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Royal Caribbean Cruises Ltd. – ‘10-Q’ for 9/30/20 – ‘EX-10.10’

On:  Wednesday, 11/4/20, at 7:57am ET   ·   For:  9/30/20   ·   Accession #:  884887-20-49   ·   File #:  1-11884

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  As Of               Filer                 Filing    For·On·As Docs:Size

11/04/20  Royal Caribbean Cruises Ltd.      10-Q        9/30/20   98:15M

Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML   1.63M 
 3: EX-10.10    Material Contract                                   HTML     44K 
 4: EX-10.11    Material Contract                                   HTML     44K 
 5: EX-10.12    Material Contract                                   HTML     37K 
 6: EX-10.13    Material Contract                                   HTML     37K 
 2: EX-10.9     Material Contract                                   HTML     41K 
 7: EX-31.1     Certification -- §302 - SOA'02                      HTML     31K 
 8: EX-31.2     Certification -- §302 - SOA'02                      HTML     31K 
 9: EX-32.1     Certification -- §906 - SOA'02                      HTML     29K 
16: R1          Cover Page                                          HTML     78K 
17: R2          Consolidated Statements of Comprehensive (Loss)     HTML    142K 
                Income                                                           
18: R3          Consolidated Balance Sheets                         HTML    127K 
19: R4          Consolidated Balance Sheets (Parenthetical)         HTML     45K 
20: R5          Consolidated Statements of Cash Flows               HTML    159K 
21: R6          Consolidated Statements of Shareholders' Equity     HTML     74K 
22: R7          Consolidated Statements of Shareholders' Equity     HTML     28K 
                (Parenthetical)                                                  
23: R8          General                                             HTML     49K 
24: R9          Summary of Significant Accounting Policies          HTML     32K 
25: R10         Impairment and Credit Losses                        HTML     97K 
26: R11         Revenues                                            HTML     78K 
27: R12         (Loss) Earnings Per Share                           HTML     45K 
28: R13         Other Assets                                        HTML     68K 
29: R14         Debt                                                HTML     98K 
30: R15         Leases                                              HTML    118K 
31: R16         Redeemable Noncontrolling Interest                  HTML     45K 
32: R17         Commitments and Contingencies                       HTML     72K 
33: R18         Shareholders' Equity                                HTML     30K 
34: R19         Changes in Accumulated Other Comprehensive Income   HTML     90K 
                (Loss)                                                           
35: R20         Fair Value Measurements and Derivative Instruments  HTML    456K 
36: R21         Restructuring Charges                               HTML     64K 
37: R22         Summary of Significant Accounting Policies          HTML     40K 
                (Policies)                                                       
38: R23         Impairment and Credit Losses (Tables)               HTML    116K 
39: R24         Revenues (Tables)                                   HTML     63K 
40: R25         (Loss) Earnings Per Share (Tables)                  HTML     44K 
41: R26         Other Assets (Tables)                               HTML     53K 
42: R27         Debt (Tables)                                       HTML     76K 
43: R28         Leases (Tables)                                     HTML     74K 
44: R29         Redeemable Noncontrolling Interest (Tables)         HTML     41K 
45: R30         Commitment and Contingencies (Tables)               HTML     59K 
46: R31         Changes in Accumulated Other Comprehensive (Loss)   HTML     90K 
                Income (Tables)                                                  
47: R32         Fair Value Measurements and Derivative Instruments  HTML    456K 
                (Tables)                                                         
48: R33         Restructuring Charges (Tables)                      HTML     61K 
49: R34         General (Details)                                   HTML    127K 
50: R35         Impairment and Credit Losses - Schedule of          HTML     46K 
                Goodwill (Details)                                               
51: R36         Impairment and Credit Losses - Narrative (Details)  HTML     80K 
52: R37         Impairment and Credit Losses - Intangible Assets    HTML     56K 
                (Details)                                                        
53: R38         Impairment and Credit Losses - Summary of Credit    HTML     34K 
                Loss Allowance (Details)                                         
54: R39         Revenues - Narrative (Details)                      HTML     54K 
55: R40         Revenues - Disaggregation of Revenue (Details)      HTML     59K 
56: R41         (Loss) Earnings Per Share (Details)                 HTML     54K 
57: R42         (Loss) Earnings Per Share - Narrative (Details)     HTML     36K 
58: R43         Other Assets - Narrative (Details)                  HTML    135K 
59: R44         Other Assets - Share of Equity Income From          HTML     36K 
                Investments (Details)                                            
60: R45         Other Assets - Notes Receivable Due From Equity     HTML     35K 
                Instruments (Details)                                            
61: R46         Other Assets - Related Party Transactions           HTML     30K 
                (Details)                                                        
62: R47         Debt - Summary of Debt (Details)                    HTML    106K 
63: R48         Debt - Narrative (Details)                          HTML    351K 
64: R49         Debt - Schedule of Convertible Notes (Details)      HTML     41K 
65: R50         Debt - Schedule of Maturities (Details)             HTML     41K 
66: R51         Leases - Narrative (Details)                        HTML     51K 
67: R52         Leases - Schedule of Lease Expense (Details)        HTML     43K 
68: R53         Leases - Schedule of Lease Terms and Discount       HTML     36K 
                Rates (Details)                                                  
69: R54         Leases - Supplemental Noncash Information           HTML     32K 
                (Details)                                                        
70: R55         Leases - Schedule of Lease Maturities (Details)     HTML     64K 
71: R56         Redeemable Noncontrolling Interest - Narrative      HTML     51K 
                (Details)                                                        
72: R57         Redeemable Noncontrolling Interest - Schedule of    HTML     41K 
                Redeemable Noncontrolling Interest (Details)                     
73: R58         Commitments and Contingencies - Narrative           HTML    126K 
                (Details)                                                        
74: R59         Commitment and Contingencies - Capital Commitments  HTML     65K 
                (Details)                                                        
75: R60         Shareholders' Equity (Details)                      HTML     45K 
76: R61         Changes in Accumulated Other Comprehensive (Loss)   HTML     52K 
                Income - Changes in AOCI by Component (Details)                  
77: R62         Changes in Accumulated Other Comprehensive (Loss)   HTML     67K 
                Income - Reclassifications (Details)                             
78: R63         Changes in Accumulated Other Comprehensive Income   HTML     46K 
                (Loss) - Narrative (Details)                                     
79: R64         Fair Value Measurements and Derivative Instruments  HTML     55K 
                - Estimated Fair Value (Details)                                 
80: R65         Fair Value Measurements and Derivative Instruments  HTML     64K 
                - Recurring (Details)                                            
81: R66         Fair Value Measurements and Derivative Instruments  HTML     99K 
                - Nonrecurring (Details)                                         
82: R67         Fair Value Measurements and Derivative Instruments  HTML     51K 
                - Offsetting of Derivative Instruments (Details)                 
83: R68         Fair Value Measurements and Derivative Instruments  HTML     79K 
                - Derivative Instruments, Interest Rate Risk,                    
                Foreign Currency Exchange Rate Risk (Narrative)                  
                (Details)                                                        
84: R69         Fair Value Measurements and Derivative Instruments  HTML     82K 
                - Interest Rate Risk (Details)                                   
85: R70         Fair Value Measurements and Derivative Instruments  HTML     49K 
                - Fuel Price Risk (Details)                                      
86: R71         Fair Value Measurements and Derivative Instruments  HTML     71K 
                - Balance Sheet (Details)                                        
87: R72         Fair Value Measurements and Derivative Instruments  HTML     68K 
                - Income Statement Hedging Instruments (Details)                 
88: R73         Fair Value Measurements and Derivative Instruments  HTML     33K 
                - Balance Sheet Hedging Instruments (Details)                    
89: R74         Fair Value Measurements and Derivative Instruments  HTML     70K 
                - Designated Cash Flow Hedges (Details)                          
90: R75         Fair Value Measurements and Derivative Instruments  HTML     29K 
                - Non-Derivative Net Investment (Details)                        
91: R76         Fair Value Measurements and Derivative Instruments  HTML     37K 
                - Derivatives Not Designated as Hedging                          
                Instruments (Details)                                            
92: R77         Fair Value Measurements and Derivative Instruments  HTML     34K 
                - Credit Related Contingent Features (Details)                   
93: R78         Restructuring Charges - Narrative (Details)         HTML     41K 
94: R79         Restructuring Charges - Summary of Changes          HTML     69K 
                (Details)                                                        
96: XML         IDEA XML File -- Filing Summary                      XML    173K 
15: XML         XBRL Instance -- rcl-20200930_htm                    XML   4.87M 
95: EXCEL       IDEA Workbook of Financial Reports                  XLSX    159K 
11: EX-101.CAL  XBRL Calculations -- rcl-20200930_cal                XML    310K 
12: EX-101.DEF  XBRL Definitions -- rcl-20200930_def                 XML   1.35M 
13: EX-101.LAB  XBRL Labels -- rcl-20200930_lab                      XML   2.42M 
14: EX-101.PRE  XBRL Presentations -- rcl-20200930_pre               XML   1.66M 
10: EX-101.SCH  XBRL Schema -- rcl-20200930                          XSD    254K 
97: JSON        XBRL Instance as JSON Data -- MetaLinks              509±   757K 
98: ZIP         XBRL Zipped Folder -- 0000884887-20-000049-xbrl      Zip    567K

‘EX-10.10’   —   Material Contract

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Exhibit 10.10
Supplemental agreement in relation to certain amendments in connection
with the Silversea negative covenants and the exercise of the Buyer’s Stretch Option


Dated: 29 August 2020

1.We refer to (a) the novation agreement dated 24 July 2017 (as amended and restated pursuant to a supplemental agreement dated 12 March 2020, the Novation Agreement) entered into between, amongst others, Hoediscus Finance Limited as existing borrower, Royal Caribbean Cruises Ltd. as new borrower (the New Borrower), Citibank Europe plc, UK Branch as facility agent (the Facility Agent) and the banks and financial institutions listed therein as lenders (the Lenders) and (b) the form of facility agreement in respect of hull no. L34 (the Facility Agreement) appended to the Novation Agreement.
2.Words and expressions defined in the Novation Agreement shall have the same meaning when used in this agreement.
3.It is acknowledged that the New Borrower has elected to exercise the Buyer’s Stretch Option (as defined in the Building Contract). In connection with such election, certain Change Orders have been (or will be) agreed between the New Borrower and the Builder in order to effect the modifications required to be made to the Vessel in accordance with the Buyer’s Stretch Option.
4.It is further acknowledged that following the election of the Buyer’s Stretch Option, there is an inconsistency between the terms of the Novation Agreement and the proposed terms of the BpiFAE Insurance Policy to be issued prior to the First Payment Date (as defined in the Receivable Purchase Agreement) with regard to the potential liability to breakage costs with respect to that part of the Commitment that could be used to fund the Change Orders in respect of the Buyer’s Stretch Option. In order to address such inconsistency, it is hereby agreed that with effect on and from the date of this agreement, the Novation Agreement shall be amended by deleting clause 10.5 and replacing it with the following:
"Clause 10.5 Fixed rate breakage costs
If the New Borrower:
    (a)    voluntarily cancels all or any of the Commitment under clause 10.2;
(b)    voluntarily cancels all or any of the Commitment after it has exercised its rights under clause 4.3 of the Buyer Consent Agreement; or

(c)    subject to the proviso below, does not borrow the Maximum Loan Amount as a result of the Contract Price being reduced in accordance with Article III of the Building Contract (resulting in a corresponding cancellation of part of the Commitment),

the New Borrower shall pay to the Facility Agent breakage costs in the amount notified to it following a calculation of such breakage costs based on the methodology referred to in Section 4.4.1b) of the Novated Credit Agreement and on the basis that for this purpose references in such clause to prepayment and prepay shall be treated as references to cancellation and the basis for the calculation of any breakage costs shall be determined by reference to:
(i) if:
(A)    the Commitment is cancelled in full, the Threshold Amount (as defined below); or

(B)    the Commitment is partially cancelled, the Threshold Amount minus the un-cancelled Commitment; and
(ii)    24 assumed semi-annual repayment instalments starting from the Expected Delivery Date at the Signing Date.
Provided however that no breakage costs will be charged under clauses 10.5(a), 10.5(b) or 10.5(c) above if the Loan (as defined in the Novated Credit Agreement) assumed by and/or advanced to the New Borrower on the Novation Effective Date or otherwise pursuant to any restated or new credit agreement entered into in accordance with clause 5.3 equals or exceeds 80% of the aggregate amount of:
(1) €631,167,000 (being the amount of the Fixed Basic Contract Price); and
(2) the total value of the Change Orders (as such term is defined in the Receivable Purchase Agreement) forming part of the Change Order Amount which have, as at the date of the notification from the Facility Agent referred to in this clause 10.5, been agreed in connection with the work required in respect of the Buyer’s Stretch Option (as defined in the Building Contract) and which therefore form or (absent such cancellation) would have formed, part of the Final Payment, such value being for this purpose €51,500,000,
(such aggregate amount being the Threshold Amount).
To the extent that an event of the type contemplated by this clause 10.5 does occur, the New Borrower undertakes that it shall provide (or procure that the Builder provides) to the Facility Agent promptly upon request any information that may be required by the Facility Agent in order for it to verify the Change Order Amount applicable to the Buyer’s Stretch Option (as defined in the Building Contract),and to determine whether breakage costs are required to be charged pursuant to clauses 10.5(a), 10.5(b) or 10.5(c) above.
It is acknowledged and agreed for all purposes of this Agreement and the Novated Credit Agreement that the New Borrower shall not be liable to pay (or indemnify any Indemnified Party under Section 11.4 of the Novated Credit Agreement in respect of) any breakage costs related to the Fixed Rate in the event the Fixed Rate is not available as a result of any of the conditions precedent set forth in Section 5.1.10 of the Novated Credit Agreement not being satisfied for any reason other than due to the New Borrower’s own breach of the terms of this Agreement.".
5.In addition to the matters set out above, it is acknowledged that the New Borrower has recently made certain amendments to a number of its other facility agreements in order to provide further exemptions to restrictive covenants equivalent to those set out in sections 7.2.2 and 7.2.3 of the Facility Agreement. It has been agreed that such exemptions shall also be included in the Facility Agreement, and accordingly the Facility Agreement shall, with effect on and from the date of this agreement, be amended as follows:
(a)a new sub-paragraph f) shall be inserted into section 7.2.2 of the Facility Agreement as follows (and the remainder of the section shall be construed accordingly):

“Indebtedness of Silversea Cruise Holding Ltd. and its Subsidiaries ("Silversea") identified in Section 1 of Exhibit F hereto”;

(b)a new sub-paragraph r) shall be inserted into section 7.2.3 of the Facility Agreement as follows (and the remainder of the section shall be construed accordingly):

"Liens on any property of Silversea identified in Section 2 of Exhibit F hereto"; and

    

(c)a new exhibit in the form set out in the schedule to this agreement shall be inserted as a new exhibit F of the Facility Agreement entitled "Exhibit F – Silversea Indebtedness and Liens".
6.Save as expressly amended by this agreement, all other terms and conditions of the Novation Agreement, the Facility Agreement and the other Finance Documents shall remain unaltered and in full force and effect.
7.This agreement is a Finance Document (as defined in the Principal Agreement) and a Loan document (as defined in the Facility Agreement).
8.No term of this agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by anyone who is not a party to this agreement.
9.This agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this agreement.
10.This agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. The provisions of clause 14.2 of the Novation Agreement shall apply with equal effect to this agreement.

    

/s/ ELAINE ANDERSON
Elaine Anderson - Director
For and on behalf of
Hoediscus Finance Limited
as Existing Borrower



/s/ ANTJE M. GIBSON
Antje M. Gibson
For and on behalf of
Royal Caribbean Cruises Ltd.
as New Borrower



/s/ CLAIRE CRAWFORD
Claire Crawford, Delegated Signatory
For and on behalf of
Citibank Europe Plc, UK Branch
as Facility Agent on behalf of the Lenders



/s/ CHRISTOPHER CONWAY
Christopher Conway, Managing Director
For and on behalf of
Citibank N.A., London Branch
as Global Coordinator



/s/ VIOLA JAPAUL
Viola Japaul, Attorney
For and on behalf of
Citicorp Trustee Company Limited
as Security Trustee on behalf of the Finance Parties



/s/ GUY WOELFEL
Guy Woelfel, Authorised Signatory
/s/ PHILIPPE ABONNEAU
Philippe Abonneau, Authorised Signatory
For and on behalf of
HSBC France
as French Coordinating Bank



/s/ HERVE BILLI
Herve Billi
/s/ ROY MOURAD
Roy Mourad
For and on behalf of
Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
as ECA Agent on behalf of the Lenders

    

Schedule

Exhibit F
Silversea Liens and Indebtedness

SECTION 1: Existing Indebtedness of Silversea
(a)     The obligations of the Borrower or its Subsidiaries in connection with those certain Bareboat Charterparties with respect to (i) the vessel SILVER EXPLORER dated July 22, 2011 between Silversea Cruises Ltd. and Hammonia Adventure and Cruise Shipping Company Ltd. and (ii) the vessel SILVER WHISPER dated March 15, 2012 between Whisper S.p.A. and various lessors, and the replacement, extension, renewal or amendment of each of the foregoing without increase in the amount or change in any direct or contingent obligor of such obligations, (the “Existing Silversea Leases”);
(b)    Indebtedness arising pursuant to that certain Bareboat Charterparty dated May 17, 2018 by and between Hai Xing 1702 Limited and Silversea New Build Eight Ltd., as such agreement may be amended from time to time; and
(c)     Indebtedness secured by Liens of the type described in Section 2 of this Exhibit F.
SECTION 2: Existing Liens of Silversea
(a)     Liens securing the $620,000,000 in principal amount of 7.25% senior secured notes due 2025 issued by Silversea Cruise Finance Ltd. pursuant that certain Indenture dated as of January 30, 2017;
(b)     Liens on the vessels SILVER WHISPER and SILVER EXPLORER existing as of 29 April 2020 and securing the Existing Silversea Leases (and any Lien on such vessels securing any refinancing of the Existing Silversea Leases, so long as such Vessel was subject to a Lien securing the Indebtedness being refinanced immediately prior to such refinancing);
(c)     Liens on the Vessel with Hull 6280 built or being built at Fincantieri S.p.A. and arising pursuant to that certain Bareboat Charterparty dated May 17, 2018 by and between Hai Xing 1702 Limited and Silversea New Build Eight Ltd., as such agreement may be amended from time to time (and any Lien on such Vessel securing any refinancing of such bareboat charterparty); and
(d)     Liens securing Indebtedness of the type described in Section 1 of this Exhibit F.

    

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
Filed on:11/4/20
For Period end:9/30/20
5/17/18
1/30/174
3/15/12
7/22/11
 List all Filings 

5 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/21/24  Royal Caribbean Cruises Ltd.      10-K       12/31/23  121:18M
 2/23/23  Royal Caribbean Cruises Ltd.      10-K       12/31/22  123:20M
 3/01/22  Royal Caribbean Cruises Ltd.      10-K       12/31/21  126:20M
 2/26/21  Royal Caribbean Cruises Ltd.      10-K       12/31/20  153:57M
12/03/20  Royal Caribbean Cruises Ltd.      424B5                  1:1.8M                                   Toppan Merrill/FA

1 Previous Filing that this Filing References

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/03/20  Royal Caribbean Cruises Ltd.      8-K:1,9     7/28/20   18:777K                                   Toppan Merrill/FA
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