EXHIBIT 10.8
                              ACQUISITION AGREEMENT

                                 March 20, 1997

                                      among

                               PAN AM CORPORATION

                                   ("Pan Am")

                                       and

                           CAL ACQUISITION CORPORATION

                                 ("Acquisition")

                                       and

                               AIR HOLDING COMPANY

                                     ("AHC")

                                       and

                            CARNIVAL AIR LINES, INC.

                                  ("Carnival")


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                                TABLE OF CONTENTS
         <S>               <C>                                                                                 <C>
                                                                                                               Page

         ARTICLE I         Definitions..........................................................................  1

         ARTICLE II        The Merger...........................................................................  6

         ARTICLE III       Representations and Warranties of AHC and Carnival...................................  6
                  3.1      Organization.........................................................................  6
                  3.2      Authorization; Enforceability........................................................  6
                  3.3      No Violation or Conflict.............................................................  6
                  3.4      Consent of Governmental Authorities..................................................  7
                  3.5      Carnival Statements..................................................................  7
                  3.6      Compliance with Laws.................................................................  7
                  3.7      Legal Proceedings....................................................................  8
                  3.8      Brokers..............................................................................  8
                  3.9      Absence of Material Adverse Changes..................................................  8
                  3.10     Articles of Incorporation, Bylaws and Minute Books...................................  9
                  3.11     Capitalization.......................................................................  9
                  3.12     Rights, Warrants, Options............................................................  9
                  3.13     Properties........................................................................... 10
                  3.14     Governmental Authorizations.......................................................... 11
                  3.15     Insurance............................................................................ 11
                  3.16     Employment Matters................................................................... 11
                  3.17     Material Agreements.................................................................. 13
                  3.18     List of Accounts..................................................................... 14
                  3.19     Major Customers and Suppliers........................................................ 14
                  3.20     Related Party Transactions........................................................... 14
                  3.21     Tax Matters.......................................................................... 14
                  3.22     Guaranties........................................................................... 15
                  3.23     Absence of Certain Business Practices................................................ 15
                  3.24     RWDR Transaction..................................................................... 15
                  3.25     AHC Spinoff and RWDR Transaction Liability........................................... 15
                  3.26     Intentionally Omitted................................................................ 15
                  3.27     Registration Statement and Proxy Statement........................................... 15
                  3.28     Pooling-of-Interests................................................................. 16
                  3.29     Intentionally Left Blank............................................................. 16
                  3.30     Investment Representations........................................................... 16
                  3.31     Disclosure........................................................................... 17

         ARTICLE IV        Representations and Warranties of Pan Am and Acquisition............................. 17
                  4.1      Organization......................................................................... 17
                  4.2      Authorization; Enforceability........................................................ 17
                  4.3      No Violation or Conflict............................................................. 17
                  4.4      Consent of Governmental Authorities.................................................. 18
                  4.5      Exchange Act Reports; Financial Statements........................................... 18
                  4.6      Compliance with Laws................................................................. 18
                  4.7      Legal Proceedings.................................................................... 19
                  4.8      Brokers.............................................................................. 19
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                  4.9      Absence of Material Adverse Changes.................................................. 19
                  4.10     Articles of Incorporation, Bylaws and Minute Books................................... 20
                  4.11     Capitalization....................................................................... 20
                  4.12     Rights, Warrants, Options............................................................ 20
                  4.13     Properties........................................................................... 20
                  4.14     Governmental Authorizations.......................................................... 22
                  4.15     Insurance............................................................................ 22
                  4.16     Employment Matters................................................................... 22
                  4.17     Material Agreements.................................................................. 24
                  4.18     Related Party Transactions........................................................... 24
                  4.20     Tax Matters.......................................................................... 25
                  4.21     Guaranties........................................................................... 26
                  4.22     Validity of Pan Am Common Stock...................................................... 26
                  4.23     Absence of Certain Business Practices................................................ 26
                  4.24     Opinion of Financial Advisor......................................................... 26
                  4.25     Registration Statement and Proxy Statement........................................... 26
                  4.26     Pooling-of-Interests................................................................. 27
                  4.27     Disclosure........................................................................... 27

         ARTICLE V         Covenants............................................................................ 27
                  5.1      Interim Operations of Pan Am and AHC................................................. 27
                  5.2      Access............................................................................... 29
                  5.3      Confidentiality...................................................................... 29
                  5.4      Notification......................................................................... 30
                  5.5      Consent of Governmental Authorities and Others....................................... 30
                  5.6      Reasonable Efforts................................................................... 30
                  5.7      Publicity............................................................................ 30
                  5.8      Acquisition Proposals................................................................ 30
                  5.9      Carnival and Pan Am Shareholder Approval............................................. 31
                  5.10     Proxy Statement; Registration........................................................ 31
                  5.11     Affiliates' Letters.................................................................. 31
                  5.12     Nonsolicitation of Employees......................................................... 33
                  5.13     Certain Post-Closing Notifications................................................... 33

         ARTICLE VI        Additional Agreements................................................................ 33
                  6.1      Investigation; Notices............................................................... 33
                  6.2      Survival of the Representations and Warranties....................................... 33
                  6.3      Indemnification...................................................................... 33
                  6.4      General Release...................................................................... 35
                  6.5      Noncompetition....................................................................... 35
                  6.6      Confidentiality; Name Use............................................................ 36
                  6.7      Continuing Obligations............................................................... 36
                  6.8      AHC Spinoff and RWDR Transaction..................................................... 37
                  6.9      Voting Agreements.................................................................... 37
                  6.10     Accountants' Comfort Letters......................................................... 37
                  6.12     Intentionally Left Blank............................................................. 37
                  6.13     Use of the Carnival Name............................................................. 37
                  6.14     Board Representation................................................................. 38

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                  6.15     Additional Capital Contribution...................................................... 38
                  6.16     Registration Rights Agreement........................................................ 38
                  6.17     Intentionally Left Blank............................................................. 38
                  6.18     Wertheim Consulting Arrangement...................................................... 38

         ARTICLE VII       Closing; Conditions Precedent; Termination........................................... 39
                  7.1      Closing.............................................................................. 39
                  7.2      Mutual Conditions Precedent.......................................................... 39
                  7.3      Conditions Precedent to the Obligations of AHC and Carnival.......................... 39
                  7.4      Conditions Precedent to the Obligations of Pan Am and Acquisition.................... 40
                  7.5      Termination.......................................................................... 41

         ARTICLE VIII Miscellaneous............................................................................. 42
                  8.1      Notices.............................................................................. 42
                  8.2      Entire Agreement..................................................................... 42
                  8.3      Assignment........................................................................... 42
                  8.4      Waiver and Amendment................................................................. 42
                  8.5      No Third Party Beneficiary........................................................... 43
                  8.6      Severability......................................................................... 43
                  8.7      Expenses............................................................................. 43
                  8.8      Headings............................................................................. 43
                  8.9      Counterparts......................................................................... 43
                  8.10     Litigation; Prevailing Party......................................................... 43
                  8.11     Injunctive Relief.................................................................... 43
                  8.12     Remedies Cumulative.................................................................. 43
                  8.13     Participation of Parties; Construction............................................... 44
                  8.14     Governing Law........................................................................ 44
                  8.15     Jurisdiction and Venue............................................................... 44

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<PAGE>

                              ACQUISITION AGREEMENT

         This Acquisition Agreement ("AGREEMENT") is entered into as of March
20, 1997, among Pan Am Corporation, a Florida corporation ("PAN AM"), CAL
Acquisition Corporation, a Florida corporation ("ACQUISITION"), Air Holding
Company, a Florida corporation ("AHC"), and Carnival Air Lines, Inc., a Florida
corporation ("CARNIVAL").

                             PRELIMINARY STATEMENTS

         1. Pan Am and AHC believe that it is in their respective best interests
and in the best interests of their respective shareholders for Acquisition to
merge with and into Carnival upon the terms and subject to the conditions of
this Agreement.

         2. Prior to the Closing (as defined herein), AHC shall sell or
otherwise transfer all of its assets other than the capital stock of Carnival
(the "AHC SPINOFF").

         3. Prior to the Closing, AHC will merge with and into Carnival (the
"RWDR TRANSACTION").

                                    AGREEMENT

         In consideration of the preliminary statements and the respective
covenants, representations and warranties contained in this Agreement, the
parties agree as set forth below.

                                    ARTICLE I

                                   DEFINITIONS

         In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:

         "ACQUISITION COMMON STOCK" means the common stock of Acquisition, par
value $.0001 per share.

         "ADDITIONAL CAPITAL CONTRIBUTION" has the meaning set forth in SECTION
6.15 of this Agreement.

         "AFFILIATE" has the meaning specified in Rule 144 promulgated by the
Commission under the Securities Act.

         "AGREEMENT" means this Acquisition Agreement, together with all
exhibits and schedules referred to herein.

         "AHC COMMON STOCK" means the common stock of AHC, par value $1.00 per
share.

         "AHC MATERIAL AGREEMENTS" has the meaning set forth in SECTION 3.17 of
this Agreement.

         "AHC PENSION PLAN" has the meaning set forth in SECTION 3.16(D) of this
Agreement.

         "AHC PLANS" has the meaning set forth in SECTION 3.16(D) of this
Agreement.

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         "AHC RELATED PARTY" and "AHC RELATED PARTIES" have the meanings set
forth in SECTION 3.20 of this Agreement.

         "AHC WELFARE PLAN" has the meaning set forth in SECTION 3.16(D) of this
Agreement.

         "AIRWORTHINESS DIRECTIVES" has the meaning set forth in SECTION 3.13(B)
of this Agreement.

         "AMEX" means the American Stock Exchange.

         "ANCA" has the meaning set forth in SECTION 3.13(B) of this Agreement

         "ARTICLES AND AGREEMENT OF MERGER" means the Agreement and Plan of
Merger in the form of EXHIBIT A hereto, which sets forth the matters required to
be contained in a plan of merger under the Florida BCA.

         "AVERAGE PRICE" means the average closing price for the Common Stock as
reported on AMEX for the twenty (20) trading days immediately preceding the day
prior to the date the Proxy Statement is ready to be mailed to the shareholders
of Pan Am.

         "CARNIVAL COMMON STOCK" means the common stock of Carnival, par value
$.0002105 per share.

         "CARNIVAL CRUISE" means Carnival Corporation.

         "CARNIVAL FINANCIAL STATEMENTS" has the meaning set forth in SECTION
3.5 of this Agreement.

         "CARNIVAL MARKS" has the meaning set forth in SECTION 3.13(C) of this
Agreement.

         "CARNIVAL MATERIAL ADVERSE EFFECT" has the meaning set forth in SECTION
3.1 of this Agreement.

         "CARNIVAL RELATED MARK" has the meaning set forth in SECTION 6.13 of
this Agreement.

         "CARNIVAL SPECIAL MEETING" has the meaning set forth in SECTION 5.9 of
this Agreement.

         "CERCLA" has the meaning set forth in SECTION 3.6(B) of this Agreement.

         "CLAIM" has the meaning set forth in SECTION 3.13(C) of this Agreement.

         "CLOSING" has the meaning set forth in SECTION 7.1 of this Agreement.

         "CLOSING DATE" has the meaning set forth in SECTION 7.1 of this
Agreement.

         "CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.

         "COMMISSION" means the Securities and Exchange Commission.

         "COMMON STOCK" means the Common Stock of Pan Am, par value $.0001 per
share.

         "DOT" means the United States Department of Transportation or any
successor agency.

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         "ENCUMBRANCES" mean any and all liens, encumbrances, mortgages,
security interests, pledges, claims, equities and other restrictions or charges
of any kind or nature whatsoever.

         "ENVIRONMENTAL LAWS" means all federal, state, local or foreign laws
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or industrial, toxic or hazardous substances or wastes into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of chemicals,
pollutants, contaminants, or industrial, toxic or hazardous substances or
wastes, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations issued, entered, promulgated or approved
thereunder.

         "ERISA" has the meaning set forth in SECTION 3.16(D) of this Agreement.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

         "EXCHANGE SHARES" has the meaning set forth in ARTICLE II of this
Agreement.

         "EXCHANGE VALUATION" means $8.40 per share of Common Stock.

         "FAA" means the United States Federal Aviation Administration or any
successor agency.

         "FEDERAL AVIATION LAWS" means Subtitle VII of Title 49 of the United
States Code, as amended, and the rules and regulations promulgated thereunder.

         "FLORIDA BCA" means the Business Corporation Act of the State of
Florida, as amended.

         "GUARANTY" means, as to any Person, any contract, agreement or
understanding of such Person pursuant to which such Person guarantees the
indebtedness, liabilities or obligations of others, directly or indirectly, in
any manner, including agreements to purchase such indebtedness, liabilities or
obligations, or to supply funds to or in any manner invest in others, or to
otherwise assure the holder of such indebtedness, liabilities or obligations
against loss.

         "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

         "INDEMNIFYING PARTY" and "INDEMNIFIED PARTY" have the meaning set forth
in SECTION 6.3(C) of this Agreement.

         "INTANGIBLE PROPERTY" means, as to any Person, all foreign and domestic
trademarks, trademark rights, trade names, trade dress, trade name rights,
service marks, brands and copyrights (or pending registrations and applications
therefor) owned, used or controlled by such Person, and all other intellectual
property and proprietary rights, including trade secrets, technology, know-how
and other information owned, held or used by such Person.

         "IRS" means the Internal Revenue Service or any successor agency.

                                       -3-

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         "KNOWLEDGE" or "KNOWN" means, with respect to any representation or
warranty or other statement in this Agreement qualified by the knowledge of any
party, that such party has made a reasonable investigation as to the matters
that are the subject of such representation, warranty or other statement. Where
reference is made to the knowledge of any party, such reference shall mean (i)
with respect to Pan Am, the actual knowledge of any of Martin R. Shugrue, Jr.,
John J. Ogilby, Jr., Robert Coile or John J. Sicilian following such
investigation and (ii) with respect to AHC or Carnival, shall mean the actual
knowledge of any of Micky Arison, Reuven Wertheim, Ray Vecci, Lew Graham or
Howard Frank following such investigation. All of the parties referenced in
items (i) and (ii) in the preceding sentence shall be deemed to have conducted
the investigation required by this definition.

         "LIABILITIES" has the meaning set forth in SECTION 6.3(A) of this
Agreement.

         "LICENSES" has the meaning set forth in SECTION 3.14 of this Agreement.

         "MARKS" has the meaning set forth in SECTION 4.13(C) of this Agreement.

         "MERGER" has the meaning set forth in Article II of this Agreement.

         "PAN AM FINANCIAL STATEMENTS" has the meaning set forth in SECTION
4.5(B) of this Agreement.

         "PAN AM FINANCINGS AND ACQUISITIONS" means the borrowing of money,
incurrence of debt, leasing of property or equipment, issuance of securities
(including, without limitation, pursuant to the Private Placement Memorandum),
acquisition of real property, equipment, or other assets, or the merger
consolidation or acquisition of other businesses by, or on behalf of, or
otherwise involving Pan Am or any Subsidiary. Pan Am Financings and Acquisitions
shall also include the taking of action relating to corporate governance issues,
such as classifying Pan Am Board of Directors and adopting various anti-takeover
provisions.

         "PAN AM MATERIAL ADVERSE EFFECT" has the meaning set forth in SECTION
4.1 of this Agreement.

         "PAN AM MATERIAL AGREEMENTS" has the meaning set forth in SECTION 4.17
of this Agreement.

         "PAN AM PENSION PLAN" has the meaning set forth in SECTION 4.16(D) of
this Agreement.

         "PAN AM PLANS" has the meaning set forth in SECTION 4.16(D) of this
Agreement.

         "PAN AM RELATED PARTY" and "PAN AM RELATED PARTIES" have the meanings
set forth in SECTION 4.18 of this Agreement.

         "PAN AM SEC REPORTS" has the meaning set forth in SECTION 4.5(A) of
this Agreement.

         "PAN AM SPECIAL MEETING" has the meaning set forth in SECTION 5.9 of
this Agreement.

         "PAN AM WELFARE PLAN" has the meaning set forth in SECTION 4.16(D) of
this Agreement.

         "PBGC" has the meaning set forth in SECTION 3.16(D) of this Agreement.

         "PERSON" means any natural person, corporation, unincorporated
organization, partnership, association, joint stock company, joint venture,
trust or government, or any agency or political subdivision of any government,
or any other entity.

                                       -4-

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         "PRIVATE PLACEMENT MEMORANDUM" means that certain Private Placement
Memorandum of Pan Am, pursuant to which Pan Am is anticipated to seek to raise
funds for Pan Am.

         "PROXY STATEMENT" means the proxy statement of Pan Am relating to the
Common Stock to be issued in connection with the Merger.

         "REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in SECTION
6.16 of this Agreement.

         "REGISTRATION STATEMENT" means the registration statement(s) of Pan Am
on Form S-3 (or such other form available) filed to register the Shareholders'
resale of the Exchange Shares under the Securities Act.

         "REVOLVING LINE OF CREDIT" has the meaning set forth in SECTION 7.3(F)
of this Agreement.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

         "SHAREHOLDERS" mean Reuven Wertheim, A. Daniel Ratti, Micky Arison and
the Trust.

         "SUBSIDIARY" of any Person means any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of 50% or more, or any Person which may be controlled, directly or
indirectly, by such Person, whether through the ownership of voting securities,
by contract, or otherwise.

         "TAX" means any federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, transportation, transportation excise, registration, value added,
documentary stamp, excise, natural resources, severance, stamp, occupation,
premium, windfall profit, environmental, customs, duties, real property,
personal property, capital stock, social security, unemployment, disability,
payroll, license, employee or other withholding, or other tax or governmental
charge, of any kind whatsoever, including any interest, penalties or additions
to tax or additional amounts in respect of the foregoing; the foregoing shall
include any transferee or secondary liability for a Tax and any liability
assumed by agreement or arising as a result of being (or ceasing to be) a member
of any affiliated group (or being included (or required to be included) in any
tax return relating thereto).

         "TERMINATION DATE" has the meaning set forth in SECTION 7.5 of this
Agreement.

         "TRUST" means the Micky Arison 1995 Air Holding Trust, which is the
sole shareholder of AHC.

         "VOTING AGREEMENTS" has the meaning set forth in SECTION 6.9 of this
Agreement.

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<PAGE>

                                   ARTICLE II

                                   THE MERGER

         Subject to the terms and conditions of this Agreement, Acquisition will
be merged with and into Carnival (the "MERGER") in accordance with the Florida
BCA. Carnival shall be the surviving corporation of the Merger. The Merger shall
become effective upon the filing of the Articles and Agreement of Merger,
substantially in the form set forth in EXHIBIT A hereto, with the Secretary of
State of the State of Florida in accordance with Section 607.1105 of the Florida
BCA.

         The consideration for the Merger shall consist of the delivery of
9,523,810 shares of Common Stock upon the Merger (the "EXCHANGE SHARES").

                                   ARTICLE III

               REPRESENTATIONS AND WARRANTIES OF AHC AND CARNIVAL

         In order to induce Pan Am and Acquisition to enter into this Agreement
and to consummate the transactions contemplated hereby, AHC and Carnival make
the representations and warranties set forth below to Pan Am and Acquisition.

         3.1 ORGANIZATION. Each of AHC and its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
state or country of incorporation. Each of AHC and its Subsidiaries is duly
qualified to transact business as a foreign corporation in all jurisdictions
where the ownership or leasing of its properties or the conduct of its business
requires such qualification except where the failure to be so qualified would
not have a material adverse effect on the financial condition, results of
operations, assets, liabilities, prospects or business of AHC and its
Subsidiaries on a consolidated basis (a "CARNIVAL MATERIAL ADVERSE EFFECT").
Each jurisdiction in which AHC or any of its Subsidiaries is qualified to
transact business as a foreign corporation is listed on SCHEDULE 3.1. Each of
AHC and its Subsidiaries has the corporate authority to (i) own or lease and
operate its properties and (ii) conduct its business as presently conducted.
Each of AHC and Carnival has the corporate authority to execute, deliver and
perform this Agreement and the Articles and Agreement of Merger. Carnival is a
"citizen of the United States" within the meaning of 49 U.S.C. ss. 40102(a)(15)
and is an "air carrier" certified under Chapter 411 and Section 44705 of 49
U.S.C.

         3.2 AUTHORIZATION; ENFORCEABILITY. The execution, delivery and
performance of this Agreement and the Articles and Agreement of Merger by AHC
and Carnival and the consummation by AHC and Carnival of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of AHC and Carnival. Each of the Shareholders is
authorized to execute and deliver this Agreement. This Agreement and the
Articles and Agreement of Merger have been duly executed and delivered by AHC
and Carnival, and constitute the legal, valid and binding obligations of AHC,
Carnival and each of the Shareholders, enforceable against them in accordance
with their terms, except to the extent that their enforcement is limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights generally or by general principles of
equity.

         3.3 NO VIOLATION OR CONFLICT. Except as set forth on SCHEDULE 3.3, the
execution, delivery and performance by the Shareholders, AHC and Carnival of
this Agreement, and the Articles and Agreement of Merger by AHC and Carnival,
and the consummation by AHC and Carnival of the

                                       -6-

<PAGE>

transactions contemplated hereby and thereby: (i) do not and will not (subject
to obtaining the consents contemplated by SECTION 3.4 hereof) violate or
conflict with any provision of law or regulation, the result of which could
reasonably be expected to cause, individually or in the aggregate, a Carnival
Material Adverse Effect or any writ, order, judgment or decree of any court or
governmental or regulatory authority specifically naming AHC or any of its
Subsidiaries or any Shareholder, or any provision of AHC's or Carnival's
Articles of Incorporation or Bylaws; and (ii) do not and will not, with or
without the passage of time or the giving of notice, result in the breach of, or
constitute a default, cause the acceleration of performance, permit the
unilateral modification or termination of, or require any consent under, or
result in the creation of any lien, charge or encumbrance upon any property or
assets of any of the Shareholders, AHC or any of its Subsidiaries pursuant to,
any material instrument or agreement to which any Shareholder, AHC or any of its
Subsidiaries is a party or by which any Shareholder, AHC or any of its
Subsidiaries or their respective properties may be bound or affected.

         3.4 CONSENT OF GOVERNMENTAL AUTHORITIES. Other than in connection with
the HSR Act, the laws and regulations of the FAA and the DOT, and the state
securities laws of any jurisdiction, no consent, approval or authorization of,
or registration, qualification or filing with any federal, state or local
governmental or regulatory authority is required to be made by any Shareholder,
AHC or any of its Subsidiaries in connection with the execution, delivery or
performance by any Shareholder, AHC or Carnival of this Agreement or the
Articles and Agreement of Merger or the consummation by AHC and Carnival of the
transactions contemplated hereby and thereby.

         3.5 CARNIVAL STATEMENTS. AHC has previously delivered to Pan Am and
Acquisition a true and complete copy of the balance sheets of Carnival as of
June 30, 1995 and 1996, and the statements of income, cash flows and retained
earnings of Carnival for the fiscal years ended June 30, 1994, 1995 and 1996,
including any related notes, audited for the 1996, 1995 and 1994 fiscal years by
Carnival's independent certified public accountants pursuant to their audit of
the financial records of Carnival and the unaudited statement of income, cash
flows and retained earnings of Carnival for the period commencing June 30, 1996
and ending on January 31, 1997 (collectively, the "CARNIVAL FINANCIAL
STATEMENTS"). Except as indicated on SCHEDULE 3.5, the Carnival Financial
Statements fairly present in all material respects Carnival's financial
condition, assets, liabilities, equity and results of operations at the dates
and for the periods specified in those statements in accordance with generally
accepted accounting principles consistently applied with prior periods (subject
in the case of the unaudited statement, to normal nonmaterial year-end audit
adjustments and the absence of notes). Other than as disclosed by the Carnival
Financial Statements, or on SCHEDULE 3.5, SCHEDULE 3.17 or executory contractual
obligations not required to be disclosed on SCHEDULE 3.17 hereto, neither AHC
nor Carnival has any liabilities, commitments or obligations (which reasonably
could be expected to be material to AHC and Carnival on a consolidated basis) of
any nature whatsoever, whether accrued, contingent or otherwise (other than
liabilities, commitments or obligations incurred since January 31, 1997 in the
ordinary course of business consistent with past practices to Persons other than
Affiliates of AHC), and, to Carnival's knowledge, there is no reasonable basis
for assertion against AHC or Carnival or any of its Subsidiaries of any such
liability, commitment or obligation.

         3.6 COMPLIANCE WITH LAWS.

                  (a) Except as set forth on SCHEDULE 3.6(A), each of AHC and
its Subsidiaries is in compliance in all material respects with all federal,
state, local and foreign laws, ordinances, regulations, judgments, rulings,
orders and other legal requirements applicable to it, its operations or its
properties, including, without limitation, those relating to employment,
building, zoning, safety and health, and environmental matters. Except as
otherwise disclosed to Pan Am in writing, neither AHC nor any of its
Subsidiaries has received notification from any governmental or regulatory
authority asserting that it may

                                       -7-

<PAGE>

not be in compliance with or may have violated any of the laws or regulations
which said governmental or regulatory authority enforces, or threatening to
revoke any authorization, consent, approval, franchise, license or permit, and
neither AHC nor any of its Subsidiaries is subject to any agreement or consent
decree with any governmental or regulatory authority arising out of previously
asserted violations. Pan Am has been furnished with, or AHC or Carnival has made
available to Pan Am, true and correct copies of all records of inspections,
notices, reports, or audits of any of AHC's or its Subsidiaries' businesses and
properties during the last three years under applicable federal, state, foreign
and local laws and regulations or conducted by insurance companies, consultants
or other Persons, including without limitation, any conducted by the FAA, the
DOT or the Department of Defense; and all deficiencies noted therein have been
corrected. Pan Am has been furnished with, or AHC or Carnival has made available
to Pan Am, true and correct copies of all correspondence and other filings made
to or received from any governmental regulatory agency or authority (including,
but not limited to, the FAA and the DOT) regarding AHC or any of its
Subsidiaries within the last three years.

                  (b) Without limiting the generality of SECTION 3.6(A), except
as disclosed by the environmental audits and reports listed on SCHEDULE 3.6,
copies of which have heretofore been delivered to Pan Am and Acquisition, or as
otherwise set forth on SCHEDULE 3.6, there are, with respect to AHC and its
Subsidiaries, no past or present violations of any laws or regulations
promulgated by the FAA or the DOT or of any Environmental Laws, releases of any
material into the environment, actions, activities, circumstances, conditions,
events, incidents or contractual obligations which could reasonably be expected
to give rise to any common law or other legal liability in excess of $50,000,
including, without limitation, liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, and the rules and
regulations promulgated thereunder ("CERCLA"), or similar state or local laws.

         3.7 LEGAL PROCEEDINGS. Except as set forth on SCHEDULE 3.7, neither AHC
nor any of its Subsidiaries is, nor during the past three years has been, a
party to any pending or, to the knowledge of AHC, threatened, legal,
administrative or other proceeding, arbitration or investigation, which could
reasonably be expected to result in such party expending in excess of $100,000,
and neither AHC nor any Shareholder has any knowledge of any set of facts which
could reasonably be expected to result in any legal, administrative or other
proceeding, arbitration or investigation involving AHC or any of its
Subsidiaries. Except as set forth on SCHEDULE 3.7, neither any Shareholder, AHC
nor any of its Subsidiaries is subject to any order, injunction or other
judgment of any court or governmental authority. Each of the Shareholders, AHC
and its Subsidiaries is in compliance with the terms of each order, injunction
or other judgment set forth on SCHEDULE 3.7. None of the items set forth on
SCHEDULE 3.7 could, individually or in the aggregate, reasonably be expected to
have a Carnival Material Adverse Effect.

         3.8 BROKERS. Except as set forth in SCHEDULE 3.8 hereto, neither AHC
nor any of its Subsidiaries nor any Shareholder has employed any financial
advisor, broker or finder and none has incurred and none will incur any
broker's, finder's, investment banking or similar fees, commissions or expenses
to any other party in connection with the transactions contemplated by this
Agreement that could become an obligation of AHC or any Subsidiary or utilize
any of their respective funds in connection with payment thereof.

         3.9 ABSENCE OF MATERIAL ADVERSE CHANGES. Except as set forth on
SCHEDULE 3.9, from January 31, 1997 to the date hereof: (i) Carnival has in all
material respects conducted its business in the ordinary and usual course
consistent with past practices; (ii) there has been no material adverse change
in the financial condition, results of operations, assets, liabilities or
business of AHC or Carnival; and

                                       -8-

<PAGE>

(iii) AHC or Carnival has not engaged or agreed to engage in any of the actions
described in SECTION 5.1 (except as otherwise specifically permitted in SECTION
5.1).

         3.10 ARTICLES OF INCORPORATION, BYLAWS AND MINUTE BOOKS. True and
complete copies of the Articles of Incorporation, as amended to date, Bylaws, as
amended to date, and minute book of Carnival has been delivered or made
available by AHC to Pan Am. Such documents contain complete and accurate records
in all material respects and have embodied therein copies of minutes of all
meetings and actions by written consent of the incorporators, boards of
directors (and committees thereof) and shareholders of such entities from the
date of incorporation to the date hereof.

         3.11 CAPITALIZATION. As of the date hereof, all issued and outstanding
shares of AHC Common Stock are legally owned by the Trust and beneficially owned
by Micky Arison, free and clear of all Encumbrances subject to an Encumbrance
granted in connection with the Revolving Line of Credit, which Encumbrance will
be released at Closing. All of the outstanding shares of Carnival Common Stock
are owned by the Persons set forth on SCHEDULE 3.11 hereto, free and clear of
all Encumbrances subject to an Encumbrance granted in connection with the
Revolving Line of Credit, which Encumbrance will be released at Closing. As of
the Closing, all issued and outstanding shares of Carnival Common Stock will be
legally and beneficially owned by the Persons set forth on SCHEDULE 3.11 hereto,
free and clear of all Encumbrances. The authorized capital stock of Carnival
consists of 20,000,000 shares of Carnival Common Stock, of which 3,166,667
shares are issued and outstanding. All shares of AHC's and each of its
Subsidiaries' outstanding capital stock have been duly authorized, are validly
issued and outstanding, and are fully paid and nonassessable. No securities
issued by AHC or any of its Subsidiaries from the date of its incorporation to
the date hereof were issued in violation of any statutory or common law
preemptive rights or the registration requirements of federal or state
securities laws. There are no dividends which have accrued or been declared but
are unpaid on the capital stock of AHC or any of its Subsidiaries. All Taxes
required to be paid in connection with the issuance by AHC or any of its
Subsidiaries' capital stock have been paid. All of the outstanding shares of
capital stock of each of AHC's Subsidiaries other than Carnival are owned by
either AHC or another of its Subsidiaries, free and clear of all Encumbrances.
SCHEDULE 3.11 lists all Subsidiaries of AHC, their jurisdictions of
incorporation or organization, the number of shares of their respective capital
stock or other equity interests issued and outstanding, and the record owners
and the amounts and percentage of ownership of such shares of capital stock or
equity interests. Carnival has no Subsidiaries. Except as set forth on SCHEDULE
3.11, neither AHC nor any of its Subsidiaries has any equity investment in any
other corporation, association, partnership, joint venture or other entity.
Except as noted on SCHEDULE 3.11, each of AHC and its shareholders is a "citizen
of the United States" within the meaning of 49 U.S.C. ss. 40102(a)(15).

         3.12 RIGHTS, WARRANTS, OPTIONS. Except as set forth on SCHEDULE 3.12,
there are no outstanding: (i) securities or instruments convertible into or
exercisable for any of the capital stock or other equity interests of AHC or
Carnival issued by AHC or Carnival or any other Person or to which AHC or
Carnival or any shareholder thereof is a party; (ii) options, warrants,
subscriptions or other rights to acquire capital stock or other equity interests
of AHC or Carnival issued by AHC or Carnival or any other Person; or (iii)
commitments, agreements or understandings of any kind to which AHC or Carnival
or any shareholder thereof is a party, including employee benefit arrangements,
relating to the issuance or repurchase by AHC or Carnival of any capital stock
or other equity interests of AHC or Carnival, any such securities or instruments
convertible into or exchangeable for capital stock or other equity interests of
AHC or Carnival or any such options, warrants or rights.

                                       -9-

<PAGE>

         3.13 PROPERTIES.

                  (a) Except as set forth on SCHEDULE 3.13(A), Carnival has
valid title to all properties, interests in properties and assets (real and
personal) as reflected in the balance sheet of Carnival as of January 31, 1997
or acquired after January 31, 1997 (except nonmaterial properties, interests in
properties and assets sold or otherwise disposed of since January 31, 1997, in
the ordinary course of business to Persons other than Affiliates of AHC), free
and clear of all Encumbrances. Carnival does not own any real property. SCHEDULE
3.13(A) lists each piece of real property leased or utilized by Carnival, with
obligations remaining in excess of $50,000, including the owner or lessor
thereof, the location thereof and the use to which it is put by Carnival. On the
Closing Date, AHC will have no assets other than Carnival Common Stock. The
facilities and equipment of Carnival necessary to the operations of its business
are in good operating condition and repair sufficient for the operation of its
business as presently conducted, normal wear and tear excepted. Except for those
assets leased or licensed by Carnival, Carnival owns all assets used in its
business. All aircraft, engines, spare engines and spare parts owned, leased or
in the possession or control of Carnival are in sound operating condition,
normal wear and tear excepted, except for those engines, spare engines and spare
parts under repair or overhaul pursuant to Carnival's FAA approved maintenance
programs. A certificate of airworthiness for each aircraft of Carnival has been
duly issued pursuant to the Federal Aviation Laws and is in full force and
effect (except for the period of time any aircraft may be out of service and
such certificate is suspended in connection therewith), and each aircraft,
engine and spare engine, and spare part having a value, individually or together
with similar spare parts, in excess of $15,000, complies with all applicable FAA
airworthiness standards and is maintained in accordance with all applicable FAA-
approved maintenance programs. Each aircraft owned by Carnival is duly
registered in the name of Carnival in accordance with the Federal Aviation Laws,
and is not registered under the laws of any other country. Each aircraft used by
Carnival but owned by a third party is duly registered in the name of such third
party in accordance with all applicable Federal Aviation Laws and Carnival is
authorized to use such aircraft under all applicable Federal Aviation Laws.
Carnival's chief executive office and the location of its books and records is
set forth on SCHEDULE 3.13(A).

                  (b) SCHEDULE 3.13(B) sets forth a list of all owned and leased
aircraft, or aircraft under contract for future purchase or lease, a description
of the type and aircraft number of each such aircraft, the date of manufacture
of each such aircraft, the date Carnival placed such aircraft in service or
proposes to place such aircraft in service, the lease expiration date of such
aircraft, and a notation as to whether the aircraft (i) is owned or leased; (ii)
complies with Stage 3 noise level requirements of the Airport Noise and Capacity
Act of 1990 ("ANCA"); and (iii) requires refitting or repair to bring it into
compliance with any outstanding FAA aircraft requirements mandated by certain
Airworthiness Directives promulgated by the FAA (the "AIRWORTHINESS
DIRECTIVES"). SCHEDULE 3.13(B) also contains a list of all airline slots owned
or leased by Carnival and the terms upon which Carnival utilizes such slots. No
event has occurred which would subject any of such slots to recall by the FAA.

                  (c) SCHEDULE 3.13(C) sets forth a complete and accurate list
of all of Carnival's material owned Intangible Property registered with or
pending registration in the United States Patent and Trademark Office (the
"CARNIVAL MARKS"). AHC has delivered or made available to Pan Am correct and
complete copies of all material written documents in the possession of AHC and
its Subsidiaries or any of their Affiliates evidencing the Carnival Marks.
SCHEDULE 3.13(C) sets forth, to the knowledge of AHC, all material unresolved
claims or conflicts with the rights of others (individually, a "CLAIM") relating
to any Intangible Property owned or used by Carnival. Except as set forth on
SCHEDULE 3.13(C), no interest in any such Intangible Property has been assigned,
transferred, licensed or sublicensed by AHC or Carnival to any other party
(including any Affiliates of AHC or Carnival), and, to the knowledge of AHC or
Carnival, no other license of any of such Intangible Property exists. Except as
set forth on SCHEDULE

                                      -10-

<PAGE>

3.13(C), to AHC's knowledge, (i) Carnival possesses all right, title and
interest in and to the Carnival Marks free and clear of any and all Encumbrances
and have rights to all other Intangible Property and (ii) the Intangible
Property is not subject to any outstanding order or Claim, nor is there any
action, suit, proceeding or investigation pending with respect thereto.

         3.14 GOVERNMENTAL AUTHORIZATIONS. AHC and its Subsidiaries have in full
force and effect all authorizations, consents, approvals, franchises,
certificates, operating authorities, takeoff and landing authorizations
(including "slots" at United States airports), licenses and permits required
under applicable law or regulation (collectively referred to as "LICENSES") for
the ownership of Carnival's properties and operation of its business as
presently operated. Except as set forth on SCHEDULE 3.14, none of the
transactions contemplated hereby could reasonably be expected to have an adverse
effect on the status of any such License or require AHC or any of its
Subsidiaries or Affiliates to obtain any additional License to continue to
operate the business of Carnival as presently conducted.

         3.15 INSURANCE. SCHEDULE 3.15 sets forth a list and description of all
insurance policies existing as of the date hereof providing insurance coverage
of any nature to Carnival. All such policies are in full force and effect.

         3.16 EMPLOYMENT MATTERS.

                  (a) LABOR RELATIONS. Except as set forth on SCHEDULE 3.16(A),
none of the employees of AHC or any of its Subsidiaries is represented by any
labor union, and neither AHC nor any of its Subsidiaries is subject to any labor
or collective bargaining agreement. Except as set forth on SCHEDULE 3.16(A),
none of the employees of AHC or any of its Subsidiaries is known by AHC to be
engaged in organizing any labor union or other employee group that is seeking
recognition as a bargaining unit. AHC and its Subsidiaries have not experienced
any strike, work stoppage or labor disturbance with any group of employees, and
to AHC's knowledge, no set of facts exists which could reasonably be expected to
lead to any of the foregoing events.

                  (b) EMPLOYMENT POLICIES. Except as set forth on SCHEDULE
3.16(B), AHC has provided to Pan Am and Acquisition all of AHC's and its
Subsidiaries' employee policies (written or otherwise), employee manuals or
other written statements of rules or policies concerning employment.

                  (c) EMPLOYMENT AGREEMENTS. Except as set forth on SCHEDULE
3.16(C), there are no employment, consulting, severance or indemnification
arrangements, agreements, or to the knowledge of Carnival, material
understandings between AHC or any of its Subsidiaries and any officer, director,
consultant or employee. Except as set forth on SCHEDULE 3.16(C) or as required
by the WARN Act, the terms of employment or engagement of all employees, agents,
consultants and professional advisors of AHC or any of its Subsidiaries are such
that their employment or engagement may be terminated by not more than two
weeks' notice given at any time without liability for payment of compensation or
damages and neither AHC nor any of its Subsidiaries has entered into any
agreement or arrangement for the management of its business or any part thereof
other than with its directors or employees.

                  (d) EMPLOYEE BENEFIT PLANS. SCHEDULE 3.16(D) sets forth a
complete list of all pension, retirement, stock purchase, stock bonus, stock
ownership, stock option, profit sharing, savings, medical, disability,
hospitalization, insurance, deferred compensation, bonus, incentive, welfare or
any other employee benefit plan, policy, agreement, commitment or arrangement
maintained by or binding upon AHC or any or all of its Subsidiaries for any of
their directors, officers, consultants, employees or former employees (the "AHC
PLANS"). SCHEDULE 3.16(D) also identifies each AHC Plan which constitutes an
"employee pension benefit plan" ("AHC PENSION PLAN") or an "employee welfare
benefit plan" ("AHC

                                      -11-

<PAGE>

WELFARE PLAN"), as such terms are defined in the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder ("ERISA"). None of the AHC Plans is a "multiemployer plan," as such
term is defined in ERISA, or is subject to Title IV of ERISA.

         AHC and its Subsidiaries have delivered to Pan Am or its Subsidiaries
current, accurate and complete copies of each AHC Plan (including all other
instruments relating thereto) and summary plan descriptions therefor and, to the
extent applicable, copies of their most recent (i) IRS determination letter and
any outstanding request for a determination letter; (ii) Form 5500 and attached
Schedule B (including any related actuarial valuation report) with respect to
the last three plan years for each AHC Plan; (iii) certified financial
statements; (iv) attorney's response to an auditor's request for information;
(v) collective bargaining agreements or other such contracts; (vi) Form 5310 and
any related filings with the Pension Benefit Guaranty Corporation or any
successor agency (the "PBGC") with respect to the last three plan years for each
AHC Plan subject to Title IV of ERISA; (vii) ruling letter and any outstanding
request for a ruling letter with respect to the tax-exempt status of any
voluntary employees' beneficiary association which is implementing such AHC
Plan; and (viii) general notification to employees of their rights under Code
Section 4980B and form of letter(s) distributed upon the occurrence of a
qualifying event described in Code Section 4980B, in the case of a AHC Plan that
is a "group health plan" as defined in Code Section 5000(b)(1).

         Each AHC Pension Plan purporting to be is qualified under Section
401(a) of the Code, and each such plan remains so qualified; and to AHC's
knowledge, no facts or circumstances exist which could result in the revocation
of such qualification. Each AHC Welfare Plan which is intended to meet the
requirements for tax-favored treatment under Subchapter B of Chapter 1 of the
Code meets such requirements. Each AHC Plan has been administered in all
materials respects in accordance with its terms and the Code, and each AHC
Pension Plan and AHC Welfare Plan has been administered in all material respects
in accordance with ERISA. No facts or circumstances exist which could reasonably
to be expected to give rise to any liability of AHC or any of its Subsidiaries
to the PBGC or which could reasonably be anticipated to result in any claims
being made against AHC, Pan Am or any Subsidiary thereof by the PBGC. The assets
of each AHC Plan are at least equal in value to the present value of the accrued
benefits of participants of such Plan. No facts or circumstances exist which
could reasonably be expected to give rise to any liability of any AHC Plan, AHC,
Pan Am or any Subsidiary thereof to any other Person. AHC has paid all amounts
required under applicable law, any AHC Pension Plan and any AHC Welfare Plan to
be paid as a contribution to each AHC Pension Plan and AHC Welfare Plan through
the date hereof. To the extent required by law, AHC has set aside adequate
reserves to meet contributions which are not yet due under any AHC Pension Plan
or AHC Welfare Plan. Neither AHC, any of its Subsidiaries, nor any other Person
has engaged in any transaction or taken any other action with respect to any AHC
Plan which would subject AHC, Pan Am or any Subsidiary thereof to: (i) any Tax,
penalty or liability for prohibited transactions under ERISA or the Code; (ii)
any Tax under Code Sections 4971, 4972, 4976, 4977 or 4979; or (iii) a penalty
under ERISA Sections 502(c) or 502(l). None of AHC or any of its Subsidiaries,
or any director, officer or employee of AHC or any of its Subsidiaries, to the
extent it or he is a fiduciary with respect to any AHC Pension Plan or AHC
Welfare Plan, has breached any of its or his responsibilities or obligations
imposed upon fiduciaries under ERISA or the Code or which could result in any
claim being made under, by or on behalf of any AHC Pension Plan or AHC Welfare
Plan or any participant or beneficiary thereof. Each AHC Welfare Plan which is a
group health plan within the meaning of Code Section 5000(b)(1) complies in all
material respects with and in each and every case has complied in all material
respects with the applicable requirements of Code Section 4980B and Part 6 of
Title I of ERISA and does not benefit retirees, except as otherwise required by
law. As of the date thereof, there was no accrued vacation or sick leave payable
to the employees of AHC or any Subsidiary which is not reflected in the AHC
Financial Statements.

                                      -12-

<PAGE>

                  (e) PERSONNEL. SCHEDULE 3.16(E) sets forth: (i) the names of
all directors and officers of Carnival; and (ii) the names and job designations
of all employees of Carnival whose cash compensation exceeds $75,000 per annum.
Except as disclosed in the Carnival Financial Statements and except for unpaid
base compensation accrued in the ordinary course of business consistent with
past practice since January 31, 1997, there are no material sums due to any of
Carnival's employees.

         3.17 MATERIAL AGREEMENTS.

                  (a) SCHEDULE 3.17 sets forth a list of all written and oral
agreements, arrangements or commitments (collectively, the "AHC MATERIAL
AGREEMENTS") to which Carnival is a party or by which it or any of its
respective assets are bound which are material to the financial position or
results of operations of Carnival on a consolidated basis, including, but not
limited to: (i) contract, commitment, agreement or relationship resulting in a
commitment or potential commitment for expenditure or other obligation or
potential obligation, or which provides for the receipt or potential receipt,
involving in excess of $100,000; (ii) contract or commitment for the employment
or retention of any employee, consultant or agent or any other type of contract
with any employee, consultant or agent providing for annual payments in excess
of $100,000; (iii) indenture, mortgage, promissory note, loan agreement,
guarantee or other agreement or commitment relating to the borrowing of money,
or encumbrance of assets; (iv) licensing or royalty agreements or agreements
providing for other similar rights or agreements with third parties relating to
the supply or use of products or materials or any intellectual property; (v) any
plan of a type referenced in SECTION 3.16(D); (vi) agreements which restrict
Carnival from engaging in any line of business or from competing with any other
Person anywhere in the world; (vii) arrangements for the sale of any of the
assets, property or rights of Carnival, in excess of $100,000, except for
agreements to sell products or services in the ordinary course of business
consistent with past practices; (viii) agreement, contract or arrangement with
any Affiliate of AHC or any of its Subsidiaries or any Affiliate of any officer,
director or employee of AHC or any of its Subsidiaries which is nonterminable
without penalty and without greater than 30 days notice; (ix) lease of or
agreement to purchase real property; (x) any material indemnification,
contribution or similar agreement or arrangement pursuant to which AHC or any of
its Subsidiaries may be required to make any indemnification or contribution to
any other Person except to the extent provided in the Articles of Incorporation
or Bylaws of AHC or Carnival as in effect on the date hereof; (xi) agreement
relating to the lease or purchase of aircraft, material travel agency
arrangements, agreements relating to procuring reservations, code sharing
arrangements, interline arrangements, interchange arrangements, baggage
handling, chartering of airlines, purchase of fuel, maintenance of aircraft
equipment or any other outsourcing agreement; or (xii) any other material
contract, agreement or instrument which cannot be terminated without penalty to
AHC and its Subsidiaries, upon the provision of not greater than 30 days notice.

                  (b) Except as set forth on SCHEDULE 3.17, all AHC Material
Agreements have been entered into on an "arms-length" basis with parties who are
not Affiliates of AHC. The AHC Material Agreements are each in full force and
effect and are the valid and legally binding obligations of AHC or the
applicable Subsidiary which is a party to same and, to AHC's knowledge, have not
been breached by any of the other parties thereto and are valid and binding
obligations of the other parties thereto. Neither AHC nor any of its
Subsidiaries is in default under its Articles or Certificate of Incorporation or
Bylaws or in default or alleged default under any Material Agreement to which it
is a party, and no event has occurred which with the giving of notice or lapse
of time or both would constitute such a default. Except as set forth on SCHEDULE
3.17, consummation of the transactions contemplated hereby will not constitute a
breach or default of any Material Agreements or require any consent thereunder.

                                      -13-

<PAGE>

         3.18 LIST OF ACCOUNTS. SCHEDULE 3.18 sets forth, as of the date hereof:
(i) the name and address of each bank or other institution in which Carnival
maintains an account (cash, securities or other) or safe deposit box; (ii) the
name and phone number of the contact person at such bank or institution; (iii)
the account number of the relevant account and a description of the type of
account; and (iv) the persons authorized to transact business in such accounts.

         3.19 MAJOR CUSTOMERS AND SUPPLIERS. Carnival has delivered to Pan Am a
list of its five largest customers and suppliers (measured by dollar volume)
during the fiscal year ended June 30, 1996, and the six months ended December
31, 1996, and with respect to each, the name and address, dollar volume involved
and nature of the relationship. None of the five largest customers or suppliers
of AHC or any of its Subsidiaries during the fiscal year ended June 30, 1996,
and the six months ended December 31, 1996, has (i) cancelled, suspended or
otherwise terminated its relationship with Carnival or (ii) to the knowledge of
Carnival, advised Carnival or any Affiliate of Carnival of its intention to
cancel, suspend or terminate its relationship or to significantly decrease its
purchases from or sales to Carnival or to materially and adversely change the
terms upon which it purchases or sells products or services to or from Carnival.
SCHEDULE 3.19 sets forth, for each of the last three full fiscal years of AHC
and the six months ended December 31, 1996, the revenues and percentage of
revenues of Carnival (on a consolidated basis) arising directly from package
bookings with Carnival Cruise and from arrangements with other Affiliates of
Carnival Cruise or AHC.

         3.20 RELATED PARTY TRANSACTIONS. Except as set forth on SCHEDULE 3.20
or reflected in the Carnival Financial Statements, no director, officer or
shareholder of AHC or any of its Subsidiaries, or to AHC's knowledge, any
employee of AHC or any of its Subsidiaries (individually an "AHC RELATED PARTY"
and collectively the "AHC RELATED PARTIES") or any Affiliate of any AHC Related
Party: (i) owns, directly or indirectly, any interest in any Person which is a
competitor of Carnival, or a supplier of Carnival, except for the ownership of
not more than 2% of the outstanding stock of any company listed by a national
stock exchange or the Nasdaq National Market; (ii) owns, directly or indirectly,
in whole or in part, any material property, asset (other than cash) or right,
real, personal or mixed, tangible or intangible, which is associated with or
necessary in the operation of the business of Carnival, as presently conducted;
or (iii) has an interest in or is, directly or indirectly, a party to any
contract, agreement, lease or arrangement to which Carnival is bound or is a
party.

         3.21 TAX MATTERS.

                  (a) All federal, state, local and foreign Tax returns and Tax
reports, if any, required to be filed with respect to the business or assets of
AHC and its Subsidiaries have been filed with the appropriate governmental
agencies in all jurisdictions in which such returns and reports are required to
be filed; all of the foregoing as filed are true, correct and complete, and
reflect accurately all liability for Taxes of AHC and its Subsidiaries for the
periods for which such returns relate; and all amounts shown as owing thereon
have been paid. Except as set forth on SCHEDULE 3.21, none of such returns or
reports have been audited by any governmental authority.

                  (b) All Taxes, if any, payable by AHC and its Subsidiaries or
relating to or chargeable against any of their assets, revenues or income
through December 31, 1996, were fully paid by such date or provided for by
adequate reserves in the AHC Financial Statements, and all similar items due
through the Closing will have been fully paid by that date or provided for by
adequate reserves on the books of AHC and its Subsidiaries.

                  (c) None of AHC or any of its Subsidiaries will have any
liability with respect to any such Taxes including, but not limited to, interest
and/or penalties, in excess of the amount so paid or the

                                      -14-

<PAGE>

reserves so established on the books of AHC and its Subsidiaries. Neither AHC
nor any of its Subsidiaries is delinquent in the payment of any Tax. No
deficiencies for any Tax have been asserted against AHC or any of its
Subsidiaries with respect to any Taxes which have not been paid, settled or
adequately provided for and there exists no basis for the making of any such
deficiency, assessment or charge.

                  (d) Neither AHC nor any of its Subsidiaries has waived any
restrictions on assessment or collection of Taxes or consented to the extension
of any statute of limitations relating to federal, state, local or foreign
taxation.

         3.22 GUARANTIES. Except as set forth on SCHEDULE 3.20, neither AHC nor
any of its Subsidiaries is a party to any Guaranty.

         3.23 ABSENCE OF CERTAIN BUSINESS PRACTICES. No officer, director or
shareholder of AHC or any of its Subsidiaries and, to AHC's knowledge, no
employee or agent of AHC or any of its Subsidiaries and no other Person acting
at the direction of any of the foregoing or associated or Affiliated with AHC or
any of its Subsidiaries and no other Person for whom AHC or any of its
Subsidiaries may be responsible, acting alone or together, has (i) received,
directly or indirectly, any rebates, payments, commissions, promotional
allowances or any other economic benefits, regardless of their nature or type
from any customer, supplier, trading company, shipping company, governmental
employee or other Person with whom AHC or any of its Subsidiaries has done
business directly or indirectly, or (ii) directly or indirectly, given or agreed
to give any gift or similar benefit to any customer, supplier, trading company,
shipping company, governmental employee or other Person who is or may be in a
position to help or hinder the business of AHC and any of its Subsidiaries (or
assist AHC or any of its Subsidiaries in connection with any actual or proposed
transaction), in either event which (a) could reasonably be expected to subject
AHC or any of its Subsidiaries to any damage or penalty in any civil, criminal
or governmental litigation or proceeding, or (b) if not given, could reasonably
be expected to have a material adverse effect on the results of operations,
assets, business, operations or prospects of AHC or any of its Subsidiaries or
may lead to suit or penalty in any private or governmental litigation or
proceeding.

         3.24 RWDR TRANSACTION. Immediately prior to the RWDR Transaction, AHC's
sole asset will be Carnival Common Stock which shall be owned by AHC free and
clear of any and all Encumbrances, and which will be fully paid and
nonassessable. Immediately prior to the RWDR Transaction, AHC will have no
liabilities, commitments or obligations of any nature whatsoever whether
accrued, contingent or otherwise, and Carnival shall not acquire any such
liabilities, commitments or obligations of any nature whatsoever, whether
actual, contingent or otherwise, by virtue of or arising from such transaction.
No asset or right utilized by Carnival in connection with its operations is or
has been owned by AHC.

         3.25 AHC SPINOFF AND RWDR TRANSACTION LIABILITY. Neither the AHC
Spinoff nor the RWDR Transaction has nor will it result in or impose any
liability, commitment or obligation of any nature whatsoever, whether accrued,
contingent or otherwise, to or upon Carnival, including without limitation, any
Tax liability.

         3.26 INTENTIONALLY OMITTED.

         3.27 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information relating to AHC or Carnival to be supplied by Carnival for use in
the Proxy Statement and/or the Registration Statement, at the respective times
that the Registration Statement, the Proxy Statement or any amendment thereto is
filed with the Commission, or is declared effective by the Commission, or at the
respective times that

                                      -15-

<PAGE>

the Proxy Statement is mailed to Pan Am's shareholders and at the time the Pan
Am shareholders' meeting takes place (subject, if required, to a reasonable
period of time for the parties hereto to take such action necessary to
supplement or amend the Proxy Statement), will contain any untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time prior
to the Closing Date, an event or circumstance relating to AHC or Carnival, or
any of their respective officers, directors or shareholders, should be
discovered by AHC that should be set forth in an amendment or a supplement to
the Registration Statement or Proxy Statement, AHC shall promptly inform Pan Am.

         3.28 POOLING-OF-INTERESTS. Except as set forth on SCHEDULE 3.28, no
facts or circumstances exist with respect to AHC, Carnival or any Subsidiary
which could reasonably be expected to disqualify Pan Am's acquisition of
Carnival pursuant to this Agreement for pooling-of-interests accounting
treatment.

         3.29 INTENTIONALLY LEFT BLANK.

         3.30 INVESTMENT REPRESENTATIONS.

                  (a) The Shareholders understand and acknowledge that the
Common Stock which is to be received by them has not been registered under the
Securities Act. The Shareholders hereby represent and warrant that (i) the
Common Stock is being acquired for investment for the Shareholders' own account,
and not as a nominee or agent and not with a view to the resale or distribution
of all or any part of such shares, and the Shareholders have no present
intention of selling, granting any participation in or otherwise distributing
any of the Common Stock within the meaning of the Securities Act and (ii) the
Shareholders do not have any contracts, understandings, agreements or
arrangements with any Person to sell, transfer or grant participations to such
Person, with respect to any such Common Stock, in each case except for and as
contemplated by the Registration Rights Agreement.

                  (b) The Shareholders have knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the investment in the Common Stock. The Shareholders understand that an
investment in Pan Am represents a relatively high degree of risk and there is no
assurance that Pan Am's business or operations will be successful. The
Shareholders have considered carefully the risk factors attendant to an
investment in Pan Am and that, as a consequence of such risks, the Shareholders
could lose their entire investment in Pan Am.

                  (c) The Shareholders understand that they must bear the
economic risk of an investment in Pan Am for an indefinite period of time. The
Shareholders understand that the shares of Common Stock are characterized as
"restricted securities" under applicable securities laws since they are being
acquired in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Securities Act only in certain limited circumstances. The
Shareholders hereby represent that they understand the resale limitations
imposed by the Securities Act and the rules and regulations promulgated
thereunder and that as a consequence thereof it may not be possible for the
Shareholders to liquidate their investment in Pan Am or to transfer any of the
shares of Common Stock except pursuant to the Registration Rights Agreement.

                  (d) The Shareholders understand and agree that the
certificates evidencing the shares of Common Stock will bear an appropriate
legend evidencing the restricted nature of such shares and indicating that no
transfer of any of such shares may be made unless they are registered under the
Securities Act or an exemption from such registration is available, and that Pan
Am may instruct its

                                      -16-

<PAGE>

transfer agent not to transfer any such shares unless such transfer shall be
made in compliance with such legend.

         3.31 DISCLOSURE. The representations and warranties of AHC and Carnival
contained in this Agreement together with the Schedules hereto and the
information specifically reflected therein, taken as a whole, do not contain and
will not contain any untrue statement of a material fact and do not omit and
will not omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.

                                   ARTICLE IV

            REPRESENTATIONS AND WARRANTIES OF PAN AM AND ACQUISITION

         In order to induce AHC and Carnival to enter into this Agreement and to
consummate the transactions contemplated hereby, Pan Am and Acquisition make the
representations and warranties set forth below to AHC and Carnival.

         4.1 ORGANIZATION. Each of Pan Am and its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
state or country of incorporation. Each of Pan Am and its Subsidiaries is duly
qualified to transact business as a foreign corporation in all jurisdictions
where the ownership or leasing of its properties or the conduct of its business
requires such qualification except where the failure to be so qualified would
not have a material adverse effect on the financial condition, results of
operations, assets, liabilities, prospects or business of Pan Am and its
Subsidiaries on a consolidated basis (a "PAN AM MATERIAL ADVERSE EFFECT"). Each
jurisdiction in which Pan Am or any of its Subsidiaries is qualified to transact
business as a foreign corporation is listed on SCHEDULE 4.1. Each of Pan Am and
its Subsidiaries has the corporate authority to (i) own or lease and operate its
properties and (ii) conduct its business as presently conducted.

         4.2 AUTHORIZATION; ENFORCEABILITY. Each of Pan Am and Acquisition has
the corporate authority to execute, deliver and perform this Agreement and the
Articles and Agreement of Merger. The execution, delivery and performance of
this Agreement and the Articles and Agreement of Merger by Pan Am and
Acquisition and the consummation by Pan Am and Acquisition of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of Pan Am and Acquisition. This Agreement and the
Articles and Agreement of Merger have been duly executed and delivered by Pan Am
and Acquisition and constitute the legal, valid and binding obligations of Pan
Am and Acquisition, enforceable against them in accordance with their terms,
except to the extent that their enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally or by general principles of equity.

         4.3 NO VIOLATION OR CONFLICT. Except as set forth on SCHEDULE 4.3, the
execution, delivery and performance by Pan Am and Acquisition of this Agreement
and the Articles and Agreement of Merger and the consummation by Pan Am and
Acquisition of the transactions contemplated hereby and thereby: (i) do not and
will not (subject to obtaining the consents contemplated by SECTION 4.4 hereof)
violate or conflict with any provision of law or regulation, the result of
which, individually or in the aggregate, could reasonably be expected to cause a
Pan Am Material Adverse Effect, or any writ, order, judgment or decree of any
court or governmental or regulatory authority specifically naming Pan Am or any
of its Subsidiaries, or any provision of Pan Am's or Acquisition's Certificate
or Articles of Incorporation or Bylaws; and (ii) do not and will not, with or
without the passage of time or the giving of notice, result in the breach of, or
constitute a default, cause the acceleration of performance, permit

                                      -17-

<PAGE>

the unilateral modification or termination of, or require any consent under, or
result in the creation of any lien, charge or encumbrance upon any property or
assets of Pan Am or any of its Subsidiaries pursuant to, any material instrument
or agreement to which Pan Am or any of its Subsidiaries is a party or by which
Pan Am or any of its Subsidiaries or their respective properties may be bound or
affected.

         4.4 CONSENT OF GOVERNMENTAL AUTHORITIES. Other than in connection with
the HSR Act, the laws and regulations of the FAA and the DOT, and the state
securities laws of any jurisdiction, no consent, approval or authorization of,
or registration, qualification or filing with any federal, state or local
governmental or regulatory authority is required to be made by Pan Am or
Acquisition in connection with the execution, delivery or performance by Pan Am
or Acquisition of this Agreement or the Articles and Agreement of Merger or the
consummation by Pan Am or Acquisition of the transactions contemplated hereby
and thereby.

         4.5 EXCHANGE ACT REPORTS; FINANCIAL STATEMENTS.

                  (a) The Common Stock is registered under Section 12(b) of the
Exchange Act. Since January 1, 1995, Pan Am has timely filed all reports and
other documents required to be filed by it with the Commission under the
Exchange Act, including but not limited to proxy statements and reports on Form
10-KSB, Form 10-QSB and Form 8-K (collectively, with the Registration Statement
on Form S-4 (File No. 333-4350) of Frost Hanna Mergers Group, Inc., the "PAN AM
SEC REPORTS"). As of the respective dates they were filed with the Commission,
the Pan Am SEC Reports, including all documents incorporated by reference into
such reports, complied in all material respects with the rules and regulations
of the Commission and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

                  (b) Pan Am has delivered to AHC a true and complete copy of
its consolidated unaudited balance sheet, statement of income and cash flow as
of and for the fiscal year ended December 31, 1996 (the "PAN AM FINANCIAL
STATEMENTS"). Except as indicated in SCHEDULE 4.5, the Pan Am Financial
Statements fairly present in all material respects Pan Am's and its
Subsidiaries' financial condition, assets, liabilities, and equity and results
of operations, at the dates and for the period specified in that statement in
accordance with generally accepted accounting principles consistently applied
with prior periods, (subject to normal nonmaterial year-end audit adjustments
and the absence of notes). Other than as disclosed by the Pan Am Financial
Statements, the Pan Am SEC Reports or on SCHEDULE 4.5 or on SCHEDULE 4.17 or
executory contractual obligations not required to be disclosed on SCHEDULE 4.17
hereto, neither Pan Am nor any of its Subsidiaries has any liabilities,
commitments or obligations (which reasonably could be expected to be material to
Pan Am and its Subsidiaries on a consolidated basis) of any nature whatsoever,
whether accrued, contingent or otherwise (other than liabilities, commitments or
obligations incurred since December 31, 1996 in the ordinary course of business
consistent with past practices to Persons other than Affiliates of Pan Am), and,
to Pan Am's knowledge, there is no reasonable basis for assertion against Pan Am
or any of its Subsidiaries of any such liability, commitment or obligation.

         4.6 COMPLIANCE WITH LAWS.

                  (a) Each of Pan Am and its Subsidiaries is in compliance in
all material requests with all federal, state, local and foreign laws,
ordinances, regulations, judgments, rulings, orders and other legal requirements
applicable to it, its operations or its properties, including, without
limitation, those relating to employment, building, zoning, safety and health,
and environmental matters. Neither Pan Am nor any of its Subsidiaries has
received notification from any governmental or regulatory authority

                                      -18-

<PAGE>

asserting that it may not be in compliance with or may have violated any of the
laws or regulations which said governmental or regulatory authority enforces, or
threatening to revoke any authorization, consent, approval, franchise, license
or permit, and neither Pan Am nor any of its Subsidiaries is subject to any
agreement or consent decree with any governmental or regulatory authority
arising out of previously asserted violations. AHC has been furnished with or
Pan Am has made available to AHC true and correct copies of all records of
inspections, notices, reports or audits of any of Pan Am's or any of its
Subsidiaries' businesses or properties since incorporation under applicable
federal, state, foreign and local laws and regulations or conducted by insurance
companies, consultants or other Persons; and all deficiencies noted therein have
been corrected. AHC has been furnished with or Pan Am has made available to AHC
true and correct copies of all correspondence and other filings made to or
received from any governmental regulatory agency or authority (including, but
not limited to, the FAA and the DOT) regarding Pan Am or any of its Subsidiaries
since their incorporation.

                  (b) Without limiting the generality of SECTION 4.6(A), except
as disclosed by the environmental audits and reports listed on SCHEDULE 4.6 or
the Pan Am SEC Reports, copies of which have heretofore been delivered to AHC,
or as otherwise set forth on SCHEDULE 4.6, there are, with respect to Pan Am and
its Subsidiaries, no past or present violations of any laws or regulations
promulgated by the FAA or the DOT or any Environmental Laws, releases of any
material into the environment, actions, activities, circumstances, conditions,
events, incidents or contractual obligations which could reasonably be expected
to give rise to any common law or other legal liability in excess of $50,000,
including, without limitation, under CERCLA or similar state or local laws.

         4.7 LEGAL PROCEEDINGS. Except as set forth on SCHEDULE 4.7 or the Pan
Am SEC Reports, neither Pan Am nor any of its Subsidiaries is, nor since
incorporation has been, a party to any pending or, to the knowledge of Pan Am,
threatened, legal, administrative or other proceeding, arbitration or
investigation, which could reasonably be expected to result in such party
expending in excess of $100,000, and Pan Am has no knowledge of any set of facts
which could reasonably be expected to result in any legal, administrative or
other proceeding, arbitration or investigation involving Pan Am or any of its
Subsidiaries. Except as set forth on SCHEDULE 4.7, neither Pan Am nor any of its
Subsidiaries is subject to any order, injunction or other judgment of any court
or governmental authority. Each of Pan Am and its Subsidiaries is in compliance
with the terms of each order, injunction or other judgment set forth on SCHEDULE
4.7. Except as set forth on SCHEDULE 4.7, none of the items set forth on
SCHEDULE 4.7 could, individually or in the aggregate, reasonably be expected to
have a Pan Am Material Adverse Effect.

         4.8 BROKERS. Except for Lazard Freres & Co. and other financial
advisors of whom Pan Am shall advise AHC and Carnival, neither Pan Am nor any of
its Subsidiaries has employed any financial advisor, broker or finder and none
has incurred and none will incur any broker's, finder's, investment banking or
similar fees, commissions or expenses to any other party in connection with the
transactions contemplated by this Agreement.

         4.9 ABSENCE OF MATERIAL ADVERSE CHANGES. Except as set forth on
SCHEDULE 4.9 or the Pan Am SEC Reports, from December 31, 1996 to the date
hereof: (i) each of Pan Am and its Subsidiaries has in all material respects
conducted its businesses in the ordinary and usual course consistent with past
practices; (ii) there has been no material adverse change in the financial
condition, results of operations, assets, liabilities or business of Pan Am and
its Subsidiaries on a consolidated basis; and (iii) neither Pan Am nor any of
its Subsidiaries has engaged or agreed to engage in any of the actions described
in SECTION 5.1 (except as otherwise specifically permitted in SECTION 5.1).

                                      -19-

<PAGE>

         4.10 ARTICLES OF INCORPORATION, BYLAWS AND MINUTE BOOKS. True and
complete copies of the Articles of Incorporation, as amended to date, Bylaws, as
amended to date, and minute books of Pan Am and its Subsidiaries have been
delivered or made available by Pan Am to AHC. Such documents contain complete
and accurate records in all material respects and have embodied therein copies
of minutes of all meetings and actions by written consent of the incorporators,
boards of directors (and committees thereof) and shareholders of such entities
from the date of incorporation to the date hereof.

         4.11 CAPITALIZATION. As of the date hereof, the authorized capital
stock of Pan Am consists of 100,000,000 shares of Pan Am Common Stock, of which
10,920,191 shares are issued and outstanding. All shares of Pan Am's and each of
its Subsidiary's outstanding capital stock have been duly authorized, are
validly issued and outstanding, and are fully paid and nonassessable. No
securities issued by Pan Am or any of its Subsidiaries from the date of its
incorporation to the date hereof were issued in violation of any statutory or
common law preemptive rights or the registration requirements of federal or
state securities laws. There are no dividends which have accrued or been
declared but are unpaid on the capital stock of Pan Am or any of its
Subsidiaries. All Taxes required to be paid in connection with the issuance by
Pan Am or any of its Subsidiaries of Pan Am's and each of its Subsidiaries'
capital stock have been paid. All of the outstanding shares of capital stock of
each of Pan Am's Subsidiaries are owned by either Pan Am or another of its
Subsidiaries, free and clear of all Encumbrances. SCHEDULE 4.11 lists all
Subsidiaries of Pan Am, their jurisdictions of incorporation or organization,
the number of shares of their respective capital stock or other equity interests
issued and outstanding, and the record owners and the amounts and percentage of
ownership of such shares of capital stock or equity interests. Except as set
forth on SCHEDULE 4.11, neither Pan Am nor any of its Subsidiaries has any
equity investment in any other corporation, association, partnership, joint
venture or other entity. Pan Am has delivered to Carnival a true and correct
listing of its record shareholders as of approximately March 1, 1997.

         4.12 RIGHTS, WARRANTS, OPTIONS. Except as set forth on SCHEDULE 4.12 or
the Pan Am SEC Reports, there are no outstanding: (i) securities or instruments
convertible into or exercisable for any of the capital stock or other equity
interests of Pan Am or any of its Subsidiaries or any other Person issued by Pan
Am or any of its Subsidiaries or to which Pan Am or any of its Subsidiaries is a
party; (ii) options, warrants, subscriptions or other rights to acquire capital
stock or other equity interests of Pan Am or any of its Subsidiaries issued by
Pan Am or any of its Subsidiaries; or (iii) commitments, agreements or
understandings of any kind to which Pan Am or any of its Subsidiaries is a
party, including employee benefit arrangements, relating to the issuance or
repurchase by Pan Am or any of its Subsidiaries of any capital stock or other
equity interests of Pan Am or any of its Subsidiaries, any such securities or
instruments convertible into or exchangeable for capital stock or other equity
interests of Pan Am or any such options, warrants or rights. As of the date
hereof, Pan Am had reserved not more than 2,124,589 shares of Common Stock for
issuance upon exercise of outstanding stock options.

         4.13 PROPERTIES.

                  (a) Except as set forth in SCHEDULE 4.13(A) hereof, Pan Am or
one of its Subsidiaries has valid title to all properties, interests in
properties and assets (real and personal) as reflected in the consolidated
balance sheet of Pan Am as of December 31, 1996 or acquired after December 31,
1996 (except nonmaterial properties, interests in properties and assets sold or
otherwise disposed of since December 31, 1996 in the ordinary course of business
to Persons other than Affiliates of Pan Am), free and clear of all Encumbrances,
except for those Encumbrances listed on SCHEDULE 4.13(A) hereto. Neither Pan Am
nor any of its Subsidiaries own any real property. SCHEDULE 4.13(A) lists each
piece of real property, leased or utilized by Pan Am or any of its Subsidiaries,
with obligations remaining in excess of $50,000, including the owner or lessor
thereof, the location thereof and the use to which it is put by

                                      -20-

<PAGE>

Pan Am and/or any of its Subsidiaries. The facilities and equipment of Pan Am
and its Subsidiaries necessary to the operations of Pan Am's business are in
good operating condition and repair sufficient for the operation of the business
as presently conducted, normal wear and tear excepted. Except for those assets
leased or licensed by Pan Am or its Subsidiaries and required to be listed on
SCHEDULE 4.13(A), Pan Am or its Subsidiaries own all assets used in their
business. All aircraft, engines, spare engines and spare parts owned, leased or
in the possession or control of Pan Am or any of its Subsidiaries are in sound
operating condition, normal wear and tear excepted, except for those engines,
spare engines and spare parts under repair or overhaul pursuant to Pan Am's FAA
approved maintenance programs. A certificate of airworthiness for each aircraft
of Pan Am has been duly issued pursuant to the Federal Aviation Laws and is in
full force and effect (except for the period of time any aircraft may be out of
service and such certificate is suspended in connection therewith), and each
aircraft, engine and spare engine, and spare part having a value, individually
or together with similar spare parts, in excess of $15,000, of Pan Am or any of
its Subsidiaries complies with all applicable FAA airworthiness standards and is
maintained in accordance with all applicable FAA-approved maintenance programs.
Each aircraft owned by Pan Am is duly registered in the name of Pan Am in
accordance with the Federal Aviation Laws, and is not registered under the laws
of any other country. Each aircraft used by Pan Am but owned by a third party is
duly registered in the name of such third party in accordance with all
applicable Federal Aviation Laws and Pan Am is authorized to use such aircraft
under all applicable Federal Aviation Laws. Pan Am's chief executive office and
the location of its books and records is set forth on SCHEDULE 4.13(A).

                  (b) SCHEDULE 4.13(B) sets forth a list of all owned and leased
aircraft, or aircraft under contract for future purchase or lease, a description
of the type and aircraft number of each such aircraft, the date of manufacture
of each such aircraft, the date Pan Am placed such aircraft in service or
proposes to place such aircraft in service, the lease expiration date of such
aircraft, and a notation as to whether the aircraft (i) is owned or leased; (ii)
complies with Stage 3 noise level requirements of the ANCA; and (iii) requires
refitting or repair to bring it into compliance with any outstanding FAA
aircraft requirements mandated by certain Airworthiness Directives promulgated
by the FAA. SCHEDULE 4.13(B) also contains a list of all airline slots owned or
leased by Pan Am or any of its Subsidiaries, and the terms upon which Pan Am or
its Subsidiaries utilize such slots. No event has occurred which would subject
any of such slots to recall by the FAA.

                  (c) SCHEDULE 4.13(C) sets forth a complete and accurate list
of all of Pan Am's and its Subsidiaries' material owned Intangible Property
registered with or pending registration in the United States Patent and
Trademark Office (the "MARKS"). Pan Am has delivered or made available to AHC
correct and complete copies of all material written documents in the possession
of Pan Am and its Subsidiaries or any of their Affiliates evidencing the Marks.
SCHEDULE 4.13(C) sets forth, to the knowledge of Pan Am, all material unresolved
Claims relating to such Intangible Property owned or used by Pan Am. Except as
set forth on SCHEDULE 4.13(C), no interest in any such Intangible Property has
been assigned, transferred, licensed or sublicensed by Pan Am or its
Subsidiaries to any other party (including any Affiliates of Pan Am or its
Subsidiaries), and, to the knowledge of Pan Am and its Subsidiaries, no other
license of any of such Intangible Property exists. Except as set forth on
SCHEDULE 4.13(C), to the knowledge of Pan Am, no other Person is infringing,
violating or misappropriating any interest it acquired to the Intangible
Property by virtue of an assignment from Eclipse Holdings, Inc. Except as set
forth on SCHEDULE 4.13(C), to Pan Am's knowledge, (i) Pan Am or its Subsidiaries
possess all right, title and interest in and to the Marks free and clear of any
and all liens, security interests or encumbrances and have rights to all other
Intangible Property and (ii) the Intangible Property is not subject to any
outstanding order or Claim, nor is there any action, suit, proceeding or
investigation pending with respect thereto. Notwithstanding the foregoing, the
parties hereto acknowledge and understand that neither Pan Am nor its
Subsidiaries have registered, renewed or maintained registration for such
Intangible Property in many foreign territories and/or jurisdictions and that
certain of the

                                      -21-

<PAGE>

registrations of such Intangible Property may be vulnerable to cancellation for
various reasons in certain foreign jurisdictions.

         4.14 GOVERNMENTAL AUTHORIZATIONS. Pan Am and its Subsidiaries have in
full force and effect all Licenses for the ownership of Pan Am's and its
Subsidiaries' properties and operation of their businesses as presently
operated. Except as set forth on SCHEDULE 4.14, none of the transactions
contemplated hereby could reasonably be expected to have an adverse effect on
the status of any such License. Except as set forth on SCHEDULE 4.14, none of
the transactions contemplated hereby could reasonably be expected to have an
adverse effect on the status of any such License or require Pan Am or any of its
Subsidiaries or Affiliates to obtain any additional License to continue to
operate the business of Pan Am and its Subsidiaries as presently conducted.

         4.15 INSURANCE. SCHEDULE 4.15 sets forth a list and description of all
insurance policies existing as of the date hereof providing insurance coverage
of any nature to Pan Am or any of its Subsidiaries. All such policies are in
full force and effect.

         4.16 EMPLOYMENT MATTERS.

                  (a) LABOR RELATIONS. Except as set forth on SCHEDULE 4.16(A),
none of the employees of Pan Am or any of its Subsidiaries is represented by any
labor union, and neither Pan Am nor any of its Subsidiaries is subject to any
labor or collective bargaining agreement. Except as set forth on SCHEDULE
4.16(A), none of the employees of Pan Am or any of its Subsidiaries is known by
Pan Am to be engaged in organizing any labor union or other employee group that
is seeking recognition as a bargaining unit. Pan Am and its Subsidiaries have
not experienced any strike, work stoppage or labor disturbance with any group of
employees, and to Pan Am's knowledge, no set of facts exists which could
reasonably be expected to lead to any of the foregoing events.

                  (b) EMPLOYMENT POLICIES. Except as set forth on SCHEDULE
4.16(B), Pan Am has provided to AHC all of Pan Am's and its Subsidiaries'
employee policies (written or otherwise), employee manuals or other written
statements of rules or policies concerning employment.

                  (c) EMPLOYMENT AGREEMENTS. Except as set forth on SCHEDULE
4.16(C), there are no employment, consulting, severance or indemnification
arrangements, agreements, or, to the knowledge of Pan Am, material
understandings between Pan Am or any of its Subsidiaries and any officer,
director, consultant or employee. Except as set forth on SCHEDULE 4.16(C) or as
required by the WARN Act, the terms of employment or engagement of all
employees, agents, consultants and professional advisors of Pan Am and its
Subsidiaries are such that their employment or engagement may be terminated by
not more than two weeks' notice given at any time without liability for payment
of compensation or damages and neither Pan Am nor any of its Subsidiaries has
entered into any agreement or arrangement for the management of its business or
any part thereof other than with its directors or employees.

                  (d) SCHEDULE 4.16(D) sets forth a complete list of all
pension, retirement, stock purchase, stock bonus, stock ownership, stock option,
profit sharing, savings, medical, disability, hospitalization, insurance,
deferred compensation, bonus, incentive, welfare or any other employee benefit
plan, policy, agreement, commitment or arrangement maintained by or binding upon
Pan Am or any or all of its Subsidiaries for any of their directors, officers,
consultants, employees or former employees (the "PAN AM PLANS"). SCHEDULE
4.16(D) also identifies each Pan Am Plan which constitutes an "employee pension
benefit plan" ("PAN AM PENSION PLAN") or an "employee welfare benefit plan"
("PAN AM WELFARE PLAN"), as such terms are defined in ERISA. None of the Pan Am
Plans is a "multiemployer plan," as such term is defined in ERISA, or is subject
to Title IV of ERISA.

                                      -22-

<PAGE>

         Pan Am and its Subsidiaries have delivered to AHC or Carnival current,
accurate and complete copies of each Pan Am Plan (including all other
instruments relating thereto) and Summary Plan Descriptions therefor and, to the
extent applicable, copies of their most recent (i) IRS determination letter and
any outstanding request for a determination letter; (ii) Form 5500 and attached
Schedule B (including any related actuarial valuation report) with respect to
the last three plan years for each Pan Am Plan; (iii) certified financial
statements; (iv) attorney's response to an auditor's request for information;
(v) collective bargaining agreements or other such contracts; (vi) Form S-8
(including any amendments thereto) and Form S-11; (vii) Form 5310 and any
related filings with the PBGC with respect to the last three plan years for each
Pan Am Plan subject to Title IV of ERISA; (viii) ruling letter and any
outstanding request for a ruling letter with respect to the tax-exempt status of
any voluntary employees' beneficiary association which is implementing such Pan
Am Plan; and (ix) general notification to employees of their rights under Code
Section 4980B and form of letter(s) distributed upon the occurrence of a
qualifying event described in Code Section 4980B, in the case of a Pan Am Plan
that is a "group health plan" as defined in Code Section 5000(b)(1).

         Except as noted on SCHEDULE 4.16(D), each Pan Am Pension Plan
purporting to be is qualified under Section 401(a) of the Code, and each such
plan remains so qualified; and to Pan Am's knowledge, no facts or circumstances
exist which could result in the revocation of such qualification. Each Pan Am
Welfare Plan which is intended to meet the requirements for tax-favored
treatment under Subchapter B of Chapter 1 of the Code meets such requirements.
Each Pan Am Plan has been administered in all material respects in accordance
with its terms and the Code, and each Pan Am Pension Plan and Pan Am Welfare
Plan has been administered in all material respects in accordance with ERISA. No
facts or circumstances exist which could reasonably be expected to give rise to
any liability of Pan Am or any of its Subsidiaries to the PBGC or which could
reasonably be anticipated to result in any claims being made against Pan Am or
any Subsidiary thereof by the PBGC. The assets of each Pan Am Plan are at least
equal in value to the present value of the accrued benefits of participants of
such Plan. No facts or circumstances exist which could reasonably be expected to
give rise to any liability of any Pan Am Plan, Pan Am or any Subsidiary thereof
to any other Person. Pan Am has paid all amounts required under applicable law,
any Pan Am Pension Plan and any Pan Am Welfare Plan to be paid as a contribution
to each Pan Am Pension Plan and Pan Am Welfare Plan through the date hereof. To
the extent required by law, Pan Am has set aside adequate reserves to meet
contributions which are not yet due under any Pan Am Pension Plan or Pan Am
Welfare Plan. Neither Pan Am, any of its Subsidiaries, nor any other Person has
engaged in any transaction or taken any other action with respect to any Pan Am
Plan which would subject Pan Am or any Subsidiary thereof to: (i) any Tax,
penalty or liability for prohibited transactions under ERISA or the Code; (ii)
any Tax under Code Sections 4971, 4972, 4976, 4977 or 4979; or (iii) a penalty
under ERISA Sections 502(c) or 502(l). None of Pan Am or any of its
Subsidiaries, or any director, officer or employee of Pan Am or any of its
Subsidiaries, to the extent it or he is a fiduciary with respect to any Pan Am
Pension Plan or Pan Am Welfare Plan, has breached any of its or his
responsibilities or obligations imposed upon fiduciaries under ERISA or the Code
or which could result in any claim being made under, by or on behalf of any Pan
Am Pension Plan or Pan Am Welfare Plan or any participant or beneficiary
thereof. Each Pan Am Welfare Plan which is a group health plan within the
meaning of Code Section 5000(b)(1) complies in all material respects with and in
each and every case has complied in all material respects with the applicable
requirements of Code Section 4980B and Part 6 of Title I of ERISA and does not
benefit retirees, except as otherwise required by law. As of the date thereof,
there was no accrued vacation or sick leave payable to the employees of Pan Am
or any Subsidiary which is not reflected in the Pan Am Financial Statements.

                  (e) PERSONNEL. SCHEDULE 4.16(E) sets forth: (i) the names of
all directors and officers of Pan Am and each of its Subsidiaries; and (ii) the
names and job designations of all employees of Pan Am and each of its
Subsidiaries whose cash compensation exceeds $75,000 per annum. Except as

                                      -23-

<PAGE>

disclosed in the Pan Am Financial Statements and except for unpaid base
compensation accrued in the ordinary course of business since December 31, 1996,
there are no material sums due to any of Pan Am's or any of its Subsidiary's
employees.

         4.17 MATERIAL AGREEMENTS.

                  (a) SCHEDULE 4.17 sets forth a list of all written and oral
agreements, arrangements or commitments (collectively, the "PAN AM MATERIAL
AGREEMENTS") to which either Pan Am or any of its Subsidiaries is a party or by
which it or any of their respective assets are bound which are material to the
financial position or results of operations of Pan Am and its Subsidiaries on a
consolidated basis including, but not limited to: (i) contract, commitment,
agreement or relationship resulting in a commitment or potential commitment for
expenditure or other obligation or potential obligation, or which provides for
the receipt or potential receipt, involving in excess of $100,000; (ii) contract
or commitment for the employment or retention of any employee, consultant or
agent or any other type of contract with any employee, consultant or agent
providing for annual payments in excess of $100,000; (iii) indenture, mortgage,
promissory note, loan agreement, guarantee or other agreement or commitment
relating to the borrowing of money, or encumbrance of assets; (iv) licensing or
royalty agreements or agreements providing for other similar rights or
agreements with third parties relating to the supply or use of products or
materials or any intellectual property; (v) any plan of a type referenced in
SECTION 4.16(D); (vi) agreements which restrict Pan Am or any of its
Subsidiaries from engaging in any line of business or from competing with any
other Person anywhere in the world; (vii) agreements or arrangements for the
sale of any of the assets, property or rights of Pan Am or any of its
Subsidiaries, in excess of $100,000, except for agreements to sell products or
services in the ordinary course of business consistent with past practices;
(viii) agreement, contract or arrangement with any Affiliate of Pan Am or any of
its Subsidiaries or any Affiliate of any officer, director or employee of Pan Am
or any of its Subsidiaries which is nonterminable without penalty and without
greater than 30 days notice; (ix) lease or agreement to purchase real property;
(x) any material indemnification, contribution or similar agreement or
arrangement pursuant to which Pan Am or any of its Subsidiaries may be required
to make any indemnification or contribution to any other Person except to the
extent provided in the Articles of Incorporation or Bylaws of Pan Am; (xi)
agreement relating to the lease or purchase of aircraft, material travel agency
arrangements, agreements relating to procuring reservations, code sharing
arrangements, interline arrangements, interchange arrangements, baggage
handling, chartering of airlines, purchase of fuel, maintenance of aircraft
equipment or any other outsourcing agreement; or (xii) any other material
contract, agreement or instrument which cannot be terminated without penalty to
Pan Am and its Subsidiaries, upon the provision of not greater than 30 days
notice.

                  (b) Except as set forth on SCHEDULE 4.17 or in the Pan Am SEC
Reports, all Pan Am Material Agreements have been entered into on an
"arms-length" basis with parties who are not Affiliates of Pan Am. The Pan Am
Material Agreements are each in full force and effect and are the valid and
legally binding obligations of Pan Am or the applicable Subsidiary which is a
party to same and, to Pan Am's knowledge, have not been breached by any of the
other parties thereto and are valid and binding obligations of the other parties
thereto. Neither Pan Am nor any of its Subsidiaries is in default under its
Articles or Certificate of Incorporation or Bylaws or in default under any Pan
Am Material Agreement to which it is a party, and no event has occurred which
with the giving of notice or lapse of time or both would constitute such a
default. Except as set forth on SCHEDULE 4.17, the consummation of the
transactions contemplated hereby will not constitute a breach or default of any
Material Agreements or require any consent thereunder.

         4.18 RELATED PARTY TRANSACTIONS. Except as set forth on SCHEDULE 4.18
or reflected in the Pan Am Financial Statements or in the Pan Am SEC Reports, no
director or officer of Pan Am or any

                                      -24-

<PAGE>

of its Subsidiaries or, to Pan Am's knowledge, any shareholder or employee of
Pan Am or any of its Subsidiaries (individually a "PAN AM RELATED PARTY" and
collectively the "PAN AM RELATED PARTIES") or any Affiliate of any Pan Am
Related Party: (i) owns, directly or indirectly, any interest in any Person
which is a competitor of Pan Am, or a supplier of Pan Am, except for the
ownership of not more than 2% of the outstanding stock of any company listed by
a national stock exchange or the Nasdaq stock market; (ii) owns, directly or
indirectly, in whole or in part, any material property, asset (other than cash)
or right, real, personal or mixed, tangible or intangible, which is associated
with or necessary in the operation of the business of Pan Am, as presently
conducted; or (iii) has an interest in or is, directly or indirectly, a party to
any contract, agreement, lease or arrangement to which Pan Am is bound or is a
party.

         4.19 MAJOR CUSTOMERS AND SUPPLIERS. Pan Am has delivered to Carnival a
list of its five largest customers and suppliers (measured by dollar volume)
during the fiscal year ended December 31, 1996, and, with respect to each, the
name and address, dollar volume involved and nature of the relationship. None of
the five largest customers or suppliers of Pan Am or any of its Subsidiaries
during the fiscal year ended December 31, 1996, has (i) cancelled, suspended, or
otherwise terminated its relationship with Pan Am or any of its Subsidiaries or
(ii) to the knowledge of Pan Am, advised Pan Am or any of its Subsidiaries of
its intention to cancel, suspend or terminate its relationship or to
significantly decrease its purchases from sales to Pan Am or any of its
Subsidiaries or to materially and adversely change the terms upon which it
purchases or sells products or services to or from Pan Am or any of its
Subsidiaries.

         4.20 TAX MATTERS.

                  (a) All federal, state, local and foreign Tax returns and Tax
reports, if any, required to be filed with respect to the business or assets of
Pan Am and its Subsidiaries have been filed with the appropriate governmental
agencies in all jurisdictions in which such returns and reports are required to
be filed; all of the foregoing as filed are true, correct and complete, and
reflect accurately all liability for Taxes of Pan Am and its Subsidiaries for
the periods for which such returns relate; and all amounts shown as owing
thereon have been paid. Except as set forth on SCHEDULE 4.20, none of such
returns or reports have been audited by any governmental authority.

                  (b) All Taxes, if any, payable by Pan Am and its Subsidiaries
or relating to or chargeable against any of their assets, revenues or income
through December 31, 1996 were fully paid by such date or provided for by
adequate reserves in the Pan Am Financial Statements and all similar items due
through the Closing will have been fully paid by that date or provided for by
adequate reserves on the books of Pan Am and its Subsidiaries.

                  (c) None of Pan Am or any of its Subsidiaries will have any
liability with respect to any such Taxes including, but not limited to, interest
and/or penalties, in excess of the amount so paid or the reserves so established
on the books of Pan Am and its Subsidiaries. Neither Pan Am nor any of its
Subsidiaries is delinquent in the payment of any Tax. No deficiencies for any
Tax have been asserted against Pan Am or any of its Subsidiaries with respect to
any Taxes which have not been paid, settled or adequately provided for and there
exists no basis for the making of any such deficiency, assessment or charge.

                  (d) Neither Pan Am nor any of its Subsidiaries has waived any
restrictions on assessment or collection of Taxes or consented to the extension
of any statute of limitations relating to federal, state, local or foreign
taxation.

                                      -25-

<PAGE>

         4.21 GUARANTIES. Except as set forth on SCHEDULE 4.21, neither Pan Am
nor any of its Subsidiaries is a party to any Guaranty.

         4.22 VALIDITY OF PAN AM COMMON STOCK. The Pan Am Common Stock to be
issued in the Merger will, when issued in accordance with this Agreement and the
Articles and Agreement of Merger, be validly issued, fully paid and
non-assessable.

         4.23 ABSENCE OF CERTAIN BUSINESS PRACTICES. No officer or director of
Pan Am or any of its Subsidiaries, and to Pan Am's knowledge, no employee or
agent of Pan Am or any of its Subsidiaries and no other Person acting at the
direction of any of the foregoing or associated or Affiliated with Pan Am or any
of its Subsidiaries, and no other Person for whom Pan Am or any of its
Subsidiaries may be responsible, acting alone or together, has (i) received,
directly or indirectly, any rebates, payments, commissions, promotional
allowances or any other economic benefits, regardless of their nature or type
from any customer, supplier, trading company, shipping company, governmental
employee or other Person with whom Pan Am or any of its Subsidiaries has done
business directly or indirectly, or (ii) directly or indirectly, given or agreed
to give any gift or similar benefit to any customer, supplier, trading company,
shipping company, governmental employee or other Person who is or may be in a
position to help or hinder the business of Pan Am and its Subsidiaries (or
assist Pan Am or its Subsidiaries in connection with any actual or proposed
transaction), in either event which (a) could reasonably be expected to subject
Pan Am or its Subsidiaries to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, or (b) if not given, could reasonably be
expected to have a material adverse effect on the results of operations, assets,
business, operations or prospects of Pan Am or any of its Subsidiaries or may
lead to suit or penalty in any private or governmental litigation or proceeding.

         4.24 OPINION OF FINANCIAL ADVISOR. Pan Am's financial advisor has
delivered to the Board of Directors of Pan Am its oral opinion to the effect
that, as of the date hereof, the Merger is fair to the holders of the Common
Stock (other than AHC and its Affiliates) from a financial point of view.

         4.25 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information relating to Pan Am and its Subsidiaries to be supplied by Pan Am for
use in the Proxy Statement and/or the Registration Statement, at the respective
times that the Registration Statement, the Proxy Statement or any amendment
thereto is filed with the Commission or is declared effective by the Commission,
or at the respective times that the Proxy Statement is mailed to Pan Am's
shareholders and at the time the Pan Am shareholders' meeting takes place
(subject, if required, to a reasonable period of time for the parties hereto to
take such action necessary to supplement or amend the Proxy Statement), will
contain any untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If at any time prior to the Closing Date, an event or circumstance
relating to Pan Am or any Subsidiary, or any of their respective officers or
directors, should be discovered by Pan Am that should be set forth in an
amendment or a supplement to the Registration Statement or Proxy Statement, Pan
Am shall promptly inform AHC. The Proxy Statement, including any amendments
thereto, will comply with and be distributed to the Pan Am shareholders in
accordance with Pan Am's Articles of Incorporation and Bylaws and all applicable
laws and regulations, including the Florida BCA, the Securities Act and the
Exchange Act, and the rules and regulations of the AMEX. Pan Am understands that
an investment in Carnival represents a relatively high degree of risk and there
is no assurance that Carnival's business or operations will be successful. Pan
Am has considered carefully the risk factors attendant to an investment in
Carnival and that, as a consequence of such risks, Pan Am could lose its entire
investment in Carnival.

                                      -26-

<PAGE>

         4.26 POOLING-OF-INTERESTS. Except as set forth on SCHEDULE 4.26, no
facts or circumstances exist with respect to Pan Am or any Subsidiary which
could reasonably be expected to disqualify Pan Am's acquisition of Carnival
pursuant to this Agreement for pooling-of-interests accounting treatment.

         4.27 DISCLOSURE. The representations and warranties of Pan Am or
Acquisition contained in this Agreement together with the Schedules hereto and
the information specifically reflected therein, taken as a whole, do not contain
and will not contain any untrue statement of a material fact and do not omit and
will not omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.

                                    ARTICLE V

                                    COVENANTS

         During the period from the date of this Agreement to the Closing Date,
Pan Am and AHC, as applicable, agree to perform the covenants set forth below.

         5.1 INTERIM OPERATIONS OF PAN AM AND AHC. Each of Pan Am and AHC shall,
and shall cause their respective Subsidiaries to, operate their respective
businesses only in the ordinary and usual course consistent with past practices
and shall use its reasonable efforts to (i) preserve intact its business
organization and the goodwill of its customers, suppliers, employees and others
having business relations with it and (ii) continuously maintain insurance
coverage substantially equivalent to the insurance coverage in existence on the
date hereof. Except as otherwise expressly contemplated herein or set forth on
SCHEDULE 5.1, without the written consent of AHC (which shall not be
unreasonably withheld), Pan Am shall not, nor shall it cause or permit any of
its Subsidiaries to: (i) amend its Articles or Certificate of Incorporation or
Bylaws, except in connection with any Pan Am Financings and Acquisitions; (ii)
issue, sell or authorize for issuance or sale, shares of any class of its
securities (including, but not limited to, by way of stock split or dividend) or
any subscriptions, options, warrants, rights or convertible securities, or enter
into any agreements or commitments of any character obligating it to issue or
sell any such securities except in connection with any Pan Am Financings or
Acquisitions; (iii) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock or the capital stock of any
Affiliate or any option, warrant or other right to purchase or acquire any of
its shares or the shares of any Affiliate, except in connection with any Pan Am
Financings and Acquisitions; (iv) declare or pay any dividend or other
distribution (whether in cash, stock or other property) with respect to its
capital stock; (v) voluntarily sell, transfer, surrender, abandon or dispose of
any of its material assets or property rights (tangible or intangible); (vi)
grant or make any mortgage or pledge or subject itself or any of its properties
or assets to any Encumbrances, except Encumbrances listed in SCHEDULE 4.13(A)
hereto, or Encumbrances not exceeding $100,000 in the aggregate and except in
connection with any Pan Am Financings or Acquisitions; (vii) create, incur or
assume any liability or indebtedness for borrowed money (including purchase
money financing), except in the ordinary course of business consistent with past
practices, but in no event in an aggregate amount exceeding $250,000 and except
in connection with any Pan Am Financings or Acquisitions; (viii) make or commit
to make any capital expenditures in excess of $250,000 in the aggregate, except
in connection with any Pan Am Financings and Acquisitions; (ix) grant any
increase in the compensation payable or to become payable to directors, officers
or employees, other than merit increases to officers and employees in the
ordinary course of business; (x) enter into any agreement, arrangement or
commitment that, if it existed on the date hereof, would be a Pan Am Material
Agreement, or amend or terminate any of same or any existing Pan Am Material
Agreement, except in connection with any Pan Am Financings or Acquisitions; (xi)
alter the manner of keeping its books, accounts or records, or change in any
manner the accounting practices therein reflected; (xii) apply any

                                      -27-

<PAGE>

of its assets to the direct or indirect payment, discharge, satisfaction or
reduction of any amount payable directly or indirectly to or for the benefit of
any Affiliate (except for salary and benefits as currently in effect and except
in accordance with existing agreements and arrangements which have been
disclosed to AHC in writing); (xiii) knowingly or negligently take or omit to
take any action which could reasonably be expected to disqualify Pan Am's
acquisition of Carnival pursuant to this Agreement for pooling-of-interests
accounting treatment (it being recognized that due to the importance of this
matter, Pan Am should consult regularly with its accountants and AHC's
accountants with respect to the ramifications of various acts or omissions on
pooling-of-interests accounting treatment); or (xiv) agree, whether in writing
or otherwise, to do any of the foregoing. Except as otherwise expressly
contemplated herein or set forth on SCHEDULE 5.1, without the written consent of
Pan Am (which shall not be unreasonably withheld), AHC shall not, nor shall it
cause or permit any of its Subsidiaries to: (i) amend its Articles or
Certificate of Incorporation or Bylaws; (ii) issue, sell or authorize for
issuance or sale, shares of any class of its securities (including, but not
limited to, by way of stock split or dividend) or any subscriptions, options,
warrants, rights or convertible securities, or enter into any agreements or
commitments of any character obligating it to issue or sell any such securities;
(iii) redeem, purchase or otherwise acquire, directly or indirectly, any shares
of its capital stock or the capital stock of any Affiliate or any option,
warrant or other right to purchase or acquire any of its shares or the shares of
any Affiliate; (iv) declare or pay any dividend or other distribution (whether
in cash, stock or other property) with respect to its capital stock; (v)
voluntarily sell, transfer, surrender, abandon or dispose of any of its assets
or property rights (tangible or intangible) having an aggregate value in excess
of $25,000; (vi) grant or make any mortgage or pledge or subject itself or any
of its properties or assets to any Encumbrances, except Encumbrances listed in
SCHEDULE 3.13(A) hereto, or Encumbrances not exceeding $25,000 in the aggregate;
(vii) create, incur or assume any liability or indebtedness for borrowed money
(including purchase money financing) or otherwise make expenditures in an
aggregate amount exceeding $50,000; (viii) make or commit to make any capital
expenditures in excess of $50,000 in the aggregate; (ix) grant any increase in
the compensation payable or to become payable to directors, officers or
employees; (x) enter into any agreement, arrangement or commitment that, if it
existed on the date hereof, would involve the expenditure or potential
expenditure of funds, individually or in the aggregate, in excess of $50,000 or
be an AHC Material Agreement, or amend or terminate any of same or any existing
AHC Material Agreement; (xi) alter the manner of keeping its books, accounts or
records, or change in any manner the accounting practices therein reflected;
(xii) apply any of its assets to the direct or indirect payment, discharge,
satisfaction or reduction of any amount payable directly or indirectly to or for
the benefit of any Affiliate (except for salary and benefits as currently in
effect and except in accordance with existing agreements and arrangements which
have been disclosed to Pan Am in writing); (xiii) knowingly or negligently take
or omit to take any action which could reasonably be expected to disqualify Pan
Am's acquisition of Carnival pursuant to this Agreement for pooling-of-interests
accounting treatment (it being recognized that due to the importance of this
matter, AHC should consult regularly with its accountants and Pan Am's
accountants with respect to the ramifications of various acts or omissions on
pooling-of-interests accounting treatment); or (xiv) agree, whether in writing
or otherwise, to do any of the foregoing. Notwithstanding any provisions
contained herein to the contrary, AHC and Carnival shall regularly consult with
Pan Am with respect to all operational aspects of the business of Carnival
(except for pricing of fares issues), including without limitation, the
day-to-day operations of Carnival. Notwithstanding anything to the contrary set
forth in this Agreement, it is recognized that each of Carnival and Pan Am has
experienced significant operating losses, and that each may continue to do so.
In connection therewith, it is contemplated that Pan Am, Carnival and their
respective Subsidiaries shall, between the date of this Agreement and the
Closing Date, continue to experience significant losses, and with respect to Pan
Am, engage in one or more Pan Am Financings and Acquisitions, and the parties
hereto agree that notwithstanding any provisions contained in this Agreement to
the contrary, the incurrence of any such significant losses or the effectuation
of any such transactions (regardless of the materiality thereof) will not
constitute a breach of any representation, warranty, covenant or other

                                      -28-

<PAGE>

agreement of a party contained herein or provide the basis for the
nonfulfillment of a condition precedent to the other party's obligations
hereunder. Nothing contained herein shall prohibit the cancellation by Micky
Arison at Closing of that certain Contribution Agreement between him and
Carnival, described in SCHEDULE 3.17 hereof.

         5.2 ACCESS.

                  (a) PAN AM ACCESS. Pan Am shall: (i) afford to AHC and its
agents and representatives reasonable access to the properties, books, records
and other information of Pan Am and its Subsidiaries, provided that such access
shall be granted upon reasonable notice and at reasonable times during normal
business hours in such a manner as to not unreasonably interfere with normal
business operations; (ii) use its reasonable efforts to cause Pan Am's
personnel, without unreasonable disruption of normal business operations, to
assist AHC in its investigation of Pan Am and its Subsidiaries pursuant to this
SECTION 5.2(A); and (iii) furnish promptly to AHC all information and documents
concerning the business, assets, liabilities, properties and personnel of Pan Am
and its Subsidiaries as AHC may from time to time reasonably request. In
addition, from the date of this Agreement until the Closing Date, Pan Am shall
cause one or more of its officers to confer on a regular basis with officers of
AHC and to report on the general status of its ongoing operations.

                  (b) AHC ACCESS. AHC shall: (i) afford to Pan Am and its agents
and representatives full access to the properties, books, records and other
information of AHC and its Subsidiaries; (ii) use its reasonable efforts to
cause AHC's personnel, without unreasonable disruption of normal business
operations, to assist Pan Am in its investigation of AHC and its Subsidiaries
pursuant to this SECTION 5.2(B); and (iii) furnish promptly to Pan Am all
information and documents concerning the business, assets, liabilities,
properties and personnel of AHC and its Subsidiaries as Pan Am may from time to
time reasonably request. In addition, from the date of this Agreement until the
Closing Date, AHC and Carnival shall cause one or more of their respective
officers to confer on a regular basis with officers of Pan Am and to report on
the general status of Carnival's ongoing operations.

         5.3 CONFIDENTIALITY. The parties acknowledge that all confidential or
proprietary information with respect to the business and operations of the other
party and their respective Subsidiaries is valuable, special and unique. The
parties shall not disclose, directly or indirectly, to any Person, or use or
purport to authorize any Person to use any confidential or proprietary
information with respect to the other party or any of their respective
Subsidiaries, without the prior written consent of the other party, including
without limitation, information as to the financial condition, results of
operations, customers, suppliers, products, products under development,
services, services under development, inventions, sources, leads or methods of
obtaining new business, pricing methods or formulas, costs, marketing strategies
or any other information relating to Carnival or Pan Am or any of their
respective Subsidiaries, which could reasonably be regarded as confidential or
proprietary, but not including information which (i) is or shall become
generally available to the public other than as a result of an unauthorized
disclosure by any of the parties or any of its Affiliates, (ii) becomes
available to the other party on a nonconfidential basis from a source other than
a party to this Agreement, provided such source is not in violation of a
confidentiality agreement with the party providing such information or (iii) is
required to be disclosed by law or by the rules and regulations of AMEX. The
covenants of the parties contained in this SECTION 5.3 shall survive any
termination of this Agreement. AHC and Carnival specifically consent to the
disclosure of all information relating to Carnival and its Subsidiaries
reasonably required to be disclosed in the Private Placement Memorandum, the
Registration Statement and the Proxy Statement. The foregoing notwithstanding,
Pan Am agrees to provide AHC and Carnival with a reasonable opportunity to
review and comment on the Private Placement Memorandum, the Registration
Statement, the Proxy Statement or any other documents pursuant to which
securities of Pan Am will be offered for sale by Pan

                                      -29-

<PAGE>

Am, prior to the distribution thereof, to the extent that such sale will be
closed prior to the Closing Date. In the event that the Merger is consummated,
Pan Am's obligations under this SECTION 5.3 with respect to Carnival shall
terminate.

         5.4 NOTIFICATION. Each party to this Agreement shall promptly notify
the other parties in writing of the occurrence, or threatened occurrence, of:
(i) any event that, with the lapse of time or notice or both, would constitute a
breach of this Agreement by such party; (ii) any event that would cause any
representation or warranty made by such party in this Agreement to be false or
misleading in any respect; and (iii) any event which would have been required to
be disclosed herein had such event occurred on or prior to the date of this
Agreement. The updating of any schedule pursuant to this SECTION 5.4 shall not
be deemed to release any party for the breach of any representation, warranty or
covenant hereunder or of any other liability arising hereunder.

         5.5 CONSENT OF GOVERNMENTAL AUTHORITIES AND OTHERS. Each of AHC and Pan
Am agrees to cooperate with each other, file, submit or request promptly after
the date of this Agreement and to prosecute diligently any and all applications
or notices required to be filed or submitted to any governmental authorities,
including those specified in SECTIONS 3.4 and 4.4. Each of AHC and Pan Am shall
promptly make available to the other such information as each of them may
reasonably request relating to its business, assets, liabilities, properties and
personnel as may be required by each of them to prepare and file or submit such
applications and notices and any additional information requested by any
governmental authority, and shall update by amendment or supplement any such
information given in writing. Each of AHC and Pan Am represents and warrants to
the other that such information, as amended or supplemented, shall be true and
not misleading. Each of AHC and Pan Am shall promptly provide the other with
copies of all filings made with governmental authorities in connection with this
Agreement.

         5.6 REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement, each of the parties shall use its reasonable efforts in good faith to
take or cause to be taken as promptly as practicable all reasonable actions that
are within its control to cause to be fulfilled those conditions precedent to
its obligations to consummate the Merger. The parties shall use reasonable
efforts to obtain all consents and approvals required in connection with the
consummation of the transactions contemplated by this Agreement.

         5.7 PUBLICITY. The parties agree to reasonably cooperate in issuing any
press release or other public announcement or making any governmental filing
concerning this Agreement or the transactions contemplated hereby. Nothing
contained herein shall prevent any party from at any time furnishing any
information to any governmental authority which it is by law or pursuant to the
rules and regulations of AMEX so obligated to disclose or from making any
disclosure which its independent outside counsel (which may be such party's
regularly engaged outside counsel) deems (in the case of non-governmental
filings, in writing) necessary in order to fulfill such party's disclosure
obligations under applicable law, or the rules and regulations of AMEX.

         5.8 ACQUISITION PROPOSALS. Except for the transactions contemplated by
this Agreement, unless and until this Agreement shall have been terminated,
neither Carnival nor AHC shall (nor shall either of them permit any of their
officers, directors, agents or Affiliates to): directly or indirectly solicit,
encourage, initiate or participate in any negotiations or discussions with
respect to any offer or proposal to acquire all or substantially all of the
business and properties or capital stock of AHC or any of its Subsidiaries,
whether by merger, purchase of assets or otherwise, or to sell any capital stock
or debt of AHC or any of its Subsidiaries in a public offering or otherwise. In
the event AHC or any of its

                                      -30-

<PAGE>

Subsidiaries shall receive any such offer or proposal, AHC shall promptly inform
Pan Am as to any such offer.

         5.9 CARNIVAL AND PAN AM SHAREHOLDER APPROVAL. Each of Carnival and Pan
Am shall take all such action as may be necessary to call, notice and convene as
promptly as practicable a special meeting of its shareholders (the "CARNIVAL
SPECIAL MEETING" or the "PAN AM SPECIAL MEETING") to consider and vote upon, in
the case of Carnival, this Agreement and the Merger and, in the case of Pan Am,
authorizing the issuance of shares of Common Stock in connection with the
Merger. The Carnival Board of Directors has adopted resolutions approving the
Agreement, the Articles and Agreement of Merger and the Merger and will submit
the Agreement, the Articles and Agreement of Merger and the Merger to Carnival's
shareholders for approval thereof as promptly as practicable. The Pan Am Board
of Directors has adopted resolutions approving the Agreement, the Articles and
Agreement of Merger, and the Merger, and will submit to its shareholders for
approval the authorization of the issuance of the shares of Common Stock in
connection with the Merger as promptly as practicable. The Board of Directors of
Carnival and Pan Am have determined that the Merger is advisable and in the best
interests of Carnival and Pan Am and each shall recommend in the Proxy Statement
and otherwise that the Carnival shareholders approve this Agreement, the
Articles and Agreement of Merger and the Merger, and that the Pan Am
shareholders approve the issuance of shares of Common Stock in connection with
the Merger and otherwise use their best efforts to obtain shareholder approval
of the issues set forth above.

         5.10 PROXY STATEMENT; REGISTRATION. AHC shall cooperate with Pan Am in
the preparation by Pan Am of the Proxy Statement and the Private Placement
Memorandum and the Registration Statement, as well as any necessary amendments
and post-effective amendments thereto. Pan Am shall (i) file the Proxy Statement
with the Commission as soon as practicable, (ii) mail the Proxy Statement to its
shareholders after completion of the Private Placement Memorandum and the
closing of the raising of funds contemplated thereby, (iii) use its best efforts
to cause the Proxy Statement to be cleared by the Commission, and (iv) prepare
and, as soon as practicable after the closing of the Private Placement
Memorandum, file the Registration Statement with the Commission, as well as any
necessary amendments and post-effective amendments thereto and use its best
efforts to cause the Registration Statement to be declared effective as soon as
practicable on or after the Closing Date. If at any time after the Proxy
Statement is mailed to Pan Am's shareholders any event shall occur which shall
require an amendment or supplement to the Proxy Statement, or which would cause
the Proxy Statement to contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading, the party having knowledge of such event shall promptly notify the
other party and the parties shall prepare and file such amendments or
supplements as may be necessary.

         5.11 AFFILIATES' LETTERS.

                  (a) SCHEDULE 5.11(A) sets forth a list of names and addresses
of those persons who, to the best knowledge of Carnival, may be deemed
Affiliates of AHC or from whom a letter in the form of EXHIBIT B hereto (the
"CARNIVAL AFFILIATE LETTER") could reasonably be expected to be necessary in
order for the Merger to qualify as a pooling-of-interests transaction. Carnival
shall provide Pan Am such information and documents as Pan Am shall reasonably
request for purposes of reviewing such list. There shall be added to such list
the names and addresses of any other person who becomes an Affiliate of Carnival
at any time after the date hereof up to and including the time of the Carnival
Special Meeting, or who Pan Am reasonably identifies (by written notice to
Carnival) as being a Person who may be deemed to be an Affiliate of Carnival.
Provided that the Merger would otherwise qualify for pooling of interests
accounting treatment, Carnival shall use its best efforts to deliver or cause to
be delivered to Pan

                                      -31-

<PAGE>

Am, concurrent herewith, or as promptly as practicable after the date hereof,
from each of the Affiliates identified on SCHEDULE 5.11 (as the same may be
supplemented as aforesaid), a Carnival Affiliate Letter.

         If an Affiliate of Carnival refuses to provide a Carnival Affiliate
Letter, Pan Am shall in lieu of receipt of such letter be entitled to place
appropriate legends on the certificates evidencing the Common Stock to be
received by such Affiliates pursuant to the terms of this Agreement, and to
issue appropriate stock transfer instructions to the transfer agent for the
Common Stock, to the effect that the shares of the Common Stock received or to
be received by such Affiliate pursuant to the terms of this Agreement may only
be sold, transferred or otherwise conveyed, and the holder thereof may only
reduce his interest in or risks relating to such shares of Common Stock,
pursuant to an effective registration statement under the Securities Act or in
accordance with the provisions of Rule 144 promulgated under the Securities Act
or pursuant to an exemption provided from registration under the Securities Act
and, in any event, only after financial results covering at least 30 days of
combined operations of Pan Am and Carnival after the Closing Date shall have
been published. The foregoing restrictions on the transferability of the Common
Stock shall apply to all purported sales, transfers and other conveyances of the
shares of Common Stock received or to be received by such Affiliate pursuant to
this Agreement and to all purported reductions in the interest in or risks
relating to such shares of the Common Stock whether or not such Affiliate has
exchanged the certificates previously evidencing such Affiliate's shares of the
Carnival Common Stock for certificates evidencing the shares of Common Stock
into which such shares of Carnival Common Stock were converted. The Proxy
Statement and the Registration Statement shall each disclose the foregoing in a
reasonably prominent manner.

                  (b) SCHEDULE 5.11(B) sets forth a list of names and addresses
of those persons who, to the best knowledge of Pan Am, may be deemed Affiliates
of Pan Am or from whom a letter in the form of EXHIBIT B hereto (the "PAN AM
AFFILIATE LETTER") could reasonably be expected to be necessary in order for the
Merger to qualify as a pooling-of-interests transaction. Pan Am shall provide
Carnival such information and documents as Carnival shall reasonably request for
purposes of reviewing such list. There shall be added to such list the names and
addresses of any other person who becomes an Affiliate of Pan Am at any time
after the date hereof up to and including the time of the Pan Am Special
Meeting, or who Carnival reasonably identifies (by written notice to Pan Am) as
being a Person who may be deemed to be an Affiliate of Pan Am. Provided that the
Merger would otherwise qualify for pooling of interests accounting treatment,
Pan Am shall use its best efforts to deliver or cause to be delivered to
Carnival, concurrent herewith, or as promptly as practicable after the date
hereof, from each of the Affiliates identified on SCHEDULE 5.11(B) (as the same
may be supplemented as aforesaid), a Pan Am Affiliate Letter.

         If an Affiliate of Pan Am refuses to provide a Pan Am Affiliate Letter,
Pan Am shall, in lieu of receipt of such letter, be entitled to issue
appropriate stock transfer instructions to the transfer agent for the Common
Stock, to the effect that the shares of the Common Stock held by such Affiliate
may only be sold, transferred or otherwise conveyed and the holder thereof may
only reduce his interest in or risks relating to such shares of Common Stock,
pursuant to an effective registration statement under the Securities Act or in
accordance with the provisions of Rule 144 promulgated under the Securities Act
or pursuant to an exemption provided from registration under the Securities Act
and, in any event, only after financial results covering at least 30 days of
combined operations of Pan Am and Carnival after the Closing date shall have
been published. The foregoing restrictions on the transferability of the Common
Stock shall apply to all purported sales, transfers and other conveyances of the
shares of Common Stock held by such Affiliate and to all purported reductions in
the interest in or risks relating to such shares of the Common Stock. The Proxy
Statement and the Registration Statement shall each disclose the foregoing in a
reasonably prominent manner.

                                      -32-

<PAGE>

         5.12 NONSOLICITATION OF EMPLOYEES. Each of Pan Am and Carnival agrees
that, for a period of two years following the date hereof, it shall not,
directly or indirectly, solicit for employment any employee of the other whose
responsibilities or duties relate to the operation of a commercial airline;
provided however, that the provisions of this SECTION 5.12 shall not apply to
any general solicitation for employment made by any party to the public at large
by means of a newspaper advertisement or other similar means of mass
communication, and provided further that this provision shall not prohibit the
hiring of non-executive employees where no solicitation has occurred. This
SECTION 5.12 shall not survive the Closing, but shall survive the termination of
this Agreement.

         5.13 CERTAIN POST-CLOSING NOTIFICATIONS. If, at any time on or after
the Closing, the employees of either of Pan Am or Carnival would be entitled to
receive any notice or notification pursuant to the WARN Act for activities
occurring on or after the Closing Date, then Pan Am shall bear sole
responsibility for delivering such notices or causing such notices to be
delivered to any employees entitled thereto.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

         6.1 INVESTIGATION; NOTICES. The representations, warranties, covenants
and agreements set forth in this Agreement shall not be affected or diminished
in any way by the receipt of any notice pursuant to SECTION 5.4 or by any
investigation (or failure to investigate) at any time by or on behalf of the
party for whose benefit such representations, warranties and covenants were
made.

         6.2 SURVIVAL OF THE REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the parties set forth in this Agreement shall survive the
Closing to the extent provided in SECTION 6.3.

         6.3 INDEMNIFICATION.

                  (a) BY AHC. Subject to the limitations set forth in SECTION
6.3(D), the Shareholders severally (in accordance with SCHEDULE 6.3) agree to
indemnify and hold harmless Pan Am and Acquisition from, against and in respect
of, the full amount of any and all liabilities, damages, claims, deficiencies,
fines, assessments, losses, Taxes, penalties, interest, costs and expenses,
including, without limitation, reasonable fees and disbursements of counsel
(collectively, the "LIABILITIES"), arising from, in connection with, or incident
to: (i) (provided that the Closing occurs) any breach or violation of any of the
representations or warranties of either of AHC, Carnival or any Shareholder
contained in this Agreement as modified by any Schedule hereto; (ii) any breach
or violation of any of the covenants or agreements of either AHC, Carnival or
any Shareholder contained in this Agreement as modified by any Schedule hereto
which, in the case of pre-Closing breaches, continues after notice and a
reasonable opportunity to cure; and (iii) any and all actions, suits,
proceedings, demands, assessments or judgments, costs and expenses incidental to
any of the foregoing. Notwithstanding the foregoing, Micky Arison and the Trust
shall be jointly and severally liable for the indemnification obligations of
each Shareholder arising under this SECTION 6.3.

                  (b) BY PAN AM AND ACQUISITION. Subject to the limitations set
forth in SECTION 6.3(D), Pan Am and Acquisition agree to indemnify and hold
harmless Carnival and the Shareholders from, against and in respect of, the full
amount of any and all Liabilities arising from, in connection with, or incident
to (i) (provided that the Closing occurs) any breach or violation of any of the
representations or warranties of Pan Am and Acquisition contained in this
Agreement as modified by any Schedule hereto; (ii) any breach or violation of
any of the covenants or agreements of either Pan Am or Acquisition

                                      -33-

<PAGE>

contained in this Agreement as modified by any Schedule hereto which, in the
case of pre-Closing breaches, continues after notice and a reasonable
opportunity to cure; and (iii) any and all actions, suits, proceedings, demands,
assessments or judgments, costs and expenses incidental to any of the foregoing.

                  (c) INDEMNITY PROCEDURE. A party or parties responsible for
indemnifying another party against any matter pursuant to this Agreement is
referred to herein as the "INDEMNIFYING PARTY," and a party or parties entitled
to indemnity is referred to as the "INDEMNIFIED PARTY."

         An Indemnified Party under this Agreement shall, with respect to claims
asserted against such party by any third party, give written notice to each
Indemnifying Party of any liability which might give rise to a claim for
indemnity under this Agreement within sixty business days of the receipt of any
written claim from any such third party, and with respect to other matters for
which the Indemnified Party may seek indemnification, give prompt written notice
to each Indemnifying Party of any liability which might give rise to a claim for
indemnity; provided, however, that any failure to give such notice will not
waive any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are materially prejudiced.

         As to any claim, action, suit or proceeding by a third party, the
Indemnifying Party shall be entitled, together with the Indemnified Party, to
participate in the defense, compromise or settlement of any such matter through
the Indemnifying Party's own attorneys and at its own expense. The Indemnified
Party shall provide such cooperation and such access to its books, records and
properties as the Indemnifying Party shall reasonably request with respect to
such matter; and the parties hereto agree to cooperate with each other in order
to ensure the proper and adequate defense thereof, it being understood that the
Indemnified Party shall control any such defense.

         Neither an Indemnified Party nor an Indemnifying Party shall make any
settlement of any claims without the written consent of the other party, which
consent shall not be unreasonably withheld. Without limiting the generality of
the foregoing, it shall not be deemed unreasonable to withhold consent to a
settlement involving injunctive or other equitable relief against the other
party or its assets, employees or business.

         With regard to claims of third parties for which indemnification is
payable hereunder, such indemnification shall be paid by the Indemnifying Party
upon the earliest to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five days prior to the date that the judgment creditor has the right to
execute the judgment or if earlier the date that the Indemnified Party must post
any bond with respect to any judgment or other judicial ruling; (ii) the entry
of an unappealable judgment or final appellate decision against the Indemnified
Party; (iii) a settlement of the claim; or (iv) with respect to indemnities for
Tax liabilities, upon the issuance of any resolution by a taxation authority.
Notwithstanding the foregoing, expenses of counsel to the Indemnified Party
shall be reimbursed on a current basis by the Indemnifying Party if such
expenses are a liability of the Indemnifying Party. With regard to other claims
for which indemnification is payable hereunder, such indemnification shall be
paid promptly by the Indemnifying Party upon demand by the Indemnified Party.

                  (d) LIMITATIONS. Except as otherwise expressly set forth
herein, no party shall have any obligation under the indemnification provisions
set forth in SECTIONS 6.3(A) OR 6.3(B): (i) unless notice of a claim for
indemnity in respect of any such matter has been given to such party on or
before the date which is the earlier of one year after the Closing Date or the
date that audited financial statements showing the combined operations of
Carnival and Pan Am are published; provided, however, that with respect to a
breach of any of the representations and warranties contained in SECTIONS 3.21
OR 4.20, notice

                                      -34-

<PAGE>

of a claim for indemnity must be given on or before the date on which the
statute of limitations expires for each respective tax year; (ii) until and
except to the extent that the aggregate of all such claims for which such party
is responsible under such indemnification provisions with respect to any breach
of a representation or warranty (but not any covenant or agreement except the
covenants set forth in SECTIONS 5.4 AND 5.10 hereof) exceeds $1,000,000 (the
"BASKET LIMITATION"); and (iii) in excess of $7,500,000 (inclusive of the Basket
Limitation). Except for specific performance, the provisions of this SECTION 6.3
shall be the sole remedy for the breach of any representations or warranties
contained in this Agreement. None of the limitations of clauses (ii) and (iii)
of this SECTION 6.3(D) shall apply with respect to indemnification obligations
of a party arising in connection with the breach of any representation or
warranty set forth in SECTIONS 3.2, 3.8, 3.11, 3.12, 3.24, 3.25, 3.30, 4.2, 4.8,
4.11, 4.12 OR 4.18 of this Agreement, and none of the limitations of this
SECTION 6.3(D) shall apply with respect to any action based upon intentional or
fraudulent actions, misrepresentations or breaches of any party. Notwithstanding
anything to the contrary contained herein, no party shall have any obligation
under the indemnification provisions set forth in SECTIONS 6.3(A) or 6.3(b) for
a breach of any representation or warranty contained in SECTION 3.20 or 4.18
hereunder, until and except to the extent the aggregate of all such claims for
which such party is responsible for such breach exceeds $50,000. 773,810
Exchange Shares (90% of which shall be deposited by Micky Arison, 6% of which
shall be deposited by Reuven Wertheim, and 4% of which shall be deposited by A.
Daniel Ratti) shall be placed in escrow pursuant to a mutually agreeable Escrow
Agreement to secure the indemnification obligations of the Shareholders
hereunder. The Shareholders' indemnity obligations hereunder shall be satisfied
by application by Pan Am of Exchange Shares held in escrow in satisfaction
thereof in accordance with the preceding sentence prior to pursuit of any
additional indemnity claims. Such Exchange Shares shall be valued for such
purposes at the Exchange Valuation.

         6.4 GENERAL RELEASE. Other than as set forth on SCHEDULE 6.4, each of
the Shareholders hereby unconditionally and irrevocably releases and forever
discharges, effective as of the Closing, AHC, Carnival and each of its
Subsidiaries and their respective officers, directors, employees and agents,
from any and all rights, claims, demands, judgments, obligations, liabilities
and damages, whether accrued or unaccrued, asserted or unasserted, and whether
known or unknown, relating directly or indirectly to AHC and/or any of its
Subsidiaries which ever existed, now exist, or may hereafter exist, by reason of
any tort, breach of contract, violation of law or other act or failure to act
which shall have occurred at or prior to the Closing. Each Shareholder expressly
intends that the foregoing release shall be effective regardless of whether the
basis for any claim or right hereby released shall have been known to or
anticipated by the Shareholders. Micky Arison will use his best efforts, subject
to his fiduciary duties, to cause Carnival Cruise to deliver on the Closing Date
a general release to AHC, Carnival and its Subsidiaries identical to the release
granted by the Shareholders pursuant to this SECTION 6.4. If subsequent to the
Closing, a Shareholder incurs damages by reason of his serving as a director or
officer of Carnival prior to the Closing, then, for a two-year period following
the Closing Date, Pan Am agrees to indemnify such Shareholder to the fullest
extent permitted by law and provided that the matters for which indemnification
is sought would not in and of themselves be deemed a breach of any
representation or warranty contained herein.

         6.5 NONCOMPETITION. For a period of five years beginning as of the
Closing Date, each of the Shareholders (other than A. Daniel Ratti and Reuven
Wertheim) agrees to not, directly or indirectly, engage or have an interest,
anywhere in the United States or any other geographic area where AHC, Carnival
or any of their respective Subsidiaries do business or in which any of their
products or services are marketed, alone or in association with others, as
principal, officer, agent, employee, director, partner or shareholder, or
through the investment of capital, lending of money or property, rendering of
services or otherwise, in the operation of a commercial airline. For a period of
five years beginning on the Closing Date, each of the Shareholders and their
Affiliates will not directly or indirectly permit any of

                                      -35-

<PAGE>

his employees, agents or others under his control to, directly or indirectly,
recruit or otherwise solicit or induce any person who is an employee of, or
otherwise engaged by, Pan Am, AHC, Carnival or any of their respective
Subsidiaries or any successor to the business thereof, to terminate his or her
employment or other relationship thereof, or hire any person who has left the
employ or engagement thereof during the preceding one year regardless of whether
such person was involuntarily terminated or terminated such employment on his
own volition. The ownership or control of up to five percent of the outstanding
voting securities or securities of any class of a company with a class of
securities which are traded on a national stock exchange or the Nasdaq stock
market shall not be deemed to be a violation of the provisions of this SECTION
6.5.

         6.6 CONFIDENTIALITY; NAME USE. Each of the Shareholders acknowledges
that all confidential or proprietary information with respect to the business
and operations of each of Carnival, Pan Am and their respective Subsidiaries is
valuable, special and unique. Each Shareholder shall not, at any time after the
Closing, disclose, directly or indirectly, to any Person, or use or purport to
authorize any Person to use any confidential or proprietary information with
respect to Carnival or Pan Am or any of their respective Subsidiaries, without
the prior written consent of Pan Am, including without limitation, information
as to the financial condition, results of operations, customers, suppliers,
products, products under development, services, services under development,
inventions, sources, leads or methods of obtaining new business, pricing methods
or formulas, costs, marketing strategies or any other information relating to
Carnival or Pan Am or any of their respective Subsidiaries, which could
reasonably be regarded as confidential or proprietary, but not including
information which (i) is or shall become generally available to the public other
than as a result of an unauthorized disclosure by AHC or any of its Affiliates,
(ii) relates to Pan Am (and not Carnival) and was in the possession of such
Shareholder prior to its receipt from Pan Am, (iii) becomes available to such
Shareholder on a nonconfidential basis from a source other than a party to this
Agreement, provided such source is not in violation of a confidentiality
agreement with the party providing such information or (iv) is required to be
disclosed by law. AHC and each of the Shareholders acknowledge that Pan Am would
not enter into this Agreement without the assurance that all such confidential
and proprietary information will be used for the exclusive benefit of Carnival
and Pan Am. In addition, Micky Arison agrees to use his best efforts to cause
each of his Affiliates (and with respect to Carnival Cruise, subject to his
fiduciary duties), for a period of five years from the Closing Date, not to use,
license or otherwise authorize the use, directly or indirectly, of the name
"Carnival" or any similar name, mark, logo or other identifying words or images
in connection with the operation of any commercial airline, whether for its own
direct or indirect benefit or otherwise. Micky Arison will use his best efforts,
to cause Carnival Cruise (subject to his fiduciary duties) or the legal and
beneficial owner of the trademark or tradename "Carnival" if Carnival Cruise is
not such owner to agree to the foregoing in a document reasonably satisfactory
to Pan Am on or prior to the Closing Date.

         6.7 CONTINUING OBLIGATIONS. The restrictions set forth in SECTIONS 5.3,
6.5 AND 6.6 are considered by the parties to be reasonable for the purposes of
protecting the value of the business and goodwill of Pan Am and Carnival. The
parties acknowledge that Pan Am and Carnival would be irreparably harmed and
that monetary damages would not provide an adequate remedy to Pan Am in the
event the covenants contained in SECTIONS 5.3, 6.5 AND 6.6 were not complied
with in accordance with their terms. Accordingly, each of the Shareholders
agrees that any breach or threatened breach of any provision of SECTIONS 5.3,
6.5 AND 6.6 shall entitle Pan Am to injunctive and other equitable relief to
secure the enforcement of these provisions, in addition to any other remedies
which may be available to Pan Am, and that Pan Am shall be entitled to receive
from each of the Shareholders reimbursement for all attorneys' fees and expenses
incurred by Pan Am in enforcing these provisions. In addition to its other
rights and remedies, Pan Am shall have the right to require each of the
Shareholders to account for and pay over to Pan Am, all compensation, profits,
money, accruals and other benefits derived or

                                      -36-

<PAGE>

received, directly or indirectly, by any party breaching such provisions from
the action constituting such breach. It is the desire and intent of the parties
that the provisions of SECTIONS 5.3, 6.5 AND 6.6 be enforced to the fullest
extent permissible under the laws and public policies of each jurisdiction in
which enforcement is sought. If any provisions of SECTIONS 5.3, 6.5 OR 6.6
relating to the time period, scope of activities or geographic area of
restrictions is declared by a court of competent jurisdiction to exceed the
maximum permissible time period, scope of activities or geographic area, the
maximum time period, scope of activities or geographic area, as the case may be,
shall be reduced to the maximum which such court deems enforceable. If any
provisions of SECTIONS 5.3, 6.5 OR 6.6 other than those described in the
preceding sentence are adjudicated to be invalid or unenforceable, the invalid
or unenforceable provisions shall be deemed amended (with respect only to the
jurisdiction in which such adjudication is made) in such manner as to render
them enforceable and to effectuate as nearly as possible the original intentions
and agreement of the parties.

         6.8 AHC SPINOFF AND RWDR TRANSACTION. AHC and Carnival shall effectuate
the AHC Spinoff and the RWDR Transactions as described herein prior to the
Closing in accordance with all applicable laws, and pursuant to documentation
which has been approved by Pan Am, which approval shall not be unreasonably
withheld. Any obligations of AHC arising under this Agreement shall, after
effectuation of the RWDR Transaction, be deemed to be obligations of Carnival.
Each of the Shareholders agree to take any action required, including without
limitation, to vote in his capacity as a director and/or a shareholder for such
transactions.

         6.9 VOTING AGREEMENTS. Certain of the respective shareholders of AHC
and Pan Am will execute and deliver Voting Agreements (the "VOTING AGREEMENTS")
simultaneously herewith, in the form of EXHIBIT C, pursuant to which, among
other things, they will agree to vote their shares of AHC or Pan Am, as the case
may be, in favor of the Merger.

         6.10 ACCOUNTANTS' COMFORT LETTERS. Each of Pan Am and AHC shall each
use its best efforts to cause to be delivered to itself and the other a
so-called "comfort" letter of its independent public accountants, in form
reasonably acceptable to the recipients thereof, dated not more than two
business days prior to each of the effectiveness of the Registration Statement
and the mailing of the Proxy Statement with the Commission.

         6.11 INTENTIONALLY LEFT BLANK.

         6.12 INTENTIONALLY LEFT BLANK.

         6.13 USE OF THE CARNIVAL NAME. Pan Am agrees that after Closing it
shall not use the name "Carnival" or any related mark or logo or other
identifying words or images specifically relating to the name "Carnival" (a
"CARNIVAL RELATED MARK") in the promotion of its ongoing business; provided,
however, that the foregoing shall not be deemed to restrict Pan Am and its
Affiliates from describing the operations of Pan Am or Carnival prior to such
date and, provided, further, to the extent required by law or by the rules and
regulations of any national securities exchange, as reasonably determined by Pan
Am's counsel, Pan Am and its Affiliates shall be entitled to utilize the name
"Carnival" with respect to all Licenses until such Licenses have been
appropriately amended to delete such name, and to fly and otherwise utilize such
aircraft and other equipment and material which have affixed thereon the name
"Carnival" and other Carnival Related Marks as set forth herein. Pan Am agrees
to use all reasonable efforts to promptly amend the above-mentioned Licenses and
to make such revisions to such existing aircraft and other equipment and
material during its ordinary maintenance schedule so as to eliminate the use of
the "Carnival" name and the Carnival Related Marks. Until such time as such
amendments and revisions have been effectuated, Pan Am and its Affiliates shall
be granted a royalty-free license to utilize

                                      -37-

<PAGE>

the name "Carnival" and the Carnival Related Marks for the limited purposes
described above. Micky Arison shall use his best efforts, subject to his
fiduciary duties, to cause Carnival Cruise to grant such license for a period of
two years in a document reasonably satisfactory to Carnival Cruise and Pan Am.
Over twelve equal monthly installments commencing one month after the Closing
Date, Carnival shall pay any fees due and payble under the terms and conditions
of that certain Nonexclusive License Agreement, dated March 25, 1989, by and
between Carnival Airlines and Carnival.

         6.14 BOARD REPRESENTATION. Upon the request of Micky Arison at any time
or from time to time, Pan Am shall, after the Closing Date, use its best efforts
to cause Micky Arison and/or Howard Frank to be nominated to the Board of
Directors of Pan Am, and shall use reasonable efforts consistent with and no
less than are taken with respect to all other nominees to the Board of Directors
to have such persons elected to its Board of Directors for so long as Micky
Arison and/or the Trust beneficially owns more than 5% of Pan Am's issued and
outstanding Common Stock. If either or both of such persons are elected to the
Board of Directors, each will be given indemnification agreement protections by
Pan Am in the same form as currently in effect for Pan Am's current directors.

         6.15 ADDITIONAL CAPITAL CONTRIBUTION. It is agreed and understood, as
provided in SECTION 7.3(F) of this Agreement, that a condition to Carnival's and
AHC's obligations to close the transactions contemplated hereby is the
procurement of the release of Micky Arison's personal guaranty and AHC's limited
recourse guaranty of that certain Amended and Restated Revolving Line of Credit
Agreement, dated as of October 2, 1996 between Carnival Airlines, Inc. and
Barnett Bank of South Florida, N.A., a national banking association (the
"REVOLVING LINE OF CREDIT"). Micky Arison hereby agrees to make a capital
contribution of Thirty Million Dollars ($30,000,000) prior to the Closing (the
"ADDITIONAL CAPITAL CONTRIBUTION") in exchange for 1,900,000 shares of Carnival
Common Stock. Micky Arison further agrees to take any and all additional actions
which may be required (including the payment of money in addition to the
Additional Capital Contribution) to discharge, pay in full and cancel the
Revolving Line of Credit and to procure the release of his personal guaranty of
the Revolving Line of Credit and the release of AHC's limited recourse guaranty.

         6.16 REGISTRATION RIGHTS AGREEMENT. Pan Am will contemporaneously
herewith execute and deliver the Registration Rights Agreement (the
"REGISTRATION RIGHTS AGREEMENT") granting certain registration rights to the
Shareholders, in the form of EXHIBIT D, effective as of the Closing.

         6.17 INTENTIONALLY LEFT BLANK.

         6.18 WERTHEIM CONSULTING ARRANGEMENT. Carnival and Reuven Wertheim
shall enter into a Consulting Agreement providing for compensation in the
aggregate amount of Three Hundred Thousand Dollars ($300,000) payable over four
quarterly installments, commencing one hundred twenty (120) days from the
Closing Date, in the form of EXHIBIT E, and containing the other terms and
conditions set forth therein.

                                   ARTICLE VII

                   CLOSING; CONDITIONS PRECEDENT; TERMINATION

         7.1 CLOSING. The consummation of the transactions contemplated by this
Agreement (the "CLOSING") shall take place at the offices of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A. as promptly as practicable and in any
event within 15 days after the satisfaction or waiver of the conditions
precedent to the obligations of the parties set forth in this Article VII (the
"CLOSING DATE"),

                                      -38-

<PAGE>

or on such other date and at such other place as may be agreed to by the
parties, but in no event beyond June 30, 1997, as such date may be extended
pursuant to the provisions of Section 7.5 hereof. At the Closing, the parties
shall deliver to each other such customary documents as may be specified, or
required to satisfy the conditions set forth, in SECTIONS 7.2, 7.3 and 7.4, and
such other documents and instruments as each party may reasonably request from
the other parties. On the Closing Date, the parties shall cause to be filed the
appropriate Articles and Agreement of Merger with the Secretary of State of the
State of Florida. The Closing shall be effective upon 5:00 P.M., Eastern Time,
on the date such Articles and Agreement of Merger are filed. All proceedings to
be taken and all documents to be executed at the Closing shall be deemed to have
been taken, delivered and executed simultaneously, and no proceeding shall be
deemed taken nor documents deemed executed or delivered until all have been
taken, delivered and executed.

         7.2 MUTUAL CONDITIONS PRECEDENT. The respective obligations of the
parties to consummate the transactions contemplated by this Agreement are
subject to the satisfaction at or prior to the Closing of the following
conditions.

                  (a) GOVERNMENTAL CONSENTS. All material consents and approvals
required by governmental authorities for the consummation of the transactions
contemplated by this Agreement shall have been obtained, including without
limitation, the expiration or termination of any notice and waiting period under
the HSR Act. All of such consents and approvals shall have been obtained without
the imposition of any conditions which would materially adversely affect Pan
Am's ability to operate Carnival or its business following the Closing.

                  (b) NO LITIGATION. No litigation, arbitration or other
proceeding shall be pending or, to the knowledge of the parties, threatened by
or before any court, arbitration panel or governmental authority; no law or
regulation shall have been enacted after the date of this Agreement; and no
judicial or administrative decision shall have been rendered; in each case,
which enjoins, prohibits or materially restricts, or seeks to enjoin, prohibit
or materially restrict, the consummation of the transactions contemplated by
this Agreement and which, in the case of non-governmental proceedings, has a
reasonable likelihood of success.

                  (c) CORPORATE APPROVALS. The shareholders of Carnival and Pan
Am shall have respectively approved the matters set forth in SECTION 5.9 hereof
in accordance with the Articles of Incorporation and Bylaws of Carnival and Pan
Am and all applicable laws and regulations.

         7.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF AHC AND CARNIVAL. The
obligations of AHC and Carnival to consummate the transactions contemplated by
this Agreement are subject to the satisfaction at or prior to the Closing of the
following conditions.

                  (a) INTENTIONALLY LEFT BLANK.

                  (b) COVENANTS PERFORMED. The covenants of Pan Am and
Acquisition contained in this Agreement to be performed or complied with on or
prior to the Closing Date shall have been duly performed or complied with in all
material respects.

                  (c) OPINION OF COUNSEL. AHC shall have received from Stearns
Weaver Miller Weissler Alhadeff & Sitterson, P.A., legal counsel to Pan Am, an
opinion letter, dated the Closing Date, in form and substance reasonably
satisfactory to AHC, with respect to the matters set forth on EXHIBIT F.

                                      -39-

<PAGE>

                  (d) CERTIFICATE OF PAN AM. Pan Am shall have delivered to AHC
a certificate executed by its President, dated the Closing Date, to the effect
that the conditions specified in SECTION 7.3 above have been fulfilled.

                  (e) REASONABLE ASSURANCES AS TO THE EFFECTIVENESS OF
REGISTRATION STATEMENT. Counsel for the Shareholders shall have received
reasonable assurances that the Registration Statement will be declared effective
upon the Closing Date or within five business days thereafter.

                  (f) RELEASE OF PERSONAL GUARANTY. The release and termination
of the personal guaranty of Micky Arison and AHC's limited recourse guaranty of
the Revolving Line of Credit shall have been procured.

                  (g) REGISTRATION RIGHTS AGREEMENT. Pan Am shall have executed
and delivered the Registration Rights Agreement.

         7.4 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PAN AM AND ACQUISITION.
The obligations of Pan Am and Acquisition to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or prior to
the Closing of the following conditions.

                  (a) INTENTIONALLY LEFT BLANK.

                  (b) COVENANTS PERFORMED. The covenants of AHC and Carnival
contained in this Agreement to be performed or complied with on or prior to the
Closing Date shall have been duly performed or complied with in all material
respects.

                  (c) CONSENTS. All material consents and approvals required to
effectuate the transactions contemplated herein should have been obtained, each
of which shall have been obtained without the imposition of any materially
adverse terms or conditions; provided, however, with regard to those consents
and approvals set forth on SCHEDULE 7.4(C)(I) hereof, if the sole reason that
such consents or approvals are not obtained is Pan Am's failure to provide
certain security such as a letter of credit or other type of financial security
required to maintain an agreement or arrangement, in the same nature and amount
as currently required by Carnival, then the securing of such consent or approval
shall not be considered a condition precedent hereunder and provided, further
that the procurement of the consents for those agreements set forth on SCHEDULE
7.4(C)(II) hereof shall not be considered a condition precedent to Pan Am's
obligations hereunder.

                  (d) OPINION OF COUNSEL. Pan Am shall have received from
Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., AHC's counsel, an
opinion letter, dated the Closing Date, in form and substance reasonably
satisfactory to Pan Am, with respect to the matters set forth in EXHIBIT G.

                  (e) CERTIFICATE OF AHC. AHC shall have delivered to Pan Am a
certificate executed by its President, dated the Closing Date, to the effect
that the conditions specified in SECTIONS 7.4(B) and (I) have been fulfilled.

                  (f) AGREEMENT OF CARNIVAL CRUISE. Micky Arison shall have
delivered to Pan Am the agreement of Carnival Cruise contemplated by the last
sentence of SECTION 6.6 hereof.

                  (g) GENERAL RELEASE OF CARNIVAL CRUISE; AGREEMENT NOT TO USE
NAME. Micky Arison shall have delivered to Pan Am the general release of
Carnival Cruise contemplated by SECTION 6.4 hereof

                                      -40-

<PAGE>

and the agreement not to permit the "Carnival" name to be utilized in connection
with a commercial airline contemplated by SECTION 6.6 hereof.

                  (h) LICENSE OF CARNIVAL NAME. Micky Arison shall have
delivered to Pan Am the license to be granted by Carnival Cruise contemplated by
SECTION 6.13 hereof.

                  (i) ADDITIONAL CAPITAL CONTRIBUTION. Micky Arison shall have
made the Additional Capital Contribution and complied with the other provisions
of SECTION 6.15 hereof.

                  (j) NO IMPOSITION OF RESTRICTIONS. There shall not have
occurred any imposition by any governmental agency or the promulgation or
proposal of any new law, regulations or directive which imposition of any
additional restrictions or conditions upon the operation of or the business of
Carnival which has or could reasonably be expected to (i) have a material
adverse impact on the operations of the business of Carnival as presently
conducted, (ii) materially impede or restrict the operations of Carnival as
presently conducted, (iii) materially delay the consummation of the transactions
contemplated hereby, and (iv) materially increase the cost of operating by Pan
Am of the Carnival business as presently conducted.

                  (k) STANDSTILL AGREEMENT. The Standstill Agreement shall have
been executed and delivered by Micky Arison and the Trust.

                  (l) ENCUMBRANCES RELATING TO REVOLVING LINE OF CREDIT. All
Encumbrances relating to the Revolving Line of Credit shall be released.

         7.5 TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated prior to the Closing: (i) at any time by mutual consent
of the parties; (ii) by either party if the Closing has not occurred on or prior
to June 30, 1997 (the "TERMINATION DATE"), provided the failure of the Closing
to occur by such date is not the result of the failure of the party seeking to
terminate this Agreement to perform or fulfill any of its material obligations
hereunder and provided further that either party may automatically extend the
Termination Date for an additional thirty day period by providing written notice
to that effect to the other party on or prior to the Termination Date (the
"EXTENDED TERMINATION DATE"); (iii) by AHC at any time in its sole discretion if
any of the representations or warranties of Pan Am or Acquisition in this
Agreement are not in all material respects true and accurate or if Pan Am or
Acquisition breaches in any material respect any covenant contained in this
Agreement, provided that if such misrepresentation or breach is curable, it is
not cured following notice and a reasonable opportunity to cure, which shall in
no event extend beyond the Extended Termination Date or, if later, ten days
after such notice of breach, or such other date as the parties may agree in
writing; (iv) by Pan Am at any time in its sole discretion if any of the
representations or warranties of AHC in this Agreement are not in all material
respects true and accurate or if AHC or Carnival breaches in any material
respect any covenant contained in this Agreement, provided that if such
misrepresentation or breach is curable, it is not cured following notice and a
reasonable opportunity to cure, which shall in no event extend beyond the
Extended Termination Date or, if later, ten days after such notice of breach, or
such other date as the parties may agree in writing; or (v) by AHC if the
Average Price falls below $6.00 per share, provided that if this right to
terminate is not exercised by AHC prior to the date the Proxy Statement is
mailed to the shareholders of Pan Am, then such right to terminate shall be
deemed to have been waived by AHC; and provided, further, that Pan Am shall
provide AHC at least five business days prior notice of such mailing. If this
Agreement is terminated pursuant to this SECTION 7.5, written notice thereof
shall promptly be given by the party electing such termination to the other
party and, subject to the expiration of the cure periods provided in clauses
(iii) and (iv) above, if any, this Agreement shall terminate without further
actions by the parties and no party shall have any further

                                      -41-

<PAGE>

obligations under this Agreement; provided that any termination of this
Agreement pursuant to this SECTION 7.5 shall not relieve any party from any
liability for any breach or violation hereof. Notwithstanding the termination of
this Agreement, the respective obligations of the parties under SECTIONS 5.3,
8.7, 8.10, 8.11, 8.12, 8.13, 8.14 AND 8.15 shall survive the termination of this
Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         8.1 NOTICES. Any notice or other communication under this Agreement
shall be in writing and shall be delivered personally or sent by registered
mail, return receipt requested, postage prepaid, or sent by prepaid overnight
courier to the parties at the addresses set forth below their names on the
signature pages of this Agreement (or at such other addresses as shall be
specified by the parties by like notice). Such notices, demands, claims and
other communications shall be deemed given when actually received or (i) in the
case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery or (ii) in the case of registered
U.S. mail, five days after deposit in the U.S. mail. A copy of any notices
delivered to AHC shall also be sent to Arnaldo Perez, Esq., 3655 N.W. 36th
Street, Miami, Florida, 33178 and to Bruce Macdonough, Esq., Greenberg Traurig
Hoffman Lipoff Rosen & Quentel, P.A., 1221 Brickell Avenue, Suite 2100, Miami,
Florida, 33131. A copy of any notices delivered to Pan Am shall also be sent to
John J. Ogilby, Jr., Esq., 9300 N.W. 36th Street, Miami, Florida, 33178 and to
Teddy D. Klinghoffer, Esq., Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A., Suite 2200, 150 West Flagler Street, Miami, Florida, 33130.

         8.2 ENTIRE AGREEMENT. This Agreement and the Articles and Agreement of
Merger contain every obligation and understanding between the parties relating
to the subject matter hereof and merge all prior discussions, negotiations and
agreements, if any, between them, and none of the parties shall be bound by any
representations, warranties, covenants, or other understandings, other than as
expressly provided or referred to herein.

         8.3 ASSIGNMENT. This Agreement may not be assigned by any party without
the written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, heirs, personal representatives, legal
representatives, and permitted assigns.

         8.4 WAIVER AND AMENDMENT. Any representation, warranty, covenant, term
or condition of this Agreement which may legally be waived, may be waived, or
the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof may
be amended by the parties hereto at any time. Any such waiver, extension or
amendment shall be evidenced by an instrument in writing executed on behalf of
the appropriate party by a person who has been authorized by its Board of
Directors to execute waivers, extensions or amendments on its behalf. No waiver
by any party hereto, whether express or implied, of its rights under any
provision of this Agreement shall constitute a waiver of such party's rights
under such provisions at any other time or a waiver of such party's rights under
any other provision of this Agreement. No failure by any party hereto to take
any action against any breach of this Agreement or default by another party
shall constitute a waiver of the former party's right to enforce any provision
of this Agreement or to take action against such breach or default or any
subsequent breach or default by such other party.

                                      -42-

<PAGE>

         8.5 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
other than the parties hereto and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.

         8.6 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall be declared invalid, void or unenforceable,
the remainder of the provisions of this Agreement shall remain in full force and
effect, and such invalid, void or unenforceable provision shall be interpreted
as closely as possible to the manner in which it was written.

         8.7 EXPENSES. All expenses (including, without limitation, legal fees
and expenses, investment banking fees, fees and expenses of accountants)
incurred by AHC or Carnival in connection with the transactions contemplated
hereby will be borne by Carnival and all expenses (including, without
limitation, legal fees and expenses, investment banking fees, fees and expenses
of accountants) incurred by Pan Am or Acquisition in connection with the
transactions contemplated hereby will be borne by Pan Am, except that (i)
neither AHC, Carnival nor any of its Subsidiaries shall directly or indirectly
pay and/or have paid more than $150,000 in the aggregate of its or its
Affiliates' legal fees and expenses in connection with the transactions
contemplated hereby (and such excess shall be borne by the Affiliate of AHC or
Carnival who incurred such expenses but not by AHC or Carnival) and (ii) Pan Am
and AHC shall each pay for one-half of any filing fee or similar fee made by
such party or any Affiliate under the HSR Act.

         8.8 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.

         8.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Any telecopied version of
any manually executed signature page shall be deemed a manually executed
original.

         8.10 LITIGATION; PREVAILING PARTY. In the event of any litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay upon demand all
reasonable fees and expenses of counsel for the prevailing party.

         8.11 INJUNCTIVE RELIEF. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.

         8.12 REMEDIES CUMULATIVE. Other than as expressly set forth in SECTION
6.3, no remedy made available by any of the provisions of this Agreement is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity.

         8.13 PARTICIPATION OF PARTIES; CONSTRUCTION. The parties hereto
acknowledge that this Agreement and all matters contemplated herein, have been
negotiated among all parties hereto and their respective legal counsel and that
all such parties have participated in the drafting and preparation of this
Agreement from the commencement of negotiations at all times through the
execution hereof. This Agreement shall be construed and interpreted without
regard to presumption or other rule or interpretation against the party who may
have had primary responsibility for drafting this Agreement.

                                      -43-

<PAGE>


         8.14 GOVERNING LAW. This Agreement has been entered into and shall be
construed and enforced in accordance with the laws of the State of Florida
without reference to the choice of law principles thereof.

         8.15 JURISDICTION AND VENUE. This Agreement shall be subject to the
exclusive jurisdiction of the courts of Dade County, Florida, which shall be the
exclusive jurisdiction and venue for disputes, actions or lawsuits arising out
of or relating to this Agreement or the transactions contemplated hereby. The
parties to this Agreement agree that any breach of any term or condition of this
Agreement shall be deemed to be a breach occurring in the State of Florida by
virtue of a failure to perform an act required to be performed in the State of
Florida and irrevocably and expressly agree to submit to the jurisdiction of the
courts of the State of Florida for the purpose of resolving any disputes among
the parties relating to this Agreement or the transactions contemplated hereby.
The parties irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement, or any
judgment entered by any court in respect hereof brought in the State of Florida,
and further irrevocably waive any claim that any suit, action or proceeding
brought in the State of Florida has been brought in an inconvenient forum.

         IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.

                                      -44-

<PAGE>

                                            AIR HOLDING COMPANY

                                            By: _______________________________
                                                     Name: ____________________
                                                     Title: ___________________

                                            Address:

                                            CARNIVAL AIR LINES, INC.

                                            By: _______________________________
                                                     Name: ____________________
                                                     Title: ___________________

                                            Address:

                                            PAN AM CORPORATION

                                            By: _______________________________
                                                     Name: ____________________
                                                     Title: ___________________

                                            Address:

                                            CAL ACQUISITION CORPORATION

                                            By: _______________________________
                                                     Name: ____________________
                                                     Title: ___________________

                                            Address:

                                      -45-

<PAGE>

                                   With respect to
                                   the following
                                   Sections: Article
                                   III, 6.3, 6.4,
                                   6.5, 6.6, 6.7,
                                   6.8, 6.9, 6.12,
                                   6.13 6.15, Article
                                   VII and Article
                                   VIII

                                   _______________________________
                                            MICKY ARISON

                                            REUVEN WERTHEIM
                                   _______________________________

                                            A. DANIEL RATTI
                                   _______________________________

                                   MICKY ARISON 1995 AIR HOLDING TRUST

                                            By: JMD Delaware, Inc., as Trustee

                                            ______________________
                                            Name:
                                            Title:

                                      -46-

<PAGE>

                         INDEX OF SCHEDULES AND EXHIBITS

         EXHIBITS          DESCRIPTION

         A                 Articles and Agreement of Merger
         B                 Forms of Affiliate Letters
         C                 Forms of Voting Agreements
         D                 Form of Registration Rights Agreement
         E                 Form of Wertheim Consulting Agreement

         F                 Form of Opinion of Stearns Weaver Miller Weissler
                           Alhadeff & Sitterson, P.A.

         G                 Form of Opinion of Greenberg Traurig Hoffman Lipoff
                           Rosen & Quentel, P.A.

         SCHEDULES

         SECTION            DESCRIPTION

         3.1               Schedule of AHC Foreign Qualifications
         3.3               Schedule of AHC Violations and Conflicts
         3.5               Schedule of AHC Financial Statements
         3.6               Schedule of AHC Compliance with Laws
         3.7               Schedule of AHC Legal Proceedings
         3.8               Schedule of AHC Brokers
         3.9               Schedule of AHC Material Adverse Changes
         3.11              Schedule of AHC Capitalization and Subsidiaries
         3.12              Schedule of AHC Rights, Warrants and Options
         3.13(a)           Schedule of AHC Real Properties
         3.13(b)           Schedule of AHC Aircraft Properties
         3.13(c)           Schedule of AHC Intellectual Properties
         3.14              Schedule of AHC Governmental Authorizations
         3.15              Schedule of AHC Insurance Policies
         3.16(a)           Schedule of AHC Labor Relations
         3.16(b)           Schedule of AHC Employment Policies
         3.16(c)           Schedule of AHC Employment Agreements
         3.16(d)           Schedule of AHC Employee Benefit Plans
         3.16(e)           Schedule of AHC Personnel
         3.17              Schedule of AHC Material Agreements
         3.18              Schedule of AHC Accounts
         3.19              Schedule of AHC Customers and Suppliers
         3.20              Schedule of AHC Related Party Transactions
         3.21              Schedule of AHC Tax Matters
         3.28              Schedule of AHC Pooling of Interests Matters
         4.1               Schedule of Pan Am Foreign Qualifications
         4.3               Schedule of Pan Am Violations and Conflicts
         4.5               Schedule of Pan Am Financial Statements
         4.6               Schedule of Pan Am Compliance with Laws
         4.7               Schedule of Pan Am Legal Proceedings
         4.9               Schedule of Pan Am Material Adverse Changes
         4.11              Schedule of Pan Am Subsidiaries
         4.12              Schedule of Pan Am Rights, Warrants and Options
         4.13(a)           Schedule of Pan Am Real Properties
         4.13(b)           Schedule of Pan Am Aircraft Properties
         4.13(c)           Schedule of Pan Am Intellectual Properties


<PAGE>

         4.14              Schedule of Pan Am Governmental Authorizations
         4.15              Schedule of Pan Am Insurance Policies
         4.16(a)           Schedule of Pan Am Labor Relations
         4.16(b)           Schedule of Pan Am Employment Policies
         4.16(c)           Schedule of Pan Am Employment Agreements
         4.16(d)           Schedule of Pan Am Employee Benefit Plans
         4.16(e)           Schedule of Pan Am Personnel
         4.17              Schedule of Pan Am Material Agreements
         4.18              Schedule of Pan Am Related Party Transactions
         4.20              Schedule of Pan Am Tax Matters
         4.21              Schedule of Pan Am Guaranties
         4.26              Schedule of Pan Am Pooling-of-Interests Matters
         5.1               Schedule of Interim Operations
         5.11(a)           Schedule of AHC Affiliates
         5.11(b)           Schedule of Pan Am Affiliates
         6.3               Schedule of Shareholder Indemnification
         6.4               Schedule of Shareholders' General Release
         7.4(c)            Schedule of Consents