have been required by this sentence in
respect of such portion if it were the entire Equivalent Distribution that the
Corporation had declared or became obligated to make) that it can make out of
its Distributable Reserves, and (ii) P&O Princess shall only pay or make the
portion of its Equivalent Distribution that it can make out of its Distributable
Reserves following receipt of such payment.

          (c) For purposes of section (b) above, any amount the Corporation is
required to pay to P&O Princess shall be determined after taking into account
all Taxes payable by, and all Tax credits of, the Corporation and P&O Princess
with respect to the payment or receipt of such payment and any such payment may
be made on the Equalization Share, if any, issued by the Corporation if both the
Board of Directors and the P&O Princess Board deem it appropriate.

          (d) The Board of Directors shall:

               (1) insofar as is practicable in relation to any proposed cash
Distribution, cooperate with the P&O Princess Board to agree the amount of the
Equivalent Distribution to be paid by the Corporation and P&O Princess;

               (2) determine to pay or recommend to pay Equivalent Distributions
at Board of Directors meetings convened as close in time to those similarly
convened by the P&O Princess Board as is practicable;

               (3) cooperate with the P&O Princess Board to announce and pay
Equivalent Distributions simultaneously or as close in time as practicable;

               (4) ensure that the record dates for receipt of the Equivalent
Distribution, in respect of the Corporation and P&O Princess, are on the same
date; and

               (5) generally coordinate with the P&O Princess Board the timing
of all other aspects of the payment or making of Equivalent Distributions.

                                  ARTICLE XVII
                                   Liquidation

          (a) In the event of a voluntary or involuntary Liquidation of the
Corporation, the Corporation will, subject to subsection (b) below, make such
payments or take such other actions required to ensure that the holders of
Carnival Common Stock and P&O Princess Ordinary Shares would, had each of the
Corporation and P&O Princess gone into Liquidation on the same date, be entitled
to receive a Liquidation Distribution which is equivalent on a per share basis
in accordance with the Equalization

                                                                              27



Ratio then in effect and having regard to the Liquidation Exchange Rate, but
disregarding any shareholder Tax or Tax Benefit.

          (b) To establish the amount payable under section (a) above, each of
the Corporation and P&O Princess will determine the amount of assets (if any) it
will have available for distribution in a Liquidation on the date of the
Liquidation (or notional date of Liquidation) to holders of Carnival Common
Stock or P&O Princess Ordinary Shares, as the case may be, after payment of all
debts and other financial obligations, including any Tax costs associated with
the realization of any assets on a Liquidation and any payments due with respect
to any securities ranking in preference to the Carnival Common Stock or the P&O
Princess Ordinary Shares, as the case may be (each such amount, the "Net
Assets"). To the extent that the Net Assets of the Corporation or P&O Princess
would enable such company to make a Liquidation Distribution to the holders of
Carnival Common Stock or P&O Princess Ordinary Shares, as the case may be, that
is greater (taking into account the Equalization Ratio then in effect) than the
equivalent Liquidation Distribution that the other company could pay from its
Net Assets to the holders of its Ordinary Shares, adjusting such comparative
Liquidation Distribution in accordance with the Equalization Ratio then in
effect and having regard to the Liquidation Exchange Rate, but disregarding any
shareholder Tax (including any withholding Tax required to be deducted by the
company concerned) or Tax Benefit ("Equivalent Liquidation Payments"), then,
subject to subsection (c) below, such company will make a balancing payment (or
take any other action described in subsection (d) below) in such amount as will
ensure that both companies make Equivalent Liquidation Payments; provided that
neither the Corporation nor P&O Princess need make a balancing payment (or take
any other action) as described in this subsection (b) if it would result in
neither the holders of Carnival Common Stock nor the holders of P&O Princess
Ordinary Shares being entitled to receive any Liquidation Distribution at all.

          (c) For purposes of subsection (b) above, any amount a company is
required to pay the other company shall be determined after taking into account
all Taxes payable by, and all Tax credits, losses or deductions of, the
Corporation and P&O Princess with respect to the payment or receipt of such
payment and any such payment may be made on the Equalization Share, if any,
issued by the paying party if both the Board of Directors and the P&O Princess
Board deem it appropriate.

          (d) In giving effect to the principles regarding a Liquidation of the
Corporation and/or P&O Princess described above, the Corporation shall take such
action as may be required to give effect to such principles, which may include:

                    (i)    making a payment (of cash or in specie) to P&O
          Princess in accordance with the provisions of the Equalization
          Agreement;

                    (ii)   issuing shares (which may include the Equalization
          Share) to P&O Princess or to holders of P&O Princess Ordinary Shares
          and making a distribution or return on such shares; or

                                                                              28



                    (iii) taking any other action that the Board of Directors
          and the P&O Princess Board shall both consider appropriate to give
          effect to such principles

provided that any action other than a payment of cash by one company to the
other company shall require the prior approval of both the Board of Directors
and the P&O Princess Board.

                                 ARTICLE XVIII
                                    Domicile

          The domicile of the Corporation shall be in Panama City, Republic of
Panama. However, the Corporation may, as provided for by the Board of Directors,
engage in business and establish branches and keep its files and assets anywhere
in the world. Likewise, the Corporation may change its domicile of incorporation
and continue to exist under the laws or jurisdiction of another country, if
authorized by a resolution of the shareholders of the Corporation or of the
Board of Directors.

                                  ARTICLE XIX
                             Directors and Officers

          The names and addresses of the directors and officers of the
Corporation in office as of the date hereof are as follows:

Name Address Office - ----------------------- ------------------------- ------------------------------------ Micky Arison 3655 N.W. 87 Avenue Director, Chairman of the Board and Miami, Florida 33178 Chief Executive Officer Shari Arison Golda Center Director 23 Shaul Hamelech Blvd. Tel Aviv, Israel 64367 Maks L. Birnbach 580 Fifth Avenue Director New York, New York 10036 Richard G. Capen, Jr. 6077 San Elijo Director Rancho Santa Fe, California 92067 Robert H. Dickinson 3655 N.W. 87 Avenue Director, President and Chief Miami, Florida 33178 Operating Officer - Carnival Cruise Lines Arnold W. Donald 3655 N.W. 87 Avenue Director Miami, Florida 33178
29
Name Address Office - ----------------------- ------------------------- ------------------------------------ James M. Dubin 1285 Avenue of the Director Americas New York, New York 10019 Howard S. Frank 3655 N.W. 87 Avenue Director, Vice Chairman of the Board Miami, Florida 33178 and Chief Operating Officer A. Kirk Lanterman 300 Elliott Avenue West Director, Chairman of the Board and Seattle, Washington 98119 Chief Executive Officer - Holland America Line - Westours Inc. Modesto A. Maidique Florida International Director University Office of the President University Park Campus Miami, Florida 33199 Stuart S. Subotnick 215 East 67th Street Director New York, New York 10021 Sherwood M. Weiser 3250 Mary Street Director Coconut Grove, Florida 33133 Meshulam Zonis 3655 N.W. 87 Avenue Director Miami, Florida 33178 Uzi Zucker 245 Park Avenue Director New York, New York 10167 Richard D. Ames 3655 N.W. 87 Avenue Miami, Florida 33178 Senior Vice President - Audit Services Gerald R. Cahill 3655 N.W. 87 Avenue Senior Vice President Finance and Miami, Florida 33178 Chief Financial Officer Pamela C. Conover 3655 N.W. 87 Avenue President and Chief Operating Officer, Miami, Florida 33178 Cunard Line Limited Kenneth D. Dubbin 3655 N.W. 87 Avenue Miami, Vice President - Corporate Development Florida 33178 Pier L. Foschi 3655 N.W. 87 Avenue Miami, Chairman and Chief Executive Officer - Florida 33178 Costa Crociere S.p.A Ian Gaunt 3655 N.W. 87 Avenue Miami, Senior Vice President - International Florida 33178 Lowell Zemnick 3655 N.W. 87 Avenue Vice President and Treasurer Miami, Florida 33178
30
Name Address Office - ----------------------- ------------------------- -------------------------------------- Arnaldo Perez 3655 N.W. 87 Avenue Senior Vice President, General Counsel Miami, Florida 33178 and Secretary
ARTICLE XX Miscellaneous (a) Ambiguity. In the case of an ambiguity in the application of any of the provisions of these Articles of Incorporation, including any definition contained in Article XXI hereof, the Board of Directors shall have the power to determine the application of the provisions of these Articles of Incorporation with respect to any situation based on the facts known to them. (b) Enforcement. The Corporation is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of these Articles of Incorporation. (c) Non-Waiver. No delay or failure on the part of the Corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the Board of Directors, as the case may be, except to the extent specifically waived in writing. (d) No Trust Business. Notwithstanding anything to the contrary included in these Articles of Incorporation, the creation and continued existence of the Excess Share Trust may not be regarded as constituting the exercise by the Excess Share Trustee of trust business in Panama in violation of the trust laws of Panama. ARTICLE XXI Definitions For purposes of these Articles of Incorporation, except where the context otherwise requires, the following terms shall have the following meanings: "Acting in Concert" shall have the same meaning as it has in the City Code; provided that, notwithstanding anything to the contrary, none of (x) the Arison Group, (y) the Corporation or (z) P&O Princess (each, a "Non-Concert Party"), shall be deemed to be Acting in Concert with any other Non-Concert Party for the purpose of these Articles of Incorporation. "Amendment Date" shall mean _________, 2003. "Applicable Exchange Rate" shall mean, in relation to any proposed Distributions by the Corporation and P&O Princess in relation to which a foreign exchange rate is required, the average of the closing mid-point spot U.S. dollar-sterling exchange rate on the five Business Days ending on the Business Day before the 31 Distribution Determination Date relating to such Distributions (as shown in the London edition of the Financial Times, or such other point of reference as the parties shall agree), or such other spot U.S. dollar-sterling exchange rate or average U.S. dollar-sterling exchange rate as at such other date (or over such other period) before a Distribution Determination Date as the Board of Directors and the P&O Princess Board shall agree, in each case rounded to five decimal places. "Applicable Regulations" shall mean (a) any law, statute, ordinance, regulation, judgment, order, decree, license, permit, directive or requirement of any Governmental Agency having jurisdiction over the Corporation and/or P&O Princess; and (b) the rules, regulations, and guidelines of (i) any stock exchange or other trading market on which any shares or other securities or depositary receipts representing such shares or securities of either the Corporation or P&O Princess are listed, traded or quoted; and (ii) any other body with which entities with securities listed or quoted on such exchanges customarily comply (but, if not having the force of law, only if compliance with such directives, requirements, rules, regulations or guidelines is in accordance with the general practice of persons to whom they are intended to apply), in each case for the time being in force and taking into account all exemptions, waivers or variations from time to time applicable (in particular situations or generally) to the Corporation or, as the case may be, P&O Princess. "Arison Group" shall mean each of Marilyn B. Arison, Micky Arison, Shari Arison, Michael Arison or their spouses or children or lineal descendants of Marilyn B. Arison, Micky Arison, Shari Arison, Michael Arison or their spouses, any trust established by Theodore Arison, any trust established for the benefit of any Arison family member mentioned in this definition, or any "person" (as such term is used in Section 13(d) or 14(d) of the US Securities Exchange Act of 1934, directly or indirectly, controlling, controlled by or under common control with any Arison family member mentioned in this paragraph or any trust established for the benefit of any such Arison family member or any charitable trust or non-profit entity established by a member of the Arison Group but excluding (for the avoidance of doubt) Carnival or P&O Princess or any of their respective Subsidiaries or affiliates. "Articles of Incorporation" shall mean the articles of incorporation of the Corporation, as amended from time to time. "Associated Tax Credit" shall mean, in relation to any Distribution proposed to be made by either the Corporation or P&O Princess, the amount of any imputed or associated Tax credit or rebate or exemption (or the value of any other similar associated Tax Benefit) which would be available to a shareholder receiving or entitled to receive the Distribution, together with the amount of any credit or benefit in respect of any Tax required to be deducted or withheld from the Distribution by or on behalf of the paying company. "Beneficial Ownership" shall mean ownership of Shares by a Person who would be treated as the owner of such Shares directly, indirectly or constructively, as determined for purposes of Section 883(c)(3) of the Code and the regulations 32 promulgated thereunder, and shall include any Shares Beneficially Owned by any other Person who is a "related person" with respect to such Person through the application of Section 267(b) of the Code, as modified in any way for the purposes of Section 883(c)(3) of the Code and the regulations promulgated thereunder. The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have correlative meanings. "Board of Directors" or "Board" shall mean the board of directors of the Corporation (or a duly authorised committee of the board of directors of the Corporation) from time to time. "Business Day" shall mean, for purposes of the definitions of "Applicable Exchange Rate" and "Liquidation Exchange Rate" only, any day other than a Saturday, Sunday or day on which banking institutions in the cities of both New York and London are authorized or obligated by law or executive order to close in the United States or England (or on which such banking institutions are open solely for trading in euros). "By-Laws" shall mean the by-laws of the Corporation, as from time to time amended. "Carnival Common Stock" shall mean issued and outstanding shares of Common Stock from time to time, as the same may be subdivided or consolidated from time to time and any shares of capital stock into which such Common Stock may be reclassified, converted or otherwise changed, excluding the Carnival Special Voting Share and the Carnival Equalization Share and, except with respect to any voting rights and rights on a Liquidation as described in Article V(e), shall include the Disenfranchised Carnival Common Stock. "Carnival Deed Poll Guarantee" shall mean the deed dated as of ________ __, 2003, pursuant to which the Corporation guarantees certain obligations of P&O Princess for the benefit of certain future creditors of P&O Princess, as amended from time to time. "Carnival Entrenched Articles" shall mean section (a) (2), (c), (d) and (e) of Article V, sections (b) and (d) of Article X, Article XIV, Article XV, Article XVI and Article XVII. and the definitions referred to therein. "Carnival Entrenched By-Laws" shall mean the following sections of the By-Laws 2.06, 2.08(b), 2.10, 2.15, 2.16, 2.17, 2.18, 2.19, 2.20, 3.03(a), 3.03(b), 3.07, 3.19, 3.20 and 5.03 and the definitions referred to therein. "Carnival Entrenched Provisions" means the Carnival Entrenched Articles and the Carnival Entrenched By-Laws. "Carnival Special Voting Share" shall mean the special voting share, par value $.01 per share, of the Corporation. 33 "Charitable Beneficiary" shall mean the organization or organizations described in Section 170(c)(2) and 501(c)(3) of the Code selected by the Excess Share Trustee. "City Code" shall mean the United Kingdom City Code on Takeovers and Mergers, as amended from time to time (including any supplemental or replacement Applicable Regulations), and including any actions required, or approved, by any relevant governing or supervisory body with authority in relation to the United Kingdom City Code on Takeovers and Mergers (or any replacement). "Class Rights Action" shall mean the following actions: (1) the voluntary Liquidation of the Corporation or P&O Princess for which the approval of shareholders of the Corporation is required by Applicable Regulations or proposed other than a voluntary Liquidation of both P&O Princess and the Corporation at or about the same time with the purpose or effect of no longer continuing the operation of the businesses of the companies as a combined going concern and not as part of a scheme, plan, transaction or series of related transactions the primary purpose or effect of which is to reconstitute all or a substantial part of such businesses in one or more successor entities; (2) the sale, lease, exchange or other disposition of all or substantially all of the assets of either P&O Princess or the Corporation, other than in a bona fide commercial transaction undertaken for a valid business purpose in which such company receives consideration with a fair market value reasonably equivalent to the assets disposed of and not as part of a scheme, plan, transaction or series of related transactions the primary purpose or effect of which is to collapse or unify the DLC Structure. (3) any adjustment to the Equalization Ratio, otherwise than in accordance with the provisions of the Equalization Agreement; (4) except where specifically provided for in such agreements, any amendment to the terms of, or termination of, the Equalization Agreement, the SVC Special Voting Deed, the Carnival Deed Poll Guarantee or the P&O Princess Deed Poll Guarantee (including, for the avoidance of doubt, the voluntary termination of either Deed Poll Guarantee); (5) any amendment to, removal or alteration of the effect of (which shall include the ratification of or any breach of) any Carnival Entrenched Provision or any P&O Princess Entrenched Provision; (6) any amendment to, removal or alteration of the effect of (which shall include the ratification of any breach of) Article XII or XIII of the Articles of Incorporation that would cause, or at the time of implementation would be reasonably likely to cause, an Exchange Event described in clause (a) of the definition thereof in the P&O Princess Articles to occur; and 34 (7) the doing of anything which the Board of Directors and the P&O Princess Board agree (either in a particular case or generally), in their absolute discretion, should be approved as a Class Rights Action. "Code" shall mean the United States Internal Revenue Code of 1986, as amended from time to time. "Combined Group" means the Corporation, P&O Princess and their respective Subsidiaries. "Combined Group City Code Limit" shall mean, at any time (i) with respect to any person other than a Significant Combined Group Holder (or persons Acting in Concert) such Ordinary Shares (which may include either or both of Carnival Common Stock or P&O Princess Ordinary Shares) representing, in aggregate and after giving effect to the Equalization Ratio, the right to cast 30% of the votes on a Joint Electorate Action from time to time, or (ii) with respect to a Significant Combined Group Holder only, any further Ordinary Shares (which may include either or both of Carnival Common Stock or P&O Princess Ordinary Shares) which increase that person's percentage of votes which could be cast on a Joint Electorate Action from time to time. "Combined Group Excess Share Holder" shall mean the holder of Combined Group Excess Shares as of the date such Carnival Common Stock were designated as Combined Group Excess Shares pursuant to section (c) of Article XIV. "Combined Group Excess Shares" shall mean Carnival Common Stock designated as such pursuant to section (c) of Article XIV. "Combined Group Restricted Shares" shall mean Carnival Common Stock designated as such pursuant to sections (a) or (b) of Article XIV. "Common Stock" shall mean the nominative common stock, par value $.01 per share, of the Corporation. "Corporation" shall mean Carnival Corporation, a corporation organized and existing in accordance with the laws of the Republic of Panama. "Corporation Law" shall mean the Corporation Law of the Republic of Panama. "Disenfranchised Carnival Common Stock" has the meaning given to it in Article V(e). "Distributable Reserves" shall mean, with respect to any Distribution by the Corporation or P&O Princess, the total funds available to such company which it is permitted to use to pay or make such Distribution under Applicable Regulations relating to the Corporation or P&O Princess, as the case may be. 35 "Distribution" shall mean, in relation to the Corporation or P&O Princess, any dividend or other distribution, whether of income or capital, and in whatever form, made by such company or any of its Subsidiaries to the holders of such company's Ordinary Shares by way of pro rata entitlement, excluding any Liquidation Distribution or buy back or repurchase or cancellation of Ordinary Shares. "Distribution Determination Date" shall mean, with respect to any parallel Distributions to be made by the Corporation and P&O Princess, the date on which the Board of Directors and the P&O Princess Board resolve to pay or make such parallel Distributions (or if they resolve on different dates to pay or make such parallel Distributions, the later of those dates). "Equalization Agreement" shall mean the Equalization and Governance Agreement, dated as of ________ __, 200[2][3], between the Corporation and P&O Princess, as the same may be amended or modified from time to time in accordance with its terms. "Equalization Fraction" shall mean, as of any date, the Equalization Ratio as of such date expressed as a fraction where the numerator is one and the denominator is the P&O Princess Equivalent Number comprising the second element of such Equalization Ratio. "Equalization Ratio" shall mean the ratio of (i) one share of Carnival Common Stock to (ii) that number of P&O Princess Ordinary Shares that have the same rights to distributions of income and capital and voting rights as one share of Carnival Common Stock (the "P&O Princess Equivalent Number"). The Equalization Ratio shall initially be 1:3.3289 but if the Corporation and P&O Princess agree to make such subdivisions and/or combinations of Carnival Common Stock and/or P&O Princess Ordinary Shares as are necessary to achieve the result it shall instead be 1:1 and shall be subject to adjustment in the future as provided in accordance with the Equalization Agreement. In all cases, the P&O Princess Equivalent Number shall be rounded to five decimal places. "Equalization Share" shall mean, in relation to the Corporation, any share designated as an Equalization Share in the Corporation from time to time by the Board and, in relation to P&O Princess, the Equalization Share of (Pounds)50,000 in the capital of P&O Princess. "Equalized Distribution Amount" shall mean, in relation to either the Corporation or P&O Princess, the amount of any Distribution proposed to be paid or made by such company at any particular time on its Ordinary Shares, before deduction of any amount in respect of Tax required to be deducted or withheld from such Distribution by or on behalf of such company and excluding the amount of any Associated Tax Credit, all such amounts being expressed in the currency of declaration and on a per share basis. "Equivalent Distribution" shall have the meaning set forth in section (a) of Article XVI. 36 "Equivalent Liquidation Payments" shall have the meaning set forth in section (b) of Article XVII. "Equivalent Resolution" shall mean a resolution of either the Corporation or P&O Princess, certified by a duly authorized officer of the Corporation or P&O Princess as equivalent in nature and effect to a resolution of the other company. "Excess Shares" shall mean Shares resulting from an event described in section (b) of Article XII. "Excess Share Trust" shall mean a trust created pursuant to Article XIII or Article XV hereof, as applicable. "Excess Share Trustee" shall mean a Person, who shall be unaffiliated with the Corporation, any Purported Beneficial Transferee, any Purported Record Transferee and any Combined Group Excess Share Holder, appointed by the Board of Directors as the trustee of the Excess Share Trust. "Existing Holders" shall mean (i) any member of the group of Persons that jointly filed the Schedule 13D with the United States Securities and Exchange Commission on November 22, 1999, with respect to the beneficial ownership of shares of Carnival Common Stock and (ii) any Permitted Transferee. "Governmental Agency" shall mean a court of competent jurisdiction or any government or governmental, regulatory, self regulatory or administrative authority, agency, commission, body or other governmental entity and shall include without limitation any relevant competition authorities, the UK Panel on Takeovers and Mergers, the London Stock Exchange, the UK Listing Authority, the U.S. Securities and Exchange Commission and the New York Stock Exchange. "Joint Electorate Action" shall have the meaning set forth in the Corporation's By-Laws. "Liquidation" shall mean, with respect to the Corporation or P&O Princess, any liquidation, winding up, receivership, dissolution, insolvency or equivalent proceedings pursuant to which the assets of such company will be liquidated and distributed to creditors and other holders of provable claims against such company. "Liquidation Distribution" shall mean, in relation to the Corporation or P&O Princess, any dividend or other distribution per Carnival Common Stock or P&O Princess Ordinary Share, respectively, whether of income or capital and in whatever form, made or to be made by such company or any of its Subsidiaries to the holders of Carnival Common Stock or P&O Princess Ordinary Shares, as the case may be, by way of pro rata entitlement in connection with the Liquidation of such company. "Liquidation Exchange Rate" shall mean, as at any date, the average of the closing mid-point spot U.S. dollar-U.K. pound sterling exchange rate on the five Business 37 Days ending on the Business Day before such date (as shown in the London Edition of the Financial Times), or such other U.S. dollar-U.K. pound sterling exchange rate as the Board of Directors and the P&O Princess Board or the P&O Princess Board and the liquidators of Carnival or the Board of Directors and the liquidators of P&O Princess or the liquidators of both P&O Princess and Carnival Corporation, as the case may be, may determine, in each case rounded to five decimal places. "Majority Resolution" means a resolution duly approved at a meeting of the Corporation's shareholders by the affirmative vote of a majority of all the votes cast on such resolution by all Shareholders of the Corporation entitled to vote thereon (including, where applicable, the Carnival SVC) who are present in person or by proxy at such meeting. "Mandatory Exchange" shall have the meaning set forth in the P&O Princess Articles. "Market Price" of any class of Shares on any date shall mean the average of the daily closing prices for any such class of Shares for the five (5) consecutive trading days ending on such date, or if such date is not a trading date, the five consecutive trading days preceding such date. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to any class of Shares listed or admitted to trading on the New York Stock Exchange, or if such class of Shares are not listed or admitted to trading on the New York Stock Exchange, on the principal national securities exchange on which such class of Shares are listed or admitted to trading, or if such class of Shares are not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over the counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use, or if such class of Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such class of Shares selected by the Board of Directors. "Ordinary Shares" shall mean the Carnival Common Stock and/or the P&O Princess Ordinary Shares, as the context requires. "Other Voting Shares" shall mean, with respect to any resolution to be acted on by the shareholders of the Corporation or P&O Princess, as the case may be, such shares of capital stock of that company that are entitled to vote on such resolution at a meeting of the shareholders of such company, other than the Carnival Special Voting Share, the P&O Princess Special Voting Share and the Ordinary Shares. "Ownership Limit" shall mean, in the case of a Person other than an Existing Holder, Beneficial Ownership of more than four and nine tenths percent (4.9%), by value, vote or number, of any class of Shares. The Ownership Limit shall not apply to 38 any Existing Holder or to any class of Shares exempted in accordance with the provisions of section (g) of Article XII. "P&O Princess" shall mean P&O Princess Cruises plc, a public limited company incorporated in England and Wales. "P&O Princess Articles" shall mean the articles of association of P&O Princess, as amended from time to time. "P&O Princess Board" shall mean the Board of Directors of P&O Princess (or a duly authorized committee of the board of directors of P&O Princess) from time to time. "P&O Princess Equivalent Number" shall have the meaning given to such term in the definition of "Equalization Ratio." "P&O Princess Group" means P&O Princess and its Subsidiaries from time to time, and a member of the P&O Princess Group means any one of them. "P&O Princess Ordinary Shares" shall have the meaning given to it in the P&O Princess Articles. "P&O Princess Special Voting Share" shall mean the special voting share of [(Pounds)1] in P&O Princess. "Parallel Shareholder Meeting" shall have the same meaning as it has in the By-Laws. "Permitted Transfer" shall mean a Transfer by an Existing Holder to any Person which does not result in the Corporation losing its exemption from taxation on gross income derived from the international operation of a ship or ships within the meaning of Section 883 of the Code. Any such transferee is herein referred to as a "Permitted Transferee." "Person" shall mean a person as defined by Section 7701(a) of the Code. "Preferred Stock" shall mean preferred stock, par value $.01 share, of the Corporation. "Purported Beneficial Holder" shall mean, with respect to any event (other than a purported Transfer, but including holding Shares in excess of the Ownership Limitation on the Amendment Date) which results in Excess Shares, the Person for whom the Purported Record Holder held Shares that, pursuant to section (b) of Article XII, became Excess Shares upon the occurrence of such event. "Purported Beneficial Transferee" shall mean, with respect to any purported Transfer which results in Excess Shares, the purported beneficial transferee for 39 whom the Purported Record Transferee would have acquired Shares if such Transfer had been valid under section (a) of Article XII. "Purported Record Holder" shall mean, with respect to any event (other than a purported Transfer, but including holding Shares in excess of the Ownership Limitation on the Amendment Date) which results in Excess Shares, the record holder of the Shares that, pursuant to section (b) of Article XII, became Excess Shares upon the occurrence of such event. "Purported Record Transferee" shall mean, with respect to any purported Transfer which results in Excess Shares, the record holder of the Shares if such Transfer had been valid under section (a) of Article XII. "Qualifying Acquisition" shall mean an acquisition of Ordinary Shares consummated pursuant to a Qualifying Takeover Offer. "Qualifying Takeover Offer" shall mean an offer or offers to acquire Carnival Common Stock and P&O Princess Ordinary Shares (i) which are made in accordance with the City Code to the extent that the City Code applies to the Combined Group, and (ii) which (provided that compliance with the following is not inconsistent with the City Code): (a) are made to all holders of Carnival Common Stock and P&O Princess Ordinary Shares; or (b) are undertaken with respect to the Carnival Common Stock and P&O Princess Ordinary Shares at or about the same time; and (c) comply with all Applicable Regulations and these Articles of Incorporation and the P&O Princess Articles; and (d) each of the Board of Directors and the P&O Princess Board determines are equivalent to the holders of Carnival Common Stock, on the one hand, and the holders of P&O Princess Ordinary Shares, on the other hand, with respect to: (1) the consideration offered for such shares (taking into account exchange rates and any difference in the share price of P&O Princess Ordinary Shares and Carnival Common Stock determined by the Board of Directors and the P&O Princess Board in their sole discretion to be appropriate and taking into account the Equalization Ratio); (2) the information provided to such holders; (3) the time available to such holders to consider such offer (4) the conditions to which the offers are subject; and 40 (5) such other terms of the offers which the Board of Directors and the P&O Princess Board shall determine are relevant. "Restriction Termination Date" shall mean such date as may be determined by the Board of Directors in its sole discretion (and for any reason) as the date on which the ownership and transfer restrictions set forth in Articles XII and XIII should cease to apply. "Section 883 Amendment Date" means August 2, 2002. "Shares" shall mean shares of the Corporation of any class or classes traded on an established securities market as may be authorized and issued from time to time pursuant to Article V. "Significant Combined Group Holder" shall mean any person who, whether solely or together with any party or parties Acting in Concert with such person, after complying with the provisions of Articles XIV and XV, holds or exercises voting control over Ordinary Shares (which may include either or both of P&O Princess Ordinary Shares or Carnival Common Stock) representing, in aggregate and after giving effect to the Equalization Ratio, the right to cast not less than thirty percent (30%) and not more than fifty percent (50%) of the votes on a Joint Electorate Action from time to time. "Subsidiary" shall mean with respect to the Corporation or P&O Princess, any entity, whether incorporated or unincorporated, in which such company owns, directly or indirectly, a majority of the securities or other ownership interests having by their terms ordinary voting power to elect a majority of the directors or other persons performing similar functions, or the management and policies of which such party otherwise has the power to direct. "Supermajority Resolution" means a resolution required by Applicable Regulations, these Articles of Incorporation or the By-Laws, as relevant, to be approved by a higher percentage of votes cast than required under a Majority Resolution, or where the percentage of votes in favour and against the resolution is required to be calculated by a different mechanism to that required by a Majority Resolution. "SVC Owner" means ________________________ or such other trust company as shall be agreed between the Corporation and P&O Princess. "SVC Special Voting Deed" means the SVC Special Voting Deed, dated as of ________, 2003, by and among the Corporation, Carnival SVC Limited, P&O Princess, P&O Princess SVC Limited, and _________. "Tax" shall mean any taxes, levies, imposts, deductions, charges, withholdings or duties levied by any authority (including stamp and transaction duties) (together with any related interest, penalties, fines and expenses in connection with them). 41 "Tax Benefit" shall mean any credit, rebate, exemption or benefit in respect of Tax available to any person. "Transfer" shall mean any sale, transfer, gift, hypothecation, pledge, assignment, devise or other disposition of Shares (including (i) the granting of any option or interest similar to an option (including an option to acquire an option or any series of such options) or entering into any agreement for the sale, transfer or other disposition of Shares or (ii) the sale, transfer, assignment or other disposition of any securities or rights convertible into or exchangeable for Shares), whether voluntary or involuntary, whether of record, constructively or beneficially and whether by operation of law or otherwise. For purposes of this definition, whether securities or rights are convertible or exchangeable for Shares shall be determined in accordance with Sections 267(b) and 883 of the Code. In witness whereof, the undersigned have executed the Third Amended and Restated Articles of Incorporation of Carnival Corporation this ___ day of __________, 2003. _________________________________________ _________________________________ By: Micky Arison By: Arnaldo Perez Title: Chairman of the Board of Directors Title: Secretary and Chief Executive Officer 42


                                                                 [Proposed Form]

                          AMENDED AND RESTATED BY-LAWS

                                       OF

                              CARNIVAL CORPORATION

                                    ARTICLE I
                                     Offices

               Section 1.1 Offices. The Corporation may have and maintain an
office or offices at such places within or without the Republic of Panama as the
Board of Directors may from time to time determine or the business of the
Corporation requires.

                                   ARTICLE II

                            Meetings of Shareholders

               Section 2.1 Place of Meeting. Every meeting of the Shareholders
the Corporation shall be held at the office of the Corporation or at such place
or places within or outside the Republic of Panama as shall be specified or
fixed in the notice of such meeting or in the waiver of notice thereof.

               Section 2.2 Annual Meeting. The Annual Meeting of the
Shareholders shall be held annually at such hour and on such business day in
March or April as may be determined by the Board of Directors and designated in
the notice of meeting. At such Annual Meeting, the Shareholders then entitled to
vote shall elect directors and shall transact such other business as may
properly be brought before the meeting.

               Section 2.3 Deferred Meeting for Election of Directors, Etc. If
the Annual Meeting for the election of directors and the transaction of other
business is not held within the months specified in Section 2.2, the Board shall
call a meeting of Shareholders for the election of directors and the transaction
of other business as soon thereafter as convenient.

               Section 2.4 Special Meetings. A Special Meeting of Shareholders
(other than special meting for the election of directors), unless otherwise
prescribed by statute, may be called at any time by the Board or by the
President or by the Secretary. At any Special Meeting of Shareholders only such
business may be transacted as is related to the purpose or purposes of such
meeting set forth in the notice thereof or in any waiver of notice thereof.

               Section 2.5 Notice of Meetings. Except as provided in Section
6.2, written notice of all meetings of Shareholders stating the purpose or
purposes for which the meeting is called, including whether the resolution
relates to a Joint Electorate Action or a Class Rights Action, the name of the
person or persons at whose direction the notice



is being given, and the date, time and place where it is to be held, shall be
given, personally or by mail, at least ten (10) but not more than sixty (60)
days before such meeting, to each Shareholder of record entitled to vote at such
meeting and to each member of the Board of Directors. If mailed, such notice
shall be deemed to be given when deposited in the United States mail, with
postage prepaid directed to the Shareholder at his address as it appears on the
records of the Corporation. An affidavit of the Secretary or an Assistant
Secretary or of the transfer agent of the Corporation that the notice required
by this Section 2.5 has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. When a meeting is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken, and at the adjourned meeting any business may be transacted that might
have been transacted at the meeting as originally called. If, however, the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each Shareholder of record entitled to vote at the
meeting.

               Section 2.6 Notice with Respect to Joint Electorate Action or
Class Rights Action. If the Corporation proposes to undertake a Joint Electorate
Action or Class Rights Action, the Corporation shall immediately give notice to
P&O Princess of the nature of the Joint Electorate Action or the Class Rights
Action it proposes to take. Unless such action is proposed to be taken at the
Annual Meeting of Shareholders, the Board of Directors shall convene a Special
Meeting for the purpose of considering a resolution to approve the Joint
Electorate Action or Class Rights Action. Such meeting shall be held as close in
time as practicable with the Parallel Shareholder Meeting convened by P&O
Princess for purposes of considering such Joint Electorate Action or Class
Rights Action.

                       (a) The Corporation shall cooperate fully with P&O
Princess in preparing resolutions, explanatory memoranda or any other
information or material required in connection with the proposed Joint
Electorate Action or Class Rights Action.

               Section 2.7 Quorum, Manner of Acting and Adjournment.

                       (a) The presence in person or by proxy at any meeting of
Shareholders holding at least one-third of the total votes entitled to be cast
shall constitute a quorum for the transaction of business at such meeting except
as otherwise required by Applicable Regulation, the Articles of Incorporation or
these By-Laws. When a quorum is once present to organize a meeting of
Shareholders, it is not broken by the subsequent withdrawal of any Shareholders.
The holders of a majority of the shares of stock present in person or
represented by proxy at any meeting of Shareholders, including an adjourned
meeting, whether or not a quorum is present, may adjourn such meeting to another
time and place. The Secretary shall give notice to P&O Princess as soon as
possible of an adjournment and of the business to be transacted at an adjourned
meeting.

                       (b) When a quorum for the transaction of business is
present at any meeting, a Majority Resolution shall decide such question brought
before such

                                       2



meeting, unless the question is one upon which, by express provision of
Applicable Regulation, the Articles of Incorporation or as provided in these
By-Laws, a Supermajority Resolution is required, in which case such express
provision shall govern the decision of such question. Shareholders present in
person or by proxy at a duly convened meeting can continue to transact business
until adjournment, notwithstanding withdrawal of Shareholders so as to leave
fewer than a quorum present.

               Section 2.8 Quorum for Joint Electorate Actions and Class Rights
Actions.

                       (a) For purposes of determining whether a quorum exists
at any meeting of Shareholders where a Joint Electorate Action or a Class Rights
Action is to be considered:

                           (i)   if the meeting of Shareholders convenes before
the Parallel Shareholder Meeting of P&O Princess, the Carnival Special Voting
Share shall, at the commencement of the meeting, have no votes and therefore
shall not be counted for purposes of determining the total number of shares
entitled to vote at such meeting or whether a quorum exists at such meeting,
although the Carnival Special Voting Share itself must be present, either in
person (through a representative of Carnival SVC) or by proxy;

                           (ii)  if the meeting of the Shareholders convenes at
substantially the same time as or after the Parallel Shareholder Meeting of P&O
Princess with respect to one or more Joint Electorate Actions, the Carnival
Special Voting Share will have the maximum number of votes attached to it as
were cast on such Joint Electorate Actions, either for, against or abstained, at
the Parallel Shareholder Meeting of P&O Princess, and such maximum number of
votes (including abstentions) shall constitute shares entitled to vote and
present for purposes of determining whether a quorum exists at such meeting; and

                           (iii) if the meeting of Shareholders convenes at
substantially the same time as or after the Parallel Shareholder Meeting of P&O
Princess with respect to a Class Rights Action, the Carnival Special Voting
Share shall, at the commencement of the meeting, have no votes and therefore
shall not be counted for purposes of determining the total number of shares
entitled to vote at such meeting or whether a quorum exists at such meeting,
although the Carnival Special Voting Share itself must be present, either in
person (through a representative of Carnival SVC) or by proxy.

                       (b) Notwithstanding the foregoing, in order for a quorum
to be validly constituted with respect to meetings of Shareholders convened to
consider a Joint Electorate Action or Class Rights Action, Carnival SVC must be
present at such meeting.

               Section 2.9 Organization. At every meeting of Shareholders, the
Chairman of the Board, if there be one, or in the case of vacancy in the office
or absence of the Chairman of the Board, one of the following persons present in
the order stated:

                                       3



the vice chairman of the Board, if there be one or in their order of rank or
seniority if there be more than one, the Chief Executive Officer, the President,
the vice presidents in their order of rank or seniority, a chairman designated
by those members of the Board of Directors present at the meeting or a chairman
chosen by Shareholders shall act as chairman, and the Secretary, or in his
absence, an assistant secretary, or in the absence of the Secretary and
assistant secretaries, a person appointed by the Chairman, shall act as
secretary.

               Section 2.10 Voting by Ballot. Any resolution to be considered at
a meeting of Shareholders in relation to which the Carnival SVC is or may be
entitled to vote shall be decided by ballot. The ballot shall be kept open for
such time as to allow the Parallel Shareholder Meeting of P&O Princess to be
held and for the votes attaching to the Carnival Special Voting Share to be
calculated and cast on such ballot, although such ballot may be closed earlier
in respect of shares of other classes. The chairman of the meeting shall direct
the procedures for voting by ballot.

               Section 2.11 Voting by Proxy. Each Shareholder entitled to vote
at a meeting of Shareholders may authorize any person to act for him by proxy. A
proxy deposited by Carnival SVC will be valid if it is received by or delivered
to the chairman of the meeting before the close of the ballot to which it
relates. To be valid, a proxy must comply in form and substance with all
applicable provisions of Panamanian law.

               Section 2.12 [Intentionally left blank]

               Section 2.13 List of Shareholders. The Secretary shall prepare
and make, or cause to be prepared and made, at least ten days before every
meeting of Shareholders, a complete list of Shareholders, entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
Shareholder and the number of shares registered in the name of each Shareholder.
Such list shall be open to the examination of any Shareholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Shareholder who is
present.

               Section 2.14 Inspectors of Election.

                       (a)  In advance of any meeting of Shareholders, the Board
of Directors may appoint inspectors of election, who need not be Shareholders,
to act at such meeting or any adjournment thereof. If inspectors of election are
not so appointed, the person presiding at any such meeting may, and on the
request of any Shareholder entitled to vote at the meeting and before voting
begins shall, appoint inspectors of election. In case any absence of the
Chairman of the Board and the President, the persons designated pursuant to
Section 2.9 shall act as chairman and secretary of the meeting.

                                       4



                       (b)  On request of the person presiding at the meeting or
any Shareholder entitled to vote thereat, the inspectors shall make a report in
writing of any challenge or question or matter determined by them, and execute a
sworn certificate of any fact found by them. Any such report or certificate
shall be prima facie evidence of the facts stated and on the vote as certified
by him or them.

               Section 2.15 Actions for Shareholder Approval.

                       (a)  All actions to be approved by the holders of
Carnival Common Stock shall be Joint Electorate Actions, Class Rights Actions or
Procedural Resolutions.

                       (b)  No resolution with respect to a Joint Electorate
Action or a Class Rights Action shall be approved unless the Parallel
Shareholder Meeting of P&O Princess is validly held and a vote of the holders of
P&O Princess Ordinary Shares is held on an Equivalent Resolution.

               Section 2.16 Joint Electorate Actions. All actions put to the
holders of Carnival Common Stock or P&O Princess Ordinary Shares, except for
Class Rights Actions and Procedural Resolutions, shall constitute Joint
Electorate Actions. For the avoidance of doubt, the following actions, if put to
the holders of Carnival Common Stock or P&O Princess Ordinary Shares, shall
constitute Joint Electorate Actions:

                       (a)  the appointment, removal or re-election of any
director of the Corporation or P&O Princess, or both of them;

                       (b)  to the extent such receipt or adoption is required
by Applicable Regulations, the receipt or adoption of the Corporation's or P&O
Princess' financial statements, or both of them, or accounts prepared on a
combined basis, other than any accounts in respect of the period(s) ended prior
to the date of the Equalization Agreement;

                       (c)  a change of name of either the Corporation, P&O
Princess, or both of them; and

                       (d)  the appointment or removal of the auditors of the
Corporation or P&O Princess, or both of them.

               Section 2.17 Procedure for Approval of Joint Electorate Actions.

                       (a)  If the Corporation proposes to take any Joint
Electorate Action, such action shall require approval by Majority Resolution (or
if Applicable Regulations, the Articles of Incorporation or these By-Laws
require the action to be approved by a Supermajority Resolution, by the vote
required thereby) of the holders of Carnival Common Stock, holders of the
Corporation's Other Voting Shares and the Carnival SVC, voting together as a
single class by ballot.

                                       5



                       (b)  No resolution will be approved with respect to a
Joint Electorate Action unless at least one-third of the total votes entitled to
be cast by (i) the holders of Carnival Common Stock, and (ii) the Carnival SVC
(assuming for purposes of this calculation only that all holders of issued and
outstanding P&O Princess Ordinary Shares voted at the Parallel Shareholder
Meeting of P&O Princess) are cast on the resolution proposing such Joint
Electorate Action.

                       (c)  If P&O Princess proposes to take any Joint
Electorate Action, the Corporation shall convene a Special Meeting, unless such
action is proposed for an Annual Meeting, as close in time as practicable to
such P&O Princess shareholders meeting to consider such action and shall propose
a resolution which is an Equivalent Resolution to the proposed P&O Princess
resolution with respect to such Joint Electorate Action. Such Equivalent
Resolution shall be proposed as a Majority Resolution, unless Applicable
Regulations, the Articles of Incorporation or these By-Laws require the Joint
Electorate Action to be approved by a Supermajority Resolution.

                       (d)  In relation to a resolution of the Corporation to
approve a Joint Electorate Action at any meeting of Shareholders, the Carnival
Special Voting Share shall carry:

                            (i)   such number of votes in favour of the
resolution as were cast in favour of the Equivalent Resolution at the Parallel
Shareholder Meeting of P&O Princess by holders of P&O Princess Ordinary Shares
and Other Voting Shares of P&O Princess;

                            (ii)  such number of votes against the resolution as
were cast against the Equivalent Resolution at the Parallel Shareholder Meeting
of P&O Princess by holders of P&O Princess Ordinary Shares and Other Voting
Shares of P&O Princess; and

                            (iii) such number of abstentions as were recorded as
abstentions from the Equivalent Resolution at the Parallel Shareholder Meeting
of P&O Princess by holders of P&O Princess Ordinary Shares and Other Voting
Shares of P&O Princess;

in each case, multiplied by the Equalization Fraction in effect at the time such
meeting of the Shareholders is held and in each case rounded up to the nearest
whole number, such votes to be cast by the holder of the Carnival Special Voting
Share in accordance with the above provisions.

               Section 2.18 Class Rights Action. The following actions
constitute Class Rights Actions:

                       (a)  the voluntary Liquidation of the Corporation or P&O
Princess for which the approval of shareholders of the Corporation is required
by Applicable Regulations or proposed other than a voluntary Liquidation of both
P&O Princess and the Corporation at or about the same time with the purpose or
effect of no longer continuing the operation of the businesses of the companies
as a combined going

                                       6



concern and not as part of a scheme, plan, transaction, or series of related
transactions the primary purpose or effect of which is to reconstitute all or a
substantial part of such businesses in one or more successor entities;

                       (b)  the sale, lease, exchange or other disposition of
all or substantially all of the assets of either P&O Princess or the
Corporation, other than in a bona fide commercial transaction undertaken for a
valid business purpose in which such company receives consideration with a fair
market value reasonably equivalent to the assets disposed of and not as a part
of a scheme, plan, transaction or series of related transactions the primary
purpose of which is to collapse or unify the DLC Structure;

                       (c)  any adjustment to the Equalization Ratio, otherwise
than in accordance with the provisions of the Equalization Agreement;

                       (d)  except where specifically provided for in such
agreements, any amendment to the terms of, or termination of, the Equalization
Agreement, the SVC Special Voting Deed, the Carnival Deed Poll Guarantee or the
P&O Princess Deed Poll Guarantee (including, for the avoidance of doubt, the
voluntary termination of either Deed Poll Guarantee);

                       (e)  any amendment to, removal or alteration of the
effect of (which shall include the ratification of any breach of any Carnival
Entrenched Provision or any P&O Princess Entrenched Provision;

                       (f)  any amendment to, removal or alteration of the
effect of (which shall include the ratification of any breach of) Article XII or
XIII of the Articles of Incorporation that would cause, or at the time of
implementation would be reasonably likely to cause, an Exchange Event described
in clause (a) of the definition of such term in the P&O Princess Articles of
Association to occur; and

                       (g)  the doing of anything which the Board of Directors
and the P&O Princess Board agree (either in a particular case or generally), in
their absolute discretion, should be approved as a Class Rights Action.

Notwithstanding anything in these By-Laws to the contrary, none of the foregoing
actions may be taken by the Corporation unless it has been approved as a Class
Rights Action in accordance with Section 2.19.

               Section 2.19 Procedure for Approval of Class Rights Actions.

                       (a)  If the Corporation proposes to take any Class Rights
Action, such action shall require approval by a Majority Resolution (or, if
Applicable Regulations, the Articles of Incorporation or these By-Laws require
the action to be approved by a Supermajority Resolution, by the vote required
thereby) of holders of Carnival Common Stock, holders of Other Voting Shares of
the Corporation, and the Carnival SVC, voting together as a single class by
ballot.

                                       7



                       (b)  If the proposed Class Rights Action is approved by
the requisite vote (as determined in accordance with the P&O Princess Memorandum
and Articles) of the holders of P&O Princess Ordinary Shares and Other Voting
Shares of P&O Princess entitled to vote thereon at the Parallel Shareholder
Meeting of P&O Princess, the Carnival Special Voting Share shall have no votes
with respect to such proposed Class Rights Action. If the proposed Class Rights
Action is not approved by the requisite vote (as determined in accordance with
the P&O Princess Memorandum and Articles) of the holders of P&O Princess
Ordinary Shares and Other Voting Shares of P&O Princess, entitled to vote
thereon at the Parallel Shareholder Meeting of P&O Princess, the Carnival
Special Voting Share shall:

                            (i)   if the resolution needs to be passed by a
Majority Resolution, then the Carnival Special Voting Share shall vote to cast
such number of votes representing the largest whole percentage that is less than
the percentage of the number of votes as would be necessary to defeat a Majority
Resolution if the total votes capable of being cast by the outstanding Carnival
Common Stock and Other Voting Shares of Carnival that are entitled to vote
pursuant to Applicable Regulations and/or the Carnival Articles and By-Laws
(including the Carnival Special Voting Share) were cast in favour of the
resolution at the Carnival Special Meeting; and

                            (ii)  if the resolution needs to be passed by a
Supermajority Resolution, then the Carnival Special Voting Share shall vote to
cast such number of votes representing the largest whole percentage that is less
than the percentage of the number of votes as would be necessary to defeat a
Supermajority Resolution if the total votes capable of being cast by the
outstanding Carnival Common Stock and Other Voting Shares of Carnival that are
entitled to vote pursuant to Applicable Regulations and/or the Carnival Articles
and By-Laws (including the Carnival Special Voting Share) were cast in favour of
the resolution at the Carnival Special Meeting.

                       (c)  If P&O Princess proposes to take any Class Rights
Action, the Corporation shall convene a Special Meeting, unless such action is
proposed for an Annual Meeting, as close in time as practicable to the P&O
Princess shareholders meeting at which the P&O Princess resolution in respect of
such Class Rights Action is to be proposed, and shall propose an Equivalent
Resolution. Such Equivalent Resolution shall be proposed as a Majority
Resolution, unless Applicable Regulations, the Articles of Incorporation or
these By-Laws require the Class Rights Action to be approved by a Supermajority
Resolution.

               Section 2.20 Procedural Resolutions. The Carnival Special Voting
Share shall have no right to vote on any resolution of a procedural or technical
nature, which does not adversely affect the shareholders of P&O Princess in any
material respect, put to the Shareholders at a meeting ("Procedural
Resolutions"), nor shall notice of such meeting to Shareholders be required to
include reference to these matters. The Chairman of the Board will, in his
absolute discretion, determine whether a resolution is a Procedural Resolution.
Subject to the foregoing and without limitation, to the extent that such matters
require the approval of Shareholders, any of the following shall be Procedural
Resolutions:

                                       8



                       (a)  that certain people be allowed to attend or be
excluded from attending the meeting;

                       (b)  that discussion be closed and the question put to
the vote (provided no amendments have been raised);

                       (c)  that the question under discussion not be put to the
vote (where a shareholder feels the original motion should not be put to the
meeting at all, if such original motion was brought during the course of that
meeting);

                       (d)  to proceed with matters in an order other than that
set out in the notice of the meeting;

                       (e)  to adjourn the debate (for example, to a subsequent
meeting); and

                       (f)  to adjourn the meeting.

               Section 2.21 Cumulative Voting. Cumulative voting for directors
shall not be permitted.

                                   ARTICLE III
                               Board of Directors

               Section 3.1  Powers. All powers of the Corporation, except those
specifically reserved or granted to Shareholders by Applicable Regulation, the
Articles of Incorporation or these By-Laws, are hereby granted to and vested in
the Board of Directors; all such powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be managed
by, the Board of Directors.

               Section 3.2  Number and Term of Office.

                       (a)  The Board of Directors shall consist of no less than
three (3) nor more than twenty-five (25) members. Directors need not be
Shareholders. Each director shall hold office until his successor is elected and
qualified or until his earlier death, resignation or removal.

                       (b)  The Board of Directors shall consist of the
identical individuals that constitute the P&O Princess Board.

               Section 3.3  Eligibility for Election, Effectiveness of
Appointment, Reciprocal Appointment.

                       (a)  No person shall be a director of the Corporation
unless they are also a director of P&O Princess. The appointment of a person as
a director of the Corporation shall only take effect at the same time as that
person's appointment as a director of P&O Princess takes effect.

                                       9



                       (b)  If a person is appointed as a director of P&O
Princess by the P&O Princess Board in accordance with the P&O Princess
Memorandum and Articles, the Board of Directors shall also appoint that person
as a director of the Corporation.

               Section 3.4  Vacancies. Vacancies on the Board of Directors shall
be filled by a majority of the directors then in office, even though less than a
quorum, provided that any such person is appointed to both the Board of
Directors and P&O Princess Board at the same time. If only one director remains
in office, this director shall have the power to fill all vacancies. If there
are no directors, the Secretary may call a meeting at the request of any two
shareholders of the Corporation for the purpose of appointing one or more
directors.

               Section 3.5  Resignation of Directors. Any director of the
Corporation may resign at any time by written notice to the Corporation. Such
director must, concurrently with his or her resignation as director of the
Corporation, also resign as director of P&O Princess. Such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein, but in all events, only concurrently with the effectiveness
of the director's resignation from the P&O Princess Board, and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

               Section 3.6  Removal of Directors. Subject to the provisions of
the Corporation Law, any or all of the directors may be removed with or without
cause only a majority vote of a quorum of the Shareholders.

               Section 3.7  Disqualification of Directors. A director shall be
disqualified from continuing to serve on the Board of Directors if (i) he ceases
to be a director by virtue of any provisions of Applicable Regulation, the
Articles of Incorporation or these By-Laws; (ii) he resigns from office by
giving written notice to the Corporation or, having been appointed for a fixed
term, the term expires or his office as a director is vacated pursuant to
Section 3.6; or (iii) he ceases to be a director of P&O Princess.

               Section 3.8  Organization. At every meeting of the Board of
Directors, the Chairman of the Board, if there be one, or, in the case of a
vacancy in the office or absence of the Chairman of the Board, one of the
following officers present in the order stated: the vice chairman of the Board
of Directors, if there be one or in their order of rank and seniority if more
than one, the Chief Executive Officer, the President, the vice presidents in
their order of rank and seniority, or a chairman chosen by a majority of the
directors present, shall preside, and the Secretary, or, in his absence, an
assistant secretary, or in the absence of the Secretary and the assistant
secretaries, any person appointed by the chairman of the meeting shall act as
secretary.

               Section 3.9  Place of Meeting. The Board of Directors may hold
its meetings, both regular and special, at such place or places within or
outside the Republic

                                       10



of Panama as the Board of Directors may from time to time appoint, or as may be
designated in the notice calling the meeting.

               Section 3.10 Annual Meetings. On the day when and at the place
where the Annual Meeting of Shareholders is held, and as soon as practicable
thereafter, the Board of Directors may hold its annual meeting, for the purposes
of organization, the election of officers and the transaction of other business.
Such annual meeting may be held at any other time and place specified in a
notice given as provided in Section 3.11 or in a waiver of notice thereof.

               Section 3.11 Regular Meetings. Unless otherwise required by the
Board of Directors, regular meetings of the Board of Directors may be held
without notice at such time and place as shall be designated from time to time
by resolution of the Board of Directors. At such meetings, the directors may
transact such business as may properly be brought before the meeting. If any day
fixed for a regular meeting of the Board shall be a Saturday or Sunday or a
legal holiday at the place where such meeting is to be held, then such meeting
shall be held at the same hour at the same place on the first business day
thereafter which is not a Saturday, Sunday or legal holiday.

               Section 3.12 Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board, the
President or the Secretary or by two or more directors. Notice of each such
meeting shall be given to each director by telephone or in writing at least 24
hours (in the case of notice by telephone) or 48 hours (in the case of notice by
electronic mail or facsimile) or 10 days (in the case of notice by mail) before
the time at which the meeting is to be held. Each such notice shall state the
time and place of the meeting but need not state the purpose or purposes of the
meeting. If mailed, each notice shall be deemed given when deposited, with
postage thereon prepaid, in a post office or official depository under the
exclusive care and custody of the United States post office department. Such
mailing shall be by first class mail.

               Section 3.13 Voting by Proxy. Each director may authorize another
director to act for him by proxy at meetings of the Board of Directors, at
meetings of committees of the Board of Directors of which he is a member and in
giving a written consent in lieu of meetings of the Board of Directors and such
committees on behalf of his appointor. A proxy to a director shall be given in
an instrument in writing including a facsimile or similar communication method
and shall be produced to the first meeting at which it is used or otherwise
delivered to the Secretary of the Corporation. A proxy shall be conclusive
evidence of its validity until notice of revocation of such proxy in writing
including a facsimile or similar method of communication has been delivered to
the Secretary of the Corporation.

               Section 3.14 Quorum, Manner of Acting, Adjournment and Action
without Meeting.

                       (a)  At all meetings of the Board of Directors the
presence, in person or by proxy, of one-third of the total number of directors
shall constitute a quorum

                                       11



for the transaction of business except as may be otherwise specifically provided
by Applicable Regulation, the Articles of Incorporation or these By-Laws. The
act of a simple majority of the directors present in person or by proxy at any
meeting at which there is a quorum shall be the act of the Board of Directors,
except as may be otherwise specifically provided by Applicable Regulation, the
Articles of Incorporation or these By-Laws. A majority of the directors present
at any meeting of the Board, including an adjourned meeting, whether or not a
quorum is present, may adjourn such meeting to another time and place. Notice of
any adjourned meeting of the Board need not be given to any director whether or
not present at the time of the adjournment. Any business may be transacted at
any adjourned meeting that might have been transacted at the meeting as
originally called.

                       (b)  Any person who is himself a director and acting as a
proxy for any other director shall be entitled to have one vote for each
capacity in which he so acts (in addition to any vote he may have as a
director).

                       (c)  Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be taken without
a meeting, if all of the members of the Board of Directors or committee (or
other proxies) consent thereto in writing, and the writings are filed with the
minutes of proceedings of the Board of Directors or committee.

               Section 3.15 Conference Telephone Meetings. One or more directors
may participate in a meeting of the Board of Directors, or of a committee of the
Board of Directors, by means of conference telephone or similar communications
equipment by means of which all persons can hear each other. Participation in a
meeting pursuant to this Section shall constitute presence in person at such
meeting.

               Section 3.16 Committees of the Board of Directors.

                       (a)  The Board of Directors may, by resolutions adopted
by a majority vote of the entire Board of Directors, designate from among its
members one or more other committees (having such name or names as may be
determined from time to time by resolution adopted by the Board of Directors),
each committee to consist of two or more directors. The Board may designate one
or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board to
act at the meeting in the place of any such absent or disqualified member.

                       (b)  Any committee designated by the Board of Directors
shall have and may exercise such powers and authorities as shall be provided in
the resolution of the Board of Directors establishing such committee; but no
committee of the Board of Directors shall have the power or authority in
reference to the submission to Shareholders of any action that requires
Shareholders' authorization under Applicable Regulation, the Articles of
Incorporation, or these By-Laws, the filling of vacancies in the Board of

                                       12



Directors or in a committee, the fixing of the compensation of the directors for
serving on the Board of Directors or on any committee, the adoption of an
agreement of merger or consolidation, the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to
Shareholders a dissolution of the Corporation or revocation of a dissolution,
the amendment or repeal of the By-Laws or the adoption of new By-Laws, or the
amendment or repeal of any resolution of the Board of Directors other than one
which is by its terms so amendable or repealable.

               Section 3.17 Compensation of Directors. Each director, in
consideration of his service as such, shall be entitled to receive from the
Corporation such amount per annum or such fees for attendance at directors'
meetings, or both, as the Board may from time to time determine, together with
reimbursement for the reasonable expenses incurred by him in connection with the
performance of his duties. Each director who shall serve as a member of any
committee of directors in consideration of his serving as such shall be entitled
to such additional amount per annum or such fees for attendance at committee
meetings, or both, as the Board may from time to time determine, together with
reimbursement for the reasonable expenses incurred by him in the performance of
his duties. Nothing contained in this section shall preclude any director from
serving the Corporation or its subsidiaries in any other capacity and receiving
proper compensation therefor.

               Section 3.18 Specific and General Powers of Directors. Subject to
any regulations from time to time made by Shareholders, the Board of Directors
shall have the management of the affairs, business and property of the
Corporation and may do all such acts as are not prohibited by Applicable
Regulation, by the Articles of Incorporation, or by these By-Laws, and as are
not reserved to the Shareholders.

               Section 3.19 Directors' Power to Give Effect to the DLC
Agreements.

                       (a)  The directors are authorized to operate and carry
into effect the Equalization Agreement, the SVC Special Voting Deed and the
Carnival Deed Poll Guarantee with full power to:

                            (i)  enter into, operate and carry into effect any
further or other agreements or arrangements with or in connection with P&O
Princess or the holder of the P&O Princess Special Voting Share; and

                            (ii) do all such things as, in the opinion of the
directors, are necessary or desirable for the application, implementation,
protection, furtherance or maintenance of the dual listed company relationship
with P&O Princess constituted by or arising out of any agreement or arrangement.

                       (b)  Subject to Applicable Regulation, nothing done by
any director in good faith pursuant to such authority and obligations shall
constitute a breach of the fiduciary duties of such director to the Corporation
or Shareholders. In particular, the directors shall, in addition to their duties
to the Corporation, be entitled to have regard to the interests of the Combined
Shareholders as if the Corporation and P&O Princess

                                       13



were a single legal entity. They are also authorized to provide to P&O Princess
and any officer, employee or agent of P&O Princess any information relating to
the Corporation.

               Section 3.20 Discretionary Matters. The Board of Directors may,
by agreement with the P&O Princess Board:

                       (a)  decide to seek the approval of the shareholders (or
any class of shareholders) of either or both of the Corporation and P&O Princess
for any matter that would not otherwise require such approval;

                       (b)  require any Joint Electorate Action to be approved
instead as a Class Rights Action; or

                       (c)  specify a higher majority vote than the required
majority that would otherwise be required for any shareholder vote provided for
in Section 2.7.

                                   ARTICLE IV
                                    Officers

               Section 4.1  Number, Qualifications and Designation. The officers
of the Corporation shall be chosen by the Board of Directors and shall be a
Chief Executive Officer, a President, one or more vice presidents, a Secretary,
a Treasurer, and such other officers as may be elected or appointed in
accordance with the provisions of Section 4.2. Officers may be of any
nationality and need not be residents or citizens of the Republic of Panama. One
person may hold more than one office. Officers may be, but need not be,
directors of the Corporation or Shareholders.

               Section 4.2  Election and Term of Office. The officers of the
Corporation, except those appointed by delegated authority pursuant to Section
4.3, shall be elected annually by the Board of Directors, and each such officer
shall hold his office until his successor shall have been elected or appointed
and qualified, or until his earlier death, resignation or removal. More than two
offices may be held by the same person. Any officer may resign at any time upon
written notice to the Corporation. Any officer elected by the Board of Directors
or appointed by delegated authority may be removed at any time with or without
cause by the affirmative vote of a majority of members of the Board of Directors
then in office. The removal of an officer without cause shall be without
prejudice to his contract rights, if any. The election or appointment of an
officer shall not of itself create contract rights. Any vacancy occurring in the
office of the Corporation may be filled by the Board of Directors.

               Section 4.3  Powers and Duties. The Chairman of the Board, or, if
a Chairman of the Board has not been chosen or is unavailable, the Vice-Chairman
of the Board, or, if neither has been chosen or are unavailable, the President,
shall preside at all meetings of the Shareholders and of the Board. The Chairman
of the Board and the Vice-Chairman of the Board shall be executive officers of
the Corporation and shall exercise such executive duties as may be prescribed
from time to time by the Board. The officers and agents of the Corporation shall
each have such powers and perform such duties in the management of the business
and affairs of the Corporation as generally pertain to their

                                       14



respective offices, as well as such powers and duties as from time to time may
be prescribed by the Board.

               Section 4.4  Other Officers, Subordinate Officers, Non-Board
Committees and Agents. The Board of Directors may from time to time elect such
other officers and appoint such employees or other agents, or such committees
(not constituting committees of the Board of Directors), as it deems necessary,
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as are provided in these By-Laws, or as the Board of
Directors may from time to time determine. The Board of Directors may delegate
to any officer or committee of the Board of Directors referred to in Section
3.16 the power to appoint subordinate officers and to retain or appoint
employees or other agents, or committees (not constituting committees of the
Board of Directors) and to prescribe the authority, duties and compensation of
such subordinate officers, committees, employees or other agents.

                                   ARTICLE V
                      Certificates of Stock, Transfer, Etc.

               Section 5.1  Issue. Each Shareholder shall be entitled to a
certificate or certificates for shares of the Corporation owned by him upon his
request thereof. All share certificates of the Corporation shall be issued in
registered form only, consistent with the provisions of Article 27 of the
Corporation Law. They shall be signed by the President or a vice president and
by the Secretary or an assistant secretary or the Treasurer or an assistant
treasurer, and may bear the corporate seal, which may be a facsimile. The
signatures of the officers upon such certificate may be facsimiles, if the
certificate is countersigned by a transfer agent or registered by a registrar
other than the Corporation itself or its employees. In case any officer who has
signed, or whose facsimile signature has been placed upon, any share certificate
shall have ceased to be such officer before the certificate is issued it may be
issued or delivered with the same effect as if he were such officer at the date
of its issue or delivery. The Corporation shall keep a record containing the
names and addresses of all registered Shareholders, the number and class of
shares held by each and the date when they respectively became the owners of
record thereof.

               Section 5.2  Transfer.

                       (a)  Transfer of shares issued in the name of a holder of
record shall be made only on the books of the Corporation only by the person
named in the certificate or by his attorney lawfully constituted and upon
surrender of and cancellation of the certificate therefor. Every transfer of
shares by holders of record shall be entered on the stock book of the
Corporation. Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for registered shares duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, it shall
be the duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
No transfer of shares of capital stock shall be valid as against the
Corporation, its shareholders and creditors for any purpose except to render the
transferee liable for the debts of the

                                       15



Corporation to the extent provided by law until such transfer shall have been
entered on the books of the Corporation by an entry showing from and to whom
transferred.

                       (b)  Any applicant wishing to transfer shares shall pay
to the Corporation any stamp or other duties or taxes payable in respect of the
transfer, together with any charges imposed by the Corporation in respect of
such transfer, all prior to and as a condition precedent to the issuance of any
new certificates to such applicant.

               Section 5.3  Transfer of the Carnival Special Voting Share. No
transfer of the Carnival Special Voting Share will take effect until the
transfer has been approved in accordance with the SVC Special Voting Deed and
until the transferee has agreed to be bound by the terms of the SVC Special
Voting Deed.

               Section 5.4  Lost, Stolen, Destroyed or Mutilated Certificates.
The holder of any shares of capital stock of the corporation shall immediately
notify the Corporation of any loss, destruction, theft or mutilation of the
certificate representing such shares, and the corporation may issue a new
certificate to replace the certificate alleged to have been lost, destroyed,
stolen or mutilated. The Board may, in its discretion, as a condition to the
issue of any such new certificate, require the owner of the lost, destroyed,
stolen or mutilated certificate, or his legal representatives, to make proof
satisfactory to the Board of such loss, destruction, theft or mutilation and to
advertise such fact in such manner as the Board may require, and to give the
Corporation and its transfer agents and registrars, or such of them as the Board
may require, a bond in such form, in such sums and with such surety or sureties
as the Board may direct, to indemnify the Corporation and its transfer agents
and registrars against any claim that may be made against any of them on account
of the continued existence of any such certificate so alleged to have been lost,
destroyed, stolen or mutilated and against any expense in connection with such
claim.

               Section 5.5  Record Holder of Shares. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of registered shares to receive dividends, to vote and to exercise any
other rights in respect of the shares held as the owner thereof.

               Section 5.6  Determination of Shareholders of Record. In order
that the Corporation may determine the holders of registered shares entitled to
notice of meeting of Shareholders, or entitled to express consent to or dissent
from any proposed corporate action without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any rights in
respect of any change, conversion or exchange of shares or for the purposes of
any other action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action.
If no such record is fixed:

                       (a)  The record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the

                                       16



day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the date next preceding the day on which the meeting is
held;

                       (b)  The record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting,
when no prior action by the Board is necessary, shall be the day on which the
first written consent is expressed; and

                       (c)  The record date for determining stockholders for any
purpose other than those specified in subsections (a) and (b) shall be at the
close of business on the day on which the Board adopts resolution relating
thereto.

A determination of registered Shareholders of record entitled to notice of or to
vote at a meeting of Shareholders shall apply to any adjournment of the meeting;
except that the Board of Directors may fix a new record date for an adjourned
meeting.

                                   ARTICLE VI
                                     Notices

               Section 6.1  Notice to Corporation. Whenever, under the
provisions of the statutes of the Republic of Panama or the Articles of
Incorporation or these By-Laws, any notice, request, demand or other
communication is required to be or may be given or made to the Corporation, it
shall also not be construed to mean that such notice, request, demand or other
communication must be given or made in person, but the same may be given or made
to the Corporation by mail or facsimile. Any such notice, request, demand or
other communication shall be considered to have been properly given or made, in
the case of mail when deposited in the mail, and in other cases when transmitted
by the party giving or making the same, directed to the Corporation at its then
registered address, provided that a copy of the same is sent by like medium of
communication to the attention of the secretary at the Corporation's then
principal place of business.

               Section 6.2  Waiver of Notice.

                       (a)  Whenever any written notice is required to be given
under the provision of Applicable Regulation, the Articles of Incorporation or
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.

                       (b)  Attendance of a person, either in person or by
proxy, at any meeting, without protesting prior to the conclusion of the meeting
the lack of notice of such meeting, shall constitute a waiver of notice of such
meeting.

                                  ARTICLE VII
                                Indemnification

               Section 7.1  Indemnification of Officers and Directors. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made

                                       17



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 or an officer of the Corporation or P&O Princess,
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 Corporation Law, 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. The foregoing provisions of this Section 7.1 shall be
deemed to be a contract between the Corporation and each director and officer of
the Corporation or P&O Princess who serves in such capacity at any time while
this Article VII and the relevant provisions of the Corporation Law and other
applicable law, if any, are in effect, and any repeal or modification thereof
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought or threatened based in whole or in part upon
any such state of facts.

               Section 7.2  Indemnification of Other Persons. The Corporation
may indemnify any person who was or is 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 an employee or agent of the Corporation or P&O Princess, or is
or was serving at the request of the Corporation or P&O Princess as a director,
officer, employee or agent or another corporation, partnership, joint venture,
trust or other enterprise, 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 extent and in
the manner set forth in and permitted by the Corporation Law, 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 any such person may
be entitled apart from he foregoing provisions.

               Section 7.3  Insurance. The Corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation or P&O Princess, or is
or was serving at the request of the Corporation or P&O Princess as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of Sections 7.1 and 7.2 hereof or under the
Corporation Law or any other provision of law.

                                       18



                                  ARTICLE VIII
                               General Provisions

               Section 8.1  Dividends.

                       (a)  Dividends upon the capital stock of the Corporation,
subject to the provisions of the Articles of Incorporation, and the Equalization
Agreement, may be declared by the Board of Directors at any regular or special
meeting, pursuant to Applicable Regulation. Dividends may be paid in cash, in
property or in shares of the capital stock of the Corporation, subject to the
provisions of the Articles of Incorporation and the Equalization Agreement.
Before payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for repairing or maintaining any property of
the Corporation, or for such other purposes as the Board of Directors shall
think conducive to the interests of the Corporation, and the Board of Directors
may modify or abolish any such reserve in the manner in which it was created.

                       (b)  The Corporation or other person paying any dividend
or issuing any right on behalf of the Corporation shall be entitled to withhold
therefrom any taxes required to be withheld by the laws and regulations of any
taxing authority having jurisdiction in the circumstances.

               Section 8.2  Contracts. Except as otherwise provided in these
By-Laws, the Board of Directors may authorize any officer or officers or any
agent or agents, to enter into any contract or to execute or deliver any
instrument on behalf of the Corporation and such authority may be general or
confined to specific instances.

               Section 8.3  Loans. The President or any other officer, employee
or agent authorized to do so by the Board may effect loans and advances at any
time for the Corporation from any bank, trust company or other institutions or
from any firm, corporation or individual and for such loans and advances may
make, execute and deliver promissory notes, bonds or other certificates or
evidences of indebtedness of the Corporation, and, when authorized by the Board
so to do, may pledge and hypothecate or transfer any securities or the property
of the Corporation as security for any such loans or advances. Such authority
conferred by the Board may be general or confined to specific instances or
otherwise limited.

               Section 8.4  Checks, Drafts, Etc. All checks, drafts and other
orders for the payment of money out of the funds of the Corporation and all
notes or other evidences of indebtedness of the Corporation shall be signed on
behalf of the Corporation in such manner as shall from time to time be
determined by resolution of the Board.

               Section 8.5  Deposits. The funds of the Corporation otherwise
employed shall be deposited from time to time to the order of the Corporation in
such banks, trust companies or other depositaries as the Board may select or as
may be

                                       19



selected by a officer, employee or agent of the Corporation to whom such power
may from time to time be delegated by the Board.

               Section 8.6  Corporate Seal. The corporate seal shall be in the
form of a circle and shall have inscribed thereon the name of the Corporation,
the year of its incorporation and the words "Republic of Panama." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
otherwise reproduced.

               Section 8.7  Corporate Records. Every Shareholder shall, upon
written demand stating the purpose thereof, have a right to inspect, in person
or by agent or attorney, during the usual hours of business, for a purpose
reasonably related to his interests as a Shareholder, the share register, books
of account, and minutes of all proceedings, and make copies or extracts
therefrom.

               Section 8.8  Fiscal Year. The fiscal year of the Corporation
shall be determined, and may be changed, by resolution of the Board.

               Section 8.9  Amendment of By-Laws. These By-Laws may be amended
in accordance with the Articles of Incorporation.

               Section 8.10 Effective Date. Any amendment to or any amendment
and restatement of these By-Laws shall govern the affairs of the Corporation
from and after the date stated in the resolution adopting the same.

                                   ARTICLE IX
                                   Definitions

               Section 9.1  For purposes of these By-Laws:

               "Annual Meeting" means the annual meeting of the Shareholders as
described in Section 2.2.

               "Applicable Exchange Rate" means, in relation to any proposed
Distributions by the Corporation and P&O Princess in relation to which a foreign
exchange rate is required, the average of the closing mid-point spot US
dollar-sterling exchange rate on the five Business Days ending on the Business
Day before the Distribution Determination Date relating to such Distributions
(as shown in the London edition of the Financial Times, or such other point of
reference as the parties shall agree), or such other spot US dollar-sterling
exchange rate or average US dollar-sterling exchange rate as at such other date
(or over such other period) before a Distribution Determination Date as the
Board of Directors and the P&O Princess Board shall agree, in each case rounded
to five decimal places.

               "Applicable Regulation" means

                       (a)  any law, statute, ordinance, regulation, judgment,
order, decree, license, permit, directive or requirement of any Governmental
Agency having jurisdiction over the Corporation; and

                                       20



                        (b) the rules, regulations, and guidelines of:

                            (i)  any stock exchange or other trading market on
which any shares or other securities or depositary receipts representing such
shares or securities of the Corporation or P&O Princess are listed, traded or
quoted; and

                            (ii) any other body with which entities with
securities listed or quoted on such exchanges customarily comply,

(but, if not having the force of law, only if compliance with such directives,
requirements, rules, regulations or guidelines is in accordance with the general
practice of persons to whom they are intended to apply) in each case for the
time being in force and taking account all exemptions, waivers or variations
from time to time applicable (in particular situations or generally) to the
Corporation or, as the case may be, P&O Princess.

                  "Articles of Incorporation" means the articles of
incorporation of the Corporation, as amended from time to time.

                  "Board of Directors" or "Board" means the board of directors
of the Corporation (or a duly authorized committee of the board of directors of
the Corporation) from time to time.

                  "Carnival Common Stock" has the same meaning as described in
the Articles of Incorporation.

                  "Carnival Deed Poll Guarantee" means the deed dated as of
___________, 200[2][3], pursuant to which the Corporation guarantees certain
obligations of P&O Princess for the benefit of certain future creditors of P&O
Princess, as amended from time to time.

                  "Carnival Entrenched Provision" shall have the meaning given
to such term in the Articles of Incorporation.

                  "Carnival Special Voting Share" means the special voting
share, par value $.01 per share, of the Corporation.

                  "Carnival SVC" means the holder, from time to time, of the
Carnival Special Voting Share.

                  "Class Rights Action" means any of the actions listed in
Section 2.18.

                  "Combined Shareholders" means the holders of Carnival Common
Stock and the holders of P&O Princess Ordinary Shares.

                  "Corporation" means Carnival Corporation, a corporation
organized and existing in accordance with the laws of the Republic of Panama.

                                       21



                  "Corporation Law" shall mean Law 32 of the Corporation Law of
1927 of the Republic of Panama, as amended.

                  "Deed Poll Guarantees" means the Carnival Deed Poll Guarantee
and the P&O Princess Deed Poll Guarantee.

                  "Disenfranchised Carnival Common Stock" has the meaning in the
Articles of Incorporation.

                  "Equalization Agreement" means the Equalization and Governance
Agreement, dated as of _____________, 200[2][3], between the Corporation and P&O
Princess, as amended from time to time.

                  "Equalization Fraction" means, as of any date, the
Equalization Ratio as of such date expressed as a fraction where the numerator
is one and the denominator is the P&O Princess Equivalent Number comprising the
second element of such Equalization Ratio.

                  "Equalization Ratio" means the ratio of (i) one share of
Carnival Common Stock to (ii) that number of P&O Princess Ordinary Shares that
have the same rights to distributions of income and capital and voting rights as
one share of Carnival Common Stock (the "P&O Princess Equivalent Number"). The
Equalization Ratio shall initially be 1:3.3289 but if P&O Princess and the
Corporation agree to make such subdivisions and/or combinations of Carnival
Common Stock and/or P&O Princess Ordinary Shares as are necessary to achieve the
result it shall instead be 1:1 and shall be subject to adjustment in the future
as provided in accordance with the Equalization Agreement. In all cases, the P&O
Princess Equivalent Number shall be rounded to five decimal places.

                  "Equalization Share" shall mean, in relation to the
Corporation, any share designated as an Equalization Share in the Corporation
from time to time by the Board and, in relation to P&O Princess, the
Equalization Share of (Pounds) 50,000 in the capital of P&O Princess.

                  "Equivalent Resolution" means a resolution of either the
Corporation or P&O Princess, certified by a duly authorized officer of the
Corporation or P&O Princess as equivalent in nature and effect to a resolution
of the other company.

                  "Governmental Agency" means a court of competent jurisdiction
or any government or any governmental, regulatory, self-regulatory, or
administrative authority, agency, commission, body or other governmental entity
and shall include any relevant competition authorities, the U.S. Securities and
Exchange Commission, the New York Stock Exchange, the UK Panel on Takeovers and
Mergers, the London Stock Exchange and the UK Listing Authority.

                  "Implementation Agreement" means the Offer and Implementation
Agreement, dated as of ___________, 200[2][3], between the Corporation and P&O
Princess.

                                       22



                  "Joint Electorate Action" means any of the actions listed in
Section 2.16, or as provided by the Board of Directors.

                  "Liquidation" means, with respect to either the Corporation or
P&O Princess, any liquidation, winding up, receivership, dissolution, insolvency
or equivalent proceedings pursuant to which the assets of such company will be
liquidated and distributed to creditors and other holders of provable claims
against such company.

                  "London Stock Exchange" means the London Stock Exchange plc.

                  "Majority Resolution" means a resolution duly approved at a
meeting of the Corporation's Shareholders by the affirmative vote of a majority
of all the votes cast on such resolution by all shareholders of the Corporation
entitled to vote thereon (including, where applicable, the Carnival SVC) who are
present in person or by proxy at such meeting.

                  "New York Stock Exchange" means the New York Stock Exchange,
Inc.

                  "Ordinary Shares" means that Carnival Common Stock and the P&O
Princess Ordinary Shares, as the context requires.

                  "Other Voting Shares" means, with respect to any resolution to
be acted on by the shareholders of the Corporation or P&O Princess, as the case
may be, such shares of capital stock of that company that are entitled to vote
on such resolution at a meeting of the shareholders of such company, other than
the Carnival Special Voting Share, the P&O Princess Special Voting Share and the
Ordinary Shares (including the Disenfranchised Carnival Common Stock).

                  "P&O Princess Articles" means the P&O Princess articles of
association, as amended from time to time.

                  "P&O Princess" means P&O Princess Cruises plc, a public
limited company incorporated in England and Wales.

                  "P&O Princess Board" means the Board of Directors of P&O
Princess.

                  "P&O Princess Deed Poll Guarantee" means the agreement dated
as of ___________, 200[2][3], whereby P&O Princess agrees to guarantee certain
obligations of the Corporation for the benefit of certain future creditors of
the Corporation, as amended from time to time.

                  "P&O Princess Entrenched Provision" means those provisions
designated as such in the P&O Princess Memorandum and Articles.

                  "P&O Princess Equivalent Number" has the meaning given in the
definition of "Equalization Ratio."

                                       23



                  "P&O Princess Memorandum and Articles" means the P&O Princess
memorandum and articles of association, as amended from time to time.

                  "P&O Princess Ordinary Shares" has the meaning given to in the
P&O Princess Articles.

                  "P&O Princess SVC" means the holder, from time to time, of the
P&O Princess Special Voting Share.

                  "P&O Princess Special Voting Share" means the special voting
share of (pound)1 in P&O Princess.

                  "Parallel Shareholder Meeting" means, in relation to P&O
Princess, any meeting of the shareholders of P&O Princess which is:

                           (a)   nearest in time to, or is contemporaneous with,
the meeting of the Shareholders of the Corporation and at which some or all of
the same resolutions or some or all Equivalent Resolutions are to be considered;
or

                           (b)   designated by the P&O Princess Board as the
parallel meeting of shareholders of a particular meeting of Shareholders of the
Corporation.

                  "Procedural Resolutions" shall have the meaning set forth in
Section 2.20.

                  "Shareholders" means the holders of shares of the
Corporation's capital stock.

                  "Special Meeting" means a meeting of the Shareholders other
than an Annual Meeting as described in Section 2.4.

                  "Special Voting Share" means, in relation to the Corporation,
the Carnival Special Voting Share and, in relation to P&O Princess, the P&O
Princess Special Voting Share.

                  "Supermajority Resolution" means a resolution required by
Applicable Regulations, the Articles of Incorporation or these By-Laws, as
relevant, to be approved by a higher percentage of votes cast than required
under a Majority Resolution, or where the percentage of votes in favour and
against the resolution is required to be calculated by a different mechanism to
that required by a Majority Resolution.

                  "SVC Owner" means _________________________ or such other
trust company as shall be agreed between the Corporation and P&O Princess.

                  "SVC Special Voting Deed" means the SVC Special Voting Deed,
dated as of __________, 200[2][3], by and among the Corporation, Carnival SVC
Limited, P&O Princess, P&O Princess SVC Limited, and ______.

                                       24



                                                                 [Proposed Form]

                             THE COMPANIES ACT 1985


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


                       A PUBLIC COMPANY LIMITED BY SHARES


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


                            MEMORANDUM OF ASSOCIATION

                                       of

                            P&O PRINCESS CRUISES PLC


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

1.   The name of the Company is "P&O Princess Cruises plc".

2.   The Company is to be a public company.

3.   The registered office of the Company is to be situated in England and
     Wales.

4.   The objects for which the Company is established are:

4.1  To enter into, operate and carry into effect the Equalization and
     Governance Agreement between the Company and Carnival Corporation
     ("Carnival"), the SVC Special Voting Deed between, inter alia, the Company,
     Carnival, [Carnival SVC] Limited, [P&O Princess SVC] Limited and [.] and
     the Deed Poll Guarantee made by the Company in favour of certain creditors
     of Carnival each as described in the circular to shareholders of the
     Company dated . 200[2][3] with full power to:

     4.1.1   agree any amendment or termination of all or any of the terms of
             the said Agreement or the said Deeds in accordance with the terms
             thereof;

     4.1.2   enter into, operate and carry into effect any further or other
             agreements or arrangements with or in connection with Carnival; and

     4.1.3   do all such things as in the opinion of the Directors are necessary
             or desirable for the furtherance of this object or for the
             furtherance, maintenance or development of the relationship with
             Carnival constituted by or arising out of any agreement, deed or
             other arrangement mentioned in or made in accordance with this
             sub-clause.

4.2.

                                        1



     4.2.1   To carry on the business of ship and boat owners, forwarding and
             general agents, organising and conducting cruises, tours, holidays
             and excursions and to carry on the business as carriers of
             passengers and goods by sea, river, land and air, travel agents,
             tourist agents and contractors, insurance brokers, agents for the
             operators of sea, river, land and air carriage undertakings, and to
             provide passengers, travellers and tourists with hotel and other
             services and conveniences of all kinds.

     4.2.2   To co-ordinate, finance and manage all or any part of the
             operations of any company which is a subsidiary company of or
             otherwise under the control of the Company and generally to carry
             on the business of a holding company.

     4.2.3   To carry out such operations and to manufacture or deal with such
             goods and to purchase or otherwise acquire, take options over,
             construct, lease, hold, manage, maintain, alter, develop, exchange
             or deal with such property, rights or privileges (including the
             whole or part of the business, property or liabilities of any other
             person or company) as may seem to the board of directors directly
             or indirectly to advance the interests of the Company.

     4.2.4   To enter into such commercial or other transactions in connection
             with any trade or business of the Company as may seem to the board
             of directors desirable for the purpose of the Company's affairs.

     4.2.5   To apply for, purchase or otherwise acquire, protect, maintain and
             renew any patents, patent rights, trade marks, designs, licences
             and other intellectual property rights of all kinds or any secret
             or other information as to any invention and to use, exercise,
             develop or grant licences in respect of, or otherwise turn to
             account the property, rights or information so acquired and to
             experiment with any such rights which the Company may propose to
             acquire.

     4.2.6   To invest and deal with the moneys of the Company not immediately
             required in any manner and hold and deal with any investment so
             made.

     4.2.7   To pay or to provide or to make such arrangements for providing
             such gratuities, pensions, benefits, share option and acquisition
             schemes, loans and other matters and to establish, support,
             subsidise and subscribe to any institutions, associations, clubs,
             schemes, funds or trusts (whether to or for the benefit of present
             or past directors or employees of the Company or its predecessors
             in business or of any company which is a subsidiary company of the
             Company or is allied to or associated with the Company or with any
             such subsidiary company or to or for or for the benefit of persons
             who are or were related to or connected with or dependants of any
             such directors or employees) as may seem to the board of directors
             directly or indirectly to advance the interests of the Company.

     4.2.8   To draw, make, accept, endorse, discount, negotiate, execute and
             issue promissory notes, bills of exchange, bills of lading,
             warrants, debentures and other negotiable and transferable
             instruments.

     4.2.9   To act as agents, brokers or trustees, and to enter into such
             arrangements (whether by way of amalgamation, partnership, profit
             sharing, union of

                                       2



             interests, co-operation, joint venture or otherwise) with other
             persons or companies as may seem to the board of directors to
             advance the interests of the Company and to vest any property of
             the Company in any person or company on behalf of the Company and
             with or without any declaration of trust in favour of the Company.

     4.2.10  To apply for, promote and obtain any Act of Parliament, charter,
             privilege, concession, licence or authorisation of any government,
             state or municipality, or any other department or authority, or
             enter into arrangements with any such body, for enabling the
             Company to carry any of its objects into effect or for extending
             any of the powers of the Company or for effecting any modification
             of the constitution of the Company or for any other purpose which
             may seem to the board of directors to be expedient, and to oppose
             any proceedings or applications which may seem calculated directly
             or indirectly to prejudice the interests of the Company.

     4.2.11  To sell, lease, dispose of, grant rights over or otherwise deal
             with the whole or any part of the undertaking, property or assets
             of the Company on such terms as the board of directors may decide,
             and to distribute any property or assets of the Company of whatever
             kind in specie among the members of the Company.

     4.2.12  To pay for any rights or property acquired by the Company or any of
             its subsidiaries and to remunerate any person or company, whether
             by cash payment or by the allotment of shares, debentures or other
             securities of the Company credited as paid up in full or in part,
             or by any other method the board of directors thinks fit.

     4.2.13  To establish or promote companies and to place or guarantee the
             placing of, underwrite, subscribe for or otherwise acquire, hold,
             dispose of and deal with, and guarantee the payment of interest,
             dividends and capital on all or any of the shares, debentures,
             debenture stock or other securities or obligations of any company
             or association and to pay or provide for brokerage, commission and
             underwriting in respect of any such issue on such terms as the
             board of directors may decide.

     4.2.14  To carry on through any subsidiary or associated company any
             activities which the Company is authorised to carry on and to make
             any arrangements whatsoever with such company (including any
             arrangements for taking the profits or bearing the losses of any
             such activities) as the board of directors thinks fit.

     4.2.15  To raise or borrow money in such manner as the board of directors
             thinks fit and to receive deposits and to mortgage, charge, pledge
             or give liens or other security over the whole or any part of the
             Company's undertaking, property and assets (whether present or
             future), including its uncalled capital, for such purposes and in
             such circumstances and on such terms and conditions as the board of
             directors thinks fit.

     4.2.16  To lend or advance money and to give credit and to enter (whether
             gratuitously or otherwise) into guarantees or indemnities of all
             kinds, and whether secured or unsecured, whether in respect of its
             own obligations or

                                       3



             those of some other person or company, in such circumstances and on
             such terms and conditions as the board of directors thinks fit.

     4.2.17  To pay or agree to pay all or any of the promotion, formation and
             registration expenses of the Company.

     4.2.18  To contribute to or support any public, general, political,
             charitable, benevolent or useful object, which it seems to the
             board of directors to be in the interests of the Company or its
             members to contribute to or support.

     4.2.19  To do all or any of the things stated in this clause 4 in any part
             of the world whether as principal, agent or trustee or otherwise
             and either alone or jointly with others and either by or through
             agents, subcontractors, trustees or otherwise.

     4.2.20  To do all such other things as the board of directors considers
             will further the interests of the Company or to be incidental or
             conducive to the attainment of all or any of the objects stated in
             this clause 4.

5.   The objects stated in each part of clause 4 shall not be restrictively
     construed but shall be given the widest interpretation. In clause 4, the
     word "company" shall be deemed, except where used to refer to the Company,
     to include any partnership or other body of persons, whether corporate or
     unincorporate and whether domiciled in the United Kingdom or elsewhere.
     Except where the context expressly so requires, none of the sub-clauses of
     clause 4, or the objects stated in clause 4, or the powers conferred by
     clause 4 shall be limited by, or be deemed subsidiary or auxiliary to, any
     other sub-clause of clause 4, or any other object stated in clause 4 or any
     other power conferred by clause 4.

6.   The liability of the members is limited.

7.   The share capital of the Company is (Pounds)50,000 divided into 2
     subscriber shares of (Pounds)1 each and 49,998 redeemable preference shares
     of (Pounds)1 each/1/.

- ---------------------------
/1/  This is the share capital of the Company as at 28 July 2000. A statement of
     the Company's share capital on incorporation is given at the end of the
     memorandum of association.

                                       4



We, the subscribers to this memorandum of association, wish to be formed into a
company pursuant to this memorandum. We agree to take the number of shares shown
opposite our respective names.

Name and address of subscriber                  Number of shares taken

Michael Gradon                                  One Subscriber Share

The Summer House
18 Granville Road
Limpsfield, Oxted
Surrey
RH8 0DA

Nicholas Luff                                   One Subscriber Share

30 Kings Avenue
Carshalton
Surrey
SM5 4NX


                                                Total shares taken

                                                Two Subscriber Shares


Date:


Witness to signatures:

                                       5



                                                                 [Proposed Form]

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

                       A PUBLIC COMPANY LIMITED BY SHARES

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

                             ARTICLES OF ASSOCIATION

                                       of

                            P&O PRINCESS CRUISES PLC
                                  (the Company)
                                 ([           ])

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

                                                                               1



CONTENTS                                                            ARTICLE

Preliminary ....................................................    1-2
Construction. ..................................................    3-15
Share Capital ..................................................    16-34
Redeemable Shares ..............................................    35-51
Variation of Rights ............................................    52
Share Certificates .............................................    53-55
Lien ...........................................................    56-59
Calls on Shares ................................................    60-66
Forfeiture and Surrender .......................................    67-73
Transfer of Shares .............................................    74-83
Transmission of Shares .........................................    84-87
Alteration of Share Capital ....................................    88-91
Purchase of Own Shares .........................................    92
General Meetings ...............................................    93-98
Notice of General Meetings .....................................    99-110
Proceedings at General Meetings ................................    111-123
Voting rights and procedures under theEqualization Agreement ...    124-146
Voting rights and procedures ...................................    147-160
Proxies and Corporate Representatives ..........................    161-169
Number of Directors ............................................    170
Appointment and Retirement of Directors ........................    171-181
Alternate Directors ............................................    182-187
Powers of the Board ............................................    188-190
Delegation of powers of the Board ..............................    191-194
Disqualification and Removal of Directors ......................    195
Remuneration of Non-Executive Directors ........................    196-197
Directors' Expenses ............................................    198
Executive Directors ............................................    199-201
Directors' Interests ...........................................    202-203
Gratuities, Pensions and Insurance .............................    204-207
Proceedings of the Board .......................................    208-217
Secretary ......................................................    218
Minutes ........................................................    219-220
The Seal .......................................................    221-223
Registers ......................................................    224-225
Dividends ......................................................    226-247
Capitalisation of Profits and Reserves .........................    248
Record Dates ...................................................    249
Accounts .......................................................    250-252
Notices ........................................................    253-265
Destruction of Documents .......................................    266-267
Untraced Shareholders ..........................................    268-271
Liquidation ....................................................    272-276
Share Control Limit ............................................    277-285
Combined Group Excess Shares ...................................    286
Voting Control .................................................    287
Indemnity ......................................................    288
Mandatory Exchange .............................................    289-292

                                                                               2



PRELIMINARY

Table A

1.   Regulations in Table A as in force at the date of the incorporation of the
     Company shall not apply to the Company.

Definitions

2.   In these Articles, except where the subject or context otherwise requires:

     "Act" means the Companies Act 1985 including any modification or
     re-enactment of it for the time being in force;

     "Acting in Concert" has the same meaning as it has in the City Code
     provided that, notwithstanding anything to the contrary, none of (x) the
     Arison Group, (y) the Corporation or (z) P&O Princess (each, a "Non-Concert
     Party"), shall be deemed to be Acting in Concert with any other Non-Concert
     Party for the purposes of these Articles;

     "Action" means, in relation to Carnival or the Company, any action
     affecting the amount or nature of issued share capital of such company,
     including any non-cash Distribution, offer by way of rights, bonus issue,
     sub-division or consolidation, or buy-back;

     "Acts" means the Act and all other statutes and subordinate legislation for
     the time being in force concerning companies so far as they apply to the
     Company;

     "address" in relation to electronic communications, includes any number or
     address used for the purposes of such communications;

     a person shall be treated as "Appearing to be Interested" in any Ordinary
     Shares if:

     (a)    the Company has received a notification which either:

            (i)   states that such person is, or may be, Interested in such
                  Ordinary Shares;

            (ii)  fails to establish the identities of those Interested in the
                  Ordinary Shares and (after taking into account any
                  notification and any relevant information) the directors
                  know or have reasonable cause to believe that the person in
                  question is, or may be, Interested in the Ordinary Shares; or

     (b)    the directors know or have reasonable cause to believe that the
            person in question is, or may be, Interested in the Ordinary Shares;

     "Applicable Exchange Rate" means, in relation to any proposed Distributions
     by the Company and Carnival in relation to which a foreign exchange rate is
     required, the average of the closing mid-point spot US dollar-sterling
     exchange rate on the five Business Days ending on the Business Day before
     the Distribution Determination Date relating to such Distributions (as
     shown in the London edition of the Financial Times, or such other point of
     reference as the parties shall agree), or such other spot US
     dollar-sterling exchange rate or average US dollar-sterling exchange rate
     as at

                                                                               3



     such other date (or over such other period) before a Distribution
     Determination Date as the Board and the Board of Carnival shall agree, in
     each case rounded to five decimal places;

     "Applicable Regulations" means;

     (a)    any law, statute, ordinance, regulation, judgement, order, decree,
            licence, permit, directive or requirement of any Governmental Agency
            having jurisdiction over P&O Princess and/or Carnival; and

     (b)    the rules, regulations, and guidelines of:

            (i)   any stock exchange or other trading market on which any shares
                  or other securities or depositary receipts representing such
                  shares or securities of either P&O Princess or Carnival are
                  listed, traded or quoted; and

            (ii)  any other body with which entities with securities listed or
                  quoted on such exchanges customarily comply,

            (but, if not having the force of law, only if compliance with such
            directives, requirements, rules, regulations or guidelines is in
            accordance with the general practice of persons to whom they are
            intended to apply) in each case for the time being in force and
            taking account all exemptions, waivers or variations from time to
            time applicable (in particular situations or generally) to the
            Company or, as the case may be, Carnival;

     "Arison Group" shall mean each of Marilyn B. Arison, Micky Arison, Shari
     Arison, Michael Arison or their spouses or children or lineal descendants
     of Marilyn B. Arison, Micky Arison, Shari Arison, Michael Arison of their
     spouses, any trust established by Theodore Arison, any trust established
     for the benefit of any Arison family member mentioned in this definition,
     or any "person" (as such term is used in Section 13(d) or 14(d) of the
     United States Securities Exchange Act of 1934), directly or indirectly,
     controlling, controlled by or under common control with any Arison family
     member mentioned in this definition or any trust established for the
     benefit of any such Arison family member or any charitable trust or
     non-profit entity established by a member of the Arison Group but excluding
     (for the avoidance of doubt) Carnival, the Company or any of their
     respective Subsidiaries or affiliates.

     "Articles" means these articles of association as altered from time to time
     by special resolution;

     "Associated Tax Credit" means, in relation to any Distribution proposed to
     be made by the Company, the amount of any imputed or associated Tax credit
     or rebate or exemption (or the value of any other similar associated Tax
     Benefit) which would be available to a holder of P&O Princess Ordinary
     Shares receiving or entitled to receive the Distribution, together with the
     amount of any credit or benefit in respect of any Tax required to be
     deducted or withheld from the Distribution by or on behalf of the Company;

     "Auditors" means the auditors of the Company;

                                                                               4



     "Board" means the board of directors of the Company (or a duly authorised
     committee of the board of directors of the Company) from time to time;

     "Board of Carnival" means the board of directors of Carnival (or a duly
     authorised committee of the board of directors of Carnival) from time to
     time;

     "Business Day" means any day other than a Saturday, Sunday or day on which
     banking institutions in the cities of both New York and London are
     authorised or obligated by law or executive order to close in the United
     Sates or England (or on which day such banking institutions are open solely
     for trading in euros);

     "Carnival" means Carnival Corporation;

     "Carnival Common Stock" has the meaning set out in the Carnival
     Constitution;

     "Carnival Constitution" means the Articles of Incorporation and By-Laws of
     Carnival as amended from time to time;

     "Carnival Entrenched Provisions" means the Carnival Entrenched Articles and
     the Carnival Entrenched By-Laws as defined in the Carnival Constitution;

     "Carnival Group" means Carnival and its Subsidiaries and associated
     undertakings from time to time;

     "Carnival Guarantee" means the deed poll guarantee of the same date as the
     Equalization Agreement under which Carnival agrees to guarantee certain
     obligations of the Company for the benefit of certain future creditors of
     the Company, as amended from time to time;

     "Carnival Special Voting Share" means the special voting share in the
     capital of Carnival having the rights set out in the Carnival Constitution;

     "Carnival SVC" means the holder, from time to time, of the Carnival Special
     Voting Share;

     "certificated share" means a share in the capital of the Company that is
     not an uncertificated share and references in these Articles to a share
     being held in certificated form shall be construed accordingly;

     "Charitable Beneficiary" means any registered charity or similar body or
     organisation;

     "City Code" means the UK City Code on Takeovers and Mergers as amended from
     time to time (including any supplemental or replacement Applicable
     Regulations), and including any actions required, or approved, by any
     relevant governing or supervisory body with authority in relation to the UK
     City Code on Takeovers and Mergers (or any replacement);

     "Class Rights Action" means any of the actions listed in Article 124;

     "clear days" in relation to the sending of a notice means the period
     excluding the day on which a notice is sent or deemed to be sent and the
     day for which it is sent or on which it is to take effect;

                                                                               5





          "Combined Group" means the Company, Carnival and their respective
          subsidiaries;

          "Combined Group City Code Limit" means, at any time (i) with respect
          to any person other than a Significant Combined Group Holder (or
          persons Acting in Concert), such Ordinary Shares (which may include
          either or both of P&O Princess Ordinary Shares and Carnival Common
          Stock) representing, in aggregate and after giving effect to the
          Equalization Ratio, the right to cast 30 per cent. of the votes on a
          Joint Electorate Action from time to time, or (ii) with respect to a
          Significant Combined Group Holder only, any further Ordinary Shares
          (which may include either or both of P&O Princess Ordinary Shares or
          Carnival Common Stock) which increase that person's percentage of
          votes which could be cast on a Joint Electorate Action from time to
          time;

          "Combined Group Excess Shares" means the Ordinary Shares designated as
          such pursuant to Article 279;

          "Combined Group Excess Share Trust" means any trust established by the
          Company for the purposes, inter alia, of holding Combined Group
          Restricted Shares on behalf of, and for the benefit of, a Charitable
          Beneficiary;

          "Combined Group Excess Share Trustee" means any body corporate,
          association or other person appointed as a trustee by the Company who
          is empowered to hold, possess, dispose of and/or deal with the
          Combined Group Restricted Shares;

          "Combined Group Restricted Shares" means the Ordinary Shares as
          determined by reference to Article 277;

          "Combined Shareholders" means the holders of P&O Princess Ordinary
          Shares and the holders of Carnival Common Stock;

          "Companies Acts" has the meaning given by section 744 of the Act and
          includes any enactment passed after those Acts which may, by virtue of
          that or any other such enactment, be cited together with those Acts as
          the "Companies Acts" (with or without the addition of an indication of
          the date of any such enactment);

          "director" means a director of the Company;

          "Disenfranchised P&O Ordinary Shares" has the meaning given to it in
          Article 21A;

          "Distribution" means, in relation to the Company or Carnival, any
          dividend or other distribution, whether of income or capital, and in
          whatever form, made by the Company or Carnival (or any of their
          subsidiaries) to the holders of Ordinary Shares by way of pro rata
          entitlement, excluding any Liquidation Distribution, buy-back,
          repurchase or cancellation of Ordinary Shares;

          "Distribution Determination Date" means, with respect to any parallel
          Distributions to be made by the Company and Carnival, the date on
          which the Board and the Board of Carnival resolve to pay or make such
          parallel Distributions (or if they resolve on different dates to pay
          or make such parallel Distributions, the later of those dates);

          "dividend" means dividend or bonus;

                                                                               6



          "electronic signature" has the meaning given by section 7(2) of the
          Electronic Communications Act 2000;

          "employees' share scheme" has the meaning given by section 743 of the
          Act;

          "entitled by transmission" means, in relation to a share in the
          capital of the Company, entitled as a consequence of the death or
          bankruptcy of the holder or otherwise by operation of law;

          "Equalization Agreement" means the agreement entered into between the
          Company and Carnival and entitled the Equalization and Governance
          Agreement, as amended from time to time;

          "Equalization Distribution" shall have the meaning set out in Article
          234;

          "Equalization Distribution Amount" means the amount of any
          Distribution proposed to be paid or made by the Company or Carnival on
          its Ordinary Shares, before deduction of any amount in respect of Tax
          required to be deducted or withheld from such Distribution by or on
          behalf of such company and excluding the amount of any Associated Tax
          Credit, all such amounts being expressed in the currency of payment
          and on a per share basis;

          "Equalization Fraction" means, as of any date, the Equalization Ratio
          as of such date expressed as a fraction where the numerator is one and
          the denominator is the P&O Princess Equivalent Number (as defined in
          the "Equalization Ratio" below) comprising the second element of such
          Equalization Ratio;

          "Equalization Ratio" means the ratio of (i) one share of Carnival
          Common Stock to (ii) that number of P&O Princess Ordinary Shares that
          have the same rights to distributions of income and capital and voting
          rights as one share of Carnival Common Stock (the "P&O Princess
          Equivalent Number"). The Equalization Ratio shall initially be
          1:3.3289 but if the parties to the Equalization Agreement agree to
          make such subdivisions and/or consolidations of Carnival Common Stock
          and/or P&O Princess Ordinary Shares as are necessary to achieve the
          result it shall instead be 1:1 immediately after adoption of these
          Articles and shall be subject to adjustment in the future as provided
          in accordance with the Equalization Agreement. In all cases, the P&O
          Princess Equivalent Number shall be rounded to five decimal places;

          "Equalization Share" means, in relation to the Company, an
          Equalization Share in the capital of the Company with a par value of
          (Pounds)50,000 having the rights set out in Article 22 and, in
          relation to Carnival, any share in the capital of Carnival designated
          as an Equalization Share from time to time by the Board of Carnival;

          "Equivalent Liquidation Payment" shall have the meaning set out in
          Article 273;

          "Equivalent Resolution" means a resolution of either the Company or
          Carnival, certified by a duly authorised officer of the Company or of
          Carnival as equivalent in nature and effect to a resolution of the
          other company;

          "Exchange Event" means any of the following:

          (a)   there shall have occurred any change in the tax laws, rules or
                regulations applicable to the Company and/or Carnival and/or
                their shareholders or in the

                                                                               7



               application or interpretation thereof (collectively, a "Change In
               Tax Law") and the Board shall have reasonably determined, based
               on an opinion of a recognized independent tax counsel experienced
               in such matters and after using its commercially reasonable
               efforts to explore the available alternatives to the Mandatory
               Exchange in consultation with such counsel and external financial
               advisors, that (x) such Change In Tax Law is reasonably likely to
               have a material adverse effect on the Company and Carnival,
               considered as a single enterprise (a "Material Adverse Tax
               Effect"), (y) it is reasonably likely that such Material Adverse
               Tax Effect would be eliminated or substantially reduced by a
               Mandatory Exchange and (z) such Material Adverse Tax Effect could
               not be substantially eliminated by any commercially reasonable
               alternative to such Mandatory Exchange;

          (b)  either (A) there shall have occurred any change in the non-tax
               laws, rules or regulations applicable to the Company and/or
               Carnival or in the application or interpretation thereof
               (collectively, a "Change In Other Law") as a result of which the
               Board has reasonably determined that, and has received a written
               legal opinion from independent counsel to the effect that, it is
               reasonably likely that, or (B) any court, governmental entity or
               regulatory body of competent jurisdiction shall have issued any
               ruling, judgement, decree or order which has been appealed to the
               extent the Board reasonably determined was appropriate in the
               circumstances (the "Final Order") finding, holding or declaring
               that, in either of cases (A) or (B), all or a substantial part of
               the contracts between, and the constituent documents of, the
               Company and Carnival that create the Combined Group (the "DLC
               Arrangements") are unlawful, illegal or unenforceable
               (collectively, an "Illegality Event") and the Board shall have
               reasonably determined, based on an opinion of a recognized
               independent counsel and after using its commercially reasonable
               efforts to explore the available alternatives to the Mandatory
               Exchange in consultation with such counsel and external financial
               advisors, that (x) the legal basis for the Illegality Event would
               be eliminated by a Mandatory Exchange, (y) the Illegality Event
               could not be eliminated by any amendments to the DLC Arrangements
               that would not materially and adversely affect the rights of the
               shareholders of the Company or Carnival, taken together or in
               relation to each other and (z) the Change in Other Law or Final
               Order is reasonably likely to be enforced in a way that will have
               a material adverse effect on the Company and Carnival, considered
               as a single enterprise;

          "Exchange Notice" means a notice that is served on the holders of P&O
          Princess Ordinary Shareholders subsequent to the occurrence of an
          Exchange Event;

          "Governmental Agency" means a court of competent jurisdiction or any
          government or governmental, regulatory, self-regulatory or
          administrative authority, agency, commission, body or other
          governmental entity and shall include without limitation any relevant
          competition authorities, the UK Panel on Takeovers and Mergers, the
          London Stock Exchange, the UK Listing Authority, the US Securities and
          Exchange Commission and the New York Stock Exchange;

          "holder" in relation to a share in the capital of the Company means
          the member whose name is entered in the register as the holder of that
          share;

                                                                               8



          A person shall be deemed to be "Interested" or to have an "Interest"
          in Ordinary Shares if such person has an interest which would be taken
          into account, or which he would be taken as having, in determining for
          the purposes of Part VI of the Act whether a person has a notification
          interest in a share (including any interest which he would be taken as
          having for the purposes) but shall not be deemed to be "Interested" or
          to have an "Interest" in shares which he holds as a bare or custodian
          trustee under the law of England or as a simple trustee under the law
          of Scotland;

          "Joint Electorate Action" means any of the resolutions referred to in
          Article 126;

          "Law Debenture" means The Law Debenture Trust Corporation p.l.c.;

          "Liquidation" means, with respect to either the Company or Carnival,
          any liquidation, winding up, receivership, dissolution, insolvency or
          equivalent proceedings pursuant to which the assets of either the
          Company or Carnival will be liquidated and distributed to creditors
          and other holders of recognisable claims against such company;

          "Liquidation Distribution" means in relation to the Company or
          Carnival, any dividend or other distribution per Ordinary Share,
          whether of income or capital and in whatever form, made or to be made
          by such company or any of its Subsidiaries to the holders of such
          company's Ordinary Shares by way of pro rata entitlement in connection
          with the Liquidation of such company;

          "Liquidation Exchange Rate" means as at any date, the average of the
          closing mid-point spot US dollar-sterling exchange rate on the five
          Business Days ending on the Business Day before such date (as shown in
          the London edition of the Financial Times), or such other point of
          reference as the Board and the Board of Carnival or the Board and
          liquidators of Carnival or the Board of Carnival and the liquidators
          of the Company or the liquidators of both the Company and Carnival, as
          the case may be, may determine in each case rounded to five decimal
          places;

          "London Stock Exchange" means the London Stock Exchange plc;

          "Mandatory Exchange" shall have the meaning set out in Article 289;

          "Market Price" means the average of the daily closing price of an
          Ordinary Share on the London Stock Exchange, as derived from the Daily
          Official List, over the five consecutive Dealing Days prior to the
          relevant date;

          "member" means, unless the context otherwise requires, a member of the
          Company;

          "Member Present" means, in connection with a meeting, a member present
          at the venue or venues for the meeting, in person or by proxy, by
          attorney or, where the member is a body corporate, by representative;

          "Memorandum" means the memorandum of association of the Company as
          amended from time to time;

          "NYSE" means New York Stock Exchange, Inc;

          "office" means the registered office of the Company;

                                                                               9



          "Operator" means the "Operator" of the "relevant system", in each case
          as defined in the Regulations;

          "Ordinary Share" means a P&O Princess Ordinary Share and/or a share of
          Carnival Common Stock, as the context requires;

          "paid" means paid or credited as paid;

          "Parallel Shareholder Meeting" means, in relation to Carnival, any
          meeting of the shareholders of Carnival which is:

          (a)  nearest in time to, or contemporaneous with, the meeting of the
               shareholders of the Company and at which some or all of the same
               resolutions or some or all Equivalent Resolutions are to be
               considered; or

          (b)  designated by the Board of Carnival as the parallel meeting of
               shareholders of a particular general meeting of the shareholders
               of the Company;

          "P&O Princess" means the Company;

          "P&O Princess Entrenched Provision" means Articles 19, 20, 21, 21A,
          22, 52, 76, 77, 96, 97, 98, 112, 113, 124 to 132 (inclusive), 136,
          147, 174, 177, 189, 194, 195(c), 234 to 237 (inclusive), 272 to 275
          (inclusive), 277 to 287 (inclusive) and 289 to 292 (inclusive) and the
          definitions referred to therein;

          "P&O Princess Guarantee" means the deed poll guarantee of the same
          date as the Equalization Agreement under which the Company agrees to
          guarantee certain obligations of Carnival for the benefit of certain
          future creditors of Carnival, as amended from time to time;

          "P&O Princess Ordinary Shares" means ordinary shares in the capital of
          the Company (and, in respect of Articles 125 and 128 only, will
          include any class of share entitled to vote on the relevant
          resolution), excluding the P&O Princess Special Voting Share and the
          Equalization Share, and except with respect to any voting rights (as
          described in Articles 147 and 148), on a Liquidation (as described in
          Articles 272-276 inclusive) and rights on a Mandatory Exchange (as
          described in Articles 289-292 inclusive), shall also include the
          Disenfranchised P&O Ordinary Shares;

          "P&O Princess Special Voting Share" means the special voting share in
          the capital of the Company (having the rights set out in and referred
          to in Article 19);

          "P&O Princess SVC" means the holder, from time to time, of the P&O
          Princess Special Voting Share;

          "Qualifying Takeover Offer" means an offer or offers to acquire
          Carnival Common Stock and P&O Princess Ordinary shares (i) which would
          be in accordance with the provisions of the City Code to the extent
          that the City Code applies to the Combined Group, and (ii) which:

          (a)  are made to all holders of Carnival Common Stock and P&O Princess
               Ordinary Shares; and

          (b)  are undertaken with respect to the Carnival Common Stock and P&O
               Princess Ordinary Shares at or about the same time; and

                                                                              10



          (c)  comply with all Applicable Regulations, the Carnival Constitution
               and these Articles; and

          (d)  each of the Board of Directors of Carnival and the Board
               determines are equivalent to the holders of Carnival Common
               Stock, on the one hand, and the holders of P&O Princess Ordinary
               Shares, on the other hand, with respect to:

               (1)  the consideration offered for such shares (taking into

                    account exchange rates and any difference in the share price
                    of P&O Princess Ordinary Shares and Carnival Common Stock
                    determined by the Board and the Board of Carnival in their
                    sole discretion to be appropriate and taking into account
                    the Equalization Ratio);

               (2)  the information provided to such holders;

               (3)  the time available to such holders to consider such offers;

               (4)  the conditions to which the offer(s) is subject; and

               (5)  such other terms of the offer(s) which the Board and the
                    Board of Carnival shall determine are relevant.

          "recognised person" means a recognised clearing house or a nominee of
          a recognised clearing house or of a recognised investment exchange,
          each of which terms having the meaning given to it by section 185(4)
          of the Act;

          "register" means the register of members of the Company;

          "Regulations" means the Uncertificated Securities Regulations 2001;

          "seal" means the common seal of the Company and includes any official
          seal kept by the Company by virtue of section 39 or 40 of the Act;

          "secretary" means the secretary of the Company and includes a joint,
          assistant, deputy or temporary secretary and any other person
          appointed to perform the duties of the secretary;

          "Significant Combined Group Holder" means any person who, after
          complying with the provisions of Articles 277 to 287, whether solely
          or together with any party Acting in Concert with such person, holds
          or exercises voting control over Ordinary Shares (which may include
          either or both of P&O Princess Ordinary Shares or Carnival Common
          Stock) representing, in aggregate and after giving effect to the
          Equalization Ratio, the right to cast not less than 30 per cent. and
          not more than 50 per cent. of the votes on a Joint Electorate Action
          from time to time;

          "Special Resolution" means, with respect to the Company or Carnival, a
          resolution required by Applicable Regulations and/or the Carnival
          Constitution or the Memorandum and these Articles, as relevant, to be
          approved by a higher percentage of votes voted than required under an
          ordinary resolution, or where the percentages of votes in favour and
          against the resolution is required to be calculated by a different
          mechanism to that required by an ordinary resolution;

                                                                              11



     "subsidiary" means with respect to the Company or Carnival, any entity,
     whether incorporated or unincorporated, in which such company owns,
     directly or indirectly, a majority of the securities or other ownership
     interests having by their terms ordinary voting power to elect a majority
     of the directors or other persons performing similar functions, or the
     management and policies of which such company otherwise has the power to
     direct;

     "Substantive Resolution" means any resolution of the Company to be
     considered at a general meeting other than a resolution of a procedural or
     technical nature;

     "Tax" means any taxes, levies, imposts, deductions, charges, withholdings
     or duties levied by any authority (including stamp and transaction duties)
     (together with any related interest, penalties, fines and expenses in
     connection with them);

     "Tax Benefit" means any credit, rebate, exemption or benefit in respect of
     Tax available to any person;

     "uncertificated share" means a share in the capital of the Company which is
     recorded on the register as being held in uncertificated form and title to
     which may, by virtue o the Regulations, be transferred by means of a
     relevant system and references in these Articles to a share being held in
     uncertificated form shall be construed accordingly;

     "United Kingdom" means Great Britain and Northern Ireland; and

     "Voting Agreement" means the deed entered into between the Company, P&O
     Princess SVC, Carnival, Carnival SVC and Law Debenture and entitled SVC
     Special Voting Deed, as amended or novated from time to time, and shall
     include any deed entered into to replace that deed or any such replacement.

CONSTRUCTION

3.   References to a document include, unless the context otherwise requires,
     references to an electronic communication.

4.   References to an electronic communication mean, unless the contrary is
     stated, an electronic communication (as defined in the Act) comprising
     writing.

5.   References to a document being executed include references to its being
     executed under hand or under seal or, in the case of an electronic
     communication, by electronic signature.

6.   References to an instrument mean, unless the contrary is stated, a written
     document having tangible form and not comprised in an electronic
     communication (as defined in the Act).

7.   Where, in relation to a share, these Articles refer to a relevant system,
     the reference is to the relevant system in which that share is a
     participating security at the relevant time.

8.   References to a notice or other document being sent to a person by the
     Company include references to such notice or other document, or a copy of
     such notice or other

                                                                              12



     document, being sent, given, delivered, issued or made available to, or
     served on, that person by any method authorised by these Articles, and
     sending shall be construed accordingly.

9.   References to writing mean the representation or reproduction of words,
     symbols or other information in a visible form by any method or combination
     of methods, whether comprised in an electronic communication (as defined in
     the Act) or otherwise, and written shall be construed accordingly.

10.  Words denoting the singular number include the plural number and vice
     versa; words denoting the masculine gender include the feminine gender; and
     words denoting persons include corporations.

11.  Words or expressions contained in these Articles which are not defined in
     Article 2 but are defined in the Act have the same meaning as in the Act
     (but excluding any modification of the Act not in force at the date of
     adoption of these Articles) unless inconsistent with the subject or
     context.

12.  Words or expressions contained in these Articles which are not defined in
     Article 2 but are defined in the Regulations have the same meaning as in
     the Regulations (but excluding any modification of the Regulations not in
     force at the date of adoption of these Articles) unless inconsistent with
     the subject or context.

13.  Subject to the preceding two paragraphs, references to any provision of any
     enactment or of any subordinate legislation (as defined by section 21(1) of
     the Interpretation Act 1978) include any modification or re-enactment of
     that provision for the time being in force.

14.  Headings and marginal notes are inserted for convenience only and do not
     affect the construction of these Articles.

15.  In these Articles, (a) powers of delegation shall not be restrictively
     construed but the widest interpretation shall be given to them; (b) the
     word Board or board in the context of the exercise of any power contained
     in these Articles includes any validly appointed committee; (c) no power of
     delegation shall be limited by the existence or, except where expressly
     provided by the terms of delegation, the exercise of that or any other
     power of delegation; and (d) except where expressly provided by the terms
     of delegation, the delegation of a power shall not exclude the concurrent
     exercise of that power by any other body or person who is for the time
     being authorised to exercise it under these Articles or under another
     delegation of the power.

SHARE CAPITAL

Share capital

16.  The authorised share capital of the Company on the adoption of these
     Articles is (Pounds)100,001 divided into 2 subscriber shares of (Pounds)1
     each, 49,998 redeemable preference shares of (Pounds)1 each, one P&O
     Princess Special Voting Share of (Pounds)1 and one Equalization Share of
     (Pounds)50,000 and US$ [.] divided into [.] ordinary shares of US$ [.] each
     and [.].

17.  The two subscriber shares have no rights whatsoever, including without
     limitation the right to receive notice, attend and vote at a general or
     extraordinary meeting, the right

                                                                              13



     to receive dividends and the right to receive the payment of capital upon a
     distribution of assets.

Return of Capital

18.  If on any return of capital to a shareholder of the Company there is any
     fraction of a cent, or pence as the case may be in respect of the amount
     due to be paid to holder of any P&O Princess Ordinary Share, such fraction
     shall, to the extent permitted by Applicable Regulations, be rounded up to
     the nearest whole cent or pence as the case may be.

P&O Princess Special Voting Share

19.  The P&O Princess Special Voting Share shall confer on the holder of such
     share the relevant rights set out in these Articles, but shall cease to
     confer any right to receive notice of, attend or vote at any general
     meeting if either:

     (a)   the Equalization Agreement is terminated; or

     (b)   a resolution to terminate the Voting Agreement is approved by both
           Carnival and the Company as a Class Rights Action.

20.  On a distribution of assets of the Company on a Liquidation of the Company,
     the P&O Princess Special Voting Share shall rank after the holders of
     Ordinary Shares and redeemable preference shares but ahead of the
     Equalization Share for repayment of any capital paid up or credited as paid
     up and shall only be entitled to repayment of the nominal value paid up on
     its share. The P&O Princess Special Voting Share shall not be entitled to
     receive any dividends.

21.  The rights attaching to the P&O Princess Special Voting Share may be varied
     by a resolution approved as a Class Rights Action. Where the proposed
     variation increases the obligations of the holder of the P&O Princess
     Special Voting Share, such variation shall also require the consent of the
     holder of the P&O Princess Special Voting Share.

21A. All P&O Princess Ordinary Shares acquired by any member of the Carnival
     Group whether pursuant to the partial share offer by Carnival for up to 20
     per cent. of the P&O Princess Ordinary Shares dated [?] or otherwise shall
     automatically be reclassified on the day that such shares are registered in
     the name of such member of the Carnival Group in the register of members of
     the Company into disenfranchised Ordinary Shares ("Disenfranchised P&O
     Ordinary Shares") which, save that the rights attached to such shares shall
     not entitle the member holding such shares:

     (a)   to attend or vote at any general meeting or class meeting of the
           Company unless at the relevant date the Carnival Group is interested
           in 90 per cent. or more of the P&O Princess Ordinary Shares
           (including for the purpose of such calculation the Disenfranchised
           P&O Ordinary Shares); or

     (b)   to receive a Liquidation Distribution,

     such Disenfranchised P&O Ordinary Shares shall otherwise rank pari passu in
     all other respects with P&O Princess Ordinary Shares. Following the
     transfer of any Disenfranchised P&O Ordinary Shares from the Carnival Group
     to a person who is not a member of, or Acting in Concert with, the Combined
     Group such

                                                                              14



     Disenfranchised P&O Ordinary Shares shall automatically be reclassified on
     the day that such shares are, following such transfer, registered in the
     register of members of the Company into P&O Princess Ordinary Shares.

Equalization Share

22.  The Equalization Share shall:

     (a)   have no rights to receive notice of, attend or vote at any general
           meeting of the Company;

     (b)   have rights to dividends as declared and paid by the Board as interim
           dividends declared on that share from time to time; and

     (c)   on a distribution of assets of the Company on a Liquidation of the
           Company, rank after all other holders of shares for repayment of any
           capital paid up or credited as paid up.

Shares with special rights

23.  Subject to the provisions of the Companies Acts and the provisions of
     Articles 124 to 129 and without prejudice to any rights attached to any
     existing shares or class of shares, any share may be issued with such
     rights or restrictions as the Company may by ordinary resolution determine
     or, subject to and in default of such determination, as the Board shall
     determine.

Share warrants to bearer

24.  Subject to the provisions of Articles 124 to 129, the Board may issue share
     warrants to bearer in respect of any fully paid shares under a seal of the
     Company or in any other manner authorised by the Board. Any share while
     represented by such a warrant shall be transferable by delivery of the
     warrant relating to it. In any case in which a warrant is so issued, the
     Board may provide for the payment of dividends or other moneys on the
     shares represented by the warrant by coupons or otherwise. The Board may
     decide, either generally or in any particular case or cases, that any
     signature on a warrant may be applied by mechanical means or printed on it
     or that the warrant need not be signed by any person.

Conditions of issue of share warrants

25.  The Board may determine, and from time to time vary, the conditions on
     which share warrants to bearer shall be issued and, in particular, the
     conditions on which:

     (a)   a new warrant or coupon shall be issued in place of one which has
           been worn-out, defaced, lost or destroyed (but no new warrant shall
           be issued unless the Company is satisfied beyond reasonable doubt
           that the original has been destroyed); or

     (b)   the bearer shall be entitled to attend and vote at general meetings;
           or

     (c)   a warrant may be surrendered and the name of the bearer entered in
           the register in respect of the shares specified in the warrant.

                                                                              15



     The bearer of such a warrant shall be subject to the conditions for the
     time being in force in relation to the warrant, whether made before or
     after the issue of the warrant. Subject to those conditions and to the
     provisions of the Companies Acts, the bearer shall be deemed to be a member
     of the Company and shall have the same rights and privileges as he would
     have if his name had been included in the register as the holder of the
     shares comprised in the warrant.

No right in relation to share

26.  The Company shall not be bound by or be compelled in any way to recognize
     any right in respect of the share represented by a share warrant other than
     the bearer's absolute right to the warrant.

Uncertificated shares

27.  Subject to the provisions of the Regulations, the Board may permit the
     holding of shares in any class of shares in uncertificated form and the
     transfer of title to shares in that class by means of a relevant system and
     may determine that any class of shares shall cease to be a participating
     security.

Not separate class of shares

28.  Shares in the capital of the Company that fall within a certain class shall
     not form a separate class of shares from other shares in that class because
     any share in that class:

     (a)   is held in uncertificated form; or

     (b)   is permitted in accordance with the Regulations to become a
           participating security.

Exercise of Company's entitlements in respect of uncertificated shares

29.  Where any class of shares is a participating security and the Company is
     entitled under any provision of the Companies Acts, the Regulations or
     these Articles to sell, transfer or otherwise dispose of, forfeit,
     re-allot, accept the surrender of or otherwise enforce a lien over a share
     held in uncertificated form, the Company shall be entitled, subject to the
     provisions of the Companies Acts, the Regulations, these Articles and the
     facilities and requirements of the relevant system:

     (a)   to require the holder of that uncertificated share by notice to
           change that share into certificated form within the period specified
           in the notice and to hold that share in certificated form so long as
           required by the Company;

     (b)   to require the holder of that uncertificated share by notice to give
           any instructions necessary to transfer title to that share by means
           of the relevant system within the period specified in the notice;

     (c)   to require the holder of that uncertificated share by notice to
           appoint any person to take any step, including without limitation the
           giving of any instructions by means of the relevant system, necessary
           to transfer that share within the period specified in the notice; and

     (d)   to take any action that the Board considers appropriate to achieve
           the sale, transfer, disposal, forfeiture, re-allotment or surrender
           of that share or

                                                                              16



           otherwise to enforce a lien in respect of that share, including
           giving notice to any person that the share should be converted into
           certificated form.

Section 80 authority

30.  The Board has general and unconditional authority to exercise all the
     powers of the Company to allot relevant securities up to an aggregate
     nominal amount equal to the section 80 amount, for each prescribed period.

Section 89 disapplication

31.  The Board is empowered for each prescribed period to allot equity
     securities for cash pursuant to the authority conferred by Article 30 as if
     section 89(1) of the Act did not apply to any such allotment, provided that
     its power shall be limited to:

     (a)   the allotment of equity securities in connection with an issue in
           favour of ordinary shareholders where the equity securities
           respectively attributable to the interests of all ordinary
           shareholders are proportionate (as nearly as practicable) to the
           respective numbers of ordinary shares held by them, but subject to
           such exclusions or other arrangements as the Board may deem necessary
           or expedient in relation to fractional entitlements or any legal,
           regulatory or practical problems under the laws or regulations of any
           overseas territory or the requirements of any regulatory body or
           stock exchange; and

     (b)   the allotment (otherwise than pursuant to Article 31) of equity
           securities up to an aggregate nominal amount equal to the section 89
           amount.

Allotment after expiry

32.  Before the expiry of a prescribed period the Company may make an offer or
     agreement which would or might require equity securities or other relevant
     securities to be allotted after such expiry. The Board may allot equity
     securities or other relevant securities in pursuance of that offer or
     agreement as if the prescribed period during which that offer or agreement
     was made had not expired.

Further Definitions

33.  In Articles 30 to 33:

     "prescribed period" means any period for which the authority conferred by
     Article 30 is given by ordinary or special resolution stating the section
     80 amount and/or the power conferred by Article 31 is given by special
     resolution stating the section 89 amount;

     "section 80 amount" means, for any prescribed period, the amount stated in
     the relevant ordinary or special resolution; and

     "section 89 amount" means, for any prescribed period, the amount stated in
     the relevant special resolution.

Residual allotment powers

34.  Subject to Articles 124 to 129, the provisions of the Companies Acts
     relating to authority, pre-emption rights or otherwise and of any
     resolution of the Company in

                                                                              17



     general meeting passed pursuant to those provisions, the provisions of
     Articles 124 to 129 and, in the case of redeemable shares, the provisions
     of Article 35:

     (a)   all unissued shares for the time being in the capital of the Company
           shall be at the disposal of the Board; and

     (b)   the Board may allot (with or without conferring a right of
           renunciation), grant options over, or otherwise dispose of them to
           such persons on such terms and conditions and at such times as it
           thinks fit.

REDEEMABLE SHARES

Redeemable shares

35.  Subject to the provisions of the Companies Acts, and without prejudice to
     any rights attached to any existing shares or class of shares, shares may
     be issued which are to be redeemed or are to be liable to be redeemed at
     the option of the Company on such terms and in such manner as may be
     provided by these Articles.

Redeemable Preference Shares

36.  The rights attaching to the redeemable preference shares are as follows:

Dividends

37.  The holders of redeemable preference shares shall be entitled, in priority
     to the holders of any other class of shares in the Company's share capital,
     to receive out of the profits of the Company available for distribution and
     resolved under the Articles to be distributed in respect of each financial
     year of the Company a fixed cumulative preferential dividend (the
     "Preference Dividend") at the rate of 8 per cent. per annum on the amount
     for the time being paid up on each redeemable preference share held by them
     respectively, save that no Preference Dividend shall accrue in respect of
     any redeemable preference share not in issue.

38.  The Preference Dividend shall accrue on a daily basis and shall be payable
     annually in arrears on 31 December ("Annual Preference Dividend Payment
     Date"), or if such date is not a Business Day, on the next following
     Business Day, in respect of the year ending on that date. The first such
     payment shall be made on the 31 December following the issue in respect of
     the period from the date of the issue of the redeemable preference shares
     concerned until such date. The Preference Dividend shall be paid to the
     holders of the issued redeemable preference shares whose names appear on
     the register at 12 noon on any date selected by the directors up to 42 days
     before the relevant dividend payment date.

Capital

39.  On a distribution of assets of the Company among its members on a winding
     up or other return of capital (other than a redemption or purchase by the
     Company of its own shares), the holders of the redeemable preference shares
     shall rank behind the holders of Ordinary Shares but ahead of the holders
     of any other classes of shares of the Company in relation to the payment of
     any capital paid up or credited as paid up on each redeemable preference
     share.

                                                                              18



No further rights to dividends or capital

40.  Save as provided in Articles 37, 38 and 39, the holders of the redeemable
     preference shares shall not be entitled to any participation in the profits
     or assets of the Company.

Voting

41.  The holders of redeemable preference shares shall not have any rights to
     vote.

Redemption

42.  Subject to the Act, the Company shall have the right at any time to redeem
     any redeemable preference shares (provided that they are credited as fully
     paid) by giving to the registered holder written notice of its intention to
     do so (the "Redemption Notice").

43.  The Redemption Notice must specify the number of redeemable preference
     shares to be redeemed, the amount payable on redemption and the date and
     time (the "Redemption Date") and place in England at which:

     (a)   the share certificates in respect of the redeemable preference shares
           must be delivered to the Company for cancellation; and

     (b)   the Company shall pay to the registered holders of the redeemable
           preference shares to be redeemed the redemption money in respect of
           such redeemable preference shares together with a sum equal to any
           arrears and accruals of the Preference Dividend (whether accrued or
           declared or not) and any interest payable calculated down to the date
           of such repayment.

     The holders of the redeemable preference shares to be redeemed shall be
     bound by the Redemption Notice.

44.  The amount to be paid on redemption of each redeemable preference share
     shall equal the amount credited as paid up on it (including any share
     premium) together with all arrears or accruals of the Preference Dividend
     (whether accrued, declared or not) calculated up to and including the
     Redemption Date and in the case of a partial redemption proportionately in
     respect of each holding of redeemable preference shares.

45.  The redeemable preference shares shall be redeemed on or before 31
     December 2050 and if, in accordance with the Act, the redeemable preference
     shares shall not on any such date be capable of being redeemed by the
     Company, such redemption shall be effected as soon as possible after the
     redeemable preference shares have become capable of being redeemed.

46.  The Preference Dividend shall cease to accrue on any redeemable preference
     shares, which are to be redeemed, on the Redemption Date.

47.  If any holder of a redeemable preference share to be redeemed fails or
     refuses to surrender the share certificate for such redeemable preference
     share (or fails or refuses to accept the redemption money payable in
     respect of it), the Company shall retain such money and hold it on trust
     for such holder but without interest or further obligation whatever.

                                                                              19



48.  No redeemable preference share shall be redeemed otherwise than out of
     distributable profits or the proceeds of a fresh issue of shares made for
     the purposes of the redemption or out of capital to the extent permitted by
     the Act but any premium payable on redemption shall be paid either out of
     distributable profits, or to the extent permitted by law, out of the share
     premium account of the Company.

49.  No redeemable preference share redeemed by the Company shall be capable of
     re-issue and on redemption of any redeemable preference shares the
     directors may convert the authorised share capital created as a consequence
     of such redemption into shares of any other class of share capital into
     which the authorised share capital of the Company is or may at that time be
     divided of a like nominal amount (as nearly as may be) as the shares of
     such class then in issue or into unclassified shares of the same nominal
     amount as the redeemable preference shares.

Commissions

50.  The Company may exercise all powers of paying commissions or brokerage
     conferred or permitted by the Companies Acts. Subject to the provisions of
     the Companies Acts, any such commission or brokerage may be satisfied by
     the payment of cash or by the allotment of fully or partly paid shares or
     partly in one way and partly in the other.

Trusts not recognised

51.  Except as required by law or as otherwise provided by these Articles, the
     Company shall recognise no person as holding any share on any trust and
     (except as otherwise provided by these Articles or by law) the Company
     shall not be bound by or recognise any interest in any share (or in any
     fractional part of a share) except the holder's absolute right to the
     entirety of the share (or fractional part of the share).

VARIATION OF RIGHTS

Method of varying rights

52.  Subject to the provisions of the Companies Acts and the provisions of
     Articles 124 to 129, if at any time the capital of the Company is divided
     into different classes of shares, the rights attached to any class may
     (unless otherwise provided by the terms of allotment of the shares of that
     class) be varied or abrogated, whether or not the Company is being wound
     up, either:

     (a)   with the consent of the holders of three-quarters in nominal value of
           the issued shares of the class, which consent shall be by means of
           one or more instruments or contained in one or more electronic
           communications sent to such address (if any) as may for the time
           being be notified by or on behalf of the Company for that purpose or
           a comombination of both; or

     (b)   with the sanction of an extraordinary resolution passed at a separate
           general meeting of the holders of the shares of the class,

     but not otherwise.

                                                                              20



SHARE CERTIFICATES

Members' rights to certificates

53.      Every member, on becoming the holder of any certificated share (except
         a recognised person in respect of whom the Company is not required by
         law to complete and have ready for delivery a certificate) shall be
         entitled, without payment, to one certificate for all the certificated
         shares of each class held by him (and, on transferring a part of his
         holding of certificated shares of any class, to a certificate for the
         balance of his holding of certificated shares). He may elect to receive
         one or more additional certificates for any of his certificated shares
         if he pays for every certificate after the first a reasonable sum
         determined from time to time by the Board. Every certificate shall:

         (a)  be executed under the seal or otherwise in accordance with Article
              222 or in such other manner as the Board may approve; and

         (b)  specify the number, class and distinguishing numbers (if any) of
              the shares to which it relates and the amount or respective
              amounts paid up on the shares.

54.      The Company shall not be bound to issue more than one certificate for
         certificated shares held jointly by more than one person and delivery
         of a certificate to one joint holder shall be a sufficient delivery to
         all of them. Shares of different classes may not be included in the
         same certificate.

Replacement certificates

55.      If a share certificate is defaced, worn out, lost or destroyed, it may
         be renewed on such terms (if any) as to evidence and indemnity and
         payment of any exceptional out-of-pocket expenses reasonably incurred
         by the Company in investigating evidence and preparing the requisite
         form of indemnity as the Board may determine but otherwise free of
         charge, and (in the case of defacement or wearing out) on delivery up
         of the old certificate.

LIEN

Company to have lien on shares

56.      The Company shall have a first and paramount lien on every share (not
         being a fully paid share) for all moneys payable to the Company
         (whether presently or not) in respect of that share. The Board may at
         any time (generally or in a particular case) waive any lien or declare
         any share to be wholly or in part exempt from the provisions of this
         Article. The Company's lien on a share shall extend to any amount
         (including without limitation dividends) payable in respect of it.

Enforcement of lien by sale

57.      The Company may sell, in such manner as the Board determines, any share
         on which the Company has a lien if a sum in respect of which the lien
         exists is presently payable and is not paid within 14 clear days after
         notice has been sent to the holder of the share, or to the person
         entitled to it by transmission, demanding payment and stating that if
         the notice is not complied with the share may be sold.

                                                                              21



Giving effect to sale

58.      To give effect to that sale the Board may, if the share is a
         certificated share, authorise any person to execute an instrument of
         transfer in respect of the share sold to, or in accordance with the
         directions of, the buyer. If the share is an uncertificated share, the
         Board may exercise any of the Company's powers under Article 29 to
         require the share to be changed into certificated form and to effect
         the sale of the share to, or in accordance with the directions of, the
         buyer. The buyer shall not be bound to see to the application of the
         purchase money and his title to the share shall not be affected by any
         irregularity in or invalidity of the proceedings in relation to the
         sale.

Application of proceeds

59.      The net proceeds of the sale, after payment of the costs, shall be
         applied in or towards payment or satisfaction of so much of the sum in
         respect of which the lien exists as is presently payable. Any residue
         shall (if the share sold is a certificated share, on surrender to the
         Company for cancellation of the certificate in respect of the share
         sold and, whether the share sold is a certificated or uncertificated
         share, subject to a like lien for any moneys not presently payable as
         existed on the share before the sale) be paid to the person entitled to
         the share at the date of the sale.

CALLS ON SHARES

Power to make calls

60.      Subject to the terms of allotment, the Board may from time to time make
         calls on the members in respect of any moneys unpaid on their shares
         (whether in respect of nominal value or premium). Each member shall
         (subject to receiving at least 14 clear days' notice specifying when
         and where payment is to be made) pay to the Company the amount called
         on his shares as required by the notice. A call may be required to be
         paid by instalments. A call may be revoked in whole or part and the
         time fixed for payment of a call may be postponed in whole or part as
         the Board may determine. A person on whom a call is made shall remain
         liable for calls made on him even if the shares in respect of which the
         call was made are subsequently transferred.

Time when call made

61.      A call shall be deemed to have been made at the time when the
         resolution of the Board authorising the call was passed.

Liability of joint holders

62.      The joint holders of a share shall be jointly and severally liable to
         pay all calls in respect of it.

Interest payable

63.      If a call or any instalment of a call remains unpaid in whole or in
         part after it has become due and payable the person from whom it is due
         and payable shall pay interest on the amount unpaid from the day it
         became due and payable until it is paid. Interest shall be paid at the
         rate fixed by the terms of allotment of the share or in the notice of
         the call or, if no rate is fixed, the rate determined by the Board, not
         exceeding 15 per cent. per annum, or, if higher, the appropriate rate
         (as defined in the

                                                                              22



         Act), but the Board may in respect of any individual member waive
         payment of such interest wholly or in part.

Deemed calls

64.      An amount payable in respect of a share on allotment or at any fixed
         date, whether in respect of nominal value or premium or as an
         instalment of a call, shall be deemed to be a call duly made and
         notified and payable on the date so fixed or in accordance with the
         terms of the allotment. If it is not paid the provisions of these
         Articles shall apply as if that amount had become due and payable by
         virtue of a call duly made and notified.

Differentiation on calls

65.      Subject to the terms of allotment, the Board may make arrangements on
         the issue of shares for a difference between the allottees or holders
         in the amounts and times of payment of calls on their shares.

Payment of calls in advance

66.      The Board may, if it thinks fit, receive from any member all or any
         part of the moneys uncalled and unpaid on any share held by him. Such
         payment in advance of calls shall extinguish the liability on the share
         in respect of which it is made to the extent of the payment. The
         Company may pay on all or any of the moneys so advanced (until they
         would but for such advance become presently payable) interest at such
         rate agreed between the Board and the member not exceeding (unless the
         Company by ordinary resolution otherwise directs) 15 per cent. per
         annum or, if higher, the appropriate rate (as defined in the Act).

FORFEITURE AND SURRENDER

Notice requiring payment of call

67.      If a call or any instalment of a call remains unpaid in whole or in
         part after it has become due and payable, the Board may give to the
         person from whom it is due not less than 14 clear days' notice
         requiring payment of the amount unpaid together with any interest which
         may have accrued and any costs, charges and expenses incurred by the
         Company by reason of such non-payment. The notice shall name the place
         where payment is to be made and shall state that if the notice is not
         complied with the shares in respect of which the call was made will be
         liable to be forfeited.

Forfeiture for non-compliance

68.      If that notice is not complied with, any share in respect of which it
         was given may, at any time before the payment required by the notice
         has been made, be forfeited by a resolution of the Board. The
         forfeiture shall include all dividends or other moneys payable in
         respect of the forfeited share which have not been paid before the
         forfeiture. When a share has been forfeited, notice of the forfeiture
         shall be sent to the person who was the holder of the share before the
         forfeiture. An entry shall be made promptly in the register opposite
         the entry of the share showing that notice has been sent, that the
         share has been forfeited and the date of forfeiture. No forfeiture
         shall be invalidated by the omission or neglect to give that notice or
         to make those entries.

                                                                              23



Sale of forfeited shares

69.      Subject to the provisions of the Companies Acts, a forfeited share
         shall be deemed to belong to the Company and may be sold, re-allotted
         or otherwise disposed of on such terms and in such manner as the Board
         determines, either to the person who was the holder before the
         forfeiture or to any other person. At any time before sale,
         re-allotment or other disposal, the forfeiture may be cancelled on such
         terms as the Board thinks fit. Where for the purposes of its disposal a
         forfeited share held in certificated form is to be transferred to any
         person, the Board may authorise any person to execute an instrument of
         transfer of the share to that person. Where for the purposes of its
         disposal a forfeited share held in uncertificated form is to be
         transferred to any person, the Board may exercise any of the Company's
         powers under Article 29. The Company may receive the consideration
         given for the share on its disposal and may register the transferee as
         holder of the share.

Liability following forfeiture

70.      A person shall cease to be a member in respect of any share which has
         been forfeited and shall, if the share is a certificated share,
         surrender the certificate for any forfeited share to the Company for
         cancellation. The person shall remain liable to the Company for all
         moneys which at the date of forfeiture were presently payable by him to
         the Company in respect of that share with interest on that amount at
         the rate at which interest was payable on those moneys before the
         forfeiture or, if no interest was so payable, at the rate determined by
         the Board, not exceeding 15 per cent. per annum or, if higher, the
         appropriate rate (as defined in the Act), from the date of forfeiture
         until payment. The Board may waive payment wholly or in part or enforce
         payment without any allowance for the value of the share at the time of
         forfeiture or for any consideration received on its disposal.

Surrender

71.      The Board may accept the surrender of any share which it is in a
         position to forfeit on such terms and conditions as may be agreed.
         Subject to those terms and conditions, a surrendered share shall be
         treated as if it had been forfeited.

Extinction of rights

72.      The forfeiture of a share shall involve the extinction at the time of
         forfeiture of all interest in and all claims and demands against the
         Company in respect of the share and all other rights and liabilities
         incidental to the share as between the person whose share is forfeited
         and the Company, except only those rights and liabilities expressly
         saved by these Articles, or as are given or imposed in the case of past
         members by the Companies Acts.

Evidence of forfeiture or surrender

73.      A statutory declaration by a director or the secretary that a share has
         been duly forfeited or surrendered on a specified date shall be
         conclusive evidence of the facts stated in it as against all persons
         claiming to be entitled to the share. The declaration shall (subject if
         necessary to the execution of an instrument of transfer or transfer by
         means of the relevant system, as the case may be) constitute a good
         title to the share. The person to whom the share is disposed of shall
         not be bound to see to the application of the purchase money, if any,
         and his title to the share shall not be

                                                                              24



         affected by any irregularity in, or invalidity of, the proceedings in
         reference to the forfeiture, surrender, sale, re-allotment or disposal
         of the share.

TRANSFER OF SHARES

Form and execution of transfer of certificated share

74.      The instrument of transfer of a certificated share may be in any usual
         form or in any other form which the Board may approve. An instrument of
         transfer shall be signed by or on behalf of the transferor and, unless
         the share is fully paid, by or on behalf of the transferee. An
         instrument of transfer need not be under seal.

Right to refuse Registration

75.      The Board may, in its absolute discretion and without giving any
         reason, refuse to register the transfer of a certificated share which
         is not fully paid, provided that the refusal does not prevent dealings
         in shares in the Company from taking place on an open and proper basis.

76.      The Board shall decline to register any transfer of the P&O Princess
         Special Voting Share unless the transfer has been approved in
         accordance with, and the transferee complies with, the relevant
         provisions of the Voting Agreement.

77.      The Board shall refuse to register any transfer of the Equalization
         Share unless such transfer is to a member of the Carnival Group or to a
         trustee for the benefit of one or more members of the Carnival Group.

78.      The Board may, in its absolute discretion, also refuse to register the
         transfer of a certificated share unless the instrument of transfer:

         (a)  is lodged, duly stamped (if stampable), at the office or at
              another place appointed by the Board accompanied by the
              certificate for the share to which it relates and such other
              evidence as the Board may reasonably require to show the right of
              the transferor to make the transfer;

         (b)  is in respect of only one class of shares; and

         (c)  is in favour of not more than four transferees.

Transfers by recognised persons

79.      In the case of a transfer of a certificated share by a recognised
         person, the lodgement of a share certificate will only be necessary if
         and to the extent that a certificate has been issued in respect of the
         share in question.

Notice of refusal to register

80.      If the Board refuses to register a transfer of a share, it shall send
         the transferee notice of its refusal within two months after the date
         on which the instrument of transfer was lodged with the Company or the
         Operator-instruction was received, as the case may be.

                                                                              25



Suspension of registration

81.      The registration of transfers of shares or of transfers of any class of
         shares may be suspended at such times and for such periods (not
         exceeding 30 days in any year) as the Board may determine, except that
         the Board may not suspend the registration of transfers of any
         participating security without the consent of the Operator of the
         relevant system.

No fee payable on registration

82.      No fee shall be charged for the registration of any instrument of
         transfer or other document relating to or affecting the title to a
         share.

Retention of transfers

83.      The Company shall be entitled to retain an instrument of transfer which
         is registered, but an instrument of transfer which the Board refuses to
         register shall be returned to the person lodging it when notice of the
         refusal is given.

TRANSMISSION OF SHARES

Transmission

84.      If a member dies, the survivor or survivors where he was a joint
         holder, and his personal representatives where he was a sole holder or
         the only survivor of joint holders, shall be the only persons
         recognised by the Company as having any title to his interest. Nothing
         in these Articles shall release the estate of a deceased member
         (whether a sole or joint holder) from any liability in respect of any
         share held by him.

Elections permitted

85.      A person becoming entitled by transmission to a share may, on
         production of any evidence as to his entitlement properly required by
         the Board, elect either to become the holder of the share or to have
         another person nominated by him registered as the transferee. If he
         elects to become the holder he shall give notice to the Company to that
         effect. If he elects to have another person registered and the share is
         a certificated share, he shall execute an instrument of transfer of the
         share to that person. If he elects to have himself or another person
         registered and the share is an uncertificated share, he shall take any
         action the Board may require (including without limitation the
         execution of any document and the giving of any instruction by means of
         a relevant system) to enable himself or that person to be registered as
         the holder of the share. All the provisions of these Articles relating
         to the transfer of shares apply to that notice or instrument of
         transfer as if it were an instrument of transfer executed by the member
         and the death or bankruptcy of the member or other event giving rise to
         the transmission had not occurred.

Elections required

86.      The Board may at any time send a notice requiring any such person to
         elect either to be registered himself or to transfer the share. If the
         notice is not complied with within 60 days, the Board may after the
         expiry of that period withhold payment of all dividends or other moneys
         payable in respect of the share until the requirements of the notice
         have been complied with.

                                                                              26



Rights of persons entitled by transmission

87.      A person becoming entitled by transmission to a share shall, on
         production of any evidence as to his entitlement properly required by
         the Board and subject to the requirements of Articles 85 and 86, have
         the same rights in relation to the share as he would have had if he
         were the holder of the share, subject to Article 241. That person may
         give a discharge for all dividends and other moneys payable in respect
         of the share, but he shall not, before being registered as the holder
         of the share, be entitled in respect of it to receive notice of, or to
         attend or vote at, any meeting of the Company or to receive notice of
         or to attend or vote at any separate meeting of the holders of any
         class of shares in the capital of the Company.

ALTERATION OF SHARE CAPITAL

Alterations by ordinary resolution

88.      Subject to Articles 124 to 129 and the provisions of the Equalization
         Agreement, the Company may by ordinary resolution:

         (a)  increase its share capital by such sum to be divided into shares
              of such amount as the resolution prescribes;

         (b)  consolidate and divide all or any of its share capital into shares
              of larger amount than its existing shares;

         (c)  subject to the provisions of the Companies Acts, sub-divide its
              shares, or any of them, into shares of smaller amount than is
              fixed by the Memorandum and the resolution may determine that, as
              between the shares resulting from the sub-division, any of them
              may have any preference or advantage as compared with the others;
              and

         (d)  cancel shares which, at the date of the passing of the resolution,
              have not been taken or agreed to be taken by any person and
              diminish the amount of its share capital by the amount of the
              shares so cancelled.

New shares subject to these Articles

89.      All shares created by ordinary resolution pursuant to Article 88 shall
         be:

         (a)  subject to all the provisions of these Articles including, without
              limitation, provisions relating to payment of calls, lien,
              forfeiture, transfer and transmission; and

         (b)  ordinary shares, unless otherwise provided by these Articles, by
              the resolution creating the shares or by the terms of allotment of
              the shares.

Fractions arising

90.      Whenever any fractions arise as a result of a consolidation or
         sub-division of shares, the Board may on behalf of the members deal
         with the fractions as it, in its absolute discretion, thinks fit. In
         particular, without limitation, the Board may sell shares representing
         fractions to which any members would otherwise become entitled to any
         person (including, subject to the provisions of the Companies Acts, the
         Company) and distribute the net proceeds of sale in due proportion
         among those members. Where

                                                                              27



     the shares to be sold are held in certificated form the Board may authorise
     some person to execute an instrument of transfer of the shares to, or in
     accordance with the directions of, the buyer. Where the shares to be sold
     are held in uncertificated form, the Board may do all acts and things it
     considers necessary or expedient to rematerialize the shares into
     certificated form and/or to effect the transfer of the shares to, or in
     accordance with the directions of, the buyer. The buyer shall not be bound
     to see to the application of the purchase moneys and his title to the
     shares shall not be affected by any irregularity in, or invalidity of, the
     proceedings in relation to the sale.

Power to reduce capital

91.  Subject to Articles 124 to 129, the provisions of the Companies Acts, and
     the provisions of the Equalization Agreement, the Company may by special
     resolution reduce its share capital, capital redemption reserve and share
     premium account in any way.

PURCHASE OF OWN SHARES

Power to purchase own shares

92.  Subject to Articles 124 to 129, and in accordance with the provisions of
     the Companies Acts and the provisions of the Equalization Agreement, and
     without prejudice to any relevant special rights attached to any class of
     shares, the Company may purchase any of its own shares of any class
     (including without limitation redeemable shares) in any way and at any
     price (whether at par or above or below par).

GENERAL MEETINGS

Types of general meeting

93.  All general meetings of the Company other than annual general meetings
     shall be called extraordinary general meetings. The Board shall convene and
     the Company shall hold general meetings as annual general meetings in
     accordance with the requirements of the Act.

Convening general meetings

94.  The Board may call general meetings whenever and at such times and places
     as it shall determine. On the requisition of members pursuant to the
     provisions of the Companies Acts, the Board shall promptly convene an
     extraordinary general meeting in accordance with the requirements of the
     Companies Acts. If there are no directors of the Company at any time, any
     two members of the Company may summon a meeting for the purpose of
     appointing one or more directors.

Recipients of notice

95.  Subject to the provisions of the Companies Acts, to the provisions of these
     Articles and to any restrictions imposed on any shares, any notice of
     general meeting shall be sent to all the members, to each of the directors
     and to the auditors.

96.  If the Company proposes to undertake a Joint Electorate Action or a Class
     Rights Action:

                                                                              28



     (a)  the Company shall immediately give notice to Carnival of the nature of
          the Joint Electorate Action or the Class Rights Action it proposes to
          take; and

     (b)  the Board shall convene a general meeting for the purpose of
          considering the Joint Electorate Action or Class Rights Action to be
          held as close in time as practicable with the Parallel General Meeting
          convened by Carnival for the purposes of considering that Joint
          Electorate Action or Class Rights Action.

97.  If the Company receives notice that Carnival proposes to undertake a Joint
     Electorate Action or Class Rights Action, the directors shall convene a
     general meeting for the purposes of considering that Joint Electorate
     Action or Class Rights Action, such meeting to be held as close in time as
     practicable with the Parallel General Meeting and shall propose a
     resolution which is an Equivalent Resolution to the Carnival Joint
     Electorate Action or Class Rights Action.

98.  The Company shall co-operate fully with Carnival in the preparation of any
     information or material required in connection with any general meeting to
     consider a proposed Joint Electorate Action or Class Rights Action.

NOTICE OF GENERAL MEETINGS

Period of notice

99.  An annual general meeting and an extraordinary general meeting called for
     the passing of a special resolution shall be called by at least 21 clear
     days' notice. All other extraordinary general meetings shall be called by
     at least 14 clear days' notice.

Contents of notice: general

100. The notice shall specify the time and place of the meeting (including
     without limitation any satellite meeting place arranged for the purposes of
     Article 103, which shall be identified as such in the notice) and the
     general nature of that business.

Contents of notice: additional requirements

101. In the case of an annual general meeting, the notice shall specify the
     meeting as such. In the case of a meeting to pass a special or
     extraordinary resolution, the notice shall specify the intention to propose
     the resolution as a special or extraordinary resolution, as the case may
     be. The notice shall also state whether the resolution relates to a Joint
     Electorate Action or a Class Rights Action.

Article 105 arrangements

102.     The notice shall include details of any arrangements made for the
         purpose of Article 105 making clear that participation in those
         arrangements will not amount to attendance at the meeting to which the
         notice relates.

General meetings at more than one place

103. The Board may resolve to enable persons entitled to attend a general
     meeting to do so by simultaneous attendance and participation at a
     satellite meeting place anywhere in the world. The members present in
     person or by proxy at satellite meeting places shall be counted in the
     quorum for, and entitled to vote at, the general meeting in question, and
     that meeting shall be duly constituted and its proceedings valid if the

                                                                              29



     chairman of the general meeting is satisfied that adequate facilities are
     available throughout the general meeting to ensure that members attending
     at all the meeting places are able to:

     (a)  participate in the business for which the meeting has been convened;

     (b)  hear and see all persons who speak (whether by the use of microphones,
          loudspeakers, audio-visual communications equipment or otherwise) in
          the principal meeting place and any satellite meeting place; and

     (c)  be heard and seen by all other persons so present in the same way, and
          the meeting shall be deemed to take place at the principal meeting
          place.

Interruption or adjournment where facilities inadequate

104. If it appears to the chairman of the general meeting that the facilities at
     the principal meeting place or any satellite meeting place have become
     inadequate for the purposes referred to in Article 103, then the chairman
     may, without the consent of the meeting, interrupt or adjourn the general
     meeting. All business conducted at that general meeting up to the time of
     that adjournment shall be valid. The provisions of Article 119 shall apply
     to that adjournment.

Other arrangements for viewing/hearing proceedings

105. The Board may make arrangements for persons entitled to attend a general
     meeting or an adjourned general meeting to be able to view and hear the
     proceedings of the general meeting or adjourned general meeting and to
     speak at the meeting (whether by the use of microphones, loudspeakers,
     audio-visual communications equipment or otherwise) by attending at a venue
     anywhere in the world not being a satellite meeting place. Those attending
     at any such venue shall not be regarded as present at the general meeting
     or adjourned general meeting and shall not be entitled to vote at the
     meeting at or from that venue. The inability for any reason of any member
     present in person or by proxy at such a venue to view or hear all or any of
     the proceedings of the meeting or to speak at the meeting shall not in any
     way affect the validity of the proceedings of the meeting.

Controlling level of attendance

106. The Board may from time to time make any arrangements for controlling the
     level of attendance at any venue for which arrangements have been made
     pursuant to Article 105 (including without limitation the issue of tickets
     or the imposition of some other means of selection) which it in its
     absolute discretion considers appropriate, and may from time to time change
     those arrangements. If a member, pursuant to those arrangements, is not
     entitled to attend in person or by proxy at a particular venue, he shall be
     entitled to attend in person or by proxy at any other venue for which
     arrangements have been made pursuant to Article 105. The entitlement of any
     member to be present at such venue in person or by proxy shall be subject
     to any such arrangement then in force and stated by the notice of meeting
     or adjourned meeting to apply to the meeting.

                                                                              30



Change in place and/or time of meeting

107. If, after the sending of notice of a general meeting but before the meeting
     is held, or after the adjournment of a general meeting but before the
     adjourned meeting is held (whether or not notice of the adjourned meeting
     is required), the Board decides that it is impracticable or unreasonable
     for a reason beyond its control to hold the meeting at the declared place
     (or any of the declared places, in the case of a meeting to which Article
     103 applies) and/or time, it may change the place (or any of the places, in
     the case of a meeting to which Article 103 applies) and/or postpone the
     time at which the meeting is to be held. If such a decision is made, the
     Board may then change the place (or any of the places, in the case of a
     meeting to which Article 103 applies) and/or postpone the time again if it
     decides that it is reasonable to do so. In either case:

     (a)  no new notice of the meeting need be sent, but the Board shall, if
          practicable, advertise the date, time and place of the meeting in at
          least two newspapers having a national circulation and shall make
          arrangements for notices of the change of place and/or postponement to
          appear at the original place and/or at the original time; and

     (b)  a proxy appointment in relation to the meeting may, if by means of an
          instrument, be delivered to the office or to such other place within
          the United Kingdom as may be specified by or on behalf of the Company
          in accordance with Article 165(a) or, if contained in an electronic
          communication, be received at the address (if any) specified by or on
          behalf of the Company in accordance with Article 165(b), at any time
          not less than 48 hours before any postponed time appointed for holding
          the meeting; and

     (c)  any valid proxy duly delivered to the Company in respect of a meeting
          which is postponed in accordance with these Articles shall be valid
          and subsisting in respect of that meeting when held notwithstanding
          that the time and/or place for the meeting changes unless expressly
          provided otherwise in the relevant proxy.

Meaning of participate

108. For the purposes of Articles 103 to 107, the right of a member to
     participate in the business of any general meeting shall include, without
     limitation, the right to speak, vote on a show of hands (to the extent
     applicable), vote on a poll, be represented by a proxy and have access to
     all documents which are required by the Companies Acts or these Articles to
     be made available at the meeting.

Accidental omission to give notice etc.

109. The accidental omission to send a notice of a meeting, or to send any
     notification where required by the Companies Acts or these Articles in
     relation to the publication of a notice of meeting on a website, or to send
     a form of proxy where required by the Companies Acts or these Articles, to
     any person entitled to receive it, or the non-receipt for any reason of any
     such notice or notification or form of proxy by that person, whether or not
     the Company is aware of such omission or non-receipt, shall not invalidate
     the proceedings at that meeting.

                                                                              31



Security

110. The Board and, at any general meeting, the chairman may make any
     arrangement and impose any requirement or restriction it or he considers
     appropriate to ensure the security of a general meeting including, without
     limitation, requirements for evidence of identity to be produced by those
     attending the meeting, the searching of their personal property and the
     restriction of items that may be taken into the meeting place. The Board
     and, at any general meeting, the chairman are entitled to refuse entry to a
     person who refuses to comply with these arrangements, requirements or
     restrictions.

PROCEEDINGS AT GENERAL MEETINGS

Quorum

111. No business shall be transacted at any general meeting unless a quorum is
     present, but the absence of a quorum shall not preclude the choice or
     appointment of a chairman, which shall not be treated as part of the
     business of the meeting. Save as otherwise provided by these Articles and
     subject to Articles 112 and 130, three Members Present in person or by
     proxy and entitled to vote on the business to be transacted shall be a
     quorum (and for the avoidance of doubt, the holder of the P&O Princess
     Special Voting Share shall be treated as being entitled to vote for the
     purposes of determining whether a quorum exists notwithstanding the
     operation of Articles 125 and 131).

112. Where a Joint Electorate Action or a Class Rights Action is to be
     considered at the general meeting, one of the Members Present must be the
     holder of the P&O Princess Special Voting Share. Notwithstanding the
     provisions of Article 111, no resolution will be approved as a Joint
     Electorate Action unless one third of the total votes capable of being cast
     by (i) the holders of the P&O Princess Ordinary Shares, and (ii) the holder
     of the P&O Princess Special Voting Share (assuming all holders of
     outstanding Carnival Common Stock vote at the Parallel General Meeting),
     are cast on the resolution proposing such Joint Electorate Action.

113. For the purposes of Article 112, (i) votes which a holder of P&O Princess
     Ordinary Shares specifically elects to abstain from voting in accordance
     with Article 148; and (ii) votes which the P&O Princess Special Voting
     Share carries as abstentions in accordance with Article 129 shall in each
     case be counted as having been "cast".

If quorum not present

114. If such a quorum is not present within five minutes (or such longer time
     not exceeding 60 minutes as the chairman of the meeting may decide to wait)
     from the time appointed for the meeting, or if during a meeting such a
     quorum ceases to be present, the meeting, if convened on the requisition of
     members, shall be dissolved, and in any other case shall stand adjourned to
     such time and place as the chairman of the meeting may determine. The
     adjourned meeting shall be dissolved if a quorum is not present within 15
     minutes after the time appointed for holding the meeting.

Chairman

115. The chairman, if any, of the Board or, in his absence, any deputy chairman
     of the Board or, in his absence, some other director nominated by the
     Board, shall preside as

                                                                              32



     chairman of the meeting. If neither the chairman, deputy chairman nor any
     such other director is present within thirty minutes after the time
     appointed for holding the meeting or is not willing to act as chairman, the
     directors present shall elect one of their number to be chairman. If there
     is only one director present and willing to act, he shall be chairman. If
     no director is willing to act as chairman, or if no director is present
     within thirty minutes after the time appointed for holding the meeting, the
     members present and entitled to vote shall choose one of their number to be
     chairman.

Directors entitled to attend and speak

116. A director shall, notwithstanding that he is not a member, be entitled to
     attend and speak at any general meeting and at any separate meeting of the
     holders of any class of shares in the capital of the Company.

Adjournments: chairman's powers

117. The chairman may, with the consent of a meeting at which a quorum is
     present (and shall if so directed by the meeting), adjourn the meeting from
     time to time and from place to place. No business shall be transacted at an
     adjourned meeting other than business which might properly have been
     transacted at the meeting had the adjournment not taken place. In addition
     (and without prejudice to the chairman's power to adjourn a meeting
     conferred by Article 104), the chairman may adjourn the meeting to another
     time and place without such consent if it appears to him that:

     (a)  any amendment to a Substantive Resolution has been approved at the
          meeting;

     (b)  it is likely to be impracticable to hold or continue that meeting
          because of the number of members wishing to attend who are not
          present; or

     (c)  the unruly conduct of persons attending the meeting prevents or is
          likely to prevent the orderly continuation of the business of the
          meeting; or

     (d)  an adjournment is otherwise necessary so that the business of the
          meeting may be properly conducted; or

     (e)  notice is received of any adjournment of the Parallel General Meeting.

118. In determining whether to adjourn the meeting under Article 117, the
     chairman shall have regard to the Company's obligations under Articles 106
     and 109 and the impact of any adjournment on the Parallel General Meeting
     (if any).

Adjournments: procedures

119. Any such adjournment may be for such time and to such other place (or, in
     the case of a meeting held at a principal meeting place and a satellite
     meeting place, such other places) as the chairman may, in his absolute
     discretion, determine, notwithstanding that by reason of such adjournment
     some members may be unable to be present at the adjourned meeting. Any such
     member may nevertheless appoint a proxy for the adjourned meeting either in
     accordance with Article 163 or by means of an instrument which, if
     delivered by him at the meeting which is adjourned to the chairman or the
     secretary or any director, shall be valid even though it is given at less
     notice than would otherwise be required by Article 165(a). When a meeting
     is adjourned for 30 days or more or for an indefinite period, notice shall
     be sent at least seven clear days

                                                                              33



     before the date of the adjourned meeting specifying the time and place (or
     places, in the case of a meeting to which Article 103 applies) of the
     adjourned meeting and the general nature of the business to be transacted.
     Otherwise it shall not be necessary to send any notice of an adjournment or
     of the business to be transacted at an adjourned meeting.

120. The Company shall as soon as possible give notice to Carnival of an
     adjournment and of the business to be transacted at an adjourned meeting.

Class meetings

121. Subject to Articles 122 and 123 below, all provisions of these Articles
     relating to general meetings of the Company shall, mutatis mutandis, apply
     to every separate general meeting of the holders of any class of shares in
     the capital of the Company, except that:

     (a)  the necessary quorum shall be two or more persons holding or
          representing by proxy at least one-third in nominal value of the
          issued shares of the class or, at any adjourned meeting of such
          holders, one holder present in person or by proxy, whatever the amount
          of his holding, who shall be deemed to constitute a meeting;

     (b)  any holder of shares of the class present in person or by proxy may
          demand a poll; and

     (c)  each holder of shares of the class shall, on a poll, be entitled to
          such aggregate number of votes as are attached to every share of the
          class held by him.

122. Any separate class meeting of the holder of the P&O Princess Special Voting
     Share shall take effect by written resolution.

123. Any separate class meeting of the holder of the Equalization Share shall
     take effect by written resolution.

VOTING RIGHTS AND PROCEDURES UNDER THE EQUALIZATION AGREEMENT

Class Rights Actions

124. The following actions constitute Class Rights Actions:

     (a)  the voluntary Liquidation of the Company or Carnival for which the
          approval of the members is required by Applicable Regulations or
          proposed other than a voluntary Liquidation of both the Company and
          Carnival at or about the same time with the purpose or effect of no
          longer continuing the operation of the businesses of the companies as
          a combined going concern and not as part of a scheme, plan,
          transaction, or series of related transactions the primary purpose or
          effect of which is to reconstitute all or a substantial part of such
          businesses in one or more successor entities;

     (b)  the sale, lease, exchange or other disposition of all or substantially
          all of the assets of either Carnival or the Company, other than in a
          bona fide commercial transaction undertaken for a valid business
          purpose in which such company receives consideration with a fair
          market value reasonably equivalent to the

                                                                              34



          assets disposed of and not as a part of a scheme, plan, transaction or
          series of related transactions the primary purpose or effect of which
          is to collapse or unify the DLC Structure;

     (c)  any adjustment to the Equalization Ratio otherwise than in accordance
          with the provisions of the Equalization Agreement;

     (d)  except where specifically provided for in the relevant agreements, any
          amendment to the terms of, or termination of, the Equalization
          Agreement, the Voting Agreement, the P&O Princess Guarantee or the
          Carnival Guarantee (including, for the avoidance of doubt, the
          voluntary termination of either the P&O Princess Guarantee or the
          Carnival Guarantee);

     (e)  any amendment to, or removal of, or alteration of the effect of (which
          shall include the ratification of any breach of) any P&O Princess
          Entrenched Provision or any Carnival Entrenched Provision;

     (f)  any amendment to, removal or alteration of the effect of (which shall
          include the ratification of any breach of) Article XII or XIII of the
          Articles of Incorporation of Carnival that would cause, or at the time
          of implementation would be reasonably likely to cause, an Exchange
          Event described in clause (a) of the definition thereof to occur; and

     (g)  the doing of anything which the Board and the Board of Carnival agree
          (either in a particular case or generally), in their absolute
          discretion, should be approved as a Class Rights Action.

     Notwithstanding anything to the contrary contained in these Articles, none
     of the foregoing actions may be undertaken by the Company unless it has
     been approved as a Class Rights Action in accordance with Article 125.

Class Rights Action Procedure

125. If the Company proposes to take any Class Rights Action or is required to
     put a resolution pursuant to Article 97:

     (a)  such action (either by the Company or by Carnival) shall require
          approval by an ordinary resolution (or, if required by these Articles
          or Applicable Regulations, by a Special Resolution) passed at a
          general meeting of the members of the Company in relation to which the
          holders of P&O Princess Ordinary Shares and the holder of the P&O
          Princess Special Voting Share shall be entitled to vote as a single
          class on a poll; and

     (b)  in relation to such resolution:

          (i)  if the proposed action is approved by the requisite majority (as
               determined in accordance with the Carnival Constitution and
               Applicable Regulations) of the holders of Carnival Common Stock
               entitled to vote thereon at the Parallel General Meeting, the P&O
               Princess Special Voting Share shall have no votes; and

          (ii) if the proposed action is not approved by the holders of Carnival
               Common Stock (on the basis described in Article 125(b)(i) above)
               at

                                                                              35



               the Parallel General Meeting, the P&O Princess Special Voting
               Share shall vote as follows:

               (x) if the resolution needs to be passed at the Company's general
               meeting by an ordinary resolution, the P&O Princess Special
               Voting Share shall vote to cast such number of votes representing
               the largest whole percentage that is less than the percentage of
               the number of votes as would be necessary to defeat an ordinary
               resolution if the total votes capable of being cast by the issued
               P&O Princess Ordinary Shares and other class of shares of P&O
               Princess that are entitled to vote pursuant to Applicable
               Regulations and/or the P&O Princess Memorandum and Articles
               (including the P&O Princess Special Voting Share) were cast in
               favour of the resolution at the Company's general meeting; and
               (y) if the resolution needs to be passed at the Company's general
               meeting by a special (or extraordinary) resolution, then the P&O
               Princess Voting Share shall vote to cast such number of votes
               representing the largest whole percentage that is less than the
               percentage of the number of votes (less one vote) as would be
               necessary to defeat a special (or extraordinary) resolution if
               the total votes capable of being cast by the issued P&O Princess
               Ordinary Shares and the other class of shares of P&O Princess
               that are entitled to vote pursuant to Applicable Regulations
               and/or the P&O Princess Memorandum and Articles (including the
               P&O Princess Special Voting Share) were cast in favour of the
               resolution at the Company's general meeting.

Joint Electorate Actions

126. All actions put to the holders of P&O Princess Ordinary Shares or Carnival
     Common Stock, except for Class Rights Actions and resolutions of a
     procedural or technical nature (described in Article 131 below) shall
     constitute Joint Electorate Actions. For the avoidance of doubt, the
     following actions, if put to the holders of P&O Princess Ordinary Shares or
     Carnival Common Stock, shall constitute Joint Electorate Actions:

     (a)  the appointment, removal or re-election of any director of the Company
          or Carnival, or both of them;

     (b)  to the extent such receipt or adoption is required by Applicable
          Regulations, the receipt or adoption of the financial statements of
          the Company or Carnival, or both of them, or accounts prepared on a
          combined basis, other than any accounts in respect of the period(s)
          ended prior to the date of the Equalization Agreement;

     (c)  a change of name of either the Company or Carnival, or both of them;
          and

     (d)  the appointment or removal of the auditors of either the Company or
          Carnival, or both of them.

127. If a particular matter falls both within Articles 124 and 126, then it
     shall be treated as a Class Rights Action falling exclusively within
     Article 124.

                                                                              36



Joint Electorate Action Procedure

128. If the Company proposes to take any Joint Electorate Action or is required
     to propose a resolution pursuant to Article 97, such action (either by the
     Company or by Carnival) shall require approval by ordinary resolution (or,
     if required by these Articles or Applicable Regulations, approval by a
     Special Resolution) of the holders of the P&O Princess Ordinary Shares and
     the holder of the P&O Princess Special Voting Share, voting as a single
     class.

129. In relation to a resolution of the Company to approve a Joint Electorate
     Action, the P&O Princess Special Voting Share shall carry:

     (a)  such number of votes in favour of the resolution as were cast in
          favour of the Equivalent Resolution at the Parallel Shareholder
          Meeting; and

     (b)  such number of votes against the resolution as were cast against the
          Equivalent Resolution at the Parallel Shareholder Meeting; and

     (c)  solely for the purposes of Article 112, such number of abstentions as
          is equivalent to the number of votes which holders of Carnival Common
          Stock have specifically elected to abstain from the Equivalent
          Resolution at the Parallel Shareholder Meeting in accordance with the
          Carnival Constitution and/or Applicable Regulations,

     in each case divided by the Equalization Fraction in effect at the time
     such general meeting of the Company is held and in each case rounded up to
     the nearest whole number, such votes to be cast by the holder of the P&O
     Princess Special Voting Share in accordance with the above provisions.

Resolutions Generally

130. No resolution to approve a Class Rights Action or a Joint Electorate Action
     shall be approved unless the Parallel General Meeting of Carnival is
     validly held and a vote of the holders of Carnival Common Stock is held on
     an Equivalent Resolution.

131. The P&O Princess Special Voting Share shall have no right to vote on any
     resolution of a procedural or technical nature put to a general meeting of
     the Company provided it has no adverse effect on the holders of Carnival
     Common Stock in any material respect. Resolutions of a procedural or
     technical nature will not be included in any notice of general meeting to
     the Company's shareholders. The Chairman will, in his absolute discretion,
     determine whether a resolution is of a procedural or technical nature.
     Subject to the foregoing, without limitation, the following resolutions
     shall constitute resolutions of a procedural or technical nature:

     (a)  that certain people be allowed to attend or excluded from attending
          the Company's general meeting;

     (b)  that discussion be closed and the question put to the vote (provided
          no amendments have been raised);

     (c)  that the question under discussion not be put to the vote;

     (d)  to proceed to the next item of business;

                                                                              37



     (e)  to proceed with matters in an order other than that set out in the
          notice of the meeting;

     (f)  to adjourn the debate (for example, to a subsequent meeting); and

     (g)  to adjourn the general meeting.

Methods of voting

132. Every resolution put to the vote of a general meeting on which the holder
     of the P&O Princess Special Voting Share is or may be entitled to vote
     shall be decided on a poll.

133. Subject to Article 132, any resolution to be put to the vote of a general
     meeting shall be decided on a show of hands unless, before or on the
     declaration of the result of a vote on the show of hands or on the
     withdrawal of any other demand for a poll, a poll is duly demanded. Subject
     to the provisions of the Companies Acts, a poll may be demanded by:

     (a)  the chairman of the meeting; or

     (b)  at least five Members Present in person or by proxy having the right
          to vote at the meeting; or

     (c)  any member or Members Present in person or by proxy representing not
          less than one-tenth of the total voting rights of all the members
          having the right to vote at the meeting; or

     (d)  any member or Members Present in person or by proxy holding shares
          conferring a right to vote at the meeting being shares on which an
          aggregate sum has been paid up equal to not less than one-tenth of the
          total sum paid up on all the shares conferring that right.

134. A demand by a person as proxy for a member shall be the same as a demand by
     the member.

Declaration of result in the absence of a poll

135. Unless a poll is required pursuant to Article 132 or is duly demanded
     pursuant to Article 133 (and the demand is not withdrawn before the poll is
     taken) a declaration by the chairman that a resolution has been carried or
     carried unanimously, or by a particular majority, or lost, or not carried
     by a particular majority shall be conclusive evidence of the fact without
     proof of the number or proportion of the votes recorded in favour of or
     against the resolution.

Procedure on a poll

136. A poll on a resolution on which the holder of the P&O Princess Special
     Voting Share is or may be entitled to vote shall be kept open for such time
     as to allow the Parallel General Meeting to be held and for the votes
     attaching to the P&O Princess Special Voting Share to be calculated and
     cast on such poll.

137. A poll shall, subject to Article 136, be taken in such manner as the
     chairman directs. He may appoint scrutineers, who need not be members, and
     may fix a time and place

                                                                              38



     for declaring the result of the poll. The result of the poll is deemed to
     be the resolution of the meeting at which the poll is demanded.

138. A poll shall be taken at such time and place as the chairman decides,
     either at once or after an interval or adjournment (but not more than 30
     clear days after the date of the demand).

139. The chairman may determine that any poll may close at different times for
     different classes of shareholder or for different shareholders of the same
     class entitled to vote on the relevant resolution.

140. No notice need be given of a poll not taken immediately if the time and
     place at which it is to be taken are announced at the meeting at which it
     is demanded. In any other case at least seven clear days' notice shall be
     given specifying the time and place at which the poll is to be taken.

141. A demand for a poll may be withdrawn but only with the consent of the
     chairman. A demand withdrawn in this way validates the result of a show of
     hands declared before the demand is made. If a poll is demanded before the
     declaration of the result of a show of hands and the demand is duly
     withdrawn, the meeting shall continue as if the demand has not been made.
     If the demand for a poll is withdrawn, the chairman or any other member
     entitled may demand a poll.

142. The requirement for a poll (whether automatic or on demand) does not
     prevent the meeting continuing for the transaction of business other than
     the question on which a poll is to be held.

143. On a poll, votes may be given in person or by proxy and a member entitled
     to more than one vote need not, if he votes, use all his votes or cast all
     the votes he uses in the same way, whether present in person or by proxy.

144. The chairman shall determine any dispute as to the admission or rejection
     of a vote and such determination made in good faith shall be final and
     conclusive.

Effectiveness of special and extraordinary resolutions

145. Where for any purpose an ordinary resolution of the Company is required, a
     special or extraordinary resolution shall also be effective. Where for any
     purpose an extraordinary resolution is required, a special resolution shall
     also be effective.

146. [Intentionally left blank]

VOTING RIGHTS AND PROCEDURES

Right to vote

147. Subject to any special terms as to voting on which shares have been
     allotted or issued, or a suspension or abrogation of voting rights pursuant
     to the Articles, at a general meeting or meeting of members of a class
     every Member Present has on a show of hands one vote and has on a poll:

    (a)   one vote for each fully paid P&O Princess Ordinary Share; and

                                                                              39



     (b)  in the case of a partly paid share, that fraction of a vote equivalent
          to the proportion which the amount paid up (not credited) on that
          member's share bears to the total amount paid and payable for that
          share (excluding amounts credited). Amounts paid in advance of a call
          shall be ignored when calculating the proportion; and

     (c)  in the case of the P&O Princess Special Voting Share, such number of
          votes as are determined in accordance with Articles 125, 129 and 131.

148. On a poll, every Member Present may cast the votes attaching to his
     Ordinary Shares either for or against the resolution or may specifically
     elect to abstain from voting, in which case his vote shall, subject to
     Article 112, neither be counted as a vote in favour or against such
     resolution.

Votes of joint holders

149. In the case of joint holders of a share, the vote of the senior who tenders
     a vote, whether in person or by proxy, shall be accepted to the exclusion
     of the votes of he other joint holders. For this purpose seniority shall be
     determined by the order in which the names of the holders stand in the
     register.

Member under incapacity

150. A member in respect of whom an order has been made by a court or official
     having jurisdiction (whether in the United Kingdom or elsewhere) in matters
     concerning mental disorder may vote, whether on a show of hands or on a
     poll, by his receiver, curator bonis or other person authorised for that
     purpose appointed by that court or official. That receiver, curator bonis
     or other person may, on a poll, vote by proxy. The right to vote shall be
     exercisable only if evidence satisfactory to the Board of the authority of
     the person claiming to exercise the right to vote has been deposited at the
     office, or at another place specified in accordance with these Articles for
     the delivery of proxy appointments, not less than 48 hours before the time
     appointed for holding the meeting or adjourned meeting at which the right
     to vote is to be exercised.

Calls in arrears

151. No member shall be entitled to vote at a general meeting or at a separate
     meeting of the holders of any class of shares in the capital of the
     Company, either in person or by proxy, in respect of any share held by him
     unless all moneys presently payable by him in respect of that share have
     been paid.

Errors in voting

152. If any votes are counted which ought not to have been counted, or might
     have been rejected, the error shall not vitiate the result of the voting
     unless it is pointed out at the same meeting, or at any adjournment of the
     meeting, and, in the opinion of the chairman (in his absolute discretion),
     it is of sufficient magnitude to vitiate the result of the voting.

Objection to voting

153. No objection shall be raised to the qualification of any voter except at
     the meeting or adjourned meeting or poll at which the vote objected to is
     tendered. Every vote not

                                                                              40



     disallowed at such meeting shall be valid and every vote not counted which
     ought to have been counted shall be disregarded. Any objection made in due
     time shall be referred to the chairman whose decision shall be final and
     conclusive.

Disclosure Notice

154. The directors may by notice in writing (a "Disclosure Notice") require any
     member or other person Appearing to be Interested or Appearing to have been
     Interested in the Ordinary Shares to disclose to the Company in writing
     such information as directors require relating to the ownership of, or
     Interests in, the Ordinary Shares in question as lies within the knowledge
     of such member or other person (supported, if the directors so require, by
     a statutory declaration and/or by such independent evidence as the
     directors reasonably require) including:

     (a)  any information which the Company is entitled to seek pursuant to Part
          VI of the Act; and

     (b)  any information which the directors shall deem necessary or desirable
          in order to determine whether any Ordinary Shares are Combined Group
          Restricted Shares.

     The directors may give a Disclosure Notice at any time and may give one or
     more notices to the same members or other person in respect of the same
     Ordinary Shares.

Failure to comply with Disclosure Notice

155. If any member or any other person Appearing to be Interested in Ordinary
     Shares has been served with a Disclosure Notice or a notice under Section
     212 of the Act and has failed to supply the Company with the information
     required within 14 days from the date of service of the notice (or, such
     other period of time as the directors may, in their absolute discretion,
     prescribe in the notice), then the directors may, in their absolute
     discretion, at any time thereafter by notice (a "Direction Notice") to such
     member direct that in respect of the Ordinary Shares in relation to which
     the default occurred (the "Default Shares") the member shall not be
     entitled to vote either personally or by proxy at a general meeting of the
     Company or to exercise any other right conferred by membership in relation
     to general meetings of the Company or meetings of the holders of any class
     of shares of the Company. The Company shall send to each other person
     Appearing to be Interested in Ordinary Shares which are the subject of a
     Direction Notice a copy of the notice, but the failure or omission by the
     Company to do so shall not invalidate such notice. Any Direction Notice
     shall have effect, in accordance with its terms, for so long as the default
     in respect of which the Direction Notice was issued continues. The
     Direction Notice shall cease to have effect five days after confirmation by
     the Company that the information required by the Disclosure Notice has been
     provided to the Company.

Additional directions

156. Where the Default Shares represent at least 0.25 per cent. in nominal value
     of the issued shares of that class then the Direction Notice may
     additionally direct:

     (a)  that any dividend or other money (or shares instead of such amount)
          payable in respect of the Default Shares shall (in whole or part) be
          retained by the

                                                                              41



          Company without any liability to pay interest on it when it is finally
          paid to the member; and/or

     (b)  that no transfer of any Default Shares held by such member shall be
          registered unless:

          (i)   the member is not in default as regards supplying the
                information required;

          (ii)  the member proves to the satisfaction of the directors that no
                person in default as regards supplying such information is
                Interested in any of the Ordinary Shares which are the subject
                of the transfer;

          (iii) registration of the transfer is required by the Regulations; or

          (iv)  the transfer is an approved transfer if:

                (A)  it is a transfer of shares pursuant to an acceptance of a
                     takeover offer (within the meaning of section 428(1) of the
                     Act); or

                (B)  the Board is satisfied that the transfer is made pursuant
                     to a sale of the shares the subject of the transfer to a
                     party unconnected with the member and with any other person
                     appearing to be interested in the shares; or

                (C)  the transfer results from a sale made through a recognised
                     investment exchange as defined in the Financial Services
                     and Markets Act 2000 or any other stock exchange outside
                     the United Kingdom on which the Company's shares are
                     normally traded.

Additional Shares

157. Any new Ordinary Shares in the Company issued in right of Default Shares
     shall be subject to the same sanctions as apply to the Default Shares, and
     the directors may make any right to an allotment of new Ordinary Shares
     subject to sanctions corresponding to those which will apply to those
     Ordinary Shares on issue, provided that:

     (a)  any sanctions applying to, or to a right to, new Ordinary Shares by
          virtue of this Article 157 shall cease to have effect when the
          sanctions applying to the related Default Shares cease to have effect
          (and shall be suspended or cancelled if and to the extent that the
          sanctions applying to the related Default Shares are suspended or
          cancelled); and

     (b)  Article 154 shall apply to the exclusion of this Article 157 if the
          Company issues a separate Disclosure Notice in respect of the new
          shares.

Section 216 of the Act

158. The provisions of Article 157 are without prejudice to the provisions of
     section 216 of the Act and, in particular, the Company may apply to the
     court under section 216(1) of the Act whether or not the provisions of
     Article 157 have been applied.

                                                                              42



Conversion of uncertificated shares

159. The Company may exercise any of its powers under Article 29 in respect of
     any Default Shares that are held in uncertificated form.

Notification of interests

160. In addition to the obligation to disclose interests in shares pursuant to
     Part VI of the Act and the regulations made under it, any person with an
     interest in Ordinary Shares and any person treated as Appearing to be
     Interested in Ordinary Shares shall notify the Company in writing as soon
     as practicable following any event which would cause such person to
     disclose interests in shares pursuant to Part VI of the Act and any
     regulations made under it as if such obligation applied by reference to
     interests in Ordinary Shares.

PROXIES AND CORPORATE REPRESENTATIVES

Appointment of proxy: execution

161. The appointment of a proxy, whether by means of an instrument or contained
     in an electronic communication, shall be executed in such manner as the
     Board may approve. Subject thereto, the appointment of a proxy shall be
     executed by the appointor or his attorney or, if the appointor is a
     corporation, executed by a duly authorised officer, attorney or other
     authorised person or under its common seal. For the purpose of this Article
     and Articles 162 to 166, an electronic communication which contains a proxy
     appointment need not comprise writing if the Board so determines and in
     such a case, if the Board so determines, the appointment need not be
     executed but shall instead be subject to such conditions as the Board may
     approve.

Method of proxy appointment

162. The appointment of a proxy shall be in any usual form or in any other form
     which the Board may approve. Subject thereto, the appointment of a proxy
     may be:

     (a)  by means of an instrument; or

     (b)  contained in an electronic communication sent to such address (if any)
          as may for the time being be notified by or on behalf of the Company
          for that purpose, provided that the electronic communication is
          received in accordance with Article 163 not less than 48 hours before
          the time appointed for holding the meeting or adjourned meeting (or
          any postponed time appointed for holding the meeting pursuant to
          Article 107) or, where a poll is taken more than 48 hours after it is
          demanded, after the poll has been demanded and not less than 24 hours
          before the time appointed for the taking of the poll, and

     the Board may, if it thinks fit, but subject to the provisions of the
     Companies Acts, at the Company's expense send forms of proxy for use at the
     meeting and issue invitations contained in electronic communications to
     appoint a proxy in relation to the meeting in such form as may be approved
     by the Board. The appointment of a proxy shall not preclude a member from
     attending and voting in person at the meeting or poll concerned. A member
     may appoint more than one proxy to attend on the same occasion.

                                                                              43



Sending of proxy appointment

163. Without prejudice to Article 107(b) or to the second sentence of Article
     119, the appointment of a proxy shall:

     (a)  in the case of an instrument, be delivered personally or by post to
          the office or such other place within the United Kingdom as may be
          specified by or on behalf of the Company for that purpose:

          (i)   in the notice convening the meeting, or

          (ii)  in any form of proxy sent by or on behalf of the Company in
                relation to the meeting,

          not less than 48 hours before the time appointed for holding the
          meeting or adjourned meeting (or any postponed time appointed for
          holding the meeting pursuant to Article 107) at which the person named
          in the appointment proposes to vote; or

     (b)  in the case of an appointment contained in an electronic
          communication, where an address has been specified by or on behalf of
          the Company for the purpose of receiving electronic communications:

          (i)   in the notice convening the meeting, or

          (ii)  in any form of proxy sent by or on behalf of the Company in
                relation to the meeting, or

          (iii) in any invitation contained in an electronic communication to
                appoint a proxy issued by or on behalf of the Company in
                relation to the meeting,

          be received at that address not less than 48 hours before the time
          appointed for holding the meeting or adjourned meeting (or any
          postponed time appointed for holding the meeting pursuant to Article
          107) at which the person named in the appointment proposes to vote; or

     (c)  in either case, where a poll is automatic, the appointment of a proxy
          shall be delivered or received not less than 48 hours before the
          meeting at which the poll is to be held, and, in circumstances where a
          poll is demanded and taken more than 48 hours after it is demanded, be
          delivered or received as aforesaid after the poll has been demanded
          and not less than 24 hours before the time appointed for the taking of
          the poll; or

     (d)  in the case only of an instrument, where a poll is not taken forthwith
          but is, in respect of resolutions on which the P&O Princess Special
          Voting Share has no vote, taken not more than 48 hours after it was
          demanded, be delivered at the meeting at which the poll was demanded
          to the chairman or to the secretary or to any director.

164. A proxy deposited by the holder of the P&O Princess Special Voting Share
     will be valid if it is received by or delivered to the chairman of the
     meeting before the close of the poll to which it relates.

                                                                              44



Delivery of authority

165. Except in relation to an instrument deposited by the holder of the P&O
     Princess Special Voting Share (which is governed by Article 164 above), any
     power of attorney or other written authority under which a proxy
     appointment is executed or an office or notarially certified copy or a copy
     certified in accordance with the Powers of Attorney Act 1971 of such power
     or written authority shall be:

     (a)  delivered personally or by post to the office, or to such other place
          within the United Kingdom as may be specified by or on behalf of the
          Company in accordance with Article 163(a), not less than 48 hours
          before the time appointed for holding the meeting or adjourned meeting
          (or any postponed time appointed for holding the meeting pursuant to
          Article 107) at which the person named in the appointment proposes to
          vote; or

     (b)  in respect of resolutions on which the P&O Princess Special Voting
          Share has no vote, where a poll is taken more than 48 hours after it
          is demanded, be delivered as aforesaid after the poll has been
          demanded and not less than 24 hours before the time appointed for the
          taking of the poll; or

     (c)  in the case only of a proxy appointment by means of an instrument, in
          respect of resolutions on which the P&O Princess Special Voting Share
          has no vote, where a poll is not taken forthwith but is taken not more
          than 48 hours after it was demanded, be delivered at the meeting at
          which the poll was demanded to the chairman or to the secretary or to
          any director together with the proxy appointment to which it relates.

166. A proxy appointment which is not delivered or received in accordance with
     Articles 163 or 164, or in respect of which Article 165 has not been
     complied with, shall be invalid. No proxy appointment shall be valid more
     than twelve months after the date stated in it as the date of its
     execution. When two or more valid proxy appointments are delivered or
     received in respect of the same share for use at the same meeting, the one
     which was executed last shall be treated as replacing and revoking the
     others as regards that share; if the Company is unable to determine which
     was executed last, none of them shall be treated as valid in respect of
     that share.

Validity of proxy appointment

167. A proxy appointment shall be deemed to include the right to demand, or join
     in demanding, a poll but shall not confer any further right to speak at a
     meeting, except with the permission of the chairman. Save in respect of a
     proxy delivered in respect of the P&O Princess Special Voting Share, the
     proxy appointment shall also be deemed to confer authority to vote on any
     amendment of a resolution put to the meeting for which it is given as the
     proxy thinks fit. The proxy appointment shall, unless it provides to the
     contrary, be valid for any adjournment of the meeting as well as for the
     meeting to which it relates.

Corporate representatives

168. Any corporation which is a member of the Company (in this Article the
     "grantor") may, by resolution of its directors or other governing body,
     authorise such person as it thinks fit to act as its representative at any
     meeting of the Company or at any separate meeting of the holders of any
     class of shares. A person so authorised shall be entitled

                                                                              45



     to exercise the same power on behalf of the grantor as the grantor could
     exercise if it were an individual member of the Company, save that a
     director, the secretary or other person authorised for the purpose by the
     secretary may require such person to produce a certified copy of the
     resolution of authorisation before permitting him to exercise his powers.
     The grantor shall for the purposes of these Articles be deemed to be
     present in person at any such meeting if a person so authorised is present
     at it.

Revocation of authority

169. A vote given or poll demanded by a proxy or by the duly authorised
     representative of a corporation shall be valid notwithstanding the previous
     determination of the authority of the person voting or demanding the poll
     unless notice of the determination was either delivered or received as
     mentioned in the following sentence at least three hours before the start
     of the meeting or adjourned meeting at which the vote is given or the poll
     demanded or (in the case of a poll taken otherwise than on the same day as
     the meeting or adjourned meeting) the time appointed for taking the poll.
     Such notice of determination shall be either by means of an instrument
     delivered to the office or to such other place within the United Kingdom as
     may be specified by or on behalf of the Company in accordance with Article
     163(a) or contained in an electronic communication received at the address
     (if any) specified by or on behalf of the Company in accordance with
     Article 163(b), regardless of whether any relevant proxy appointment was
     effected by means of an instrument or contained in an electronic
     communication. For the purpose of this Article, an electronic communication
     which contains such notice of determination need not comprise writing if
     the Board has determined that the electronic communication which contains
     the relevant proxy appointment need not comprise writing.

NUMBER OF DIRECTORS

Limits on number of directors

170. Unless otherwise determined by ordinary resolution, the number of directors
     (other than alternate directors) shall be not less than three nor more than
     a maximum of twenty five in number (or such lesser maximum as the directors
     may from time to time resolve).

APPOINTMENT AND RETIREMENT OF DIRECTORS

Directors

Number of directors to retire

171. At every subsequent annual general meeting following the adoption of these
     Articles one-third of the directors who are subject to retirement by
     rotation or, if their number is not three or a multiple of three, the
     number nearest to one-third shall retire from office; but;

     (a)  if any director has at the start of the annual general meeting been in
          office for more than three years since his last appointment or
          re-appointment, he shall retire; and

     (b)  if there is only one director who is subject to retirement by
          rotation, he shall retire.

                                                                              46



Which directors to retire

172. Subject to the provisions of the Companies Acts and these Articles, the
     directors to retire by rotation shall be those who have been longest in
     office since their last appointment or re-appointment. As between persons
     who became or were last re-appointed directors on the same day those to
     retire shall (unless they otherwise agree among themselves) be determined
     by lot. The directors to retire on each occasion (both as to number and
     identity) shall be determined by the composition of the board at the date
     of the notice convening the annual general meeting. No director shall be
     required to retire or be relieved from retiring or be retired by reason of
     any change in the number or identity of the directors after the date of the
     notice but before the close of the meeting. If the Company does not fill
     the vacancy at the meeting at which a director retires by rotation or
     otherwise, the retiring director shall, if willing to act, be deemed to
     have been re-appointed unless at the meeting it is resolved not to fill the
     vacancy or unless a resolution for the re-appointment of the director is
     put to the meeting and lost.

Eligibility for election and effectiveness of appointment

173. No person shall be appointed a director at any general meeting unless:

     (a)  he is recommended by the Board; or

     (b)  not less than seven nor more than 42 days before the earlier of the
          date appointed for the meeting and the date appointed for the Parallel
          General Meeting, notice executed by a member qualified to vote at the
          meeting (not being the person to be proposed) has been received by the
          Company of the intention to propose that person for appointment
          stating the particulars which would, if he were so appointed, be
          required to be included in the Company's register of directors,
          together with notice executed by that person of his willingness to be
          appointed.

174. No person shall be a director of the Company unless he is also a director
     of Carnival. The appointment of a person as a director of the Company shall
     only take effect at the same time as that person's appointment as a
     director of Carnival takes effect. Any director who resigns from his office
     will be obliged to resign as a director of Carnival at the same time as he
     resigns from the Board and his resignation from the Board shall not take
     effect until he does so.

Separate resolutions on appointment

175. Except as otherwise authorised by the Companies Acts, the appointment of
     any person proposed as a director shall be effected by a separate
     resolution.

Additional powers of the Company

176. Subject to Articles 124 to 129 and to Article 174, the Company may by
     ordinary resolution appoint a person who is willing to act to be a director
     either to fill a vacancy or as an additional director. The appointment of a
     person to fill a vacancy or as an additional director shall take effect
     from the end of the meeting.

                                                                              47



Appointment by Board

177. The Board may appoint a person who is willing to act to be a director,
     either to fill a vacancy or as an additional director and in either case
     whether or not for a fixed term, provided that the appointment does not
     cause the number of directors to exceed the number, if any, fixed by or in
     accordance with these Articles as the maximum number of directors. If a
     person is appointed as a director of Carnival by the Board of Carnival in
     accordance with the Carnival Constitution, the Board shall also appoint
     that person as a director of the Company.

178. Irrespective of the terms of his appointment, a director so appointed shall
     hold office only until the next following annual general meeting and shall
     not be taken into account in determining the directors who are to retire by
     rotation at the meeting. If not re-appointed at such annual general
     meeting, he shall vacate office at its conclusion.

Position of retiring directors

179. A director who retires at an annual general meeting may, if willing to act,
     be re-elected. If he is not re-elected, he shall retain office until the
     meeting appoints someone in his place, or if it does not do so, until the
     later of the end of the meeting at which the director retires and the end
     of the Parallel General Meeting.

Age limit

180. No person shall be disqualified from being appointed or re-appointed a
     director, and no director shall be required to vacate that office, by
     reason only of the fact that he has attained the age of 70 years or any
     other age nor shall it be necessary by reason of his age to give special
     notice under the Companies Acts of any resolution for his appointment or
     re-appointment.

No share qualification

181. A director shall not be required to hold any shares in the capital of the
     Company by way of qualification.

ALTERNATE DIRECTORS

Power to appoint alternates

182. Any director (other than an alternate director) may appoint any other
     director, willing to act, to be an alternate director and may remove from
     office an alternate director so appointed by him.

Alternates entitled to receive notice

183. An alternate director shall be entitled to receive notice of all meetings
     of the Board and of all meetings of committees of the Board of which his
     appointor is a member, to attend and vote at any such meeting at which his
     appointor is not personally present, and generally to perform all the
     functions of his appointor (except as regards power to appoint an
     alternate) as a director in his absence.

                                                                              48



Alternates representing more than one director

184. A director may act as alternate director to represent more than one
     director, and an alternate director shall be entitled at meetings of the
     Board or any committee of the Board to one vote for every director whom he
     represents (and who is not present) in addition to his own vote as a
     director, and shall count for the purpose of determining whether a quorum
     is present both in his capacity as a director and in his capacity as an
     alternate director.

Termination of appointment

185. An alternate director shall cease to be an alternate director:

     (a)  if his appointer ceases to be a director; but, if a director retires
          by rotation or otherwise but is re-appointed or deemed to have been
          re-appointed at the meeting at which he retires, any appointment of an
          alternate director made by him which was in force immediately prior to
          his retirement shall continue after his re-appointment; or

     (b)  on the happening of any event which would cause him to vacate his
          office as director; or

     (c)  if he resigns his office as a director by notice to the Company; or

     (d)  if he notifies the Board and his appointer that he no longer wishes to
          serve as an alternate director.

Method of appointment and revocation

186. Any appointment or removal of an alternate director shall be by notice to
     the Company signed by the director making or revoking the appointment and
     shall take effect in accordance with the terms of the notice on receipt of
     such notice by the Company which shall, in the case of a notice contained
     in an instrument, be at the office or, in the case of a notice contained in
     an electronic communication, be at such address (if any) as may for the
     time being be notified by or on behalf of the Company for that purpose.

Alternate not an agent of appointor

187. Except as otherwise expressly provided in these Articles, an alternate
     director shall be deemed for all purposes to be a director. Accordingly,
     except where the context otherwise requires, a reference to a director
     shall be deemed to include a reference to an alternate director. An
     alternate director shall alone be responsible for his own acts and defaults
     and he shall not be deemed to be the agent of the director appointing him.

POWERS OF THE BOARD

Business to be managed by Board

188. Subject to the provisions of the Companies Acts, the Memorandum and these
     Articles and to any directions given by special resolution, the business of
     the Company shall be managed by the Board which may pay all expenses
     incurred in forming and registering the Company and may exercise all the
     powers of the Company, including without limitation the power to dispose of
     all or any part of the undertaking of the

                                                                              49



     Company. No alteration of the Memorandum or Articles and no such direction
     shall invalidate any prior act of the Board which would have been valid if
     that alteration had not been made or that direction had not been given. The
     powers given by this Article shall not be limited by any special power
     given to the Board by these Articles. A meeting of the Board at which a
     quorum is present may exercise all powers exercisable by the Board.

Discretionary Matters

189. The Board may, by agreement with the Board of Carnival:

     (a)  decide to seek the approval of the shareholders (or any class of
          shareholders) of either or both of the Company and Carnival for any
          matter that would not otherwise require such approval;

     (b)  require any Joint Electorate Action to be approved instead as a Class
          Rights Action; or

     (c)  specify a higher majority vote than the required majority that would
          otherwise be required for any shareholder vote provided for in
          Articles 125(a) and 128.

Exercise by Company of voting rights

190. The Board may exercise the voting power conferred by the shares in any body
     corporate held or owned by the Company in such manner in all respects as it
     thinks fit (including without limitation the exercise of that power in
     favour of any resolution appointing its members or any of them as directors
     of such body corporate, or voting or providing for the payment of
     remuneration to the directors of such body corporate).

DELEGATION OF POWERS OF THE BOARD

Committees of the Board

191. A majority of the Board may delegate any of its powers to any committee
     consisting of two or more directors. Any such delegation may be made
     subject to such conditions as the majority of the Board may specify and may
     be revoked or altered. Subject to any conditions imposed by a majority of
     the Board, the proceedings of a committee with two or more directors shall
     be governed by these Articles regulating the proceedings of directors so
     far as they are capable of applying. For the avoidance of doubt, Article
     209 shall not apply with regard to determining whether a committee of the
     Board is quorate. A committee of the Board will be quorate if at least a
     majority of the directors appointed to that committee is present.

Agents

192. A majority of the Board or of a committee of the Board may, by power of
     attorney or otherwise, appoint any person to be the agent of the Company
     for such purposes, with such powers, authorities and discretions (not
     exceeding those vested in the Board) and on such conditions as the Board or
     the relevant committee determines, including without limitation authority
     for the agent to delegate all or any of his powers, authorities and
     discretions, and may revoke or vary such delegation.

                                                                              50



Offices including the title "director"

193. A majority of the Board may appoint any person to any office or employment
     having a designation or title including the word "director" or attach to
     any existing office or employment with the Company such a designation or
     title and may terminate any such appointment or the use of any such
     designation or title. The inclusion of the word "director" in the
     designation or title of any such office or employment shall not imply that
     the holder is a director of the Company, and the holder shall not thereby
     be empowered in any respect to act as, or be deemed to be, a director of
     the Company for any of the purposes of these Articles.

Director's power to give effect to the DLC agreements

194. The directors are authorised and directed to carry into effect the
     provisions of the Equalization Agreement, the Voting Agreement, the P&O
     Princess Guarantee and any further agreements or arrangements that the
     Company is party to which are mentioned in or contemplated by such
     agreements. Subject to the Acts, nothing done in good faith by any director
     pursuant to such authority and obligations shall constitute a breach of the
     fiduciary duties of such director to the Company or its shareholders. In
     particular:

     (a)  the directors shall, in addition to their duties to the Company, be
          entitled to have regard to the interests of the Combined Shareholders
          and to the interests of Carnival, as if the Company and Carnival were
          a single legal entity;

     (b)  the directors are authorised to provide to Carnival and any officer,
          employee or agent of Carnival any information relating to the Company;
          and

     (c)  the directors are authorised to enter into, operate and carry into
          effect the Equalization Agreement, the Voting Agreement and the P&O
          Princess Guarantee with full power to:

          (i)  enter into, operate and carry into effect any further or other
               agreements or arrangements with or in connection with Carnival or
               the holder of the P&O Princess Special Voting Share; and

          (ii) do all such things as, in the opinion of the directors, are
               necessary or desirable for the application, implementation,
               protection, furtherance or maintenance of the dual listed company
               relationship with Carnival constituted by or arising out of any
               agreement or arrangement.

DISQUALIFICATION AND REMOVAL OF DIRECTORS

Disqualification as a director

195. The office of a director shall be vacated immediately if:

     (a)  he ceases to be a director by virtue of any provisions of the
          Companies Acts or these Articles or he becomes prohibited by
          applicable law from being a director; or

     (b)  he resigns his office by notice to the Company or, having been
          appointed for a fixed term, the term expires or his office as a
          director is vacated pursuant to Article 177; or

                                                                              51



     (c)  he ceases to be a director of Carnival.

REMUNERATION OF NON-EXECUTIVE DIRECTORS

Ordinary remuneration

196. The ordinary remuneration of the directors who do not hold executive office
     for their services (excluding amounts payable under any other provision of
     these Articles) shall not exceed in aggregate (pound)1,000,000 per annum or
     such higher amount as the Company may from time to time by ordinary
     resolution determine and shall be satisfied in such manner as the Board or
     any validly formed committee thereof shall from time to time determine,
     which includes without limitation satisfaction in Company shares. Subject
     thereto, each such director shall be paid a fee (which shall be deemed to
     accrue from day to day) at such rate as may from time to time be determined
     by the Board.

Additional remuneration for special services

197. Any director who does not hold executive office and who serves on any
     committee of the Board, by the request of the Board goes or resides abroad
     (from his normal country of residence) for any purpose of the Company or
     otherwise performs special services which in the opinion of the Board are
     outside the scope of the ordinary duties of a director, may (without
     prejudice to the provisions of Article 196) be paid such extra remuneration
     by way of salary, commission or otherwise as the Board may determine.

DIRECTORS' EXPENSES

Directors may be paid expenses

198. The directors may be paid all travelling, hotel, and other expenses
     properly incurred by them in connection with their attendance at meetings
     of the Board or the Board of Carnival, meetings of any committees of the
     Board or of the Board of Carnival, or general meetings or separate meetings
     of the holders of any class of shares or of debentures of the Company or
     Carnival, or otherwise in connection with the discharge of their duties

EXECUTIVE DIRECTORS

Appointment to executive office

199. Subject to the provisions of the Companies Acts, the Board may appoint one
     or more of its body to be the holder of any executive office (except that
     of auditor) in the Company and may enter into an agreement or arrangement
     with any director for his employment by the Company or for the provision by
     him of any services outside the scope of the ordinary duties of a director.
     Any such appointment, agreement or arrangement may be made on such terms,
     including without limitation terms as to remuneration, as the Board
     determines. The Board may revoke or vary any such appointment but without
     prejudice to any rights or claims which the person whose appointment is
     revoked or varied may have against the Company because of the revocation or
     variation.

                                                                              52



Termination of appointment to executive office

200. Any appointment of a director to an executive office shall terminate if he
     ceases to be a director but without prejudice to any rights or claims which
     he may have against the Company by reason of such cessation. A director
     appointed to an executive office shall not cease to be a director merely
     because his appointment to such executive office terminates.

Emoluments to be determined by the Board

201. The emoluments of any director holding executive office for his services as
     such shall be determined by the Board, and may be of any description,
     including without limitation admission to, or continuance of, membership of
     any scheme (including any share acquisition scheme) or fund instituted or
     established or financed or contributed to by the Company for the provision
     of pensions, life assurance or other benefits for employees or their
     dependants, or the payment of a pension or other benefits to him or his
     dependants on or after retirement or death, apart from membership of any
     such scheme or fund.

DIRECTORS' INTERESTS

Directors may contract with the Company

202. Subject to the provisions of the Companies Acts, and provided that he has
     disclosed to the Board the nature and extent of any material interest of
     his, a director notwithstanding his office:

     (a)  may be a party to, or otherwise interested in, any transaction or
          arrangement with the Company or in which the Company is otherwise
          interested;

     (b)  may act by himself or his firm in a professional capacity for the
          Company (otherwise than as auditor) and he or his firm shall be
          entitled to remuneration for professional services as if he were not a
          director;

     (c)  may be a director or other officer of, or employed by, or a party to
          any transaction or arrangement with, or otherwise interested in, any
          body corporate promoted by the Company or in which the Company is
          otherwise interested; and

     (d)  shall not, by reason of his office, be accountable to the Company for
          any benefit which he derives from any such office or employment or
          from any such transaction or arrangement or from any interest in any
          such body corporate and no such transaction or arrangement shall be
          liable to be avoided on the ground of any such interest or benefit.

Notification of interests

203. For the purposes of this Article:

     (a)  a general notice given to the Board that a director is to be regarded
          as having an interest of the nature and extent specified in the notice
          in any transaction or arrangement in which a specified person or class
          of persons is interested shall be deemed to be a disclosure that the
          director has an interest in any such transaction of the nature and
          extent so specified; and

                                                                              53



     (b)  an interest of which a director has no knowledge and of which it is
          unreasonable to expect him to have knowledge shall not be treated as
          an interest of his.

GRATUITIES, PENSIONS AND INSURANCE

Gratuities and pensions

204. The Board may (by establishment of, or maintenance of, schemes or
     otherwise) provide benefits, whether by the payment of gratuities or
     pensions or by insurance or otherwise, for any past or present director or
     employee of the Company or any of its subsidiary undertakings or any body
     corporate associated with, or any business acquired by, any of them, and
     for any member of his family (including a spouse and a former spouse) or
     any person who is or was dependent on him, and may (as well before as after
     he ceases to hold such office or employment) contribute to any fund and pay
     premiums for the purchase or provision of any such benefit.

Insurance

205. Without prejudice to the provisions of Article 288, the Board may exercise
     all the powers of the Company to purchase and maintain insurance for or for
     the benefit of any person who is or was:

     (a)  a director, officer, employee or auditor of the Company or Carnival,
          or any body which is or was the holding company or subsidiary
          undertaking of the Company or Carnival, or in which the Company or
          Carnival or a holding company or subsidiary undertaking of the Company
          or Carnival has or had any interest (whether direct or indirect) or
          with which the Company or Carnival or a holding company or subsidiary
          undertaking of the Company or Carnival is or was in any way allied or
          associated; or

     (b)  a trustee of any pension fund in which employees of the Company,
          Carnival or, any other body referred to in Article 205(a) is or has
          been interested,

     including without limitation insurance against any liability incurred by
     such person in respect of any act or omission in the actual or purported
     execution or discharge of his duties or in the exercise or purported
     exercise of his powers or otherwise in relation to his duties, powers or
     offices in relation to the relevant body or fund.

Directors not liable to account

206. No director or former director shall be accountable to the Company or the
     members for any benefit provided pursuant to Article 204. The receipt of
     any such benefit shall not disqualify any person from being or becoming a
     director of the Company.

Section 719 of the Act

207. Pursuant to section 719 of the Act, the Board is hereby authorised to make
     such provision as may seem appropriate for the benefit of any persons
     employed or formerly employed by the Company or any of its subsidiary
     undertakings in connection with the cessation or the transfer of the whole
     or part of the undertaking of the Company or any subsidiary undertaking.
     Any such provision shall be made by a resolution of the Board in accordance
     with section 719.

                                                                              54



PROCEEDINGS OF THE BOARD

Convening meetings

208. Subject to the provisions of these Articles, the Board may regulate its
     proceedings as it thinks fit. The Chairman or any two directors may, and
     the secretary at the request of the Chairman or any two directors shall,
     call a meeting of the Board. Notice of a Board meeting shall be deemed to
     be properly sent to a director if it is sent to him personally or by word
     of mouth or sent by instrument to him, at his last known address (whether
     within or outside the United Kingdom) or such other address (if any) as may
     for the time being be notified by him or on his behalf to the Company for
     that purpose, or sent using electronic communications to such address (if
     any) as may for the time being be notified by him or on his behalf to the
     Company for that purpose. Questions arising at a meeting shall be decided
     by a majority of directors present at any meeting (provided that the
     meeting is quorate). Any director may waive notice of a meeting and any
     such waiver may be retrospective. Any electronic communication pursuant to
     this Article need not comprise writing if the Board so determines.

Quorum

209. The quorum for the transaction of the business shall be a majority of the
     directors of the Company. A person who holds office as an alternate
     director shall, if his appointor is not present, be counted in the quorum
     in his capacity as an alternate director (on behalf of his appointor) in
     addition to in his capacity as a director of the Company. Any director who
     ceases to be a director at a Board meeting may continue to be present and
     to act as a director and be counted in the quorum until the termination of
     the Board meeting if no director objects.

Powers of directors if number falls below minimum

210. The continuing directors or a sole continuing director may act
     notwithstanding any vacancies in their number.

Chairman and deputy chairman

211. The Board may appoint one of their number to be the chairman, and one of
     their number to be the deputy chairman, of the Board and may at any time
     remove either of them from such office. Unless he is unwilling to do so,
     the director appointed as chairman, or in his stead the director appointed
     as deputy chairman, shall preside at every meeting of the Board at which he
     is present. If there is no director holding either of those offices, or if
     neither the chairman nor the deputy chairman is willing to preside or
     neither of them is present within five minutes after the time appointed for
     the meeting, the directors present may appoint one of their number to be
     chairman of the meeting.

Validity of acts of the Board

212. All acts done by a meeting of the Board, or of a committee of the Board, or
     by a person acting as a director or alternate director, shall,
     notwithstanding that it be afterwards discovered that there was a defect in
     the appointment of any director or any member of the committee or alternate
     director or that any of them were disqualified from holding office, or had
     vacated office, or were not entitled to vote, be as valid as if every such
     person had been duly appointed and was qualified and had

                                                                              55



     continued to be a director or, as the case may be, an alternate director
     and had been entitled to vote.

Resolutions in writing

213. A resolution in writing signed by all of the directors entitled to receive
     notice and vote at a meeting of the Board or of a committee of the Board
     shall be as valid and effectual as if it had been passed at a meeting of
     the Board or (as the case may be) a committee of the Board duly convened
     and held. For this purpose:

     (a)  a resolution may be by means of an instrument or contained in an
          electronic communication sent to such address (if any) as may for the
          time being be notified by the Company for that purpose;

     (b)  a resolution may consist of several instruments or several electronic
          communications, each executed by one or more directors, or a
          combination of both;

     (c)  a resolution signed by an alternate director need not also be signed
          by his appointor; and

     (d)  a resolution signed by a director who has appointed an alternate
          director need not also be signed by the alternate director in that
          capacity.

Meetings by telephone, etc.

214. Without prejudice to the first sentence of Article 209, a person entitled
     to be present at a meeting of the Board or of a committee of the Board
     shall be deemed to be present for all purposes if he is able (directly or
     by telephonic communication) to speak to and be heard by all those present
     or deemed to be present simultaneously. A director so deemed to be present
     shall be entitled to vote and be counted in a quorum accordingly. Such a
     meeting shall be deemed to take place where it is convened to be held or
     (if no director is present in that place) where the largest group of those
     participating is assembled, or, if there is no such group, where the
     chairman of the meeting is. The word "meeting" in these Articles shall be
     construed accordingly.

Directors' power to vote on contracts in which they are interested

215. Except as otherwise provided by these Articles, a director shall not vote
     at a meeting of the Board or a committee of the Board on any resolution of
     the Board concerning a matter in which he has an interest (other than by
     virtue of his interests in shares or debentures or other securities of, or
     otherwise in or through, the Company or Carnival) which (together with any
     interest of any person connected with him) is to his knowledge material
     unless his interest arises only because the resolution concerns one or more
     of the following matters:

     (a)  the giving of a guarantee, security or indemnity in respect of money
          lent or obligations incurred by him or any other person at the request
          of or for the benefit of, the Company or Carnival or any of their
          respective subsidiary undertakings;

     (b)  the giving of a guarantee, security or indemnity in respect of a debt
          or obligation of the Company or Carnival or any of their respective
          subsidiary

                                                                              56



          undertakings for which the director has assumed responsibility (in
          whole or part and whether alone or jointly with others) under a
          guarantee or indemnity or by the giving of security;

     (c)  a contract, arrangement, transaction or proposal concerning an offer
          of shares, debentures or other securities of the Company or Carnival
          or any of their respective subsidiary undertakings for subscription or
          purchase, in which offer he is or may be entitled to participate as a
          holder of securities or in the underwriting or sub-underwriting of
          which he is to participate;

     (d)  a contract, arrangement, transaction or proposal concerning any other
          body corporate in which he or any person connected with him is
          interested, directly or indirectly, and whether as an officer,
          shareholder, creditor or otherwise, if he and any persons connected
          with him do not to his knowledge hold an interest (as that term is
          used in sections 198 to 211 of the Act) representing one per cent. or
          more of either any class of the equity share capital of such body
          corporate (or any other body corporate through which his interest is
          derived) or of the voting rights available to members of the relevant
          body corporate (any such interest being deemed for the purpose of this
          Article to be material interest in all circumstances);

     (e)  a contract, arrangement, transaction or proposal for the benefit of
          employees of the Company or Carnival or any of their respective
          subsidiary undertakings which does not award him any privilege or
          benefit not generally accorded to the employees to whom the
          arrangement relates; and

     (f)  a contract, arrangement, transaction or proposal concerning any
          insurance which the Company or Carnival is empowered to purchase or
          maintain for, or for the benefit of, any directors of the Company or
          of Carnival, or for persons who include directors of the Company or of
          Carnival.

Interests of connected person and alternate director

216. For the purposes of this Article, an interest of a person who is, for any
     purpose of the Companies Acts (excluding any statutory modification of the
     Companies Acts not in force when this Article is adopted), connected with a
     director shall be treated as an interest of the director and, in relation
     to an alternate director, an interest of his appointor shall be treated as
     an interest of the alternate director without prejudice to any interest
     which the alternate director has otherwise.

Division of proposals

217. Where proposals are under consideration concerning the appointment
     (including without limitation fixing or varying the terms of appointment)
     of two or more directors to offices or employments with the Company or any
     body corporate in which the Company is interested, the proposals may be
     divided and considered in relation to each director separately. In such
     cases each of the directors concerned shall be entitled to vote in respect
     of each resolution except that concerning his own appointment.

                                                                              57



SECRETARY

Appointment and removal of secretary

218. Subject to the provisions of the Companies Acts, the secretary shall be
     appointed by the Board for such term, at such remuneration and on such
     conditions as it may think fit. Any secretary so appointed may be removed
     by the Board, but without prejudice to any claim for damages for breach of
     any contract of service between him and the Company.

MINUTES

Minutes required to be kept

219. The Board shall cause minutes to be made in books kept for the purpose of:

     (a)  all appointments of officers made by the Board; and

     (b)  all proceedings at meetings of the Company, the holders of any class
          of shares in the capital of the Company, the Board and committees of
          the Board, including the names of the directors present at each such
          meeting.

Conclusiveness of minutes

220. Any such minutes, if purporting to be signed by the chairman of the meeting
     to which they relate or of the meeting at which they are read, shall be
     sufficient evidence of the proceedings at the meeting without any further
     proof of the facts stated in them.

THE SEAL

Authority required for execution of deed

221. The seal shall only be used by the authority of a resolution of the Board
     or a duly appointed committee of the Board. The Board may determine who
     shall sign any instrument executed under the seal. If they do not, it shall
     be signed by at least one director and the secretary or by at least two
     directors. Any instrument may be executed under the seal by impressing the
     seal by mechanical means or by printing the seal or a facsimile of it on
     the instrument or by applying the seal or a facsimile of it by any other
     means to the instrument. An instrument signed, with the authority of a
     resolution of the Board, by a director and the secretary or by two
     directors and expressed (in whatever form of words) to be executed by the
     Company has the same effect as if executed under the seal. For the purpose
     of the preceding sentence only, "secretary" shall have the same meaning as
     in the Act and not the meaning given to it by Article 2.

Certificates for shares and debentures

222. The Board may by resolution determine either generally or in any particular
     case that any certificate for shares or debentures or representing any
     other form of security may have any signature affixed to it by some
     mechanical means, or printed on it or, in the case of a certificate
     executed under the seal, need not bear any signature.

                                                                              58



Official seal for use abroad

223. The Company may exercise the powers conferred by section 39 of the Act with
     regard to having an official seal for use abroad.

REGISTERS

Overseas and local registers

224. Subject to the provisions of the Companies Acts and the Regulations, the
     Company may keep an overseas or local or other register in any place, and
     the Board may make, amend and revoke any regulations it thinks fit about
     the keeping of that register.

Authentication and certification of copies and extracts

225. Any director or the secretary or any other person appointed by the Board
     for the purpose shall have power to authenticate and certify as true copies
     of and extracts from:

     (a)  any document comprising or affecting the constitution of the Company
          whether in physical form or electronic form;

     (b)  any resolution passed by the Company, the holders of any class of
          shares in the capital of the Company, the Board or any committee of
          the Board whether in physical form or electronic form; and

     (c)  any book, record and document relating to the business of the Company
          whether in physical form or electronic form (including without
          limitation the accounts), and

if certified in this way, a document purporting to be a copy of a resolution, or
the minutes or an extract from the minutes of a meeting of the Company, the
holders of any class of shares in the capital of the Company, the Board or a
committee of the Board, whether in physical form or electronic form, shall be
conclusive evidence in favour of all persons dealing with the Company in
reliance on it or them that the resolution was duly passed or that the minutes
are, or the extract from the minutes is, a true and accurate record of
proceedings at a duly constituted meeting.

DIVIDENDS

Declaration of dividends

226. Subject to the provisions of the Companies Acts and the Equalization
     Agreement, the Company may by ordinary resolution declare dividends in
     accordance with the respective rights of the members, but no dividend shall
     exceed the amount recommended by the Board.

227. The Board shall announce any dividends on ordinary shares in US dollars (or
     such other currency as it shall determine from time to time) together with
     a sterling equivalent for any such dividend in accordance with Article 232
     below.

228. The Board may at its discretion make provisions to enable a member to
     receive dividends duly payable in a currency or currencies other than
     dollars or sterling.

                                                                              59



229. Holders of ordinary shares shall be entitled to be paid dividends in
     sterling for so long as sterling remains the national currency of the
     United Kingdom or in any replacement currency if sterling ceases to be the
     only national currency of the United Kingdom.

Interim dividends

230. Subject to the provisions of the Companies Acts, the Equalization Agreement
     and Articles 234 to 236 (inclusive), the Board may pay interim dividends if
     it appears to the Board that they are justified by the profits of the
     Company available for distribution. If the share capital is divided into
     different classes, the Board may pay interim dividends on shares which
     confer deferred or non-preferred rights with regard to dividend as well as
     on shares which confer preferential rights with regard to dividend, but no
     interim dividend shall be paid on shares carrying deferred or non-preferred
     rights if, at the time of payment, any preferential dividend is in arrear.
     The Board may also pay at intervals settled by it any dividend payable at a
     fixed rate if it appears to the Board that the profits available for
     distribution justify the payment. If the Board acts in good faith it shall
     not incur any liability to the holders of shares conferring preferred
     rights for any loss they may suffer by the lawful payment of an interim
     dividend on any shares having deferred or non-preferred rights.

Apportionment of dividends

231. Except as otherwise provided by the rights attached to shares, all
     dividends shall be declared and paid according to the amounts paid up on
     the shares on which the dividend is paid; but no amount paid on a share in
     advance of the date on which a call is payable shall be treated for the
     purposes of this Article as paid on the share. All dividends shall be
     apportioned and paid proportionately to the amounts paid up on the shares
     during any portion or portions of the period in respect of which the
     dividend is paid; but, if any share is allotted or issued on terms
     providing that it shall rank for dividend as from a particular date, that
     share shall rank for dividend accordingly.

Exchange rate dividend calculation

232. For the purposes of the calculation of the amount receivable in respect of
     any dividend payable in a currency or currencies other than US dollars, the
     rate of exchange to be used to determine the relevant currency equivalent
     of any sum payable as a dividend shall be such market rate (whether spot or
     forward) selected by the Board as it shall consider appropriate by
     reference to such market rate or rates or the mean of such market rates
     prevailing at such time or times or on such date or dates as the Board may
     in its discretion select.

Ranking of shares for dividends

233. The rights attaching to the shares of the Company, as regards the
     participation in the profits available for distribution and resolved to be
     distributed, are as follows:

     (a)  the holders of preference shares shall be entitled, in priority to any
          payment of dividends to the holders of any other class of shares, to a
          preferred right to participate as regards dividends up to but not
          beyond a specified amount; and

                                                                              60



     (b)  any surplus remaining after payment of the dividends under paragraph
          (a) shall be payable to the holders of the P&O Princess Ordinary
          Shares in equal amounts per share.

Matching cash dividends or distributions of an income nature

234. Subject to the other provisions of these Articles, the Company shall not
     pay or make any Distribution in cash unless Carnival also pays or makes a
     Distribution in cash at or about the same time and the ratio of the
     Equalization Distribution Amount so paid or made by Carnival to the
     Equalization Distribution Amount so paid or made by the Company (converted,
     if applicable, at the Applicable Exchange Rate for such Distributions and
     rounded to five decimal places) equals the Equalization Ratio in effect on
     the Distribution Determination Date for such Distributions (each, an
     "Equivalent Distribution").

235. The Company shall not declare or otherwise become obligated to pay or make
     a Distribution in cash unless (i) on the date on which such declaration is
     made or such obligation is created, Carnival has sufficient distributable
     reserves to make an Equivalent Distribution with respect to such
     Distribution; or (ii) the Company agrees to pay, and does pay, to Carnival
     (before Carnival pays or makes such Distribution) the minimum amount
     required by Carnival so that it will have sufficient distributable reserves
     to pay or make such an Equivalent Distribution. Notwithstanding compliance
     with the preceding sentence, if Carnival shall have declared or otherwise
     become obligated to pay or make such Equivalent Distribution when due, then
     the Company shall pay to Carnival the minimum amount required by Carnival
     so that Carnival will have sufficient distributable reserves to pay or make
     such Equivalent Distribution; provided however that if the Company does not
     have sufficient distributable reserves to pay or make in full both the
     Equivalent Distribution that it declared or became obligated to make and
     the payment required by this sentence, then (i) the Company shall only pay
     or make the portion of that Equivalent Distribution (and any related
     payment that would have been required by this sentence in respect of such
     portion if it were the entire Equivalent Distribution that it had declared
     or became obligated to make) that it can make with its distributable
     reserves and (ii) Carnival shall only pay or make the portion of its
     Equivalent Distribution that it can make out of its distributable reserves
     following receipt of such payment.

236. For purposes of Article 235, the amount the Company is required to pay
     Carnival shall be determined after taking into account all Taxes payable
     by, and all Tax credits of, the Company and Carnival with respect to the
     payment or receipt of such payment and any such payment may be made on the
     Equalization Share issued by the Company if both the Board and the Board of
     Carnival deem it appropriate.

Timing of dividends and distributions

237. The Board, insofar as is practical, will:

     (a)  in relation to any proposed cash Distribution, agree with the Board of
          Carnival the amount of the Equivalent Distribution to be made by each
          company;

     (b)  determine to pay or recommend to pay Equivalent Distributions at a
          meeting of the Board convened as close in time as is practicable to
          the respective meeting of the Board of Carnival;

                                                                              61



     (c)  announce and pay any Equivalent Distributions simultaneously or as
          close in time as is practicable to the announcement or payment of any
          Equivalent Distribution made by the Board of Carnival;

     (d)  ensure that the record dates for receipt of the Equivalent
          Distribution, in respect of the Company and Carnival, are on the same
          date; and

     (e)  generally co-ordinate the timing of all other aspects of the payment
          or making of Equivalent Distributions with the Board of Carnival.

Dividends in specie

238. Subject to the provisions of Articles 124 to 129 and the provisions of the
     Equalization Agreement, a general meeting declaring a dividend may, on the
     recommendation of the Board, by ordinary resolution direct that it shall be
     satisfied wholly or partly by the distribution of assets, including without
     limitation paid up shares or debentures of another body corporate. The
     Board may make any arrangements it thinks fit to settle any difficulty
     arising in connection with the distribution, including without limitation
     (a) the fixing of the value for distribution of any assets, (b) the payment
     of cash to any member on the basis of that value in order to adjust the
     rights of members, and (c) the vesting of any asset in a trustee.

Scrip dividends: authorising resolution

239. Subject to the Companies Acts and the provisions of Articles 124 to 129,
     the Board may, if authorised by an ordinary resolution of the Company (the
     "Resolution"), offer any holder of ordinary shares the right to elect to
     receive Ordinary Shares, credited as fully paid, instead of cash in respect
     of the whole (or some part, to be determined by the Board) of all or any
     dividend specified by the Resolution. The offer shall be on the terms and
     conditions and be made in the manner specified in Article 240 or, subject
     to those provisions, specified in the Resolution.

Scrip dividends: procedures

240. The following provisions shall apply to the Resolution and any offer made
     pursuant to it and Article 239.

     (a)  The Resolution may specify a particular dividend, or may specify all
          or any dividends declared within a specified period.

     (b)  Each holder of Ordinary Shares shall be entitled to that number of new
          shares as are together as nearly as possible equal in value to (but
          not greater than) the cash amount (disregarding any tax credit) of the
          dividend that such holder elects to forgo (each a "new share"). For
          this purpose, the value of each new share shall be:

          (i)  equal to the average quotation for the Company's Ordinary Shares,
               that is, the average of the middle market quotations for those
               shares on the London Stock Exchange, as derived from the Daily
               Official List, on the day on which such shares are first quoted
               ex the relevant dividend and the four subsequent dealing days; or

          (ii) calculated in any other manner specified by the Resolution,

                                                                              62



          but shall never be less than the par value of the new share. A
          certificate or report by the auditors as to the value of a new share
          in respect of any dividend shall be conclusive evidence of that value.

     (c)  On or as soon as practicable after announcing that any dividend is to
          be declared or recommended, the Board, if it intends to offer an
          election in respect of that dividend, shall also announce that
          intention. If, after determining the basis of allotment, the Board
          decides to proceed with the offer, it shall notify the holders of
          Ordinary Shares of the terms and conditions of the right of election
          offered to them, specifying the procedure to be followed and place at
          which, and the latest time by which, elections or notices amending or
          terminating existing elections must be lodged in order to be
          effective.

     (d)  The Board shall not proceed with any election unless the Company has
          sufficient unissued Ordinary Shares authorised for issue and
          sufficient reserves or funds that may be appropriated to give effect
          to it after the basis of allotment is determined.

     (e)  The Board may exclude from any offer any holders of Ordinary Shares
          where the Board believes the making of the offer to them would or
          might involve the contravention of the laws of any territory or that
          for any other reason the offer should not be made to them.

     (f)  The dividend (or that part of the dividend in respect of which a right
          of election has been offered) shall not be payable in cash on Ordinary
          Shares in respect of which an election has been made (the "elected
          shares") and instead such number of new shares shall be allotted to
          each holder of elected shares as is arrived at on the basis stated in
          Article 240(b). For that purpose the Board shall appropriate out of
          any amount for the time being standing to the credit of any reserve or
          fund (including without limitation the profit and loss account),
          whether or not it is available for distribution, a sum equal to the
          aggregate nominal amount of the new shares to be allotted and apply it
          in paying up in full the appropriate number of new shares for
          allotment and distribution to each holder of elected shares as is
          arrived at on the basis stated in Article 240(b).

     (g)  The new shares when allotted shall rank equally in all respects with
          the fully paid shares of the same class then in issue except that they
          shall not be entitled to participate in the relevant dividend.

     (h)  No fraction of an Ordinary Share shall be allotted. The Board may make
          such provision as it thinks fit for any fractional entitlements
          including without limitation payment in cash to holders in respect of
          their fractional entitlements, provision for the accrual, retention or
          accumulation of all or part of the benefit of fractional entitlements
          to or by the Company or to or by or on behalf of any holder or the
          application of any accrual, retention or accumulation to the allotment
          of fully paid shares to any holder.

     (i)  The Board may do all acts and things it considers necessary or
          expedient to give effect to the allotment and issue of any share
          pursuant to this Article or otherwise in connection with any offer
          made pursuant to this Article and may

                                                                              63



          authorise any person, acting on behalf of the holders concerned, to
          enter into an agreement with the Company providing for such allotment
          or issue and incidental matters. Any agreement made under such
          authority shall be effective and binding on all concerned.

     (j)  The Board may, at its discretion, amend, suspend or terminate any
          offer pursuant to this Article.

Permitted deductions and retentions

241. The Board may deduct from any dividend or other moneys payable to any
     member in respect of a share any moneys presently payable by him to the
     Company in respect of that share. Where a person is entitled by
     transmission to a share, the Board may retain any dividend payable in
     respect of that share until that person (or that person's transferee)
     becomes the holder of that share.

Procedure for payment to holders and others entitled

242. Any dividend or other moneys payable in respect of a share may be paid:

     (a)  in cash; or

     (b)  by cheque or warrant made payable to or to the order of the holder or
          person entitled to payment; or

     (c)  by any direct debit, bank or other funds transfer system to the holder
          or person entitled to payment or, if practicable, to a person
          designated by notice to the Company by the holder or person entitled
          to payment; or

     (d)  by any other method approved by the Board and agreed (in such form as
          the Company thinks appropriate) by the holder or person entitled to
          payment including (without limitation) in respect of an uncertificated
          share by means of the relevant system (subject to the facilities and
          requirements of the relevant system).

Joint entitlement

243. If two or more persons are registered as joint holders of any share, or are
     entitled by transmission jointly to a share, the Company may:

     (a)  pay any dividend or other moneys payable in respect of the share to
          any one of them and any one of them may give effectual receipt for
          that payment; and

     (b)  for the purposes of Article 242, rely in relation to the share on the
          written direction, designation or agreement of, or notice to the
          Company by, any one of them.

Payment by post

244. A cheque or warrant may be sent by post to:

     (a)  where a share is held by a sole holder, the registered address of the
          holder of the share; or

                                                                              64



     (b)  if two or more persons are the holders, to the registered address of
          the person who is first named in the register; or

     (c)  if a person is entitled by transmission to the share, as if it were a
          notice to be given under Articles 254 to 260; or

     (d)  in any case, to such person and to such address as the person entitled
          to payment may direct by notice to the Company.

Discharge to Company and risk

245. Payment of a cheque or warrant by the bank on which it was drawn or the
     transfer of funds by the bank instructed to make the transfer or, in
     respect of an uncertificated share, the making of payment in accordance
     with the facilities and requirements of the relevant system (which, if the
     relevant system is CREST, shall be the creation of an assured payment
     obligation in respect of the dividend or other moneys payable in favour of
     the settlement bank of the member or other person concerned) shall be a
     good discharge to the Company. Every cheque or warrant sent in accordance
     with these Articles shall be at the risk of the holder or person entitled.
     The Company shall have no responsibility for any sums lost or delayed in
     the course of payment by any other method used by the Company in accordance
     with Article 242.

Interest not payable

246. No dividend or other moneys payable in respect of a share shall bear
     interest against the Company unless otherwise provided by the rights
     attached to the share.

Forfeiture of unclaimed dividends

247. Any dividend which has remained unclaimed for 12 years from the date when
     it became due for payment shall, unless the Board resolves otherwise, be
     forfeited and cease to remain owing by the Company. The payment of any
     unclaimed dividend or other moneys payable in respect of a share may (but
     need not) be paid by the Company into an account separate from the
     Company's own account. Such payment shall not constitute the Company a
     trustee in respect of it. The Company shall be entitled to cease sending
     dividend warrants and cheques by post or otherwise to a member if those
     instruments have been returned undelivered to, or left uncashed by, that
     member on at least two consecutive occasions, or, following one such
     occasion, reasonable enquiries have failed to establish the member's new
     address. The entitlement conferred on the Company by this Article in
     respect of any member shall cease if the member claims a dividend or cashes
     a dividend warrant or cheque.

CAPITALISATION OF PROFITS AND RESERVES

Power to capitalise

248. Subject to the provisions of Articles 124 to 129 and the provisions of the
     Equalization Agreement, the Board may with the authority of an ordinary
     resolution of the Company:

     (a)  subject to the provisions of this Article, resolve to capitalise any
          undistributed profits of the Company not required for paying any
          preferential dividend (whether or not they are available for
          distribution) or any sum standing to the

                                                                              65



              credit of any reserve or other fund, including without limitation
              the Company's share premium account and capital redemption
              reserve, if any;

         (b)  appropriate the sum resolved to be capitalised to the members or
              any class of members on the record date specified in the relevant
              resolution who would have been entitled to it if it were
              distributed by way of dividend and in the same proportions;

         (c)  apply that sum on their behalf either in or towards paying up the
              amounts, if any, for the time being unpaid on any shares held by
              them respectively, or in paying up in full unissued shares,
              debentures or other obligations of the Company of a nominal amount
              equal to that sum but the share premium account, the capital
              redemption reserve, and any profits which are not available for
              distribution may, for the purposes of this Article, only be
              applied in paying up unissued shares to be allotted to members
              credited as fully paid;

         (d)  allot the shares, debentures or other obligations credited as
              fully paid to those members, or as they may direct, in those
              proportions, or partly in one way and partly in the other;

         (e)  where shares or debentures become, or would otherwise become,
              distributable under this Article in fractions, make such provision
              as they think fit for any fractional entitlements including
              without limitation authorising their sale and transfer to any
              person, resolving that the distribution be made as nearly as
              practicable in the correct proportion but not exactly so, ignoring
              fractions altogether or resolving that cash payments be made to
              any members in order to adjust the rights of all parties;

         (f)  authorise any person to enter into an agreement with the Company
              on behalf of all the members concerned providing for either:

              (i)   the allotment to the members respectively, credited as fully
                    paid, of any shares, debentures or other obligations to
                    which they are entitled on the capitalisation; or

              (ii)  the payment up by the Company on behalf of the members of
                    the amounts, or any part of the amounts, remaining unpaid on
                    their existing shares by the application of their respective
                    proportions of the sum resolved to be capitalised,

              and any agreement made under that authority shall be binding on
              all such members; and

         (g)  generally do all acts and things required to give effect to the
              ordinary resolution.

RECORD DATES

Record dates for dividends, etc.

249.     Notwithstanding any other provision of these Articles, the Company or
         the Board may:

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         (a)  fix any date as the record date for any dividend, distribution,
              allotment or issue, which may be on or at any time before or after
              any date on which the dividend, distribution, allotment or issue
              is declared, paid or made;

         (b)  for the purpose of determining which persons are entitled to
              attend and vote at a general meeting of the Company, or a separate
              general meeting of the holders of any class of shares in the
              capital of the Company, and how many votes such persons may cast,
              specify in the notice of meeting a time, not more than 48 hours
              before the time fixed for the meeting, by which a person must be
              entered on the register in order to have the right to attend or
              vote at the meeting; changes to the register after the time
              specified by virtue of this Article 249(b) shall be disregarded in
              determining the rights of any person to attend or vote at the
              meeting; and

         (c)  for the purpose of sending notices of general meetings of the
              Company, or separate general meetings of the holders of any class
              of shares in the capital of the Company, under these Articles,
              determine that persons entitled to receive such notices are those
              persons entered on the register at the close of business on a day
              determined by the Company or the Board, which day may not be more
              than 21 days before the day that notices of the meeting are sent.

ACCOUNTS

Rights to inspect records

250.     No member shall (as such) have any right to inspect any accounting
         records or other book or document of the Company except as conferred by
         statute or authorized by the Board or by ordinary resolution of the
         Company or order of a court of competent jurisdiction.

Sending of annual accounts

251.     Subject to the Companies Acts, a copy of the Company's annual accounts,
         together with a copy of the directors' report for that financial year
         and the auditors' report on those accounts shall, at least 21 clear
         days before the date of the meeting at which copies of those documents
         are to be laid in accordance with the provisions of the Companies Acts,
         be sent to every member and to every holder of the Company's debentures
         of whose address the Company is aware, and to every other person who is
         entitled to receive notice of meetings from the Company under the
         provisions of the Companies Acts or of these Articles or, in the case
         of joint holders of any share or debenture, to one of the joint
         holders.

Summary financial statements

252.     Subject to the Companies Acts, the requirements of Article 251 shall be
         deemed satisfied in relation to any person by sending to the person,
         instead of such copies, a summary financial statement derived from the
         Company's annual accounts and the directors' report, which shall be in
         the form and containing the information prescribed by the Companies
         Acts and any regulations made under the Companies Acts.

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NOTICES

When notice required to be in writing: use of electronic communications

253.     Any notice to be sent to or by any person pursuant to these Articles
         (other than a notice calling a meeting of the Board) shall be in
         writing. Any such notice may be sent using electronic communications to
         such address (if any) as may for the time being be notified for that
         purpose to the person giving the notice by or on behalf of the person
         to whom the notice is sent.

Methods of giving notice

254.     The Company may send any notice or other document pursuant to these
         Articles to a member by whichever of the following methods it may in
         its absolute discretion determine:

         (a)  personally; or

         (b)  by posting the notice or other document in a prepaid envelope
              addressed to the member at his registered address; or

         (c)  by leaving the notice or other document at that address; or

         (d)  by sending the notice or other document using electronic
              communications to such address (if any) as may for the time being
              be notified to the Company by or on behalf of the member for that
              purpose.

Website publication

255.     Subject to the Companies Acts, the Company may also send any notice or
         other document pursuant to these Articles to a member by publishing
         that notice or other document on a website where:

         (a)  the Company and the member have agreed to him having access to the
              notice or document on a website (instead of it being sent to him);

         (b)  the notice or document is one to which that agreement applies;

         (c)  the member is notified, in a manner for the time being agreed
              between him and the Company for the purpose, of:

              (i)    the publication of the notice or document on a website;

              (ii)   the address of that website; and

              (iii)  the place on that website where the notice or document may
                     be accessed, and how it may be accessed; and

         (d)  the notice or document is published on that website throughout the
              publication period, provided that, if the notice or document is
              published on that website for a part, but not all of, the
              publication period, the notice or document shall be treated as
              being published throughout that period if the failure to publish
              that notice or document throughout that period is wholly
              attributable to circumstances which it would not be reasonable to
              have expected the Company to prevent or avoid.

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         In this Article 255, "publication period" means:

         (e)  in the case of a notice of an adjourned meeting pursuant to
              Article 104, a period of not less than seven clear days before the
              date of the adjourned meeting, beginning on the day following that
              on which the notification referred to in sub-paragraph (c) above
              is sent or (if later) is deemed sent;

         (f)  in the case of a notice of a poll pursuant to Article 136, a
              period of not less than seven clear days before the taking of the
              poll, beginning on the day following that on which the
              notification referred to in sub-paragraph (c) above is sent or (if
              later) is deemed sent; and

         (g)  in any other case, a period of not less than the relevant notice
              period, beginning on the day following that on which the
              notification referred to in sub-paragraph (c) above is sent or (if
              later) is deemed sent.

Notice to joint holders

256.     In the case of joint holders of a share, all notices or other documents
         shall be sent to the joint holder whose name stands first in the
         register in respect of the joint holding. Any notice or other document
         so sent shall be deemed for all purposes sufficient sending to all the
         joint holders.

Registered address outside United Kingdom

257.     A member whose registered address is not within the United Kingdom and
         who gives to the Company an address within the United Kingdom at which
         a notice or other document may be sent to him by instrument or an
         address to which a notice or other document may be sent using
         electronic communications shall (provided that, in the case of
         electronic communications, the Company so agrees) be entitled to have
         notices or other documents sent to him at that address but otherwise:

         (a)  no such member shall be entitled to receive any notice or other
              document from the Company; and

         (b)  without prejudice to the generality of the foregoing, any notice
              of a general meeting of the Company which is in fact sent or
              purports to be sent to such member shall be ignored for the
              purpose of determining the validity of the proceedings at such
              general meeting.

Deemed receipt of notice

258.     A member present, either in person or by proxy, at any meeting of the
         Company or of the holders of any class of shares in the capital of the
         Company shall be deemed to have been sent notice of the meeting and,
         where requisite, of the purposes for which it was called.

Terms and conditions for electronic communications

259.     The Board may from time to time issue, endorse or adopt terms and
         conditions relating to the use of electronic communications for the
         sending of notices, other documents and proxy appointments by the
         Company to members and by members to the Company.

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Notice includes website notification

260.     In this Article and in Articles 261, 262 and 263, references to a
         notice include without limitation references to any notification
         required by the Companies Acts or these Articles in relation to the
         publication of any notices or other documents on a website.

Notice to persons entitled by transmission

261.     A notice or other document may be sent by the Company to the person or
         persons entitled by transmission to a share by sending it in any manner
         the Company may choose authorised by these Articles for the sending of
         a notice or other document to a member, addressed to them by name, or
         by the title of representative of the deceased, or trustee of the
         bankrupt or by any similar description at the address, if any, in the
         United Kingdom as may be supplied for that purpose by or on behalf of
         the person or persons claiming to be so entitled. Until such an address
         has been supplied, a notice or other document may be sent in any manner
         in which it might have been sent if the death or bankruptcy or other
         event giving rise to the transmission had not occurred.

Transferees etc.  bound by prior notice

262.     Every person who becomes entitled to a share shall be bound by any
         notice in respect of that share which, before his name is entered in
         the register, has been sent to a person from whom he derives his title,
         provided that no person who becomes entitled by transmission to a share
         shall be bound by any direction notice issued under Article 154 to a
         person from whom he derives his title.

Proof of sending when sent by post

263.     Proof that an envelope containing a notice or other document was
         properly addressed, prepaid and posted shall be conclusive evidence
         that the notice or document was sent. Proof that a notice or other
         document contained in an electronic communication was sent in
         accordance with guidance issued by the Institute of Chartered
         Secretaries and Administrators current at the date of adoption of these
         Articles, or, if the Board so resolves, any subsequent guidance so
         issued, shall be conclusive evidence that the notice or document was
         sent. A notice or other document sent by the Company to a member by
         post shall be deemed to be sent:

         (a)  if sent by first class post or special delivery post from an
              address in the United Kingdom to another address in the United
              Kingdom, or by a postal service similar to first class post or
              special delivery post from an address in another country to
              another address in that other country, on the day following that
              on which the envelope containing it was posted;

         (b)  if sent by airmail from an address in the United Kingdom to an
              address outside the United Kingdom, or from an address in another
              country to an address outside that country (including without
              limitation an address in the United Kingdom), on the third day
              following that on which the envelope containing it was posted; and

         (c)  in any other case, on the second day following that on which the
              envelope containing it was posted.

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When notices etc. deemed sent by electronic communication

264.     A notice or other document sent by the Company to a member contained in
         an electronic communication shall be deemed sent to the member on the
         day following that on which the electronic communication was sent to
         the member. Such a notice or other document shall be deemed sent to the
         member on that day notwithstanding that the Company becomes aware that
         the member has failed to receive the relevant notice or other document
         for any reason and notwithstanding that the Company subsequently sends
         a copy of such notice or other document by post to the member.

Notice during disruption of postal services

265.     If at any time the Company is unable effectively to convene a general
         meeting by notices sent through the post in the United Kingdom as a
         result of the suspension or curtailment of postal services, notice of
         general meeting may be sufficiently given by advertisement in the
         United Kingdom. Any notice given by advertisement for the purpose of
         this Article shall be advertised on the same date in at least one
         newspaper having a national circulation. Such notice shall be deemed to
         have been sent to all persons who are entitled to have notice of
         meetings sent to them on the day when the advertisement appears. In any
         such case the Company shall send confirmatory copies of the notice by
         post if at least seven days before the meeting the posting of notices
         to addresses throughout the United Kingdom again becomes practicable.
         The foregoing shall not absolve the Company from any duty to send
         notice of a general meeting by use of electronic communications
         pursuant to these Articles.

DESTRUCTION OF DOCUMENTS

Power of Company to destroy documents

266.     The Company shall be entitled to destroy:

         (a)  all instruments of transfer of shares which have been registered,
              and all other documents on the basis of which any entry is made in
              the register, at any time after the expiration of six years from
              the date of registration;

         (b)  all dividend mandates, variations or cancellations of dividend
              mandates, and notifications of change of address at any time after
              the expiration of two years from the date of recording;

         (c)  all share certificates which have been cancelled at any time after
              the expiration of one year from the date of the cancellation;

         (d)  all paid dividend warrants and cheques at any time after the
              expiration of one year from the date of actual payment;

         (e)  all proxy appointments which have been used for the purpose of a
              poll at any time after the expiration of one year from the date of
              use; and

         (f)  all proxy appointments which have not been used for the purpose of
              a poll at any time after one month from the end of the meeting to
              which the proxy appointment relates and at which no poll was
              demanded.

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Presumption in relation to destroyed documents

267.     It shall conclusively be presumed in favour of the Company that:

         (a)  every entry in the register purporting to have been made on the
              basis of an instrument of transfer or other document destroyed in
              accordance with Article 266 was duly and properly made;

         (b)  every instrument of transfer destroyed in accordance with Article
              266 was a valid and effective instrument duly and properly
              registered;

         (c)  every share certificate destroyed in accordance with Article 266
              was a valid and effective certificate duly and properly cancelled;
              and

         (d)  every other document destroyed in accordance with Article 266 was
              a valid and effective document in accordance with its recorded
              particulars in the books or records of the Company,

         but:

         (e)  the provisions of this Article apply only to the destruction of a
              document in good faith and without notice of any claim (regardless
              of the parties) to which the document might be relevant;

         (f)  nothing in this Article shall be construed as imposing on the
              Company any liability in respect of the destruction of any
              document earlier than the time specified in Article 266 or in any
              other circumstances which would not attach to the Company in the
              absence of this Article; and

         (g)  any reference in Articles 266 and 267 to the destruction of any
              document includes a reference to its disposal in any manner.

UNTRACED SHAREHOLDERS

Power to dispose of shares of untraced shareholders

268.     The Company shall be entitled to sell, at the best price reasonably
         obtainable, the shares of a member or the shares to which a person is
         entitled by transmission if:

         (a)  during the period of 12 years before the date of the publication
              of the advertisements referred to in Article 268(b) (or, if
              published on different dates, the first date) (for the purposes of
              this Article, the "relevant period") at least three dividends in
              respect of the shares in question have been declared and all
              dividend warrants and cheques which have been sent in the manner
              authorized by these Articles in respect of the shares in question
              have remained uncashed;

         (b)  the Company shall as soon as practicable after expiry of the
              relevant period have inserted advertisements both in a national
              daily newspaper and in a newspaper circulating in the area of the
              last known address of such member or other person giving notice of
              its intention to sell the shares;

         (c)  during the relevant period and the period of three months
              following the publication of the advertisements referred to in
              Article 268(b) (or, if published

                                                                              72



               on different dates, the first date) the Company has received no
               indication either of the whereabouts or of the existence of such
               member or person; and

         (d)   if the shares are listed on the London Stock Exchange, notice
               has been given to the London Stock Exchange of the Company's
               intention to make such sale before the publication of the
               advertisements.

Transfer on sale

269.     To give effect to any sale pursuant to Article 268, the Board may:

         (a)   where the shares are held in certificated form, authorise any
               person to execute an instrument of transfer of the shares to, or
               in accordance with the directions of, the buyer; or

         (b)   where the shares are held in uncertificated form, do all acts
               and things it considers necessary or expedient to rematerialise
               shares into certificated form and/or to effect the transfer of
               the shares to, or in accordance with the directions of, the
               buyer.

Effectiveness of transfer

270.     An instrument of transfer executed by that person in accordance with
         Article 269(a) shall be as effective as if it had been executed by the
         holder of, or person entitled by transmission to, the shares. An
         exercise by the Company of its powers in accordance with Article 269(b)
         shall be as effective as if exercised by the registered holder of or
         person entitled by transmission to the shares. The transferee shall not
         be bound to see to the application of the purchase money, and his title
         to the shares shall not be affected by any irregularity in, or
         invalidity of, the proceedings in reference to the sale.

Proceeds of sale

271.     The net proceeds of sale shall belong to the Company which shall be
         obliged to account to the former member or other person previously
         entitled for an amount equal to the proceeds. The Company shall enter
         the name of such former member or other person in the books of the
         Company as a creditor for that amount. In relation to the debt, no
         trust is created and no interest is payable. The Company shall not be
         required to account for any money earned on the net proceeds of sale,
         which may be used in the Company's business or invested in such a way
         as the Board from time to time thinks fit.

LIQUIDATION

272.     If either or both of the Company and/or Carnival goes into any
         voluntary or involuntary Liquidation, the Company and Carnival will,
         subject to Article 273 below, make and receive such payments or take
         such other actions required to ensure that the holders of Ordinary
         Shares of each company would, had each entity gone into Liquidation on
         the same date, be entitled to receive a Liquidation Distribution which
         is equivalent on a per share basis in accordance with the then existing
         Equalization Ratio, having regard to the Liquidation Exchange Rate but
         ignoring any shareholder Tax or Tax Benefit.

                                                                              73



Liquidation Procedure

273.  To establish the amount payable under Article 272, each of the Company and
      Carnival will determine the amount of assets (if any) it will have
      available for distribution in a Liquidation on the date of Liquidation (or
      notional date of Liquidation) to holders of its Ordinary Shares after
      payment of all its debts and other financial obligations, including any
      tax costs associated with the realisation of any assets on a Liquidation
      and any payments due on any preference shares (its "Net Assets"). To the
      extent that the Net Assets of one company would enable it to make a
      Liquidation Distribution to the holders of its Ordinary Shares that is
      greater (taking into account the then existing Equalization Ratio) than
      the equivalent Liquidation Distribution that the other company could pay
      from its Net Assets to the holders of its Ordinary Shares, adjusting such
      comparative Liquidation Distribution in accordance with the then existing
      Equalization Ratio and having regard to the Liquidation Exchange Rate, but
      ignoring any shareholder Tax (including any withholding Tax required to be
      deducted by the company concerned) or Tax Benefit ("Equivalent Liquidation
      Payments"), then subject to Article 274 such company will make a balancing
      payment (or take any other balancing action described in Article 275
      below) in such amount as will ensure that both companies may make
      Equivalent Liquidation Payments, PROVIDED ALWAYS THAT no company need make
      a balancing payment (or take any other action) as described in this
      Article 273 if it would result in neither the holders of Carnival Common
      Stock nor the holders of P&O Princess Ordinary Shares being entitled to
      receive any Liquidation Distribution at all.

274.  For purposes of Article 273, the amount a company is required to pay the
      other company shall be determined after taking into account all Taxes
      payable by, and all Tax credits, losses or deductions of, the parties with
      respect to the payment or receipt of such payment and any such payment may
      be made on the Equalization Share issued by the paying company if both the
      Board and the Board of Carnival deem it appropriate.

Liquidation Actions

275.  In giving effect to the principle regarding a Liquidation of the Company
      and/or Carnival described above, the Company and/or Carnival shall take
      such action as may be required to give effect to that principle, which may
      include:

      (a)   making a payment (of cash or in specie) to the other company;

      (b)   issuing shares (which may include the Equalization Share) to the
            other party or to holders of Ordinary Shares of the other company
            and making a distribution or return on such Ordinary Shares; or

      (c)   taking any other action that the Board and the Board of Carnival
            shall both consider appropriate to give effect to that principle,

      provided that any action other than a payment of cash by one company to
      the other shall require the prior approval of the Board and the Board of
      Carnival.

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Disposal of assets by liquidator

276.  The power of sale of a liquidator shall include a power to sell wholly or
      partially for shares or debentures or other obligations of another body
      corporate, either then already constituted or about to be constituted for
      the purpose of carrying out the sale.

SHARE CONTROL LIMIT

Trigger of limit

277.  Subject to Article 278, if any person (an "Acquiring Person") acquires
      additional Ordinary Shares or voting control over additional Ordinary
      Shares and, after giving effect to such acquisition (or, if the Company is
      subject to the City Code, acquires Ordinary Shares or voting control over
      Ordinary Shares) such Acquiring Person, whether solely or together with
      any person or persons Acting in Concert with such Acquiring Person, holds
      or exercises voting control over Ordinary Shares which equal or are in
      excess of the Combined Group City Code Limit (such acquisition of Ordinary
      Shares or voting control over Ordinary Shares, a "Triggering
      Acquisition"), then all (i) Ordinary Shares held by the Acquiring Person
      or over which the Acquiring Person exercises voting control, and (ii)
      Ordinary Shares held by any party or parties Acting in Concert with such
      Acquiring Person or over which any party or parties Acting in Concert with
      such Acquiring Person exercise(s) voting control (the "Acquiring Person
      Attributable Shares") shall automatically be designated as "Combined Group
      Restricted Shares" for the purposes of Articles 277 to 287. A Triggering
      Acquisition can occur more than once and the provisions set forth in
      Articles 277 to 287 shall apply to every separate Triggering Acquisition
      or series of Triggering Acquisitions; or

Qualifying Takeover Offer

278.  Notwithstanding the provisions of Article 277, if:

      (a)   prior to or simultaneously with a Triggering Acquisition, such
            Acquiring Person has made a Qualifying Takeover Offer (and, in the
            event that the Qualifying Takeover Offer was made prior to the
            Triggering Acquisition, such Qualifying Takeover Offer has not been
            withdrawn, abandoned or terminated prior to or simultaneously with
            the Triggering Acquisition), or

      (b)   where the circumstances described in Article 278(a) have not
            occurred, such Acquiring Person (i) within 10 days after the date on
            which the applicable Triggering Action occurs, makes a binding
            public announcement to commence a Qualifying Takeover Offer, and
            (ii) within 28 days after making the public announcement referred to
            in 278(b)(i), commences a Qualifying Takeover Offer,

      then the Acquiring Person Attributable Shares shall not be designated
      Combined Group Restricted Shares for the purposes of Articles 278 to 287
      hereof until the earliest to occur (if at all) of (x) a withdrawal,
      abandonment or termination of such Qualifying Takeover Offer other than in
      accordance with its terms, or (y) any amendment, modification or
      supplement to the terms of either offer constituting the Qualifying
      Takeover Offer such that, as amended, modified or supplemented, the offers
      would not constitute a Qualifying Takeover Offer; provided that
      immediately upon the earliest to occur of the events described in (x) or
      (y) above, such Acquiring

                                                                              75



      Person Attributable Shares shall be automatically designated as Combined
      Group Restricted Shares.

Determination of Combined Group Excess Shares

279.  In the event that any Ordinary Shares are designated Combined Group
      Restricted Shares pursuant to Articles 277 or 278:

      (a)    If the Combined Group Restricted Shares (i) consist entirely of P&O
             Princess Ordinary Shares, and (ii) are held by or subject to the
             voting control of a single person, then all P&O Princess Ordinary
             Shares held by such person or over which such person exercises
             voting control which cause the Combined Group City Code Limit to be
             equalled or exceeded shall automatically be designated as Combined
             Group Excess Shares for the purposes of Articles 286 and 287;

      (b)    If the Combined Group Restricted Shares consist of both Carnival
             Common Stock and P&O Princess Ordinary Shares, and are held by or
             subject to the voting control of a single person, then:

             (i)    if, after giving effect to the Equalization Ratio, (x) the
                    number of votes represented by such P&O Princess Ordinary
                    Shares that could be cast with respect to a Joint Electorate
                    Action exceeds or is equal to (y) the number of votes
                    represented by such Carnival Common Stock that could be cast
                    with respect to a Joint Electorate Action, then all P&O
                    Princess Ordinary Shares held by such person or over which
                    such person exercises voting control which cause the
                    Combined Group City Code Limit to be equalled or exceeded
                    shall automatically be designated as Combined Group Excess
                    Shares for the purposes of Articles 286 and 287; and

             (ii)   if, after giving effect to the Equalization Ratio, (x) the
                    number of votes represented by such P&O Princess Ordinary
                    Shares that could be cast with respect to a Joint Electorate
                    Action is less than (y) the number of votes represented by
                    such Carnival Common Stock that could be cast with respect
                    to a Joint Electorate Action, such P&O Princess Ordinary
                    Shares shall automatically be designated as Combined Group
                    Excess Shares for the purposes of Articles 286 and 287 only
                    to the extent that such P&O Princess Ordinary Shares would
                    give such person ownership or voting control equal to or in
                    excess of the Combined Group City Code Limit, if such limit
                    was applied without regard to any Carnival Common Stock held
                    or subject to the voting control of such person.

      (c)    If the Combined Group Restricted Shares are held by or subject to
             the voting control of two or more persons Acting in Concert, where:

             (i)    all or a part of such Combined Group Restricted Shares would
                    all have been designated as Combined Group Excess Shares
                    pursuant to Article 279(a) had they been held by or subject
                    to the voting control of a single person; or

             (ii)   all or a part of such Combined Group Restricted Shares would
                    have been designated as Combined Group Excess Shares
                    pursuant to Article

                                                                              76



                   279(b) had they been held by or subject to the voting control
                   of a single person,

            then such automatic designation as Combined Group Excess Shares for
            the purposes of Articles 286 and 287 shall be made with respect to
            the same number of P&O Princess Ordinary Shares held by or subject
            to the voting control of such persons Acting in Concert as if they
            had been held by or subject to the voting control of a single
            person, such designation to be made on a pro rata basis based on the
            number of P&O Princess Ordinary Shares each such person holds or
            over which each such person exercises voting control.

Authority of the Board

280.  The Board shall have the authority to exercise all rights and powers
      granted to or vested in the Board or the Company under Articles 277 to 287
      and to take any action as it deems necessary or advisable to give effect
      to the provisions of Articles 277 to 287, including the right and power to
      interpret the provisions of Articles 277 to 278 and to make all
      determinations deemed necessary or advisable to give effect to the
      provisions of Articles 277 to 287. Without limiting the generality of the
      foregoing, the Company shall expressly have the right to effect or procure
      a transfer of Combined Group Restricted Shares as described in Articles
      277 to 287. In the case of ambiguity in the application of any of the
      provisions of Articles 277 to 287, the Board shall, in its absolute
      discretion, have the power to determine the application of such provisions
      with respect to any situation based on the facts known to them. All such
      actions, calculation, interpretations and determinations which are done or
      made by the Board in good faith shall be final, conclusive and binding on
      the Company and all other parties. No Director shall be liable for any act
      or omission pursuant to these Articles 277 to 287 if such action was taken
      in good faith.

281.  Immediately on a trigger of the Combined Group City Code Limit by any
      member (or any Acquiring Person), such person(s) shall:

      (a)   be deemed to irrevocably appoint the Company as his agent for the
            sale of the Combined Group Excess Shares, together with all rights
            attaching thereto, including, but not limited to, the right to do
            all acts and things, receive (on behalf of the Acquiring Person) the
            proceeds from the sale of the Combined Group Excess Shares and to
            negotiate, sign, execute and deliver all documents on behalf of the
            Acquiring Person which it considers necessary and advisable in
            connection with the sale of the Combined Group Excess Shares and
            such appointment shall endure until the ninetieth day after final
            delivery of the proceeds of the sale of all of the relevant Combined
            Group Excess Shares to the Company; and

      (b)   authorise any person to execute an instrument of transfer in respect
            of the Combined Group Excess Shares sold to, or in accordance with
            the directions of, the Combined Group Excess Share Trustee and/or
            any subsequent purchaser. The transferee shall not be bound to see
            to the application of any purchase money and his title to the
            Combined Group Excess Shares shall not be affected by any
            irregularity in or invalidity of the proceedings in relation to the
            sale or transfer; and

                                                                              77



      (c)   assist the Company in any and all matters or things relating to the
            sale of the Combined Group Excess Shares, including, but not limited
            to, procuring the appointment of the Company by his nominee or
            trustee, as their agent for the sale of the Combined Group
            Restricted Shares together with those rights, permissions and
            authorisations granted in (i) and (ii) above.

282.  Articles 277 to 287 override any other provision of these Articles.

Notice

283.  Any person whose acquisition of Ordinary Shares or voting control over
      Ordinary Shares would or does result in any Ordinary Shares being
      constituted as Combined Group Restricted Shares pursuant to Articles 277
      or 278 shall immediately give written notice to the Company of such event
      and shall provide to the Company such other information as the Company may
      request in order to determine (i) whether any acquisition of Ordinary
      Shares or voting control over Ordinary Shares has resulted or could result
      in any Ordinary Shares being designated as Combined Group Excess Shares
      under Article 279, and/or (ii) to what extent any Combined Group
      Restricted Shares should be designated as Combined Group Excess Shares
      pursuant to Article 278.

284.  The Company will, as soon as practicable after the Board has knowledge
      thereof, notify in writing any person who holds any Combined Group
      Restricted Shares; provided that failure by the Company to give any such
      notification shall in no way invalidate any of the provisions of Articles
      277 to 287. The Company may, at any time after serving such notice
      referred to in this Article 284, require that the holder(s) of Combined
      Group Restricted Shares provide the Company with such other information as
      the Company may request in order to determine (i) whether any acquisition
      of Ordinary Shares or voting control over Ordinary Shares has resulted or
      could result in any Ordinary Shares being designated as Combined Group
      Excess Shares under Article 279, and/or (ii) to what extent any Combined
      Group Restricted Shares should be designated as Combined Group Excess
      Shares pursuant to Article 278.

Exclusions

285.  The provisions set forth in Articles 277 to 284 and 286 and 287 shall not
      apply to:

      (a)   any Ordinary Shares to the extent that such restrictions are
            prohibited pursuant to the Applicable Regulations; or

      (b)   any acquisition of Ordinary Shares or voting control over Ordinary
            Shares by any member of the Arison Group if, as a result, the
            aggregate of the voting rights of the P&O Princess Ordinary Shares
            and of the Carnival Common Stock held by the Arison Group and of the
            P&O Princess Ordinary Shares and of the Carnival Common Stock over
            which the Arison Group, after giving effect to the Equalization
            Ratio, exercises voting control does not thereby (i) increase by one
            per cent. or more in any period of twelve consecutive months and
            (ii) after giving effect to the Equalization Ratio, equal or exceed
            forty per cent. of the aggregate voting rights attached to the whole
            of the issued P&O Princess Ordinary Shares and the outstanding
            Carnival Common Stock. For the avoidance of doubt, (x) a member
            shall not be deemed to have acquired

                                                                              78



              Ordinary Shares or voting control over Ordinary Shares if solely
              as a result of a share buyback, cancellation or reduction of share
              capital, disenfranchisement of voting rights or any other
              procedure which has the effect of reducing the share capital or
              the voting share capital of the Company or of Carnival the
              percentage holding of such person is increased; (y) the transfer
              of Ordinary Shares or voting control over Ordinary Shares among
              members of the Arison Group shall not be deemed to be a Triggering
              Acquisition; or

         (c)  any acquisition by Carnival or any member of the Carnival Group
              pursuant to a Mandatory Exchange; or

         (d)  any acquisition by any member of the Carnival Group of any
              Ordinary Shares; or

         (e)  any acquisition by the Company or any of its Subsidiaries from
              time to time of any Ordinary Shares.

COMBINED GROUP EXCESS SHARES

286.     The following shall apply to any Combined Group Excess Shares:

         Ownership in Trust

         (a)  Any Combined Group Excess Shares, as soon as possible after
              trigger of the Combined Group City Code Limit, shall be
              transferred by or on behalf of any Acquiring Person to the
              Combined Group Excess Share Trustee, as trustee of the Combined
              Group Excess Shares Trust, for the benefit of the Charitable
              Beneficiary (subject to the provisions of these Articles). The
              Acquiring Person shall, immediately after any trigger of the
              Combined Group City Code Limit, have no rights whatsoever in such
              Combined Group Excess Shares (except as provided in Articles
              286(c), 286(e) and 286(f)), and pending such transfer the Combined
              Group Excess Shares shall be held by the Acquiring Person on trust
              for the benefit of the Charitable Beneficiary. The Combined Group
              Excess Share Trustee may resign at any time so long as the Company
              shall have appointed a successor trustee. The Combined Group
              Excess Share Trustee shall, from time to time, designate one or
              more charitable organisation or organisations as the Charitable
              Beneficiary. More than one Combined Group Excess Share Trustee may
              be appointed to hold the Combined Group Excess Shares on trust for
              one or more Charitable Beneficiaries.

         Dividend Rights

         (b)  Combined Group Excess Shares shall remain entitled to the same
              dividends and other distributions as other Ordinary Shares are
              entitled to, and any dividend or distribution made or paid on
              Combined Group Excess Shares shall, pending transfer of such
              shares to the Combined Group Excess Share Trustee, be received by
              the relevant Acquiring Person in its capacity as trustee for the
              Charitable Beneficiary. Any dividend or distribution declared,
              paid or made shall, after the Combined Group Excess Shares have
              been transferred to the Combined Group Excess Share Trustee, be
              made or paid to the Combined Group Excess Share Trust. All
              dividends received or other income earned by the Combined Group
              Excess Share Trust shall be paid over to the Charitable
              Beneficiary.

                                                                              79



         Rights Upon Liquidation

         (c)  Upon Liquidation of the Company, an Acquiring Person shall (if it
              has not already received consideration for the transfer of the
              Combined Group Excess Shares to the Combined Group Excess Share
              Trustee) receive, for each Combined Group Excess Share, the amount
              per share of any distribution made upon liquidation, dissolution
              or winding up less any costs and expenses incurred by the Company,
              the Combined Group Excess Share Trustee or the Charitable
              Beneficiary in respect of the transfer or holding of such shares.

         Voting Rights

         (d)  Pending a transfer of the Combined Group Excess Shares by an
              Acquiring Person, it shall have no rights whatsoever to vote on
              those shares and those votes shall not be counted for any purpose
              pursuant to these Articles. The Combined Group Excess Share
              Trustee shall be entitled (but not required) to vote the Combined
              Group Excess Shares on behalf of the Charitable Beneficiary on any
              matter. The Charitable Beneficiary will be deemed to have given an
              irrevocable proxy to the Combined Group Excess Share Trustee to
              vote the Combined Group Excess Shares for its benefit.

         Restrictions on Transfer; Designation of Combined Group Excess Share
         Trust Beneficiary

         (e)  At the direction of the Board, the Combined Group Excess Share
              Trustee shall transfer the Combined Group Excess Shares held in
              the Combined Group Excess Share Trust to a person or persons
              (including, without limitation, if permitted under Applicable
              Regulations, to the Company pursuant to Article 286(f) below)
              whose ownership of such shares shall not cause a trigger of the
              Combined Group City Code Limit within 180 days after the later of
              (i) the date of triggering of the Combined Group City Code Limit,
              and (ii) the date the Board determines or is notified that a
              trigger of the Combined Group City Code Limit has occurred. If
              such a transfer is made, the interest of the Charitable
              Beneficiary shall terminate, the designation of such Ordinary
              Shares as Combined Group Excess Shares shall thereupon cease and
              the proceeds of such transfer shall be paid to the Acquiring
              Person net of any costs incurred by the Company, the Combined
              Group Excess Share Trustee and/or the Charitable Beneficiary in
              connection with the transfer of the Combined Group Excess Shares
              to the Combined Group Excess Share Trustee, the holding by the
              Combined Group Excess Share Trustee of the Combined Group Excess
              Shares and the transfer of the Combined Group Excess Shares by the
              Combined Group Excess Share Trustee to such person(s) in
              accordance with this Article 286(e).

         Purchase Rights in relation to Combined Group Excess Shares

         (f)  Combined Group Excess Shares held by the Combined Group Excess
              Share Trustee shall be deemed to have been offered for sale by the
              Combined Group Excess Share Trustee to the Company, or its
              designee, at a price per Combined Group Excess Share equal to the
              Market Price less any costs and expenses incurred by the Company,
              the Combined Group Excess Share Trustee and/or the Charitable
              Beneficiary relating to the transfer or holding of the Combined

                                                                              80



              Group Excess Shares and their subsequent purchase by the Company,
              whereby the "relevant date" for determining the Market Price shall
              be the date of acquisition of the Combined Group Excess Shares by
              the Company. The Company shall, to the extent permitted under
              Applicable Regulations, have the right to accept such offer for a
              period of ninety (90) days after the later of (i) the date of any
              breach of Article 277 and (ii) the date the Board determines there
              has been a breach of Article 277 if the Company does not receive a
              notice of transfer or other event pursuant to Article 286(e).

         Underwritten Offerings

         (g)  Ordinary Shares or rights, options or warrants for, or securities
              convertible into, Ordinary Shares acquired by an underwriter in a
              public offering or placement agent in a private offering shall not
              be treated as Combined Group Excess Shares, provided that the
              underwriter makes a timely distribution of such Ordinary Shares or
              rights, options or warrants for, or securities convertible into,
              Ordinary Shares such that, after the distribution, such
              underwriter or placement agent does not hold or exercise voting
              control over Ordinary Shares equal to or in excess of the Combined
              Group City Code Limit.

VOTING CONTROL

287.     In Articles 277 to 286, (i) references to holding or acquiring shares
         will also be deemed to include holding or acquiring voting control over
         shares, (ii) a person will be deemed to have voting control over shares
         if such person has the power to direct the voting of such shares, and
         (iii) a person will be deemed to acquire shares upon the occurrence of
         any event which results in such person Acting in Concert with another
         person with respect to such other person's shares.

INDEMNITY

Indemnity to directors and officers

288.     Subject to the provisions of the Companies Acts but without prejudice
         to any indemnity to which a director may otherwise be entitled, every
         director or other officer of the Company or of Carnival shall be
         indemnified out of the assets of the Company against any liability
         incurred by him to the fullest extent permitted under law.

MANDATORY EXCHANGE

289.     Following the occurrence of an Exchange Event described in clause (a)
         of the definition thereof, the Board may call a general meeting (which
         may be an annual general meeting or an extraordinary general meeting)
         of the members of the Company to consider whether to effect the
         Mandatory Exchange. Such action by the members of the Company shall be
         by Supermajority Resolution approved by 66?% of those voting and shall
         be a Joint Electorate Action. If the requisite approval is obtained for
         an Exchange Event described in clause (a) of the definition thereof the
         Board shall, or following the occurrence of an Exchange Event described
         in clause (b) of the definition thereof (which, for the avoidance of
         doubt shall not require the calling of a general meeting or a
         Supermajority Resolution), the Board may, send an Exchange Notice to
         each holder of P&O Princess Ordinary Shares (other than non-voting

                                                                              81



         Ordinary Shares held by Carnival or a wholly-owned Subsidiary of
         Carnival) notifying such holder of the Mandatory Exchange (as defined
         below). On the date specified in the Exchange Notice, which date shall
         be not less than fourteen days and no more than thirty days after the
         date of the Exchange Notice, the P&O Princess Ordinary Shares held by
         each member of the Company (other than the Non-Voting Ordinary Shares
         held by Carnival or a wholly-owned subsidiary of Carnival) shall,
         subject to the terms and conditions set forth in this Article, be
         automatically exchanged for such number of validly issued, fully paid
         and non-assessable shares of Carnival Common Stock as are equal to the
         number of such P&O Princess Ordinary Shares held by such member at such
         time multiplied by the Equalisation Fraction in effect at such time
         ("Mandatory Exchange"). Notwithstanding the foregoing, there shall be
         no entitlement to receive fractional interest in shares and in lieu of
         such fractional interest the member shall receive from Carnival an
         amount in cash in U.S. dollars at the Applicable Exchange Rate equal to
         either:

         (a)  the product of multiplying the fractional interest by the closing
              price of the Carnival Common Stock on the NYSE (as reported in The
              Wall Street Journal or, if not reported therein, such other
              authoritative source as the Board may determine) on the date that
              the Mandatory Exchange is implemented; or

         (b)  the pro rata entitlement of such member to the net proceeds of the
              sale of the aggregate fractional entitlements to Carnival Common
              Stock which shall be sold in the market at the best price
              reasonably obtainable by Carnival,

         provided always that Carnival shall be able to choose whether to apply
         the procedure referred to in (a) or (b) above, shall not be obliged to
         give any reasons for such choice and such choice shall be conclusive
         and binding on all persons concerned and shall not be open to challenge
         on any grounds whatsoever.

290.     On the day on which Exchange Notices are served pursuant to Article 289
         each member shall:

         (a)  be deemed to irrevocably appoint the Company as his agent to
              effect the Mandatory Exchange, including, but not limited to, the
              right to do all acts and things, receive (on behalf of the
              relevant member) sign, execute and deliver all documents on behalf
              of the relevant member which it considers necessary and advisable
              in connection with the Mandatory Exchange and such appointment
              shall endure until the Mandatory Exchange is completed; and

         (b)  authorise any director to execute an instrument of transfer in
              respect of the P&O Princess Ordinary Shares which are the subject
              of the Mandatory Exchange conditional on the issuance of Carnival
              Common Stock to the relevant member in accordance with Articles
              289 to 292; and

         (a)  assist the Company in any and all matters or things relating to
              the Mandatory Exchange of the P&O Princess Shares held by such
              member, including, but not limited to, procuring the appointment
              of the Company as their agent for the exchange together with the
              rights, permissions and authorisations granted in (a) and (b)
              above.

291.     To the extent that any of the procedures relating to the implementation
         of the Mandatory Exchange are inconsistent with any Applicable
         Regulations governing

                                                                              82



         such Mandatory Exchange, such Applicable Regulations shall apply to the
         implementation of the Mandatory Exchange, and not such procedures or
         the provisions of this Articles 289 to 292.

292.     Any resolution or determination of, or any decision or the exercise of
         any discretion or power by, the Board under and in accordance with
         Articles 289 to 292 shall be final and conclusive and they shall not be
         obliged to give any reasons therefor. Any disposal, transfer, exchange,
         or other thing done, by or on behalf, or on the authority of the Board
         pursuant to this Article shall be conclusive and binding on all persons
         concerned and shall not be open to challenge on any grounds whatsoever.

                                                                              83



Name and address of subscriber                       Number of shares taken

Michael Gradon                                       One Subscriber Share

The Summer House
18 Granville Road
Limpsfield, Oxted
Surrey RH8 0DA

Nicholas Luff                                        One Subscriber Share

30 Kings Avenue
Carshalton
Surrey SM5 4NX

Date:

Witness to signatures:

                                                                              84



                                                                 [Proposed Form]



          DATED                                          200[2][3]
       ----------------------------------------------------------------





                              CARNIVAL CORPORATION

                                       and

                            P&O PRINCESS CRUISES PLC










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

                      EQUALIZATION AND GOVERNANCE AGREEMENT

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

                                                                               1



                                    CONTENTS
Page 1. Definitions and Interpretation ................................................. 1 2. Boards of P&O Princess and Carnival ............................................ 9 3. Equalization of Distributions .................................................. 10 4. Capital Actions ................................................................ 11 5. Joint Electorate Actions ....................................................... 16 6. Separate Approvals of Class Rights Actions ..................................... 17 7. Meetings and Voting ............................................................ 20 8. Change of Control of either P&O Princess or Carnival ........................... 21 9. Stock Exchanges ................................................................ 21 10. Liquidation .................................................................... 21 11. Termination .................................................................... 23 12. Consequences of Termination .................................................... 23 13. Personal Rights Only ........................................................... 24 14. Issue of Equalization Shares ................................................... 24 15. Relationship with other Documents .............................................. 24 16. Miscellaneous .................................................................. 24 17. Notices ........................................................................ 25 18. Counterparts ................................................................... 26 19. Governing Law .................................................................. 26 20. Arbitration .................................................................... 26
EQUALIZATION AND GOVERNANCE AGREEMENT THIS AGREEMENT is made on . 200[2][3] between: (1) CARNIVAL CORPORATION, a Panamanian corporation having its principal place of business at Carnival Place, 3655, 87 Avenue, Miami, Florida, 33178 - 2482 ("Carnival"); and (2) P&O PRINCESS CRUISES PLC, a public limited company incorporated in England and Wales (Registered No. 4039524) having its registered office at 77 New Oxford Street, London WC1A 1PP ("P&O Princess") WHEREAS: (A) P&O Princess and Carnival entered into an Implementation Agreement as of . 200[2][3] pursuant to which P&O Princess and Carnival have agreed to do certain acts and things to implement the DLC Combination and create certain rights for the Carnival Shareholders and the P&O Princess Shareholders in respect of their interests in the combined enterprise. (B) P&O Princess and Carnival wish to agree upon the terms of the ongoing relationship between them following the DLC Combination, the basic principles being that: (i) the two companies shall operate as if they were a single unified economic entity; and (ii) the Equalization Ratio shall govern the proportion in which distributions of income and capital are made to, and the relative voting rights of, the holders of Carnival Common Stock relative to the holders of P&O Princess Ordinary Shares. 1. Definitions and Interpretation 1.1 Definitions In this Agreement, unless the context otherwise requires: "Action" means, in relation to Carnival or P&O Princess, any action affecting the amount or nature of issued share capital of such company, including any non-cash Distribution, offer by way of rights, bonus issue, sub-division or consolidation, or buy-back; "Applicable Exchange Rate" means, in relation to any proposed Distributions by P&O Princess and Carnival in relation to which a foreign exchange rate is required, the average of the closing mid-point spot US dollar-sterling exchange rate on the five Business Days ending on the Business Day before the Distribution Determination Date relating to such Distributions (as shown in the London Edition of the Financial Times, or such other point of reference as the parties shall agree), or such other spot US dollar-sterling exchange rate or average US dollar-sterling exchange rate as at such other date (or over such other period) before a Distribution Determination Date as the Boards of P&O Princess and Carnival shall agree, in each case rounded to five decimal places; 1 "Applicable Regulations" means: (a) any law, statute, ordinance, regulation, judgement, order, decree, licence, permit, directive or requirement of any Governmental Agency having jurisdiction over P&O Princess and/or Carnival; and (b) the rules, regulations, and guidelines of: (i) any stock exchange or other trading market on which any shares or other securities or depositary receipts representing such shares or securities of either P&O Princess or Carnival are listed, traded or quoted; and (ii) any other body with which entities with securities listed or quoted on such exchanges customarily comply, (but, if not having the force of law, only if compliance with such directives, requirements, rules, regulations or guidelines is in accordance with the general practice of persons to whom they are intended to apply) in each case for the time being in force and taking account all exemptions, waivers or variations from time to time applicable (in particular situations or generally) to P&O Princess or, as the case may be, Carnival; "Associated Tax Credit" means, in relation to any Distribution proposed to be made by either P&O Princess or Carnival, the amount of any imputed or associated Tax credit or rebate or exemption (or the value of any other similar associated Tax benefit) which would be available to a shareholder receiving or entitled to receive the Distribution, together with the amount of any credit or benefit in respect of any tax required to be deducted or withheld from the Distribution by or on behalf of the paying company; "Board" means the Board of P&O Princess or the Board of Carnival as the context may require; "Board of Carnival" means the board of directors of Carnival (or a duly appointed committee of that board) from time to time; "Board of P&O Princess" means the board of directors of P&O Princess (or a duly appointed committee of that board) from time to time; "Business Day" means any day other than a Saturday, Sunday or day on which banking institutions in the City of New York or London are authorised or obligated by law or executive order to close in the United States or England (or on which such banking institutions are open solely for trading in euros); "Carnival Articles" means the Amended Articles of Incorporation of Carnival which will be in effect immediately following Completion, as amended from time to time; "Carnival Articles and By-laws" means the Carnival Articles and the By-laws of Carnival which will be in effect immediately following Completion, as amended from time to time; "Carnival Common Stock" means the issued and outstanding common stock, par value US$0.01 per share, of Carnival from time to time, as the same may be 2 subdivided or consolidated from time to time and any capital stock into which such common stock may be reclassified, converted or otherwise changed; "Carnival Convertible Instruments" means the $600,000,000 2% Convertible Senior Debentures due 2021; and the $1,051,175,000 Liquid Yield Option Notes due 2021 (Zero Coupon-Senior); "Carnival Entrenched Provision" has the meaning given to it in the Carnival Articles and By-laws; "Carnival Equalization Share" means any share designated as an equalization share in Carnival from time to time by the Board of Carnival; "Carnival Group" means Carnival and its Subsidiaries from time to time and a member of the Carnival Group means any one of them; "Carnival Guarantee" means the agreement of even date herewith whereby Carnival agrees to guarantee certain obligations of P&O Princess for the benefit of certain future creditors of P&O Princess, as amended from time to time; "Carnival SVC" means Carnival SVC Limited, a company incorporated in England and Wales with registered number . or such other company as replaces Carnival SVC Limited pursuant to the terms of the SVC Special Voting Deed; "Carnival Special Voting Share" means the special voting share of US$0.01 in Carnival; "Class Rights Action" means any of the actions listed in Clause 6.1; "Combined Group" means the P&O Princess Group and the Carnival Group; "Combined Shareholders" means the holders of Carnival Common Stock and the holders of P&O Princess Ordinary Shares; "Completion" means the time at which the steps set out in Section 2.2 (Transaction to be Effected and Documents to be Exchanged) of the Implementation Agreement have been completed; "Current Market Price" has the meaning given to it in Paragraph 3 of the Schedule; "Dealing Day" has the meaning given to it in Paragraph 3 of the Schedule; "Disenfranchised Carnival Common Stock" has the meaning given to that term in the Carnival Articles; "Disenfranchised P&O Ordinary Shares" has the meaning given to that term in the P&O Princess Articles of Association; "Disenfranchised Shares" means the Disenfranchised P&O Ordinary Shares and the Disenfranchised Carnival Common Stock; "Dispute" has the meaning given to it in Clause 20(A); "Distributable Reserves" means, with respect to any Distribution by Carnival or P&O Princess, the total funds available to such company which it is permitted to use 3 to pay or make such Distribution under the Applicable Regulations relating to Carnival or P&O Princess, as the case may be; "Distribution" means, in relation to Carnival or P&O Princess, any dividend or other distribution, whether of income or capital, and in whatever form, made by such company or any of its Subsidiaries to the holders of such company's Shares, including for the purposes of this definition Disenfranchised Shares, by way of pro rata entitlement, excluding any Liquidation Distribution or buy-back or repurchase or cancellation of Shares; "Distribution Determination Date" means, with respect to any parallel Distributions to be made by Carnival and P&O Princess, the date on which the Board of P&O Princess and the Board of Carnival resolve to pay or make such parallel Distributions (or, if they resolve on different dates to pay or make such parallel Distributions, the later of those dates); "DLC Combination" means the combination of Carnival and P&O Princess by means of a dual listed company structure effected pursuant to this Agreement and the transactions contemplated hereby, including the SVC Special Voting Deed, the Carnival Articles and By-laws, the P&O Princess Memorandum and Articles, the Carnival Guarantee and the P&O Princess Guarantee; "DLC Structure" means the structure created by the DLC Combination; "DLC Transactions" has the meaning given to that term in the Implementation Agreement; "Equalization Distribution Amount" means, in relation to either P&O Princess or Carnival, the amount of any Distribution proposed to be paid or made by such company at any particular time on its Shares, before deduction of any amount in respect of Tax required to be deducted or withheld from such Distribution by or on behalf of such company and excluding the amount of any Associated Tax Credit, all such amounts being expressed in the currency of declaration and on a per share basis; "Equalization Fraction" means, as of any date, the Equalization Ratio as of such date expressed as a fraction where the numerator is one and the denominator is the P&O Princess Equivalent Number comprising the second element of such Equalization Ratio; "Equalization Ratio" means the ratio of (i) one share of Carnival Common Stock to (ii) that number of P&O Princess Ordinary Shares that have the same rights to distributions of income and capital and voting rights as one share of Carnival Common Stock (the "P&O Princess Equivalent Number"). The Equalization Ratio shall initially be 1:3.3289 but if the Parties agree to make such subdivisions and/or combinations of Carnival Common Stock and/or P&O Princess Ordinary Shares as are necessary to achieve the result it shall instead be 1:1 immediately after Completion and shall be subject to adjustment in the future as provided in Clause 4 and the Schedule. In all cases, the P&O Princess Equivalent Number shall be rounded to five decimal places; "Equalization Share" means, in relation to P&O Princess, the P&O Princess Equalization Share and, in relation to Carnival, the Carnival Equalization Share; 4 "equity equivalents" has the meaning given in Clause 4.4(A); "Equivalent Distribution" has the meaning given in Clause 3.1; "Equivalent Liquidation Payments" has the meaning given in Clause 10.2; "Equivalent Resolution" means a resolution of either P&O Princess or Carnival, certified by a duly authorised officer of P&O Princess or Carnival as equivalent in nature and effect to a resolution of the other company; "Fair Market Value" has the meaning given to it in Paragraph 3 of the Schedule; "Final Award" has the meaning given to it in Clause 20(D); "Financial Period" means a financial year of either P&O Princess or Carnival or any other period for which both of their accounts may by mutual agreement be made up; "Governmental Agency" means a court of competent jurisdiction or any government or any governmental, regulatory, self-regulatory or administrative authority, agency, commission, body or other governmental entity and shall include any relevant competition authorities, the UK Panel on Takeovers and Mergers, the European Commission, the London Stock Exchange, the UK Listing Authority, the U.S. Securities and Exchange Commission and the NYSE; "Group" means, in relation to P&O Princess, the P&O Princess Group and, in relation to Carnival, the Carnival Group as the context requires; "Guarantee" means each of the P&O Princess Guarantee and the Carnival Guarantee; "Implementation Agreement" means the agreement headed "Offer and Implementation Agreement" entered into between P&O Princess and Carnival as of . 200[2][3]; "Joint Electorate Action" means any of the resolutions referred to in Clause 5.1; "Joint Electorate Procedure" means the procedures referred to in Clause 5.2; "Liquidation" means, with respect to either Carnival or P&O Princess, any liquidation, winding up, receivership, dissolution, insolvency or equivalent proceedings pursuant to which the assets of such company will be liquidated and distributed to creditors and other holders of provable claims against such company; "Liquidation Distribution" means, in relation to Carnival or P&O Princess, any dividend or other distribution per Share, whether of income or capital, and in whatever form, made or to be made by such company or any of its Subsidiaries to the holders of such company's Shares by way of pro rata entitlement in connection with the Liquidation of such company; "Liquidation Exchange Rate" means, as at any date, the average of the closing mid-point spot US dollar-sterling exchange rate on the five Business Days ending on the Business Day before such date (as shown in the London Edition of the Financial Times), or such other US dollar-sterling exchange rate as the Boards of P&O Princess and Carnival or the Board of P&O Princess and liquidators of Carnival or the Board 5 of Carnival and the liquidators of P&O Princess or the liquidators of both P&O Princess and Carnival, as the case may be, may determine, in each case rounded to five decimal places; "London Stock Exchange" means the London Stock Exchange plc; "Majority Resolution" means, with respect to Carnival or P&O Princess, a resolution duly approved at a meeting of the shareholders of such company by the affirmative vote of a majority of all the votes Voted on such resolution by all shareholders of such company entitled to vote thereon (including, where appropriate, the holder of the Special Voting Share of such company) who are present in person or by proxy at such meeting; "Matching Action" has the meaning given in Clause 4.5; "Net Assets" has the meaning given in Clause 10.2; "NYSE" means the New York Stock Exchange, Inc.; "P&O Princess Articles of Association" means the Articles of Association of P&O Princess which will be in effect immediately following Completion, as amended from time to time; "P&O Princess Entrenched Provision" has the meaning given to it in the P&O Princess Memorandum and Articles; "P&O Princess Equalization Share" means the equalization share of (Pounds)50,000 in the capital of P&O Princess; "P&O Princess Equivalent Number" has the meaning given in the definition of "Equalization Ratio"; "P&O Princess ADS" means an American Depositary Share of P&O Princess, each of which represents four P&O Princess Ordinary Shares, which is listed on NYSE; "P&O Princess Guarantee" means the agreement of even date herewith whereby P&O Princess agrees to guarantee certain obligations of Carnival for the benefit of certain future creditors of Carnival, as amended from time to time; "P&O Princess Group" means P&O Princess and its Subsidiaries from time to time and a member of the P&O Princess Group means any one of them; "P&O Princess Memorandum and Articles" means the Memorandum and Articles of Association of P&O Princess which will be in effect immediately following Completion, as amended from time to time; "P&O Princess Ordinary Shares" means the issued ordinary shares of US$[.] each in P&O Princess from time to time (including the underlying ordinary shares to each P&O Princess ADS), as the same may be subdivided or consolidated from time to time and any ordinary shares into which such class of shares may be reclassified, converted or otherwise changed; 6 "P&O Princess SVC" means P&O Princess SVC Limited, a company incorporated in England and Wales with registered number ? or such other company as replaces P&O Princess SVC Limited pursuant to the terms of the SVC Special Voting Deed; "P&O Princess Special Voting Share" means the special voting share of (Pounds)1 in P&O Princess; "Parallel Shareholder Meeting" means, in relation to Carnival or P&O Princess, any meeting of the shareholders of that company which is: (a) nearest in time to, or is actually contemporaneous with, the meeting of the shareholders of the other company and at which some or all of the same resolutions or some or all the Equivalent Resolutions are to be considered; (b) designated by the Board of Carnival or the Board of P&O Princess, as the case may be, as the parallel meeting of a particular meeting of shareholders of the other company; "Primary Action" has the meaning given in Clause 4.5; "Relevant Company" has the meaning given in Paragraph 1.1 of the Schedule; "Repurchase" means: (a) a repurchase of P&O Princess Ordinary Shares by P&O Princess or a reduction by P&O Princess of its issued Ordinary share capital; (b) a repurchase of Carnival Common Stock by Carnival; or (c) a purchase of P&O Princess Ordinary Shares by any member of the Carnival Group; or (d) a purchase of Carnival Common Stock by any member of the P&O Princess Group. "Required Majority" has the meaning given in Clause 6.2; "Shares" means, in relation to P&O Princess, the P&O Princess Ordinary Shares which, for the avoidance of doubt shall not include Disenfranchised P&O Ordinary Shares (except where stated to the contrary) and, in relation to Carnival, the Carnival Common Stock which, for the avoidance of doubt shall not include Disenfranchised Carnival Common Stock (except where stated to the contrary); "Special Voting Share" means, in relation to Carnival, the Carnival Special Voting Share and, in relation to P&O Princess, the P&O Princess Special Voting Share; "sterling" means the lawful currency from time to time of the United Kingdom; "Subsidiary" means with respect to Carnival or P&O Princess, any entity, whether incorporated or unincorporated, in which such company owns, directly or indirectly, a majority of the securities or other ownership interests having by their terms ordinary voting power to elect a majority of the directors or other persons performing similar functions, or the management and policies of which such party otherwise has the power to direct; 7 "Supermajority Resolution" means, with respect to Carnival or P&O Princess, a resolution required by Applicable Regulations and/or the Carnival Articles and By-laws or the P&O Princess Memorandum and Articles, as relevant, to be approved by a higher percentage of votes Voted than required under a Majority Resolution, or where the percentage of votes Voted in favour and against the resolution is required to be calculated by a different mechanism to that required by a Majority Resolution; "SVC Special Voting Deed" means the agreement of even date herewith entered into between Carnival SVC, P&O Princess SVC, the Trustee, P&O Princess and Carnival relating, inter alia, to how each Special Voting Share is to be voted, as amended from time to time; "Tax" means any taxes, levies, imposts, deductions, charges, withholdings or duties levied by any authority (including stamp and transaction duties) (together with any related interest, penalties, fines and expenses in connection with them); "Tax Benefit" means any credit, rebate, exemption or benefit in respect of Tax available to any person; "Tribunal" has the meaning given to it in Clause 20(B); "Trustee" means [.] or such other trust company as shall be agreed between P&O Princess and Carnival; "UK Listing Authority" means the Financial Services Authority in its capacity as competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000; "US Securities Exchange Act" means the U.S. Securities Exchange Act of 1934; and "Voted" means the number of votes recorded in favour of and against a particular resolution at a shareholders' meeting of either P&O Princess or Carnival by holders of Shares, holders of any other class of shares entitled to vote and the holder of the relevant Special Voting Share PROVIDED THAT votes recorded as abstentions by holders of Carnival Common Stock or P&O Princess Ordinary Shares (or any other class of shares entitled to vote) shall not be counted as having been Voted for these purposes. 1.2 Interpretation Headings are for convenience only and do not affect interpretation. The following rules of interpretation apply unless the context requires otherwise. (A) The singular includes the plural and conversely. (B) One gender includes all genders. (C) Where a word or phrase is defined, its other grammatical forms have a corresponding meaning. (D) A reference to a person includes a body corporate, an unincorporated body or other entity and conversely. 8 (E) A reference to a Clause or a Schedule is to a Clause of or a Schedule to this Agreement, and the Schedule forms part of this Agreement. (F) A reference to any agreement or document is to that agreement or document as amended, novated, supplemented, varied or replaced from time to time, except to the extent prohibited by this Agreement. (G) A reference to any legislation (including any listing rules of a stock exchange or voluntary codes) or to any provision of any legislation includes any modification or re-enactment of it, any legislative provision substituted for it and all regulations and statutory instruments issued under it. (H) A reference to "writing" includes a facsimile transmission and any means of reproducing words in a tangible and permanently visible form. (I) Mentioning anything after "include", "includes", or "including" does not limit what else might be included. Where particular words are following by general words, the general words are not limited by the particular. (J) Reference to a body, other than a party to this Agreement (including any Governmental Agency), whether statutory or not: (i) which ceases to exist; or (ii) whose powers or functions are transferred to another body, is a reference to the body which replaces it or which substantially succeeds to its powers or functions. (K) All references to "time" are to the local time in the place where the relevant obligation is to be performed (or right exercised). (L) References in this Agreement to "US$" and "cents" are to United States dollars and cents and to "(Pounds)" and "p" are to pounds sterling and to pence sterling. (M) References to an offer by way of rights by Carnival or P&O Princess are to any type of offer (whether renounceable or non-renounceable) made by such company to the holders of its Shares in proportion to their holdings at the relevant time, subject to such exclusions or other arrangements as the relevant Board may deem necessary or expedient in relation to fractional entitlements or legal or practical difficulties with making the offer under any Applicable Regulations of or in any jurisdiction. (N) References to "party" or "parties" in this Agreement are to the parties to this Agreement. 2. Boards of P&O Princess and Carnival 2.1 Board Principles P&O Princess and Carnival agree that the following principles are essential to the implementation, management and operation of the DLC Structure: 9 (A) P&O Princess and Carnival must operate as if they were a single unified economic entity, through boards of directors which comprise exactly the same individuals and a unified senior executive management, and the Combined Shareholders shall be treated as if they were shareholders of a combined enterprise; and (B) the directors of P&O Princess and Carnival shall, in addition to their duties to the company concerned, have regard to the interests of the other company and both the holders of P&O Princess Ordinary Shares and the holders of Carnival Common Stock as if the two companies were a single unified legal entity. 2.2 Board Composition Each of Carnival and P&O Princess will therefore do (and will, to the extent it is able, procure that each member of its Group will do) all acts and things necessary and within their respective powers to ensure that at all times the Board of P&O Princess and the Board of Carnival comprise exactly the same individuals. 2.3 Indemnification of Directors Each of Carnival and P&O Princess will take all actions necessary or desirable to ensure that the directors of each company shall be indemnified by such company and the other company for any acts or omissions by such directors in their capacity as a director of such company, to the maximum permitted by Applicable Regulations PROVIDED THAT nothing in this paragraph shall affect the obligations provided for in Section 4.8.1 (Director and Officer Liability) of the Implementation Agreement. 3. Equalization of Distributions 3.1 Equalization Principle 3.1.1 Subject to the other provisions of this Agreement, neither Carnival nor P&O Princess shall pay or make any Distribution in cash unless the other company also pays or makes a Distribution in cash at or about the same time and the ratio of the Equalization Distribution Amount so paid or made by Carnival to the Equalization Distribution Amount so paid or made by P&O Princess (converted, if applicable, at the Applicable Exchange Rate for such Distributions and rounded to five decimal places) equals the Equalization Ratio in effect on the Distribution Determination Date for such Distributions (each, an "Equivalent Distribution") 3.1.2 Subject to Clause 3.1.3, neither Carnival nor P&O Princess shall declare or otherwise become obligated to pay or make a Distribution in cash unless (i) on the date on which such declaration is made or such obligation is created, the other company has sufficient Distributable Reserves to make an Equivalent Distribution with respect to such Distribution; or (ii) such company agrees to pay, and does pay, to the other company (before such other company pays or makes such Distribution) the minimum amount required by the other company so that it will have sufficient Distributable Reserves to pay or make such an Equivalent Distribution. Notwithstanding compliance with the preceding sentence, if either of Carnival or P&O Princess shall have declared or otherwise become obligated to pay or make an Equivalent Distribution and does not have sufficient Distributable Reserves to pay or make such 10 Equivalent Distribution when due, then the other company shall pay to such company the minimum amount required by such company so that it will have sufficient Distributable Reserves to pay or make such Equivalent Distribution; PROVIDED HOWEVER that if the other company does not have sufficient Distributable Reserves to pay or make in full both the Equivalent Distribution that it declared or became obligated to make and the payment required by this sentence, then (1) such other company shall only pay or make the portion of that Equivalent Distribution (and any related payment that would have been required by this sentence in respect of such portion if it were the entire Equivalent Distribution that it had declared or became obligated to make) that it can make out of its Distributable Reserves; and (2) the first company shall only pay or make the portion of its Equivalent Distribution that it can make out of its Distributable Reserves following receipt of such payment. 3.1.3 For the purposes of Clause 3.1.2, the amount a company is required to pay the other company shall be determined after taking into account all Taxes payable by, and all Tax Benefits of, the parties with respect to the payment or receipt of such payment and any such payment may be made on the Equalization Share issued by the paying party if both Boards deem it appropriate. 3.2 Timing of Equalized Distributions The parties agree that, insofar as is practical, the Boards of P&O Princess and Carnival shall: (A) in relation to any proposed cash Distribution, agree the amount of the Equivalent Distribution to be made by each company; (B) determine to pay or recommend to pay Equivalent Distributions at Board meetings convened as close in time to each other as is practicable; (C) announce and pay their Equivalent Distributions simultaneously or as close in time as is practicable; (D) ensure that the record dates for receipt of the Equivalent Distributions are on the same date; and (E) generally co-ordinate the timing of all other aspects of the payment or making of Equivalent Distributions. 4. Capital Actions 4.1 Equalization Principle The capital of the DLC Structure is to be deployed and managed in the most effective way for the benefit of the Combined Shareholders. Solely for purposes of construing the provisions of this Clause 4 and the Schedule, and without providing an independent basis for requiring any adjustment to the Equalization Ratio or other action hereunder, Carnival and P&O Princess further intend to undertake Actions in such a way as will not give rise to a materially different financial effect as between the interests of the holders of Carnival Common Stock and the interests of the holders of P&O Princess Ordinary Shares, unless approved as a Class Rights Action. 11 4.2 Automatic Adjustment If any Action by Carnival or P&O Princess is covered by the Schedule, then an automatic adjustment to the Equalization Ratio will occur pursuant to such Schedule unless the Board of the other company, in its sole discretion, undertakes: (A) a Matching Action; or (B) an alternative to such automatic adjustment, that has been approved as such by a Class Rights Action, it being understood that the Board of the other company is under no obligation to undertake any such Matching Action or to seek approval as a Class Rights Action of any such alternative. 4.3 Other Actions If any Action by Carnival or P&O Princess is not covered by the Schedule, then no automatic adjustment to the Equalization Ratio will occur, but the Board of the other company shall have the right (in its sole discretion), but not the obligation (i) to undertake a Matching Action; or (ii) to seek approval of an adjustment to the Equalization Ratio as a Class Rights Action in order to ensure that the proposed Action does not give rise to materially different financial effects as between the interests of the holders of Carnival Common Stock and the interests of holders of P&O Princess Ordinary Shares. In all cases, the Boards of P&O Princess and Carnival will co-operate in deciding what (if any) Actions or Matching Actions to undertake. 4.4 No Adjustment Required Notwithstanding any other provision of this Clause 4 or the Schedule, no adjustment to the Equalization Ratio will be required on the following Actions: (A) grants or issuances by Carnival or P&O Princess of their equity securities, or securities convertible into, or exchangeable or exercisable for, their equity securities ("equity equivalents"), under scrip dividend or dividend reinvestment schemes where the market value of the equity securities or equity equivalents granted or issued (determined in the manner customary for such schemes or plans in the jurisdictions in which they operate) is equal to, or less than, the cash amount of the dividend waived or reinvested; (B) issuances of equity securities or equity equivalents by either P&O Princess or Carnival pursuant to a share or stock option or purchase or other benefit plan to or on behalf of any one or more of the directors, officers, employees or consultants (in their capacity as such) of such company or any of its Subsidiaries, which plans are either: (i) in existence prior to the date of this Agreement; or (ii) approved by the relevant Board and as otherwise required by Applicable Regulations; (C) any issuance of Carnival Common Stock under the Carnival Convertible Instruments; 12 (D) other issuances by Carnival or P&O Princess of its equity securities or equity equivalents to any person, including for acquisitions, other than by way of rights to the holders of its Shares as a class; (E) repurchases or buy-backs by Carnival or P&O Princess of its Shares as follows: (i) in the market in an offer (1) not made by way of rights to the holders of its Shares; or (2) in compliance with Rule 10b-18 (under the US Securities Exchange Act); (ii) (other than under the preceding sub-clause (i)) at or below market price of such Shares (1) in the case of a repurchase or buy-back at a fixed price, on the Dealing Day immediately preceding the date on which such repurchase or buy-back is announced; or (2) otherwise, on the Dealing Day immediately preceding the date on which such repurchase or buy-back is made; (iii) any purchase by Carnival of Excess Shares (as defined in the Carnival Articles and By-laws) under Article XIII of the Carnival Articles (or any equivalent amended articles of Carnival's Articles); (iv) any purchase pursuant to the provisions of the Carnival Articles and By-laws or the P&O Princess Memorandum and Articles referred to in Clause 8; and (v) pro rata by way of rights to the Combined Shareholders at the same amount of premium to the market value of the relevant Shares (as adjusted by the Equalization Ratio); (F) Matching Actions; (G) the issue of an Equalization Share in accordance with Clause 14 by either party; (H) any purchase, cancellation or reduction of Disenfranchised P&O Ordinary Shares; and (I) any purchase, cancellation or reduction of Disenfranchised Carnival Common Stock. 4.5 Matching Action For the purposes of this Agreement, a "Matching Action" means, in relation to an Action in respect of the holders of Shares of Carnival or P&O Princess (the "Primary Action"), an Action in respect of the holders of Shares in the other company which the Board of such other company determines (i) has a financial effect on the holders of the Shares of such other company equivalent (but not necessarily identical) to the financial effect of the Primary Action on the holders of Shares of the company undertaking the Primary Action; and (ii) does not materially disadvantage the holders of the Shares of either company. In making the determination referred to in the preceding sentence: 13 (A) the Board of such other company shall consider the then existing Equalization Ratio, the timing of the Primary Action and any proposed Matching Action, and any other relevant circumstances; (B) in relation to any Action, when calculating any economic return to the holders of P&O Princess Ordinary Shares or Carnival Common Stock, any Tax or Tax Benefit shall be disregarded; and (C) the Boards of Carnival and P&O Princess shall have no obligation to take into account any fluctuations in exchange rates or in the market value of any securities or any other changes in circumstances arising after the date on which the Boards of Carnival and P&O Princess, as the case may be, decide to undertake a particular Matching Action. 4.6 Boards' Decisions Final The decision as to whether an Action is a Matching Action shall be a decision solely for the Boards of P&O Princess and Carnival, which may obtain appropriate professional advice in connection with such determination if they, in their sole discretion, consider it to be appropriate. Any such decision made by the Boards of P&O Princess and Carnival in accordance with this Clause 4 shall be final and binding. 4.7 Repurchase of Shares 4.7.1 From the date of this Agreement until the second anniversary of the date of this Agreement: (A) no P&O Princess Ordinary Shares (other than Disenfranchised P&O Ordinary Shares) or other shares in the capital of P&O Princess carrying voting rights shall be Repurchased; (B) Carnival Common Stock may be Repurchased without restriction; 4.7.2 From the second anniversary of the date of this Agreement until the fifth anniversary of the date of this Agreement; (A) Carnival Common Stock may be Repurchased without restriction; (B) during each twelve month period commencing on an anniversary of this Agreement, P&O Princess Ordinary Shares representing not more than 5% of the total aggregate number of issued P&O Princess Ordinary Shares and other shares in the capital of P&O Princess carrying voting rights (including for the purpose of this provision any Disenfranchised P&O Ordinary Shares) as of the beginning of such twelve month period may be Repurchased. 4.7.3 From the fifth anniversary of the date of this Agreement: (A) there shall be no restriction on the Repurchase of Carnival Common Stock; (B) there shall be no restriction on the Repurchase of P&O Princess Ordinary Shares. 14 4.7.4 All Repurchases shall be made in accordance with Applicable Regulations. 4.8 Issuance of Shares 4.8.1 From the date of this Agreement until the second anniversary of the date of this Agreement: (A) no P&O Princess Ordinary Shares or other shares or securities convertible into shares in the capital of P&O Princess carrying voting rights (other than an Equalization Share) shall be issued to any member of the Carnival Group except where P&O Princess Ordinary Shares or other shares or securities convertible into shares in the capital of P&O Princess carrying voting rights are issued on a pre-emptive basis to all shareholders of P&O Princess; (B) no Carnival Common Stock or other shares or securities convertible into common stock of Carnival carrying voting rights (other than an Equalization Share) shall be issued to any member of the P&O Princess Group except where Carnival Common Stock or other shares or securities convertible into common stock of Carnival carrying voting rights are issued on a pre-emptive basis to all shareholders of Carnival. 4.8.2 From the second anniversary of the date of this Agreement until the fifth anniversary of the date of this Agreement: (A) during each twelve month period commencing on an anniversary of this Agreement, P&O Princess Ordinary Shares representing not more than 5% of the total aggregate number of issued P&O Princess Ordinary Shares and other shares or securities convertible into shares in the capital of P&O Princess carrying voting rights (including for the purpose of this provision any Disenfranchised P&O Ordinary Shares) as of the beginning of such twelve month period may be issued to a member of the Carnival Group; (B) during each twelve month period commencing on an anniversary of this Agreement, Carnival Common Stock representing not more than 5% of the total aggregate outstanding Carnival Common Stock and other shares or securities convertible into common stock of Carnival carrying voting rights (including for the purpose of this provision any Disenfranchised Carnival Common Stock) as of the beginning of such twelve month period may be issued to a member of the P&O Princess Group. 4.8.3 From the fifth anniversary of the date of this Agreement: (A) there shall be no restriction on the issue of Carnival Common Stock to a member of the P&O Princess Group; (B) there shall be no restriction on the issue of P&O Princess Ordinary Shares to a member of the Carnival Group; 15 4.8.4 All issuances of shares by Carnival and P&O Princess shall be made in accordance with Applicable Regulations. 5. Joint Electorate Actions 5.1 Joint Electorate Actions 5.1.1 All actions put to shareholders of either P&O Princess or Carnival, except for Class Rights Actions (see Clause 6 below) or resolutions of a procedural or administrative nature (see Clause 7.5 below), will be Joint Electorate Actions. 5.1.2 For the avoidance of doubt, the following actions, if put to the holders of P&O Princess Ordinary Shares or the holders of Carnival Common Stock, will be put to the Combined Shareholders as Joint Electorate Actions: (A) the appointment, removal or re-election of any director of Carnival or P&O Princess, or both of them; (B) to the extent such receipt or adoption is required by Applicable Regulations, the receipt or adoption of the financial statements of P&O Princess or Carnival, or both of them, or accounts prepared on a combined basis, other than any accounts in respect of the period(s) ended prior to the date of Completion; (C) a change of name by P&O Princess or Carnival, or both of them; or (D) the appointment or removal of the auditors of P&O Princess or Carnival, or both of them. 5.2 Joint Electorate Procedure A Joint Electorate Action shall be approved under the Joint Electorate Procedure if, and only if, such action shall have been approved by: (A) a Majority Resolution of P&O Princess (or, if the P&O Princess Memorandum and Articles or Applicable Regulations require the action to be approved by Supermajority Resolution of the holders of the P&O Princess Ordinary Shares, by a Supermajority Resolution); and (B) a Majority Resolution of Carnival (or, if the Carnival Articles and By-laws or Applicable Regulations require the action to be approved by Supermajority Resolution of the holders of the Carnival Common Stock, by a Supermajority Resolution). 5.3 Disenfranchised P&O Ordinary Shares If at any relevant time the rights attached to the Disenfranchised P&O Ordinary Shares enable the holders of such shares to attend or vote at any general meeting or class meeting of the Company then all references in Clauses 5.1 and 5.2 to: (A) shareholders of P&O Princess; (B) holders of P&O Princess Ordinary Shares; and (C) Combined Shareholders, 16 shall include the holders of the Disenfranchised P&O Ordinary Shares and such persons shall have the right to vote such shares on Joint Electorate Actions, Class Rights Actions of P&O Princess and procedural resolutions in the same manner as the holders of P&O Princess Ordinary Shares for the purposes of Clauses 5, 6 and 7. 5.4 Disenfranchised Carnival Common Stock If at any relevant time the rights attached to the Disenfranchised Carnival Common Stock enable the holders of such shares to attend or vote at any general meeting or class meeting of the Company then all references in Clauses 5.1 and 5.2 to: (A) shareholders of Carnival; (B) holders of Carnival Common Stock; and (C) Combined Shareholders, shall include the holders of the Disenfranchised Carnival Common Stock and such persons shall have the right to vote such shares on Joint Electorate Actions, Class Rights Actions of Carnival and procedural resolutions in the same manner as holders of Carnival Common Stock for the purposes of Clauses 5, 6 and 7. 6. Separate Approvals of Class Rights Actions 6.1 Class Rights Action Notwithstanding anything to the contrary contained in this Agreement, if either P&O Princess or Carnival proposes to take any of the following actions: (A) the voluntary Liquidation of such company for which the approval of shareholders is required by Applicable Regulations or proposed other than a voluntary Liquidation of both companies at or about the same time with the purpose or effect of no longer continuing the operation of the businesses of the companies as a combined going concern and not as part of a scheme, plan, transaction, or series of related transactions the primary purpose or effect of which is to reconstitute all or a substantial part of such businesses in one or more successor entities; (B) the sale, lease exchange or other disposition of all or substantially all of the assets of such company, other than in a bona fide commercial transaction undertaken for a valid business purpose in which such company receives consideration with a fair market value reasonably equivalent to the assets disposed of and not as a part of a scheme, plan, transaction or series of related transactions the primary purpose or effect of which is to collapse or unify the DLC Structure; (C) any adjustment to the Equalization Ratio otherwise than in accordance with the provisions of this Agreement; (D) except where specifically provided for in the relevant agreements, any amendment to the terms of, or termination of, this Agreement, the SVC Special Voting Deed, the P&O Princess Guarantee or the Carnival Guarantee (including, for the avoidance of doubt, the voluntary termination of either Guarantee); 17 (E) any amendment to, removal or alteration of the effect of (which shall include the ratification of any breach of) any P&O Princess Entrenched Provision or any Carnival Entrenched Provision; (F) any amendment to, removal or alteration of the effect of (which shall include the ratification of any breach of) Article XII or XIII of the Carnival Articles that would cause, or at the time of implementation would be reasonably likely to cause, an Exchange Event described in clause (a) of the definition of such term in the P&O Princess Articles to occur; and (G) the doing of anything which the Boards of Carnival and P&O Princess agree (either in a particular case or generally), in their absolute discretion, should be approved as a Class Rights Action, each of them agrees with the other that it shall only take such action after it has been approved as a Class Rights Action in accordance with this Clause 6. 6.2 Approvals of Class Rights Action A Class Rights Action shall require approval by a Majority Resolution of each company, unless Applicable Regulations and/or the Carnival Articles and By-laws and the P&O Princess Memorandum and Articles (as relevant) require such Class Rights Action to be approved as a Supermajority Resolution by either or both companies, in which case it shall be approved as a Supermajority Resolution by the relevant company or companies to which such requirement applies (the "Required Majority"). 6.3 Class Rights Procedure A Class Rights Action must be approved separately by the Required Majority of (i) the holders of the Carnival Common Stock and the holders of any other class of shares of Carnival that are entitled to vote pursuant to Applicable Regulations and/or the Carnival Articles and By-laws; and (ii) the holders of the P&O Princess Ordinary Shares and the holders of any other class of shares of P&O Princess that are entitled to vote pursuant to Applicable Regulations and/or the P&O Princess Memorandum and Articles. Each of Carnival and P&O Princess will convene a shareholders meeting at which the holders of its Shares and the holder of its Special Voting Share (and the holders of any other relevant class of shares) may vote upon the Class Rights Action together as a single class on a poll; PROVIDED THAT the holder of the relevant Special Voting Share shall not vote on such resolution unless the Class Rights Action is not approved by the Required Majority of the holders of Shares (and any other relevant class of shares) of the other company, in which case the holder of the Special Voting Share shall vote as follows: (A) in respect of the Carnival Special Voting Share whereby the resolution was not approved by the Requisite Majority of the holders of the P&O Princess Ordinary Shares and the holders of any other class of shares of P&O Princess that are entitled to vote pursuant to Applicable Regulations and/or the P&O Princess Memorandum and Articles (excluding the P&O Princess Special Voting Share): (i) if the resolution needs to be passed by a Majority Resolution, then the Carnival Special Voting Share shall vote to cast such number of votes 18 representing the largest whole percentage that is less than the percentage of the number of votes as would be necessary to defeat a Majority Resolution if the total votes capable of being cast by the outstanding Carnival Common Stock and other class of shares of Carnival that are entitled to vote pursuant to Applicable Regulations and/or the Carnival Articles and By-laws (including the Carnival Special Voting Share) were cast in favour of the resolution at the Carnival Parallel General Meeting; and (ii) if the resolution needs to be passed by a Supermajority Resolution, then the Carnival Special Voting Share shall vote to cast such number of votes representing the largest whole percentage that is less than the percentage of the number of votes as would be necessary to defeat a Supermajority Resolution if the total votes capable of being cast by the outstanding Carnival Common Stock and other class of shares of Carnival that are entitled to vote pursuant to Applicable Regulations and/or the Carnival Articles and By-laws (including the Carnival Special Voting Share) were cast in favour of the resolution at the Carnival Parallel General Meeting; and (B) in respect of the P&O Princess Special Voting Share whereby the resolution was not approved by the Requisite Majority of the holders of the Carnival Common Stock and the holders of any other class of shares or Carnival that are entitled to vote pursuant to Applicable Regulations and/or the Carnival Articles and By-laws (excluding the Carnival Special Voting Share): (i) if the resolution needs to be passed by a Majority Resolution, then the P&O Princess Special Voting Share shall vote to cast such number of votes representing the largest whole percentage that is less than the percentage of the number of votes as would be necessary to defeat a Majority Resolution if the total votes capable of being cast by the issued P&O Princess Ordinary Shares and other class of shares of P&O Princess that are entitled to vote pursuant to Applicable Regulations and/or the P&O Princess Memorandum and Articles (including the P&O Princess Special Voting Share) were cast in favour of the resolution at the P&O Princess Parallel General Meeting; and (ii) if the resolution needed to be passed by a Supermajority Resolution, then the P&O Princess Special Voting Share shall vote to cast such number of votes representing the largest whole percentage that is less than the percentage of the number of votes (less one vote) as would be necessary to defeat a Supermajority Resolution if the total votes capable of being cast by the issued P&O Princess Ordinary Shares and other class of shares of P&O Princess that are entitled to vote pursuant to Applicable Regulations and/or the P&O Princess Memorandum and Articles (including the P&O Princess Special Voting Share) were cast in favour of the resolution at the P&O Princess Parallel General Meeting. 19 7. Meetings and Voting 7.1 Obligations to convene meetings In relation to both Joint Electorate Actions and Class Rights Actions: (A) each party shall, as soon as practicable, convene a meeting of its shareholders for the purpose of considering a resolution to approve the Joint Electorate Action or Class Rights Action; (B) each party shall endeavour to ensure such meetings are held on dates as close together as is practicable; and (C) the parties shall co-operate fully with each other in preparing resolutions, explanatory memoranda or any other information or material required in connection with the proposed Joint Electorate Action or Class Rights Action. 7.2 Poll Each of P&O Princess and Carnival agrees with the other that any resolution proposed at a meeting of its shareholders in relation to which the holder of the P&O Princess Special Voting Share, or the holder of the Carnival Special Voting Share, is or may be entitled to vote shall be decided on by a poll (i.e. by tabulation of individual votes) and not, for the avoidance of doubt, on a show of hands. 7.3 Timing of Poll 7.3.1 P&O Princess agrees with Carnival that any poll in which the holder of the P&O Princess Special Voting Share is or may be entitled to vote shall (as regards the P&O Princess Special Voting Share) be kept open for such time as to allow the corresponding general meeting of Carnival to be held and for the votes attaching to the P&O Princess Special Voting Share to be calculated and cast on such poll, although such poll may be closed earlier in respect of shares of other classes. 7.3.2 Carnival agrees with P&O Princess that any poll on which the holder of the Carnival Special Voting Share is or may be entitled to vote shall (as regards the Carnival Special Voting Share) be kept open for such time as to allow the corresponding general meeting of P&O Princess to be held and for the votes attaching to the Carnival Special Voting Share to be calculated and cast on such poll, although such poll may be closed earlier in respect of shares of other classes. 7.4 Discretionary Matters The Boards of P&O Princess and Carnival may by agreement (subject to Applicable Regulations): (A) decide to seek the approval of the shareholders (or any class of shareholders) of either or both of P&O Princess and Carnival for any matter that would not otherwise require such approval; (B) require any Joint Electorate Action to be approved instead as a Class Rights Action; or 20 (C) specify a higher majority vote than the majority that would otherwise be required for any shareholder vote provided for in this Clause 7. 7.5 Procedural Resolutions Notwithstanding anything to the contrary contained in this Agreement, resolutions of Carnival or P&O Princess of a procedural or technical nature (and which do not adversely affect the other company or its shareholders in any material respect) shall not constitute Joint Electorate Actions or Class Rights Actions and will be voted on by the relevant company's shareholders voting separately, and neither Special Voting Share will have any vote on those resolutions. Resolutions which will constitute resolutions of a procedural or technical nature may include any resolution: (A) that certain people be allowed to attend or excluded from attending the meeting; (B) that discussion be closed and the question put to the vote (provided no amendments have been raised); (C) that the question under discussion not be put to the vote; (D) to proceed with matters in an order other than that set out in the notice of the meeting; (E) to adjourn the debate (for example, to a subsequent meeting); and (F) to adjourn the meeting. 8. Change of Control of Either P&O Princess or Carnival Carnival and P&O Princess shall co-operate with each other in the prompt enforcement of the provisions of Articles XIV and XV of the Carnival Articles and Articles 277 to 286 of the P&O Princess Memorandum and Articles to the full extent possible under law. 9. Stock Exchanges Each of P&O Princess and Carnival will, and so far as it is able will ensure that each of its Subsidiaries will, ensure that it is in a position to comply with obligations imposed on it by all stock exchanges on which either or both of the parties' shares (or other securities or depository receipts representing such shares or securities) are from time to time listed, quoted or traded. 10. Liquidation 10.1 Liquidation Principle If either or both of Carnival and/or P&O Princess goes into any voluntary or involuntary Liquidation, Carnival and P&O Princess will, subject to Clause 10.2 below, make and receive such payments or take such other actions required to ensure that the holders of Shares (which, for the avoidance of doubt in this Clause 10 do not include the holders of Disenfranchised Shares) of each entity would, had each entity gone into Liquidation on the same date, be entitled to receive a Liquidation Distribution which is equivalent on a per Share basis in accordance with the then 21 existing Equalization Ratio, having regard to the Liquidation Exchange Rate but ignoring any shareholder Tax or Tax Benefit. 10.2 Liquidation Procedure 10.2.1 To establish the amount payable under Clause 10.1, each of Carnival and P&O Princess will determine the amount of assets (if any) it will have available for distribution in a Liquidation on the date of Liquidation (or notional date of Liquidation) to holders of its Shares after payment of all its debts and other financial obligations, including any tax costs associated with the realisation of any assets on a Liquidation and any payments due on any preference shares (its "Net Assets"). To the extent that the Net Assets of one company would enable it to make a Liquidation Distribution to the holders of its Shares that is greater (taking into account the then existing Equalization Ratio) than the equivalent Liquidation Distribution that the other company could pay from its Net Assets to the holders of its Shares, adjusting such comparative Liquidation Distribution in accordance with the then existing Equalization Ratio and having regard to the Liquidation Exchange Rate, but ignoring any shareholder Tax (including any withholding Tax required to be deducted by the company concerned) or Tax Benefit ("Equivalent Liquidation Payments"), then, subject to Clause 10.2.2, such company will make a balancing payment (or take any other balancing action described in Clause 10.3 below) in such amount as will ensure that both companies may make Equivalent Liquidation Payments, PROVIDED ALWAYS THAT no company need make a balancing payment (or take any other action) as described in this Clause 10.2 if it would result in neither the holders of Carnival Common Stock nor the holders of P&O Princess Ordinary Shares being entitled to receive any Liquidation Distribution at all. 10.2.2 For purposes of Clause 10.2.1, the amount a company is required to pay the other company shall be determined after taking into account all Taxes payable by, and all Tax credits, losses or deductions of, the parties with respect to the payment or receipt of such payment and any such payment may be made on the Equalization Share issued by the paying party if both Boards deem it appropriate. 10.3 Liquidation Actions In giving effect to the principle regarding a Liquidation of Carnival and/or P&O Princess described above, Carnival and P&O Princess shall take such action as may be required to give effect to that principle, which may include: (A) making a payment (of cash or in specie) to the other company; (B) issuing shares (which may include the Equalization Share) to the other party or to holders of Shares of the other party and making a distribution or return on such Shares; or (C) taking any other action that the Boards of Carnival and P&O Princess shall both consider appropriate to give effect to that principle. Any action other than a payment of cash by one company to the other shall require the prior approval of the Boards of both companies. 22 11. Termination Either Carnival or P&O Princess may terminate this Agreement: (A) on the mutual agreement of both parties (upon approval as a Class Rights Action); (B) if either party becomes a wholly-owned Subsidiary of the other; or (C) after all Liquidation obligations under Clause 10 have been satisfied. 12. Consequences of Termination 12.1 Non Dual-Listed Group In any combination of Carnival and P&O Princess into a single non dual-listed group, the consideration to be received by the holders of Shares in the two companies will be calculated by reference to the applicable Equalization Ratio. 12.2 Other Circumstances 12.2.1 In any other circumstances of termination of the DLC Structure, the Boards of Carnival and P&O Princess will use their reasonable endeavours to agree a termination proposal to be put to their shareholders which the Boards consider to be equitable to both the holders of Carnival Common Stock and the holders of P&O Princess Ordinary Shares, at the applicable Equalization Ratio and using an exchange rate agreed by the parties (failing which, such exchange rate to be determined by an independent accounting firm). If the Boards cannot agree on the proposal to be put to their respective holders of Shares, each Board will appoint an independent accounting firm to establish the value of its company as at the proposed date of termination. The two accounting firms will use the same principles of valuation. If the accounting firms fail to agree on each other's valuation of any company, then a third independent accounting firm shall be appointed to finally determine the value of such company or companies. If, subject to Clause 12.2.2, the agreed/determined respective values of each company on a per Share basis (using the agreed or determined exchange rate) are not equivalent in accordance with the Equalization Ratio at the proposed date of termination then a balancing payment, or other balancing action agreed by the companies, will be made by one company to the other as appropriate in such amount as will ensure that such values are equivalent in accordance with such Equalization Ratio. 12.2.2 For purposes of Clause 12.2.1, the amount a company is required to pay the other company shall be determined after taking into account all Taxes payable by, and all Tax credits, losses or deductions of, the parties with respect to the payment or receipt of such payment and any such payment may be made on the Equalization Share issued by the paying party if both Boards deem it appropriate. 23 13. Personal rights only 13.1 Contracts (Rights of Third Parties) Act 1999 The parties to this Agreement do not intend that any term of this Agreement should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this Agreement. 13.2 Personal rights For the avoidance of doubt, the provisions of this Agreement are personal rights only. They do not, and are not intended to, create any proprietary right (including any proprietary right in any member, shareholder or creditor of P&O Princess or Carnival). These undertakings are not assignable, and cannot be subject to a mortgage, charge, pledge, encumbrance or other security interest. These undertakings do not survive any termination of this Agreement. It is fundamental to the agreement of each of P&O Princess and Carnival to give these undertakings that they should be relied on solely by the other, and it is fundamental to the agreement of each of P&O Princess and Carnival to accept these undertakings that they should be performed solely by the other. 14. Issue of Equalization Shares The parties agree that the Board of P&O Princess and the Board of Carnival may agree to the issue of the P&O Princess Equalization Share to a member of the Carnival Group (against the nominal value of that share) and of the Carnival Equalization Share to a member of the P&O Princess Group (against the nominal value of that share), but that neither Carnival or P&O Princess shall issue its Equalization Share unless the Board of Carnival and the Board of P&O Princess shall have agreed to such issue. 15. Relationship with other documents In the event of any conflict between this Agreement on the one hand and on the other hand either of the P&O Princess Memorandum and Articles or the Carnival Articles and By-laws, the terms of this Agreement shall prevail and the parties shall use their best endeavours to ensure that any required amendment to the P&O Princess Memorandum and Articles or the Carnival Articles and By-laws, as is appropriate, is proposed at meetings of P&O Princess and/or as the case may be Carnival in order to conform it or them with the provisions of this Agreement. 16. Miscellaneous 16.1 Regulatory The parties will co-operate with each other from time to time to ensure that all information necessary or desirable for the making of (or responding to any requests for further information consequent upon) any notifications or filings made in respect of this Agreement, or the transactions contemplated hereunder, is supplied to the party dealing with such notification and filings and that they are properly, accurately and promptly made. 24 16.2 No assignment Neither of the parties may assign any of its rights or obligations under this Agreement in whole or in part without the approval of the other party. 16.3 No waiver No waiver by a party of a failure or failures by the other party to perform any provision of this Agreement shall operate or be construed as a waiver in respect of any other or further failure whether of a like or different character. 16.4 No partnership Neither this Agreement nor the DLC Transactions are intended for any legal, tax or other purpose to (i) alter the status of P&O Princess and Carnival as separate, independent entities (taxed respectively and exclusively as a United Kingdom and a Panamanian non-resident corporation), (ii) result in any of Carnival, P&O Princess, their respective Subsidiaries, or their respective shareholders being treated as creating an entity or otherwise entering into any partnership, joint venture, association or agency relationship, or (iii) give either party (or its respective Subsidiaries or shareholders) any legal or beneficial ownership interest in the assets or income of the other party, and shall not be construed as having such effect. 16.5 Applicable Regulations Each of the obligations of the parties hereto shall be subject to any Applicable Regulations as in force from time to time. To the extent not prohibited by law, the parties will do all things necessary to remedy any situation where Applicable Regulations prevent any party from performing its obligations hereunder. 16.6 Severance If any of the provisions of this Agreement is or becomes invalid, illegal or unenforceable under any relevant law, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired. Notwithstanding the foregoing, the parties shall thereupon negotiate in good faith in order to agree the terms of a mutually satisfactory provision, achieving as nearly as possible the same commercial effect, to be substituted for the provision found to be invalid, illegal or unenforceable. 16.7 Amendment Any amendment to or termination of this Agreement shall be made in writing signed by duly authorised representatives of P&O Princess and Carnival. Any amendments to this Agreement which are formal or technical in nature and which are not materially prejudicial to the interests of the shareholders of either party or are necessary to correct any inconsistency or manifest error may be agreed between the Board of P&O Princess and the Board of Carnival. Any other amendment to this Agreement shall, for the avoidance of doubt, require approval by a Class Rights Action. 17. Notices Notices, requests, instructions or other documents to be given under this Agreement shall be in writing and shall be deemed given (i) when sent if sent by facsimile is 25 promptly confirmed by telephone confirmation thereof; or (ii) when delivered, if delivered personally to the intended recipient or sent by overnight delivery via a national courier service, and in each case, addressed to such person or persons at such address or addresses as each party shall notify in writing to the other party at the address given at the head of this Agreement or thereafter at the relevant address for notification from time to time. 18. Counterparts This Agreement may be entered into in any number of counterparts, all of which taken together, shall constitute one and the same instrument. Either party may enter into this Agreement by signing any such counterpart. 19. Governing Law This Agreement shall be governed by and construed in accordance with English law. 20. Arbitration (A) Any and all disputes, controversies or claims arising out of or in connection with this Agreement, any provision hereof, or any alleged breach hereof, and any and all disputes, controversies or claims relating to the validity of this Agreement (all of which are referred to herein as "Disputes"), even though some or all of such Disputes are alleged to be extra-contractual in nature, whether such Disputes sound in contract, tort or otherwise, at law or in equity, whether for damages, specific performance or other relief, shall be finally and exclusively determined by final and binding arbitration in accordance with this Clause 20. (B) The arbitral tribunal (the "Tribunal") shall be composed of three arbitrators, which shall be appointed as follows: each party shall have the right to appoint one arbitrator; the two arbitrators so appointed shall then appoint a third arbitrator who shall serve as the Chairman of the Tribunal. A person or persons, entitled to appoint an arbitrator, shall appoint such arbitrator within ten (10) days of receiving notice from a party of the commencement of an arbitration, failing which such arbitrator shall, at the written request of either party, be appointed by the International Chamber of Commerce. At the initiation of a proceeding and upon the convening of the Tribunal, the arbitrators shall take an oath of neutrality and shall decide the matters presented to them based upon the evidence submitted in the proceeding and without regard to the origin or circumstances of their appointment or selection for service on the Tribunal. (C) The construction and interpretation of this Clause 20, and all rules of conduct of any arbitration conducted pursuant to this Clause 20 (including procedural and evidentiary matters), shall be determined by the Tribunal. Unless otherwise unanimously agreed by the arbitrators, the venue of the arbitration shall be Miami, Florida, USA. (D) The Tribunal shall conduct a hearing as soon as reasonably practicable after a matter has been submitted for arbitration by a party and the members of the Tribunal have been selected. As the Tribunal may direct and without the 26 necessity of subpoenas or other court orders, the parties shall make their agents, employees and witnesses available upon reasonable notice at reasonable times for deposition or for testimony at the hearing and shall respond to requests for documents. An award completely disposing of all Disputes (a "Final Award") shall be rendered by the Tribunal as soon as reasonably practicable after the hearing. The Tribunal shall not be required to submit a detailed statement of its reasons, but shall set forth concisely in the Final Award the amounts, actions, contractual responsibilities or other remedial conclusions that the Tribunal determines to be appropriate. (E) Each party acknowledges and agrees that in the event either party breaches any of its obligations under this Agreement, the other party would be irreparably harmed and could not be made whole by monetary damages alone. Both parties accordingly agree that the Tribunal shall have the authority to grant any party all appropriate non-monetary relief, including ordering a breaching party to comply fully with its obligations under the Agreement, ordering specific performance or granting temporary or permanent injunctive relief; PROVIDED, HOWEVER, that nothing in this Clause 20 shall be construed to limit the Tribunal in awarding monetary damages, whether as a sole remedy or together with remedies for specific performance and/or injunctive relief. (F) Any award made by the Tribunal shall be final and binding upon each party, each of which expressly waives all right to appeal or recourse to any court. The Final Award may be confirmed, and a judgement entered or enforced, in any court of competent jurisdiction in the United States or the United Kingdom. (G) The fees and expenses of the arbitrators shall be borne equally by the parties, but the Final Award may include such allocations and awards of the arbitrators' fees and expenses as the Tribunal determines is appropriate. IN WITNESS whereof this Agreement has been executed on the date first written above. 27 Schedule Automatic Adjustments to the Equalization Ratio 1. Automatic Adjustments 1.1 Rights issue of Shares If either Carnival or P&O Princess (the "Relevant Company") shall offer its Shares to the holders of its Shares as a class by way of rights at less than the Current Market Price of such Shares, the Equalization Ratio shall be adjusted by: (i) multiplying the Equalization Fraction by the following fraction where Carnival is the Relevant Company; and (ii) dividing the Equalization Fraction by the following fraction where P&O Princess is the Relevant Company: K + L Q ------- where L = - M K + M P where: K is the number of Shares of the Relevant Company which rank for the relevant offer; M is the aggregate number of Shares being offered to the holders of Shares of the Relevant Company; P is the Current Market Price of one Share of the Relevant Company; and Q is the price per Share being offered to the holders of Shares of the Relevant Company. The adjustment to the Equalization Ratio shall become effective from the later of the time at which the Shares of the Relevant Company are first traded ex-rights and the time at which the issue of the Shares becomes wholly unconditional. 1.2 Rights issue of other securities If the Relevant Company shall offer any securities (other than a rights issue of Shares described in paragraph 1.1 of this Schedule) to holders of its Shares as a class by way of rights, or grant to such shareholders as a class by way of rights, any options, warrants or other rights to subscribe for, purchase or sell any securities, the Equalization Ratio shall be adjusted by: (i) multiplying the Equalization Fraction by the following fraction where Carnival is the Relevant Company; and (ii) dividing the Equalization Fraction by the following fraction where P&O Princess is the Relevant Company: R - S ----- R 28 where: R is the Current Market Price of one Share; and S is the estimated Fair Market Value (calculated in the same currency as the Shares described in R above) of the portion of the rights attributable to one Share of the Relevant Company over any five consecutive Dealing Days determined by the Board of the Relevant Company during the twenty Dealing Days preceding the date on which the Shares are first traded ex-rights. The adjustment to the Equalization Ratio shall become effective from the later of the time at which the Shares of the Relevant Company are first traded ex-rights and the time at which the issue of the Shares becomes wholly unconditional. 1.3 Non cash distributions and share repurchases If the Relevant Company shall implement (i) any distribution of any non-cash assets; or (ii) any repurchase of its Shares involving an offer made to all or substantially all of its holders of Shares to repurchase their Shares at a premium to the Current Market Price of such shares, the Equalization Ratio shall be adjusted by: (i) multiplying the Equalization Fraction by the following fraction where Carnival is the Relevant Company; and (ii) dividing the Equalization Fraction by the following fraction where P&O Princess is the Relevant Company: V T - -- U ----- T where: T is the Current Market Price of one Share of the Relevant Company; U is equal to the number of Shares of the Relevant Company prior to the non cash distribution or repurchase; and V is (i) in the case of a non cash distribution, the aggregate Fair Market Value of the assets distributed to shareholders of the Relevant Company; and (ii) in the case of a repurchase, the aggregate premium paid to holders of Shares; in either case denominated in the same currency as the Current Market Price referred to in T and disregarding the effect of any shareholder Taxes or Tax Benefits and/or any fees incurred in connection with the non-cash Distribution or repurchase. The adjustment to the Equalization Ratio shall become effective immediately following implementation of the non-cash Distribution or repurchase. 1.4 Consolidation or subdivision of shares If there shall be a change to the number of Shares of the Relevant Company as a result of a consolidation or subdivision of shares, the Equalization Ratio shall be adjusted by: 29 (i) multiplying the Equalization Fraction by the following fraction where Carnival is the Relevant Company; and (ii) dividing the Equalization Fraction by the following fraction where P&O Princess is the Relevant Company: X --- Y where: X is the number of Shares of the Relevant Company outstanding or in issue immediately before such alteration; and Y is the number of Shares of the Relevant Company outstanding or in issue immediately after such alteration. The adjustment to the Equalization Ratio shall become effective immediately after the alteration takes effect. 1.5 Bonus issue or stock dividend If the Relevant Company issues any Shares to holders of Shares for no consideration or solely by way of capitalisation of profits or reserves, the Equalization Ratio shall be adjusted by: (i) multiplying the Equalization Fraction by the following fraction where Carnival is the Relevant Company; and (ii) dividing the Equalization Fraction by the following fraction where P&O Princess is the Relevant Company: X --- Y where: X is the number of Shares of the Relevant Company outstanding immediately before the issue; and Y is the number of Shares of the Relevant Company outstanding immediately after such issue. The adjustment to the Equalization Ratio shall become effective from the time the issue of such Shares becomes wholly unconditional. 2. Certification The auditors for the time being of P&O Princess and Carnival shall jointly certify the arithmetical adjustment to be made to the Equalization Ratio in the circumstances set out in this Schedule where an adjustment is made to such Equalization Ratio and any adjustments so certified shall, in the absence of manifest error, be final and binding on the parties and on all others affected thereby. P&O Princess and Carnival agree with each other to make and co-ordinate such public announcements as are appropriate in 30 relation to any such adjustments, subject to the requirements of Applicable Regulations. 3. Definitions In this Schedule: "Current Market Price" means the average market price of one Share of the Relevant Company (on its primary or main stock exchange) calculated over any five consecutive Dealing Days determined by the Board of the Relevant Company during the twenty Dealing Days preceding: - (i) in the case of P in paragraph 1.1 and R in paragraph 1.2, the date on which such Shares are first traded ex-rights; and (ii) in the case of T in paragraph 1.3, the date on which the non-cash distribution or repurchase is implemented; "Dealing Day" means, with respect to any relevant market for the Shares, a day on which trading is conducted in such market; and "Fair Market Value" means the fair market value determined by an investment bank of international repute appointed by agreement between the Boards of Carnival and P&O Princess, acting as expert and not as arbitrator and whose determination (in the absence of manifest error) shall be final and binding on the parties and on all others affected by such determination. 31


                          CARNIVAL DEED POLL GUARANTEE

THIS DEED is made by way of DEED POLL on . 200[2][3] by Carnival Corporation
("Carnival") in favour of each Creditor.

BACKGROUND

Under the Implementation Agreement referred to below, Carnival has agreed with
P&O Princess to issue this Guarantee in respect of certain obligations of P&O
Princess (including, without limitation, guarantees by P&O Princess of certain
obligations of Principal Debtors).

THIS DEED WITNESSES as follows:

1.   Definitions and Interpretation

1.1  Definitions

     In this Guarantee:

     "Business Day" means any day other than a Saturday, Sunday or day on which
     banking institutions in the City of New York or London are authorised or
     obligated by law or executive order to close in the United States or
     England (or on which such banking institutions are open solely for trading
     in euros);

     "Creditor" means any Person to whom or to which any Obligation is owed;

     "Equalization and Governance Agreement" means the Agreement headed
     "Equalization and Governance Agreement" entered into between P&O Princess
     and Carnival as of even date with this Guarantee;

     "Existing Obligation" means, in relation to:

          (a)  any agreement or exclusion referred to in Clause 4; or

          (b)  any termination of this Guarantee; or

          (c)  any amendment to this Guarantee,

     any Obligation incurred before, or arising out of any credit or similar
     facility (whether committed or uncommitted) available for use at, the time
     at which the relevant agreement, exclusion, termination or amendment
     becomes effective;

     "Group" means, in relation to Carnival or P&O Princess, such company and
     its Subsidiaries from time to time;

     "Implementation Agreement" means the Agreement headed "Offer and
     Implementation Agreement" entered into between P&O Princess and Carnival as
     of . 200[2][3];

     "Obligation" means:

          (a)  any contractual monetary obligation (whether primary or secondary
               (and including, for the avoidance of doubt, any guarantee of the

                                                                               1



                 contractual monetary obligations of any Principal Debtor))
                 incurred by P&O Princess after the date of this Guarantee; and

          (b)    any other obligation of any kind which may be agreed in writing
                 between Carnival and P&O Princess (in their absolute
                 discretion) after the date of this Guarantee (in which case a
                 note of such Obligation will be appended as an exhibit to this
                 Guarantee),

     other than, in each case, any obligation:

          (i)    to the extent that (without reference to the effect of this
                 Guarantee) it is covered by the terms of any policy of
                 insurance (or any indemnity in the nature of insurance) of
                 which P&O Princess (or, where relevant, the Principal Debtor)
                 has the benefit and which is in full force and effect;

          (ii)   explicitly guaranteed in writing by Carnival (otherwise than
                 under this Guarantee);

          (iii)  where the arrangement under which the obligation was or is
                 incurred, or the terms of issue of the obligation, explicitly
                 provided or provide(s) that the obligation is not to be
                 guaranteed by Carnival, or where the Creditor has explicitly
                 agreed or explicitly agrees that the obligation is not to be
                 guaranteed by Carnival;

          (iv)   owed to Carnival or to any Subsidiary or Subsidiary Undertaking
                 of Carnival or to any of the Subsidiaries or Subsidiary
                 Undertakings of P&O Princess;

          (v)    of P&O Princess under or in connection with the P&O Princess
                 Guarantee or any other guarantee by P&O Princess of any
                 obligation of Carnival or any Subsidiary or Subsidiary
                 Undertaking of Carnival;

          (vi)   excluded from the scope of this Guarantee as provided in Clause
                 4 (Exclusion Of Certain Obligations) or Clause 5 (Termination);
                 or

          (vii)  of P&O Princess under a guarantee to the extent that the
                 guaranteed obligation of the Principal Debtor is not a
                 contractual monetary obligation and/or is of a type referred to
                 in any of paragraphs (i) to (vi) of this definition;

     "Person" includes an individual, company, corporation, firm, partnership,
     joint venture, association, trust, state or agency of a state (in each
     case, whether or not having a separate legal personality);

     "P&O Princess" means P&O Princess Cruises plc, whose registered office at
     the date of this Guarantee is 77 New Oxford Street, London, WC1A lPP,
     United Kingdom;

     "P&O Princess Guarantee" means the deed poll guarantee entered into by P&O
     Princess on or about the date of this Guarantee pursuant to the
     Implementation Agreement;

                                                                               2



     "Principal Debtor" means, at any time, any Person any of whose obligations
     are at that time guaranteed by P&O Princess;

     "Relevant Creditor" has the meaning given in Clause 3.1;

     "Subsidiary" means, with respect to Carnival or P&O Princess, any entity,
     whether incorporated or unincorporated, in which such company owns,
     directly or indirectly, a majority of the securities or other ownership
     interests having by their terms ordinary voting power to elect a majority
     of the directors or other persons performing similar functions, or the
     management and policies of which such company otherwise has the power to
     direct; and

     "Subsidiary Undertaking" has the meaning as defined in section 258 of the
     Companies Act 1985.

1.2  Interpretation

     Headings are for convenience only and do not affect interpretation. The
     following rules of interpretation apply unless the context requires
     otherwise.

     (A)  The singular includes the plural and conversely.

     (B)  One gender includes all genders.

     (C)  Where a word or phrase is defined, its other grammatical forms have a
          corresponding meaning.

     (D)  A reference to a person includes a body corporate, an unincorporated
          body or other entity and conversely.

     (E)  A reference to a Clause is to a Clause of this Guarantee.

     (F)  A reference to any agreement or document is to that agreement or
          document as amended, novated, supplemented, varied or replaced from
          time to time, except to the extent prohibited by this Guarantee.

     (G)  A reference to any legislation (including any listing rules of a stock
          exchange or voluntary codes) or to any provision of any legislation
          includes any modification or re-enactment of it, any legislative
          provision substituted for it and all regulations and statutory
          instruments issued under it.

     (H)  A reference to writing includes a facsimile transmission and any means
          of reproducing words in a tangible and permanently visible form.

     (I)  Mentioning anything after include, includes, or including does not
          limit what else might be included. Where particular words are
          following by general words, the general words are not limited by the
          particular.

     (J)  Reference to a body other than Carnival or P&O Princess (including any
          government agency), whether statutory or not:

          (i)  which ceases to exist; or

          (ii) whose powers or functions are transferred to another body,

                                                                               3



          is a reference to the body which replaces it or which substantially
          succeeds to its powers or functions.

     (K)  All references to time are to the local time in the place where the
          relevant obligation is to be performed (or right exercised).

2.   Effect Of This Deed Poll

     The Guarantee shall take effect as a deed poll for the benefit of each
     Creditor severally.

3.   Guarantee and Indemnity

3.1  Carnival unconditionally and irrevocably guarantees, as a continuing
     obligation, to the Creditor to whom or to which it is owed (the "Relevant
     Creditor") the proper and punctual payment by P&O Princess of each
     Obligation and unconditionally and irrevocably undertakes that, if for any
     reason P&O Princess does not make such payment on its due date, Carnival
     shall pay the amount due and unpaid to the Relevant Creditor upon written
     demand by the Relevant Creditor. In this Clause 3, references to the
     Obligations include references to any part of them.

3.2  The obligations of Carnival under this Guarantee shall be continuing
     obligations and shall not be satisfied, discharged or affected by any
     intermediate payment or settlement of account.

3.3  For the avoidance of doubt, nothing in this Guarantee shall require, bind
     or oblige Carnival to fulfil any non-monetary Obligation of P&O Princess of
     any kind.

3.4  Carnival shall, for the avoidance of doubt, be entitled without limitation
     to all available rights of subrogation against P&O Princess in order to
     obtain repayment of any moneys paid by it to Creditors under this
     Guarantee.

3.5  Subject to Clause 3.6, Carnival shall be deemed to be liable for the
     Obligations as sole or principal debtor and not merely as surety.

3.6  A demand may not be made under this Guarantee without:

     (A)  a demand first having been made by the Relevant Creditor on P&O
          Princess; and/or

     (B)  to the extent, if any, that the terms of the relevant Obligation of
          P&O Princess (or the underlying obligation of the relevant Principal
          Debtor) require such recourse, recourse first being had to any other
          Person or to any security.

3.7  Unless otherwise provided in this Guarantee, the liabilities and
     obligations of Carnival under this Guarantee shall remain in force
     notwithstanding any act, omission, neglect, event or matter which would not
     affect or discharge the liabilities of P&O Princess owed to the Relevant
     Creditor. Without prejudice to its generality, the foregoing shall apply in
     relation to:

     (A)  anything which would have discharged Carnival (wholly or in part) but
          not P&O Princess;

                                                                               4



     (B)  anything which would have offered Carnival (but not P&O Princess) any
          legal or equitable defence; and

     (C)  any winding-up, insolvency, dissolution and/or analogous proceeding
          of, or any change in constitution or corporate identity or loss of
          corporate identity by, P&O Princess or any other Person.

3.8  Any discharge or release of any liabilities and obligations of Carnival
     under this Guarantee, and any composition or arrangement which Carnival may
     effect with any Creditor in respect of any such liabilities or obligations,
     shall be deemed to be made subject to the condition that it will be void to
     the extent that any or all of the payment or security which the Creditor
     may previously have received or may thereafter receive from any Person in
     respect of the relevant Obligations is set aside or reduced under any
     applicable law or proves to have been for any reason invalid.

3.9  Without prejudice to the generality of this Clause 3, and to Clause 3.10 in
     particular, none of the liabilities or obligations of Carnival under this
     Guarantee shall be impaired by any Creditor:

     (A)  agreeing with P&O Princess any variation of or departure from (however
          substantial) the terms of any Obligation and any such variation or
          departure shall, whatever its nature, be binding upon Carnival in all
          circumstances; or

     (B)  releasing or granting any time or any indulgence whatsoever to P&O
          Princess.

3.10 Despite anything else in this Guarantee (including Clause 3.9), no
     variation of or departure from the terms of any Obligation (or any
     underlying obligation of any Principal Debtor) agreed with P&O Princess or
     any Principal Debtor, as applicable, after termination of this Guarantee or
     exclusion of that Obligation shall be binding on Carnival (or extend its
     liabilities and obligations under this Guarantee) except to the extent, if
     any, that:

     (A)  Carnival explicitly agrees in writing to that variation or departure
          at the same time as P&O Princess or that Principal Debtor; or

     (B)  it reduces Carnival's obligations or liability under this Guarantee.

3.11 As a separate, additional and continuing obligation, Carnival
     unconditionally and irrevocably agrees that, should any Obligation not be
     recoverable from Carnival under Clause 3.1 as a result of the Obligation
     becoming void, voidable or unenforceable against P&O Princess, then
     Carnival will, as a sole, original and independent obligor, make payment of
     the Obligation by way of a full indemnity on the due date provided for
     payment by the terms of the Obligation.

4.   Exclusion Of Certain Obligations

4.1  Subject to Clauses 4.2 and 4.3, Carnival and P&O Princess may at any time
     agree that obligations of a particular type, or a particular obligation or
     particular obligations, incurred after the time at which such exclusion
     becomes effective shall be excluded from the scope of this Guarantee (and
     shall not be "Obligations" for the purpose of this Guarantee) with effect
     from such future time (being at least 3 months after the date on which
     notice of the relevant exclusion is given in accordance with Clause 8.2 or,
     where the Obligation is a particular obligation, at least 5 Business Days
     after the

                                                                               5



     date on which notice of the relevant exclusion is given in accordance with
     Clause 4.5) as they may agree.

4.2  No such agreement or exclusion shall be effective with respect to any
     Existing Obligation.

4.3  No such agreement or exclusion shall be effective unless and until Carnival
     enters into a supplemental deed poll specifying the relevant exclusion and
     the time at which it is to become effective.

4.4  Notice of any such exclusion of obligations of a particular type, of the
     time at which such exclusion is to become effective, and of the date of the
     related supplemental deed poll, shall be given in accordance with Clause
     8.2.

4.5  Notice of any such exclusion of a particular obligation and of the time at
     which it is to become effective shall be given to the relevant Creditor in
     writing addressed to that Creditor at the last address of that Creditor
     known to Carnival and shall be effective when delivered to that address. It
     shall not be necessary for the related supplemental deed poll to have been
     entered into before that notice is sent, nor for the notice to state the
     date of the related supplemental deed poll.

5.   Termination

5.1  Subject to Clause 5.3, this Guarantee shall automatically terminate if, and
     with effect from, the same time as:

     (A)  the Equalization and Governance Agreement terminates or otherwise
          ceases to have effect; or

     (B)  the P&O Princess Guarantee terminates or otherwise ceases to have
          effect.

5.2  Subject to Clause 5.3, Carnival may at any time terminate this Guarantee by
     giving notice under Clause 8.2 with effect from such future time (being at
     least 3 months after the date on which such notice of termination is given)
     as it may determine. Subject to the next sentence, no such termination
     under this Clause 5.2 shall be effective unless P&O Princess agrees to such
     termination before such notice is given. However, such termination shall
     not require the agreement of P&O Princess if:

     (A)  Carnival has given notice of the proposed termination of this
          Guarantee in accordance with Clause 8.2; and

     (B)  prior to the date set out in such notice, a resolution is passed or an
          order is made for the liquidation of P&O Princess.

5.3  No such termination shall be effective with respect to any Existing
     Obligation.

5.4  Notice of any automatic termination under Clause 5.1, and of the time at
     which it became effective, shall be given in accordance with Clause 8.2
     within 10 Business Days of such termination.

6.   Amendments

6.1  Subject to Clause 6.2, Carnival may at any time amend this Guarantee by
     giving notice under Clause 8.2 with effect from such future time (being at
     least 3 months

                                                                               6



     after the date on which notice of such amendment is given) as it may
     determine. Any such amendment shall require the prior agreement of P&O
     Princess if P&O Princess' agreement would then be required to a termination
     of this Guarantee under Clause 5.2.

6.2  No such amendment shall be effective with respect to any Existing
     Obligation.

6.3  No such amendment shall be effective unless and until Carnival enters into
     a supplemental deed poll specifying the relevant amendment and the time at
     which it is to become effective.

6.4  Notice of any such amendment, of the time at which it is to become
     effective, and of the date of the related supplemental deed poll, shall be
     given in accordance with Clause 8.2.

7.   Currency

7.1  All payments to be made under this Guarantee shall be made in the currency
     or currencies in which the Obligations are expressed to be payable by P&O
     Princess.

7.2  If, under any applicable law, whether as a result of a judgment against
     Carnival or P&O Princess or the liquidation of Carnival or P&O Princess or
     for any other reason, any payment under or in connection with this
     Guarantee is made or is recovered in a currency (the "other currency")
     other than that in which it is required to be paid under the terms of the
     relevant Obligation (the "agreed currency") then, to the extent that the
     payment to the Creditor (when converted at the rate of exchange on the date
     of payment, or in the case of a liquidation, the latest date for the
     determination of liabilities permitted by the applicable law) falls short
     of the amount due and unpaid in respect of that Obligation, Carnival shall,
     as a separate and independent obligation, fully indemnify the Creditor
     against the amount of the shortfall, and for the purposes of this Clause 7,
     "rate of exchange" means the spot rate at which the Creditor is able on the
     relevant date to purchase the agreed currency with the other currency.

8.   Notices

8.1  Any notice to or demand upon Carnival under this Guarantee shall be in
     writing addressed to it at its principal place of business in the U.S.A.
     for the time being (marked for the attention of the Chief Financial
     Officer, with a copy sent to the General Counsel and Secretary) and shall
     be effective when delivered to that principal place of business.

8.2  Any notice by Carnival under Clause 4.4, 5.4 or 6.4 shall be given by
     advertisements in the Financial Times (London Edition) and the Wall Street
     Journal (but, if at any time Carnival determines that advertisement in such
     newspaper(s) is not practicable, the relevant advertisement shall instead
     be published in such other newspaper(s) circulating generally in the United
     Kingdom or the U.S.A., as the case may be, as Carnival shall determine).
     Any such notice shall be deemed given on the date of publication in such
     newspaper in the United Kingdom or the U.S.A., as the case may be (or,
     where such advertisements are published on different dates, on the later of
     such dates).

8.3  The original of this Guarantee and of any related supplemental deed poll
     shall be kept at the principal place of business in the U.S.A. for the time
     being of Carnival and shall

                                                                               7







     be available for inspection there on reasonable notice during the normal
     business hours of that office.

9.   General

9.1  Prohibition and Enforceability

     Any provision of, or the application of any provision of, this Guarantee
     which is void, illegal or unenforceable in any jurisdiction does not affect
     the validity, legality or enforceability of that provision in any other
     jurisdiction or of the remaining provisions in that or any other
     jurisdiction.

9.2  Further Assurances

     Carnival shall take all steps, execute all documents and do everything
     reasonably required to give effect to its liabilities and obligations
     contemplated by this Guarantee.

9.3  No Novation

     Carnival may not novate any of its liabilities or obligations under this
     Guarantee, in whole or part.

10.  Law and Jurisdiction

10.1 This Guarantee shall be governed by and construed in accordance with the
     laws of England.

10.2 Any legal action or proceeding arising out of or in connection with this
     Guarantee shall be brought exclusively in the courts of England.

10.3 Carnival irrevocably submits to the jurisdiction of such courts and waives
     any objection to proceedings in any such court on the ground of venue or on
     the ground that the proceedings have been brought in an inconvenient forum.

IN WITNESS WHEREOF

Executed as a deed by                   )
CARNIVAL CORPORATION                    )
acting by [.] [and [.]] [who, in        )
accordance with the laws of the         )        _______________________________
territory in                            )        _______________________________
which Carnival Corporation              )        (Authorised
is                                      )        signatory(ies))
incorporated, is/are] acting under
the
authority of Carnival Corporation

                                                                               8



                                                                 [Proposed Form]




                DATED                           200[2][3]
                -----------------------------------------




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

                    CARNIVAL CORPORATION DEED POLL GUARANTEE

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




                        P&O PRINCESS DEED POLL GUARANTEE

THIS DEED is made by way of DEED POLL on . 200[2][3] by P&O Princess Cruises plc
("P&O Princess") in favour of each Creditor.

BACKGROUND

Under the Implementation Agreement referred to below, P&O Princess has agreed
with Carnival to issue this Guarantee in respect of certain obligations of
Carnival (including, without limitation, guarantees by Carnival of certain
obligations of Principal Debtors).

THIS DEED WITNESSES as follows:

1.       Definitions and Interpretation

1.1      Definitions

         In this Guarantee:

         "Business Day" means any day other than a Saturday, Sunday or day on
         which banking institutions in the City of New York or London are
         authorised or obligated by law or executive order to close in the
         United States or England (or on which such banking institutions are
         open solely for trading in euros);

         "Carnival" means Carnival Corporation, a Panamanian company, having its
         principal place of business at Carnival Place, 3655, 87 Avenue, Miami,
         Florida, 33178-2482;

         "Carnival Guarantee" means the deed poll guarantee entered into by
         Carnival on or about the date of this Guarantee pursuant to the
         Implementation Agreement;

         "Creditor" means any Person to whom or to which any Obligation is owed;

         "Equalization and Governance Agreement" means the Agreement headed
         "Equalization and Governance Agreement" entered into between Carnival
         and P&O Princess as of even date with this Guarantee;

         "Existing Obligation" means, in relation to:

                  (i)     any agreement or exclusion referred to in Clause 4; or

                  (ii)    any termination of this Guarantee; or

                  (iii)   any amendment to this Guarantee,

         any Obligation incurred before, or arising out of any credit or similar
         facility (whether committed or uncommitted) available for use at, the
         time at which the relevant agreement, exclusion, termination or
         amendment becomes effective;

         "Group" means, in relation to Carnival or P&O Princess, such company
         and its Subsidiaries from time to time;

                                                                               1



         "Implementation Agreement" means the Agreement headed "Offer and
         Implementation Agreement" entered into between P&O Princess and
         Carnival as of . 200[2][3];

         "Obligation" means:

         (a)      any contractual monetary obligation (whether primary or
                  secondary (and including, for the avoidance of doubt, any
                  guarantee of the contractual monetary obligations of any
                  Principal Debtor)) incurred by Carnival after the date of this
                  Guarantee; and

         (b)      any other obligation of any kind which may be agreed in
                  writing between Carnival and P&O Princess (in their absolute
                  discretion) after the date of this Guarantee (in which case a
                  note of such Obligation will be appended as an exhibit to this
                  Guarantee),

         other than, in each case, any obligation:

         (i)      to the extent that (without reference to the effect of this
                  Guarantee) it is covered by the terms of any policy of
                  insurance (or any indemnity in the nature of insurance) of
                  which Carnival (or, where relevant, the Principal Debtor) has
                  the benefit and which is in full force and effect;

         (ii)     explicitly guaranteed in writing by P&O Princess (otherwise
                  than under this Guarantee);

         (iii)    where the arrangement under which the obligation was or is
                  incurred, or the terms of issue of the obligation, explicitly
                  provided or provide(s) that the obligation is not to be
                  guaranteed by P&O Princess, or where the Creditor has
                  explicitly agreed or explicitly agrees that the obligation is
                  not to be guaranteed by P&O Princess;

         (iv)     owed to P&O Princess or to any Subsidiary or Subsidiary
                  Undertaking  of P&O Princess or to any of the Subsidiaries or
                  Subsidiary Undertakings of Carnival;

         (v)      of Carnival under or in connection with the Carnival Guarantee
                  or any other guarantee by Carnival of any obligation of P&O
                  Princess or any Subsidiary or Subsidiary Undertaking of P&O
                  Princess;

         (vi)     excluded from the scope of this Guarantee as provided in
                  Clause 4 (Exclusion Of Certain Obligations) or Clause 5
                  (Termination); or

         (vii)    of Carnival under a guarantee to the extent that the
                  guaranteed obligation of the Principal Debtor is not a
                  contractual monetary obligation and/or is of a type referred
                  to in any of paragraphs (i) to (vi) of this definition;

         "Person" includes an individual, company, corporation, firm,
         partnership, joint venture, association, trust, state or agency of a
         state (in each case, whether or not having a separate legal
         personality);

         "Principal Debtor" means, at any time, any Person any of whose
         obligations are at that time guaranteed by Carnival;

                                                                               2



         "Relevant Creditor" has the meaning given in Clause 3.1;

         "Subsidiary" means, with respect to Carnival or P&O Princess, any
         entity, whether incorporated or unincorporated, in which such company
         owns, directly or indirectly, a majority of the securities or other
         ownership interests having by their terms ordinary voting power to
         elect a majority of the directors or other persons performing similar
         functions, or the management and policies of which such company
         otherwise has the power to direct; and

         "Subsidiary Undertaking" has the meaning as defined in section 258 of
         the Companies Act 1985.

1.2      Interpretation

         Headings are for convenience only and do not affect interpretation. The
         following rules of interpretation apply unless the context requires
         otherwise.

         (A)  The singular includes the plural and conversely.

         (B)  One gender includes all genders.

         (C)  Where a word or phrase is defined, its other grammatical forms
              have a corresponding meaning.

         (D)  A reference to any person includes a body corporate, an
              unincorporated body or other entity and conversely.

         (E)  A reference to a Clause is to a Clause of this Guarantee.

         (F)  A reference to any agreement or document is to that agreement or
              document as amended, novated, supplemented, varied or replaced
              from time to time, except to the extent prohibited by this
              Guarantee.

         (G)  A reference to any legislation (including any listing rules of a
              stock exchange or voluntary codes) or to any provision of any
              legislation includes any modification or re-enactment of it, any
              legislative provision substituted for it and all regulations and
              statutory instruments issued under it.

         (H)  A reference to writing includes a facsimile transmission and any
              means of reproducing words in a tangible and permanently visible
              form.

         (I)  Mentioning anything after include, includes, or including does not
              limit what else might be included. Where particular words are
              following by general words, the general words are not limited by
              the particular.

         (J)  Reference to a body other than P&O Princess or Carnival (including
              any government agency), whether statutory or not:

              (i)   which ceases to exist; or

              (ii)  whose powers or functions are transferred to another body,

              is a reference to the body which replaces it or which
              substantially succeeds to its powers or functions.

                                                                               3



         (K)  All references to time are to the local time in the place where
              the relevant obligation is to be performed (or right exercised).

2.       Effect Of This Deed Poll

         The Guarantee shall take effect as a deed poll for the benefit of each
         Creditor severally.

3.       Guarantee and Indemnity

3.1      P&O Princess unconditionally and irrevocably guarantees, as a
         continuing obligation, to the Creditor to whom or to which it is owed
         (the "Relevant Creditor") the proper and punctual payment by Carnival
         of each Obligation and unconditionally and irrevocably undertakes that,
         if for any reason Carnival does not make such payment on its due date,
         P&O Princess shall pay the amount due and unpaid to the Relevant
         Creditor upon written demand by the Relevant Creditor. In this Clause
         3, references to the Obligations include references to any part of
         them.

3.2      The obligations of P&O Princess under this Guarantee shall be
         continuing obligations and shall not be satisfied, discharged or
         affected by any intermediate payment or settlement of account.

3.3      For the avoidance of doubt, nothing in this Guarantee shall require,
         bind or oblige P&O Princess to fulfil any non-monetary Obligation of
         Carnival of any kind.

3.4      P&O Princess shall, for the avoidance of doubt, be entitled without
         limitation to all available rights of subrogation against Carnival in
         order to obtain repayment of any moneys paid by it to Creditors under
         this Guarantee.

3.5      Subject to Clause 3.6, P&O Princess shall be deemed to be liable for
         the Obligations as sole or principal debtor and not merely as surety.

3.6      A demand may not be made under this Guarantee without:

         (A)  a demand first having been made by the Relevant Creditor on
              Carnival; and/or

         (B)  to the extent, if any, that the terms of the relevant Obligation
              of Carnival (or the underlying obligation of the relevant
              Principal Debtor) require such recourse, recourse first being had
              to any other Person or to any security.

3.7      Unless otherwise provided in this Guarantee, the liabilities and
         obligations of P&O Princess under this Guarantee shall remain in force
         notwithstanding any act, omission, neglect, event or matter which would
         not affect or discharge the liabilities of Carnival owed to the
         Relevant Creditor. Without prejudice to its generality, the foregoing
         shall apply in relation to:

         (A)  anything which would have discharged P&O Princess (wholly or in
              part) but not Carnival;

         (B)  anything which would have offered P&O Princess (but not Carnival)
              any legal or equitable defence; and

                                                                               4



         (C)  any winding-up, insolvency, dissolution and/or analogous
              proceeding of, or any change in constitution or corporate identity
              or loss of corporate identity by, Carnival or any other Person.

3.8      Any discharge or release of any liabilities and obligations of P&O
         Princess under this Guarantee, and any composition or arrangement which
         P&O Princess may effect with any Creditor in respect of any such
         liabilities or obligations, shall be deemed to be made subject to the
         condition that it will be void to the extent that any or all of the
         payment or security which the Creditor may previously have received or
         may thereafter receive from any Person in respect of the relevant
         Obligations is set aside or reduced under any applicable law or proves
         to have been for any reason invalid.

3.9      Without prejudice to the generality of this Clause 3, and to Clause
         3.10 in particular, none of the liabilities or obligations of P&O
         Princess under this Guarantee shall be impaired by any Creditor:

         (A)  agreeing with Carnival any variation of or departure from (however
              substantial) the terms of any Obligation and any such variation or
              departure shall, whatever its nature, be binding upon P&O Princess
              in all circumstances; or

         (B)  releasing or granting any time or any indulgence whatsoever to
              Carnival.

3.10     Despite anything else in this Guarantee (including Clause 3.9), no
         variation of or departure from the terms of any Obligation (or any
         underlying obligation of any Principal Debtor) agreed with Carnival or
         any Principal Debtor, as applicable, after termination of this
         Guarantee or exclusion of that Obligation shall be binding on P&O
         Princess (or extend its liabilities and obligations under this
         Guarantee) except to the extent, if any, that:

         (A)  P&O Princess explicitly agrees in writing to that variation or
              departure at the same time as Carnival or that Principal Debtor;
              or

         (B)  it reduces P&O Princess' obligations or liability under this
              Guarantee.

3.11     As a separate, additional and continuing obligation, P&O Princess
         unconditionally and irrevocably agrees that, should any Obligation not
         be recoverable from P&O Princess under Clause 3.1 as a result of the
         Obligation becoming void, voidable or unenforceable against Carnival,
         then P&O Princess will, as a sole, original and independent obligor,
         make payment of the Obligation by way of a full indemnity on the due
         date provided for payment by the terms of the Obligation.

4.       Exclusion Of Certain Obligations

4.1      Subject to Clauses 4.2 and 4.3, P&O Princess and Carnival may at any
         time agree that obligations of a particular type, or a particular
         obligation or particular obligations, incurred after the time at which
         such exclusion becomes effective shall be excluded from the scope of
         this Guarantee (and shall not be "Obligations" for the purpose of this
         Guarantee) with effect from such future time (being at least 3 months
         after the date on which notice of the relevant exclusion is given in
         accordance with Clause 8.2 or, where the Obligation is a particular
         obligation, at least 5 Business Days after the date on which notice of
         the relevant exclusion is given in accordance with Clause 4.5) as they
         may agree.

                                                                               5



4.2  No such agreement or exclusion shall be effective with respect to any
     Existing Obligation.

4.3  No such agreement or exclusion shall be effective unless and until P&O
     Princess enters into a supplemental deed poll specifying the relevant
     exclusion and the time at which it is to become effective.

4.4  Notice of any such exclusion of obligations of a particular type, of the
     time at which such exclusion is to become effective, and of the date of the
     related supplemental deed poll, shall be given in accordance with Clause
     8.2.

4.5  Notice of any such exclusion of a particular obligation and of the time at
     which it is to become effective shall be given to the relevant Creditor in
     writing addressed to that Creditor at the last address of that Creditor
     known to P&O Princess and shall be effective when delivered to that
     address. It shall not be necessary for the related supplemental deed poll
     to have been entered into before that notice is sent, nor for the notice to
     state the date of the related supplemental deed poll.

5.   Termination

5.1  Subject to Clause 5.3, this Guarantee shall automatically terminate if, and
     with effect from, the same time as:

     (A)  the Equalization and Governance Agreement terminates or otherwise
          ceases to have effect; or

     (B)  the Carnival Guarantee terminates or otherwise ceases to have effect.

5.2  Subject to Clause 5.3, P&O Princess may at any time terminate this
     Guarantee by giving notice under Clause 8.2 with effect from such future
     time (being at least 3 months after the date on which such notice of
     termination is given) as it may determine. Subject to the next sentence, no
     such termination under this Clause 5.2 shall be effective unless Carnival
     agrees to such termination before such notice is given. However, such
     termination shall not require the agreement of Carnival if:

     (A)  P&O Princess has given notice of the proposed termination of this
          Guarantee in accordance with Clause 8.2; and

     (B)  prior to the date set out in such notice, a resolution is passed or an
          order is made for the liquidation of Carnival.

5.3  No such termination shall be effective with respect to any Existing
     Obligation.

5.4  Notice of any automatic termination under Clause 5.1, and of the time at
     which it became effective, shall be given in accordance with Clause 8.2
     within 10 Business Days of such termination.

6.   Amendments

6.1  Subject to Clause 6.2, P&O Princess may at any time amend this Guarantee by
     giving notice under Clause 8.2 with effect from such future time (being at
     least 3 months after the date on which notice of such amendment is given)
     as it may determine. Any

                                                                               6



     such amendment shall require the prior agreement of Carnival if Carnival's
     agreement would then be required to a termination of this Guarantee under
     Clause 5.2.

6.2  No such amendment shall be effective with respect to any Existing
     Obligation.

6.3  No such amendment shall be effective unless and until P&O Princess enters
     into a supplemental deed poll specifying the relevant amendment and the
     time at which it is to become effective.

6.4  Notice of any such amendment, of the time at which it is to become
     effective, and of the date of the related supplemental deed poll, shall be
     given in accordance with Clause 8.2.

7.   Currency

7.1  All payments to be made under this Guarantee shall be made in the currency
     or currencies in which the Obligations are expressed to be payable by
     Carnival.

7.2  If, under any applicable law, whether as a result of a judgment against P&O
     Princess or Carnival or the liquidation of P&O Princess or Carnival or for
     any other reason, any payment under or in connection with this Guarantee is
     made or is recovered in a currency (the "other currency") other than that
     in which it is required to be paid under the terms of the relevant
     Obligation (the "agreed currency") then, to the extent that the payment to
     the Creditor (when converted at the rate of exchange on the date of
     payment, or in the case of a liquidation, the latest date for the
     determination of liabilities permitted by the applicable law) falls short
     of the amount due and unpaid in respect of that Obligation, P&O Princess
     shall, as a separate and independent obligation, fully indemnify the
     Creditor against the amount of the shortfall, and for the purposes of this
     Clause 7, "rate of exchange" means the spot rate at which the Creditor is
     able on the relevant date to purchase the agreed currency with the other
     currency.

8.   Notices

8.1  Any notice to or demand upon P&O Princess under this Guarantee shall be in
     writing addressed to it at its principal place of business in the U.S.A.
     for the time being (marked for the attention of the Chief Financial
     Officer, with a copy sent to the General Counsel and Secretary) and shall
     be effective when delivered to that principal place of business.

8.2  Any notice by P&O Princess under Clause 4.4, 5.4 or 6.4 shall be given by
     advertisements in the Financial Times (London Edition) and the Wall Street
     Journal (but, if at any time P&O Princess determines that advertisement in
     such newspaper(s) is not practicable, the relevant advertisement shall
     instead be published in such other newspaper(s) circulating generally in
     the United Kingdom or the U.S.A., as the case may be, as P&O Princess shall
     determine). Any such notice shall be deemed given on the date of
     publication in such newspaper in the United Kingdom or the U.S.A., as the
     case may be (or, where such advertisements are published on different
     dates, on the later of such dates).

8.3  The original of this Guarantee and of any related supplemental deed poll
     shall be kept at the principal place of business in the U.S.A. for the time
     being of P&O Princess

                                                                               7



     and shall be available for inspection there on reasonable notice during the
     normal business hours of that office.


9.   General

9.1  Prohibition and Enforceability

     Any provision of, or the application of any provision of, this Guarantee
     which is void, illegal or unenforceable in any jurisdiction does not affect
     the validity, legality or enforceability of that provision in any other
     jurisdiction or of the remaining provisions in that or any other
     jurisdiction.

9.2  Further Assurances

     P&O Princess shall take all steps, execute all documents and do everything
     reasonably required to give effect to its liabilities and obligations
     contemplated by this Guarantee.

9.3  No Novation

     P&O Princess may not novate any of its liabilities or obligations under
     this Guarantee, in whole or part.

10.  Law and Jurisdiction

10.1 This Guarantee shall be governed by and construed in accordance with the
     laws of England.

10.2 Any legal action or proceeding arising out of or in connection with this
     Guarantee shall be brought exclusively in the courts of England.

10.3 P&O Princess irrevocably submits to the jurisdiction of such courts and
waives any objection to proceedings in any such court on the ground of venue or
on the ground that the proceedings have been brought in an inconvenient forum.

IN WITNESS WHEREOF

EXECUTED as a DEED by                          )
P&O PRINCESS CRUISES PLC                       )
acting by two of its directors/a director and  )
secretary                                      )


                                        Director

                                 Director/Secretary

                                                                               8



                                                                [Proposed Form]

                   DATED                                200[2][3]
                   ----------------------------------------------










     __________________________________________________________________________


                  P&O PRINCESS CRUISES PLC DEED POLL GUARANTEE


     __________________________________________________________________________



                         CARNIVAL CORPORATION DEED POLL

THIS DEED is made by way of DEED POLL on . 200[2][3] by Carnival Corporation
("Carnival") in favour of the P&O Princess Shareholders.

BACKGROUND

Carnival has agreed with P&O Princess to issue this Deed in respect of certain
obligations of Carnival to effect the Mandatory Exchange under the P&O Princess
Articles of Association.

THIS DEED WITNESSES as follows:

1.   Definitions and Interpretation

1.1  Definitions

     In this Deed:

     "Business Day" means any day other than a Saturday, Sunday or day on which
     banking institutions in the City of New York or London are authorised or
     obligated by law or executive order to close in the United States or
     England (or on which such banking institutions are open solely for trading
     in euros);

     "Carnival Common Stock" means the issued and outstanding common stock, par
     value US $0.01 per share, of Carnival from time to time, as the same may be
     sub-divided or consolidated from time to time and any capital stock into
     which such common stock may be reclassified, converted or otherwise
     changed;

     "Completion" has the meaning given to it in the Equalization and Governance
     Agreement;

     "Equalization and Governance Agreement" means the Agreement headed
     "Equalization and Governance Agreement" entered into between P&O Princess
     and Carnival as of . 200[2][3];

     "Exchange Notice" has the meaning given in the P&O Princess Articles of
     Association;

     "Group" means, in relation to Carnival or P&O Princess, such company and
     its Subsidiaries from time to time;

     "Implementation Agreement" means the agreement headed "Offer and
     Implementation Agreement" entered into between P&O Princess and Carnival as
     of . 200[2][3];

     "Mandatory Exchange" has the meaning given to it in the P&O Princess
     Articles;

     "P&O Princess" means P&O Princess Cruises plc, whose registered office at
     the date of this Deed is 77 New Oxford Street, London, WC1A lPP, United
     Kingdom;

     "P&O Princess Articles of Association" means the Articles of Association of
     P&O Princess which will be in effect immediately following Completion;

     "P&O Princess Ordinary Shares" has the meaning given to it in the P&O
     Princess Articles;

                                                                               1



     "P&O Princess Shareholders" means those persons from time to time being
     registered as holders of P&O Princess Ordinary Shares;

     "Person" includes an individual, company, corporation, firm, partnership,
     joint venture, association, trust, state or agency of a state (in each
     case, whether or not having a separate legal personality); and

     "Subsidiary" means, with respect to Carnival or P&O Princess, any entity,
     whether incorporated or unincorporated, in which such company owns,
     directly or indirectly, a majority of the securities or other ownership
     interests having by their terms ordinary voting power to elect a majority
     of the directors or other persons performing similar functions, or the
     management and policies of which such company otherwise has the power to
     direct.

1.2  Interpretation

     Headings are for convenience only and do not affect interpretation. The
     following rules of interpretation apply unless the context requires
     otherwise.

     (A)  The singular includes the plural and conversely.

     (B)  One gender includes all genders.

     (C)  Where a word or phrase is defined, its other grammatical forms have a
          corresponding meaning.

     (D)  A reference to a Clause is to a Clause of this Deed.

     (E)  A reference to any agreement or document is to that agreement or
          document as amended, novated, supplemented, varied or replaced from
          time to time, except to the extent prohibited by this Deed.

     (F)  A reference to any legislation (including any listing rules of a stock
          exchange or voluntary codes) or to any provision of any legislation
          includes any modification or re-enactment of it, any legislative
          provision substituted for it and all regulations and statutory
          instruments issued under it.

     (G)  Mentioning anything after include, includes, or including does not
          limit what else might be included. Where particular words are
          following by general words, the general words are not limited by the
          particular.

     (H)  Reference to a body other than Carnival or P&O Princess (including any
          government agency), whether statutory or not:

          (i)  which ceases to exist; or

          (ii) whose powers or functions are transferred to another body,

          is a reference to the body which replaces it or which substantially
          succeeds to its powers or functions.

     (I)  All references to time are to the local time in the place where the
          relevant obligation is to be performed (or right exercised).

                                                                               2



2.   Effect Of This Deed Poll

     The Deed shall take effect as a deed poll for the benefit of the P&O
     Princess Shareholders.

3.   Agreement and Undertaking

     Carnival agrees and irrevocably undertakes, as a continuing obligation, to
     the P&O Princess Shareholders, that in the event that an Exchange Notice is
     issued pursuant to the P&O Princess Articles of Association, Carnival
     shall, on the date specified in the Exchange Notice, issue such number of
     fully paid and non-assessable shares of Carnival Common Stock to each P&O
     Princess Shareholder as shall be required to effect the Mandatory Exchange
     in accordance with the provisions of the P&O Princess Articles of
     Association. Carnival further agrees and undertakes that there shall be no
     entitlement to receive fractional interests in Carnival Common Stock issued
     by it and that, in lieu of such fractional interests, P&O Princess
     Shareholders shall receive from Carnival an amount in cash in accordance
     with the P&O Princess Articles of Association.

4.   Termination

4.1  This Deed shall automatically terminate if, and with effect from the same
     time as:

     (A)  the Equalization and Governance Agreement terminates or otherwise
          ceases to have effect;

     (B)  completion of the Mandatory Exchange;

     (C)  a resolution is passed or an order is made for the liquidation of the
          whole or substantially the whole of P&O Princess; or

     (D)  the Mandatory Exchange provisions set out in the P&O Princess Articles
          of Association are properly deleted from the P&O Princess Articles of
          Association.

5.   Notices

5.1  Any notice to or demand upon Carnival under this Deed shall be in writing
     addressed to it at its principal place of business in the U.S.A. for the
     time being (marked for the attention of the Chief Financial Officer, with a
     copy sent to the General Counsel and Secretary) and shall be effective when
     delivered to that principal place of business.

5.2  The original of this Deed and of any related supplemental deed poll shall
     be kept at the principal place of business in the U.S.A. for the time being
     of Carnival and shall be available for inspection there on reasonable
     notice during the normal business hours of that office.

6.   General

6.1  Prohibition and enforceability

     Any provision of, or the application of any provision of, this Deed which
     is void, illegal or unenforceable in any jurisdiction does not affect the
     validity, legality or

                                                                               3



     enforceability of that provision in any other jurisdiction or of the
     remaining provisions in that or any other jurisdiction.

6.2  Further assurances

     Carnival shall take all steps, execute all documents and do everything
     reasonably required to give effect to its obligations contemplated by this
     Deed.

6.3  No assignment

     Carnival may not assign any of its obligations under this Deed, in whole or
     part.

7.   Law and Jurisdiction

7.1  This Deed shall be governed by and construed in accordance with the laws of
     England.

7.2  Any legal action or proceeding arising out of or in connection with this
     Deed shall be brought exclusively in the courts of England.

7.3  Carnival irrevocably submits to the jurisdiction of such courts and waives
     any objection to proceedings in any such court on the ground of venue or on
     the ground that the proceedings have been brought in an inconvenient forum.

IN WITNESS WHEREOF

Executed as a deed by                   )
CARNIVAL CORPORATION                    )
acting by [.] [and [.]] [who, in        )
accordance with the laws of the         )        ______________________________
territory in                            )        ______________________________
which Carnival Corporation              )        (Authorised
is                                      )        signatory(ies))
incorporated, is/are] acting under
the
authority of Carnival Corporation

                                                                               4



                                                                 [Proposed Form]



                DATED                               200[2][3]
                ---------------------------------------------




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

                         CARNIVAL CORPORATION DEED POLL

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










                                                                 [Proposed Form]

DATED                                                               200[2][3]
- --------------------------------------------------------------------------------


                              CARNIVAL CORPORATION

                             [CARNIVAL SVC] LIMITED

                            P&O PRINCESS CRUISES PLC

                           [P&O PRINCESS SVC] LIMITED

                                       [.]


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

                             SVC SPECIAL VOTING DEED

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



                                    CONTENTS

CLAUSE PAGE 1. DEFINITIONS AND INTERPRETATION.......................................... 1 2. NOTIFICATION OF VOTES CAST ON JOINT ELECTORATE ACTIONS AT A PARALLEL SHAREHOLDER MEETING AND CALCULATION OF SPECIFIED NUMBER........................................................ 6 3. NOTIFICATION OF OUTCOME ON VOTE ON CLASS RIGHTS ACTIONS................. 7 4. ATTENDANCE AT MEETINGS AND VOTING....................................... 8 5. DEALINGS................................................................ 11 6. OBLIGATIONS SUBJECT TO APPLICABLE REGULATIONS........................... 12 7. DEFAULT BY CARNIVAL OR P&O PRINCESS..................................... 12 8. SUPPLY OF INFORMATION; CONFIDENTIALITY.................................. 12 9. REMUNERATION AND EXPENSES OF SVCS....................................... 12 10. POWER OF SVCS........................................................... 13 11. INDEMNITIES............................................................. 15 12. SVCS' ACTIVITIES........................................................ 16 13. MEMBERS AND DIRECTORS OF SVCS........................................... 16 14. AMENDMENTS TO THIS DEED................................................. 16 15. DAMAGES NOT ADEQUATE REMEDY............................................. 17 16. TERMINATION............................................................. 17 17. GENERAL................................................................. 18
THIS SVC SPECIAL VOTING DEED is dated 200[2][3] BETWEEN (1) CARNIVAL CORPORATION, a Panamanian corporation, having its principal place of business at Carnival Place, 3655, 87 Avenue, Miami, Florida, 33178-2482 ("Carnival"); (2) CARNIVAL SVC LIMITED, a company incorporated in England and Wales (Registered No. [.]), having its registered office at [.] ("Carnival SVC"); (3) P&O PRINCESS CRUISES PLC, a company incorporated in England and Wales (Registered No 4039524) and having its registered office at 77 New Oxford Street, London, WC1A 1PP ("P&O Princess"); (4) [ ] SVC LIMITED, a company incorporated in England and Wales (Registered No [ ]) and having its registered office at [.] ("P&O Princess SVC"); and (5) [.], a company incorporated in England and Wales (Registered No [.]), having its registered office at [.] ("[.]"). Recitals (A) Carnival and P&O Princess entered into the Implementation Agreement pursuant to which Carnival and P&O Princess have agreed to do certain acts and things to implement the DLC Structure and create certain rights for the Carnival shareholders and the P&O Princess shareholders in respect of their indirect interests in the combined enterprise. (B) Carnival SVC and P&O Princess SVC have agreed to carry out certain functions in accordance with the provisions of this Deed in connection with their ownership of the Carnival Special Voting Share and the P&O Princess Special Voting Share, respectively. (C) [.] is the legal and beneficial owner of all the shares in Carnival SVC and P&O Princess SVC. IT IS AGREED on and from Completion as follows. 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions The following definitions apply unless otherwise specified in this Deed: "Applicable Regulations" has the same meaning as in the Equalization Agreement; "Board of Carnival" means the board of directors of Carnival (or a duly appointed committee of that board) from time to time; "Boards of Carnival and P&O Princess" means the Board of Carnival and the Board of P&O Princess; 1 "Board of P&O Princess" means the board of directors of P&O Princess (or a duly appointed committee of that board) from time to time; "Business Day" means any day other than a Saturday, Sunday or day on which banking institutions in the cities of both New York or London are authorised or obligated by law or executive order to close in the United States or England (or on which banking institutions are open solely for trading in euros); "Carnival Common Stock" has the meaning given to it in the Carnival Constitution; "Carnival Constitution" means the Articles of Incorporation and the By-Laws of Carnival which will be in effect immediately following Completion, as amended from time to time; "Carnival Group" has the same meaning as in the Equalization Agreement; "Carnival Special Voting Share" means the special voting share of US$0.01 in Carnival; "Carnival Specified Numbers" means, in relation to a resolution to consider a Joint Electorate Action at a meeting of P&O Princess shareholders, (i) the number of votes Cast in favour of the Equivalent Resolution of Carnival at the Parallel Shareholder Meeting of Carnival shareholders divided by the Equalization Fraction in effect at the time such meeting of P&O Princess shareholders is held rounded up to the nearest whole number; (ii) the number of votes Cast against the Equivalent Resolution of Carnival at the Parallel Shareholder Meeting of Carnival shareholders divided by the Equalization Fraction in effect at the time such meeting of P&O Princess shareholders is held, rounded up to the nearest whole number; and (iii) the number of votes Cast as formal abstentions in relation to the Equivalent Resolution of Carnival at the Parallel Shareholder Meeting of Carnival shareholders divided by the Equalization Fraction in effect at the time such meeting of P&O Princess shareholders is held, rounded up to the nearest whole number; "Carnival SVC Constitution" means the Memorandum and Articles of Association of Carnival SVC; "Cast" means, separately, the number of votes recorded (i) in favour; (ii) against; and (iii) formally abstained in accordance with the terms of the P&O Princess Articles or the Carnival Constitution (as applicable) by holders of Carnival Common Stock (and of any other stock in Carnival (other than the Carnival Special Voting Share) that from time to time are entitled to vote on the relevant resolution) or P&O Princess Ordinary Shares (and of any other shares in P&O Princess (other than the P&O Princess Special Voting Share) that from time to time are entitled to vote on the relevant resolution), as the context requires "Class Rights Action" has the same meaning as in the Equalization Agreement; "Companies Act" means the UK Companies Act 1985 as amended; "Completion" means the time at which the steps set out in Section 2.2 of the Implementation Agreement have been completed; 2 "Deal" in relation to a share or an interest in a share or the rights attaching to a share, means transfer, assign (by operation of law or otherwise), convey, create an Encumbrance over or otherwise deal (or agree to do any of those things) with such share or interest or rights in any way whatsoever and "Dealing" shall be construed accordingly; "DLC Structure" means the combination of Carnival and P&O Princess by means of a dual listed company structure whereby, amongst other things, Carnival and P&O Princess have a unified management structure and the businesses of both the Carnival Group and the P&O Princess Group are managed on a unified basis in accordance with the provisions of the Equalization Agreement; "Encumbrance" means an interest or power: (a) reserved in or over any interest in any asset (including shares) including any retention of title; or (b) created or otherwise arising in or over any interest in any asset (including shares) under a bill of sale, mortgage, charge, lien, pledge, trust or power, by way of security for the payment of debt or any other monetary obligation or the performance of any other obligation and whether existing or agreed to be granted or created; "Equalization Agreement" means the Equalization and Governance Agreement entered into between Carnival and P&O Princess on the same date as this Deed; "Equalization Fraction" has the same meaning as in the Equalization Agreement; "Equivalent Resolution" means a resolution of either Carnival or P&O Princess, as applicable, certified in accordance with this Deed by a duly authorised officer of Carnival or a duly authorised officer of P&O Princess (as applicable) as equivalent in nature and effect to a resolution of the other company. (For example, a resolution to appoint an individual as a director of Carnival or to appoint the auditors of Carnival would, if a resolution considering such matters in relation to P&O Princess were put to a meeting of P&O Princess' shareholders, be the equivalent resolution (provided that a duly authorised officer of Carnival and a duly authorised officer of P&O give the certification described above) to a resolution to appoint the same individual as a director of P&O Princess or to appoint the auditors of P&O Princess, and vice versa. In addition, if a resolution was proposed by one of the companies (the "Proposing Company") that did not need to be proposed by the other company (the "Other Company"), (e.g. a resolution for the approval of the disapplication of pre-emption rights if under Applicable Regulations this needs to be approved by P&O Princess' shareholders, but not by Carnival's shareholders), then the Proposing Company would put that resolution to a meeting of its shareholders and the same or substantially the same resolution (provided that a duly authorised officer of Carnival and a duly authorised officer of P&O Princess give the certification described above) would also be put to a meeting of the Other Company's shareholders, to enable both sets of shareholders to vote on that resolution); "Governmental Agency" has the same meaning as in the Equalization Agreement; "Implementation Agreement" means the Offer and Implementation Agreement, dated as of [.] 200[2][3] between Carnival and P&O Princess; 3 "Joint Electorate Action" has the same meaning as in the Equalization Agreement; "London Stock Exchange" means London Stock Exchange plc; "Majority Resolution" means, with respect to Carnival or P&O Princess, a resolution duly approved at a meeting of the shareholders of such company by the affirmative vote of a majority of all the votes Voted on such resolution by all shareholders of such company entitled to vote thereon (including, where appropriate, the holder of the Special Voting Share of such company) who are present in person or by proxy at such meeting; "NYSE" means the New York Stock Exchange, Inc.; "Parallel Shareholder Meeting" means, in relation to Carnival or P&O Princess, any meeting of the shareholders of that company which is: (a) nearest in time to, or is actually contemporaneous with, the meeting of the shareholders of the other company and at which some or some or all of the same resolutions or some or all of the Equivalent Resolutions are to be considered; or (b) designated by the Board of Carnival or the Board of P&O Princess, as the case may be, as the parallel meeting of shareholders of a particular meeting of shareholders of the other company. "P&O Princess Articles" means the Articles of Association of P&O Princess which will be in effect as immediately following Completion as amended from time to time; "P&O Princess Group" has the same meaning as in the Equalization Agreement; "P&O Princess ADR" means an American Depositary Receipt of P&O Princess, each of which represents four P&O Princess Ordinary Shares, which is listed on the NYSE; "P&O Princess Ordinary Shares" has the meaning given to it in the P&O Princess Articles; "P&O Princess Special Voting Share" means the special voting share of (Pounds)1 in P&O Princess; "P&O Princess Specified Numbers" means, in relation to a resolution to consider a Joint Electorate Action at a meeting of Carnival shareholders (i) the number of votes Cast in favour of the Equivalent Resolution of P&O Princess at the Parallel Shareholder Meeting of P&O Princess shareholders multiplied by the Equalization Fraction in effect at the time such meeting of Carnival shareholders is held, rounded up to the nearest whole number; (ii) the number of votes Cast against the Equivalent Resolution of P&O Princess at the Parallel Shareholder Meeting of P&O Princess shareholders multiplied by the Equalization Fraction in effect at the time such meeting of Carnival shareholders is held, rounded up to the nearest whole number; and (iii) the number of votes Cast as formal abstentions in relation to the Equivalent Resolution of P&O Princess at the Parallel Shareholder Meeting of P&O Princess shareholders multiplied by the Equalization Fraction in effect at the time such meeting of Carnival shareholders is held, rounded up to the nearest whole number; 4 "P&O Princess SVC Constitution" means the Memorandum and Articles of Association of P&O Princess SVC; "SEC" means the United States Securities and Exchange Commission; "Shares" means, in relation to P&O Princess, the P&O Princess Ordinary Shares and, in relation to Carnival, the Carnival Common Stock; "Special Voting Share" means, in relation to P&O Princess, the P&O Princess Special Voting Share and, in relation to Carnival, the Carnival Special Voting Share; "Subsidiary" means with respect to P&O Princess or Carnival, any entity, whether incorporated or unincorporated, in which P&O Princess or Carnival owns, directly or indirectly, a majority of the securities or other ownership interests having by their terms ordinary voting power to elect a majority of the directors or other persons performing similar functions, or the management and policies of which P&O Princess or Carnival otherwise has the power to direct; "Supermajority Resolution" means, with respect to Carnival or P&O Princess, a resolution required by Applicable Regulations and/or the Carnival Constitution or the P&O Princess Articles, as relevant, to be approved by a higher percentage of votes Voted than required under a Majority Resolution, or where the percentage of votes Voted in favour and against the resolution is required to be calculated by a different mechanism to that required by a Majority Resolution "SVCs" means the P&O Princess SVC and the Carnival SVC; "UKLA" means the Financial Services Authority in its capacity as competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000; and "Voted" means the number of votes recorded in favour of and against a particular resolution at a shareholders' meeting of either P&O Princess or Carnival by holders of Shares, holders of any other class of shares entitled to vote and the holder of the relevant Special Voting Share PROVIDED THAT votes recorded as abstentions by holders of Carnival Common Stock or P&O Princess Ordinary Shares (or any other class of shares entitled to vote) shall not be counted as having been Voted for these purposes. 1.2 Interpretation The headings herein are for convenience of reference only and do not constitute part of this Deed and shall not be deemed to limit or otherwise affect any of the provisions hereof. The following rules of interpretation apply unless the context requires otherwise. (a) The singular includes the plural and conversely. (b) A gender includes all genders. (c) Where a word or phrase is defined, its other grammatical forms have a corresponding meaning. 5 (d) A reference to a person includes a body corporate, an unincorporated body or other entity. (e) A reference to a clause is to a clause of this Deed unless otherwise indicated. (f) A reference to any party to this Deed or any other agreement or document includes the party's successors and permitted assigns. (g) A reference to any agreement or document is to that agreement or document as amended, novated, supplemented, varied or replaced from time to time, except to the extent prohibited by this Deed. (h) A reference to any legislation (including any listing rules of a stock exchange or voluntary codes) or to any provision of any legislation includes any modification or re-enactment of it, any legislative provision substituted for it and all rules and regulations and statutory instruments issued thereunder. (i) A reference to $ is to US dollars and a reference to (Pounds) is to pounds sterling. (j) A reference to conduct includes any omission and any statement or undertaking, whether or not in writing. (k) A reference to writing includes a facsimile transmission and any other means of reproducing words in a tangible and permanently visible form. (l) Whenever the words include, includes or including are used in this Deed, they shall be deemed to be followed by the words without limitation; (m) A reference to a body, other than a party to this Deed (including, an institute, association, authority or Governmental Agency), whether statutory or not: (i) which ceases to exist; or (ii) whose powers or functions are transferred to another body, is a reference to the body which replaces it or which substantially succeeds to its powers or functions. (n) All references to time are to local time in the place where the relevant obligation is to be performed (or right exercised). 1.3 Business Day Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the Business Day preceding such day. 2. NOTIFICATION OF VOTES CAST ON JOINT ELECTORATE ACTIONS AT A PARALLEL SHAREHOLDER MEETING AND CALCULATION OF SPECIFIED NUMBER 2.1 Notification by Carnival Carnival agrees with P&O Princess SVC and P&O Princess that, in relation to each meeting of Carnival shareholders at which any resolution relating to a Joint Electorate Action is to be considered, Carnival shall, as soon as possible after the Carnival 6 shareholders (other than the Carnival SVC) entitled to vote on any such resolution Cast those votes at such shareholder meeting, deliver to P&O Princess SVC and P&O Princess in writing in accordance with clause 17.4 a report of the inspectors of election for such shareholder meeting setting forth the details in (a) below and a statement by a duly authorised officer of Carnival setting forth the details in (b) below: (a) how the votes were Cast (including the number of votes Cast) at the meeting of Carnival shareholders in relation to each such Equivalent Resolution; and (b) its calculation of the Carnival Specified Numbers applicable to the P&O Princess Special Voting Share for each Equivalent Resolution for a Joint Electorate Action and of the way in which P&O Princess SVC is required to vote the Carnival Specified Numbers attaching to the P&O Princess Special Voting Share in relation to each such Equivalent Resolution at the Parallel Shareholder Meeting of P&O Princess in accordance with this Deed and the P&O Princess Articles. 2.2 Notification by P&O Princess P&O Princess agrees with Carnival SVC and Carnival that, in relation to each meeting of P&O Princess shareholders at which any resolution relating to a Joint Electorate Action is to be considered, P&O Princess shall, as soon as possible after the P&O Princess shareholders (other than the P&O Princess SVC) entitled to vote on any such resolution Cast those votes at such shareholder meeting, deliver to Carnival SVC and Carnival in writing in accordance with clause 17.4 a report of the inspectors of election for such shareholder meeting setting forth the details in (a) below and a statement by a duly authorised officer of P&O Princess setting forth the details in (b) below: (a) how the votes were Cast (including the number of votes Cast) at the meeting of P&O Princess shareholders in relation to each such Equivalent Resolution; and (b) its calculation of the P&O Princess Specified Numbers applicable to the Carnival Special Voting Share for each Equivalent Resolution for a Joint Electorate Action and of the way in which Carnival SVC is required to vote the P&O Princess Specified Numbers attaching to the Carnival Special Voting Share in relation to each such Equivalent Resolution at the Parallel Shareholder Meeting of Carnival in accordance with this Deed and the Carnival Constitution. 3. NOTIFICATION OF OUTCOME ON VOTE ON CLASS RIGHTS ACTIONS 3.1 Notification by Carnival Carnival agrees with P&O Princess and P&O Princess SVC that, in relation to each meeting of Carnival shareholders at which any resolution or resolutions relating to a Class Rights Action is to be considered, Carnival shall, as soon as possible after the Carnival shareholders (other than Carnival SVC) entitled to vote on any such resolution Cast those votes at such shareholder meeting, deliver to P&O Princess SVC and P&O Princess in writing and in accordance with clause 17.4: (a) a report of the inspectors of election for such shareholder meeting setting forth how the votes were 7 Cast (including the number of votes Cast) at the meeting of Carnival shareholders in relation to each such Equivalent Resolution; and (b) a statement by a duly authorised officer of Carnival setting forth whether or not each such Equivalent Resolution or resolutions was approved by the requisite majority pursuant to the Carnival Constitution and/or Applicable Regulations. 3.2 Notification by P&O Princess P&O Princess agrees with Carnival and Carnival SVC that, in relation to each meeting of P&O Princess shareholders at which any resolution or resolutions relating to a Class Rights Action is to be considered, P&O Princess shall, as soon as possible after the P&O Princess shareholders (other than P&O Princess SVC) entitled to vote on any such resolution Cast those votes at such shareholder meeting, deliver to Carnival SVC and Carnival in writing and in accordance with clause 17.4: (a) a report of the inspectors of election for such shareholder meeting setting forth how the votes were Cast (including the number of votes Cast) at the meeting of P&O Princess shareholders in relation to each such Equivalent Resolution; and (b) a statement by a duly authorised officer of P&O Princess setting forth whether or not the Equivalent Resolution or resolutions were approved by the requisite majority pursuant to the P&O Princess Articles and/or Applicable Regulations. 4. ATTENDANCE AT MEETINGS AND VOTING 4.1 Attendance at meetings (a) Carnival SVC agrees with P&O Princess that, at every meeting of Carnival shareholders at which any resolution relating to a Joint Electorate Action or a Class Rights Action is to be considered, Carnival SVC shall be present by its duly appointed corporate representative or by proxy or proxies. Carnival agrees to notify Carnival SVC in writing and in accordance with clause 17.4 at the time it sends notice to its shareholders of a shareholder meeting whether any resolution to be proposed at such meeting is a Joint Electorate Action or a Class Rights Action and Carnival SVC shall be entitled to rely on any such notice for the purposes of this Deed. Carnival also agrees to notify Carnival SVC in advance and in writing in accordance with clause 17.4 of the time and place at which an adjourned or postponed meeting will be held and whether any resolution to be proposed at such meeting is a Joint Electorate Action or a Class Rights Action and Carnival SVC shall be entitled to rely on any such notice for the purpose of this Deed. (b) P&O Princess SVC agrees with Carnival that, at every meeting of P&O Princess at which any resolution relating to a Joint Electorate Action or a Class Rights Action is to be considered, P&O Princess SVC shall be present by its duly appointed corporate representative or by proxy or proxies. P&O Princess agrees to notify P&O Princess SVC in writing and in accordance with clause 17.4 at the time it sends notice to its shareholders of a shareholder meeting whether any resolution to be proposed at such meeting is a Joint Electorate Action or a Class Rights Action and P&O Princess SVC shall be entitled to rely on any such notice for the purposes of this Deed. P&O Princess also agrees to notify P&O Princess SVC in advance and in writing in accordance with clause 17.4 of the time and place at which an adjourned or postponed meeting will be held and whether any resolution to be proposed at 8 such meeting is a Joint Electorate Action or a Class Rights Action and Carnival SVC shall be entitled to rely on any such notice for the purpose of this Deed. 4.2 Vote in accordance with constitution (a) Carnival SVC agrees with Carnival and P&O Princess that it shall vote the Carnival Special Voting Share in accordance with the requirements of the Carnival Constitution and this Deed. (b) P&O Princess SVC agrees with Carnival and P&O Princess that it shall vote the P&O Princess Special Voting Share in accordance with the requirements of the P&O Princess Articles and this Deed. 4.3 Vote on Joint Electorate Action (a) Carnival SVC agrees with Carnival and P&O Princess that on any resolution that relates to a Joint Electorate Action it will exercise the voting rights attached to the Carnival Special Voting Share in accordance with the reports and the statement delivered under clause 2.2. (b) P&O Princess SVC agrees with Carnival and P&O Princess that on any resolution that relates to a Joint Electorate Action it will exercise the voting rights attached to the P&O Princess Special Voting Share in accordance with the reports and the statement delivered under clause 2.1. 4.4 Vote on Class Rights Action (a) Carnival SVC agrees with Carnival and P&O Princess that where it has been notified by P&O Princess in accordance with clause 3.2 that a Class Rights Action has (pursuant to the P&O Princess Articles and/or Applicable Regulations) not been approved by the requisite majority of votes at a P&O Princess meeting of shareholders then: (i) if the resolution needs to be passed by a Majority Resolution it shall vote the Carnival Special Voting Share to cast such number of votes representing the largest whole percentage that is less than the percentage of the number of votes as would be necessary to defeat a Majority Resolution if the total votes capable of being cast by the outstanding Carnival Common Stock and other class of shares of Carnival that are entitled to vote pursuant to Applicable Regulations and/or the Carnival Articles and By-laws (including the Carnival Special Voting Share) were cast in favour of the resolution at the Carnival Parallel Shareholder Meeting; and (ii) if the resolution needs to be passed by a Supermajority Resolution it shall vote the Carnival Special Voting Share to cast such number of votes representing the largest whole percentage that is less than the percentage of the number of votes as would be necessary to defeat a Supermajority Resolution if the total votes capable of being cast by the outstanding Carnival Common Stock and other class of shares of Carnival that are entitled to vote pursuant to Applicable Regulations and/or the Carnival Articles and By-laws (including the Carnival 9 Special Voting Share) were cast in favour of the resolution at the Carnival Parallel Shareholder Meeting. (b) P&O Princess SVC agrees with Carnival and P&O Princess that where it has been notified by Carnival in accordance with clause 3.1 that a Class Rights Action has (pursuant to the Carnival Constitution and/or Applicable Regulations) not been approved by the requisite majority of votes at a Carnival meeting of shareholders then: (i) if the resolution needs to be passed by an ordinary resolution, it shall vote the P&O Princess Special Voting Share to cast such number of votes representing the largest whole percentage that is less than the percentage of the number of votes as would be necessary to defeat an ordinary resolution if the total votes capable of being cast by the outstanding P&O Princess Ordinary Shares and other class of shares of P&O Princess that are entitled to vote pursuant to Applicable Regulations and/or the P&O Princess Memorandum and Articles (including the P&O Princess Special Voting Share) were cast in favour of the resolution at the P&O Princess Parallel Shareholder Meeting; and (ii) if the resolution needed to be passed by a special (or extraordinary) resolution, it shall vote the P&O Princess Special Voting Share to cast such number of votes representing the largest whole percentage that is less than the percentage of the number of votes (less one vote) as would be necessary to defeat a special (or extraordinary) resolution if the total votes capable of being cast by the outstanding P&O Princess Ordinary Shares and other class of shares of P&O Princess that are entitled to vote pursuant to Applicable Regulations and/or the P&O Princess Memorandum and Articles (including the P&O Princess Special Voting Share) were cast in favour of the resolution at the P&O Princess Parallel Shareholder Meeting. 4.5 Amendments to resolutions (a) Carnival SVC is entitled to rely on a certificate from a duly authorised officer of Carnival and a duly authorised officer of P&O Princess that for all purposes of this Deed an amendment to a resolution to approve a Joint Electorate Action is made in accordance with the Carnival Constitution and Applicable Regulations and that the resolution as amended is the Equivalent Resolution to the resolution considered at the Parallel Shareholder Meeting of P&O Princess Such certificate shall be given in accordance with clause 17.4. (b) P&O Princess SVC is entitled to rely on a certificate from a duly authorised officer of P&O Princess and a duly authorised officer of Carnival that for all purposes of this Deed an amendment to a resolution to approve a Joint Electorate Action is made in accordance with the P&O Princess Articles and Applicable Regulations and that the resolution as amended is the Equivalent Resolution to the resolution considered at the Parallel Shareholder Meeting of Carnival. Such certificate shall be given in accordance with clause 17.4. 10 4.6 No discretion as to voting Each of the SVCs agrees with Carnival and P&O Princess that it has no discretion as to how to vote the P&O Princess Special Voting Share and/or the Carnival Special Voting Share (as applicable) and that it shall only vote those shares in accordance with this Deed and in accordance with the P&O Princess Articles and/or the Carnival Constitution. 4.7 Procedural and technical resolutions Either SVC will be entitled to rely on a certificate given to it in writing (in accordance with clause 17.4) by the Chairman of the relevant shareholder meeting that a resolution is a procedural or technical resolution (in accordance with the P&O Princess Articles or the Carnival Constitution (as applicable)) and the Carnival Special Voting Share or the P&O Princess Special Voting Share (as applicable) will not have any votes in respect of such resolution. If a resolution is proposed for the first time during a meeting of shareholders of either P&O Princess or Carnival (whereby "proposed for the first time" means it was not set out in the notice of the relevant shareholders' meeting) and is determined by the Chairman of the relevant shareholder meeting (in accordance with the P&O Princess Articles or the Carnival Constitution (as applicable)) not to be a resolution of a procedural or technical nature then, if such resolution is to be voted on by shareholders, it will be voted on in the same way as any other Joint Electorate Action or Class Rights Action (as applicable) (and, for the avoidance of doubt, proper notice of such resolution will first be given to shareholders, including to the SVCs). 5. DEALINGS 5.1 P&O Princess SVC Subject to clause 16.3, P&O Princess SVC agrees with Carnival and P&O Princess that it shall not deal with the P&O Princess Special Voting Share or any interest in (or right attaching to) such share without the prior written consent of both Carnival and P&O Princess, such consent to be in the absolute discretion of Carnival and P&O Princess. No transfer of the P&O Princess Special Voting Share shall be effective unless and until the transferee of such share, as consented to by Carnival and P&O Princess, has agreed to be bound by this Deed or entered into a deed on equivalent terms. Any dealing by the P&O Princess SVC in violation of this clause 5.1 shall be null and void. 5.2 Carnival SVC Subject to clause 16.2, Carnival SVC agrees with P&O Princess and Carnival that it shall not deal with the Carnival Special Voting Share or any interest in (or right attaching to) such share without the prior written consent of both Carnival and P&O Princess, such consent to be in the absolute discretion of Carnival and P&O Princess. No transfer of the Carnival Special Voting Share shall be effective unless and until the transferee of such share, as consented to by Carnival and P&O Princess, has agreed to be bound by this Deed or entered into a deed on equivalent terms. Any Dealing by the Carnival SVC in violation of this clause 5.2 shall be null and void. 11 6. OBLIGATIONS SUBJECT TO APPLICABLE REGULATIONS The obligations of the parties under this Deed will be subject to any Applicable Regulations. The parties will use their best endeavours to remedy a situation where Applicable Regulations prevent any party from performing its obligations hereunder. 7. DEFAULT BY CARNIVAL OR P&O PRINCESS If at any time Carnival or P&O Princess defaults in the performance or observance of any obligation or other provision binding on it under or pursuant to this Deed and owed to Carnival SVC or P&O Princess SVC, respectively, Carnival SVC or P&O Princess SVC, as the case may be, shall take such actions or institute such proceedings as it may reasonably consider to be appropriate in relation to any such default and shall not be obliged to give notice of its intention to do so. 8. SUPPLY OF INFORMATION; CONFIDENTIALITY 8.1 Supply of information So long as Carnival SVC is registered as the holder of the Carnival Special Voting Share and P&O Princess SVC is registered as the holder of the P&O Princess Special Voting Share, Carnival and P&O Princess shall each give to P&O Princess SVC and Carnival SVC, as the case may be, or any person approved by Carnival or P&O Princess and appointed in writing by Carnival SVC or P&O Princess SVC, as the case may be, such information as Carnival SVC or P&O Princess SVC, as the case may be, or such appointed person shall reasonably require (other than information which is of a price-sensitive nature and not generally available) for the purpose of the discharge of the powers, duties and discretions vested in Carnival SVC or P&O Princess SVC, as the case may be, under this Deed. All information provided by P&O Princess and Carnival under this clause 8.1 shall (if requested by Carnival SVC or P&O Princess SVC) be in writing and in accordance with clause 17.4 and contained in a certificate of a duly authorised officer of P&O Princess or a duly authorised officer of Carnival. 8.2 Confidentiality Each of Carnival SVC and P&O Princess SVC shall not, and will use its respective best endeavours to ensure that any person appointed in writing by it in accordance with clause 8.1 shall not divulge any information given to it pursuant to clauses 2, 3, 4.5 and 8.1 which is confidential or proprietary to the party which gave it the information, in each case, unless prior written approval is given by the party which gave the information or unless required by Applicable Regulations. If disclosure of any such information is required by Applicable Regulations, the Carnival SVC and/or the P&O Princess SVC (as relevant) will, to the extent practicable, first consult with P&O Princess and Carnival as to the form, content and timing of such disclosure. 9. REMUNERATION AND EXPENSES OF SVCS 9.1 Fees and expenses Carnival shall pay or ensure that payment is made to P&O Princess SVC or as it shall otherwise direct, and P&O Princess shall pay or ensure that payment is made to Carnival SVC or as it shall otherwise direct, such fees and expenses as may be agreed 12 from time to time between Carnival, P&O Princess and the SVCs for the performance by the SVCs of their obligations pursuant to this Deed. 9.2 Period of remuneration The remuneration referred to in clause 9.1 shall continue to be payable (a) by Carnival until the later of: (a) P&O Princess SVC ceasing to be registered as the holder of the P&O Princess Special Voting Share and (b) the termination of this Deed in accordance with clause 16; and (b) by P&O Princess until the later of (a) Carnival SVC ceasing to be registered as the holder of the Carnival Special Voting Share and (b) the termination of this Deed in accordance with clause 16. 9.3 Exceptional duties In the event either SVC finds it is necessary or otherwise required to undertake any duties which would not have been reasonably contemplated in relation to the performance of its obligations and the exercise of the powers, authorities and discretions vested in it under this Deed, Carnival shall pay to P&O Princess SVC or as it shall otherwise direct and P&O Princess shall pay to Carnival SVC or as it shall otherwise direct such special remuneration in addition to that referred to in clause 9.1 as shall be mutually agreed. 9.4 VAT and similar taxes The remuneration referred to in clause 9.1 and any additional special remuneration payable under clause 9.3 shall be exclusive of any value added tax, sales tax, use tax or any similar transaction tax which shall be added at the rate applicable in the circumstances and paid by P&O Princess and/or Carnival, as the case may be. 9.5 Expenses Carnival and P&O Princess shall pay all travelling and other costs, charges and expenses including legal costs and other professional fees (including, where applicable, value added tax or any similar tax) which each of the SVCs may properly incur in relation to the performance of its obligations and the exercise of the powers, authorities and discretions vested in it under this Deed and/or any costs and expenses incurred in connection with the valid termination of this Deed and the resulting transfer in accordance with clause 16.2 or 16.3 of the Carnival Special Voting Share or the P&O Princess Special Voting Share, as the case may be or with the transfer of the P&O Princess Special Voting Share or the Carnival Special Voting Share under clause 16.4. 10. POWER OF SVCs 10.1 Act on advice Each of the SVCs may in the proper performance of its obligations and the exercise of the powers, authorities and discretion vested in it under this Deed act on the opinion or advice of or information obtained from any lawyer, banker, valuer, accountant, transfer agent, the share registrar or inspector of election at such time of Carnival or P&O Princess or other expert, whether obtained by Carnival or P&O Princess or by 13 the SVCs or otherwise, and in such case, provided that the SVC shall have acted reasonably in its choice of any such person, the SVC shall not be responsible for any losses, liabilities, costs, claims, actions, damages, expenses or demands which it may incur or which may be made against it in connection with or occasioned by so acting. Any such opinion, advice or information may be sought or obtained by electronic mail, letter, facsimile or other means of written communication. The SVCs shall not be liable for acting on any opinion, advice or information or for acting on, implementing and giving effect to any decision, determination or adjustment purporting to be conveyed by any such written communication reasonably appearing on its face to be authentic even though it contains an error or is not authentic. 10.2 Powers of SVCs Each of the SVCs shall have all requisite powers, authorities and discretions as shall be necessary or appropriate to enable it to take all and any such actions as are contemplated by the provisions of this Deed and the relevant provisions of the Carnival Constitution and the P&O Princess Articles. 10.3 Act on resolution Carnival SVC and P&O Princess SVC shall not be responsible, respectively, for having acted upon or having implemented or given effect to any resolution purporting to have been passed: (a) as a resolution of Carnival at any meeting of Carnival shareholders; or (b) as a resolution of P&O Princess at any meeting of P&O Princess shareholders, minutes for which have been made and signed (or in respect of which it has been informed in accordance with this Deed by any director of Carnival or P&O Princess or the secretary of Carnival or P&O Princess or other duly authorised person that the resolution has been passed) even though it may subsequently be found that there was some defect in the constitution of the meeting or the passing of the resolution or that for any reason the resolution was not valid or binding upon the holders of the relevant shares or (as the case may be) was not in accordance with this Deed. 10.4 Validity of notices The SVCs shall be at liberty to accept a notice given under clause 17.4 signed or purporting to be signed by any director of Carnival or P&O Princess or the secretary of Carnival or P&O Princess or any other duly authorised officer or person, as appropriate, and shall be at liberty to accept such certificate or notice in order to satisfy any factor or matter upon which Carnival SVC or P&O Princess SVC may in the performance of any of its obligations and the exercise of any of the powers, authorities and discretions under this Deed (including a notification, report, statement or certificate referred to in clauses 2.1, 2.2, 3.1, 3.2, 4.1, 4.3, 4.4 or 4.5) or a statement to the effect that in the opinion of the persons so certifying any particular dealing, transaction, step or thing is expedient. The SVCs shall not be in any way bound to call for further evidence nor to verify the accuracy of the contents of such certificate, report, statement or notice nor to be responsible for any losses, liabilities, costs, damages, actions, demands or expenses or for any breach of any of the provisions of this Deed that may be occasioned by accepting or acting or relying on any such certificate, report, statement or notice. 14 10.5 Assumption of no breach The SVCs shall not be bound to take any steps to ascertain whether any breach of any of the provisions of this Deed has occurred and, until it has actual knowledge to the contrary, the SVC shall be entitled to assume that no such breach has occurred. 10.6 Discretions Save as otherwise expressly provided in this Deed (including for the avoidance of doubt in clauses 4, 5 and 16), each SVC shall, as regards all powers, authorities and discretions vested in it under this Deed, have absolute and uncontrolled discretion as to the exercise or non-exercise thereof and, provided it shall have acted honestly and reasonably, it shall be in no way responsible for any losses, costs, damages, expenses, liabilities, actions, demands or inconveniences that may result from the exercise or non-exercise thereof. 11. INDEMNITIES 11.1 Indemnity by Carnival Subject to clause 11.3, Carnival agrees with P&O Princess SVC to indemnify it, its directors, officers, employees, controlling persons and every attorney, manager, agent, delegate or other person appointed by it under this Deed against all liabilities and expenses properly incurred by it or such persons in the performance or purported performance of its obligations under this Deed and of any powers, authorities or discretions vested in it or such persons pursuant to this Deed and against all actions, proceedings, costs, claims, damages, expenses and demands in respect of any matter or thing done or omitted in any way relating to this Deed, including the institution by P&O Princess SVC of any proceedings pursuant to clause 7 in respect of any default by Carnival or P&O Princess. 11.2 Indemnity by P&O Princess Subject to clause 11.3, P&O Princess agrees with Carnival SVC to indemnify it, its directors, officers, employees, controlling persons and every attorney, manager, agent, delegate or other person appointed by it under this Deed against all liabilities and expenses properly incurred by it or such persons in the performance or purported performance of its obligations under this Deed and of any powers, authorities or discretions vested in it or such persons pursuant to this Deed and against all actions, proceedings, costs, claims, damages, expenses and demands in respect of any matter or thing done or omitted in any way relating to this Deed, including the institution by Carnival SVC of any proceedings pursuant to clause 7 in respect of any default by Carnival or P&O Princess. 11.3 Limitation to indemnities Nothing contained in this Deed shall, in any circumstance in which either SVC or, as the case may be, any attorney, manager, agent, delegate or other person appointed by either SVC under this Deed (collectively "Indemnified Parties") has been guilty of fraud or negligence in the performance of any of its duties under this Deed or has willfully defaulted in its obligations, or has willfully breached its obligations, under this Deed, exempt such Indemnified Party or Parties from, or indemnify such Indemnified Party or Parties against, any liability for breach of contract or any 15 liability which by virtue of any rule of law would otherwise attach to such Indemnified Party or Parties in respect of any fraud, negligence or willful default of which such Indemnified Party or Parties may be guilty in relation to their duties under this Deed. 12. SVCs' ACTIVITIES For as long as Carnival SVC shall be registered as the holder of the Carnival Special Voting Share and P&O Princess SVC shall be registered as the holder of the P&O Princess Special Voting Share, the SVCs and [.] agree that the only activities carried out by the SVCs (unless both Carnival and P&O Princess otherwise expressly agree in writing) shall be such activities as are necessary or expedient in order for each SVC to perform its obligations and exercise its powers, authorities and discretions pursuant to this Deed, the Carnival Constitution and the P&O Princess Articles, as the case may be, and enforce the performance by each of Carnival and P&O Princess of its obligations under them. 13. MEMBERS AND DIRECTORS OF SVcs 13.1 Members of SVCs For as long as Carnival SVC shall be registered as the holder of the Carnival Special Voting Share and P&O Princess SVC shall be the registered holder of the P&O Princess Special Voting Share, [.], Carnival and P&O Princess agree that the SVCs will have only one member, being [.], and that Carnival SVC shall maintain its status as a limited liability company under the laws of England and Wales and P&O Princess SVC shall maintain its status as a limited liability company under the laws of England and Wales. 13.2 Directors of SVCs For as long as Carnival SVC shall be registered as the holder of the Carnival Special Voting Share and P&O Princess SVC shall be the registered holder of the P&O Princess Special Voting Share, the board of directors of each of the SVCs shall comprise such persons as are appointed or approved by [.]. [.] shall not appoint any person as a director of the SVCs who is an employee or director of either the Carnival Group or the P&O Princess Group. 14. AMENDMENTS TO THIS DEED The SVCs and [.] shall at any time concur with P&O Princess and Carnival in making any modifications to the provisions of this Deed which: (a) are formal or technical amendments and which Carnival and P&O Princess notify are not materially prejudicial to the interests of either Carnival or P&O Princess shareholders; (b) are necessary to correct manifest errors in this Deed or inconsistencies between provisions of this Deed or between provisions of this Deed and the Equalization Agreement; or (c) have previously been approved as a Class Rights Action, 16 provided in each case that if such modification affects (including increasing or reducing respectively) the obligations or rights of the SVCs and/or [.] under this Deed or any provision affecting the performance by Carnival SVC, P&O Princess SVC and/or [.] of its obligations under this Deed, such modification shall require the consent of the SVCs and/or [.], such consent not to unreasonably withheld or delayed. 15. DAMAGES NOT ADEQUATE REMEDY Each of the SVCs, Carnival, P&O Princess and [.] hereby acknowledge and agree with each other that damages would not be an adequate remedy for the breach of any provision of this Deed and, accordingly, each shall be entitled to the remedies of injunction, specific performance and other equitable remedies for any such threatened or actual breach. 16. TERMINATION 16.1 Automatic termination This Deed shall automatically terminate: (a) upon termination of the Equalization Agreement in accordance with its terms; or (b) if a resolution to terminate this Deed is approved by the shareholders of Carnival and P&O Princess as a Class Rights Action, provided that clauses 8.2, 9, 11, 16.1, 16.2, 16.3 and 16.4 shall continue and bind the parties for so long as may be necessary to give full effect to the rights and obligations arising under them and provided that clauses 8.1 and 10.4 shall continue and bind the parties for so long as Carnival SVC is registered as the holder of the Carnival Special Voting Share or P&O Princess SVC is registered as the holder of the P&O Princess Special Voting Share 16.2 Transfer of Carnival Special Voting Share Upon termination of this Deed in accordance with clause 16.1, Carnival SVC shall promptly, upon being requested to do so, transfer the Carnival Special Voting Share to such person as the Board of Carnival directs it to in writing. Pending notification, Carnival SVC shall have no obligation whatsoever in respect of the Carnival Special Voting Share or under this Deed except that Carnival SVC must not Deal with the Carnival Special Voting Share or any interest in, or right attaching to, that share other than in accordance with such notification, which is to be given within 6 months after the date of termination of this Deed and must be given in writing in accordance with clause 17.4. 16.3 Transfer of P&O Princess Special Voting Share Upon termination of this Deed in accordance with clause 16.1, P&O Princess SVC shall promptly, upon being requested to do so, transfer the P&O Princess Special Voting Share to such person as is notified by the Board of P&O Princess. Pending notification, P&O Princess SVC shall have no obligation whatsoever in respect of the P&O Princess Special Voting Share or under this Deed except that P&O Princess SVC must not Deal with the P&O Princess Special Voting Share or any interest in, or 17 right attaching to, that share other than in accordance with such notification, which is to be given within 6 months after the date of termination of this Deed and must be given in writing in accordance with clause 17.4 16.4 Replacement of [.] If given notice under clause 17.4 to do so by a duly authorised officer of P&O Princess and by a duly authorised officer of Carnival, P&O Princess SVC shall within two months of receipt of such notice transfer the P&O Princess Special Voting Share to such person as is notified to it in the aforementioned notice ("First Novated Person") and Carnival SVC shall within two months of receipt of such notice transfer the Carnival Special Voting Share to such person as notified to in the aforementioned notice ("Second Novated Person"). The P&O Princess SVC agrees to novate its rights and obligations under this Deed to the First Novated Person, Carnival SVC agrees to novate its rights and obligations under this Deed to the Second Novated Person and [o] agrees to novate its rights and obligations under this Deed to such person as notified in the aforementioned notice ("New SVC Owner"). The provisions of this clause 16.4 shall apply, mutatis mutandis, to any subsequent notification by a duly authorised officer of P&O Princess and by a duly authorised officer of Carnival to replace the First Novated Person, the Second Novated Person, and the New SVC Owner. Following any such transfer, references in the Deed to the P&O Princess SVC shall instead be to the First Novated Person, references in this Deed to the Carnival SVC shall be to the Second Novated Person and references in this Deed to [o] shall be to the New SVC Owner. 17. GENERAL 17.1 No assignment This Deed shall not be assignable by operation of law or otherwise, and any purported assignment (whether in whole or in part) in violation of this provision shall be void. 17.2 No partnership or agency This Deed is not intended to alter the status of the parties as separate, independent entities, to create a partnership, joint venture or agency relationship between the parties or their respective Subsidiaries or shareholders, or to give any party (or its respective Subsidiaries or shareholders) any legal or beneficial ownership interest in the assets or income of the other parties, and they shall not be construed as having that effect. 17.3 Regulatory All parties to this Deed will co-operate with each other from time to time to ensure that all information necessary or desirable for the making of (or responding to any requests for further information with respect to) any notifications or filings made in respect of this Deed, or the transactions contemplated by this Deed, is supplied to the party dealing with such notification and filings and that they are properly, accurately and promptly made. 17.4 Notices Any notice, certificate, report or statement given under this Deed: 18 (a) must be in writing addressed to the intended recipient at the address shown below: Carnival Corporation 3655 N.W. 87/th/ Avenue Miami, Florida 33178-2428 Attention: Chairman and Chief Executive Officer Fax: [.] with copies to Carnival Corporation 3655 N.W. 87/th/ Avenue Miami, Florida 33178-2428 Attention: General Counsel Fax: [.] Carnival SVC Limited [.] Attention: The Company Secretary (Ref: [.]) Fax: [.] P&O Princess Cruises plc 77 New Oxford Street London WC1A 1PP UK Attention: Chief Executive Officer Fax: (+44) 20 78051240 with copies to P&O Princess Cruises plc 77 New Oxford Street London WC1A 1PP UK Attention: General Counsel Fax: (+44) 20 7805 1240 P&O Princess SVC Limited [.] Attention: The Company Secretary Fax: 19 [.] [Address] Attention: The Company Secretary (Ref [.]) Fax: (+44) [.] Or to such other persons or addresses as may be designated in writing by any party pursuant to this clause 17.4. (b) must be signed by a person duly authorised by the sender, (c) Notices, certificates, reports and statements given under this Deed shall be in writing and shall be deemed given (i) when sent if sent by facsimile and promptly confirmed by telephone confirmation thereof; or (ii) when delivered, if delivered personally to the intended recipient or sent by overnight delivery via a national courier service, and in each case, addressed to such person or persons in accordance with this clause 17.4. 17.5 Severability If any provision of this Deed is held to be invalid or unenforceable, then such provision shall (so far as it is invalid or unenforceable) be given no effect and shall be deemed not to be included in this Deed but without invalidating any of the remaining provisions of this Deed. The parties shall then use all reasonable endeavours to replace the invalid or unenforceable provisions by a valid and enforceable substitute provision the effect of which is as close as possible to the intended effect of the invalid or unenforceable provision. 17.6 Waivers (a) Waiver of any right arising from a breach of this Deed or of any right, power, authority, discretion or remedy arising upon default under this Deed must be in writing and signed by the party granting the waiver. (b) A failure or delay in exercise, or partial exercise, of (i) a right arising from a breach of this Deed; or (ii) a right, power, authority, discretion or remedy created or arising upon default under this Deed, does not result in a waiver of that right, power, authority, discretion or remedy. (c) A party is not entitled to rely on a delay in the exercise or non-exercise of a right, power, authority, discretion or remedy arising from a breach of this Deed or on a default under this Deed as constituting a waiver of that right, power, authority, discretion or remedy. (d) A party may not rely on any conduct of another party as a defence to exercise of a right, power, authority, discretion or remedy by that other party. (e) This clause may not itself be waived except by writing. 20 (f) No waiver by a party of a failure or failures by the other party to perform any provision of this Deed shall operate or be construed as a waiver in respect of any other or further failure whether of alike or different character. 17.7 Variation A variation of any term of this Deed must be in writing and signed by all parties to this Deed. 17.8 Further assurances Each party shall take all steps, execute all documents and do everything reasonably required by the other parties to give effect to any of the transactions contemplated by this Deed. 17.9 Counterparts This Deed may be executed in any number of counterparts. All counterparts taken together will be taken to constitute one and the same instrument. 17.10 Third Parties Rights A person who is not a party to this Deed shall have no right under the UK Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms. 17.11 Governing law and jurisdiction (a) This Deed and the relationship between the parties shall be governed by, and interpreted in accordance with, English law. (b) All of the parties agree that the courts of England are to have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) which may arise in connection with the creation, validity, effect, interpretation or performance of, or the legal relationships established by, this Deed or otherwise arising in connection with this Deed, and for such purposes irrevocably submit to the jurisdiction of the English courts. (c) The parties irrevocably waive any objections to the jurisdiction of any court referred to in this clause 17.11. (d) The parties irrevocably consent to service of process or any other documents in connection with proceedings in any court by facsimile transmission, personal service, delivery at any address specified in this Deed or any other usual address, mail or in any other manner permitted by English law, the law of the place of service or the law of the jurisdiction where proceedings are instituted. DULY delivered as a DEED on the date inserted above 21 EXECUTED as a DEED by ) CARNIVAL CORPORATION ) by a duly authorised officer ) _____________________________ Signature _____________________________ Print name _____________________________ Office held EXECUTED as a DEED by ) CARNIVAL SVC LIMITED ) acting by two Directors/a Director and ) Secretary ) EXECUTED as a DEED by ) P&O PRINCESS CRUISES PLC ) acting by two Directors/a Director and ) Secretary ) EXECUTED as a DEED by ) P&O PRINCESS SVC LIMITED ) acting by two Directors/a Director and ) Secretary ) 22 EXECUTED as a DEED by ) [.] ) acting by two Directors/a Director and ) Secretary ) 23