City of Mobile Request for Proposals RFP Number:

Transcription

1 City of Mobile Request for Proposals RFP Number: MOBILE ALABAMA CRUISE TERMINAL TERMINAL MANAGEMENT 1. The City ( City ) of Mobile is seeking proposals from maritime terminal management professionals to provide terminal management services for the Mobile Alabama Cruise Terminal (MACT). 1.1 Required Pre-Proposal Conference: 10:00 a.m. CST, 20 December, 2017 Location: Mobile Alabama Cruise Terminal, 201 So. Water St, Mobile, AL Respondents unable to attend in person may call into the conference by dialing the conference participant login at: (855) ; participant code #. Please call Patrick Brennan before this date at to confirm your intent to participate in this important conference. 1.2 Proposals Due: 23 February Mailing address Delivery: City of Mobile City of Mobile Procurement Department Procurement Department PO Box 1948, 205 Government Street Mobile, AL th Floor South Tower, Room 408 Mobile, AL Phone Submit Questions to: (251) , Mr. Patrick Brennan patrick.brennan@cityofmobile.org Timeline for Award: Pre-Proposal Conference 20 December 2017 Proposals due: 23 February 2018 Selected proposer interviews: 2 March 2018 Contract award: 30 March 2018 Performance begins: 1 May PURPOSE Through this request for proposals, the City of Mobile ( City ) invites the statements of qualification and proposals from qualified firms interested in managing cruise terminal operations, security, and parking at the Mobile Alabama Cruise Terminal (MACT), a business enterprise owned and operated by the City of Mobile. The city seeks an operating partner capable of running an industry leading terminal, able to advise and assist the City in growing its cruise business, and a partner capable 1

2 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, 2018 of investing alongside the City in any necessary cruise infrastructure development. The City invites participation in the form of an operating fee agreement or lease. At the heart of this proposal is an effort on the part of the City of Mobile to determine the best operating model and team for management of the terminal. The MACT is a visible presence at the center of the City s commercial and recreational waterfront, hosting vessels that transform Mobile s skyline. Efficient, effective, and compatible operation of MACT is critical to Mobile s long-term vision of a vibrant, attractive, and productive waterfront. Respondents will be provided the information necessary to help the City make that decision and the best proposals will speak clearly to how and why the right outside professional management is in the best long-term financial and strategic business interest of the City. 2.1 The City seeks a management company to: a. Operate the Cruise Terminal as a world-class facility for cruise lines, cruise passengers, while minimizing operational costs and maximizing revenues to the City of Mobile; b. Maximize the number of cruise ships and other vessels to homeport and call on the Mobile Alabama Cruise Terminal by advising and assisting the City of Mobile with cruise business development; c. Develop a comprehensive operating plan that provides for efficient management and operation of the Cruise Terminal to include how respondent will assume current contracts in place to manage security, parking, housekeeping, lease agreements as the terminal s management may be transferred while conducting regularly scheduled cruise operations; d. Operate the Cruise Terminal with a stable and competent workforce to avoid delays or interruptions of cruise vessel operations and minimize exposure to claims of liability; 2.2 This RFP requires that interested respondents submit written evidence that they satisfy minimum qualifications by detailing their prior experience. To qualify for consideration, each respondent must possess at least 5 years of experience managing cruise terminal operations at a cruise port in North America, have at least 5 years of experience managing cruise terminal security, and have at least 5 years of experience managing parking operations of similar or larger dimensions and with multi-use characteristics. Any submittal that does not demonstrate that the respondent meets these minimum requirements will not be eligible for award of the contract. 2.3 A City committee of persons with relevant experience will review and rank submittals based upon respondent experience and capacity, plan to manage passenger terminal operations, and financial performance plan. Competitive respondents will be invited for interviews. The highest-ranked respondent will be invited to enter into Page 2 of 11

3 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, 2018 negotiations for a Management Agreement with the City. Any Management Agreement will require final approval by the elected City Council of the City of Mobile. 3. BACKGROUND The MACT has a berthing agreement with Carnival Cruise Lines to host the Carnival Fantasy commencing 9 November 2016 for a period of 13 months with Addendum No. 1 extending this agreement to November 26, These items are attached as Exhibit A. The terminal, after approximately 5 years without a berthing agreement, has undergone extensive renovations to the building s interior, exterior, wharf, and parking garage. Extensive building modifications were also made to meet requirements of the Department of Homeland Security, Customs and Border Protection (CBP). When the terminal commenced operations in 2004, the City contracted with a management firm (Point Clear Holdings, a subsidiary of the Retirement Systems of Alabama) to operate the terminal. The terminal is owned by the City of Mobile and staffed and operated by City employees. The MACT was initially designed for a vessel which carried up to 1730 passengers. The terminal now accommodates an average of 2450 passengers per cruise and often up to 2680 passengers. Because of its relatively small size the terminal experiences a number of challenges including: Difficulty processing passengers and luggage in its limited space without lines or bottlenecks A parking garage that cannot accommodate all customer vehicles requiring on average 80 cars per cruise to be diverted to our overflow parking lot. Inability to expand the facility to the south due to the expected construction of a new I-10 bridge over the Mobile River Difficulty conducting simultaneous disembarkation and embarkation operations due to the terminal s size and limited number of porters Traffic backups on routes leading to the terminal resulting from ship delays or delayed disembarkation Lack of bathrooms on the first floor The City of Mobile is looking for a partner able to assist with these challenges through innovations in efficiency and/or facility enhancement, expansion, or upgrades enabling growth of its cruise business. The City is willing to entertain either a lease agreement or a fee-based operating agreement. 3.1 The berthing agreement calls for a 5, 5, 4-day cruise rotation schedule with two 6- day cruises, two 8-day cruises, and one 10-day cruise in See Exhibit B for the cruise schedule. At the present time, Carnival has contracted out all its vessel operations to include stevedore services, transportation, embarkation guest services, and a portion of the security services. Carnival is currently booking cruises beyond the current agreement period. Page 3 of 11

4 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, The terminal is located adjacent to the new GulfQuest Maritime Museum of the Gulf of Mexico, a state-of-the-art maritime museum. The Museum facility operates under a long-term lease with the City and it shares a wharf, referred to as the Mobile Landing, with the cruise terminal. The museum does occasionally host vessels but does not comply with 33 CFR 105, facility security requirements. These vessels are generally attraction or historical vessels whose visits support the educational mission of the museum. Any operator of the terminal will need to work in close cooperation with the Museum to ensure there is no conflict between the two parties with regards to wharf use. 3.3 The terminal contracts for security guards on cruise days and other days as required. Traffic flow and other security functions on cruise days are staffed by City of Mobile police officers at the terminal s expense. The Mobile Police Department also provides a waterside security boat while the ship is moored to the facility. For FY-18, three quarters of the cost of the Police boat is paid for through a Port Security Grant. 3.4 The terminal leases space to a vendor to operate a crew services store. The store provides phone service, money transfer service, and sells various sundry items for the ship s crewmembers. 3.5 A key aspect of this agreement will be respondent s ability to take over the Terminal s management while the terminal is conducting its regular cruise schedule. The key service provider contracts, such as the parking management, housekeeping, and security will have to be assumed by the operator with most contract terms ending on 31 September, The City seeks a respondent with the ability to smoothly assume terminal operations, develop and maintain strong relations with its contractors and our other port partners, and re-negotiate service contracts as required in the best interest of the City. 3.6 One of the terminal s best features is its attached 502-space parking garage. The garage is typically full each cruise and the Mobile Civic Center is used for overflow parking. Excellent parking and shuttle service management to and from the offsite parking location is required as parking revenue comprises more than half of the terminal s revenue. 4. SCOPE OF WORK 4.1 Management Services. A management company will be expected to enter into an agreement to accept overall responsibility for management and operations of the MACT. The company will likely be required to perform the following tasks: 1. Passenger Cruise Terminal Management a. Assume use of Terminal s current equipment and provide any other equipment and gear necessary to operate terminal. Page 4 of 11

5 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, 2018 b. Manage all facility operations including terminal security, parking, housekeeping, facility maintenance, safe vessel berthing, and safe movement of passengers through the terminal. c. Retain sufficient personnel, equipment and contracted services to provide a level of service exceeding comparable terminals in the United States. i. Maintain or exceed customer satisfaction ratings in the top 25 th percentile in all rated categories. d. Coordinate with Customs and Border Protection for the convenient and efficient movement of passengers and baggage. e. Optimize safe and efficient flow of vehicles and pedestrians into and out of the terminal, including the ground transportation area, on cruise days. f. Employ and manage a well trained work force experienced in cruise operations. The workforce should be able to rapidly build positive working relationships with all its customers, partners, and stakeholders. g. Regularly engage with cruise industry executives with the aim of expanding the City s cruise business through expansion of homeport calls and port of call visits. h. Liaise with Visit Mobile (Mobile s Visitor and Convention Bureau) to market the terminal as part of the City s overall goal to expand tourism in Mobile. i. Collect fees and enforce the Marine Terminal Operator Schedule (tariff). 2. Vessel Operations a. Ensure the safe and reliable operation of the passenger boarding bridge (gangway) and position it properly for every ship arrival. b. Observe all vessel arrival and departures and inform the City of any damage to wharf, fenders, pilings and terminal premises. c. Take all reasonable action to recover the costs of any damage from the cruise line or any other responsible party. d. Cooperate and coordinate with the U. S. Coast Guard and all other federal, state, and city agencies and authorities with regulatory jurisdiction over the terminal. 3. Parking and Commercial Vehicle Management a. Using best practices and standards for parking operations, assume oversight of current parking operations and work closely with parking contractor to improve efficiency and customer satisfaction. b. Collect fees, in accordance with the tariff, from commercial passenger vehicles for hire accessing the terminal. 4. Maintenance and Repair of Facilities and Equipment a. Maintain the terminal in a clean, safe and orderly condition b. Maintain all landscaping c. Maintain the terminal s passenger boarding bridge in accordance with manufacturer s specifications. i. As per Addendum 1 to Exhibit A, ensure semi-annual maintenance is conducted by the boarding bridge manufacturer and maintain an inventory of critical spare parts. Page 5 of 11

6 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, 2018 d. Ensure all terminal equipment is maintained in excellent condition including all interior fixtures, terminal owned equipment, security equipment, fire prevention system, furniture, escalators, elevators, etc. e. Coordinate with City architectural and engineering staff on major facility repairs and maintenance. The City will maintain major building structural components including the wharf, foundation, pilings, roof, exterior walls and major systems. 5. Security a. In accordance with the Maritime Transportation Security Act of 2002, as outlined in 33 CFR Chapter 1, Subchapter H, parts 101 through 105, conduct a facility security assessment and implement a plan or assume responsibility for the terminal s United States Coast Guard (USGC) authorized Facility Security Plan (FSP), designate a Facility Security Officer (FSO), maintain FSP compliance and be responsible for the correction of any deficiencies and penalties; Designate a Facility Security Officer (FSO) and maintain a close relationship with the Federal Maritime Security Coordinator (the USCG Captain of the Port); participate in USCG directed security exercises, and be a member of the Area Maritime Security Committee. b. The FSO shall remain up to date and informed at all times on the latest threats or risk facing public maritime facilities such as the MACT. c. Using the terminal s current radio system or other equipment as required, provide sufficient and effective security communications to facilitate security operations in accordance with the FSP. d. Provide a well-trained security workforce, regularly check on and ensure compliance with security contractor s compliance with the FSP, and take immediate corrective action when deficiencies are noted. e. Assist the City with FEMA Port Security Grant funding requests. f. Maintain an appropriate set of contingency plans including but not limited to: hurricane, fire, bomb threat, and business continuity. 6. Administrative and Financial Services a. Provide sufficient personnel to manage and operate the terminal for cruise days and non-cruise days. b. Provide a monthly report to the City of all revenue (passenger fees, parking, lease payments, other fees) and expenses and a quarterly income statement. 4.2 Payments to the City of Mobile All respondents must submit a comprehensive financial plan that includes a 3-year cash flow analysis showing revenue broken out by source (passenger fees, parking, leases, etc.), operating expenses, net operating income, and net payment to the City after respondent s proposed management fee or lease payment. Estimated Exhibit C summarizes the key financial data from the berthing agreement, known expenses at the time of RFP, and estimated expenses. Because the City will be comparing its financial Page 6 of 11

7 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, 2018 performance operating the terminal itself to management by the respondent, also supplied in Appendix 1 are key assumptions regarding the City s revenue estimates used for its revenue model. The City s staffing plan, a key component of cost, is provided in order to provide some clarity as to where certain efficiencies may or may not be attained. The Terminal s budget will also be provided to respondents. There may be material differences between estimated and actual costs. 5 OTHER PROVISIONS 5.1 Insurance: Contract awardee will be required to file certificates of insurance with the City of Mobile naming the City of Mobile as an additional insured. Insurance coverage shall include at a minimum Comprehensive General Liability Coverage for Bodily Injury ($300,000/person, $500,000/occurrence), and for Property Damage ($100,000/occurrence); Automobile Liability of $500,000 bodily/property per occurrence), and Umbrella Liability of $1,000,000/occurrence, issued by a company licensed to do business in Alabama, and naming the City of Mobile as an additional insured. An insurance policy may not be modified or cancelled without 30 days' prior notice to the City of Mobile. The insurance company shall be licensed in this state, or in the state in which the insurance is purchased, with the name of a designated agent for service filed in the office of the Secretary of State. 5.2 E-Verify: The contract awardee may not knowingly employ, hire for employment, or continue to employ an unauthorized alien within the state of Alabama. The awardee will be required to provide verification of Enrollment in the E-Verify program. Additional information may be found at Business Licenses: The contract awardee will be required to be an Alabama business, or have a Certificate of Authority to do Business in the State of Alabama from the Secretary of State, prior to contract award. Contract awardee also will be required to hold and maintain a City of Mobile business license. Upon notification by the City of intent to award, awardee will have 10 business days to provide the Alabama incorporation certificate or Certificate of Authority and the E-Verify numbers to the City before award can be completed. 5.4 Non-discrimination: Contract awardee will be required to abide by provisions of the Mobile City Code, Section 14-1, which prohibits discrimination in employment by Providers and subcontractors performing work for the City. 5.5 Disadvantaged business enterprises: Contract awardee shall make every reasonable effort in the use of subcontractors and major suppliers to have at least fifteen (15) percent participation by socially and economically disadvantaged business enterprises (DBE). Provider shall indicate their intent to employ DBEs as subcontractors or suppliers in their qualification submission, and complete the City subcontracting and major supplier DBE form at the time of contract signing. 6 SUBMISSION REQUIREMENTS: Please include the following items in your proposal: Page 7 of 11

8 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, Cover Letter: A cover letter describing the respondent, the name and address of the entity submitting the response, the date the entity was established, and the name, address and phone number of the person or persons who will serve as the entity s principal contact person with the City and be authorized to make representations on behalf of the entity. The letter must bear the original signature of the person having proper authority to make the submittal for the entity. 2. Experience and Capacity to Perform a. Offer a description of the management entity including its history, principal ownership structure and staff. Please include description of relevant corporate entities and their relationship to the corporate entity that will be primarily responsible for this operation. b. Describe relevant terminal management experience in the United States including capability to hire and deploy a well-trained, certified work force. c. Describe business terms used for similar terminals operated by respondent. d. Provide written business references for the proposed operation to include reference point of contact and phone number. e. Describe respondent s financial condition, including a copy of its most recent financial statements, if a public entity. Describe any financial partners in the proposed operation and, if applicable, include their financial statements. 3. Terminal Management Plan a. Describe your vision for the most effective management relationship with the City of Mobile (e.g., management contract or lease). b. Describe your intended process to work with cruise operators and local cruise support personnel (e.g., agents, stevedores, chandlers, hotels and commercial carriers) and local authorities to maintain an orderly traffic flow on cruise days. c. Submit a proposed management staffing structure that describes respondent s terminal management staffing structure. d. Describe how security is provided for similar terminals operated by respondent. e. Describe maintenance and repairs services provided at similar facilities. f. Provide a business development plan describing how respondent, working with the City, may expand cruise business. Describe past successes in expanding cruise ship business to include addition of homeported ships and/or additional port of call visits. 4. Financial Proposal a. Provide a 3-year financial plan showing cash flows estimates broken out by revenue source, operating expenses, net operating income, and proposed management fee. i. If respondent wishes to enter into a lease agreement with the City, provide proposed duration of lease, proposed annual payment Page 8 of 11

9 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, 2018 schedule, terms of any proposed facility enhancements or upgrades, any matching funds potentially required by the City, and any other relevant terms. 7 EVALUATION / SCORING OF PROPOSALS 7.1 All submittals will be evaluated by the City in accordance with the criteria described in this proposal on the basis of respondent s apparent ability to best meet the overall objectives of the City. The City intends to employ a competitive process to select an entity to manage and operate the terminal. The highest ranking respondents will be invited to interview with the evaluation team. The highest ranked respondent will be invited to enter into negotiations for a management agreement with the City of Mobile. 7.2 The City desires the respondents to have all the necessary information to make an informed and accurate proposal. Respondents are encouraged to make site visits and ask for any amplifying information which may assist their ability to prepare an appropriate proposal. The City will also host a pre-proposal conference on November 7, The City of Mobile is the sole decision-maker regarding the awarding of any contract resulting from an RFP process, and the City of Mobile, at its sole discretion, reserves the right to reject any or all submittals, to solicit and accept proposals from parties who have not responded to this RFP, or to terminate this process at any time. The award of any contract resulting from this RFP will be subject to all required City approvals. 7.4 Reference checks may be used to confirm proposers experience including relevancy of prior projects to the services the City is requesting and the quality of services and staffing provided to prior clients. Key aspects of performance such as adherence to tariffs/budgets, problem solving, project management, business development success, communication abilities, and quality of deliverables and outcomes will be taken into consideration. 7.5 Upon completion of interviews, the City will select the most qualified respondent with whom the City will commence contract negotiations. If a satisfactory contract cannot be negotiated in a reasonable time with the selected respondent, then the City, in its sole discretion, may terminate negotiations and begin contract negotiations with another respondent as the City deems appropriate. 7.6 The selection of any respondent for contract negotiations shall not imply acceptance by the City of all terms of the proposal, which may be subject to further negotiations and approvals before the City may be legally bound. 7.7 The City reserves the right at any time to approve, disapprove, or modify proposed Program plans, timelines and deliverables, provided that all modifications are within the scope of services sought by this RFP. Page 9 of 11

10 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, If the selected Proposer fails to deliver the goods, services, or deliverables within the negotiated contract and the negotiated contract timeline or if the selected Proposer fails to meet the City s acceptance criteria stated in the negotiated contract during the initial term of the contract, the City reserves the right to terminate the contract and begin contract negotiations with and award a new contract to another proposer without initiating another solicitation process. 7.9 The City will evaluate proposals based on the following areas and emphasis: Total Score 100 Experience and Capacity To Perform 30 Terminal Management Plan 35 Financial Proposal 35 8 PROPOSAL SUBMISSIONS 8.1 Please use the cover sheet at the end of this RFP document (Exhibit D), or a reasonable facsimile, and include with your proposal. Please arrange your proposal information consistent with template information organization. It will ensure the City has everything it needs to score your proposal fairly. 8.2 Submit proposals in paper and electronic format to be received by the City of Mobile Procurement Department by 4:00 p.m, Thursday, February 23, 2018, in a sealed package or envelope marked: City of Mobile Request for Proposals Mobile Alabama Cruise Terminal Management RFP # Due February 23, 2018 Packages may be mailed to City of Mobile Procurement Department, P.O. Box 1948, Mobile AL Packages may be delivered to City of Mobile Procurement Department, 205 Government Street, 4 th Floor, South Tower, Mobile, AL Page 10 of 11

11 Mobile Alabama Cruise Terminal Terminal Management RFP # Due: 4:00 p.m., February 23, EXHIBITS A Carnival Berthing Agreement B Mobile Alabama Cruise Terminal Tentative Berth Schedule C Financial Summary D Proposal Submission Requirements Page 11 of 11

12 CRUISE TERMINAL AND BERTHING AGREEMENT THIS CRUISE TERMINAL AND BERTHING AGREEMENT (hereafter the "Agreement") is made and entered into on this 30th day of September, 2015 (the "Effective Date"), between The City of Mobile (hereafter "City"), an Alabama Municipal Corporation, with its principal place of business at 205 Government Street, Mobile, Alabama and Carnival Cruise Line, a division of Carnival Corporation, a Panamanian corporation (hereafter "Carnival"), organized and existing under the laws of the Republic of Panama with its principal place of business at Carnival Place, 3655 NW 87 Avenue, Miami, Florida WITNESETH: WHEREAS, the City owns, manages, operates and maintains the Mobile Alabama Cruise Terminal including, its cruise terminals and adjacent facilities, located at 201 Water Street, Mobile, Alabama (the "Port Facilities"); and WHEREAS, the City is vitally interested in promoting the cruise ship industry by attracting expanded cruise ship service to Mobile Alabama Cruise Terminal; and WHEREAS, Carnival is in the business of conducting passenger cruise vessel operations on a round-trip basis from an originating port ("Cruise Operations") and would like to conduct those operation from the Mobile Alabama Cruise Terminal; and WHEREAS, discussions have been conducted between the City and Carnival concerning mutually satisfactory terms and conditions for operating Carnival Vessels from Mobile Alabama Cruise Terminal, and this Agreement has been determined to be in the best interests of all concerned and to have significant benefits to the City and to business activities in the Mobile Alabama Cruise Terminal area. NOW, THEREFORE, the City and Carnival hereby agree as follows: 1. DEFINITIONS As used in this Agreement, the following terms shall apply: (A) (B) "Agreement" has the meaning set forth in the introduction. "Berth Schedule" has the meaning set forth in Section 4(A) of this Agreement. (C) "Carnival" shall mean Carnival Cruise Line, a division of Carnival Corporation, a Panama corporation. (D) "Carnival Affiliate" means any or all of Carnival's subsidiaries, affiliates, operating brands and any corporation in which Carnival owns a Controlling Interest, including, without limitation, Carnival plc, Carnival Cruise Line, Holland America Line, Cunard Line, Seaboum Cruise Line, Costa Cruise Line, Princess Cruises, P&O Cruises, and any other corporation, company or entity in which Carnival has, may purchase or acquire a Controlling Interest during the Term of this Agreement. 1

13 (E) (F) (G) (H) "Carnival Events of Default" has the meaning set forth in Section II of this Agreement. "City" has the meaning set forth in the introduction. "City Event of Default" has the meaning set forth in Section II(C) of this Agreement. "Controlling Interest" shall mean (i) ownership of at least fifty percent (50%) of the equity or other interest in the entity or (ii) management control, by control of the Board of Directors, by contract or otherwise, of the business or operations of such entity. (I) (J) "Cruise Operations" has the meaning set forth in the Recitals. "Effective Date" has the meanings set forth in the introduction. (K) "Equal Vessel" shall mean the same quality vessel or better with the same passenger capacity or greater as the Fantasy Class VesseL (L) "Fantasy Class Vessel" has the meaning set forth in Section 4(A) of this Agreement. (M) "Fees" shall mean all fees, tariffs, charges, and other sums payable by Carnival under this Agreement. (N) "First Call" has the meaning set forth in Section 5(A) of this Agreement. (O) "Force Majeure Event" means any situation in which the performance of a party's duty, obligation or undertaking under this Agreement is prevented, delayed, retarded or hindered by an Act of God, epidemic, fire, hurricane, earthquake, flood, explosion, action of civil commotion, sabotage, malicious mischief, strike, lockout, action of labor unions, condemnation, governmental restriction, order of civil or military or naval authorities, embargo, impossibility of obtaining materials, or any other cause, whether similar or dissimilar to the foregoing, not within the reasonable control of the party in question including, with respect to Carnival's Vessels, any extended failure of equipment, propulsion or similar mechanical or engine failure and with respect to the City, damage to the Terminal pier, or closure of the harbor or channel that prohibits the Vessel(s) from utilizing the Terminal. (P) "Guaranty" has the meaning set forth in Section 2(A)(i) of this Agreement. (Q) "Homeport Operations" shall mean those operations of a Carnival Vessel which utilizes the Terminal for the embarkation and/or disembarkation of passengers at the commencement or completion of a voyage of a minimum duration of forty-eight (48) hours and that has entered or will enter international waters. (R) (S) (T) (U) (V) "Homeport Vessel" shall mean a Vessel conducting Homeport Operations :from The Terminal. "Impositions" has the meaning set forth in Section 6(A) of this Agreement. "Indemnified Persons" has the meaning set forth in Section 15(B)(i) of this Agreement. "Insurance Requirements" has the meaning set forth in Section II(A)(i) of this Agreement. "MAC Event" has the meaning set forth in Section 2(A)(iii) of this Agreement. 2

14 (W) (X) (Y) "MAC Termination" has the meaning set forth in Section 2(A)(iii) of this Agreement. "Marketing Incentive" has the meaning set forth in Section 3(D)(i) of this Agreement. "Passenge Service Charge" means a fee assessed for (i) each passenger embarkation, (ii) each passenger debarkation and (iii) each passenger who arrives and leaves with the Vessel from the Port Facilities without embarking or disembarking. (Z) "Person" shall have the meaning set forth in Section 2(B)(v) of this Agreement. (AA) "Port Call" shall mean a visit to a port for the purpose of allowing passengers onshore only to tour the sites with the passengers re-boarding the vessel prior to the vessel sailing. (BB) (CC) "Port Facilities" has the meaning set forth in the Recitals. "Renewal Term" has the meaning set forth in Section 5(B)(i) of this Agreement. (DD) "Shortfall Amount" has the meaning set forth in Section 2(A)(i) of this Agreement. (EE) (FF) "Storage Area" has the meaning set forth in Section 2(B)(vi) of this Agreement. "Term" has the meaning set forth in Section S(A) of this Agreement. (GG) "Terminal" shall mean the Mobile Alabama Cruise Terminal, including its approaches and the wharf apron/vessel berths and all related port facilities. (HH) "Vessel" or "Carnival Vessel" shall mean a vessel or vessels owned or operated presently or at any time by Carnival during the Term (as hereafter defined) of this Agreement and as further referenced herein below at Section 4(A). (II) "Water Usage Cap" has the meaning set forth in Section 3(B) of this Agreement. 2. COMMITMENTS BY CARNIVAL AND CITY (A) Carnival Commitment. (i) During the 13-month period following the First Call (as defined herein), Carnival hereby guarantees to the City a minimum of One Million Three Hundred Thousand Dollars ($1,300,000.00) in Passenger Service Charges (the "Guaranty"). Any cruise passenger fees, including without limitation the Passenger Service Charge, generated by any class of Carnival Vessel calling at the Terminal shall count toward the Guaranty. The Guaranty shall be decreased by an amount corresponding to any decrease in the fees (or any successor fee or tax) that may be implemented by the City or that Carnival may be specifical1y entitled to by virtue of the terms herein. Within sixty (60) days after the end of the Term, the City shall calculate whether Carnival has met the Guaranty. Should the City determine that Carnival has failed to meet the Guaranty, it shall send a written notice along with an invoice in the amount equal to the difference between the actual Passenger Service Charges paid and the annual Guaranty (the "Shortfall Amount"). Carnival shall have thirty (30) days to dispute any such 3

15 alleged Shortfall Amount after receipt of the notice from the City. If so disputed, the parties shall meet to amicably resolve the dispute. If after sixty (60) days, the parties cannot resolve the dispute, either party may bring a court action in accordance with Section 18 of this Agreement. In so far as there is no dispute over the Shortfall Amount, Carnival shall pay the Shortfall Amount. The payment of the Shortfall Amount shall be the sole and exclusive remedy of the City for Carnival's failure to meet the Guaranty and Carnival shall not be liable for any other damages, loss or claims of the City arising from Carnival's failure to meet the Guaranty whether in contract, tort or otherwise. Should Carnival terminate this Agreement without cause prior to the end of the Term, the City or its designee may seek as its sole and exclusive remedy the unrealized balance of the Guaranty for the remaining Term of this Agreement (subject to its obligations. to mitigate damages as set forth in Section li(b)). (ii) If a Carnival Vessel does not call at the Terminal due to a Force Majeure Event, then this Agreement will be modified to reduce the Guaranty by an amount equal to the proportional Passenger Service Charges otherwise payable for the calls missed due to the Force Majeure Event. Carnival shall notify City within fifteen (15) calendar days in writing of any situation which will limit the Vessel's sailings. If any Force Majeure Event occurs for a period of thirty (30) consecutive days, and Carnival is unable to utilize the Terminal, either party may terminate this Agreement without further liability by providing written notice to the other party within ten (10) days of the expiration of the 30- day period. (iii) MAC Termination. If any new or change of applicable law is enacted, whether such law or regulation governs or relates to Carnival's obligations and performance under this Agreement, which imposes a fee, tax or operating requirement which, in Carnival's opinion, reasonably exercised, would have a material adverse effect on Carnival's operations at the Terminal (a "MAC Event") and such material adverse effect could be avoided or reduced, in whole or in part, by repositioning Carnival's vessels, Carnival shall have the right to terminate this Agreement at which time the Guaranty shall be of no further force or effect (a "MAC Termination"), except that the City shall be entitled to all Passenger Service Charges incurred on or prior to the MAC Termination under the Guaranty to the date of termination. Carnival shall deliver written notice of a MAC Termination to the City within 15 calendar days after Carnival's actual knowledge of the occurrence of a MAC Event, along with written documentation of the evidence which gave rise to Carnival's reasonable determination that a MAC event has occurred. Carnival's termination of this Agreement under this Section shall not constitute an "event of default" as defined herein. (B) City Commitments. (i) The Passenger Service Charge will be fixed as of the date of this Agreement and shall remain unchanged for the first 13-month period fo11owing the First Call. Thereafter, any increase in the Passenger Service Charge may not exceed three percent (3%) annually. (ii) Except for any increase in the Passenger Service Charge after the initial 13-month period following the First Call as set forth in Section 2(B)(i) herein, the City, to the extent permissible law, shall not impose or assess a new charge or fee on Carnival Vessels during the Term of the Agreement (including any renewal periods) without the express written consent of Carnival. 4

16 (iii) During the Term of this Agreement, at hours on each scheduled arrival date of a Carnival Vessel, the City shall be responsible for assuring that the Alabama State Port Authority will check the turning basin areas to ensure both are free of vessels, barges and boats anchored or docked in that location as necessary to allow the scheduled turning of the Vessel. (iv) City, for and in consideration of the Passenger Service Charge, and subject to the terms contained in this Agreement, does hereby grant to Carnival, and Carnival does hereby accept from City, a nonexclusive license to operate passenger vessels, either directly or through its subsidiaries, divisions or affiliates, at the Terminal and adjacent Port Facilities for the times and durations listed on the Berthing Schedule (as hereinafter defined). (v) Carnival has a non-exclusive license to use, only on days when a Carnival Vessel is at the Terminal, any office space in the terminal designated for such use by City solely to conduct administrative and clerical activities relating to Carnival's performance of Cruise Operations at the Terminal, at no cost to Carnival. This license is a personal right of Carnival, and may not be transferred or assigned to any other person or entity ("Person") without City's prior written consent. (vi) City grants Carnival a non-exclusive license to use, at no cost to Carnival, the warehouse space in the Terminal for each Carnival Vessel conducting Cruise Operations at the Terminal (each of those areas is referred to herein as a "St\)rage Area"). The location of each Storage Area will be determined by agreement of the parties at least 60 days prior to the date a Carnival Vessel begins conducting Cruise Operations under this Agreement. (vii) City shall submit to Carnival a Terminal Security Plan for its review and approval. Such plan shall be consistent with industry standards and shall comply with local, state and Federal law. During the Term, if any laws or regulations are changed or enacted which cause the costs of the Terminal security incurred by the City to increase by more than fifty percent (50%) from the costs of the Terminal security during the First Call, City will promptly notify Carnival and the parties shah meet to discuss how to address the increase in costs. If the parties are unable to reach an agreement on how best to address the increase in costs within ninety (90) days following Carnival's receipt of notice from the City, City may terminate this Agreement. (viii) City shall not require Carnival to use, hire or engage any specific labor, agent, service provider or vendor to provide any services related to Carnival's Cruise Operations. It being understood and acknowledged that, except for parking services as set forth in Section 3(E) of this Agreement, all third party service providers or vendors to provide services related to the vessel or the Cruise Operations shall be engaged solely at the discretion of Carnival. 3. FEES AND CHARGES (A) (i) Passenger Service Charge. During the Term, the City shall assess Carnival only the following fees: (a) A Passenger Service Charge in the amount of eight dollars ($8.00) per passenger movement. For the purposes of this Agreement a ''passenger movement" means each person who embarks on, or who disembarks from, any of Carnival's Vessels at the Terminal, or who arrives and leaves with the vessel 5

17 from the Terminal without embarking or disembarking, excluding any of the Carnival Vessel's crew, on-board concessionaire employees or other contractors performing services aboard the Vessel. (ii) All dockage, wharfage and other fees of the City identified herein, and related to the berthing and use of the Terminal and Port Facilities by Carnival under the terms of this Agreement are included in the Passenger Service Charge. (iii) For each. sailing, Carnival shall provide City a copy of the Vessel's passenger manifest, which shall be used to calculate the Passenger Service Charge. (iv) In the event a Carnival Vessel's departure from the Terminal is delayed by weather or other reasons beyond its control for more than a 24 hour period, no lay day or other charge may be assessed by the City against Carnival for the first seven (7) day period of such delay, and provided that the Carnival Vessel does not interfere with the use of the Terminal by another vessel. Notwithstanding the foregoing, in the event that the Carnival Vessel's departure is delayed for reason's within Carnival's direct control, the seven-day period will be reduced to forty-eight (48) hours. (B) Potable Water. Potable water fees are included in the Passenger Service Charge, provided that the amount of actual potable water used by Carnival included within the Passenger Service Charge during the Term will be capped at 2,200 metric tons per Vessel call (the "Water Usage Cap"). Should Carnival's usage of potable water exceed the Water Usage Cap during any calendar year of the Term, Carnival shall pay City a potable water fee in accordance with the standard published rates then charged by the City to other operators at the Terminal who receive potable water for their respective operations, plus any utility or other applicable tax. (C) Payment of Fees by Carnival. All fees, including specifically the Passenger Service Charge, owed by Carnival under this Agreement shall be payable to the City on a quarterly basis. City shall deliver invoices for payment to Carnival accordingly. Interest of eight percent (8%) per year shall be assessed by the City on the balance due on amounts owed which remain unpaid for more than thirty (30) days from the original invoice date. (D) Marketing. (i) In consideration of the brand recognition Carnival brings through its advertising campaigns to the year-round cruise market at the Port Facilities, the utilization of the Terminal, and the related economic benefits derived by the City therefrom, the City will provide to Carnival a marketing incentive to be dedicated by Carnival to the promotion of cruises from the Terminal, in the amount of two hundred thousand dollars ($200,000.00) per quarter year of the Term (the "Marketing Incentive"). This Marketing Incentive shall not be considered a guaranty and shall only be due and payable as long as Carnival conducts Homeport Operations at the Terminal and shall be capped at $800, during the Term. 6

18 (ii) The City will pay the Marketing Incentive to Carnival in equal quarterly installments, payable thirty (30) days after the end of each calendar quarter commencing at the end of the first quarter of 2017, of two hundred thousand dollars ($200,000.00). In the event the City fails to pay the Marketing Incentive when due, Carnival shall have as its sole remedy the right to set-off such amounts owed hereunder from the Passenger Service Charge otherwise payable to the City. (E) Parking. Parking fees shall be charged and collected directly by the City, or its designated third party contractor, for the City's own account. During the Term, the City may charge up to $18.00 per automobile, per day, in connection with Homeport Operations. This day rate may be adjusted by the City in its reasonable discretion, providea that City will (i) consult with Carnival prior to implementing any such increase and (ii) maintain its rates in line with other port facilities that provide similar cruise passenger services. 4. PRIORITY USE OF TERMINALS (A) Preferential Berthing Rights. During the Term, the City hereby grants Carnival a berth preference and priority to use the Terminal for a Fantasy Class vessel (the "Fantasy Class Vessel") or Equal Vessel for Homeport Operations and/or transit calls for the times and durations as set forth in the initial berth schedule (hereafter "Berth Schedule") attached hereto and hereby made a part of this Agreement as Exhibit A. The term "priority to use" means a first right and preference to Carnival Vessels over any other vessel requesting berthing rights at the Terminal as set forth in this Section, but does not mean an exclusive berthing right at the Terminal. From time to time, Carnival may submit amendments to the Berth Schedule, which add, delete or change the itineraries, voyages, ships and/or time of operations due to events that occur outside of Carnival's control, including without limitation, inclement weather. Additionally, Carnival may submit amendments to the Berth Schedule for operational reasons, including without limitation offering longer or shorter itineraries, provided that Carnival must provide City with no less than ninety (90) days prior written notice with respect tb such operationally desired changes. Subject to the terms herein, City shall accept all such reasonable amendments to the Berth Schedule provided there is no prior or existing reservation of the Terminal by other vessels. City shall notify Carnival in writing of any such conflict in the amended Berth Schedule within ten (10) business days of its receipt. Upon receipt of such notice, Carnival shall revise the amended Berth Schedule to accommodate any such conflicts identified by the City. Should such notice not be delivered by City to Carnival, the amended Berth Schedule shall be deemed incorporated herein and of full force and effect. In the event Carnival exercises its option to extend the Term of this Agreement as provided in Section 5 of this Agreement, Carnival shall submit to the City and the City shall accept, without modification, the updated Berth Schedule for the applicable renewal period. (B) Exclusive Access to Port Facilities. The Berth Schedule shall include the dates and times in which Carnival intends to berth such Vessels and the brand/owner, size and passenger capacity of each Vessel during the applicable period. The City shall make the Terminal and the related Port Facilities exclusively available to Carnival for the berthing of its Vessels at the times and on the dates indicated 7

19 by Carnival in the Berth Schedule. Subject to the Guaranty, Carnival may substitute the actual Vessels that call on the dates in the Carnival Berth Schedules, provided that each such Vessel would reasonably require the use of the Terminal and/or the parking facilities. All parking facilities adjacent to the Terminal shall be made exclusively available to Carnival for the duration of the voyages reflected in the Berth Schedules as per Exhibit A. In addition, City shall make additional parking spaces available off-site to meet capacity requirements as per Exhibit A. (C) Additional Rights of Carnival. Subject to the City's reasonable rules and regulations applicable to all operators at the Port Facilities, and only during such times and durations as its vessels are within the Port Facilities, Carnival shall have in connection with its preference rights set forth in this Section: (a) the right of ingress and egress to and from the Terminal and related Port Facilities, as applicable, for its officers, cruise agents, employees and passengers and those of its principals; (b) the right to embark and disembark passengers, and to bunker, load, store and moor Carnival cruise ships at said berth; (c) vessel related marketing events including travel agent functions, charity receptions and inaugural activities; and (d) the right to use all passenger facilities located at such berths, including the use of passenger waiting rooms, offices and storage areas reasonably acceptable to Carnival; comfort and washroom facilities, United States Customs and Border Protection and/or Immigration facilities used in connection with the embarking and debarking of passengers and their luggage based upon the Berthing Schedule then in force. The Terminal must not be used by either party for: (a) the installation or use of container cranes, or the loading, unloading, or dockage of container vessels; (b) any illegal, obnoxious or offensive activity; or (c) loading, unloading or storage of explosive, nuclear, radioactive, or hazardous materials without City's prior written approval. (D) Additional Obligations of Carnival. (i) Carnival must obtain and maintain all permits, certifications, licenses, approvals and fees required for its activities at or about the Terminal. (ii) Carnival must not interfere with the operations of City, its tenants, or any other permitted user of City's property. (iii) Carnival shall immediately respond to Coast Guard and Harbormaster advisories regarding weather events and relocate its ships as required. (E) Rights of the City. (i) The City shall have the right to allow other vessels to use the Terminal at any time during which such berth is not otherwise occupied by a Vessel pursuant to the Berth Schedule, provided such use does not unreasonably interfere with the use of the Terminal by Carnival in accordance with the Berth Schedule. The City shall not enter into any agreement or other understanding with any other party for the berthing of vessels at the Terminal which interferes with or precludes its use, on a preferred and priority basis, by Carnival and Carnival Affiliates including, a Berth Schedule submitted for any renewal period. 8

20 (ii) The City shall have the right to allow other parties and vessels to use the Terminal at any time during which such berths at the Terminal or the Port Facilities are not otherwise committed to Carnival Vessels pursuant to the Berth Schedule and this Agreement. 5. TERM (A) Term. This Agreement shall be effective on the Effective Date and shall continue for a thirteen (13) month period following the First Call (the "Term"). For purposes of the Guaranty and the Berth Schedules, the effective period of this Agreement shall commence on the date of the first Carnival Vessel call at the Terminal following the Effective Date, which is currently anticipated to be November 9, 2016 (the "First Call") and shall expire thirteen (13) months thereafter, provided that the actual date of expiration will align with the last Vessel call identified on the then current Berth Schedule. (B) Renewal Option. (i) At any time during the Term of this Agreement, if no Carnival Event of Default has occurred and is continuing, Carnival shall have the option, at its sole discretion, by written notice to the City no later than forty-five (45) days prior to the end of the then current term, to extend the Term of the Agreement for up to two (2) additional one-year periods under the same terms and conditions as set forth herein (each a "Renewal Term", if so exercised by Carnival, to be included as part of the "Term"), subject to Section 5(B)(ii) below. (ii) In the event that Carnival exercises its right to extend the Term pursuant to Section 5(B)(i), the parties acknowledge and agree that a new Guaranty and Marketing Incentive will apply to each Renewal Term, provided that (1) in the event the Berth Schedule for a Renewal Term contemplates substantially the same number of calls (plus or minus five (5) calls) and the same Fantasy Class Vessel or Equal Vessel, the Guaranty and Marketing Incentive shall remain the same, except for any adjustments to reflect increases to the Passenger Service Charge allowed for under Section 2(B)(i), or (2) in the event that the Berth Schedule for a Renewal Term contemplates more or less than five (5) calls from the prior year or a different class of Carnival Vessel, the parties shall meet to negotiate a new Guaranty and Marketing Incentive amount for the applicable Renewal Term. 6. IMPOSITIONS. Subject to the terms herein, as additional fees payable during the Term, Carnival will pay' all Impositions as and when they become due. The term "Impositions" means all taxes, assessments, use and occupancy taxes, excises, levies, license and sales and permit fees and taxes, and other charges by any public authority, general or special, ordinary or extraordinary, foreseen or unforeseen, of any kind or nature whatsoever, which shall or may during the Term be assessed, levied, charged, confirmed, or imposed by any public authority upon, or which accrue or become due or payable out of or on account of, Carnival's operations at the Terminal or any part thereof, including, without limitation, any harbormaster, pilot, tug, agent, line handler, ship agent services, crew support services, US Customs USW fees, and Alabama State Port Authority fees, charges and tariffs. 9

21 7. OPERATION OF TERMINALS (A) Terminal Maintenance Responsibility. (i) Except as provided in Section 9(A)(v) of this Agreement, the City shall, at its own cost and expense, (i) keep the Terminal in a clean, orderly, secure, and safe condition, free of rubbish and trash, and in good working order, (ii) maintain the landscaping in the interior and exterior and be responsible for the maintenance of the apron and wharf portions of the Terminal, and (iii) make repairs at its own cost and expense to all paved surfaces, all utilities and lighting on a reasonable basis. (ii) The City shall be obligated and responsible for maintenance and operation of the Terminal in accordance with the current practice and as required by applicable Jaws (excluding security requirements). Without limiting the foregoing, the City shall, at no cost to Carnival: (a) Provide utilities, including without limitation electricity, water and sewer service to the Terminal, subject to Section 3(B) of this Agreement. (b) Maintain, repair and replace, as needed, the electrical, heating, ventilating, air-conditioning, elevators, escalators, mechanical, plumbing, safety systems, wiring systems, carpets, fixtures, furniture, lighting and structural components of the buildings and improvements comprising the Terminal and paint the exterior and interior of Terminal, as reasonably necessary, and keep same in good working order and operating condition to accommodate Carnival's Vessel during the Term and subject to this Agreement. (c) Provide all necessary janitorial services in accordance with the City's current practice. (iii) Carnival shall be responsible at its sole cost, risk and expense for repairing any damage to the Terminal which is caused by Carnival or Carnival's Affiliates, their employees, contractors, agents, servants, representatives, invitees or permittees. Carnival shall not make any change or alterations to the Terminal without the prior written permission of the City. Should Carnival fail to (i) commence repair, replacement, maintenance or restoration of all such property which may become the subject of loss, damage or destruction within thirty (30) days after having been notified in writing by the City to perform such obligations as stated above, and (ii) continuously without interruption pursue the completion of such repair, replacement, maintenance or restoration, in addition to such remedies as may be afforded to the City by law, the City is hereby authorized by Carnival to perform the work at Carnival's cost, risk and expense, and Carnival shall pay to the City the actual reasonable expenses incurred by the City plus interest thereon at the rate of 8% per year. Upon completion of any such work, City shall submit an invoice to Carnival, as well as provide documentation and other evidence to support its expense reimbursement request. Carnival shall remit payment to City for such expenses within thirty (30) days of receipt of invoice. (iv) If at any time during the Term of this Agreement, Carnival reasonably believes that City is not properly maintaining the Terminal or is not otherwise providing the services required of it hereunder, Carnival shall promptly give written notice thereof to City giving details of such claim. City agrees that, if it accepts such claim, it wijl within a period of thirty (30) days, take all reasonable measures to remedy any such matter complained of, or if it does not accept such claim, the parties shall use good faith efforts to resolve the matter by mutual agreement, failing which resolution Carnival shall be entitled to terminate this Agreement without liability. 10

22 (v) City shall maintain, or cause to be maintained, the dredged depth of the berth (which shall be done during regularly scheduled dredging events) to a depth to safely accommodate, at all stages of tide, cruise ships having a maximum draft not in excess of thirty (30) feet. While the City is performing repairs, refurbishment or maintenance work on the Terminal or adjacent areas, City shall endeavor to minimize the impact of maintenance work on the operation of Carnival's cruise ships in the berth area. (B) Environmental. The City shall be responsible to promptly correct, at its sole cost and expense, to the extent required by applicable laws, any environmental conditions or environmental hazards existing at the Terminal, excluding only any hazards or environmental conditions caused or contributed to by Carnival or Carnivals Affiliates, their agents, employees, or contractors, which hazards and conditions shall be promptly remediated by Carnival at its sole cost and expense to the extent required by applicable laws. Carnival will reasonably cooperate with the City in such correction or remediation of any environmental hazards for which the City is responsible, provided same is performed in a manner that does not unreasonably interfere with Carnival's use of Terminal. Similarly, the City will cooperate with Carnival in its remediation of any hazards or conditions for which Carnival is responsible. Carnival shall only use, store, handle or transport environmentally hazardous material (as defined by any federal, state or local statutes, laws or regulations) with the utmost care and after obtaining all necessary permits and licenses to do so. (C) Signage. Carnival at all times shall be permitted to maintain signage inside and outside the Terminal for Carnival, subject to all local ordinance requirements, and provided all proposed signage has been approved in writing by the City, such approval not to be unreasonably withheld, conditioned or delayed. Carnival shall be solely responsible for all costs associated with the design, construction, installation, maintenance and removal of such signage. (D) Damage or Destruction (i) Notice to Carnival. If the Terminal or any improvement thereto is materially damaged or destroyed by fire, windstorm, hurricane or other casualty, City must immediately give Carnival notice of the damage or destruction, including a description of the damage and its cause. (ii) Total Destruction. If City determines, in its sole discretion, that the Terminal is totally destroyed by fire, windstorm, hurricane, or any other casualty, City may terminate this Agreement, in which event City will be entitled to all insurance proceeds payable by reason of the casualty; provided however, that City shall use commercially reasonable efforts (prior to any such termination) to provide Carnival with substitute facilities to conduct its cruise operations for the then remaining Term. Such substitute facilities offered by City must be reasonably acceptable to Carnival. (E) Condemnation 11

23 (i) Interests of Parties. If the Terminal or any part thereof is taken for public or quasi-public purposes by condemnation as a result of any action or proceeding in eminent domain, or is transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, all condemnation proceeds will be payable to City. (ii) Total Taking - Termination. If the entire Terminal is taken or transferred, or if the taking or transfer of a substantial part of the Terminal leaves the remainder of the Terminal in such condition or in such form, shape, or reduced size as to be not effectively and practicably usable in the opinion of City for the intended purpose, this Agreement terminates on the date title to such portion of the Terminal so taken or transferred vests in the condemning authority; provided however, that City shall use commercially reasonable efforts (prior to any such termination) to provide Carnival with substitute facilities to conduct its cruise operations for the then remaining Term. Such substitute facilities offered by City must be reasonably acceptable to Carnival. (iii) Partial Taking - Continuation with Fees Abated. If the taking or transfer of only an insubstantial part of the Terminal leaves the remainder of the Terminal in such condition and in such form, shape, or size as to be used effectively and practicably in the opinion of City for the intended purpose, this Agreement terminates only as to the portion of the Terminal so taken or transferred as of the date title to such portion vests in the condemning authority, but continues as to the portion of the Terminal not so taken or transferred. After such date, if the City has not provided an alternative reasonably suitable to Carnival, which the City is under no obligation to provide, then the fees required to be paid by Carnival to City, including without limitation the Passenger Service Charge, will be reduced during the unexpired portion of this Agreement to that proportion of the fees which the value of the part of the Terminal not so taken bears to the value of the total of the Terminal, such values to be determined as of the date of the actual commencement of the physical taking of the Terminal when Carnival is disturbed in its possession as a result thereof but immediately before any actual taking. (F) Advertising. Carnival may, from time to time, present the City with opportunities to incorporate inside and/or outside the Terminal advertising proposals promoting third parties and their products and service. The parties agree to discuss each opportunity in good faith in order to determine whether such opportunity merits consideration. If the parties agree to incorporate any third-party advertising inside or outside the Terminal, such agreement will be memorialized in a separate writing mutually agreeable to the parties. 8. INSURANCE REQUIREMENTS (A) Insurance Obligations of Carnival. During the Term, Carnival shall maintain the following insurance coverage on the Carnival Vessels calling at the Port Facilities. All such polices except those required by subsections (i) and (iii) below shall name the City as an additional insured for purposes of this Agreement: (i) Comprehensive General Liability Insurance - Carnival must maintain commercial general liability insurance and Protection and Indemnity Insurance, including pollution liability coverage, for liability for property damage, bodily injury, personal injury and death. The insurance provided under 12

24 this section must be in the amount of not less than $5,000,000 per occurrence for property damage and not less than $5,000,000 per occurrence for personal injury, bodily injury or death. This insurance must protect against liability to any employees or servants of Carnival and to any other person or persons whose property damage, personal injury or death arises out of or in connection with the occupation and, use of the Terminal, and must include (i) coverage for premises and operations, including completed operations, (ii) coverage for products liability, and (iii) contractual liability coverage insuring the obligations of Carnival under the terms of this Agreement. (ii) Comprehensive Motor Vehicle Liability Insurance - Carnival shall procure and maintain at its sole cost and expense comprehensive motor vehicle liability insurance which shall include hired car and nonownership coverage with limit of liability of not less than one million dollars ($1,000,000) for all injuries or deaths resulting to any one person or from any one occurrence. The limit of liability for property damage shall be not less than one million dollars ($1,000,000) for each occurrence and aggregate. (iii) Workers' Compensation Insurance - Carnival must maintain workers compensation insurance to protect against claims under Alabama. Workers Compensation laws as well as all Federal acts applicable to Carnival's operations at the Terminal. The limit of liability for such coverage must at least meet applicable statutory requirements. (iv) Employer's Liability- Carnival must maintain employer's liability insurance in the minimum amount of $1,000,000 per occurrence for personal injury, bodily injury or death to any employee of Carnival may bring a claim outside the scope of the Alabama Worker's Compensation laws or federal acts applicable to Operator's operations at the Terminal. This insurance must contain all endorsements necessary to cover maritime operations, including admiralty benefits and damages under the Jones Act, in the minimum amount of $1,000,000 per occurrence. (v) Automobile Insurance - Carnival must maintain automobile liability insurance coverage on all its owned or leased vehicles in the minimum amount of $1,000,000 combined single limit coverage per occurrence. Additionally, each policy must contain an endorsement waiving all rights of subrogation against City and their respective agents and employees. With respect to Carnival's operations at the Terminal and its obligations under this Agreement, all insurance required of Carnival in this Section shall be primary to any similar insurance that may be carried by the City for its own protection but shall in no way limit Carnival's indemnity obligations to City set forth in Section 15. All policies required herein shall provide for thirty (30) days' written notice of cancellation or material change to be sent to the City pursuant to the notice provisions contained in Section 17 of this Agreement. If a Carnival Affiliate utilizes the Terminal for Homeport Operations or Port Call Operations under the terms of this Agreement, it will be required to provide 'all insurance required under this Section before use of the Terminal. Carnival agrees that its liability and/or protection and indemnity insurance shall be extended to cover any entity deriving its rights to be at the Terminal or otherwise on City property from Carnival or a Carnival Affiliate for the purpose of supporting any Vessel at the Terminal. 13

25 (B) Insurance Obligations of The City. The City, a self-insured municipal corporation, shall maintain, or shall cause its third party contractor hired to operate the Terminal, the following insurance coverage throughout the Term: (i) Comprehensive General Liability Insurance - City shall procure and maintain at its sole cost and expense comprehensjve general liability insurance with limit of liability of not less than 5 million dollars ($5,000,000) for all injuries or deaths resulting to any one person or from any one occurrence. The limit of liability for property damage shall be not less than five million dollars ($5,000,000) for each occurrence and in the aggregate. (ii) Comprehensive Motor Vehicle Liability Insurance - City shall procure and maintain at its sole cost and expense comprehensive motor vehicle liability insurance which shall include hired car and nonownership coverage with limit of liability of not less than one million dollars ($1,000,000) for all injuries or deaths resulting to any one person or from any one occurrence. The limit of liability for property damage shall be not less than one million dollars ($1,000,000) for each occurrence and aggregate. (iii) Workers' Compensation Insurance City shall procure and maintain at its sole cost and expense, workers' compensation insurance as required by applicable law. With respect to City's operations at the Terminal and its obligations under this Agreement, all insurance required of the City in this Section shall be primary to any similar insurance that may be carried by Carnival but shall in no way limit City's indemnity obligations to Carnival set forth in Section 15. Notwithstanding any other provision of this agreement, City's liability is subject to the limitations set forth in Alabama law, and nothing in this section shall be deemed a waiver of any defense or immunity or statutory damages cap or notice requirements. (C) Insurance Certificates. During the Term, each party shall furnish the other with written evidence of the required insurance coverage set forth above and shall provide copies of annual renewals. (D) Insurance Requirements. The phrase "required Policy" means each policy of insurance required to be maintained by Carnival or City under the terms of this Agreement. Each Required Policy (except with respect to P&l insurance provided by a P&l Club who is a member of the International Group of P&l Clubs) must be written by a company satisfactory to the other party, with an A.M. Best Company financial rating of not less than A:XII (or similar rating by a comparable service selected by the other party should A.M. Best Company cease to provide such ratings) and be licensed to do business in Alabama or, if the aforesaid is not available, by a company qualified to do business as a non-admitted insurer in Alabama under current Alabama surplus lines requirements. (E) Indemnity for Noncompliance with Insurance Requirements. Each party INDEMNIFIES, DEFENDS and HOLDS HARMLESS the other from any loss it may suffer due to such party's failure to comply with all the above insurance requirements, including the requirement of obtaining waivers of subrogation, and due to any insurance coverage being invalidated because of such party's failure to comply with the terms, conditions and warranties of any Required Policy. 14

26 9. LAWS RULES AND REGULATIONS (A) Carnival Obligations. Carnival shall: (i) not use the Terminal for any unlawful purpose, any use other than a cruise passenger terminal (and related office and administrative uses), or any use prohibited by applicable laws, as amended from time to time; (ii) observe an laws and ordinances applicable to the installation, maintenance and removal of any improvements, machinery or other equipment on, in, or near the Terminal (including access or utility connections) and to take appropriate safeguards to prevent loss, damage or injury to the Terminal or to any adjacent property as a result of such installation, maintenance or removal of such improvements, machinery or equipment; (iii) adhere to the applicable provisions of the City's and the Alabama State Port Authority's tariffs for the use and handling of hazardous materials and agrees that no hazardous materials will be stored in the Terminal and that all hazardous materials brought into the Terminal or onto the wharf by or for Carnival shall be immediately loaded on the Vessel or otherwise immediately removed from the Terminal or wharf by Carnival or its subcontractors. Carnival shall report to the City all environmental compliance orders or notices of violations issued to Carnival as a result of Carnival's operations at the Terminal by the U.S. Environmental Protection Agency or the Alabama Department of Environmental Management immediately after receiving notice of any such orders; (iv) subject to the terms hereof, be responsible for complying with a11 the applicable provisions of the U.S. Coast Guard Passenger Terminal Security Plan in accordance with the requirements of 33 CFR Part , and any other U.S. Coast Guard security requirements which may be promulgated; and (v) Carnival, when using the Terminal, shall comply with all applicable local ordinances and all other applicable laws and governmental regulations affecting the Terminal. Any oil, sludge, residue or other materials to be disposed of in connection with Carnival's operation of the Terminal shall not be discharged into the Mobile River, connecting waterways or drains, nor shall any material, debris, or objects of any kind be thrown or otherwise allowed to be discharged into those waterways. (vi) Carnival shall demand adherence to all of the above mentioned Jaws, ordinances, rules and regulations from its employees, the Carnival Affiliates and their employees, and all other persons entering the Terminal who derive their right to be there from Carnival. 10. COST. RISK AND EXPENSE. Carnival shall pay all costs and assume all risks in doing work or carrying on operations, now or hereafter permitted or required under the terms and conditions of this Agreement, except as may be otherwise specifically designated in this Agreement or in written instructions given or other agreements made by proper authority of the City under the terms and conditions of this Agreement. 15

27 11. DEFAULT (A) Carnival Event of Default. The following events shall constitute Carnival events of default (hereafter "Carnival Events of Default") under this Agreement: (i) If Carnival shall fail to pay any undisputed charges due or to make any other payment required when due to City or fail to maintain any insurance coverage or comply with any other provision required. under Section 8 ("Insurance Requirements") above, and if such failure shall continue for a period of thirty (30) days after written notice of it has been given to Carnival by City; or (ii) Carnival's creating or allowing any unsafe or dangerous condition to exist at or adjacent to the Terminal or elsewhere at the Port without Carnival having taken immediate, reasonable steps to cure, or cause to be cured, such condition after written notice of such condition is provided by City to Carnival; or (iii) Carnival abandons or vacates the Terminal, or any substantial portion thereof, or fails to continuously operate its business from the Terminal for the permitted operations set forth herein for a period of 30 days (provided such failure is not caused by a Force Majeure Event or MAC Event); or (iv) Carnival's failure to perform, comply with, or observe any agreement or obligation of Carnival under this Agreement or any other agreement to which City and Carnival are parties and the continuance of such failure for a period of more than 30 days after City has delivered to Carnival written notice thereof; or (v) If Carnival shall be adjudged a bankrupt or insolvent by any court of competent jurisdiction, or if a voluntary petition in bankruptcy or a petition for reorganization or arrangement shall be filed by Carnival, or if a receiver of the property of Carnival shall be appointed and such petition shall remain for a sixty (60) day period; or (vi) If the interest of Carnival under this Agreement shall transfer to any other person, firm, corporation or entity without prior written approval of City except as set out in Section 14 ("No Assignment or Subletting") below; or (vii) If Carnival becomes a corporation or other entity in dissolution or liquidation, whether voluntary or as the result of any act or omission, or by operation of law or the order or decree of any court having jurisdiction or for any other reason whatsoever; or (viii) If Carnival breaches or defaults in respect to any other material covenants, conditions or agreements contained herein and fails for a period of thirty (30) days after receipt of written notice to remedy such default, or, if remedying such default would reasonably require longer than thirty (30) days, fails to commence to remedy and to proceed thereafter with all reasonable diligence to the remedying of such default (B) City's Rights Upon Carnival Event of Default. Upon the occurrence of such Carnival Event of Default, the fees the City would have realized had the Guaranty been met (calculated as provided in Subsection 2(A) above) shall at once become due and payable without putting Carnival in default. At that time, City in its sole discretion may exercise one or both of the following options without further 16

28 notice to Carnival and without putting Carnival into default: (i) to demand the amount due based on the unrealized Guaranty calculated as provided in Subsection 2(A) above; provided that City shall have a duty to mitigate its damages by offering the Terminal to other cruise operators and users during the times and dates it was otherwise to be used by Carnival and/or (ii) to terminate this Agreement immediately. In all cases, Carnival shall remain responsible for all direct and actual damages or losses suffered by the City as a consequence of Carnival's breach in the performance of its obligations under this Agreement; however, in no event shall Carnival be liable to City for consequential, indirect or special damages for loss of profits except pursuant to the Guaranty. (C) City Event of Default The following event shall constitute a City event of default (hereafter "City Event of Default") under this Agreement: (i) ifthe City breaches or defaults in respect to any material covenants, conditions, obligations or agreements contained herein and Carnival cannot use the Terminal in the manner intended and the City fails for a period of thirty (30) days after receipt of written notice to remedy such default, or, if remedying such default would reasonably require longer than thirty (30) days, fails to commence to remedy and to proceed thereafter with all reasonable diligence to the remedying of such default; provided that any such breach or event of default that is cured within ninety (90) days shall not be deemed a City Event of Default. (D) Carnival's Rights Upon City Event of Default. At the occurrence of a City Event of Default, the Guaranty shall be suspended and Carnival shall not be liable for any failure to meet such commitment while such City Event of Default continues. Upon any Event of Default of City, subject to the City's rights to cure any such default as set forth in Section ll(c)(i) of this Agreement, Carnival may, in addition to all other rights and remedies afforded Carnival hereunder or by law or equity, terminate this Agreement by giving written notice thereof, in which event City shall be liable to Carnival for all actual damages incurred by Carnival as a result of such Event of Default. In no event shall City be liable to Carnival for consequential, indirect or special damages or for loss of profits due to a City Event of Default. (E) Payment by Carnival; Non-Waiver. City's acceptance of fees following an Event of Default will not waive City's rights regarding such Event of Default No waiver by City of any violation or breach of any of the terms contained herein will waive City's rights regarding any future violation of such term. City's acceptance of any partial payment of fees will not waive City's rights with regard to the remaining portion of the fees that are due, regardless of any endorsement or other statement on any instrument delivered in payment of fees or any writing delivered in connection therewith. Accordingly, City's acceptance of any partial payment of fees will not constitute an accord and satisfaction of the full amount of the Fees that are due, regardless of any rule of law to the contrary. (F) All rights, options, and remedies of the non-defaulting party contained in this Agreement are construed and held to be cumulative, and no one of them is exclusive of the other, and such party has 17

29 the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law, whether or not stated in this Agreement; provided that, City waives any prejudgment right to proceed in rem against any of Carnival's vessels for a breach of this Agreement City and Carnival have a duty to mitigate damages. 12. TERMINATION OF AGREEMENT At termination of this Agreement by cancellation or expiration or for any other reason whatsoever, Carnival shall immediately give up possession of the Terminal to City. 13. LIENS Carnival shall not permit any lien or privilege to remain of record when filed by any person or company for claims arising in connection with any work or undertaking by Carnival or Carnival's agents on the Terminal, and Carnival shall promptly discharge or cause to be discharged any such lien. If in default therein for thirty (30) days after written notice thereof from City, Carnival shall pay to the City as an additional charge any amount or amounts paid by City in causing the removal of such lien, including reasonable attorney's fees and expenses. Nothing contained herein, however, shall require City to discharge such lien except in its own discretion. 14. NO ASSIGNMENT OR SUBLETTING (A) Assignment by Carnival. Carnival shall not assign this Agreement in whole or in part, nor sublet the Terminal or any portion of it, to any third party without in each case the prior written consent of City. Nothing contained herein shall be construed as requiring the consent of City to any assignment of this Agreement to a Carnival Affiliate, provided, however, that in the event of such assignment, Carnival shall continue to remain primarily liable for all obligations under this Agreement unless City shall give its written consent to the release of Carnival after the receipt of due consideration. In the event of any proposed assignment of the Agreement to a Carnival Affiliate, Carnival shall give prior written notice to City of the assignment and proof of Carnival's ownership of the Carnival Affiliate. (B) Assignment by City. City may assign its right or any interest in this Agreement to any entity that may be created by the City to operate the Port Facilities, and Carnival agrees to recognize such entity as the contracting party under this Agreement from and after the date of the assignment. 15. INDEMNITY (A) Indemnification Obligations of Carnival. (i) Carnival shall protect, defend, indemnify and forever hold harmless City, its elected officials, officers, agents, and employees against all losses, costs, claims, charges, expenses, penalties, damages, fines, suits, demands, attorney's fees, interest, and actions of any kind and nature whatsoever growing out of, in connection with, or by reason of (i) any of Carnival's or Carnival's Affiliates' 18

30 operations and the operations of those holding under or through Carnival or Carnival's Affiliates at the Terminal; (ii) any accident or other occurrence, including environmental liability, due to any act, omission, fault or negligence of Carnival or Carnival's Affiliates, their officers, directors, employees, representatives, agents or invitees, or those occupying the Terminal through Carnival or Carnival's Affiliates; (iii) injury to any person (fatal or otherwise) or damage to property caused by the use or occupancy of the Terminal by Carnival or Carnival's Affiliates, thier officers, directors, employees, servants, representatives, agents or invitees, or those occupying the Terminal through Carnival or Carnival's Affiliates during the Term of this Agreement; or (iv) Carnival's performance of its obligations hereunder. Nothing in this section shall be construed as indemnifying the City against any such losses, costs, claims, charges, expenses, penalties, damages, fines, suits, demands, attorney's fees, interest, or actions that are caused by or result from the negligence or willful misconduct of the City, its employees, agents or representatives or from the City's breach of its obligations hereunder. Any language to the contrary notwithstanding, the covenants and agreements contained in this paragraph survive the termination or expiration of this Agreement for whatever cause. (ii) Carnival hereby acknowledges that the duty to defend is a separate and distinct obligation herein and, upon the filing of any action, claim, suit or proceeding of any nature or kind, shall defend the City from and ag{linst any and all of the foregoing actions, claims, or suits, of whatever nature or kind, directly or indirectly caused by, resulting from, or growing out of the performance of Carnival's obligations under this agreement. When in the course of fulfilling its obligations under this Section, Carnival must engage attorneys to defend City, Carnival shall obtain the prior written consent of City to the attorneys to be engaged, and such consent shall not be unreasonably withheld, (B) Indemnification Obligations of City. (i) The City shall protect, defend, indemnify and forever hold harmless Carnival, its vessels, officers, agents and employees, (collectively, the "Indemnified Persons"), against all losses, costs, claims, charges, expenses, penalties, damages, fines, suits, demands, attorney's fees, interest, and actions of any kind and nature whatsoever growing out of, in connection with, or by reason of (i) injury to persons or property, including but not limited to injuries resulting in death, arising from, or caused by, or incident to any wrongful or negligent act or omission of City, its agents, servants and employees upon the Terminal, berth or Port Facilities, or arising or resulting from any defective or unsafe condition for which City is responsible, or of any apparatus, equipment or other property of City; provided that such indemnity shall not apply to any claims arising from the wrongful or negligent act or omission of Carnival, its officers, employees or agents. Any language to the contrary notwithstanding, the covenants and agreements contained in this paragraph survive the termination or expiration of this Agreement for whatever cause. Notwithstanding any other provision of this agreement, City's liability is subject to the limitations set forth in Alabama law, and nothing in this section shall be deemed a waiver of any defense or immunity or statutory damages cap or notice requirements. (ii) City hereby acknowledges that the duty to defend is a separate and distinct obligation herein and, upon the filing of any action, claim, suit or proceeding of any nature or kind, shall defend Carnival from and against any and all of the foregoing actions, claims, or suits, of whatever nature or kind, directly or indirectly caused by, resulting from, or growing out of the performance of City's obligations under this Agreement. When in the course of fulfilling its obligations under this Section, City 19

31 must engage attorneys to defend Carnival, City shall obtain the prior written consent of Carnival to the attorneys to be engaged, and such consent shall not be unreasonably withheld. 16. LIABILITY (A) Limitation of Liability of the City. Notwithstanding any other prov1s1on of this Agreement, City's liability is subject to the limitations set forth in Alabama law and nothing in this section shall be deemed a waiver of any defense or immunity or statutory damages cap or notice requirements. (B) No Personal Liability of City. The City's officers, elected officials, agents and employees, either singularly or collectively, are not personally liable on this Agreement or for any breach thereof. 17. NOTICE All notices, demands, or requests from one party to another must be in writing and must be sent by mail, certified, registered, express or overnight, postage prepaid, to the addresses stated in this Section, or to such other address as the party may request in writing, and are deemed to have been given at the time of delivery. City's address for U.S. Mail is P.O. Box 1827, Mobile, Alabama, , and for express or overnight mail is Mobile Government Plaza, 205 Government Street, 9th Floor, Mobile, Alabama In either situation, all notices, demands, or requests shall be made to the attention of the City Attorney, with a copy also sent to Britton Bonner, Adams and Reese LLP, 11 North Water Street, Suite 23200, Mobile, Alabama Carnival's address for U.S. Mail and for express or overnight mail is 3655 NW 87th Avenue, Miami, Florida In either situation, all notices, demands, or requests shall be made to the attention of Carlos Torres de Navarra, Vice President, Port Operations, with a copy also sent to the attention of General Counsel, Carnival Cruise Line at the same address. 18. GOVERNING LAW, PERFORMANCE, JURISDICTION AND VENUE This Agreement must be construed under and in accordance with the Jaws of the State of Alabama, of the United States of America and all obligations of the parties created hereunder are performable in Mobile County in the State of Alabama of the United States of America. To the full extent permitted by law, City and Carnival agree that only the federal and state courts of the State of Alabama shall have exclusive jurisdiction over any matter relating to or arising from this Agreement and the parties' rights and obligations under this Agreement Further, City and Carnival agree that 20

32 venue shall be proper only in Mobile County in the State of Alabama of the United States of America, or in the United States District Court, Southern District of Alabama. 19. NO LEASE It is agreed that this Agreement is not a lease, and that no interest or estate in real property or the improvements located in or at the Terminal is created by this Agreement. 20. RIGHT OF FIRST REFUSAL City hereby grants to Carnival during the Term the right of first refusal to match any bona fide 3rd party offer made to City on or after the date hereof to conduct Homeport Operations from the Terminal. An "Operating Year" is each 12-month period (or portion thereof) during the Term that begins on the date hereof (or an anniversary thereof) and ends on the day before the following anniversary thereof up the expiration or other termination of this Agreement. If City receives a bona fide offer on or after the date of this Agreement from a 3rd party unrelated to Carnival to conduct Homeport Operations from the Terminal and the terms of that offer are acceptable to City, Carnival has the right of first refusal to enter into an agreement with City to allow it to conduct those operations instead of the 3rd party offeror under the same terms and conditions offered by the 3rd party. The right of first refusal is subject to, and contingent upon, this Agreement being then in effect, no Carnival Event of Default exists and is ongoing, and Carnival having fully performed all its duties and obligations under this Agreement. City will furnish written notice to Carnival stating the terms and conditions of the proposed agreement with the 3rd party. Carnival has a period of 10 business days from the date of the notice within which to exercise its right of first refusal. Within 30 days after Carnival gives City notice of its election to exercise the right of first refusal, either (i) City and Carnival must enter into a new agreement to allow Carnival to conduct the Homeport Operations from the Terminal instead of the 3rd party offeror under the same terms and conditions offered by the 3rd party. The parties recognize that this is a continuing right of first refusal such that Carnival's non exercise or waiver of its right of first refusal as to any 3m party offer shall not affect its rights as to any subsequent 3m party offer made during the term of this Agreement subject to the conditions contained in this Section 20. For avoidance of doubt, and notwithstanding the foregoing, nothing in this Section 20 is intended to restrict, impede or limit the preferential berthing rights granted to Carnival under this Agreement with respect to any Renewal Terms, provided that Carnival exercises its right to extend the Agreement in accordance with the timelines set forth in Section S(B)(i). If Carnival fails to extend this Agreement for a Renewal Term within the prescribed period of time, City may, during the remaining Term, offer any preferential berthing rights enjoyed by Carnival to a third-party, subject to the right of first refusal set forth herein. 21. MISCELLANEOUS 21

33 (A) Right of Entry and Inspection. Carnival will permit City or its agents, representatives, or employees to enter and inspect the Terminal subject to Carnival's right of quiet enjoyment of the Terminal. (B). No Partnership. The relationship between City and Carnival at all times remains solely that of licensor and licensee and is not a partnership or joint venture. (C) Force Majeure. City and Carnival are excused from performing any of their respective duties, obligations or undertakings under this Agreement in the event and so long as a Force Majeure Event is occurring. Either party entitled to such extension hereunder will give prompt written notice to the other party as soon as possible after the occurrence causing such delay asserting its claim of right to such extension and the reasons therefor. For avoidance of doubt, and notwithstanding anything contained in this section to the contrary, nothing set forth herein is intended to limit Carnival's rights pursuant to Section 2(A)(ii) of this Agreement. (D) No Waiver. No waiver by either party of any default or breach of any covenant, condition, or stipulation contained in this Agreement is a waiver of any.subsequent default or breach of the same or any other covenant, condition, or stipulation of this Agreement. (E) Use Clause. Carnival agrees not to use any part or the entire Terminal for any use or purpose in violation of any law, regulation, or ordinance of the United States, the State of Alabama or the City of Mobile, or other lawful authority having jurisdiction over the Terminal. (F) Release of City. In the event the City sells or transfers the Terminal or any part thereof and as a part of such transaction assigns its interest in and to this Agreement, and provided such buyer, transferee or assignee agrees to perform as City under this Agreement, then from and after the effective date of such sale, assignment, or transfer, City has no further liability under this Agreement to Carnival except as to matters of liability which accrued and are unsatisfied as of such effective date. It is intended that the covenants and obligations contained in this Agreement on the part of City be binding on City and its successors and assigns only during and in respect of their respective Sl;lCCessive periods of ownership of the Terminal. {G) Risk Allocation for Hazardous Materials. Carnival is responsible for remediation of any environmental contamination of the Terminal and adjacent land or waterways caused by Carnival or Carnival's invitees or agents. For the purpose of this subsection, the term "environmental contamination" means the presence on the Terminal or any adjacent land or waterways of any hazardous, toxic, or other like material regulated under any state, federal, or local law dealing with hazardous substances, protection of the environment, or similar matters in excess of lawfully 22

34 permitted levels. Responsibility for environmental contamination with respect to the Terminal and adjacent land or waterways will be allocated as follows: (i) to Carnival for environmental contamination that occurs during the Term or that is caused by Carnival or Carnival's invitees or agents, and (ii) to City for environmental contamination caused by City or preexisting on the Terminal and adjacent land or waterways at the Effective Date. This allocation of responsibility is only as between City and Carnival and will be without prejudice to any rights City or Carnival may have against any other party causing environmental contamination. (H) Parties Bound. This Agreement is binding upon and inures to the benefit of the parties hereto and their respective successors, and permitted assigns. (I) Legal Construction. Any ambiguities in this agreement, or any amendment or exhibit thereto, shall not be resolved against the drafter but shall be construed in accordance with their fair meaning. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability does not affect any other provision hereof and this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. (J) Amendment. No amendment, modification, or alteration of the terms of this Agreement is binding unless in writing, dated subsequent to the Effective Date and executed by the Mayor, on behalf of the City, and by the Carnival or their successors and permitted assigns. (K) Attorneys' Fees. To the extent allowed by law, in the event City or Carnival breaches any of the terms of this Agreement and the party not in default employs attorneys to protect or enforce its rights and prevails, then the defaulting party agrees to pay the non-defaulting party's reasonable attorneys' fees. (L) Fut1her Assurances. Carnival agrees that it will from time to time and at any reasonable time execute and deliver, or cause to be executed and delivered to City such documents and instruments, and shall take, or cause to be taken, such other actions City may reasonably request to effectuate the terms of this Agreement. (M) Exhibits. All Exhibits attached to this Agreement are incorporated by reference. (N) Compliance with Laws. Carnival must comply with all laws, ordinances, rules, regulations and codes governing or in any manner applicable to this Agreement, including without limitation MARPOL, Annex I, II, III, and V; Safety of Life at Sea Convention; and the 23

35 International Maritime Organization Security Standards established by the United States Coast Guard for each vessel to be berthed at the Terminal by Carnival; and the tariffs of the Alabama State Port Authority. (O) Counterparts. This Agreement may be executed in any number of counterparts, and each counterpart is deemed to be an original instrument, but all such counterparts together constitute but one Agreement. A photocopy or facsimile reproduction of an original signature of a party binds that party to the terms, covenants and conditions of this Agreement. (P) Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and do not affect the interpretation of this Agreement. (Q) Severability. The City and Carnival hereby acknowledge and understand that if any provision herein shall be held or interpreted by a court of competent jurisdiction to be unenforceable or against public policy, this Agreement shal1 remain in effect as if such provision had not been written, the City and Carnival hereby agreeing that the provisions of this Agreement are to be considered severable. (R) No Third Party Beneficiary; Enforcement. Notwithstanding any interpretation to the contrary, the City and Carnival hereby acknowledge and agree that the provisions of this Agreement shall be interpreted only for the benefit of the City and Carnival and that this Agreement shall not be construed to create any other rights or stipulations for the benefit of any third party, nor shall any third party have the right to enforce the provisions of this Agreement. (S) Entire Agreement. The City and Carnival hereby acknowledge and agree that they have read this Agreement in its entirety and understand the terms and conditions herein. The City and Carnival further acknowledge that therare no other terms or oral agreements existing between them and understand that this Agreement shall not be amended or modified in any way without prior written consent of the parties herein. ~~ 24

36 ADDENDUM NO. 1 TO CRUISE TERMINAL AND BERTHING AGREEMENT This Addendum No. 1 to Cruise Terminal and Berthing Agreement (the "Addendum") is entered into on this 31st day of July, 2017, by and between CARNIVAL CRUISE LINE, a division of Carnival Corporation ("Carnival") and THE CITY OF MOBILE, an Alabama Municipal Corporation (''City"). RECITALS A. Carnival and City entered into that certain Cruise Terminal and Berthing Agreement on September 30, 2015 (the "Agreement"). B. Carnival and City desire to amend the terms of the Agreement pursuant to the terms and conditions set forth in this Addendum. In consideration of the foregoing, and the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Recitals; Definitions. The recitals set forth above are incorporated herein by reference and made an integral part of this Addendum. Unless otherwise stated, all capitalized terms not defined herein shall have the meanings set forth in the Agreement. 2. Extension of Term of Agreement. Pursuant to Section S(B)(i) of the Agreement, Carnival hereby exercises its right to extend the Term of the Agreement for an additional one-year period commencing December 1, 2017 and ending November 26, 2018 (i.e. the first Renewal Term), under the same terms and conditions as set forth in the Agreement, except as otherwise altered by this Addendum. For avoidance of doubt, following exercise of this right, Carnival still holds one additional option to extend the Term for another one-year period. 3. Berth Schedule. The Berth Schedule for the first Renewal Tenn is set forth on Exhibit A, attached hereto and incorporated herein. 4. Guaranty and Marketing Incentive. The parties acknowledge, agree and covenant that (i) City will provide to Carnival a marketing incentive to be dedicated by Carnival to the promotion of cruises from the Terminal in the amount of Two Hundred Thousand Dollars ($200,000.00) per quarter year of the first Renewal Term; and (ii) Carnival hereby guarantees to the City a minimum of One Million Three Hundred Thousand Dollars ($1,300,000.00) in Passenger Service Charges during the first Renewal Term. 5. Amendment to Section 7(A). Section 7(A) of the Agreement is hereby amended to incorporate a new subsection (vi) which will read as follows: (vi) City shall perform, or cause the applicable gangway manufacturer to perform, a semiannual maintenance with respect to the gangway used by Carnival'. Additionally, City shall maintain an inventory of critical spare parts for the gangway in order to expedite the performance of all necessary repairs in the event of malfunction or failure. 6. Counterparts and Facsimile Signatures. This Addendum may be executed in several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same Addendum. The execution of this Addendum by any of the 25

37 parties may be evidenced by way of a facsimile transmission of such party's signature, or a photocopy of such facsimile transmission, and such facsimile signature shall be deemed to constitute the original signature of such party hereto. 7. Full Force and Effect. Except as amended hereby, the Agreement shall remain in full force and effect according to its terms and shall be read and construed as if the terms of this Addendum were included therein. In the event a conflict exists between the terms of this Addendum and any term in the Agreement, the terms of this Addendum will control. In consideration of the foregoing, the parties have executed this Addendum as of the day and year first written above. 26

38 EXHIBIT B Mobile Alabama Cruise Terminal Tentative Berth Schedule Date Day Date Day Date Day 12/11/17 Mon 6/2/18 Sat 11/26/18 Mon 12/16/17 Sat 6/7/18 Thu 12/01/18 Sat 12/21/17 Thu 6/11/18 Mon 12/6/18 Thu 12/26/17 Tue 6/16/18 Sat 12/10/18 Mon 12/30/17 Sat 6/21/18 Thu 12/15/18 Sat 1/4/18 Thu 6/25/18 Mon 12/20/18 Thu 1/8/18 Mon 6/30/18 Sat 12/24/18 Mon 1/13/18 Sat 7/5/18 Thu 12/9/18 Sat 1/18/18 Thu 7/9/18 Mon 1/3/19 Thu 1/22/18 Mon 7/14/18 Sat 1/7/19 Mon 1/27/18 Sat 7/19/18 Thu 1/12/19 Sat 2/1/18 Thu 7/23/18 Mon 1/17/19 Thu 2/5/18 Mon 7/28/18 Sat 1/21/19 Mon 2/10/18 Sat 8/2/18 Thu 1/26/19 Sat 2/15/18 Thu 8/6/18 Mon 1/31/19 Thu 2/19/18 Mon 8/11/18 Sat 2/4/19 Mon 2/24/18 Sat 8/16/18 Thu 2/9/19 Sat 3/1/18 Thu 8/20/18 Mon 2/14/19 Thu 3/5/18 Mon 8/25/18 Sat 2/18/19 Mon 3/10/18 Sat 8/30/18 Thu 2/23/19 Sat 3/15/18 Thu 9/3/18 Mon 2/28/19 Thu 3/19/18 Mon 9/8/18 Sat 3/4/19 Mon 3/24/18 Sat 9/13/18 Thu 3/9/19 Sat 3/29/18 Thu 9/17/18 Mon 3/14/19 Thu 4/2/18 Mon 9/27/18 Thu 3/18/19 Mon 4/7/18 Sat 10/1/18 Mon 3/23/9 Sat 4/12/18 Thu 10/6/18 Sat 3/28/19 Thu 4/16/18 Mon 10/11/18 Thu 4/1/19 Mon 4/21/18 Sat 10/15/18 Mon 4/6/19 Sat 4/29/18 Sun 10/20/18 Sat 4/11/19 Thu 5/5/18 Sat 10/25/18 Thu 4/15/19 Mon 5/10/18 Thu 10/29/18 Mon 4/20/19 Sat 5/14/18 Mon 11/3/18 Sat 4/25/19 Thu 5/19/18 Sat 11/11/18 Sun 4/29/19 Mon 5/24/18 Thu 11/17/18 Sat 5/28/18 Mon 11/22/18 Thu 1