10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

OR

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

For the transition period from             to            

Commission file number: 1-11884

ROYAL CARIBBEAN CRUISES LTD.

(Exact name of registrant as specified in its charter)

Republic of Liberia	98-0081645
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1050 Caribbean Way, Miami, Florida 33132

(Address of principal executive offices) (zip code)

(305) 539-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act.     Yes  x     No   ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No   x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act).

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the registrant’s common stock at June 30, 2011 (based upon the closing sale price of the common stock on the New York Stock Exchange on June 30, 2011) held by those persons deemed by the registrant to be non-affiliates was approximately $5.08 billion. Shares of the registrant’s common stock held by each executive officer and director and by each entity or person that, to the registrant’s knowledge, owned 10% or more of the registrant’s outstanding common stock as of June 30, 2011 have been excluded from this number in that these persons may be deemed affiliates of the registrant. This determination of possible affiliate status is not necessarily a conclusive determination for other purposes.

There were 217,491,694 shares of common stock outstanding as of February 13, 2012.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Definitive Proxy Statement relating to its 2012 Annual Meeting of Shareholders are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K as indicated herein.

ROYAL CARIBBEAN CRUISES LTD.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	24
Item 1B.	Unresolved Staff Comments	31
Item 2.	Properties	31
Item 3.	Legal Proceedings	32
Item 4.	Mine Safety Disclosures	32
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33
Item 6.	Selected Financial Data	35
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 8.	Financial Statements and Supplementary Data	59
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	59
Item 9A.	Controls and Procedures	59
Item 9B.	Other Information	60
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	61
Item 11.	Executive Compensation	61
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	61
Item 13.	Certain Relationships and Related Transactions, and Director Independence	61
Item 14.	Principal Accounting Fees and Services	61
PART IV
Item 15.	Exhibits, Financial Statement Schedules	62
Signatures		63

PART I

As used in this Annual Report on Form 10-K, the terms “Royal Caribbean,” the “Company,” “we,” “our” and “us” refer to Royal Caribbean Cruises Ltd. and the terms “Royal Caribbean International,” “Celebrity Cruises,” “Pullmantur,” “Azamara Club Cruises,” and “CDF Croisières de France” refer to our cruise brands. In accordance with cruise vacation industry practice, the term “berths” is determined based on double occupancy per cabin even though many cabins can accommodate three or more passengers.

This Annual Report on Form 10-K also includes trademarks, trade names and service marks of other companies. Use or display by us of other parties’ trademarks, trade names or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, these other parties other than as described herein.

Item 1. Business

General

Royal Caribbean was founded in 1968 as a partnership. Its corporate structure evolved over the years and the current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia.

We are the world’s second largest cruise company operating 39 ships in the cruise vacation industry across five brands with an aggregate capacity of approximately 92,650 berths as of December 31, 2011.

Our ships operate on a selection of worldwide itineraries that call on approximately 460 destinations on all seven continents. In addition to our headquarters in Miami, Florida, we have offices and a network of international representatives around the world which focus on our global guest sourcing.

We compete principally on the basis of exceptional service provided by our crew, innovation and quality of ships, variety of itineraries, choice of destinations and price. We believe that our commitment to build state-of-the-art ships and to invest in the maintenance and revitalization of our fleet to, among other things, incorporate our latest signature innovations, allows us to continue to attract new and loyal repeat guests. We have also undertaken to expand globally and in 2012, we expect a significant amount of passenger ticket revenues from outside of the United States.

We believe cruising continues to be a widely accepted vacation choice due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities. In addition, we believe that our products appeal to a large consumer base and are not dependent on a single market or demographic.

Our Brands

Our global brands include Royal Caribbean International, Celebrity Cruises, and Azamara Club Cruises. These brands are complemented by our Pullmantur brand, which has been custom tailored to serve the cruise markets in Spain, Portugal and Latin America, and our CDF Croisières de France brand, which provides us with a custom tailored product targeted at the French market. In addition, we have a 50% investment in a joint venture which operates the brand TUI Cruises, specifically tailored for the German market.

We believe our global brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry. Although each of our brands has its own marketing style as well as ships and crews of various sizes, the nature of the products sold and services delivered by our brands share a common base (i.e. the sale and provision of cruise vacations). Our brands also have similar itineraries as well as similar cost and revenue components. In addition, our brands source passengers from similar markets around the world and operate in similar economic environments with a significant degree of commercial overlap. As a result, we strategically manage our brands as a single business with the ultimate objective of maximizing long-term shareholder value.

1

Royal Caribbean International

We currently operate 22 ships with an aggregate capacity of approximately 62,000 berths under our Royal Caribbean International brand, offering cruise itineraries that range from two to 18 nights. In addition, we have two ships on order for our Royal Caribbean International brand with an aggregate capacity of approximately 8,200 berths which are expected to enter service in the third quarter of 2014 and in the second quarter of 2015, respectively. Royal Caribbean International offers a variety of itineraries to destinations worldwide, including Alaska, Asia, Australia, Bahamas, Bermuda, Canada, the Caribbean, Europe, the Middle East, the Panama Canal, South America, South Pacific and New Zealand.

Royal Caribbean International is positioned at the upper end of the contemporary segment of the cruise vacation industry, generally characterized by cruises that are seven nights or shorter and feature a casual ambiance. We believe that the quality of the Royal Caribbean International brand also enables it to attract guests from the premium segment, which is generally characterized by cruises that are seven to 14 nights and appeal to the more experienced guest who is usually more affluent. This allows Royal Caribbean International to achieve market coverage that is among the broadest of any of the major cruise brands in the cruise vacation industry.

Royal Caribbean International’s strategy is to attract an array of vacationing guests by providing a wide variety of itineraries and cruise lengths with multiple innovative options for onboard dining, entertainment and other onboard activities. Popular product innovations include surf simulators, an interactive water park called the H2O Zone™, “Royal Promenades” (boulevards with shopping, dining and entertainment venues), ice skating rinks and rock climbing walls. In 2011, in an effort to maintain consistency across the fleet, Royal Caribbean International initiated a vessel revitalization program in order to incorporate some of the most popular features of our newer ships across the fleet, including the addition of new specialty restaurants, interactive flat-panel televisions in all staterooms, wireless internet throughout the ships as well as new lounge venues.

Royal Caribbean International offers a variety of shore excursions at each port of call. We believe that the variety and quality of Royal Caribbean International’s product offerings represent excellent value to consumers, especially to couples and families traveling with children. Because of the brand’s extensive and innovative product offerings, we believe Royal Caribbean International is well positioned to attract new consumers to the cruise vacation industry and to continue to bring loyal repeat guests back for their next vacation.

Celebrity Cruises

We currently operate 10 ships with an aggregate capacity of approximately 21,600 berths under our Celebrity Cruises brand, offering cruise itineraries that range from two to 18 nights. In addition, we have one ship on order for our Celebrity Cruises brand with a capacity of approximately 3,000 berths which is expected to enter service in the fourth quarter of 2012.

Celebrity Cruises is positioned within the premium segment of the cruise vacation industry. Celebrity Cruises delivers a modern luxury cruise vacation experience that appeals to experienced cruisers, resulting in a strong base of loyal repeat guests. The brand also appeals to vacationers who have not yet cruised who seek the high quality, service-focused and luxury experience the brand offers. Celebrity Cruises offers a global cruise experience by providing a variety of cruise lengths and itineraries to premium destinations throughout the world, including Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, Hawaii, the Middle East, New Zealand, the Panama Canal and South America. Celebrity Cruises is also the only major cruise line to operate a ship in the Galapagos Islands, Celebrity Xpedition. Celebrity Xpedition has 96 berths and provides this unique experience on seven day cruises with pre-cruise tours in Ecuador.

Celebrity Cruises’ strategy is to deliver an intimate experience onboard upscale ships that offer luxurious accommodations, a high staff-to-guest ratio, fine dining, personalized service, extensive spa facilities, and unique onboard activities and entertainment. In addition, Celebrity Cruises introduced the new Celebrity iLounge and became an Authorized Apple Reseller of computers and other media devices onboard certain Celebrity Cruises ships. During 2011, the brand began a revitalization program for all four Millennium-class ships in order to incorporate well-received concepts from the Solstice-class ships, such as AquaClass, the exclusive spa-inspired stateroom experience with its own private restaurant and the Celebrity iLounge, as well as new specialty restaurants, cafes and bar and lounge venues.

2

In 2011, Celebrity Cruises took delivery of Celebrity Silhouette, the fourth Solstice-class ship, and is expected to take delivery of Celebrity Reflection, the fifth and final Solstice-class ship, in the fourth quarter of 2012. These ships continue to introduce new innovations to further improve upon the guest experience.

Celebrity Cruises’ fleet, dining, service, and spa have been consistently recognized with numerous awards from consumer cruise travel polls, travel agents and travel industry publications.

Azamara Club Cruises

We currently operate two ships with an aggregate capacity of approximately 1,400 berths under our Azamara Club Cruises brand, offering cruise itineraries that range from three to 18 nights. Azamara Club Cruises is designed to serve the up-market segment of the North American, United Kingdom, German and Australian markets. The up-market segment incorporates elements of the premium segment and the luxury segment which is generally characterized by smaller ships, high standards of accommodation and service, higher prices and exotic itineraries to ports which are inaccessible to larger ships.

Azamara Club Cruises’ strategy is to deliver distinctive destination experiences, featuring unique itineraries with more overnights and longer stays as well as in-depth tours allowing guests to truly experience the destination. Azamara Club Cruises’ focus is to attract experienced travelers who enjoy cruising and who seek a more intimate onboard experience and a high level of service. Azamara Club Cruises sails in Asia, Northern and Western Europe, South America and the less-traveled islands of the Caribbean.

Azamara Club Cruises offers a variety of onboard services, amenities and activities, including gaming facilities, fine dining, spa and wellness, butler service for suites, as well as interactive entertainment venues. Azamara Club Cruises also includes as part of the base price of the cruise certain complimentary onboard services, amenities and activities which are not normally included in the base price of other cruise lines including wine with lunch and dinner, bottled water, soda, premium coffees and teas, gratuities for housekeeping and dining/bar staff, self-service laundry and shuttle buses for certain ports.

Pullmantur

As of December 31, 2011, we operated five ships with an aggregate capacity of approximately 7,650 berths under our Pullmantur brand, offering cruise itineraries that range from four to 12 nights. In February 2012, we entered into an agreement to bareboat charter our ship Ocean Dream to an unrelated party for a period of six years from the transfer date. The charter agreement provides a renewal option exercisable by the unrelated party for an additional four years. We anticipate delivery of Ocean Dream will take place in April 2012. In addition, in March 2012, Horizon will be redeployed from Pullmantur to CDF Croisières de France to replace Bleu de France which was sold in November 2010. Pullmantur serves the contemporary segment of the Spanish, Portuguese and Latin American cruise markets. Pullmantur also has land-based tour operations and owns a 49% interest in an air business that operates four Boeing 747 aircrafts in support of its cruise and tour operations.

Pullmantur’s strategy is to attract cruise guests by providing a variety of cruising options and land-based travel packages. Pullmantur offers a range of cruise itineraries to Brazil, the Caribbean, Europe and the Middle East. Pullmantur offers a wide array of onboard activities and services to guests, including exercise facilities, swimming pools, beauty salons, gaming facilities, shopping, dining, certain complimentary beverages, and entertainment venues. Pullmantur’s tour operations sell land-based travel packages to Spanish guests, including hotels and flights primarily to Caribbean resorts, and land-based tour packages to Europe aimed at Latin American guests.

CDF Croisières de France

CDF Croisières de France is designed to serve the contemporary segment of the French cruise market by providing a brand custom-tailored for French cruise guests. CDF Croisières de France offers seasonal itineraries to the Mediterranean and a variety of onboard services, amenities and activities, including entertainment venues, exercise and spa facilities, fine dining, and gaming facilities.

3

Starting in the second quarter of 2012, CDF Croisières de France will begin operating the 1,350-berth Horizon. This ship is currently operated by Pullmantur and will be redeployed to CDF Croisières de France in March 2012, following a revitalization to incorporate signature brand elements. Until November 2011, CDF Croisières de France operated Bleu de France under a one-year charter agreement following the sale of the ship from CDF Croisières de France to an unrelated third party in November 2010.

TUI Cruises

We also have a joint venture that operates TUI Cruises, which is designed to serve the contemporary and premium segments of the German cruise market by offering a custom-tailored product for German guests. All onboard activities, services, shore excursions and menu offerings are designed to suit the preferences of this target market. TUI Cruises operates two ships, Mein Schiff I and Mein Schiff II, with an aggregate capacity of approximately 3,800 berths. In 2011, TUI Cruises entered into a construction agreement to build its first newbuild ship, scheduled for delivery in the second quarter of 2014. TUI Cruises has an option to construct a second ship of the same class, which will expire on October 31, 2012. Our joint venture partner is TUI AG, a German tourism and shipping company that also owns 51% of TUI Travel.

Industry

Cruising is considered a well established vacation sector in the North American market, a growing sector in the European market and a developing but promising sector in several other emerging markets. Industry data indicates that a significant portion of cruise guests carried are first-time cruisers. We believe this presents an opportunity for long-term growth and a potential for increased profitability.

We estimate that the global cruise industry carried 20.2 million cruise guests in 2011 compared to 18.8 million cruise guests carried in 2010. We estimate that the global cruise fleet was served by approximately 417,000 berths on approximately 285 ships at the end of 2011. There are approximately 20 ships with an estimated 62,000 berths that are expected to be placed in service in the global cruise market between 2012 and 2016, although it is also possible that ships could be taken out of service during these periods. The majority of cruise guests have historically been sourced from North America and Europe.

North America

Although the North American cruise market has historically experienced significant growth, the compound annual growth rate in cruise guests for this market was approximately 3.2% from 2007 to 2011. This more limited growth is attributable in large part to the recent international expansion within the cruise industry. We estimate that North America was served by 138 ships with approximately 201,000 berths at the beginning of 2007 and by 143 ships with approximately 248,000 berths at the end of 2011. There are approximately 10 ships with an estimated 34,000 berths that are expected to be placed in service in the North American cruise market between 2012 and 2016.

Europe

In Europe, cruising represents a smaller but growing sector of the vacation industry. It has experienced a compound annual growth rate in cruise guests of approximately 9.6% from 2007 to 2011 and we believe this market has significant continued growth potential. We estimate that Europe was served by 104 ships with approximately 100,000 berths at the beginning of 2007 and by 121 ships with approximately 155,000 berths at the end of 2011. There are approximately 10 ships with an estimated 28,000 berths that are expected to be placed in service in the European cruise market between 2012 and 2016.

4

The following table details the growth in the global, North American and European cruise markets in terms of cruise guests and estimated weighted-average berths over the past five years:

Year	Global Cruise Guests(1)		Weighted- Average Supply of Berths Marketed Globally(1)		North American Cruise Guests(2)		Weighted- Average Supply of Berths Marketed in North America(1)		European Cruise Guests		Weighted- Average Supply of Berths Marketed in Europe(1)
2007		16,586,000		327,000		10,247,000		212,000		4,080,000		105,000
2008		17,184,000		347,000		10,093,000		219,000		4,500,000		120,000
2009		17,340,000		363,000		10,198,000		222,000		5,000,000		131,000
2010		18,800,000		391,000		10,781,000		232,000		5,540,000		143,000
2011		20,227,000		412,000		11,625,000		245,000		5,894,000		149,000

¹⁾  Source: Our estimates of the number of global cruise guests, and the weighted-average supply of berths marketed globally, in North America and Europe are based on a combination of data that we obtain from various publicly available cruise industry trade information sources including Seatrade Insider and Cruise Line International Association. In addition, our estimates incorporate our own statistical analysis utilizing the same publicly available cruise industry data as a base.

²⁾  Source: Cruise Line International Association based on cruise guests carried for at least two consecutive nights for years 2007 through 2010. Year 2011 amounts represent our estimates (see number 1 above).

³⁾  Source: European Cruise Council for years 2007 through 2010. Year 2011 amounts represent our estimates (see number 1 above).

Other Markets

In addition to expected industry growth in North America and Europe as discussed above, we expect the Asia/Pacific region to demonstrate an even higher growth rate in the near term, although it will continue to represent a relatively small sector compared to North America and Europe.

We compete with a number of cruise lines; however, our principal competitors are Carnival Corporation & plc, which owns, among others, Aida Cruises, Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland America Line, Iberocruceros, P&O Cruises and Princess Cruises; Disney Cruise Line; MSC Cruises; Norwegian Cruise Line and Oceania Cruises. Cruise lines compete with other vacation alternatives such as land-based resort hotels and sightseeing destinations for consumers’ leisure time. Demand for such activities is influenced by political and general economic conditions. Companies within the vacation market are dependent on consumer discretionary spending.

Operating Strategies

Our principal operating strategies are to:

• protect the health, safety and security of our guests and employees and protect the environment in which our vessels and organization operate,

• strengthen and support our human capital in order to better serve our global guest base and grow our business,

• further strengthen our consumer engagement in order to enhance our revenues while continuing to expand and diversify our guest mix through international guest sourcing,

• manage the efficiency of our operating expenditures and ensure adequate cash and liquidity, with the overall goal of maximizing our return on invested capital and long-term shareholder value,

• increase the awareness and market penetration of our brands throughout the world,

• strategically invest in our existing fleet through the revitalization of existing ships and the transfer of key innovations across each brand, while expanding our fleet with the new state-of-the-art cruise ships recently delivered and on order,

5

• capitalize on the portability and flexibility of our ships by deploying them into those markets and itineraries that provide opportunities to optimize returns, while continuing our focus on existing key markets,

• further enhance our technological capabilities to support ongoing operations and initiatives, and

• maintain strong relationships with travel agencies, the principal industry distribution channel, while enhancing our

consumer outreach programs.

Health, safety, security and environmental policies

We are committed to protecting the safety, environment and health of our guests, employees and others working on our behalf. We are also committed to protecting the marine environment in which our ships sail and the communities in which we operate, by reducing/mitigating adverse environmental consequences and using resources efficiently. As part of this commitment, our Safety, Environment and Health Departments oversee our maritime safety, global security, environmental stewardship and medical/public health activities. These departments are comprised of technical experts in our focus areas of: Regulatory and Policy Development; Compliance and Incident Prevention; Incident and Situation Response; and Business Stewardship. We also have a Maritime Advisory Board of experts as well as the Safety, Environment and Health (SEH) Committee of our Board of Directors which oversee these important areas.

Following the recent grounding of the Costa Concordia, we announced a comprehensive review of safety and emergency response procedures across all of our brands to identify lessons learned and best practices to further protect the safety of all of our passengers and crew. This review is being overseen by the Safety, Environment and Health Committee of our Board of Directors and its Chairman, Mr. William K. Reilly. Mr. Reilly was recently co-chair of the United States Government’s “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.”

Strengthen and support our human capital

Our employees, both shipboard and shoreside, are our most valuable resources. We strive to identify, hire, develop, motivate, and retain the best employees, with backgrounds and perspectives as diverse as our guest base. Attracting, engaging, and retaining key employees has been and will remain critical to our success.

We continue our focus on providing our employees with a competitive compensation structure, development and other personal and professional growth opportunities in order to strengthen and support our human capital. We are also committed to ensuring the very best leaders are developed and selected to lead the enterprise now and in the future. To that end we pay special attention to identifying high potential leaders and develop deep bench strength so these leaders can potentially assume multiple leadership roles throughout the organization. We strive to maintain a work environment that reinforces, collaboration, motivation, innovation and believe that maintaining our vibrant and distinctive culture, is critical to the growth of our business.

Strengthen our consumer engagement to enhance our revenues while expanding and diversifying our guest mix with a greater focus on international expansion

We are focused on further strengthening our consumer engagement with the ultimate goal of increasing revenues and yields while continuing to diversify our guest mix. We increase revenues and yields through various programs prior to, during and after a cruise vacation aimed at increasing our ticket prices and occupancy. In 2012, we plan to continue to strategically invest in a number of potential revenue enhancing projects, including revitalizing several of our vessels, enhancing our customer loyalty programs, introducing new onboard revenue initiatives and implementing various information technology infrastructure investments which we believe will provide opportunities for increased ticket and onboard revenues.

We sell and market our global brands, Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises, to guests outside of North America through our offices in the United Kingdom, France, Germany, Norway, Italy, Spain, Singapore, China, Brazil, Australia and Mexico. We believe that having a local presence in these markets provides us with the ability to react more quickly to local market conditions and better understand our consumer base in each

6

respective market. We further extend our geographic reach with a network of 39 independent international representatives located throughout the world covering 50 countries. Historically, our focus has been to primarily source guests for our global brands from North America. Over the last several years, we have continued to expand our focus on selling and marketing our cruise brands to countries outside of North America through fleet innovation and by responding to the itinerary preferences and cultural characteristics of our international guests. In 2012, Royal Caribbean International will focus on the development of key markets in Southern Europe, particularly France where we established a new office in 2011, and Asia, where we seek to establish a leading position in the Chinese market. In 2012, Celebrity Cruises will have additional product offerings in Australia and Asia.

We are focused on expanding our Pullmantur brand into other cruise markets. When we acquired Pullmantur in 2006, it was a brand primarily targeted at the Spanish cruise market. Since then, Pullmantur has evolved and we are focused on selling and marketing the brand to guests in Portugal and Latin America with particular emphasis in Brazil.

We also look for opportunities to acquire or develop brands custom-tailored to specific markets. TUI Cruises, our joint venture with TUI AG, is a cruise brand targeted at the cruise market in Germany. TUI Cruises complements our other custom-tailored brands including Pullmantur, our Spanish, Portuguese and Latin American targeted cruise line and CDF Croisières de France, which targets guests primarily in France.

Passenger ticket revenues generated by sales originating in countries outside of the United States were approximately 49%, 45%, and 46% of total passenger ticket revenues in 2011, 2010 and 2009, respectively. International guests have grown from approximately 871,000 in 2007 to approximately 2.2 million in 2011.

Manage our operating expenditures and ensure adequate cash and liquidity

We are committed to improving our cost efficiency and continue to implement cost containment initiatives, including a number of initiatives to reduce energy consumption and, by extension, fuel costs. These include the design of more fuel efficient ships as well as the implementation of more efficient hardware, including propulsion and cooling systems incorporating energy efficiencies. In addition, we are focused on maintaining a strong liquidity position, reducing our debt and improving our credit metrics. We are also continuing to pursue our objective of returning our credit ratings to investment grade. We believe these strategies enhance our ability to achieve our overall goal of maximizing our return on invested capital and long-term shareholder value.

Brand awareness and market penetration

We continue to work to increase the recognition and market penetration of our brands among consumers throughout the world. Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises are established global brands in the contemporary, premium and up-market segments of the cruise vacation industry, respectively. We increase brand awareness and market penetration of our Royal Caribbean International brand by targeting adults and families who are vacation enthusiasts interested in exploring new destinations and seeking new experiences through high quality and excellent-value cruise vacations. Celebrity Cruises’ communications target vacationers who most likely have prior cruise experience and who seek upscale experiences, luxurious accommodations, fine dining, spa services, and appreciate a high staff-to-guest ratio. Azamara Club Cruises targets experienced travelers who enjoy cruising and who seek a more intimate onboard experience and a high level of service. Azamara Club Cruises’ communications emphasize its unique itineraries and distinctive destinations experiences with longer stays and more overnights. Pullmantur is a widely recognized brand in the Spanish, Portuguese and Latin American contemporary cruise markets. CDF Croisières de France is targeted to serve the contemporary segment of the French cruise market.

Our brands’ marketing campaigns are designed to broaden the awareness of each brand. This includes the use of traditional media, social media, websites (www.royalcaribbean.com, www.celebritycruises.com, www.azamaraclubcruises.com, www.pullmantur.es, www.cdfcroisieresdefrance.fr) and travel agencies. Our brands engage past and potential guests by collaborating with travel partners and through call centers, international offices and international representatives. In addition, Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises retain repeat guests with exclusive benefits offered through their respective loyalty programs.

7

We also increase brand awareness across all of our brands through travel agencies who generate the majority of our bookings. We are committed to further developing and strengthening this very important distribution channel by continuing to focus the travel agents on the unique qualities of each of our brands.

Fleet revitalization, maintenance and expansion

We place a strong focus on product innovation which we seek to achieve by introducing new concepts on our new ships and continuously making improvements to our existing fleet in a cost effective manner. Our revitalization and maintenance programs enable us to incorporate our latest signature innovations, maintain consistency across the fleet and allow us to benefit from economies of scale by leveraging our suppliers. Ensuring consistency across our fleet provides us with the flexibility to deploy our ships among our brand portfolio.

We are committed to building state-of-the-art ships, and currently have signed agreements for the construction of three new ships, Celebrity Reflection which is scheduled to enter service in the fourth quarter of 2012 and two ships of a new generation of Royal Caribbean International cruise ships known as “Project Sunshine” which are scheduled to enter service in the third quarter of 2014 and in the second quarter of 2015, respectively. These additions are expected to increase our passenger capacity by approximately 11,200 berths by December 31, 2015, or approximately 12.1%, as compared to our capacity as of December 31, 2011. We continuously evaluate opportunities to order new ships, purchase existing ships or sell ships in our current fleet.

In support of our maintenance programs, we own a 40% interest in a ship repair and maintenance facility, Grand Bahama Shipyard Ltd., which is the largest cruise ship dry-dock repair facility in the world and is located in Freeport, Grand Bahamas. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. In addition, the facility serves unaffiliated cruise and cargo ships, oil and gas tankers, and offshore units.

Royal Caribbean International. Founded in 1968, Royal Caribbean International was the first cruise line to design ships for warm water year round cruises. Since then Royal Caribbean International has launched several classes of ships, each building upon the innovation of the previous class. Several of these innovations and recreational activities such as the “Royal Promenade” (a boulevard with shopping, dining and entertainment venues), ice and in-line skating rinks, rock climbing walls, miniature golf, full court basketball, enhanced staterooms and expanded dining venues have become signature elements of the brand.

In 2009 and 2010, Royal Caribbean International took delivery of the sister ships, Oasis of the Seas and Allure of the Seas, respectively, which are the largest and most innovative cruise ships in the cruise industry. In addition, Royal Caribbean International introduced DreamWorks Animations^® themed activities onboard certain ships and the first Starbucks^® Coffee at sea onboard Allure of the Seas. As part of our strategy to maintain brand consistency across our fleet, in 2011, Royal Caribbean International initiated a vessel revitalization program. Under this program, Royal Caribbean International is introducing some of the most popular features of the Oasis-class ships on certain Freedom-class, Radiance-class and Vision-class ships, including the addition of new specialty restaurants, a new lounge for Crown & Anchor Society loyalty program members, interactive flat-panel televisions in all staterooms and wireless internet throughout the ship. Liberty of the Seas, Freedom of the Seas, Radiance of the Seas and Splendour of the Seas were revitalized in 2011 as part of this revitalization program. An additional five ships are scheduled for revitalization in 2012.

Continuing our commitment to build state-of-the-art ships, Royal Caribbean International entered into an agreement with Meyer Werft to build two new ships of a new generation of Royal Caribbean International cruise ships, known as “Project Sunshine”. These ships will each have a capacity of approximately 4,100 berths and are expected to enter service in the third quarter of 2014 and in the second quarter of 2015, respectively. Project Sunshine will offer guests new activities and entertainment concepts while incorporating energy efficiencies and state-of-the-art environmental technologies.

Celebrity Cruises. Celebrity Cruises was founded in 1990 and has introduced several classes of ships, each building on the brand’s primary strengths. The progression and innovation of these ships have elevated Celebrity Cruises’ position in the premium segment of the marketplace. Some of the brand’s signature elements include the innovative design of the ships, contemporary gourmet dining, spacious staterooms and suites with verandas, spa facilities and a variety of bars and lounges. The brand continuously seeks to improve its existing fleet to keep current with the newest innovations.

8

With a strong focus on product innovation, Celebrity Cruises ordered a total of five Solstice-class ships, four of which have been delivered as of December 31, 2011. The Solstice-class ships are a wide-body construction class of ships with approximately 2,850 berths each (approximately 3,000 berths in the case of Celebrity Reflection). This wide-body construction design provides for many intimate areas onboard the ship. The Solstice-class ships incorporate many new and improved design features including the industry’s first ever “Lawn Club”. The Lawn Club is over a half acre venue featuring live grass for guest enjoyment. Celebrity Cruises also introduced the “Hot Glass Show,” a fully functional glass blowing studio which operates at the Lawn Club on some vessels. The Solstice-class ships are equipped with solar foils and solar panels, another industry first. Approximately 90% of the ships’ staterooms are outside and approximately 85% of the staterooms have verandas. Celebrity Silhouette, which was delivered in 2011 and Celebrity Reflection, which is expected to enter service in the fourth quarter of 2012, continue to introduce new innovations to further enhance the guest experience.

In 2010, Celebrity Cruises began investing in the revitalization of the Millennium-class ships as Celebrity Constellation underwent a revitalization of its onboard amenities and public areas to incorporate certain Solstice-class features. In 2012, Celebrity Constellation will undergo a second revitalization to incorporate an additional 60 staterooms. In 2011 and early 2012, respectively, Celebrity Infinity and Celebrity Summit added onboard amenities, public areas and 60 new staterooms. In the second quarter of 2012, Celebrity Millennium will undergo a revitalization to incorporate the same additions. These planned revitalizations will, among other things, help us increase brand consistency across the fleet and produce opportunities for increased ticket and onboard revenues.

Azamara Club Cruises. In 2007, we introduced Azamara Club Cruises, a new global cruise brand designed to serve the up-market segment, primarily in the North American cruise market. Since then, Azamara Club Cruises has expanded into the United Kingdom, German, Nordic and Australian markets, incorporating elements of the premium and luxury segments.

In May 2007, Blue Dream was redeployed from Pullmantur to Azamara Club Cruises, and is sailing under the name Azamara Journey. In September 2007, Blue Moon was also redeployed from Pullmantur to Azamara Club Cruises and is sailing under the name Azamara Quest. Before redeployment to the Azamara Club Cruises brand, each ship underwent revitalizations including the upgrade of guest suites and staterooms, and the addition of two new specialty restaurants. During 2012, Azamara Quest will undergo renovations of its onboard amenities and public areas.

Pullmantur. Pullmantur was founded in 1971 and for approximately 20 years it was dedicated to the land tour business in Europe primarily within Spain. As of December 31, 2011, Pullmantur operated five ships which range in size from approximately 1,000 to 2,300 berths for a total of 7,650 berths. In February 2012, we entered into an agreement to bareboat charter our ship Ocean Dream to an unrelated party for a period of six years from the transfer date. The charter agreement provides a renewal option exercisable by the unrelated party for an additional four years. We anticipate delivery of Ocean Dream will take place in April 2012.

In May 2007, Zenith was redeployed from Celebrity Cruises to Pullmantur. Empress of the Seas and Sovereign of the Seas were redeployed from Royal Caribbean International to Pullmantur in March 2008 and November 2008, respectively. Before redeployment to Pullmantur, each ship underwent revitalizations to incorporate Pullmantur’s signature elements which include Spanish signage, logos and expanded disco areas.

CDF Croisières de France. Founded in 2007, CDF Croisières de France is designed to serve the contemporary segment of the French cruise market by providing a custom-tailored product targeted to French cruise guests. Until November 2011, CDF Croisières de France operated Bleu de France under a one-year charter agreement following the sale of the ship from CDF Croisières de France to an unrelated third party in November 2010. In March 2012, Horizon will be redeployed from Pullmantur to CDF Croisières de France. The ship will enter service with CDF Croisières de France in the second quarter of 2012, following a revitalization to incorporate signature brand elements.

TUI Cruises. In 2008, we formed a joint venture with TUI AG, a European tourism and shipping company to operate TUI Cruises, a German cruise line which began operating Mein Schiff I (formerly Celebrity Galaxy). In 2011, we sold Celebrity Mercury to TUI Cruises, to serve as its second ship. The ship was renamed Mein Schiff 2 and began sailing

9

in May 2011 following revitalizations to incorporate signature brand elements. TUI Cruises currently has an aggregate capacity of approximately 3,800 berths. In addition, during 2011, TUI Cruises entered into a construction agreement to build its first newbuild ship, scheduled for delivery in the second quarter of 2014. TUI Cruises has an option to construct a second ship of the same class, which will expire on October 31, 2012.

Markets and itineraries

In an effort to penetrate untapped markets, diversify our consumer base and respond to changing economic and geopolitical market conditions, we continue to seek opportunities to optimally deploy ships in our Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises and Pullmantur brands to new markets and itineraries throughout the world. The portability of our ships and our investment in infrastructure allows us to expand into new markets and helps us reduce our dependency on any one market by allowing us to create “home ports” around the world. In addition, it allows us to readily deploy our ships to meet demand within our existing cruise markets.

Our ships offer a wide selection of itineraries that call on approximately 460 ports in 96 countries, spanning all seven continents. We are focused on obtaining the best possible long-term shareholder returns by operating in established markets while growing our presence in developing markets. New capacity allows us to expand into new markets and itineraries. Our brands have expanded their mix of itineraries, while strengthening our ability to penetrate the Asian, Caribbean, European, and Latin American markets further. We continuously attempt to place our vessels in those markets and itineraries where we are able to maximize our long-term profitability. In addition, in order to capitalize on the summer season in the Southern Hemisphere and mitigate the impact of the winter weather in the Northern Hemisphere, our brands have increased deployment to Australia and Latin America.

We continue to focus on the acceleration of Royal Caribbean International’s, Celebrity Cruises’ and Azamara Club Cruises’ strategic positioning as global cruise brands. In 2011, Royal Caribbean International increased its year-round deployment offerings, including more drive-to and locally sourced products for North American and international markets. During 2011, eleven of Royal Caribbean International’s ships sailed in Europe, making the brand an industry leader in European capacity during the summer season. Approximately 70% of the eleven ships were marketed to the European market for guest sourcing. During the Northern Hemisphere’s winter, Royal Caribbean International increased its capacity in Australia by redeploying a second ship to the region.

During 2012, Royal Caribbean International will continue its international expansion by seasonally adding a second ship in Asia and a third ship in Australia, adding new departure ports in Southern Europe in order to target guests in key source markets in the region and increasing capacity in Northern Europe. The brand has also modified certain of its itineraries for 2012 due to continuing geopolitical unrest in Northern Africa and Greece.

In October 2012, Celebrity Cruises will introduce Celebrity Reflection, the fifth Solstice-class ship, which will offer sailings in Europe and the Caribbean. With this added capacity, Celebrity Cruises will continue to grow in Europe and broaden its mix of itineraries during the winter.

The completion of all five Solstice-class ships will enable the brand to further expand and diversify its winter product offerings, reducing its concentration in the Caribbean from 82% to 58% of capacity when comparing the winter season of 2010 to the winter season of 2013. During the winter season, Celebrity Cruises will have ships in Australia and New Zealand, Hawaii, the Panama Canal and, for the first time in the brand’s history, Asia with longer cruises calling in ports in Southeast Asia, Indonesia, China and Japan.

In 2012, Azamara Club Cruises’ voyages will be sailing to 181 ports in 55 countries around the globe with nearly 50% of its ports-of-call featuring late night stays or overnights, allowing guests to experience the destination by day and by night. The Azamara Club Cruises 2012 deployment features South America, including Carnival in Rio de Janeiro, Antarctica, the West Indies, British Isles and Western Europe, Scandinavia and the Baltics, Eastern & Western Mediterranean, as well as the Indian Ocean and Asia. Also, Pullmantur and CDF Croisières de France will continue to offer itineraries in the Caribbean, Europe and South America with particular emphasis in Brazil.

In an effort to secure desirable berthing facilities for our ships, and to provide new or enhanced cruise destinations for our guests, we actively assist or invest in the development or enhancement of certain port facilities and infrastructure,

10

including mixed-use commercial properties, located in strategic ports of call. Generally, we collaborate with local, private or governmental entities by providing management and/or financial assistance and often enter into long-term port usage arrangements. In exchange for our involvement, we generally secure preferential berthing rights for our ships. During 2011, the new pier and port facilities which we invested in at the Port of Falmouth, Jamaica became operational. In addition to establishing a new port and shoreside facility to improve guest experience, Falmouth allows for the simultaneous berthing of one Oasis-class and one Freedom-class ship.

Enhance technological capabilities to support ongoing operations and initiatives

The need to develop and use technology continues to be increasingly important, even as we manage through difficult economic times. Technology is a pervasive part of virtually every business process we use and must perform well on a consistent basis in order to support our strategic focus and provide a quality experience to guests before, during and after their cruise. Moreover, as the use of our various websites and social media platforms continue to increase along with the increasing use of technology onboard our ships by both our guests and crew, we continually need to upgrade our systems, infrastructure and technologies to facilitate this growth. To further our customer-centricity, in 2011, we continued to improve our customer experiences online with significant enhancements to brand websites and the launch of mobile-friendly platforms. Active engagement in social media channels is also an integral part of our marketing strategy and a part of our broader consumer engagement strategy and relationship management platform.

To support our strategic focus on improving revenue yields, during 2011, we launched a number of new capabilities to improve our revenue management analytics and decision support processes. We also finalized the shipboard rollout of our beverage and spa pre-cruise sales program with all ships now participating which allows guests to purchase beverage packages and spa programs online prior to their sailing. Finally, we continued the execution of our international growth strategy with the launch of our consumer websites tailored to the Australian and Latin American markets and trade tools in multiple languages.

As part of Royal Caribbean International’s revitalization program, we are incorporating many of the technological innovations from the Oasis-class ships, including digital signage, enhanced WiFi and e-Mustering. In addition, Splendour of the Seas will be the first ship to introduce iPad^® mobile devices in every stateroom, allowing guests to access daily events and activities, personal itineraries, monitor their onboard spend account, access the internet and watch movies. We anticipate that the iPad^® mobile devices will be rolled out to other ships. Similarly, Solstice-class technological innovations, including iLounge and Qsine will be incorporated on the Millennium-class ships as part of the Celebrity Cruises vessel revitalization program.

To position ourselves for the future, we have embarked on several multi-year information technology strategic initiatives to ensure that we can continue to innovate and respond to the ever increasing expectations of our guests, in a scalable and cost effective manner.

Travel agency support and direct business

Travel agencies continue to be the primary source of ticket sales for our ships. We believe in the value of this distribution channel and invest heavily in maintaining strong relationships with our travel agents. To accomplish this goal, we seek to ensure that our commission rates and incentive structures remain competitive with those of other cruise lines. In addition, our sales teams focus on the unique qualities of each brand and provide support to the travel agency community. Our website Cruisingpower.com continues to be an industry-leading website exclusive to the travel agency community. Royal Caribbean International continues to enhance its online training certification program, “University of Wow,” and Celebrity Cruises continues to promote “Five Star Academy,” its online travel agent partner learning suite. In addition, over the past several years, we have completed several key enhancements to simplify the online booking process via our CruiseMatch trade booking tool based on feedback from our travel agent partners.

We have in place a virtual tradeshow platform, providing travel agents the opportunity to attend a Royal Caribbean International, Celebrity Cruises or Azamara Club Cruises tradeshow event by logging in from their own computer. These events consist of online training sessions, online general sessions with keynote speakers and online tradeshow booths all designed to educate, motivate and inform travel agents about our brands.

11

We have customer service representatives that are trained to assist travel agents in providing a higher level of service, and Insight, the first service tool of its kind in the industry, assists agencies with productivity and enhances customer service. Celebrity Cruises provides sales and marketing support to travel agents through its program, “The Celebrity Commitment”, whereby every travel agent partner in the United States and Canada has a dedicated sales manager who helps them grow their business. In addition, we currently operate reservation call centers to support our travel agent community in the United States, Canada, France, Spain, China, Singapore, Brazil, Mexico, Germany, Norway, France and the United Kingdom which allow us to provide flexible and extended hours of operations.

We also have certified vacation planners in our call centers located throughout the world offering cruise planning expertise and personal attention to our guests. We maintain websites that allow guests to plan and book a cruise and customize their reservations for Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. During 2011, we enhanced our Royal Caribbean International and Celebrity Cruises Spanish language sites in our Latin American markets, which allow for guests from countries in these markets to complete their entire booking process on-line. In addition, in order to support our direct sales initiative and to process inbound phone reservation requests from all markets, we created a Consumer Outreach department, which provides 24 hour access to certified vacation planners, group vacation planners and customer service agents.

We place a significant focus on building strong relationships with our guests before, during and after their cruise vacation with the objective of establishing customer engagement and continued loyalty. As part of this focus, we established ongoing social media platforms to increase awareness for both repeat and new guests and we emphasized marketing through our loyalty programs. As a result, we continue to experience an increase in the use of our internet sites and consumer outreach centers as a source of our overall bookings. In 2011, we also enhanced the Pullmantur website, www.pullmantur.es to include booking capabilities, which enable guests to plan and book a cruise and customize their reservation. Guests can also book their cruise vacations onboard our ships. We continue to improve our direct outreach programs by enhancing loyalty benefits offered to repeat guests. In addition, Celebrity Cruises provides dedicated agents for guests with reservations in our premium staterooms, and introduced a mobile application and mobile web site. This free application allows users to view Celebrity Cruises’ global destinations, review onboard activities, e-mail itineraries of interest and request or place a call or e-mail to customer service directly via the application.

Guest Services

We offer to handle virtually all travel aspects related to guest reservations and transportation, including arranging guest pre- and post-hotel stay arrangements and air transportation. We offer our guests the ability to check-in online in order to reduce boarding time during embarkation. Our air/sea program offers the Choice Air web based tool, which provides guests their choice of flights and the ability to customize flight arrangements by selecting a specific airline, flight and class of service. Choice Air can be accessed and utilized by both travel agents and guests.

Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises offer rewards to their guests through their loyalty programs, Crown & Anchor Society, Captain’s Club and Le Club Voyage, respectively, to encourage repeat business. Crown & Anchor Society has over 6.0 million members worldwide. Captain’s Club and Le Club Voyage have 1.7 million members combined worldwide. All loyalty programs recognize loyalty guests by offering exclusive member-only benefits. Members are typically eligible to enroll in these complimentary programs after one sailing and earn membership status by accumulating cruise points or credits which can be redeemed in future sailings. In addition, upon achieving a certain level of cruise points or credits, members benefit from reciprocal membership benefits across all of our loyalty programs. We regularly work to enhance each of our loyalty programs by adding new features and amenities in order to reward our repeat guests.

Operations

Cruise Ships and Itineraries

As of December 31, 2011, we operate 39 ships under five cruise brands, with a selection of worldwide itineraries ranging from two to 18 nights that call on approximately 460 destinations. Celebrity Reflection is expected to enter revenue service in the fourth quarter of 2012. In addition, TUI Cruises, our joint venture with TUI AG, operates Mein Schiff I and Mein Schiff II, both of which will offer sailings in Europe and the Caribbean during 2012.

12

The following table presents summary information concerning the ships we will operate in 2012 under our five cruise brands and their geographic areas of operation based on 2012 itineraries (subject to change). It does not include Pullmantur’s Atlantic Star which is currently not in operation and which we are actively trying to sell. Additionally, in February 2012, we entered into an agreement to bareboat charter our ship Ocean Dream to an unrelated party for a period of six years from the transfer date. The charter agreement provides a renewal option exercisable by the unrelated party for an additional four years. We anticipate delivery of Ocean Dream will take place in April 2012.

Ship	Year Ship Entered or Will Enter Service1	Approximate Berths	Primary Areas of Operation
Royal Caribbean International
Allure of the Seas	2010	5,400	Eastern/Western Caribbean
Oasis of the Seas	2009	5,400	Eastern/Western Caribbean
Independence of the Seas	2008	3,600	Europe, Eastern/Western Caribbean
Liberty of the Seas	2007	3,600	Europe, Short Caribbean
Freedom of the Seas	2006	3,600	Eastern/Western Caribbean
Jewel of the Seas	2004	2,100	Western Caribbean, Canada/New England, Europe
Mariner of the Seas	2003	3,100	Western Caribbean, Europe, Middle East
Serenade of the Seas	2003	2,100	Southern Caribbean, Europe, Middle East
Navigator of the Seas	2002	3,100	Western Caribbean, Europe
Brilliance of the Seas	2002	2,100	Europe, Southern Caribbean
Adventure of the Seas	2001	3,100	Southern Caribbean, Europe
Radiance of the Seas	2001	2,100	Alaska, Australia/New Zealand/South Pacific
Explorer of the Seas	2000	3,100	Eastern/Southern Caribbean, Bermuda
Voyager of the Seas	1999	3,100	Western Caribbean, Asia, Australia/New Zealand/South Pacific
Vision of the Seas	1998	2,000	Europe, Brazil, Southern Caribbean, Panama Canal
Enchantment of the Seas	1997	2,250	Eastern/Western Caribbean, Bermuda, Canada/New England
Rhapsody of the Seas	1997	2,000	Australia/New Zealand, Alaska
Grandeur of the Seas	1996	1,950	Europe, Southern Caribbean
Splendour of the Seas	1996	1,800	Europe, Brazil
Legend of the Seas	1995	1,800	Asia
Majesty of the Seas	1992	2,350	Bahamas
Monarch of the Seas	1991	2,350	Bahamas
Celebrity Cruises
Celebrity Reflection	2012	3,000	Europe, Eastern Caribbean
Celebrity Silhouette	2011	2,850	Europe, Middle East, Eastern / Western Caribbean
Celebrity Eclipse	2010	2,850	Europe, Southern Caribbean
Celebrity Equinox	2009	2,850	Europe, Long Caribbean
Celebrity Solstice	2008	2,850	Eastern/Western Caribbean, Europe, Australia/New Zealand
Celebrity Constellation	2002	2,050	Western Caribbean, Europe
Celebrity Summit	2001	2,150	Southern Caribbean, Bermuda, Canada/New England
Celebrity Infinity	2001	2,150	Alaska, Panama Canal, South America
Celebrity Millennium	2000	2,150	Western Caribbean, Alaska, Asia
Celebrity Century	1995	1,800	Australia/New Zealand/South Pacific, Alaska, Hawaii, Panama Canal
Celebrity Xpedition2	2004	96	Galapagos Islands

13

Azamara Club Cruises
Azamara Journey3	2004	700	Europe, Caribbean, Asia, South America
Azamara Quest4	2006	700	Europe, Asia, South America, Caribbean
Pullmantur
Ocean Dream5	2008	1,000	Western/Southern Caribbean
Zenith	1992	1,400	Europe, Middle East, Brazil
Empress	1990	1,600	Europe, Brazil
Sovereign	1988	2,300	Europe, Brazil
CDF Croisières de France
Horizon6	1990	1,350	Europe, Brazil
Total		95,846

¹  The year a ship entered or will enter service refers to the year in which the ship commenced cruise revenue operations for the Company, which is the same as the year the ship was built, unless otherwise noted.

²  Celebrity Xpedition was built in 2001.

³  Azamara Journey (formerly Blue Dream) was built in 2000.

⁴  Azamara Quest (formerly Blue Moon) was built in 2000.

⁵  Ocean Dream was built in 1981. In February 2012, we entered into an agreement to bareboat charter our ship Ocean Dream to an unrelated party for a period of six years from the transfer date. The charter agreement provides a renewal option exercisable by the unrelated party for an additional four years. We anticipate delivery of Ocean Dream will take place in April 2012.

⁶  Horizon was built in 1990. Horizon will be redeployed from Pullmantur to CDF Croisières de France in March 2012.

We have three ships on order, which are being built in Germany by Meyer Werft GmbH. The expected dates these ships will enter service and their planned number of berths are as follows:

Ship	Expected to  Enter Service		Approximate Berths
Celebrity Cruises—Solstice-class:
Celebrity Reflection		4th Quarter 2012		3,000
Royal Caribbean International—Project Sunshine:
Unnamed		3rd Quarter 2014		4,100
Unnamed		2nd Quarter 2015		4,100
		Total Berths		11,200

In addition, in 2011, TUI Cruises entered into a construction agreement to build its first newbuild ship, scheduled for delivery in the second quarter of 2014. TUI Cruises has an option to construct a second ship of the same class, which will expire on October 31, 2012.

Seasonality

Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays. In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have increased deployment to South America and Australia during the Northern Hemisphere winter months.

14

Passengers and Capacity

Selected statistical information is shown in the following table (see Description of Certain Line Items and Selected Operational and Financial Metrics under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, for definitions):

	Year Ended December 31,
	2011			2010			2009			2008			2007
Passengers Carried		4,850,010			4,585,920			3,970,278			4,017,554			3,905,384
Passenger Cruise Days		34,818,335			32,251,217			28,503,046			27,657,578			26,594,515
Available Passenger Cruise Days (APCD)		33,235,508			30,911,073			27,821,224			26,463,637			25,155,768
Occupancy		104.8	%		104.3	%		102.5	%		104.5	%		105.7	%

Cruise Pricing

Our cruise ticket prices include accommodations and a wide variety of activities and amenities, including meals and entertainment. Prices vary depending on the destination, cruise length, stateroom category selected and the time of year the cruise takes place. Although we grant credit terms to certain travel agencies and tour operators in select markets outside of the United States, our payment terms generally require an upfront deposit to confirm a reservation with the balance due prior to the sailing. During the selling period of a cruise, we continually monitor and adjust our cruise ticket prices for available guest staterooms based on demand, with the objective of maximizing net yields. Historically, we have opened cruises for sale at least one year in advance and often as much as two years in advance. Additionally, we offer air transportation as a service for guests that elect to utilize our transportation program. Our air transportation program is available in major cities around the world and prices vary by gateway and destination. Generally, air tickets are sold to guests at prices close to cost. Passenger ticket revenues accounted for 73.3%, 72.7% and 71.4% of total revenues in 2011, 2010 and 2009, respectively.

From time to time, we have introduced temporary fuel supplements to partially offset a portion of fuel costs, which result in an additional fee being charged to the guests. While none of our brands are currently charging fuel supplements, we reserve the right to reinstate our fuel supplements for one or more of our brands and will continue to monitor our markets and review our position based upon the appropriate facts and circumstances.

Onboard Activities and Other Revenues

Our cruise brands offer modern fleets with a wide array of onboard services, amenities and activities which vary by brand and ship including swimming pools, sun decks, lawn decks, spa facilities (which include massage and exercise facilities), beauty salons, boxing rings, gaming facilities, lounges, bars, a wide variety of dining options and venues, Las Vegas-style entertainment, hot glass shows, retail shopping, libraries, dedicated recreational areas for youth of all ages, cinemas, conference centers, internet services & cafes and shore excursions at each port of call. While many onboard activities are included in the base price of a cruise, we realize additional revenues from, among other things, gaming, the sale of alcoholic and other beverages, gift shop items, shore excursions, photography, spa/salon and fitness services, art auctions and a wide variety of specialty restaurants and dining options. A flexible dining option, “My Time Dining” and “Celebrity Select Dining”, allows guests for Royal Caribbean International and Celebrity Cruises, respectively, to choose when they dine in the main dining room onboard, on a day-by-day basis, which includes the industry’s first pre-cruise day-by-day flexible dining reservation system. Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises offer enhanced functionality on their respective internet sites for selecting shore excursions, specialty dining and amenities, including spa appointments and beverage packages for Royal Caribbean International and Celebrity Cruises prior to embarkation. Royal Caribbean International and Celebrity Cruises also offer a catalogue gift service, which is now offered via the internet to provide travel agents and others the opportunity to purchase gifts for guests.

In conjunction with our cruise vacations, we offer pre- and post-cruise hotel packages to our Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises guests. We also offer these guests escorted, premium land-tour vacation packages in Alaska, Asia, Australia, the Canadian Rockies, Europe, New Zealand and Latin America

15

through our cruise-tour operations, Royal Celebrity Tours. Pullmantur offers land-based travel packages to Spanish and European vacation travelers including hotels and flights to Caribbean resorts and sells land based tour packages to Europe aimed at Latin American guests. Pullmantur also owns a 49% interest in an air business that operates four Boeing 747 aircrafts in support of its cruise and tour operations. In addition, we sell cruise vacation protection coverage, which provides guests with coverage for trip cancellation, medical protection and baggage protection. Onboard and other revenues accounted for 26.7%, 27.3% and 28.6% of total revenues in 2011, 2010 and 2009, respectively.

Segment Reporting

We operate five wholly-owned cruise brands, Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, Pullmantur and CDF Croisières de France. In addition, we have a 50% investment in a joint venture which operates the brand TUI Cruises with TUI AG. We believe our global brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry. Although each of our brands has its own marketing style as well as ships and crews of various sizes, the nature of the products sold and services delivered by our brands share a common base (i.e. the sale and provision of cruise vacations). Our brands also have similar itineraries as well as similar cost and revenue components. In addition, our brands source passengers from similar markets around the world and operate in similar economic environments with a significant degree of commercial overlap. As a result, our brands (including TUI Cruises) have been aggregated as a single reportable segment based on the similarity of their economic characteristics, types of consumers, regulatory environment, maintenance requirements, supporting systems and processes as well as products and services provided. Our Chairman and Chief Executive Officer has been identified as the chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analyses of the Company as one segment. (For financial information see Item 8. Financial Statements and Supplementary Data.)

Employees

As of December 31, 2011, we employed approximately 6,300 full-time and 740 part-time employees worldwide in our shoreside operations. We also employed approximately 54,000 shipboard employees. As of December 31, 2011, approximately 80% of our shipboard employees were covered by collective bargaining agreements. Based on employee survey results, we believe our employees’ satisfaction level with our organization is strong.

Insurance

We maintain insurance on the hull and machinery of our ships, which includes additional coverage for disbursements, earnings and increased value, which are maintained in amounts related to the value of each ship. The coverage for each of the hull policies is maintained with syndicates of insurance underwriters from the British, Scandinavian, French, United States and other international insurance markets.

We maintain liability protection and indemnity insurance for each of our ships through either the United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited, the Steamship Mutual Underwriting Association (Bermuda) Limited or the Assuranceforeningen SKULD (Gjensidig). Our protection and indemnity liability insurance is done on a mutual basis and we are subject to additional premium calls in amounts based on claim records of all members of the mutual protection and indemnity association. We are also subject to additional premium calls based on investment shortfalls experienced by the insurer.

We maintain war risk insurance which covers damage due to acts of war, including invasion, insurrection, terrorism, rebellion, piracy and hijacking, on each ship, through a Norwegian war risk insurance organization. This coverage includes coverage for physical damage to the ship which is not covered under the hull policies as a result of war exclusion clauses in such hull policies. We also maintain protection and indemnity war risk coverage for risks that would be excluded by the rules of the indemnity insurance organizations, subject to certain limitations. Consistent with most marine war risk policies, under the terms of our war risk insurance coverage, underwriters can give seven days notice to us that the policy will be canceled and reinstated at higher premium rates.

Insurance coverage for shoreside property, shipboard inventory, and general liability risks are maintained with insurance underwriters in the United States and the United Kingdom.

16

We do not carry business interruption insurance for our ships based on our evaluation of the risks involved and protective measures already in place, as compared to the cost of insurance. We carry business interruption insurance for certain of our shoreside operations.

All insurance coverage is subject to certain limitations, exclusions and deductible levels. In addition, in certain circumstances, we either self-insure or co-insure a portion of these risks. Premiums charged by insurance carriers, including carriers in the maritime insurance industry, increase or decrease from time to time and tend to be cyclical in nature. These cycles are impacted both by our own loss experience and by losses incurred in direct and reinsurance markets. We historically have been able to obtain insurance coverage in amounts and at premiums we have deemed to be commercially acceptable. No assurance can be given that affordable and secure insurance markets will be available to us in the future, particularly for war risk insurance.

The Athens Convention relating to the Carriage of Passengers and their Luggage by Sea (1974) and the 1976 Protocol to the Athens Convention are generally applicable to passenger ships. The United States has not ratified the Athens Convention; however, with limited exceptions, the 1976 Athens Convention Protocol may be contractually enforced with respect to those of our cruises that do not call at a United States port. The International Maritime Organization Diplomatic Conference agreed upon a new Protocol to the Athens Convention on November 1, 2002. The 2002 Protocol, which is not yet in force pending ratification by the requisite number of countries, substantially increases the level of compulsory insurance which must be maintained by passenger ship operators. In an attempt to expedite implementation, the European Union adopted the European Union Regulation 392/2009 (“EU Passenger Liability Regulation”) on the liability of carriers of passengers by sea, which will become effective on December 31, 2012. This regulation incorporates the 2002 Protocol in many ways. We have had discussions with the insurance marketplace and feel that we have sufficient coverage to meet the level of coverage required under the EU Passenger Liability Regulation.

Trademarks

We own a number of registered trademarks related to the Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, Pullmantur and CDF Croisières de France cruise brands. The registered trademarks include the name “Royal Caribbean International” and its crown and anchor logo, the name “Celebrity Cruises” and its “X” logo, the name “Azamara Club Cruises” and its logo, the names “Pullmantur Cruises” and “Pullmantur” and their logos, the name “CDF Croisières de France” and its logo, and the names of various cruise ships. We believe our trademarks are widely recognized throughout the world and have considerable value.

Regulation

Our ships are regulated by various international, national, state and local laws, regulations and treaties in force in the jurisdictions in which they operate. In addition, our ships are registered in the Bahamas, Malta or in the case of Celebrity Xpedition, Ecuador. Each ship is subject to regulations issued by its country of registry, including regulations issued pursuant to international treaties governing the safety of our ships, guests and crew as well as environmental protection. Each country of registry conducts periodic inspections to verify compliance with these regulations as discussed more fully below. Ships operating out of United States ports are subject to inspection by the United States Coast Guard for compliance with international treaties and by the United States Public Health Service for sanitary conditions. Our ships are also subject to similar inspections pursuant to the laws and regulations of various other countries our ships visit.

We believe that we are in material compliance with all the regulations applicable to our ships and that we have all licenses necessary to conduct our business. Health, safety, security, environmental and financial responsibility issues are, and we believe will continue to be, an area of focus by the relevant government authorities in the United States and internationally. From time to time, various regulatory and legislative changes may be proposed that could impact our operations and subject us to increasing compliance costs in the future.

Safety and Security Regulations

Our ships are required to comply with international safety standards defined in the International Convention for Safety of Life at Sea (“SOLAS”), which among other things, establishes requirements for ship design, structural features,

17

materials, construction, life saving equipment and safe management and operation of ships to ensure guest and crew safety. The SOLAS standards are revised from time to time and the most recent modifications were phased in through 2010. Compliance with these modified standards did not a have a material effect on our operating costs. SOLAS incorporates the International Safety Management Code (“ISM Code”), which provides an international standard for the safe management and operation of ships and for pollution prevention. The ISM Code is mandatory for passenger vessel operators. All of our operations and ships are regularly audited by national authorities and maintain the required certificates of compliance with the ISM Code.

Our ships are subject to various security requirements, including the International Ship and Port Facility Security Code (“ISPS Code”), which is part of SOLAS, and the U.S. Maritime Transportation Security Act of 2002 (“MTSA”), which applies to ships that operate in U.S. ports. In order to satisfy these security requirements, we implement security measures, conduct vessel security assessments, and develop security plans. The security plans for all of our ships have been submitted to and approved by the respective countries of registry for our ships in compliance with the ISPS Code and the MTSA.

In July 2010, the U.S. adopted the Cruise Vessel Security and Safety Act of 2010, which applies to passenger vessels which embark or include port stops within the United States. This act requires the implementation of certain safety design features as well the establishment of practices for the reporting of and dealing with allegations of crime. In 2012, the U.S. Coast Guard is expected to issue regulations governing implementation of certain provisions of the act. We already exceed most of the requirements of the act and do not expect any costs that would be material to us to be required due to these likely regulations.

Environmental Regulations

We are subject to various United States and international laws and regulations relating to environmental protection. Under such laws and regulations, we are prohibited from, among other things, discharging certain materials, such as petrochemicals and plastics, into the waterways. We have made, and will continue to make, capital and other expenditures to comply with environmental laws and regulations. From time to time, environmental and other regulators consider more stringent regulations, which may affect our operations and increase our compliance costs. We believe that the impact of ships on the global environment will continue to be an area of focus by the relevant authorities throughout the world and, accordingly, will likely subject us to increasing compliance costs in the future.

Our ships are subject to the International Maritime Organization’s (“IMO”) regulations under the International Convention for the Prevention of Pollution from Ships (the “MARPOL Regulations”), which includes requirements designed to prevent and minimize pollution by oil, sewage, garbage and air emissions. We have obtained the relevant international compliance certificates relating to oil, sewage and air pollution prevention for all of our ships.

On January 1, 2010, a European Union directive regarding the use of low sulfur fuels for ships became effective. The directive places a 0.1% sulfur content limit on all marine fuels used by such ships while berthed or anchored in European Union ports. Compliance with this directive requires us to use distillate fuels such as marine gas oil. This has not had a material effect on our fuel and operating costs.

The MARPOL Regulations impose global limitations on the sulfur content of fuel used by ships operating worldwide. Permitted sulfur content was reduced from 4.5% to 3.5% on January 1, 2012. We do not expect that this required reduction will have a material effect on our fuel and operating costs. These regulations will also require the worldwide limitations on sulfur content of fuel to be reduced to 0.5% by January 1, 2020, subject to a feasibility review to be completed by IMO no later than 2018. If such a reduced limitation is implemented worldwide in 2020, our fuel costs could increase significantly.

In addition to the global limitations, the MARPOL Regulations establish special Emission Control Areas (“ECAs”) with stringent limitations on sulfur and nitrogen oxide emissions in these areas. As of July 1, 2010, ships operating in designated ECAs were required to reduce their fuel sulfur content from 1.5% to 1.0%. Under these regulations, ships operating in ECAs will be required to further reduce their fuel sulfur content to 0.1% beginning on January 1, 2015.

As of the date of this report, both the Baltic Sea and the North Sea/English Channel have been established as ECAs. During 2010, the IMO accepted and adopted the application by the United States, France and Canada to designate as an

18

ECA waters within 200 nautical miles of their east, west and gulf coasts, as applicable, as well as the Hawaiian Islands, but excluding certain areas within the Caribbean Basin such as the Bahamas, the Canadian Arctic, Western Alaska and the Aleutian Islands. This designation will be effective as of August 1, 2012. In addition, in July 2011, the IMO accepted and adopted the application by the United States to designate the waters surrounding Puerto Rico and the US Virgin Islands as an ECA. This designation will be effective as of January 2014.

As of the date hereof, the required sulfur content reductions in the existing ECAs has not had a material impact on our operations and we do not expect the initial required sulfur content reductions in either the United States, French and Canadian ECA or the Puerto Rico/US Virgin Islands ECA will have a material effect on our fuel and operating costs. However, the additional reduction to 0.1% as of January 1, 2015 could significantly increase our costs after this date based on current capacities, fuel prices, itineraries and technologies. The cost impact from implementing progressively lower sulfur content requirements after January 1, 2015 is not reasonably determinable given the length of time until such possible implementation and the applicability of many possible mitigating factors, such as changes in the future supply and demand for fuel, the development of emissions abatement technologies, including new engine designs or exhaust gas treatment systems, the acceptance of alternative compliance methods, the cost migration effects of equivalent compliance initiatives and new fuel conservation initiatives.

In July 2011, new MARPOL Regulations introduced mandatory measures to reduce greenhouse gas emissions. These include the utilization of an energy efficiency design index (EEDI) for new ships as well as the establishment of an energy efficient management plan for all ships. The EEDI is a performance-based mechanism that requires a certain minimum energy efficiency in new ships. These regulations will be effective as of January 1, 2013. We do not anticipate that compliance with these regulations will have a material effect on our operating costs.

We are required to obtain certificates from the United States Coast Guard relating to our ability to satisfy liability in cases of water pollution. Pursuant to United States Coast Guard regulations, we arrange through our insurers for the provision of guarantees aggregating $347.7 million as a condition to obtaining the required certificates. The cost of obtaining these guarantees does not have a material effect on our operating costs.

Labor Regulations

The International Labour Organization, an agency of the United Nations that develops worldwide employment standards, has adopted a new Consolidated Maritime Labour Convention (the “Convention”). The Convention, which will be effective one year following ratification by at least 30 countries representing at least 33% of the world gross tonnage, reflects a broad range of standards and conditions to govern all aspects of crew management for ships in international commerce, including additional requirements not previously in effect relating to the health, safety, repatriation, entitlements and status of crewmembers and crew recruitment practices. The Convention is expected to be ratified during 2012, in which case it would become effective in 2013. Our expenses will likely increase following its effectiveness; however, the amount of the increase is not reasonably determinable pending the enactment of legislation to implement new standards outlined in the Convention by the enacting countries.

Consumer Financial Responsibility Regulations

We are required to obtain certificates from the United States Federal Maritime Commission relating to our ability to satisfy liability in cases of non-performance of obligations to guests, as well as casualty and personal injury. Pursuant to the United States Federal Maritime Commission regulations, we arrange through our insurers for the provision of guarantees in the amount of $15.0 million for each of our two U.S. ship-operating companies, Royal Caribbean Cruises Ltd. and Celebrity Cruises Inc. and a bond in the amount of $15.0 million for one of our U.K. ship operating companies, as a condition to obtaining the required certificates. In September 2011, the United States Federal Maritime Commission published a proposed rule that would increase the required guarantees to $30.0 million per operator ($90.0 million in the aggregate), subject to consumer price index based adjustments every two years. This increase, if adopted, will be phased in over a two-year period. The FMC is expected to vote on final passage of the proposed rule in early to mid 2012. We do not anticipate that compliance with the new rule will have a material effect on our costs.

We are also required by the United Kingdom, Norway, Finland, and the Baltics to establish our financial responsibility for any liability resulting from the non-performance of our obligations to guests from these jurisdictions. In the United

19

Kingdom we are currently required by the Association of British Travel Agents to provide performance bonds totaling approximately £30.4 million. The Norwegian Travel Guarantee Fund currently requires us to maintain performance bonds of approximately $27.2 million to cover our financial responsibility in Norway, Finland and the Baltics. We are also required to pay to the United Kingdom Civil Aviation Authority a non-refundable levy of £2.50 per guest where we arrange a flight as part of the cruise vacation.

Certain other jurisdictions also require that we establish financial responsibility to our guests resulting from the non-performance of our obligations however, the related amounts do not have a material effect on our costs.

Regulations Regarding Protection of Disabled Persons

In 2010, the United States Department of Transportation issued regulations (the “New ADA Regulations”) addressing various issues applicable to passenger vessels under the American with Disabilities Act (the “ADA”). Part I of the New ADA Regulations, which include required reservation policies for disabled guests and requirements for aids and services to disabled passengers, became effective in January 2011. We are in compliance with Part I of the New ADA Regulations and did not need to make any material expenditures to comply. Part II, when issued, is expected to address physical accessibility standards. While we believe our vessels have been designed and outfitted to meet the needs of our disabled guests, we cannot at this time accurately predict whether we will be required to make material modifications or incur significant additional expenses in response to Part II of the New ADA Regulations.

Taxation of the Company

The following is a summary of our principal taxes, exemptions and special regimes. In addition to or instead of income taxation, virtually all jurisdictions where our ships call impose some tax or fee, or both, based on guest headcount, tonnage or some other measure.

We are primarily foreign corporations engaged in the business of operating passenger cruise ships in international transportation. We also own and operate other businesses primarily consisting of the land-tour operation in Alaska and the Pullmantur land-tour and air business.

United States Income Taxation

The following is a discussion of the application of the United States federal and state income tax laws to us and is based on the current provisions of the United States Internal Revenue Code, Treasury Department regulations, administrative rulings, court decisions and the relevant state tax laws, regulations, rulings and court decisions of the states where we have business operations. All of the foregoing is subject to change, and any such change could affect the accuracy of this discussion.

Application of Section 883 of the Internal Revenue Code

We and Celebrity Cruises, Inc. and many of our ship-owning subsidiaries are engaged in a trade or business in the United States, and in many cases, depending upon the itineraries of the ships, receive income from sources within the United States. Additionally, our United Kingdom tonnage tax company, owned by us and Celebrity Cruises, Inc., is a ship-operating company that may earn United States source income and is a company for which an election was filed to be classified as a partnership for United States federal income tax purposes. Under Section 883 of the Internal Revenue Code, certain foreign corporations are not subject to United States federal income or branch profits tax on United States source income derived from or incidental to the international operation of a ship or ships, including income from the leasing of such ships.

A foreign corporation will qualify for the benefits of Section 883 if, in relevant part: (1) the foreign country in which the foreign corporation is organized grants an equivalent exemption to corporations organized in the United States; and (2) the stock of the corporation (or the direct or indirect corporate parent thereof) is “primarily and regularly traded on an established securities market” in the United States or another qualifying country such as Norway. In the opinion of our United States tax counsel, Drinker Biddle & Reath LLP, based on the representations and assumptions set forth in that opinion, we, Celebrity Cruises Inc. and our ship-owning subsidiaries qualify for the benefits of Section 883 because we

20

and each of those subsidiaries are incorporated in Liberia or Malta, which are qualifying countries, and our common stock is primarily and regularly traded on an established securities market in the United States or Norway. If, in the future, (1) Liberia or Malta no longer qualifies as an equivalent exemption jurisdiction, and we do not reincorporate in a jurisdiction that does qualify for the exemption, or (2) we fail to qualify as a publicly traded corporation, we and all of our ship-owning or operating subsidiaries that rely on Section 883 for tax exemption on qualifying income would be subject to United States federal income tax on their United States source shipping income and income from activities incidental thereto.

We believe that most of our income and the income of our ship-owning subsidiaries is derived from or incidental to the international operation of a ship or ships and, therefore, is exempt from taxation under Section 883. Additionally, income earned through a partnership will qualify as income derived from or incidental to the international operation of a ship or ships to the same extent as the income would so qualify if earned directly by the partners. Thus, we believe that United States source income derived from or incidental to the international operation of a ship or ships earned by the United Kingdom tonnage tax company will qualify for exemption under Section 883 to the same extent as if it were earned directly by the owners of the United Kingdom tonnage tax company.

Regulations under Section 883 list activities that are not considered by the Internal Revenue Service to be incidental to the international operation of ships including income from the sale of air and land transportation, shore excursions and pre- and post-cruise tours. To the extent the income from these activities is earned from sources within the United States, that income will be subject to United States taxation.

Taxation in the Absence of an Exemption under Section 883 of the Internal Revenue Code

If we, Celebrity Cruises Inc. or our ship-owning subsidiaries were to fail to meet the requirements of Section 883 of the Internal Revenue Code, or if the provision was repealed, then, as explained below, such companies would be subject to United States income taxation on a portion of their income derived from or incidental to the international operation of our ships.

Because we and Celebrity Cruises Inc. conduct a trade or business in the United States, we and Celebrity Cruises Inc. would be taxable at regular corporate rates on our separate company taxable income (i.e., without regard to the income of our ship-owning subsidiaries) from United States sources. In addition, if any of our earnings and profits effectively connected with our United States trade or business were withdrawn, or were deemed to have been withdrawn, from our United States trade or business, those withdrawn amounts would be subject to a “branch profits” tax at the rate of 30%. We and Celebrity Cruises Inc. would also be potentially subject to tax on portions of certain interest paid by us at rates of up to 30%.

If Section 883 were not available to our ship-owning subsidiaries, each such subsidiary would be subject to a special 4% tax on its United States source gross transportation income, if any, each year because it does not have a fixed place of business in the United States and its income is derived from the leasing of a ship.

Other United States Taxation

Our primary domestic United States operation, the Alaska land-tour operation, is subject to United States federal income tax. Additionally, we and Celebrity Cruises, Inc. earn United States source income from activities not considered incidental to international shipping. The tax on such income is not material to our results of operation for all years presented.

State Taxation

We, Celebrity Cruises Inc. and certain of our subsidiaries are subject to various United States state income taxes which are generally imposed on each state’s portion of the United States source income subject to federal income taxes. Additionally, the state of Alaska subjects an allocated portion of the total income of companies doing business in Alaska and certain other affiliated companies to Alaska corporate state income taxes and also imposes a 33% tax on adjusted gross income from onboard gambling activities conducted in Alaska waters. This did not have a material impact to our results of operations for all years presented.

21

Maltese, Spanish and French Income Tax

Our Pullmantur ship owner-operator subsidiaries, which include the owner-operator of CDF Croisieres de France’s ship, qualify as licensed shipping organizations in Malta. No Maltese income tax is charged on the income derived from shipping activities of a licensed shipping organization. Instead, a licensed shipping organization is liable to pay a tonnage tax based on the net tonnage of the ship or ships registered under the relevant provisions of the Merchant Shipping Act. A company qualifies as a shipping organization if it engages in qualifying activities and it obtains a license from the Registrar-General to enable it to carry on such activities. Qualifying activities include, but are not limited to, the ownership, operation (under charter or otherwise), administration and management of a ship or ships registered as a Maltese ship in terms of the Merchant Shipping Act and the carrying on of all ancillary financial, security and commercial activities in connection therewith.

Our Maltese operations that do not qualify as licensed shipping organizations, which are not considered significant, remain subject to normal Maltese corporate income tax.

Pullmantur has sales and marketing functions, land-based tour operations and air business in Spain. These activities are subject to Spanish taxation. The tax from these operations is not considered significant to our operations. CDF Croisieres de France’s French operations are minimal and therefore, its French income taxes are minimal.

United Kingdom Income Tax

We operate thirteen ships under companies which have elected to be subject to the United Kingdom tonnage tax regime (“U.K. tonnage tax”).

Companies subject to U.K. tonnage tax pay a corporate tax on a notional profit determined with reference to the net tonnage of qualifying vessels. Normal United Kingdom corporate income tax is not chargeable on the relevant shipping profits of a qualifying U.K. tonnage tax company. The requirements for a company to qualify for the U.K. tonnage tax regime include being subject to United Kingdom corporate income tax, operating qualifying ships, which are strategically and commercially managed in the United Kingdom, and fulfilling a seafarer training requirement. Failure to meet any of these requirements could cause us to lose the benefit of the tonnage tax regime which will have a material effect on our results of operations.

Relevant shipping profits include income from the operation of qualifying ships and from shipping related activities. Our United Kingdom income from non-shipping activities which do not qualify under the U.K. tonnage tax regime and which are not considered significant, remain subject to United Kingdom corporate income tax.

Brazilian Income Tax

Pullmantur and our U.K. tonnage tax company charters certain ships to Brazilian companies for operations in Brazil from November to May. Some of these charters are with unrelated third parties and others are with a Brazilian affiliate. The Brazilian affiliate’s earnings are subject to Brazilian taxation which is not considered significant. We believe the charter payments made to the U.K. tonnage tax company and to Pullmantur are exempt from Brazilian income tax under Brazilian domestic law.

Other Taxation

We and certain of our subsidiaries are subject to income tax in other jurisdictions on income that does not qualify for exemption or tonnage tax regimes. The tax on such income was not material to our results of operations for all years presented. Our U.K. tonnage tax company is exempt from some taxation in certain jurisdictions where those companies have business operations under relevant United Kingdom tax treaties.

22

Website Access to Reports

We make available, free of charge, access to our Annual Reports, all quarterly and current reports and all amendments to those reports, as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission through our website at www.rclinvestor.com. The information contained on our website is not a part of any of these reports and is not incorporated by reference herein.

Executive Officers of the Company

As of February 29, 2012, our executive officers are:

Name	Age	Position
Richard D. Fain	64	Chairman, Chief Executive Officer and Director
Adam M. Goldstein	52	President and Chief Executive Officer, Royal Caribbean International
Daniel J. Hanrahan	54	President and Chief Executive Officer, Celebrity Cruises
Gonzalo Chico Barbier	51	President and Chief Executive Officer, Pullmantur
Lawrence Pimentel	60	President and Chief Executive Officer, Azamara Club Cruises
Brian J. Rice	53	Executive Vice President and Chief Financial Officer
Harri U. Kulovaara	59	Executive Vice President, Maritime
Michael W. Bayley	53	Executive Vice President, Operations

Richard D. Fain has served as a director since 1979 and as our Chairman and Chief Executive Officer since 1988. Mr. Fain has been involved in the shipping industry for over 30 years.

Adam M. Goldstein has served as President of Royal Caribbean International since February 2005 and as its President and Chief Executive Officer since September 2007. Mr. Goldstein has been employed with Royal Caribbean since 1988 in a variety of positions, including Executive Vice President, Brand Operations of Royal Caribbean International, Senior Vice President, Total Guest Satisfaction and Senior Vice President, Marketing. Mr. Goldstein served as National Chair of the United States Travel Association (formerly, Travel Industry Association of America) in 2001.

Daniel J. Hanrahan has served as President of Celebrity Cruises since February 2005 and as its President and Chief Executive Officer since September 2007. Mr. Hanrahan served as President and Chief Executive Officer of Azamara Cruises until July 2009. From 1999 until February 2005, Mr. Hanrahan served in a variety of positions with the Royal Caribbean International brand, including Senior Vice President, Sales and Marketing.

Gonzalo Chico Barbier has served as President and Chief Executive Officer of Pullmantur since June 2008. From 1995 to June 2008, Mr. Chico served as Executive President of TNT Spain, a division of TNT, a global distribution, logistics and international mail service company. From 1986 until 1995, Mr. Chico was employed in a variety of positions with Ford Motor Company in Spain and in the United Kingdom, including Pan-European Fleet Business Manager of Ford of Europe, Ltd.

Lawrence Pimentel has served as President and Chief Executive Officer of Azamara Club Cruises since July 2009. From 2001 until January 2009, Mr. Pimentel was President, Chief Executive Officer, Director and co-owner of SeaDream Yacht Club, a privately held luxury cruise line located in Miami, Florida with two yacht-style ships that sailed primarily in the Caribbean and Mediterranean. From April 1991 to February 2001, Mr. Pimentel was President and Chief Executive Officer of Carnival Corp.’s Seabourn Cruise Line and from May 1998 to February 2001, he was President and Chief Executive Officer of Carnival Corp.’s Cunard Line.

Brian J. Rice has served as Executive Vice President and Chief Financial Officer since November 2006. Mr. Rice has been employed with Royal Caribbean since 1989 in a variety of positions including Executive Vice President, Revenue Performance. In such capacity, Mr. Rice was responsible for revenue management, air/sea, groups, international operations, decision support, reservations and customer service for both Royal Caribbean International and Celebrity Cruises.

Harri U. Kulovaara has served as Executive Vice President, Maritime, since January 2005. Mr. Kulovaara is

23

responsible for fleet design and newbuild operations. Mr. Kulovaara also chairs our Maritime Safety Advisory Board. Mr. Kulovaara has been employed with Royal Caribbean since 1995 in a variety of positions, including Senior Vice President, Marine Operations, and Senior Vice President, Quality Assurance. Mr. Kulovaara is a naval architect and engineer.

Michael W. Bayley has served as Executive Vice President, Operations since February 2012. In this capacity, he is responsible for the worldwide hotel and marine operations of Royal Caribbean International as well as land operations for Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Mr. Bayley has been employed by Royal Caribbean for over 30 years, serving in a number of roles including, most recently, as Executive Vice President, International from May 2010 until February 2012. Mr. Bayley has also served as Senior Vice President, Hotel Operations for Royal Caribbean International where he oversaw worldwide hotel operations and onboard revenue as well as Chairman and Managing Director of Island Cruises.

Item 1A. Risk Factors

The risk factors set forth below and elsewhere in this Annual Report on Form 10-K are important factors that could cause actual results to differ from expected or historical results. It is not possible to predict or identify all such risks. The risks described below are only those known risks relating to our operations and financial condition that we consider material. There may be additional risks that we consider not to be material, or which are not known, and any of these risks could have the effects set forth below. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for a cautionary note regarding forward-looking statements.

Adverse worldwide economic, geopolitical or other conditions could reduce the demand for cruises and adversely impact our operating results, cash flows and financial condition including potentially impairing the value of our ships, goodwill and other assets.

The demand for cruises is affected by international, national and local economic and geopolitical conditions. The recent severe economic downturn coupled with continued uncertainty as to the future global economic landscape has had and continues to have an adverse effect on vacationers’ discretionary income and consumer confidence. This, in turn, has resulted in cruise booking slowdowns, decreased cruise prices and lower onboard revenues for us and for the others in the cruise industry as compared to more robust economic times. Although the cruise industry continued to recover in 2011, recovery has been slow and has been hindered by the ongoing economic instability, including heightened concerns regarding European economies. In addition, certain countries have been more severely impacted by the recent economic downturn than other economies around the world where we do business including, for example, Spain where we operate our Pullmantur brand. We cannot predict with any certainty whether demand for cruises will continue to improve or the rate of such improvement. Stagnant or worsening global economic conditions could result in a prolonged period of booking slowdowns, depressed cruise prices and reduced onboard revenues.

Demand for our cruises is also influenced by geopolitical events in the markets in which we operate. Unfavorable conditions, such as civil unrest and governmental changes, especially in regions with popular ports of call, can undermine consumer demand and/or pricing for itineraries featuring these ports. For example, the ongoing political instability in the Eastern Mediterranean and Northern Africa and its spillover effects in surrounding areas negatively impacted our results of operations in 2011. Continued unrest and economic instability in this or other regions we do business could materially adversely impact our operating results, cash flows and financial condition including potentially impairing the value of our ships, goodwill and other assets.

We may not be able to obtain sufficient financing or capital for our needs or may not be able to do so on terms that are acceptable or consistent with our expectations.

To fund our capital expenditures and scheduled debt payments, we have historically relied on a combination of cash flows provided by operations, drawdowns under available credit facilities, the incurrence of additional indebtedness and the sale of equity or debt securities in private or public securities markets. The decrease in consumer cruise spending as a result of the recent severe economic downturn had an adverse impact on our cash flows from operations and if the current economic conditions worsen our operational cash flows could continue to be negatively affected. See “—Adverse worldwide economic and geopolitical conditions could reduce the demand for cruises and adversely impact our operating results, cash flows and financial condition.”

24

Although we believe we have or can access sufficient liquidity to fund our operations and obligations as expected, there can be no assurances to that effect. Our ability to timely refinance and/or replace our outstanding debt securities and credit facilities on acceptable terms, our cost of funding and our ability to access additional funding, as may be needed, will depend upon numerous factors including but not limited to the vibrancy of the financial markets, our financial performance and credit ratings and the performance of our industry in general.

Our inability to satisfy the covenants required by our credit facilities could adversely impact our liquidity.

Our debt agreements contain covenants, including covenants restricting our ability to take certain actions and financial covenants that require us to maintain minimum net worth and fixed charge coverage ratios and limit our net debt-to-capital ratio. Our ability to comply with the terms of our outstanding facilities may be affected by general economic conditions, industry conditions and other events, some of which may be beyond our control. In addition, our ability to make draws under our revolving credit facilities is subject to the absence of material adverse changes in our business. Our ability to maintain our credit facilities may also be impacted by changes in our ownership base. More specifically, we may be required to prepay a majority of our debt facilities if (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 30% of our common stock and the Applicable Group owns less of our common stock than such person or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade.

Our failure to comply with the terms of our debt facilities could result in an event of default. Generally, if an event of default under any debt agreement occurs, then pursuant to cross default acceleration clauses, our outstanding debt and derivative contract payables could become due and/or terminated. We cannot provide assurances that we would have sufficient liquidity to repay or refinance the borrowings under any of the credit facilities or settle other outstanding contracts if such amounts were accelerated upon an event of default.

In addition, under several of our agreements with credit card processors that accept credit cards for the sale of cruises and other services, the credit card processor may hold back a reserve from our credit card receivables following the occurrence of certain events, including a default under our major credit facilities. As of December 31, 2011, we were not required to maintain any reserve under such agreements.

Incidents or adverse publicity concerning the cruise vacation industry, unusual weather conditions and other natural disasters or disruptions could affect our reputation as well as impact our sales and results of operations.

The operation of cruise ships, airplanes, land tours, port facilities and shore excursions involves the risk of accidents, illnesses, environmental incidents and other incidents which may bring into question guest safety, health, security and vacation satisfaction which could negatively impact our reputation. Incidents involving cruise ships, and, in particular the safety and security of guests and crew, such as the recent grounding of the Costa Concordia, media coverage thereof, as well as adverse media publicity concerning the cruise vacation industry or unusual weather patterns or natural disasters or disruptions, such as hurricanes and earthquakes, and the collateral impact thereof could impact demand for our cruises. The considerable expansion in the use of social media over recent years has compounded the potential scope of the negative publicity that could be generated by those incidents. If any such incident occurs in a region during a time of high seasonal demand, the effect could disproportionately impact our results of operations for the year. In addition, any events which impact the travel industry more generally may negatively impact our ability to deliver guests to our cruises and/or interrupt our ability to obtain services and goods from key vendors in our supply chain. Any of the foregoing could have an adverse impact on our results of operations and on industry performance.

The impact of disruptions in the global financial markets may affect the ability of our counterparties and others to perform their obligations to us.

The recent severe economic downturn, including failures of financial service companies and the related liquidity crisis, disrupted the capital and credit markets and additional economic concerns from some of the countries in the European

25

Union continue to strain the financial markets both in the US and internationally. A recurrence of these disruptions could cause our counterparties and others to breach their obligations to us under our contracts with them. This could include failures of banks or other financial service companies to fund required borrowings under our loan agreements or to pay us amounts that may become due under our derivative contracts for hedging of fuel prices, interest rates and foreign currencies or other agreements. If any of the foregoing occurs it may have a negative impact on our cash flows including our ability to meet our obligations, results of operations and financial condition.

An increase in capacity worldwide or excess capacity in a particular market could adversely impact our cruise sales and/or pricing.

Although our ships can be redeployed, cruise sales and/or pricing may be impacted both by the introduction of new ships into the marketplace and by deployment decisions of ourselves and our competitors. A total of 20 new ships with approximately 62,000 berths are on order for delivery through 2016 in the cruise industry. The further growth in capacity from these new ships and future orders, without an increase in the cruise industry’s share of the vacation market, could depress cruise prices and impede our ability to achieve yield improvement. In addition, to the extent that we or our competitors deploy ships to a particular itinerary and the resulting capacity in that region exceeds the demand, we may lower pricing and profitability may be lower than anticipated. Any of the foregoing could have an adverse impact on our results of operations, cash flows and financial condition including potentially impairing the value of our ships, goodwill and other assets.

If we are unable to appropriately balance our cost management strategy with our goal of satisfying guest expectations it may adversely impact our business success.

Our goals are to provide high quality products and deliver high quality services. There can be no assurances that we can successfully balance these goals with our cost containment efforts.

We may lose business to competitors throughout the vacation market.

We operate in the vacation market and cruising is one of many alternatives for people choosing a vacation. We therefore risk losing business not only to other cruise lines, but also to other vacation operators, which provide other leisure options including hotels, resorts and package holidays and tours.

We face significant competition from other cruise lines on the basis of cruise pricing, travel agent preference and also in terms of the nature of ships and services we offer to guests. Our principal competitors within the cruise vacation industry include Carnival Corporation & plc, which owns, among others, Aida Cruises, Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland America Line, Iberocruceros, P&O Cruises and Princess Cruises; Disney Cruise Line; MSC Cruises; Norwegian Cruise Line and Oceania Cruises.

In the event that we do not compete effectively with other vacation alternatives and cruise companies, our results of operations and financial position could be adversely affected.

Fears of terrorist and pirate attacks, war, and other hostilities and the spread of contagious diseases could have a negative impact on our results of operations.

Events such as terrorist and pirate attacks, war, and other hostilities and the resulting political instability, travel restrictions, the spread of contagious diseases and concerns over safety, health and security aspects of traveling or the fear of any of the foregoing have had, and could have in the future, a significant adverse impact on demand and pricing in the travel and vacation industry. As we continue to expand internationally, we become susceptible to a wider range of adverse events. These events could also impact our ability to source qualified crew from throughout the world at competitive costs and, therefore, increase our shipboard employee costs.

Fluctuations in foreign currency exchange rates could affect our financial results.

We earn revenues, pay expenses, recognize assets and incur liabilities in currencies other than the U.S. dollar, including, among others, the euro, the British pound sterling, the Canadian dollar, the Australia dollar and the Brazilian

26

real. In 2011, we derived approximately 49% of revenues from operations outside the United States. Because our consolidated financial statements are presented in U.S. dollars, we must convert revenues, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, absent offsetting changes in other foreign currencies, increases or decreases in the value of the U.S. dollar against other major currencies will affect our revenues, operating income and the value of balance sheet items denominated in foreign currencies. We use derivative financial instruments to mitigate our net exposure to currency exchange rate fluctuations. However, there can be no assurances that fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S. dollar against major currencies, would not materially affect our financial results.

In addition, we have ship construction contracts which are denominated in euros. While we have entered into euro-denominated forward contracts to manage a portion of the currency risk associated with these ship construction contracts, we are exposed to fluctuations in the euro exchange rate for the portion of the ship construction contracts that has not been hedged. Additionally, if the shipyard is unable to perform under the related ship construction contract, any foreign currency hedges that were entered into to manage the currency risk would need to be terminated. Termination of these contracts could result in a significant loss.

Environmental, labor, health and safety, financial responsibility and other maritime regulations could affect operations and increase operating costs.

The United States and various state and foreign government or regulatory agencies have enacted or are considering new environmental regulations or policies, such as requiring the use of low sulfur fuels, increasing fuel efficiency requirements, further restricting emissions, or other initiatives to limit greenhouse gas emissions that could increase our cost for fuel, cause us to incur significant expenses to purchase and/or develop new equipment and adversely impact the cruise vacation industry. See “Item 1. Business—Regulation—Environmental Regulations.” An increase in fuel prices not only impacts our fuel costs, but also some of our other expenses, such as crew travel, freight and commodity prices. Although not all initiatives are likely to be implemented, it is apparent that some future legislation and regulations related to the environment will impact the cruise industry and could adversely impact our costs. Some environmental groups have also lobbied for more stringent regulation of cruise ships and have generated negative publicity about the cruise vacation industry and its environmental impact.

With regards to labor, we anticipate that the new standards set forth in the Maritime Labour Convention when ratified and effective (which we currently believe may occur in 2012 and 2013, respectively) will likely result in increased costs associated with our onboard employees. See “Item 1. Business—Regulation—Labor Regulations.” While we have been actively seeking ways to mitigate the potential impact on our business, there can be no assurances that our efforts will be successful or that our financial results of operations will not be materially impacted.

In addition, we are subject to various international, national, state and local laws, regulations and treaties that govern, among other things, safety standards applicable to our ships, treatment of disabled persons, health and sanitary standards applicable to our guests, security standards on board our ships and at the ship/port interface areas, and financial responsibilities to our guests. These issues are, and we believe will continue to be, an area of focus by the relevant authorities throughout the world, especially in light of the recent grounding of the Costa Concordia. This could result in the enactment of more stringent regulation of cruise ships that would subject us to increasing compliance costs in the future.

Conducting business globally may result in increased costs and other risks.

We operate our business globally and plan to continue to develop our international presence. Operating internationally exposes us to a number of risks, including unstable local economic conditions, volatile local political conditions, potential increases in duties and taxes, required compliance with additional laws and policies affecting cruising, vacation or maritime businesses or governing the operations of foreign-based companies, currency fluctuations, interest rate movements, difficulties in operating under local business environments, U.S. and global anti-bribery laws or regulations, imposition of trade barriers and restrictions on repatriation of earnings. In addition, if a country where we have significant operations or obligations leaves the euro currency system, our financial condition may be adversely impacted. If we are unable to address these risks adequately, our financial position and results of operations could be adversely affected, including potentially impairing the value of our ships, goodwill and other assets.

27

Operating globally also exposes us to numerous and sometimes conflicting legal and regulatory requirements. In many parts of the world, including countries in which we operate, practices in the local business communities might not conform to international business standards. We may not be successful in ensuring that our employees and other representatives stationed throughout the world properly adhere to our policies or applicable laws or regulations. Failure to adhere to our policies or applicable laws or regulations could result in penalties, sanctions, damage to our reputation and related costs which in turn could negatively affect our results of operations and cash flow.

Our attempts to expand our business into new markets may not be successful.

While our historical focus has been to serve the North American cruise market, we have expanded our focus to increase our international guest sourcing, most recently, in the Brazilian, Asian and Australian markets. Expansion into new markets requires significant levels of investment. There can be no assurance that these markets will develop as anticipated or that we will have success in these markets, and if we do not, we may be unable to recover our investment, which could adversely impact our business, financial condition and results of operations.

Ship construction, repair or refurbishment delays or mechanical faults may result in cancellation of cruises or unscheduled drydocks and repairs and thus adversely affect our results of operations.

We depend on shipyards to construct, repair and refurbish our cruise ships on a timely basis and in good working order. The sophisticated nature of building a ship involves risks. Delays or mechanical faults in ship construction or refurbishment have in the past and may in the future result in delays or cancellation of cruises or necessitate unscheduled drydocks and repairs of ships. These events and any related adverse publicity could result in lost revenue, increased operating expenses, or both, and thus adversely affect our results of operations.

Shipyards and their subcontractors may experience financial difficulties which could cause or result in delay, ship cancellations or increases in shipbuilding costs that could adversely affect our results of operations.

We rely on shipyards to construct, repair and refurbish our vessels. Financial difficulties, liquidations or closures suffered by these shipyards and/or their subcontractors may impact the timely delivery or costs of new ships or the ability of shipyards to repair and refurbish our existing fleet in accordance with our needs or expectations. Delivery delays and cancelled deliveries can adversely affect our results of operations, as can any constraints on our ability to repair and maintain our ships on a timely basis.

Our operating costs, especially fuel expenditures, could increase due to market forces and economic or geo- political factors beyond our control.

Expenditures for fuel represent a significant cost of operating our business. If fuel prices rise significantly in a short period of time, we may be unable to increase fares or other fees sufficiently to offset fully our increased fuel costs. We routinely hedge a portion of our future fuel requirements to protect against rising fuel costs. However, there can be no assurance that our hedge contracts will provide a sufficient level of protection against increased fuel costs or that our counterparties will be able to perform under our hedge contracts, such as in the case of a counterparty’s bankruptcy. Further volatility in fuel prices or disruptions in fuel supplies could have a material adverse effect on our results of operations, financial condition and liquidity.

Our other operating costs, including food, payroll, airfare for our shipboard personnel, taxes, insurance and security costs are all subject to increases due to market forces and economic or political conditions or other factors beyond our control. Increases in these operating costs could adversely affect our profitability.

Unavailability of ports of call may adversely affect our results of operations.

We believe that port destinations are a major reason why guests choose to go on a particular cruise or on a cruise vacation. The availability of ports is affected by a number of factors, including, but not limited to, existing capacity constraints, security concerns, adverse weather conditions and natural disasters, financial limitations on port development, exclusivity arrangements that ports may have with our competitors, local governmental regulations and local community

28

concerns about port development and other adverse impacts on their communities from additional tourists. Any limitations on the availability of our ports of call or on the availability of shore excursion and other service providers at such ports could adversely affect our results of operations.

Price increases for commercial airline service for our guests or major changes or reduction in commercial airline service could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.

Many of our guests depend on scheduled commercial airline services to transport them to or from the ports where our cruises embark or disembark. Increases in the price of airfare would increase the overall price of the cruise vacation to our guests which may adversely impact demand for our cruises. In addition, changes in the availability of commercial airline services could adversely affect our guests’ ability to obtain airfare as well as our ability to fly our guests to or from our cruise ships which could adversely affect our results of operations.

Our reliance on travel agencies to sell and market our cruises exposes us to certain risks which, if realized, could adversely impact our business.

Because we rely on travel agencies to generate the majority of bookings for our ships, we must ensure that our commission rates and incentive structures remain competitive. If we fail to offer competitive compensation packages, these agencies may be incentivized to sell cruises offered by our competitors to our detriment, which could adversely impact our operating results. In addition, the travel agent industry is sensitive to economic conditions that impact discretionary income. Significant disruptions, especially disruptions impacting those agencies that sell a high volume of our business, or contractions in the industry could reduce the number of travel agencies available for us to market and sell our cruises, which could have an adverse impact on our financial condition and results of operations.

A disruption in our shoreside operations or our information systems may adversely affect our results of operations.

Our principal executive office and principal shoreside operations are located at the Port of Miami, Florida and we have call centers for reservations throughout the world. Although we have developed disaster recovery and similar contingency plans, actual or threatened natural disasters (e.g. hurricanes, earthquakes, tornados, fires, floods) or similar events in these locations may have a material impact on our business continuity, reputation and results of operations. In addition, substantial or repeated information systems failures, computer viruses, cyber-attacks impacting our shoreside or shipboard operations could adversely impact our business. We do not carry business interruption insurance for the majority of our shoreside operations or our information systems. As such, any losses or damages incurred by us could have an adverse impact on our results of operations.

Failure to develop the value of our brands and differentiate our products could adversely affect our results of operations.

Our success depends on the strength and continued development of our cruise brands and on the effectiveness of our brand strategies. Failure to protect and differentiate our brands from competitors throughout the vacation market could adversely affect our results of operations.

The loss of key personnel, our inability to recruit or retain qualified personnel or disruptions among our shipboard personnel due to strained employee relations could adversely affect our results of operations.

Our success depends, in large part, on the skills and contributions of key executives and other employees, and on our ability to recruit and retain high quality employees. We must continue to recruit, retain and motivate management and other employees sufficient to maintain our current business and support our projected growth. Furthermore, as of December 31, 2011, 80% of our shipboard employees were covered by collective bargaining agreements. A dispute under our collective bargaining agreements could result in a work stoppage of those employees covered by the agreements. A loss of key employees or disruptions among our shipboard personnel could adversely affect our results of operations.

29

Business activities that involve our co-investment with third parties may subject us to additional risks.

Partnerships, joint ventures, and other business structures involving our co-investment with third parties, such as our joint venture to operate TUI Cruises, generally include some form of shared control over the operations of the business and create additional risks, including the possibility that other investors in such ventures could become bankrupt or otherwise lack the financial resources to meet their obligations, or could have or develop business interests, policies or objectives that are inconsistent with ours. In addition, actions by another investor may present additional risks of operational difficulties.

A failure to keep pace with developments in technology could impair our operations or competitive position.

Our business continues to demand the use of sophisticated technology and systems. These technologies and systems must be refined, updated, and/or replaced with more advanced systems on a regular basis. If we are unable to do so on a timely basis or within reasonable cost parameters, our business could suffer. We also may not achieve the benefits that we anticipate from any new technology or system, and a failure to do so could result in higher than anticipated costs or could impair our operating results.

A change in our tax status under the United States Internal Revenue Code, or other jurisdictions, may have adverse effects on our income.

We and a number of our subsidiaries are foreign corporations that derive income from a United States trade or business and/or from sources within the United States. Drinker Biddle & Reath LLP, our United States tax counsel, has delivered to us an opinion, based on certain representations and assumptions set forth in it, to the effect that this income, to the extent derived from or incidental to the international operation of a ship or ships, is exempt from United States federal income tax pursuant to Section 883 of the Internal Revenue Code. We believe that most of our income (including that of our subsidiaries) is derived from or incidental to the international operation of a ship or ships.

The provisions of Section 883 are subject to change at any time by legislation. Moreover, changes could occur in the future with respect to the identity, residence or holdings of our direct or indirect shareholders, trading volume or trading frequency of our shares, or relevant foreign tax laws of Liberia or Malta such that they no longer qualify as equivalent exemption jurisdictions, that could affect our eligibility for the Section 883 exemption. Accordingly, there can be no assurance that we will continue to be exempt from United States income tax on United States source shipping income in the future. If we were not entitled to the benefit of Section 883, we and our subsidiaries would be subject to United States taxation on a portion of the income derived from or incidental to the international operation of our ships, which would reduce our net income.

Additionally, portions of our business are operated by companies that are within tonnage tax regimes of the U.K. and Malta. Further, some of the operations of these companies are conducted in jurisdictions where we rely on tax treaties to provide exemption from taxation. To the extent the tonnage tax laws of these countries change or we do not continue to meet the applicable qualification requirements or if tax treaties are changed or revoked, we may be required to pay higher income tax in these jurisdictions, resulting in lower net income.

As budgetary constraints continue to adversely impact the jurisdictions in which we operate, increases in income tax regulations or tax reform affecting our operations may be imposed.

We are not a United States corporation and our shareholders may be subject to the uncertainties of a foreign legal system in protecting their interests.

Our corporate affairs are governed by our Articles of Incorporation and By-Laws and by the Business Corporation Act of Liberia. The provisions of the Business Corporation Act of Liberia resemble provisions of the corporation laws of a number of states in the United States. However, while most states have a fairly well developed body of case law interpreting their respective corporate statutes, there are very few judicial cases in Liberia interpreting the Business Corporation Act of Liberia. As such, the rights and fiduciary responsibilities of directors under Liberian law are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain United States jurisdictions. For example, the right of shareholders to bring a derivative action in Liberian courts

30

may be more limited than in United States jurisdictions. There may also be practical difficulties for shareholders attempting to bring suit in Liberia and Liberian courts may or may not recognize and enforce foreign judgments. Thus, our public shareholders may have more difficulty in protecting their interests with respect to actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction.

Litigation, enforcement actions, fines or penalties could adversely impact our financial condition or results of operations and/or damage our reputation.

Our business is subject to various United States and international laws and regulations that could lead to enforcement actions, fines, civil or criminal penalties or the assertion of litigation claims and damages. In addition, improper conduct by our employees or agents could damage our reputation and/or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines. In certain circumstances it may not be economical to defend against such matters and/or a legal strategy may not ultimately result in us prevailing in a matter. Such events could lead to an adverse impact on our financial condition or results of operations.

Provisions of our Articles of Incorporation, Bylaws and Liberian law could inhibit others from acquiring us, prevent a change of control, and may prevent efforts by our shareholders to change our management.

Certain provisions of our Articles of Incorporation and Bylaws and Liberian law may inhibit third parties from effectuating a change of control of the Company without Board approval which could result in the entrenchment of current management. These include provisions in our Articles of Incorporation that prevent third parties, other than A. Wilhelmsen AS. and Cruise Associates, from acquiring beneficial ownership of more than 4.9% of our outstanding shares without the consent of our Board of Directors.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Information about our cruise ships, including their size and primary areas of operation, may be found within the Operating Strategies—Fleet revitalization, maintenance and expansion section and the Operations—Cruise Ships and Itineraries section in Item 1. Business. Information regarding our cruise ships under construction, estimated expenditures and financing may be found within the Future Capital Commitments and Funding Sources sections of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Our principal executive office and principal shoreside operations are located at the Port of Miami, Florida where we lease three office buildings totaling approximately 361,800 square feet from Miami-Dade County, Florida, under long-term leases with current terms expiring in 2021. We lease an office building in the United Kingdom totaling approximately 7,230 square feet used to conduct our operations in the United Kingdom. We also lease a number of international offices throughout Europe, Asia, Mexico, South America and Australia to administer our brand operations globally.

We lease an office building in Springfield, Oregon totaling approximately 163,000 square feet, which is used as a call center for reservations. In addition, we own two office buildings totaling approximately 95,000 square feet in Wichita, Kansas, which are used as call centers for reservations and customer service. We lease two buildings in Miramar, Florida totaling approximately 178,000 square feet. One building is used primarily as office space and the other building is used as a call center for reservations. We also lease our logistics center in Weston, Florida totaling approximately 267,000 square feet.

We believe that our facilities are adequate for our current needs and that we are capable of obtaining additional facilities as necessary.

We also operate two private destinations which we utilize as a port-of-call on certain of our itineraries: (i) an island we own in the Bahamas which we call CocoCay; and (ii) Labadee, a secluded peninsula which we lease and is located on the north coast of Haiti.

31

Item 3. Legal Proceedings

Between August 1, 2011 and September 8, 2011, three similar purported class action lawsuits were filed against us and certain of our officers in the U.S. District Court of the Southern District of Florida. The cases have since been consolidated and a consolidated amended complaint was filed on February 17, 2012. The consolidated amended complaint was filed on behalf of a purported class of purchasers of our common stock during the period from October 26, 2010 through July 27, 2011 and names the Company, our Chairman and CEO, our CFO and the Presidents and CEOs of our Royal Caribbean International and Celebrity Cruises brands as defendants. The consolidated amended complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 as well as, in the case of the individual defendants, the control person provisions of the Securities Exchange Act. The complaint principally alleges that the defendants knowingly made incorrect statements concerning the Company’s outlook for 2011 by not taking into proper account lagging European and Mediterranean bookings. The consolidated amended complaint seeks unspecified damages, interest, and attorneys’ fees. We believe the claims are without merit and we intend to vigorously defend ourselves against them.

A class action complaint was filed in June 2011 against Royal Caribbean Cruises Ltd. in the United States District Court for the Southern District of Florida on behalf of a purported class of stateroom attendants employed onboard Royal Caribbean International cruise vessels alleging that they were required to pay other crew members to help with their duties in violation of the U.S. Seaman’s Wage Act. The lawsuit also alleges that certain stateroom attendants were required to work back of house assignments without the ability to earn gratuities in violation of the U.S. Seaman’s Wage Act. Plaintiffs seek judgment for damages, wage penalties and interest in an indeterminate amount. We have filed a Motion to Dismiss the Complaint on the basis that the applicable collective bargaining agreement requires any such claims to be arbitrated. We believe we have meritorious defenses to the lawsuit which we intend to vigorously pursue.

We commenced an action in June 2010 in the United States District Court for Puerto Rico seeking a declaratory judgment that Puerto Rico’s distributorship laws do not apply to our relationship with an international representative located in Puerto Rico. In September 2010, that international representative filed a number of counterclaims against Royal Caribbean Cruises Ltd. and Celebrity Cruises Inc. alleging violations of Puerto Rico’s distributorship laws, bad faith breach of contract, tortious interference with contract, violations of various federal and state antitrust and unfair competition laws. The international representative is seeking in excess of $40.0 million on each of these counterclaims together with treble damages in the amount of $120.0 million on several of the counterclaims as well as injunctive relief and declaratory judgment. We believe that the claims made against us are without merit and we intend to vigorously defend ourselves against them.

We are routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

Item 4. Mine Safety Disclosures

None.

32

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is listed on the New York Stock Exchange (“NYSE”) and the Oslo Stock Exchange (“OSE”) under the symbol “RCL”. The table below sets forth the high and low sales prices of our common stock as reported by the NYSE and the OSE for the two most recent years by quarter:

	NYSE Common Stock				OSE Common Stock(1)
	High		Low		High		Low
2011
Fourth Quarter	$	30.99	$	18.70		168.00		111.60
Third Quarter		39.43		21.50		214.30		121.10
Second Quarter		42.30		32.68		232.60		180.00
First Quarter		49.99		40.26		293.10		226.30
2010
Fourth Quarter	$	47.83	$	30.87		284.70		180.50
Third Quarter		32.73		21.97		197.00		142.00
Second Quarter		38.12		22.55		225.50		146.50
First Quarter		33.93		24.14		205.10		142.00

⁽¹⁾ Denominated in Norwegian kroner, as listed in the price history database available at www.oslobors.no.

Holders

As of February 13, 2012 there were 1,209 record holders of our common stock. Since certain of our shares are held by brokers and other institutions on behalf of shareholders, the foregoing number is not representative of the number of beneficial owners.

Dividends

In July 2011, our Board of Directors reinstated our quarterly dividend which had been discontinued in the fourth quarter of 2008. We subsequently declared cash dividends on our common stock of $0.10 per share during the third and fourth quarters of 2011.

Holders of our common stock have an equal right to share in our profits in the form of dividends when and if declared by our Board of Directors out of funds legally available. Holders of our common stock have no rights to any sinking fund.

There are no exchange control restrictions on remittances of dividends on our common stock since (1) we are and intend to maintain our status as a nonresident Liberian entity under the Revenue Code of Liberia (2000) and the regulations thereunder, and (2) our ship-owning subsidiaries are not now engaged, and are not in the future expected to engage, in any business in Liberia, including voyages exclusively within the territorial waters of the Republic of Liberia. Under current Liberian law, no Liberian taxes or withholding will be imposed on payments to holders of our securities other than to a holder that is a resident Liberian entity or a resident individual or an individual or entity subject to taxation in Liberia as a result of having a permanent establishment within the meaning of the Revenue Code of Liberia (2000) in Liberia.

The declaration of dividends shall at all times be subject to the final determination of our Board of Directors that a dividend is prudent at that time in consideration of the needs of the business.

33

Performance Graph

The following graph compares the total return, assuming reinvestment of dividends, on an investment in the Company, based on performance of the Company’s common stock, with the total return of the Standard & Poor’s 500 Composite Stock Index and the Dow Jones United States Travel and Leisure Index for a five year period by measuring the changes in common stock prices from December 31, 2006 to December 31, 2011.

	12/06		12/07		12/08		12/09		12/10		12/11
Royal Caribbean Cruises Ltd.		100.00		104.06		34.23		62.93		117.00		62.17
S&P 500		100.00		105.49		66.46		84.05		96.71		98.75
Dow Jones United States Travel & Leisure		100.00		98.59		63.96		83.77		118.44		126.37

The stock performance graph assumes for comparison that the value of the Company’s common stock and of each index was $100 on December 31, 2006 and that all dividends were reinvested. Past performance is not necessarily an indicator of future results.

34

Item 6. Selected Financial Data

The selected consolidated financial data presented below for the years 2007 through 2011 and as of the end of each such year are derived from our audited consolidated financial statements and should be read in conjunction with those financial statements and the related notes as well as in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Year Ended December 31,
	2011		2010		2009		2008		2007
	(in thousands, except per share data)
Operating Data:
Total revenues	$	7,537,263	$	6,752,504	$	5,889,826	$	6,532,525	$	6,149,139
Operating income		931,628		802,633		488,511		831,984		901,335
Net income		607,421		515,653		152,485		573,722		603,405
Per Share Data—Basic:
Net income	$	2.80	$	2.40	$	0.71	$	2.69	$	2.84
Weighted-average shares		216,983		215,026		213,809		213,477		212,784
Per Share Data—Diluted:
Net income	$	2.77	$	2.37	$	0.71	$	2.68	$	2.82
Weighted-average shares and potentially dilutive shares		219,229		217,711		215,295		214,195		214,255
Dividends declared per common share	$	0.20	$	0.00	$	0.00	$	0.45	$	0.60
Balance Sheet Data:
Total assets	$	19,804,405	$	19,653,829	$	18,224,425	$	16,463,310	$	14,982,281
Total debt, including capital leases		8,495,853		9,150,116		8,419,770		7,011,403		5,698,272
Common stock		2,276		2,262		2,243		2,239		2,235
Total shareholders’ equity		8,407,823		7,900,752		7,489,781		6,803,012		6,757,343

35

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Revision of Prior Period Financial Statements

During the second quarter of 2011, we identified and corrected errors in the manner in which we were amortizing guarantee fees related to three outstanding export credit agency guaranteed loans, and to a much lesser extent, fees associated with our revolving credit facilities. Accordingly, we revised previously reported results for all affected periods. Refer to Note 1. General – Revision of Prior Period Financial Statements to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further details. These errors impacted the interest expense and net income we reported in prior periods. The errors do not impact operating income, cash flows, Net Yields, Net Cruise Costs or Net Cruise Costs Excluding Fuel. The discussion and analysis included herein is based on the revised financial results for the years ended December 31, 2010 and 2009.

Cautionary Note Concerning Forward-Looking Statements

The discussion under this caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this document, including, for example, under the “Risk Factors” and “Business” captions, includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding guidance (including our expectations for the first quarter and full year of 2012 set forth under the heading “- Outlook” below), business and industry prospects or future results of operations or financial position, made in this Annual Report on Form 10-K are forward-looking. Words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “will,” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements reflect management’s current expectations, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to, the following:

• the impact of the worldwide economic and geopolitical environment or other conditions on the demand for cruises;

• the impact of the worldwide economic environment on our ability to generate cash flows from operations, satisfy the financial covenants required by our credit facilities, or obtain new borrowings from the credit or capital markets in amounts sufficient to satisfy our capital expenditures, debt repayments and other financing needs;

• the impact of disruptions in the global financial markets on the ability of our counterparties and others to perform their obligations to us including those associated with our loan agreements and derivative contracts;

• negative incidents concerning the Company and the cruise vacation industry, or adverse publicity, including those involving the health, safety and security of guests, accidents (in particular the Costa Concordia tragedy in early 2012), unusual weather conditions or natural disasters or disruptions;

• our ability to appropriately balance our cost management strategy with our goal of satisfying guest expectations;

• failure to keep pace with developments in technology could impair our operations or competitive position;

• the uncertainties of conducting business globally and our ability to realize the intended benefits of our investments in new markets;

• changes in operating and financing costs, including changes in foreign exchange rates, interest rates, fuel, food, payroll, airfare for our shipboard personnel, insurance and security costs;

• vacation industry competition and industry overcapacity in certain markets;

36

• the cost of or changes in tax, environmental, labor, health, safety, security and other laws and regulations affecting our business;

• pending or threatened litigation, enforcement actions, fines or penalties;

• emergency ship repairs, including the related lost revenue;

• the impact of ship construction, repair or refurbishment delays, ship cancellations or ship construction price increases brought about by construction faults, mechanical problems or financial difficulties encountered by shipyards or their subcontractors;

• the global political climate, fears of terrorist and pirate attacks, armed conflict, the unavailability or cost of air service and the resulting concerns over safety and security aspects of traveling;

• the spread of contagious diseases;

• a disruption to our shoreside business related to actual or threatened natural disasters, information systems failure or similar events;

• our ability to differentiate our products;

• our ability to manage our business activities that involve our co-investment with third parties;

• our inability to adequately incentivize our travel agents or changes and/or disruptions to the travel agency industry;

• the loss of key personnel, strained employee relations and/or our inability to retain or recruit qualified personnel;

• changes in our stock price or principal shareholders;

• uncertainties of a foreign legal system as we are not incorporated in the United States;

• the unavailability of ports of call; and

• weather.

The above examples are not exhaustive and new risks emerge from time to time. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a further discussion of risk factors related to our business, see Part I, Item 1A. Risk Factors in this Annual Report on Form 10-K.

Overview

The discussion and analysis of our financial condition and results of operations has been organized to present the following:

• a review of our critical accounting policies and review of our financial presentation, including discussion of certain operational and financial metrics we utilize to assist us in managing our business;

• a discussion of our results of operations for the year ended December 31, 2011 compared to the same period in 2010 and the year ended December 31, 2010 compared to the same period in 2009;

• a discussion of our business outlook, including our expectations for selected financial items for the first quarter and full year of 2012; and

37

• a discussion of our liquidity and capital resources, including our future capital and contractual commitments and potential funding sources.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). (See Note 1. General and Note 2. Summary of Significant Accounting Policies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data.) Certain of our accounting policies are deemed “critical,” as they require management’s highest degree of judgment, estimates and assumptions. We have discussed these accounting policies and estimates with the audit committee of our board of directors. We believe our most critical accounting policies are as follows:

Ship Accounting

Our ships represent our most significant assets and are stated at cost less accumulated depreciation and amortization. Depreciation of ships is generally computed net of a 15% projected residual value using the straight-line method over the estimated useful life of the asset, which is generally 30 years. The 30 year useful life of our newly constructed ships and 15% associated residual value are both based on the weighted-average of all major components of a ship. Our useful life and residual value estimates take into consideration the impact of anticipated technological changes, long-term cruise and vacation market conditions and historical useful lives of similarly-built ships. In addition, we take into consideration our estimates of the weighted-average useful lives of the ships’ major component systems, such as hull, superstructure, main electric, engines and cabins. Given the very large and complex nature of our ships, our accounting estimates related to ships and determinations of ship improvement costs to be capitalized require considerable judgment and are inherently uncertain. We do not have cost segregation studies performed to specifically componentize our ship systems. Therefore, we estimate the costs of component systems based principally on general and technical information known about major ship component systems and their lives and our knowledge of the cruise vacation industry. We do not identify and track depreciation by ship component systems, but instead utilize these estimates to determine the net cost basis of assets replaced or refurbished. Improvement costs that we believe add value to our ships are capitalized as additions to the ship and depreciated over the shorter of the improvements’ estimated useful lives or that of the associated ship. The estimated cost and accumulated depreciation of replaced or refurbished ship components are written off and any resulting losses are recognized in cruise operating expenses.

We use the deferral method to account for drydocking costs. Under the deferral method, drydocking costs incurred are deferred and charged to expense on a straight-line basis over the period to the next scheduled drydock, which we estimate to be a period of thirty to sixty months based on the vessel’s age as required by Class. Deferred drydock costs consist of the costs to drydock the vessel and other costs incurred in connection with the drydock which are necessary to maintain the vessel’s Class certification. Class certification is necessary in order for our cruise ships to be flagged in a specific country, obtain liability insurance and legally operate as passenger cruise ships. The activities associated with those drydocking costs cannot be performed while the vessel is in service and, as such, are done during a drydock as a planned major maintenance activity. The significant deferred drydock costs consist of hauling and wharfage services provided by the drydock facility, hull inspection and related activities (e.g. scraping, pressure cleaning, bottom painting), maintenance to steering propulsion, stabilizers, thruster equipment and ballast tanks, port services such as tugs, pilotage and line handling, and freight associated with these items. We perform a detailed analysis of the various activities performed for each drydock and only defer those costs that are directly related to planned major maintenance activities necessary to maintain Class. The costs deferred are not otherwise routinely periodically performed to maintain a vessel’s designed and intended operating capability. Repairs and maintenance activities are charged to expense as incurred.

We use judgment when estimating the period between drydocks, which can result in adjustments to the estimated amortization of drydock costs. If the vessel is disposed of before the next drydock, the remaining balance in deferred drydock is written-off to the gain or loss upon disposal of vessel in the period in which the sale takes place. We also use judgment when identifying costs incurred during a drydock which are necessary to maintain the vessel’s Class certification as compared to those costs attributable to repairs and maintenance which are expensed as incurred. (See Note 2. Summary of Significant Accounting Policies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data).

38

We believe we have made reasonable estimates for ship accounting purposes. However, should certain factors or circumstances cause us to revise our estimates of ship useful lives or projected residual values, depreciation expense could be materially higher or lower. If circumstances cause us to change our assumptions in making determinations as to whether ship improvements should be capitalized, the amounts we expense each year as repairs and maintenance costs could increase, partially offset by a decrease in depreciation expense. If we had reduced our estimated average 30-year ship useful life by one year, depreciation expense for 2011 would have increased by approximately $27.0 million. If our ships were estimated to have no residual value, depreciation expense for 2011 would have increased by approximately $143.0 million.

Valuation of Long-Lived Assets, Goodwill and Indefinite-Lived Intangible Assets

We review our ships and other long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying amount of these assets may not be fully recoverable. We evaluate asset impairment for our ships on an individual basis at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The lowest level for which we maintain identifiable cash flows that are independent of the cash flows of other assets and liabilities is at the ship level. (See Note 2. Summary of Significant Accounting Policies to our consolidated financial statement under Item 8. Financial Statements and Supplementary Data). If estimated future cash flows are less than the carrying value of an asset, an impairment charge is recognized for the difference between the asset’s estimated fair value and its carrying value.

We estimate fair value based on quoted market prices in active markets, if available. If active markets are not available we base fair value on independent appraisals, sales price negotiations and projected future cash flows discounted at a rate estimated by management to be commensurate with the business risk. Quoted market prices are often not available for individual reporting units and for indefinite-life intangible assets. Accordingly, we estimate the fair value of a reporting unit and an indefinite-life intangible asset using an expected present value technique.

We review goodwill, trademarks and tradenames, which are our most significant indefinite-lived intangible assets, for impairment at the reporting unit level annually or, when events or circumstances dictate, more frequently. The impairment review for goodwill consists of a qualitative assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount, followed by a two-step process of determining the fair value of the reporting unit and comparing it to the carrying value of the net assets allocated to the reporting unit. If the qualitative assessment demonstrates that it is more-likely-than-not that the estimated fair value of the reporting unit exceeds its carrying value, it is not necessary to perform the two-step goodwill impairment test. We may elect to bypass the qualitative assessment and proceed directly to step one, for any reporting unit, in any period. We can resume the qualitative assessment for any reporting unit in any subsequent period. When performing the two-step process, if the fair value of the reporting unit exceeds its carrying value, no further analysis or write-down of goodwill is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the implied fair value of the reporting unit is allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value.

The impairment review for indefinite-life intangible assets consists of a comparison of the fair value of the asset with its carrying amount. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the fair value exceeds its carrying amount, the indefinite-life intangible asset is not considered impaired. Other intangible assets assigned finite useful lives are amortized on a straight-line basis over their estimated useful lives.

During the fourth quarter of 2011, we performed a qualitative assessment of whether it was more-likely-than-not that our Royal Caribbean International reporting unit’s fair value was less than its carrying amount before applying the two-step goodwill impairment test. The qualitative analysis included assessing the impact of certain factors such as general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. Based on our qualitative assessment, we concluded that it was more-likely-than-not that the estimated fair value of the Royal Caribbean International reporting unit exceeded its carrying value as of December 31, 2011 and thus, did not proceed to the two-step goodwill impairment test. No indicators of impairment exist primarily because the reporting unit’s fair value has consistently exceeded its carrying value by a significant margin, its financial performance has been solid in the face of mixed economic environments and forecasts of operating results generated by the reporting unit appear sufficient to support its carrying value.

39

In addition, during the fourth quarter of 2011, we performed our annual impairment review of goodwill for Pullmantur’s reporting unit. At December 31, 2011, the carrying amount of goodwill attributable to our Pullmantur reporting unit was €356.5 million, or $462.8 million. We did not perform a qualitative assessment but instead proceeded directly to the two-step goodwill impairment test. We estimated the fair value of the Pullmantur reporting unit using a probability-weighted discounted cash flow model. The principal assumptions used in the discounted cash flow model are projected operating results, weighted-average cost of capital, and terminal value. Significantly impacting these assumptions are the transfer of vessels from our other cruise brands to Pullmantur. Cash flows were calculated using our 2012 projected operating results as a base. To that base we added future years’ cash flows assuming multiple revenue and expense scenarios that reflect the impact on Pullmantur’s reporting unit of different global economic environments beyond 2012. We assigned a probability to each revenue and expense scenario. We discounted the projected cash flows using rates specific to Pullmantur’s reporting unit based on its weighted-average cost of capital. Based on the probability-weighted discounted cash flows we determined the fair value of the Pullmantur reporting unit exceeded its carrying value. Therefore, we did not proceed to step two of the impairment analysis and we do not consider goodwill to be impaired.

The estimation of fair value utilizing discounted expected future cash flows includes numerous uncertainties which require our significant judgment when making assumptions of expected revenues, operating costs, marketing, selling and administrative expenses, interest rates, ship additions and retirements as well as assumptions regarding the cruise vacation industry’s competitive environment and general economic and business conditions, among other factors. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets. European economies continue to demonstrate instability in light of heightened concerns over sovereign debt issues as well as the impact that proposed austerity measures will have on certain markets. The Spanish economy has been more severely impacted than many other economies around the world where we operate and there is significant uncertainty as to whether or when it will recover. In addition, the recent Costa Concordia incident is having a near term negative impact on our earnings in 2012 while the impact in future years is uncertain. If the Spanish economy weakens further or recovers more slowly than contemplated in our discounted cash flow model, if there are relatively modest changes to our projected future cash flows used in the impairment analyses, especially in Net Yields, or if certain transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur’s reporting unit’s goodwill and trademark and trade names may be required.

The factors influencing the Spanish economy and Pullmantur’s operating cash flows discussed above could also affect the recoverability of Pullmantur’s trademarks and trade names and deferred tax assets. We also performed the annual impairment review of our trademarks and trade names during the fourth quarter of 2011 using a discounted cash flow model and the relief-from-royalty method. The royalty rate used is based on comparable royalty agreements in the tourism and hospitality industry. Since these trademarks and trade names relate to Pullmantur, we used the same discount rate used in valuing the Pullmantur reporting unit in our goodwill impairment test. Based on the discounted cash flow model we determined the fair value of our trademarks and trade names exceeded their carrying value.

As of December 31, 2011, Pullmantur had deferred tax assets of €25.9 million, or $33.6 million, resulting from net operating losses. We regularly review deferred tax assets for recoverability based on our history of earnings, expectations for future earnings, and tax planning strategies. We believe it is more-likely-than-not that we will recover the deferred tax assets based on our expectation of future earnings and implementation of tax planning strategies. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income to support the amount of deferred tax assets. It is possible we may need to establish a valuation allowance for a portion or all of the deferred tax asset balance if future earnings do not meet expectations or we are unable to successfully implement our tax planning strategies.

Derivative Instruments

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. The fuel options we have entered into represent economic hedges which are not designated as hedging instruments for accounting purposes and thus, changes in their fair value are immediately recognized in earnings. Our derivative instruments are not held for trading or speculative purposes. We account for derivative financial instruments in accordance with authoritative guidance. Refer

40

to Note 2. Summary of Significant Accounting Policies and Note 13. Fair Value Measurements and Derivative Instruments to our consolidated financial statements for more information on related authoritative guidance, the Company’s hedging programs and derivative financial instruments.

We enter into foreign currency forward contracts and interest rate, cross-currency and fuel swaps and options with third party institutions in over-the-counter markets. We estimate the fair value of our foreign currency forward contracts and interest rate and cross-currency swaps using expected future cash flows based on the instruments’ contract terms and published forward curves for foreign currency exchange and interest rates. We apply present value techniques and LIBOR-based discount rates to convert the expected future cash flows to the current fair value of the instruments.

We estimate the fair value of our fuel swaps using expected future cash flows based on the swaps’ contract terms and forward prices. We derive forward prices from forward fuel curves based on pricing inputs provided by third-party institutions that transact in the fuel indices we hedge. We validate these pricing inputs against actual market transactions and published price quotes for similar assets. We apply present value techniques and LIBOR-based discount rates to convert the expected future cash flows to the current fair value of the instruments. We also corroborate our fair value estimates using valuations provided by our counterparties.

We estimate the fair value for our fuel call options based on the prevailing market price for the instruments consisting of published price quotes for similar assets based on recent transactions in an active market.

We adjust the valuation of our derivative financial instruments to incorporate credit risk, when applicable.

We believe it is unlikely that materially different estimates for the fair value of our foreign currency forward contracts and interest rate, cross-currency and fuel swaps and options would be derived from other appropriate valuation models using similar assumptions, inputs or conditions suggested by actual historical experience.

Contingencies—Litigation

On an ongoing basis, we assess the potential liabilities related to any lawsuits or claims brought against us. While it is typically very difficult to determine the timing and ultimate outcome of such actions, we use our best judgment to determine if it is probable that we will incur an expense related to the settlement or final adjudication of such matters and whether a reasonable estimation of such probable loss, if any, can be made. In assessing probable losses, we take into consideration estimates of the amount of insurance recoveries, if any. We accrue a liability when we believe a loss is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recoveries, it is possible that certain matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made.

Seasonality

Our revenues are seasonal based on demand for cruises. Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays. In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have increased deployment to South America and Australia during the Northern Hemisphere winter months.

Financial Presentation

Description of Certain Line Items

Revenues

Our revenues are comprised of the following:

• Passenger ticket revenues, which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships; and

41

• Onboard and other revenues, which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, cancellation fees, sales of vacation protection insurance, pre- and post-cruise tours, Pullmantur’s land-based tours and hotel and air packages including Pullmantur Air’s charter business to third parties.

Onboard and other revenues also include revenues we receive from independent third party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships.

Cruise Operating Expenses

Our cruise operating expenses are comprised of the following:

• Commissions, transportation and other expenses, which consist of those costs directly associated with passenger ticket revenues, including travel agent commissions, air and other transportation expenses, port costs that vary with passenger head counts and related credit card fees;

• Onboard and other expenses, which consist of the direct costs associated with onboard and other revenues, including the costs of products sold onboard our ships, vacation protection insurance premiums, costs associated with pre- and post-cruise tours and related credit card fees as well as the minimal costs associated with concession revenues, as the costs are mostly incurred by third-party concessionaires;

• Payroll and related expenses, which consist of costs for shipboard personnel (costs associated with our shoreside personnel are included in marketing, selling and administrative expenses);

• Food expenses, which include food costs for both guests and crew;

• Fuel expenses, which include fuel and related delivery and storage costs, including the financial impact of fuel swap agreements; and

• Other operating expenses, which consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel operating lease costs, costs associated with Pullmantur’s land-based tours and Pullmantur Air’s charter business to third parties, vessel related insurance and entertainment.

We do not allocate payroll and related costs, food costs, fuel costs or other operating costs to the expense categories attributable to passenger ticket revenues or onboard and other revenues since they are incurred to provide the total cruise vacation experience.

Selected Operational and Financial Metrics

We utilize a variety of operational and financial metrics which are defined below to evaluate our performance and financial condition. As discussed in more detail herein, certain of these metrics are non-GAAP financial measures which we believe provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Available Passenger Cruise Days (“APCD”) is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period. We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.

Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses.

Gross Yields represent total revenues per APCD.

42

Net Cruise Costs and Net Cruise Costs Excluding Fuel represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel (each of which is described above under the Description of Certain Line Items heading). In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations. We have not provided a quantitative reconciliation of projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel due to the significant uncertainty in projecting the costs deducted to arrive at these measures. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.

Net Debt-to-Capital is a ratio which represents total long-term debt, including current portion of long-term debt, less cash and cash equivalents (“Net Debt”) divided by the sum of Net Debt and total shareholders’ equity. We believe Net Debt and Net Debt-to-Capital, along with total long-term debt and shareholders’ equity are useful measures of our capital structure. A reconciliation of historical Debt-to-Capital to Net Debt-to-Capital is provided below under Results of Operations.

Net Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses (each of which is described above under the Description of Certain Line Items heading).

Net Yields represent Net Revenues per APCD. We utilize Net Revenues and Net Yields to manage our business on a day-to-day basis as we believe that it is the most relevant measure of our pricing performance because it reflects the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses and onboard and other expenses. A reconciliation of historical Gross Yields to Net Yields is provided below under Results of Operations. We have not provided a quantitative reconciliation of projected Gross Yields to projected Net Yields due to the significant uncertainty in projecting the costs deducted to arrive at this measure. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.

Occupancy, in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.

We believe Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel are our most relevant non-GAAP financial measures. However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses can be affected by changes in currency exchange rates. Although such changes in local currency prices is just one of many elements impacting our revenues and expenses, it can be an important element. For this reason, we also monitor Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel as if the current periods’ currency exchange rates had remained constant with the comparable prior periods’ rates, or on a “Constant Currency” basis.

It should be emphasized that Constant Currency is primarily used for comparing short-term changes and/or projections. Over the longer term, changes in guest sourcing and shifting the amount of purchases between currencies can significantly change the impact of the purely currency-based fluctuations.

The use of certain significant non-GAAP measures, such as Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel, allow us to perform capacity and rate analysis to separate the impact of known capacity changes from other less predictable changes which affect our business. We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance in addition to the standard United States GAAP based financial measures. There are no specific rules or regulations for determining non-GAAP and Constant Currency measures, and as such, there exists the possibility that they may not be comparable to other companies within the industry.

43

Executive Overview

During 2011, our business demonstrated its fundamental strength and the efficacy of our business model. Despite the impact of geopolitical events including the political unrest in the Eastern Mediterranean and Northern Africa and the earthquake and related events in Japan as well as the uncertain global economic environment, our net income for 2011 increased approximately 18% to $607.4 million in 2011 from $515.7 million in 2010 and our Net Yields increased 4.1%.

Prior to the recent tragedy in Italy involving the Costa Concordia, booking patterns for 2012 were strong and WAVE season (traditionally the first two months of the year where cruise lines experience disproportionately higher volume cruise sales) was off to an excellent start. However, the Costa Concordia incident is having a near term effect on our bookings and the impact on our earnings in 2012 and beyond remains uncertain. Refer to our Outlook section for a further discussion on our expected future results.

The globalization of our operations continues to be a major initiative for 2012 and beyond, especially within developmental markets. During 2012, we expect a significant amount of our passenger ticket revenues from outside of the United States. In 2012, Royal Caribbean International will focus on the development of key markets in Southern Europe and Asia, where we have established a leading position in the Chinese market. In furtherance of this, during 2012, Royal Caribbean International will seasonally add a second ship in Asia and a third ship in Australia, add new departure ports in Southern Europe in order to target guests in key source markets in the region and increase capacity in Northern Europe. In addition, Celebrity Cruises will have additional product offerings in Australia and Asia.

During 2012, we plan to further strengthen our consumer engagement by strategically investing in a number of potential revenue enhancing projects including further developing our customer loyalty programs, expanding our international distribution system, continuing with our vessel revitalization program, introducing new onboard revenue initiatives and implementing various information technology infrastructure investments. We believe these investments will provide opportunities for increased ticket and onboard revenues with the ultimate goal of maximizing our return on invested capital and long-term shareholder value. In October 2012, Celebrity Cruises will introduce Celebrity Reflection, the fifth Solstice-class ship which will offer sailings in Europe and the Caribbean. We also have two Project Sunshine vessels on order for Royal Caribbean International which are expected to enter service in the third quarter of 2014 and in the second quarter of 2015, respectively.

Our liquidity position at the end of 2011 remained strong and our credit metrics have improved. We continue to be focused on our goal of returning to an investment grade credit rating. In 2011, we amended our $1.225 billion unsecured revolving credit facility which was due to expire in June 2012. We have extended the termination date through July 2016 and reduced the facility amount to $875.0 million. This facility, combined with our $525.0 million unsecured revolving credit facility that matures in November 2014, provides us with access to $1.4 billion in revolving credit capacity. As a result of our strong liquidity position, in July 2011, our board of directors reinstated our quarterly dividend at a rate of $0.10 per share. We anticipate funding our 2012 scheduled maturities and other obligations in 2012 through operating cash flows, our current available revolving credit facilities and our current financing arrangements, although we may opportunistically access the credit and capital markets.

Results of Operations

Summary

Year ended December 31, 2011

Total revenues increased 11.6% to $7.5 billion in 2011 from total revenues of $6.8 billion in 2010, primarily due to a 7.5% increase in capacity (measured by APCD for such period) and a 4.1% increase in Net Yields. The increase in Net Yields was primarily due to an increase in ticket prices and the favorable effect on our revenues of changes in foreign currency exchange rates. These increases were partially offset by the impact of geopolitical events including the political unrest in the Eastern Mediterranean and Northern Africa and the earthquake and related events in Japan. These events resulted in deployment changes to avoid calling on ports in those areas and pricing reductions to stimulate demand in

44

other areas. The increase in total revenues was partially offset by higher operating expenses primarily due to the increase in capacity, an increase in fuel expenses and, to a lesser extent, the unfavorable effect of changes in foreign currency exchange rates. Our results for 2011 were also positively impacted by income from our investments in unconsolidated subsidiaries of $22.2 million in 2011 as compared to income of $0.2 million in 2010, and a gain on our fuel call options of $18.9 million in 2011 as compared to a loss of $2.8 million in 2010. We also recorded a one-time gain during 2010 of approximately $89.0 million, net of costs and payments to insurers, related to a litigation settlement that did not recur in 2011. As a result, our net income was $607.4 million or $2.77 per share on a diluted basis for 2011 compared to $515.7 million or $2.37 per share on a diluted basis for 2010.

Significant items for 2011 include:

• Our Net Debt-to-Capital ratio decreased to 49.5% in 2011 from 52.5% in 2010. Similarly, our Debt-to-Capital ratio decreased to 50.3% in 2011 from 53.7% in 2010.

• We sold Celebrity Mercury to TUI Cruises for €234.3 million. We executed certain forward contracts to lock in the sales price at approximately $290.0 million. The sale resulted in a gain of $24.2 million which, due to the related party nature of the transaction, is being recognized primarily over the remaining life of the ship, estimated to be 17 years.

• As of December 31, 2011, our liquidity was $1.1 billion, including cash and the undrawn portion of our unsecured revolving credit facilities. During 2011, we amended and restated our $1.225 billion unsecured revolving credit facility which was due to expire in June 2012. We have extended the termination date through July 2016 and reduced the facility amount to $875.0 million. See Note 7. Long-Term Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.

• We took delivery of Celebrity Silhouette, the fourth Solstice-class ship for Celebrity Cruises. To finance the purchase we borrowed $632.0 million under a 12-year unsecured term loan which is 95% guaranteed by Euler Hermes Kreditversicherungs AG (“Hermes”), the official export credit agency of Germany. See Note 7. Long-Term Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.

• We entered into agreements with Meyer Werft to build two ships of a new generation of Royal Caribbean International cruise ships, known as “Project Sunshine”. The ships will each have a capacity of approximately 4,100 berths and are expected to enter service in the third quarter of 2014 and in the second quarter of 2015, respectively. To finance the ships, we entered into credit agreements for each ship which make available to us 12-year unsecured amortizing term loans in an amount up to the United States dollar equivalent corresponding to approximately €595.0 million, which are 95% guaranteed by Hermes.

• The company from which we lease Brilliance of the Seas advised us that it will not exercise its right to cancel the lease in 2012 and we subsequently made a determination that we will not exercise our right to cancel the lease. Thus, the lease will continue until at least 2020 when both parties again have the right to cancel the lease. Refer to our lease discussion under the heading Off-Balance Sheet Arrangements below and Note 14. Commitments and Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.

• Our board of directors reinstated our quarterly dividend which had been discontinued in the fourth quarter of 2008. We declared and paid a cash dividend on our common stock of $0.10 per share during the third quarter of 2011 and declared a cash dividend on our common stock of $0.10 per share in December 2011, which was paid in the first quarter of 2012.

• We amended the unsecured credit facilities obtained in connection with our financings of the Oasis of the Seas and Allure of the Seas to reduce certain of the interest rate costs. See Note 7. Long-Term Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.

45

• TUI Cruises entered into an agreement with STX Finland to build its first newbuild ship, scheduled for delivery in the second quarter of 2014. TUI Cruises has entered into a credit agreement providing financing for up to 80% of the contract price of the ship. TUI Cruises has an option to construct a second ship of the same class, which will expire on October 31, 2012.

Other Items:

• In February 2012, we entered into an agreement to bareboat charter our ship Ocean Dream to an unrelated party for a period of six years from the transfer date. The charter agreement provides a renewal option exercisable by the unrelated party for an additional four years. We anticipate delivery of Ocean Dream will take place in April 2012.

• In February 2012, the credit facility we obtained in connection with our purchase of Celebrity Solstice was assigned from Celebrity Solstice Inc., our subsidiary which owns the ship, to Royal Caribbean Cruises Ltd. Similar assignments were simultaneously made from the ship-owning subsidiary level to Royal Caribbean Cruises Ltd. for the facilities relating to Celebrity Equinox, Celebrity Eclipse and Celebrity Silhouette and for the credit agreement relating to Celebrity Reflection, expected to be delivered in the fourth quarter of 2012. Other than the change in borrower, the economic terms of these facilities remain unchanged. These amended facilities each contain covenants substantially similar to the covenants, in our other parent-level ship financing agreements and our revolving credit facilities.

We reported historical total revenues, operating income, net income and earnings per share as shown in the following table (in thousands, except per share data):

	Year Ended December 31,
	2011		2010		2009
Total revenues	$	7,537,263	$	6,752,504	$	5,889,826
Operating income	$	931,628	$	802,633	$	488,511
Net income	$	607,421	$	515,653	$	152,485
Basic earnings per share:
Net income	$	2.80	$	2.40	$	0.71
Diluted earnings per share:
Net income	$	2.77	$	2.37	$	0.71

The following table presents historical operating data as a percentage of total revenues for the last three years:

	Year Ended December 31,
	2011			2010			2009
Passenger ticket revenues		73.3	%		72.7	%		71.4	%
Onboard and other revenues		26.7			27.3			28.6
Total revenues		100.0	%		100.0	%		100.0	%
Cruise operating expenses:
Commissions, transportation and other		17.2	%		17.4	%		17.5	%
Onboard and other		7.1			7.1			7.8
Payroll and related		11.0			11.4			11.6
Food		5.6			5.7			5.9
Fuel		10.1			9.6			10.2
Other operating		14.5			14.8			16.3
Total cruise operating expenses		65.6			66.0			69.1
Marketing, selling and administrative expenses		12.7			12.6			12.9
Depreciation and amortization expenses		9.3			9.5			9.6
Operating income		12.4			11.9			8.3
Other expense		(4.3	)		(4.2	)		(5.7	)
Net income		8.1	%		7.6	%		2.6	%

46

Selected historical statistical information is shown in the following table:

	Year Ended December 31,
	2011			2010			2009
Passengers Carried		4,850,010			4,585,920			3,970,278
Passenger Cruise Days		34,818,335			32,251,217			28,503,046
APCD		33,235,508			30,911,073			27,821,224
Occupancy		104.8	%		104.3	%		102.5	%

Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):

	Year Ended December 31,
	2011		2011 On a Constant Currency basis		2010		2009
Passenger ticket revenues	$	5,525,904	$	5,414,034	$	4,908,644	$	4,205,709
Onboard and other revenues		2,011,359		1,993,804		1,843,860		1,684,117
Total revenues		7,537,263		7,407,838		6,752,504		5,889,826
Less:
Commissions, transportation and other		1,299,713		1,273,155		1,175,522		1,028,867
Onboard and other		535,501		525,225		480,564		457,772
Net revenues	$	5,702,049	$	5,609,458	$	5,096,418	$	4,403,187
APCD		33,235,508		33,235,508		30,911,073		27,821,224
Gross Yields	$	226.78	$	222.89	$	218.45	$	211.70
Net Yields	$	171.56	$	168.78	$	164.87	$	158.27

Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel were calculated as follows (in thousands, except APCD and costs per APCD):

	Year Ended December 31,
	2011		2011 On a Constant Currency basis		2010		2009
Total cruise operating expenses	$	4,942,607	$	4,885,732	$	4,458,076	$	4,071,102
Marketing, selling and administrative expenses		960,602		944,584		848,079		761,999
Gross Cruise Costs		5,903,209		5,830,316		5,306,155		4,833,101
Less:
Commissions, transportation and other		1,299,713		1,273,155		1,175,522		1,028,867
Onboard and other		535,501		525,225		480,564		457,772
Net Cruise Costs	$	4,067,995	$	4,031,936	$	3,650,069	$	3,346,462
Less:
Fuel		764,758		762,139		646,998		600,203
Net Cruise Costs Excluding Fuel	$	3,303,237	$	3,269,797	$	3,003,071	$	2,746,259
APCD		33,235,508		33,235,508		30,911,073		27,821,224
Gross Cruise Costs per APCD	$	177.62	$	175.42	$	171.66	$	173.72
Net Cruise Costs per APCD	$	122.40	$	121.31	$	118.08	$	120.28
Net Cruise Cost Excluding Fuel per APCD	$	99.39	$	98.38	$	97.15	$	98.71

47

Net Debt-to-Capital was calculated as follows (in thousands):

	As of December 31,
	2011			2010
Long-term debt, net of current portion	$	7,856,962		$	7,951,187
Current portion of long-term debt		638,891			1,198,929
Total debt		8,495,853			9,150,116
Less: Cash and cash equivalents		262,186			419,929
Net Debt	$	8,233,667		$	8,730,187
Total shareholders’ equity	$	8,407,823		$	7,900,752
Total debt		8,495,853			9,150,116
Total debt and shareholders’ equity		16,903,676			17,050,868
Debt-to-Capital		50.3	%		53.7	%
Net Debt		8,233,667			8,730,187
Net Debt and shareholders’ equity	$	16,641,490		$	16,630,939
Net Debt-to-Capital		49.5	%		52.5	%

Outlook

On February 2, 2012, we announced the following initial first quarter and full year 2012 guidance:

Full Year 2012

	As Reported	Constant Currency
Net Yields	Flat to 4%	1% to 5%
Net Cruise Costs per APCD	5% to 6%	6% to 7%
Net Cruise Costs per APCD, excluding Fuel	3% to 4%	4% to 5%
Capacity Increase	2.1%
Depreciation and Amortization	$730 to $750 million
Interest Expense, net	$360 to $380 million
Fuel Consumption (metric tons)	1,354,000
Fuel Expenses	$889 million
Percent Hedged (fwd consumption)	55%
Impact of 10% change in fuel prices	$42 million
EPS	$1.90 to $2.30

First Quarter 2012

	As Reported	Constant Currency
Net Yields	4% to 6%	5% to 7%
Net Cruise Costs per APCD	Approx. 10%	10% to 11%
Net Cruise Costs per APCD, excluding Fuel	5% to 6%	6% to 7%
Capacity Increase	2.5%
Depreciation and Amortization	$175 to $185 million
Interest Expense, net	$82 to $92 million
Fuel Consumption (metric tons)	341,000
Fuel Expenses	$224 million
Percent Hedged (fwd consumption)	53%
Impact of 10% change in fuel prices	$11 million
EPS	$0.10 to $0.20

In providing the above guidance, we noted that prior to the Costa Concordia incident, bookings had been running approximately 5% higher than the same time last year and at higher prices. Immediately after the incident, we experienced a significant decline in new booking activity, but cancellation activity remained at normal levels. We believe the decline in new bookings was driven by the extensive media coverage of the incident and the curtailment of marketing activities by most cruise lines and travel agencies. We also noted that the impact on bookings was the greatest for the first three quarters of 2012, while longer term bookings remained healthy.

48

Over the last several weeks, media coverage has subsided and normal marketing activity has resumed. During this period, we have continued to experience a slow improvement in year over year revenue build but the pace of bookings is still lower than at the same time last year and lower when compared to the rate of revenue build we were experiencing prior to the tragedy. While booking patterns have not yet stabilized and a high degree of uncertainty remains, our total booked load factors as of the date of this filing are at approximately the same level as at this same time last year and at modestly higher prices.

As is always the case when evaluating booking activity and expectations over diverse itineraries and markets, it is difficult to reduce the volumes of data to a simple pattern. Nevertheless, the general direction and tone of the market so far are consistent with our earlier expectations as indicated in our February 2, 2012 guidance, and our outlook for Net Yields and Net Cruise Costs excluding fuel is essentially unchanged for the first quarter and for the full year of 2012. Furthermore, we continue to believe that the tragedy will not have a significant long-term impact on our business.

In addition, we noted the following changes since our February 2, 2012 announcement:

Fuel Prices Fuel prices have increased since our previous guidance. While we do not forecast fuel prices, based on current at the pump prices net of hedging, our fuel costs for the first quarter and full year of 2012 are estimated to be $229 million and $921 million, respectively.

Currency Impacts The United States dollar has weakened relative to other currencies in which we transact business. A weaker United States dollar tends to improve revenues and, to a lesser extent, increase expenses. The weakening United States dollar thus has had a net positive impact of approximately $0.04 which has offset some of the increased fuel expense.

Capacity There has been one minor change impacting capacity. We previously expected a 2.1% increase in capacity, primarily driven by the addition of Celebrity Silhouette, which entered service during the third quarter of 2011. We recently agreed to charter Pullmantur’s Ocean Dream to a third party for 6 to 10 years beginning in April 2012. This will slightly reduce our capacity growth to about 1.5% in 2012. This change is not expected to have a material impact on our results.

Except for the items noted above, our expectations for 2012 results have not changed materially since our announcement on February 2, 2012.

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

In this section, references to 2011 refer to the year ended December 31, 2011 and references to 2010 refer to the year ended December 31, 2010.

Revenues

Total revenues for 2011 increased $784.8 million or 11.6% to $7.5 billion from $6.8 billion in 2010. Approximately $507.8 million of this increase was attributable to a 7.5% increase in capacity. The increase in capacity was primarily due

49

to a full year of revenue generated by Allure of the Seas which entered service in December 2010, the addition of Celebrity Silhouette which entered service in July 2011, and a full year of Celebrity Eclipse which entered service in April 2010. This increase in capacity was partially offset by the sale of Celebrity Mercury to TUI Cruises in February 2011. In addition, approximately $277.0 million of the increase in revenue was driven by an increase in ticket prices and the favorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar. These increases were partially mitigated by the impact of geopolitical events including the political unrest in the Eastern Mediterranean and Northern Africa and the earthquake and related events in Japan which offset pricing improvements in other regions. These events resulted in deployment changes to avoid calling on ports in those areas and pricing reductions to stimulate demand in other areas.

Onboard and other revenues included concession revenues of $273.4 million in 2011 compared to $237.0 million for the same period in 2010. The increase in concession revenues was due to an increase in spending on a per passenger basis and the increase in capacity mentioned above.

Cruise Operating Expenses

Total cruise operating expenses for 2011 increased $484.5 million or 10.9% to $4.9 billion from $4.5 billion for 2010. Approximately $335.2 million of the increase was attributable to the 7.5% increase in capacity mentioned above. Other significant drivers of the increase include an increase in fuel, air and other hotel and vessel expenses and head taxes, as well as the unfavorable effect of changes in foreign currency exchange rates related to our cruise operating expenses denominated in currencies other than the United States dollar. Fuel expenses, which are net of the financial impact of fuel swap agreements, increased 18.4% per metric ton in 2011 as compared to 2010 primarily as a result of increasing fuel prices. The increase in air and other hotel and vessel expenses and head taxes were primarily due to deployment changes.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2011 increased $112.5 million or 13.3% to $960.6 million from $848.1 million for 2010. The increase was due to an increase in marketing, selling and payroll expenses primarily associated with our international expansion and, to a much lesser extent, an increase in expenses associated with technological innovations.

Depreciation and Amortization expenses

Depreciation and amortization expenses for 2011 increased $58.7 million or 9.1% to $702.4 million from $643.7 million for 2010. The increase is primarily due to a full year of Allure of the Seas which entered service in December 2010, the addition of Celebrity Silhouette which entered service in July 2011, and a full year of Celebrity Eclipse which entered service in April 2010. These increases were partially offset by the sale of Celebrity Mercury to TUI Cruises and the sale of Bleu de France.

Other Income (Expense)

Interest expense, net of interest capitalized, increased to $382.4 million in 2011 from $371.2 million in 2010. The increase was due to a reduction in interest capitalized for ships under construction. Interest capitalized decreased to $14.0 million in 2011 from $28.1 million in 2010 primarily due to a lower average level of investment in ships under construction. Gross interest expense decreased to $396.4 million from $399.3 million in 2010. The decrease was primarily due to lower interest rates partially offset by a higher average debt level.

Other income decreased to $32.9 million in 2011 from $75.0 million in 2010. The $42.1 million decrease in other income was due primarily to an $89.0 million gain recorded from a litigation settlement during 2010 that did not recur in 2011, which was partially offset by:

• Income on our investments in unconsolidated subsidiaries of $22.2 million in 2011 as compared to income of $0.2 million in 2010, for a net increase of $22.0 million when comparing these periods;

• A gain on our fuel call options of $18.9 million in 2011 as compared to a loss of $2.8 million in 2010, for a net change of $21.7 million.

50

Net Yields

Net Yields increased 4.1% in 2011 compared to 2010 primarily due to an increase in ticket prices and the favorable impact of changes in exchange rates, as discussed above. Net Yields per APCD increased 2.4% in 2011 compared to 2010 on a Constant Currency basis.

Net Cruise Costs

Net Cruise Costs increased 11.4% in 2011 compared to 2010 due to the 7.5% increase in capacity and a 3.7% increase in Net Cruise Cost per APCD. The increase in Net Cruise Costs per APCD was primarily driven by an increase in fuel and other hotel and vessel expenses, and to a lesser extent, the unfavorable impact of changes in exchange rates, as discussed above. Net Cruise Costs per APCD increased 2.7% in 2011 compared to 2010 on a Constant Currency basis. Net Cruise Costs Excluding Fuel per APCD increased 2.3% in 2011 compared to 2010. Net Cruise Costs Excluding Fuel per APCD increased 1.3% in 2011 compared to 2010 on a Constant Currency basis.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

In this section, references to 2010 refer to the year ended December 31, 2010 and references to 2009 refer to the year ended December 31, 2009.

Revenues

Total revenues for 2010 increased $862.7 million or 14.6% to $6.8 billion from $5.9 billion in 2009. Approximately $654.1 million of this increase was attributable to an 11.1% increase in capacity. The increase in capacity was primarily due to a full year of service of Oasis of the Seas, which entered service in December 2009, the addition of Celebrity Eclipse which entered service in April 2010, a full year of service of Celebrity Equinox which entered service in July 2009, a full year of service of Pacific Dream, which entered service in May 2009 and the addition of Allure of the Seas, which entered service in December 2010. This increase in capacity was partially offset by the sale of Celebrity Galaxy to TUI Cruises in March 2009, the removal of the Atlantic Star from operation in August 2009 and the sale of Oceanic in April 2009. In addition, approximately $208.6 million of the increase in total revenues was driven by increases in ticket prices and an increase in occupancy from 102.5% in 2009 to 104.3% in 2010. The increase in occupancy was primarily due to improving market conditions, certain itinerary changes and the favorable impact of our newer ships. The increase in occupancy was also due to the absence of the adverse effect caused by the H1N1 virus during the third quarter of 2009 which resulted in selective itinerary modifications and diminished demand for our cruises and tours to Mexico. These increases were partially offset by a decrease in air revenue due to a reduction in guests booking air service through us and an overall decrease in air ticket prices, a decrease in shore excursions revenue on a per passenger basis related to seasonal redeployments and to a decrease in charter revenue due to the termination of the charter to Island Cruises in April 2009. These increases in revenues were also partially offset by the adverse effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar.

Onboard and other revenues included concession revenues of $237.0 million in 2010 compared to $215.6 million for the same period in 2009. The increase in concession revenues was primarily due to the increase in capacity mentioned above.

Cruise Operating Expenses

Total cruise operating expenses for 2010 increased $387.0 million or 9.5% to $4.5 billion from $4.1 billion for 2009. Approximately $452.1 million of this increase was attributable to the 11.1% increase in capacity mentioned above. The increase was also due to an increase in commissions directly related to the increase in ticket prices. These increases were partially offset by a $30.2 million decrease primarily attributable to lower air expenses, shore excursions expenses and fuel expenses on a per passenger basis, and to a lesser extent, our continued emphasis on cost-containment. The decreases in air expenses and shore excursion expenses were directly related to the decreases in revenue as mentioned above. The decrease in fuel expenses was primarily a result of improved fuel efficiencies related to our newer ships and the favorable effect of fuel swap agreements despite increasing fuel prices. The increase in cruise operating expenses was also partially offset by an estimated $34.9 million decrease related to the favorable effect of changes in foreign currency exchange rates related to our cruise operating expenses denominated in currencies other than the United States dollar.

51

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2010 increased $86.1 million or 11.3% to $848.1 million from $762.0 million for 2009. The increase was primarily due to an increase in shoreside payroll and benefits due to higher headcount primarily related to our continued international expansion and general increases in compensation.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2010 increased $75.5 million or 13.3% to $643.7 million from $568.2 million for 2009. The increase was primarily due to the addition of Oasis of the Seas, the addition of Celebrity Eclipse and a full year of service of Celebrity Equinox. These increases were partially offset by the sale of Celebrity Galaxy to TUI Cruises, the classification of the Atlantic Star as held for sale which, accordingly, was no longer being depreciated and the sale of Oceanic.

Other Income (Expense)

Interest expense, net of interest capitalized, increased to $371.2 million in 2010 from $309.9 million in 2009. Gross interest expense increased to $399.3 million in 2010 from $351.4 million in 2009. The increase was primarily due to a higher average debt level, partially offset by lower interest rates. Interest capitalized decreased to $28.1 million in 2010 from $41.5 million in 2009 primarily due to a lower average level of investment in ships under construction and, to a lesser extent, lower interest rates.

Other income was $75.0 million in 2010 compared to other expense of $33.1 million in 2009 for a net change of $108.1 million when comparing these periods. The increase was primarily due to an $89.0 million gain, net of costs and payments to insurers, recorded from the settlement with Rolls Royce.

Net Yields

Net Yields increased 4.2% in 2010 compared to 2009 primarily due to the increase in ticket prices and the increase in occupancy, as discussed above. Net Yields on a Constant Currency basis remained consistent with Net Yields.

Net Cruise Costs

Net Cruise Costs increased 9.1% in 2010 compared to 2009 due to the 11.1% increase in capacity, partially offset by a 1.8% decrease in Net Cruise Cost per APCD. The decrease in Net Cruise Costs per APCD was primarily driven by the decrease in fuel expenses, our continued emphasis on cost-containment and by the absence in 2010 of a $7.1 million loss recognized during the third quarter of 2009 to reduce the carrying value of the Atlantic Star to its fair value less cost to sell when the ship was classified as held for sale. Net Cruise Costs per APCD on a Constant Currency basis remained consistent with Net Cruise Costs per APCD.

Recently Adopted, and Future Application of, Accounting Standards

Refer to Note 2. Summary of Significant Accounting Policies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on Recently Adopted Accounting Standards and Recent Accounting Pronouncements.

52

Liquidity and Capital Resources

Sources and Uses of Cash

Cash flow generated from operations provides us with a significant source of liquidity. Net cash provided by operating activities decreased $207.3 million to $1.5 billion for 2011 compared to $1.7 billion for 2010. This decrease was primarily a result of the monetization of certain of our interest rate, cross currency and fuel swap agreements which generated approximately $173.0 million of cash during 2010 as compared to $12.2 million in 2011 and to cash received of $68.0 million related to a litigation settlement during 2010, which did not recur in 2011.

Net cash used in investing activities was $924.6 million in 2011 compared to $2.3 billion for 2010. During 2011, our use of cash was primarily related to capital expenditures of $1.2 billion, down from $2.2 billion in 2010. The decrease in capital expenditures during 2011 was due to a decrease in the number of ships delivered in 2011 as compared to 2010. Capital expenditures were primarily related to the delivery of Celebrity Silhouette during 2011 and the delivery of Celebrity Eclipse and Allure of the Seas during 2010. Our utilization of cash from investing activities was offset by the receipt during 2011 of $290.0 million from the sale of Celebrity Mercury and $55.0 million from the sale of Bleu de France. In addition, during 2011, we received $34.3 million in proceeds primarily from the sale of our fuel call options, partially offset by cash paid on settlements on our foreign currency forward contracts of $18.0 million, compared to $91.3 million of cash paid in 2010 on settlements on our foreign currency forward contracts. We also provided approximately $110.7 million in loans to our unconsolidated affiliates during 2011 which did not occur in 2010.

Net cash used in financing activities was $676.5 million for 2011 compared to net cash provided by financing activities of $757.0 million in 2010. This change was primarily due to an increase in repayments of debt of approximately $578.8 million and a decrease in debt facility drawings of $841.9 million. The increase in repayments of debt was primarily due to our prepayment of $200.0 million on our Allure of the Seas unsecured term loan and a repayment of $500.0 million on a senior unsecured note in 2011 as compared to the repayment of $250.0 million on a senior unsecured note in 2010, and to an increase of $65.0 million in repayments on our unsecured revolving credit facilities from $820.0 million in 2010 to $885.0 million in 2011. The $841.9 million decrease in debt facility drawings during 2011 as compared to the same period in 2010 was primarily due to fewer ship deliveries. During 2011, we drew $632.0 million through an unsecured term loan to purchase Celebrity Silhouette and drew $930.0 million on our unsecured revolving credit facilities whereas during 2010, we drew $1.7 billion through unsecured term loans to purchase Celebrity Eclipse and Allure of the Seas and drew $715.0 million on our unsecured revolving credit facilities.

Future Capital Commitments

Our future capital commitments consist primarily of new ship orders. As of December 31, 2011, we have Celebrity Reflection and our Project Sunshine ship under construction for an aggregate additional capacity of approximately 7,100 berths. In addition, in February 2012, we exercised our option to construct a second Project Sunshine ship with a capacity of approximately 4,100 berths which is expected to enter service in the second quarter of 2015.

As of December 31, 2011, the aggregate cost of our ships on order was approximately $2.0 billion, of which we had deposited $185.8 million as of such date. Approximately 43.3% of the aggregate cost was exposed to fluctuations in the euro exchange rate at December 31, 2011. Including our recently ordered second Project Sunshine ship, the aggregate cost of our ships on order is approximately $2.8 billion. These amounts do not include any costs associated with the construction agreement entered into by TUI Cruises to build its first newbuild ship. (See Note 13. Fair Value Measurements and Derivative Instruments and Note 14. Commitments and Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data).

As of December 31, 2011, we anticipated overall capital expenditures will be approximately $1.2 billion for 2012, $500.0 million for 2013 and $1.1 billion for 2014. Including our recently ordered second Project Sunshine ship, our anticipated capital expenditures will be approximately $1.3 billion for 2012, $600.0 million for 2013, $1.1 billion for 2014 and $1.0 billion for 2015.

53

Contractual Obligations

As of December 31, 2011, our contractual obligations were as follows (in thousands):

	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating Activities:
Operating lease obligations(1)(2)	$	683,121	$	65,435	$	120,145	$	111,147	$	386,394
Interest on long-term debt(3)		1,320,548		329,667		453,275		212,909		324,697
Other(4)		746,772		195,680		252,615		140,740		157,737
Investing Activities:
Ship purchase obligations(5)		1,551,904		764,099		787,805		—		—
Financing Activities:
Long-term debt obligations(6)		8,435,771		626,389		3,447,840		2,242,011		2,119,531
Capital lease obligations(7)		60,082		12,502		11,674		4,268		31,638
Other(8)		173,154		43,357		74,663		41,147		13,987
Total	$	12,971,352	$	2,037,129	$	5,148,017	$	2,752,222	$	3,033,984

⁽¹⁾ We are obligated under noncancelable operating leases primarily for a ship, offices, warehouses and motor vehicles.

⁽²⁾  Under the Brilliance of the Seas lease agreement, we may be required to make a termination payment of approximately £66.8 million, or approximately $103.8 million based on the exchange rate at December 31, 2011, if the lease is canceled in 2020. This amount is included in the more than 5 years column.

⁽³⁾  Long-term debt obligations mature at various dates through fiscal year 2027 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including interest swapped from a fixed-rate to a variable-rate using the applicable rate at December 31, 2011. Debt denominated in other currencies is calculated based on the applicable exchange rate at December 31, 2011. Amounts are based on existing debt obligations and do not consider potential refinancing of expiring debt obligations.

⁽⁴⁾ Amounts represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.

⁽⁵⁾  Amounts represent contractual obligations with initial terms in excess of one year. Amounts do not include our second Project Sunshine ship which was ordered in February 2012.

⁽⁶⁾ Amounts represent debt obligations with initial terms in excess of one year.

⁽⁷⁾ Amounts represent capital lease obligations with initial terms in excess of one year.

⁽⁸⁾  Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our revolving credit facilities.

As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships or the purchase of existing ships. We continuously consider potential acquisitions and strategic alliances. If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations.

Off-Balance Sheet Arrangements

In July 2002, we entered into an operating lease denominated in British pound sterling for the Brilliance of the Seas. The lease payments vary based on sterling LIBOR. The lease has a contractual life of 25 years; however, both the lessor and we have certain rights to cancel the lease at years 10 (i.e. 2012) and 18 (i.e. 2020) upon advance notice given approximately one year prior to cancellation. Accordingly, at the inception of the lease, the lease term for accounting purposes was established to be 10 years. In June 2011, the lessor advised us that it would not exercise its right to cancel the lease in 2012 and we subsequently made a determination that we will not exercise our right to cancel the lease in 2012. As a result, we performed a lease classification analysis and concluded that the lease should continue to be classified as an operating lease. In the event of early termination at year 18, we have the option to cause the sale of the vessel at its fair value and to use the proceeds towards the applicable termination payment. Alternatively, we could opt at such time to make a termination payment of approximately £66.8 million, or approximately $103.8 million based on the exchange rate at December 31, 2011 and relinquish our right to cause the sale of the vessel. Under current circumstances we do not believe early termination of this lease is probable.

Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable determinations which may be made by United Kingdom tax authorities. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances, timing or a combination of events that could trigger such indemnifications. We have been advised by the lessor that the United Kingdom tax authorities are disputing the lessor’s accounting treatment of the

54

lease and that the parties are in discussions on the matter. If the characterization of the lease is ultimately determined to be incorrect, we could be required to indemnify the lessor under certain circumstances. The lessor has advised us that they believe their characterization of the lease is correct. Based on the foregoing and our review of available information, we do not believe an indemnification is probable. However, if the lessor loses its dispute and we are required to indemnify the lessor, we cannot at this time predict the impact that such an occurrence would have on our financial condition and results of operations.

In connection with the sale of Celebrity Mercury, we and TUI AG each guaranteed repayment of 50% of an €180.0 million 5-year bank loan provided to TUI Cruises. Based on current facts and circumstances, we do not believe potential obligations under this guarantee would be material to our results of operations.

TUI Cruises entered into a construction agreement with STX Finland to build its first newbuild ship that includes certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through the construction period. In addition, the bank credit facility agreement associated with the financing of the newbuild extends this restriction through 2019.

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification obligation is probable.

Other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

Funding Sources

We have significant contractual obligations of which the capital expenditures associated with our ship purchases and our debt service obligations represent our largest funding needs. We have approximately $2.0 billion in contractual obligations due in 2012 of which approximately $764.1 million relates to the acquisition of the Celebrity Reflection along with progress payments on our first project Project Sunshine ship, $626.4 million relates to debt maturities and $329.7 million relates to interest on our long-term debt. In addition, we have $10.9 billion in contractual obligations due beyond 2012 of which debt maturities, interest on our long-term debt and ship purchase obligations represent $7.8 billion, $991.0 million and $787.8 million, respectively. We have historically relied on a combination of cash flows provided by operations, drawdowns under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund these obligations.

As of December 31, 2011, our liquidity was $1.1 billion consisting of approximately $262.2 million in cash and cash equivalents and $810.0 million available under our unsecured revolving credit facilities. During 2011, we amended and restated our $1.225 billion unsecured revolving credit facility in order to, among other things, reduce the facility amount to $875.0 million and extend the termination date until July 2016. Together with the $525.0 million unsecured revolving credit facility that matures in November 2014, we have total revolving credit capacity of $1.4 billion.

In addition, we had a working capital deficit of $2.1 billion as of December 31, 2011 as compared to our working capital deficit of $2.4 billion as of December 31, 2010. Similar to others in our industry, we operate with a substantial working capital deficit because (1) passenger receipts are primarily paid in advance with a relatively low-level of accounts receivable, (2) rapid turnover results in a limited investment in inventories and (3) voyage-related accounts payable usually become due after receipt of cash from related bookings. In addition, we finance the purchase of our ships through long-term debt instruments. We generate substantial cash flows from operations and our business model, along with our unsecured revolving credit facilities, has historically allowed us to maintain this working capital deficit and still meet our operating, investing and financing needs. We expect that we will continue to have working capital deficits in the future.

55

Currently, we have on order Celebrity Reflection and two Project Sunshine ships in Germany each of which has committed bank financing arrangements which include sovereign financing guarantees (50% of the loans for our Project Sunshine ships are subject to syndication prior to delivery).

We continue our focus on ensuring adequate cash and liquidity. We are committed to improving our cost focus and continue to implement cost containment initiatives including a number of initiatives to reduce energy consumption and, by extension, fuel costs. These include the design of more fuel efficient ships and the implementation of other hardware and energy efficiencies. We anticipate that our cash flows from operations, our current available credit facilities and our current financing arrangements will be adequate to meet our capital expenditures and debt repayments over the next twelve-month period. In addition, we may elect to fund our contractual obligations through other means if favorable opportunities arise. Our current and anticipated liquidity has also allowed us to reinstate our quarterly dividends. Refer to our discussion in the “Dividends” section below.

If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 30% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

Debt Covenants

Our financing agreements contain covenants that require us, among other things, to maintain minimum net worth of at least $5.7 billion, a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%. The fixed charge coverage ratio is calculated by dividing net cash from operations for the past four quarters by the sum of dividend payments plus scheduled principal debt payments in excess of any new financings for the past four quarters. Our minimum net worth and maximum net debt-to-capital calculations exclude the impact of accumulated other comprehensive (loss) income on total shareholders’ equity. We are well in excess of all debt covenant requirements as of December 31, 2011. The specific covenants and related definitions can be found in the applicable debt agreements, the majority of which have been previously filed with the Securities and Exchange Commission.

Dividends

In July 2011, our board of directors reinstated our quarterly dividend which had been discontinued beginning in the fourth quarter of 2008. We declared and paid a cash dividend on our common stock of $0.10 per share during the third quarter of 2011 and declared a cash dividend on our common stock of $0.10 per share in December 2011 which was paid the first quarter of 2012.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Financial Instruments and Other

General

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We manage these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impacts of these hedging instruments are primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the amount, term and conditions of the derivative instrument with the underlying risk being hedged. We do not hold or issue derivative financial instruments for trading or other speculative purposes. We monitor our derivative positions using techniques including market valuations and sensitivity analyses. (See Note 13. Fair Value Measurements and Derivative Instruments to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data.)

56

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates to our long-term debt obligations, including future interest payments, and our operating lease for Brilliance of the Seas. At December 31, 2011, approximately 40% of our long-term debt was effectively fixed and approximately 60% was floating. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense and rent expense.

Market risk associated with our long-term fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At December 31, 2011, we maintained interest rate swap agreements that effectively changed $350.0 million of debt with a fixed rate of 7.25% to a LIBOR-based floating rate equal to LIBOR plus 1.72%, currently approximately 2.49%. Additionally, during 2011 we entered into interest rate swap agreements on the fixed rate portion of our Oasis of the Seas unsecured amortizing term loan. The interest rate swap agreements effectively changed the unamortized balance of the unsecured term loan, which was $350.0 million at inception of the hedge, with a fixed rate of 5.41%, to LIBOR-based floating rate equal to LIBOR plus 3.87%, currently approximately 4.48%.

The estimated fair value of our long-term fixed rate debt at December 31, 2011 was $4.3 billion using quoted market prices, where available, or using the present value of expected future cash flows which incorporates risk profile. The fair value of our fixed to floating interest rate swap agreements was estimated to be an asset of $65.6 million as of December 31, 2011 based on the present value of expected future cash flows. A hypothetical one percentage point decrease in interest rates at December 31, 2011 would increase the fair value of our long-term fixed rate debt by approximately $59.1 million, net of an increase in the fair value of the associated fixed to floating interest rate swap agreements, assuming no changes in foreign currency exchange rates.

Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. A hypothetical one percentage point increase in interest rates would increase our 2012 interest expense by approximately $38.0 million, assuming no change in foreign currency exchange rates. During 2011, we entered into forward-starting interest rate swap agreements that beginning April 2013 effectively convert the interest rate on the Celebrity Reflection unsecured amortizing term loan balance for approximately $627.2 million from LIBOR plus 0.40% to a fixed-rate of 2.85% (inclusive of margin). The fair value of our floating to fixed interest rate swap agreements was estimated to be a liability of $11.6 million as of December 31, 2011 based on the present value of expected future cash flows.

Market risk associated with our operating lease for Brilliance of the Seas is the potential increase in rent expense from an increase in sterling LIBOR rates. Through July 2012, we have effectively changed 49% of the operating lease obligation from a floating rate to a fixed rate obligation with a weighted-average rate of 4.76% through rate fixings with the lessor. A hypothetical one percentage point increase in sterling LIBOR rates would increase our 2012 rent expense by approximately $2.0 million, based on the exchange rate at December 31, 2011.

Foreign Currency Exchange Rate Risk

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in euro and our growing international business operations. We enter into foreign currency forward contracts and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates.

The estimated fair value as of December 31, 2011 of our euro-denominated forward contracts associated with our ship construction contracts was estimated to be a liability of $36.5 million, based on the present value of expected future cash flows. During 2011, we implemented a strategy for benefiting from anticipated weakness in the euro exchange rate. As part of that strategy we terminated our foreign currency forward contracts for Project Sunshine to allow the exchange rate to float within a predetermined range, essentially creating a floor and a ceiling around our exposure to the euro denominated cost of the vessel. We may adjust the range over time as we feel appropriate. We effected the termination of a portion of the contracts by entering into offsetting foreign currency forward contracts. We paid $8.7 million to terminate the remaining contracts and deferred a loss of $19.7 million within accumulated other comprehensive income

57

(loss) which we will recognize within depreciation expense over the estimated useful life of the Project Sunshine ship. As a result, approximately 43.3% of the aggregate cost of the ships under construction was exposed to fluctuations in the euro exchange rate at December 31, 2011. A hypothetical 10% strengthening of the euro as of December 31, 2011, assuming no changes in comparative interest rates, would result in a $81.3 million increase in the United States dollar cost of the foreign currency denominated ship construction contracts exposed to fluctuations in the euro exchange rate.

Our growing international business operations subject us to an increasing level of foreign currency exchange risk. We transact business in many different foreign currencies and maintain investments in foreign operations which may expose us to financial market risk resulting from fluctuations in foreign currency exchange rates. Movements in foreign currency exchange rates may affect the translated value of our earnings and cash flows. We manage most of this exposure on a consolidated basis, which allows us to take advantage of any natural offsets. Therefore, weakness in one particular currency might be offset by strengths in other currencies over time. Our earnings are also subject to volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than the United States dollar. To mitigate our foreign currency exchange rate exposure resulting from our net foreign currency denominated monetary assets and liabilities, we maintain cross currency swap agreements, denominate a portion of our debt in our subsidiaries’ and investments’ functional currencies and enter into foreign currency forward contracts.

At December 31, 2011, we maintained cross currency swap agreements that effectively change €150.0 million of our €1.0 billion debt with a fixed rate of 5.625% to $190.9 million of debt at a fixed rate of 6.68%. Consistent with our strategy for benefiting from anticipated weakness in the euro exchange rate and to further increase the portion of our €1.0 billion debt that we utilize as a net investment hedge of our euro denominated investments in foreign operations, during 2011, we terminated €250.0 million of our cross currency swap agreements. Upon termination of these cross currency swaps, we received net cash proceeds of approximately $12.2 million, and we deferred a loss of $3.5 million within accumulated other comprehensive income (loss) which we will recognize within Interest expense, net of capitalized interest over the remaining life of the debt. At December 31, 2011, the estimated fair value of our cross currency swap agreements was an asset of approximately $7.7 million based on the present value of expected future cash flows. A hypothetical 10% strengthening of the euro as of December 31, 2011, assuming no changes in comparative interest rates, would result in an increase in the fair value of the €150.0 million of fixed rate debt by $21.7 million, offset by an increase in the fair value of the cross currency swap agreements of $30.4 million.

We partially address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies. Specifically, we have assigned debt of €665.0 million, or approximately $863.2 million as a hedge of our net investment in foreign operations. Accordingly, we have included approximately $13.2 million of foreign-currency transaction gains in the foreign currency translation adjustment component of accumulated other comprehensive income (loss) at December 31, 2011. A hypothetical 10% increase or decrease in the December 31, 2011 foreign currency exchange rate would increase or decrease the fair value of our assigned debt by $92.1 million, which would be offset by a corresponding decrease or increase in the United States dollar value of our net investment.

Lastly, during 2011, we entered into foreign currency forward contracts to minimize volatility in earnings resulting from the remeasurement of net monetary assets and payables denominated in a currency other than the United States dollar. On a weekly basis, we enter into an average of approximately $262.0 million of these foreign currency forward contracts. These instruments generally settle on a weekly basis and are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts are recognized in earnings within other income (expense) in our consolidated statements of operations.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices primarily relates to the consumption of fuel on our ships. Fuel cost (net of the financial impact of fuel swap agreements), as a percentage of our total revenues, was approximately 10.1% in 2011, 9.6% in 2010 and 10.2% in 2009. We use a range of instruments including fuel swap agreements and fuel call options to mitigate the financial impact of fluctuations in fuel prices. During 2011, we terminated 100% of our fuel call options maturing in 2011 and 2012 in order to monetize previously recorded gains pertaining to the fuel call options’ fair value prior to their expiration. Upon termination of these options, we recognized a gain of approximately $7.3 million and received net cash proceeds of approximately $34.3 million.

58

As of December 31, 2011, we had fuel swap agreements to pay fixed prices for fuel with an aggregate notional amount of approximately $1.1 billion, maturing through 2015. The fuel swap agreements represent 55% of our projected 2012 fuel requirements, 47% of our projected 2013 fuel requirements, 30% of our projected 2014 fuel requirements and 20% of our projected 2015 fuel requirements. The estimated fair value of these contracts at December 31, 2011 was estimated to be an asset of $79.8 million. As of December 31, 2011, we had fuel call options on a total of 1.0 million barrels which mature in 2013. The fuel call options represent 9% of our projected 2013 fuel requirements. The estimated fair value of these contracts at December 31, 2011 was an asset of approximately $16.4 million. We estimate that a hypothetical 10% increase in our weighted-average fuel price from that experienced during the year ended December 31, 2011 would increase our 2012 fuel cost by approximately $42.0 million, net of the impact of fuel swap agreements.

Item 8. Financial Statements and Supplementary Data

Our Consolidated Financial Statements and Quarterly Selected Financial Data are included beginning on page F-1 of this report.

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chairman and Chief Executive Officer and Executive Vice President and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Based upon such evaluation, our Chairman and Chief Executive Officer and Executive Vice President and Chief Financial Officer concluded that those controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our management, with the participation of our Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2011. The effectiveness of our internal control over financial reporting as of December 31, 2011 has been audited by PricewaterhouseCoopers LLP, the independent registered certified public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, as stated in its report, which is included herein on page F-2.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 during the quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

59

Inherent Limitations on Effectiveness of Controls

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

Item 9B. Other Information

None.

60

PART III

Items 10, 11, 12, 13 and 14. Directors, Executive Officers and Corporate Governance, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions, and Director Independence and Principal Accountant Fees and Services.

Except for information concerning executive officers (called for by Item 401(b) of Regulation S-K), which is included in Part I of this Annual Report on Form 10-K, the information required by Items 10, 11, 12, 13 and 14 is incorporated herein by reference to the Royal Caribbean Cruises Ltd. definitive proxy statement (the “Proxy Statement”) to be filed with the Securities and Exchange Commission no later than 120 days after the close of the fiscal year. Please refer to the following sections in the Proxy Statement for more information regarding our corporate governance: “Corporate Governance”; “Proposal 1 – Election of Directors”; and “Certain Relationships and Related Party Transactions”. Copies of the Proxy Statement can be obtained through our Investor Relations website at www.rclinvestor.com (please see “Financial Reports” under “Financial Information”); by contacting our Investor Relations department at 1050 Caribbean Way, Miami, Florida 33132 – telephone (305) 982-2625; or by visiting the SEC’s website at www.sec.gov.

We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, including our executive officers, and our directors. This document is posted on our website at www.rclinvestor.com. None of the websites referenced in this Annual Report on Form 10-K or the information contained therein is incorporated herein by reference.

61

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)         (1) Financial Statements

Our Consolidated Financial Statements have been prepared in accordance with Item 8. Financial Statements and Supplementary Data and are included beginning on page F-1 of this report.

(2) Financial Statement Schedules

None.

(3) Exhibits

The exhibits listed on the accompanying Index to Exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K and such Index to Exhibits is hereby incorporated herein by reference.

62

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ROYAL CARIBBEAN CRUISES LTD.

(Registrant)

By: /s/ BRIAN J. RICE

Brian J. Rice

Executive Vice President and Chief Financial Officer (Principal Financial Officer and duly authorized signatory)

February 29, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 29, 2012.

/s/	RICHARD D. FAIN
	Richard D. Fain
	Director, Chairman and Chief Executive Officer (Principal Executive Officer)
/s/	BRIAN J. RICE
	Brian J. Rice
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/	HENRY L. PUJOL
	Henry L. Pujol
	Vice President and Corporate Controller
	(Principal Accounting Officer)
	*
	Morten Arntzen
	Director
	*
	Bernard W. Aronson
	Director
	*
	William L. Kimsey
	Director
	*
	Vagn O. Sørensen
	Director
	*
	Gert W. Munthe
	Director

63

		Eyal M. Ofer
		Director
		*
		Thomas J. Pritzker
		Director
		*
		William K. Reilly
		Director
		*
		Bernt Reitan
		Director
		*
		Arne Alexander Wilhelmsen
		Director
*By:	/s/	BRIAN J. RICE
		Brian J. Rice, as Attorney-in-Fact

64

INDEX TO EXHIBITS

Exhibits 10.15 through 10.31 represent management compensatory plans or arrangements.

Exhibit	Description
3.1	— Restated Articles of Incorporation of the Company, as amended (composite) (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-3, File No. 333-158161, filed with the Securities and Exchange Commission (the “Commission”)) on March 23, 2009.
3.2	— Restated By-Laws of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 31, 2006).
4.1	— Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., successor to NationsBank of Georgia, National Association, as Trustee (incorporated by reference to Exhibit 2.4 to the Company’s 1994 Annual Report on Form 20-F, File No. 1-11884).
4.2	— Sixth Supplemental Indenture dated as of October 14, 1997 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 2.11 to the Company’s 1997 Annual Report on Form 20-F, File No. 1-11884).
4.3	— Seventh Supplemental Indenture dated as of March 16, 1998 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 2.12 to the Company’s 1997 Annual Report on Form 20-F, File No. 1-11884).
4.4	— Eighth Supplemental Indenture dated as of March 16, 1998 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 2.13 to the Company’s 1997 Annual Report on Form 20-F, File No. 1-11884).
4.5	— Thirteenth Supplemental Indenture dated as of November 21, 2003 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 2.14 to the Company’s 2003 Annual Report on Form 20-F, File No. 1-11884.)
4.6	— Fourteenth Supplemental Indenture dated as of June 12, 2006 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.13 to the Company’s 2006 Annual Report on Form 10-K).
4.7	— Fifteenth Supplemental Indenture dated as of June 12, 2006 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.14 to the Company’s 2006 Annual Report on Form 10-K).
4.8	— Form of Indenture dated as of July 31, 2006 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (No. 333-136186) filed with the Commission on July 31, 2006).
4.9	— Indenture dated as of January 25, 2007 among the Company, as issuer, The Bank of New York, as trustee, transfer agent, principal paying agent and security registrar, and AIB/BNY Fund Management (Ireland) Limited, as Irish paying agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 26, 2007).

65

4.10	— First Supplemental Indenture dated as of July 6, 2009 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 2, 2009).
10.1	— Amended and Restated Registration Rights Agreement dated as of July 30, 1997 among the Company, A. Wilhelmsen AS., Cruise Associates, Monument Capital Corporation, Archinav Holdings, Ltd. and Overseas Cruiseship, Inc. (incorporated by reference to Exhibit 2.20 to the Company’s 1997 Annual Report on Form 20-F, File No. 1-11884).
10.2	— Assignment and Amendment to the US$875,000,000 Amended and Restated Credit Agreement dated as of July 15, 2011 among the Company, the various financial institutions party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 19, 2011).
10.3	— US$525,000,000 Credit Agreement, dated as of November 19, 2010, as amended, among the Company, the various financial institutions as are or shall become parties thereto and Nordea Bank Finland plc, New York Branch, as administrative agent for the lender parties (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 19, 2010 and Exhibit 10.9 to the Company’s 2010 Annual Report on Form 10-K).
10.4	— Assignment and Amendment Deed to Hull No. 677 Credit Agreement, dated as of February 17, 2012, among Celebrity Eclipse Inc., the Company and KfW IPEX-BANK GMBH, in its capacity as agent for Hermes, administrative agent and lender*
10.5	— Assignment and Amendment Deed to Hull No. 679 Credit Agreement, dated as of February 17, 2012, among Celebrity Silhouette Inc., the Company and KfW IPEX-BANK GMBH, in its capacity as agent for Hermes, administrative agent and lender*
10.6	— Assignment and Amendment Deed to Hull No. 691 Credit Agreement, dated as of February 17, 2012, among Celebrity Solstice V Inc., the Company and KfW IPEX-BANK GMBH, in its capacity as agent for Hermes, administrative agent and lender*
10.7	— Credit Agreement dated as of May 7, 2009, amended and restated as of October 9, 2009, as amended, among Oasis of the Seas Inc., the Company as guarantor, various financial institutions and BNP Paribas, as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 13, 2009, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010 and Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011).
10.8	— Credit Agreement dated as of March 15, 2010, as amended, among Allure of the Seas Inc., as borrower, Royal Caribbean Cruises Ltd. as guarantor, various financial institutions and Skandinaviska Enskilda Banken AB (publ), as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 19, 2010, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010, Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010 and Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011).
10.9	— Hull No. S-697 Credit Agreement, dated as of June 8, 2011, between Company, the Lenders from time to time party thereto and KfW-IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 10, 2011).

66

10.10	— Amendment Agreement in connection with the Credit Agreement in respect of Hull No. S-698, dated as of February 17, 2012, between the Company, the Lenders from time to time party thereto and KfW-IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger*
10.11	— Office Building Lease Agreement dated July 25, 1989 between Miami-Dade County and the Company, as amended (incorporated by reference to Exhibits 10.116 and 10.117 to the Company’s Registration Statement on Form F-1, File No. 33-46157, filed with the Commission and Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 5, 2011).
10.12	— Office Building Lease Agreement dated January 18, 1994 between Miami-Dade County and the Company (incorporated by reference to Exhibit 2.13 to the Company’s 1993 Annual Report on Form 20-F, File No. 1-11884 and Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 5, 2011).
10.13	— Multi-Tenant Office Lease Agreement dated May 3, 2000, as amended through January 26, 2010, between the Company and RT Miramar II, LLC (incorporated by reference to Exhibit 4.6 to the Company’s 2003 Annual Report on Form 20-F and Exhibit 10.17 to the Company’s 2009 Annual Report on Form 10-K).
10.14	— Lease Agreement dated January 24, 2005, as amended through March 20, 2006, between the Company and RC Springfield 2007, LLC (formerly Workstage-Oregon, LLC) (incorporated by reference to Exhibit 10.7 to the Company’s 2004 Annual Report on Form 10-K, Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005 and Exhibit 10.12 to the Company’s 2007 Annual Report on Form 10-K).
10.15	— Lease dated August 30, 2006 between DV3 Addlestone Limited, RCL Investments Ltd. (formerly Harmony Investments (Global) Limited) and the Company (incorporated by reference to Exhibit 10.12 to the Company’s 2006 Annual Report on Form 10-K).
10.16	— Royal Caribbean Cruises Ltd. 2000 Stock Award Plan, as amended and restated through September 18, 2006 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 8, 2005 and Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 22, 2006).
10.17	— Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan, as amended by Amendment No. 1 dated as of May 20, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008 and Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010).
10.18	— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Stock Option Award Agreement — Incentive Options (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008).
10.19	— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Stock Option Award Agreement—Nonqualified shares (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008).
10.20	— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008).
10.21	— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Restricted Stock Unit Agreement—Director Grants (incorporated by reference to Exhibit 10.31 to the Company’s 2010 Annual Report on Form 10-K).

67

10.22	— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Performance Share Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on February 22, 2012).
10.23	— Employment Agreement dated July 25, 2007, amended as of December 19, 2008, between the Company and Richard D. Fain (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007 and Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 23, 2008).
10.24	— Employment Agreement dated July 25, 2007 between the Company and Adam M. Goldstein (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007).
10.25	— Employment Agreement dated July 25, 2007 between Celebrity Cruises Inc. and Daniel J. Hanrahan (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007).
10.26	— Employment Agreement dated July 25, 2007 between the Company and Brian J. Rice (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007).
10.27	— Employment Agreement dated July 25, 2007 between the Company and Harri U. Kulovaara (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007).
10.28	— Description of consulting arrangement between the Company and William K. Reilly (incorporated by reference to Exhibit 10.16 to the Company’s 2004 Annual Report on Form 10-K).
10.29	— Royal Caribbean Cruises Ltd. Executive Short-Term Bonus Plan dated as of September 12, 2008, as amended (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011).
10.30	— Royal Caribbean Cruises Ltd. et. al. Non Qualified Deferred Compensation Plan, formerly Royal Caribbean Cruises Ltd. et. al. Non Qualified 401(k) Plan, as amended through November 11, 2008 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on December 8, 2005, Exhibit 10.29 to the Company’s 2006 Annual Report on Form 10-K, Exhibit 10.28 to the Company’s 2007 Annual Report on Form 10-K, Exhibit 10.29 to the Company’s 2007 Annual Report on Form 10-K and Exhibit 10.36 to the Company’s 2008 Annual Report on Form 10-K).
10.31	— Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan as amended through November 11, 2008 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on December 8, 2005, Exhibit 10.31 to the Company’s 2006 Annual Report on Form 10-K, Exhibit 10.31 to the Company’s 2007 Annual Report on Form 10-K, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 and Exhibit 10.38 to the Company’s Annual Report on Form 10-K).
10.32	— Summary of Royal Caribbean Cruises Ltd. Board of Directors Compensation (incorporated by reference to Exhibit 10.29 to the Company’s 2010 Annual Report on Form 10-K).
10.33	— Cruise Policy effective as of October 3, 2007 for Members of the Board of Directors of the Company (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007).

68

12.1	— Statement regarding computation of fixed charge coverage ratio*
21.1	— List of Subsidiaries*
23.1	— Consent of PricewaterhouseCoopers LLP, an independent registered certified public accounting firm.*
23.2	— Consent of Drinker Biddle & Reath LLP*
24.1	— Power of Attorney*
31.1	— Certification of Richard D. Fain required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.*
31.2	— Certification of Brian J. Rice required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*
32.1	— Certification of Richard D. Fain and Brian J. Rice pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code**
*       Filed herewith
**     Furnished herewith
Interactive Data File
101*—The following financial statements from Royal Caribbean Cruises LTD.’s Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC on February 29, 2011, formatted in XBRL, as follows:
	(i) the Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009; (ii) the Consolidated Balance Sheets at December 31, 2011 and 2010; (iii) the Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009; (iv) the Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2011, 2010 and 2009; and (v) the Notes to the Consolidated Financial Statements, tagged in summary and detail.

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

69

ROYAL CARIBBEAN CRUISES LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Certified Public Accounting Firm		F-2
Consolidated Statements of Operations		F-3
Consolidated Balance Sheets		F-4
Consolidated Statements of Cash Flows		F-5
Consolidated Statements of Shareholders’ Equity		F-6
Notes to the Consolidated Financial Statements		F-7

Report of Independent Registered Certified Public Accounting Firm

To the Board of Directors and Shareholders

of Royal Caribbean Cruises, Ltd.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, shareholders’ equity and cash flows present fairly, in all material respects, the financial position of Royal Caribbean Cruises, Ltd. and its subsidiaries at December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Miami, Florida

February 29, 2012

F-2

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2011			2010			2009
	(in thousands, except per share data)
Passenger ticket revenues	$	5,525,904		$	4,908,644		$	4,205,709
Onboard and other revenues		2,011,359			1,843,860			1,684,117
Total revenues		7,537,263			6,752,504			5,889,826
Cruise operating expenses:
Commissions, transportation and other		1,299,713			1,175,522			1,028,867
Onboard and other		535,501			480,564			457,772
Payroll and related		825,676			767,586			681,852
Food		424,308			388,205			345,272
Fuel		764,758			646,998			600,203
Other operating		1,092,651			999,201			957,136
Total cruise operating expenses		4,942,607			4,458,076			4,071,102
Marketing, selling and administrative expenses		960,602			848,079			761,999
Depreciation and amortization expenses		702,426			643,716			568,214
		6,605,635			5,949,871			5,401,315
Operating Income		931,628			802,633			488,511
Other income (expense):
Interest income		25,318			9,243			7,016
Interest expense, net of interest capitalized		(382,416	)		(371,207	)		(309,948	)
Other income (expense)		32,891			74,984			(33,094	)
		(324,207	)		(286,980	)		(336,026	)
Net Income	$	607,421		$	515,653		$	152,485
Basic Earnings per Share:
Net income	$	2.80		$	2.40		$	0.71
Diluted Earnings per Share:
Net income	$	2.77		$	2.37		$	0.71

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

F-3

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED BALANCE SHEETS

	As of December 31,
	2011			2010
	(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents	$	262,186		$	419,929
Trade and other receivables, net		292,447			266,710
Inventories		144,553			126,797
Prepaid expenses and other assets		185,460			145,144
Derivative financial instruments		84,642			56,491
Total current assets		969,288			1,015,071
Property and equipment, net		16,934,817			16,771,677
Goodwill		746,537			759,328
Other assets		1,153,763			1,107,753
	$	19,804,405		$	19,653,829
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long-term debt	$	638,891		$	1,198,929
Accounts payable		304,623			249,047
Accrued interest		123,853			160,906
Accrued expenses and other liabilities		564,272			553,218
Customer deposits		1,436,003			1,283,073
Total current liabilities		3,067,642			3,445,173
Long-term debt		7,856,962			7,951,187
Other long-term liabilities		471,978			356,717
Commitments and contingencies (Note 14)
Shareholders’ equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)		—			—
Common stock ($0.01 par value; 500,000,000 shares authorized; 227,366,165 and 226,211,731 shares issued, December 31, 2011 and December 31, 2010, respectively)		2,276			2,262
Paid-in capital		3,071,759			3,027,130
Retained earnings		5,823,430			5,259,998
Accumulated other comprehensive (loss) income		(75,938	)		25,066
Treasury stock (10,308,683 common shares at cost, December 31, 2011 and December 31, 2010)		(413,704	)		(413,704	)
Total shareholders’ equity		8,407,823			7,900,752
	$	19,804,405		$	19,653,829

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

F-4

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2011			2010			2009
	(in thousands)
Operating Activities
Net income	$	607,421		$	515,653		$	152,485
Adjustments:
Depreciation and amortization		702,426			643,716			568,214
(Gain) loss on fuel call options		(18,920	)		2,826			2,538
Changes in operating assets and liabilities:
Decrease (increase) in trade and other receivables, net		87,872			146,498			(3,633	)
Increase in inventories		(18,423	)		(20,274	)		(11,295	)
Increase in prepaid expenses and other assets		(17,052	)		(10,954	)		(3,085	)
Increase (decrease) in accounts payable		56,755			(15,507	)		16,424
(Decrease) increase in accrued interest		(28,553	)		13,359			18,668
Increase in accrued expenses and other liabilities		25,318			71,969			16,258
Increase in customer deposits		19,482			135,975			32,038
Cash received on early settlement of derivative financial instruments		12,200			172,993			—
Dividends received from unconsolidated affiliates		21,147			—			—
Other, net		6,066			6,765			56,269
Net cash provided by operating activities		1,455,739			1,663,019			844,881
Investing Activities
Purchases of property and equipment		(1,173,626	)		(2,187,189	)		(2,477,549	)
Cash received (paid) on settlement of derivative financial instruments		16,307			(91,325	)		110,830
Loans and equity contributions to unconsolidated affiliates		(110,660	)		—			(181,683	)
Proceeds from sale of ships		345,000			—			290,928
Other, net		(1,586	)		(9,404	)		(16,983	)
Net cash used in investing activities		(924,565	)		(2,287,918	)		(2,274,457	)
Financing Activities
Debt proceeds		1,578,368			2,420,262			2,317,158
Debt issuance costs		(84,381	)		(90,782	)		(61,157	)
Repayments of debt		(2,179,046	)		(1,600,265	)		(948,467	)
Dividends paid		(21,707	)		—			—
Proceeds from exercise of common stock options		19,463			26,158			569
Other, net		10,788			1,587			4,103
Net cash (used in) provided by financing activities		(676,515	)		756,960			1,312,206
Effect of exchange rate changes on cash		(12,402	)		3,249			(889	)
Net (decrease) increase in cash and cash equivalents		(157,743	)		135,310			(118,259	)
Cash and cash equivalents at beginning of year		419,929			284,619			402,878
Cash and cash equivalents at end of year	$	262,186		$	419,929		$	284,619
Supplemental Disclosures
Cash paid during the year for:
Interest, net of amount capitalized	$	360,892		$	297,477		$	288,458

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

F-5

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Common Stock		Paid-in Capital			Retained Earnings	Accumulated Other Comprehensive Income (Loss)				Treasury Stock	Total Shareholders’ Equity
	(in thousands)
Balances at January 1, 2009		2,239		2,952,540	4,592,529			(319,936	)	(424,360)			6,803,012
Issuance under employee related plans		4		20,955	—			—		—			20,959
Distribution of Rabbi Trust shares		—		—	—			—		10,656			10,656
Changes related to cash flow derivative hedges		—		—	—			458,220		—			458,220
Change in defined benefit plans		—		—	—			(2,562	)	—			(2,562	)
Foreign currency translation adjustments		—		—	—			47,011		—			47,011
Net income		—		—	152,485			—		—			152,485
Balances at December 31, 2009		2,243		2,973,495	4,745,014			182,733		(413,704)			7,489,781
Issuance under employee related plans		19		53,635	—			—		—			53,654
Dividends declared by Pullmantur Air, S.A.1		—		—	(669)			—		—			(669	)
Changes related to cash flow derivative hedges		—		—	—			(123,180	)	—			(123,180	)
Change in defined benefit plans		—		—	—			(5,422	)	—			(5,422	)
Foreign currency translation adjustments		—		—	—			(29,065	)	—			(29,065	)
Net income		—		—	515,653			—		—			515,653
Balances at December 31, 2010	$	2,262	$	3,027,130	$5,259,998		$	25,066		$(413,704)		$	7,900,752
Issuance under employee related plans		14		44,629	—			—		—			44,643
Common Stock dividends		—		—	(43,435)			—		—			(43,435	)
Dividends declared by Pullmantur Air, S.A.1		—		—	(554)			—		—			(554	)
Changes related to cash flow derivative hedges		—		—	—			(76,106	)	—			(76,106	)
Change in defined benefit plans		—		—	—			(6,698	)	—			(6,698	)
Foreign currency translation adjustments		—		—	—			(18,200	)	—			(18,200	)
Net income		—		—	607,421			—		—			607,421
Balances at December 31, 2011	$	2,276	$	3,071,759	$5,823,430		$	(75,938	)	$(413,704)		$	8,407,823

¹ Dividends declared by Pullmantur Air, S.A. to its non-controlling shareholder. See Note 6. Other Assets for further information regarding Pullmantur Air, S.A.’s ownership structure.

Comprehensive income is as follows (in thousands):	Year Ended December 31,
	2011			2010			2009
Net income	$	607,421		$	515,653		$	152,485
Changes related to cash flow derivative hedges		(76,106	)		(123,180	)		458,220
Change in defined benefit plans		(6,698	)		(5,422	)		(2,562	)
Foreign currency translation adjustments		(18,200	)		(29,065	)		47,011
Total comprehensive income	$	506,417		$	357,986		$	655,154

The following tables summarize activity in accumulated other comprehensive income (loss) related to derivatives designated as cash flow hedges, change in defined benefit plans and the foreign currency translation adjustments (in thousands):

	Year Ended December 31,
	2011			2010			2009
Accumulated net gain (loss) on cash flow derivative hedges at beginning of year	$	42,848		$	166,028		$	(292,192	)
Net (loss) gain on cash flow derivative hedges		70,480			(54,877	)		376,128
Net (gain) loss reclassified into earnings		(146,586	)		(68,303	)		82,092
Accumulated net gain (loss) on cash flow derivative hedges at end of year	$	(33,258	)	$	42,848		$	166,028

	Changes related to  cash flow derivative hedges			Change in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive income (loss)
Accumulated other comprehensive gain at beginning of the year	$	42,848		$	(23,558	)	$	5,776		$	25,066
Current-period change		(76,106	)		(6,698	)		(18,200	)		(101,004	)
Accumulated other comprehensive gain at end of year	$	(33,258	)	$	(30,256	)	$	(12,424	)	$	(75,938	)

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

F-6

ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. General

Description of Business

We are a global cruise company. We own five cruise brands, Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, and CDF Croisières de France with a combined total of 39 ships in operation at December 31, 2011. Our ships operate on a selection of worldwide itineraries that call on approximately 460 destinations. In addition, we have a 50% investment in a joint venture which operates the brand TUI Cruises with TUI AG, a German-based multinational travel and tourism company.

Basis for Preparation of Consolidated Financial Statements

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates.

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. See Note 6. Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method. We consolidate the operating results of Pullmantur and its wholly-owned subsidiary, CDF Croisières de France, on a two-month lag to allow for more timely preparation of our consolidated financial statements. No material events or transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of November 2011 and December 2011 that would require disclosure or adjustment to our consolidated financial statements as of December 31, 2011.

Revision of Prior Period Financial Statements

In connection with the preparation of our consolidated financial statements for the second quarter of 2011, we identified and corrected errors in the manner in which we were amortizing guarantee fees related to three outstanding export credit agency guaranteed loans, and to a much lesser extent, fees associated with our revolving credit facilities. Previously, these fees were amortized on a straight-line basis over the life of the respective loan. Following identification of the errors, in the second quarter of 2011 we corrected our method of amortizing these guarantee fees based on the timing of their payment, which payments are made semi-annually and vary in amount depending on a number of factors, including the relevant outstanding loan balance and our credit rating. In accordance with accounting guidance found in ASC 250-10 (SEC Staff Accounting Bulletin No. 99, Materiality), we assessed the materiality of the errors and concluded that the errors were not material to any of our previously issued financial statements. In accordance with accounting guidance found in ASC 250-10 (SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), we have revised all affected periods. These non-cash errors did not impact our operating income or cash flows for any prior period.

F-7

The following table presents the effects of the revision on the Company’s Consolidated Statements of Operations for the respective annual periods. Please refer to Note 16. Quarterly Selected Financial Data (Unaudited) for the respective quarterly periods.

	Year Ended December 31, 2010									Year Ended December 31, 2009
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(339,393	)	$	(31,814	)	$	(371,207	)	$	(300,012	)	$	(9,936	)	$	(309,948	)
Total other expense		(255,166	)		(31,814	)		(286,980	)		(326,090	)		(9,936	)		(336,026	)
Net Income		547,467			(31,814	)		515,653			162,421			(9,936	)		152,485
Earnings per Share:
Basic	$	2.55		$	(0.15	)	$	2.40		$	0.76		$	(0.05	)	$	0.71
Diluted	$	2.51		$	(0.15	)	$	2.37		$	0.75		$	(0.05	)	$	0.71

The following table presents the effect the revision had on the Consolidated Balance Sheet at December 31, 2010:

	As of December 31, 2010
	(in thousands)
	As Previously Reported		Adjustment			As Revised
Property and equipment, net	$	16,769,181	$	2,496		$	16,771,677
Other assets		1,151,324		(43,571	)		1,107,753
Total assets		19,694,904		(41,075	)		19,653,829
Accrued expenses and other liabilities		552,543		675			553,218
Total current liabilities		3,444,498		675			3,445,173
Retained earnings		5,301,748		(41,750	)		5,259,998
Total shareholders’ equity		7,942,502		(41,750	)		7,900,752
Total liabilities and shareholders’ equity		19,694,904		(41,075	)		19,653,829

The correction did not have an effect on the Company’s total operating cash flows. The following table presents the effect on the individual line items within operating cash flows on the Company’s Consolidated Statement of Cash Flows for December 31, 2010 and 2009:

	Year Ended December 31, 2010											Year Ended December 31, 2009
	(in thousands)
	As Previously Reported			Adjustment			Reclassification1			As Revised		As Previously Reported		Adjustment			Reclassification1			As Revised
Net Income	$	547,467		$	(31,814	)	$	—		$	515,653	$	162,421	$	(9,936	)	$	—		$	152,485
Increase in accrued expenses and other liabilities		72,161			(192	)		—			71,969		15,391		867			—			16,258
Other, net		(22,415	)		32,006			(2,826	)		6,765		49,738		9,069			(2,538	)		56,269

¹  Please refer to Note 2. Summary of Significant Accounting Policies for discussion.

F-8

Note 2. Summary of Significant Accounting Policies

Revenues and Expenses

Deposits received on sales of passenger cruises are initially recorded as customer deposit liabilities on our balance sheet. Customer deposits are subsequently recognized as passenger ticket revenues, together with revenues from onboard and other goods and services and all associated direct costs of a voyage, upon completion of voyages with durations of ten days or less, and on a pro-rata basis for voyages in excess of ten days. Revenues and expenses include port costs that vary with guest head counts. The amounts included in passenger ticket revenues on a gross basis were $442.9 million, $398.0 million and $303.2 million for the years 2011, 2010 and 2009, respectively.

Cash and Cash Equivalents

Cash and cash equivalents include cash and marketable securities with original maturities of less than 90 days.

Inventories

Inventories consist of provisions, supplies and fuel carried at the lower of cost (weighted-average) or market.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. We capitalize interest as part of the cost of acquiring certain assets. Improvement costs that we believe add value to our ships are capitalized as additions to the ship and depreciated over the shorter of the improvements’ estimated useful lives or that of the associated ship. The estimated cost and accumulated depreciation of replaced or refurbished ship components are written off and any resulting losses are recognized in cruise operating expenses. Liquidated damages received from shipyards as a result of the late delivery of a new ship are recorded as reductions to the cost basis of the ship.

Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the asset. The useful lives of our ships are generally 30 years, net of a 15% projected residual value. The 30 year useful life of our newly constructed ships and 15% associated residual value are both based on the weighted-average of all major components of a ship. Depreciation for assets under capital leases is computed using the shorter of the lease term or related asset life. (See Note 5. Property and Equipment.)

Depreciation of property and equipment is computed utilizing the following useful lives:

	Years
Ships	30
Ship improvements	Shorter of remaining ship life or useful life (3-20)
Buildings and improvements	10-40
Computer hardware and software	3-5
Transportation equipment and other	3-30
Leasehold improvements	Shorter of remaining lease term or useful life (3-30)

We review long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying amount of these assets may not be fully recoverable. We evaluate asset impairment for our ships on an individual basis in accordance with ASC 360-

F-9

10-35-23, (Property, Plant and Equipment), which requires that, for purposes of recognition and measurement of an impairment loss, long-lived assets be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The lowest level for which we maintain identifiable cash flows that are independent of the cash flows of other assets and liabilities is at the ship level.

We use the deferral method to account for drydocking costs. Under the deferral method, drydocking costs incurred are deferred and charged to expense on a straight-line basis over the period to the next scheduled drydock, which we estimate to be a period of thirty to sixty months based on the vessel’s age as required by Class. Deferred drydock costs consist of the costs to drydock the vessel and other costs incurred in connection with the drydock which are necessary to maintain the vessel’s Class certification. Class certification is necessary in order for our cruise ships to be flagged in a specific country, obtain liability insurance and legally operate as passenger cruise ships. The activities associated with those drydocking costs cannot be performed while the vessel is in service and, as such, are done during a drydock as a planned major maintenance activity. The significant deferred drydock costs consist of hauling and wharfage services provided by the drydock facility, hull inspection and related activities (e.g. scraping, pressure cleaning, bottom painting), maintenance to steering propulsion, stabilizers, thruster equipment and ballast tanks, port services such as tugs, pilotage and line handling, and freight associated with these items. We perform a detailed analysis of the various activities performed for each drydock and only defer those costs that are directly related to planned major maintenance activities necessary to maintain Class. The costs deferred are not otherwise routinely periodically performed to maintain a vessel’s designed and intended operating capability. Repairs and maintenance activities are charged to expense as incurred.

Goodwill

Goodwill represents the excess of cost over the fair value of net tangible and identifiable intangible assets acquired. We review goodwill for impairment at the reporting unit level annually or, when events or circumstances dictate, more frequently. The impairment review for goodwill consists of a qualitative assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount, followed by a two-step process of determining the fair value of the reporting unit and comparing it to the carrying value of the net assets allocated to the reporting unit. Factors to consider when performing the qualitative assessment include general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. If the qualitative assessment demonstrates that it is more-likely-than-not that the estimated fair value of the reporting unit exceeds its carrying value, it is not necessary to perform the two-step goodwill impairment test. We began performing this qualitative assessment in the fourth quarter of 2011 as allowable per the newly issued authoritative guidance described under the heading Recently Adopted Accounting Standards below. We may elect to bypass the qualitative assessment and proceed directly to step one, for any reporting unit, in any period. We can resume the qualitative assessment for any reporting unit in any subsequent period. When performing the two-step process, if the fair value of the reporting unit exceeds its carrying value, no further analysis or write-down of goodwill is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the implied fair value of the reporting unit is allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value.

Intangible Assets

In connection with our acquisitions, we have acquired certain intangible assets of which value has been assigned to them based on our estimates. Intangible assets that are deemed to have an indefinite life are not amortized, but are subject to an annual impairment test, or when events or circumstances dictate, more frequently. The indefinite-life intangible asset impairment test consists of a comparison of the fair value of the indefinite-life intangible asset with its carrying amount. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the fair value exceeds its carrying amount, the indefinite-life intangible asset is not considered impaired.

F-10

Other intangible assets assigned finite useful lives are amortized on a straight-line basis over their estimated useful lives.

Contingencies—Litigation

On an ongoing basis, we assess the potential liabilities related to any lawsuits or claims brought against us. While it is typically very difficult to determine the timing and ultimate outcome of such actions, we use our best judgment to determine if it is probable that we will incur an expense related to the settlement or final adjudication of such matters and whether a reasonable estimation of such probable loss, if any, can be made. In assessing probable losses, we take into consideration estimates of the amount of insurance recoveries, if any. We accrue a liability when we believe a loss is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recoveries, it is possible that certain matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made.

Advertising Costs

Advertising costs are expensed as incurred except those costs which result in tangible assets, such as brochures, which are treated as prepaid expenses and charged to expense as consumed. Advertising costs consist of media advertising as well as brochure, production and direct mail costs. Media advertising was $193.7 million, $166.0 million and $152.2 million, and brochure, production and direct mail costs were $124.3 million, $104.1 million and $92.0 million for the years 2011, 2010 and 2009, respectively.

Derivative Instruments

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. Our derivative instruments are not held for trading or speculative purposes.

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a recognized asset or liability, or a firm commitment is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings.

The foreign-currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in our foreign operations or investments are recognized as a component of accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation.

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is recognized in earnings immediately and reported in other income (expense) in our consolidated statements of operations.

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting

F-11

is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

Foreign Currency Translations and Transactions

We translate assets and liabilities of our foreign subsidiaries whose functional currency is the local currency, at exchange rates in effect at the balance sheet date. We translate revenues and expenses at weighted-average exchange rates for the period. Equity is translated at historical rates and the resulting foreign currency translation adjustments are included as a component of accumulated other comprehensive (loss) income, which is reflected as a separate component of shareholders’ equity. Exchange gains or losses arising from the remeasurement of monetary assets and liabilities denominated in a currency other than the functional currency of the entity involved are immediately included in our earnings, except for certain liabilities that have been designated to act as a hedge of a net investment in a foreign operation or investment. Exchange losses were $1.6 million, $9.5 million and $21.1 million for the years 2011, 2010 and 2009, respectively, and were recorded within other income (expense). The majority of our transactions are settled in United States dollars. Gains or losses resulting from transactions denominated in other currencies are recognized in income at each balance sheet date.

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our revolving credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies with which we have long-term relationships and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. In addition, our exposure under foreign currency contracts, fuel call options, interest rate and fuel swap agreements that are in-the-money, which is approximately $135.5 million as of December 31, 2011, is limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contract, all of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines regarding credit ratings and instrument maturities that we follow to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share incorporates the incremental shares issuable upon the assumed exercise of stock options and conversion of potentially dilutive securities. (See Note 10. Earnings Per Share.)

Stock-Based Employee Compensation

We measure and recognize compensation expense at the fair value of employee stock awards. Compensation expense for awards and the related tax effects are recognized as they vest. We use the estimated amount of expected forfeitures to calculate compensation costs for all outstanding awards.

Segment Reporting

We operate five wholly-owned cruise brands, Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, Pullmantur and CDF Croisières de France. In addition, we have a 50% investment in a joint venture which operates the brand TUI Cruises with TUI AG. We believe our global brands possess the

F-12

versatility to enter multiple cruise market segments within the cruise vacation industry. Although each of our brands has its own marketing style as well as ships and crews of various sizes, the nature of the products sold and services delivered by our brands share a common base (i.e. the sale and provision of cruise vacations). Our brands also have similar itineraries as well as similar cost and revenue components. In addition, our brands source passengers from similar markets around the world and operate in similar economic environments with a significant degree of commercial overlap. As a result, our brands (including TUI Cruises) have been aggregated as a single reportable segment based on the similarity of their economic characteristics, types of consumers, regulatory environment, maintenance requirements, supporting systems and processes as well as products and services provided. Our Chairman and Chief Executive Officer has been identified as the chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analyses of the Company as a whole.

Information by geographic area is shown in the table below. Passenger ticket revenues are attributed to geographic areas based on where the reservation originates.

	2011			2010			2009
Passenger ticket revenues:
United States		51	%		55	%		54	%
All other countries		49	%		45	%		46	%

Recently Adopted Accounting Standards

In January 2011, we adopted the remaining provisions of authoritative guidance issued in 2010 which requires enhanced disclosures for fair value measurements. The remaining provisions of this guidance became effective for our fiscal year 2011 interim and annual consolidated financial statements and require entities to present information about purchases, sales, issuances and settlements of financial instruments measured at fair value within the third level of the fair value hierarchy on a gross basis. See Note 13. Fair Value Measurements and Derivative Instruments for our disclosures required under this guidance.

In January 2011, we also adopted the remaining provisions of authoritative guidance issued in 2010 which requires enhanced and disaggregated disclosures about the credit quality of financing receivables and the allowance for credit losses. The remaining provisions of this guidance became effective for our fiscal year 2011 interim and annual consolidated financial statements and require entities to disclose reporting period activity for financing receivables and the allowance for credit losses. The adoption of this guidance did not have an impact on our consolidated financial statements.

In July 2011, we adopted authoritative guidance issued to clarify when a modification or restructuring of a receivable constitutes a troubled debt restructuring. In evaluating whether such a modification or restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that two conditions exist: (1) the modification or restructuring constitutes a concession and (2) the debtor is experiencing financial difficulties. The guidance became effective for our interim and annual reporting periods beginning after June 15, 2011 and was applied retrospectively for all of fiscal year 2011. The adoption of this guidance did not have an impact on our consolidated financial statements.

In September 2011, we adopted authoritative guidance regarding the periodic testing of goodwill for impairment. The new guidance allows an entity to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired and based on this assessment determine whether it is necessary to perform the two-step goodwill impairment test. This guidance is effective for our annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. We early adopted this guidance when performing our annual goodwill impairment testing in the fourth quarter of 2011. See Note 3. Goodwill for our disclosures related to this guidance.

F-13

Recent Accounting Pronouncements

In May 2011, authoritative guidance was issued to achieve consistent fair value measurements and to clarify certain disclosure requirements for fair value measurements. The new guidance includes clarification about when the concept of highest and best use is applicable to fair value measurements, requires quantitative disclosures about inputs used and qualitative disclosures about the sensitivity of recurring Level 3 measurements, and requires the classification of all assets and liabilities measured at fair value in the fair value hierarchy, including those assets and liabilities which are not recorded at fair value but for which fair value is disclosed. The guidance will be effective for our interim and annual reporting periods beginning after December 15, 2011. Based on our current fair value measurements, the adoption of this issued guidance is not expected to have an impact on our consolidated financial statements.

In June 2011, authoritative guidance was issued on the presentation of comprehensive income. Specifically, the guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. This guidance must be applied retrospectively and will be effective for our interim and annual reporting periods beginning after December 15, 2011. We expect to add a new primary consolidated statement of other comprehensive income which will immediately follow our consolidated statements of operations to our filings beginning in the first quarter of 2012. In addition, the original guidance issued required that any reclassifications from comprehensive income to net income to be shown on the face of the income statement by income statement line item, however, in December 2011, this guidance was deferred until further notice.

Reclassifications

During 2011, we separately presented gains on our fuel call options of $18.9 million in our consolidated statement of cash flows. As a result, the related prior year amounts were reclassified from other, net to (gain) loss on fuel call options within net cash flows provided by operating activities in order to conform to the current year presentation.

Note 3. Goodwill

In 2011, 2010 and 2009, we completed our annual goodwill impairment test and determined there was no impairment. The carrying amount of goodwill attributable to our Royal Caribbean International and the Pullmantur reporting units was as follows (in thousands):

	Royal Caribbean International		Pullmantur			Total
Balance at December 31, 2009		283,723		508,650			792,373
Foreign currency translation adjustment		—		(33,045	)		(33,045	)
Balance at December 31, 2010	$	283,723	$	475,605		$	759,328
Foreign currency translation adjustment		—		(12,791	)		(12,791	)
Balance at December 31, 2011	$	283,723	$	462,814		$	746,537

During the fourth quarter of 2011, we performed a qualitative assessment of whether it was more-likely-than-not that our Royal Caribbean International reporting unit’s fair value was less than its carrying amount before applying the two-step goodwill impairment test. The qualitative analysis included assessing the impact of certain factors such as general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. Based on our qualitative assessment, we concluded that it was more-likely-than-not that the estimated fair value of the Royal Caribbean International reporting unit exceeded its carrying value as of December 31, 2011 and thus, did not proceed to the two-step goodwill impairment test. No indicators of impairment exist primarily because the reporting unit’s fair value has consistently exceeded its carrying value by a significant margin, its financial performance has been solid in the face of mixed economic environments and forecasts of operating results generated by the reporting unit appear sufficient to support its carrying value.

F-14

In addition, during the fourth quarter of 2011, we performed our annual impairment review of goodwill for Pullmantur’s reporting unit. We did not perform a qualitative assessment but instead proceeded directly to the two-step goodwill impairment test. We estimated the fair value of the Pullmantur reporting unit using a probability-weighted discounted cash flow model. The principal assumptions used in the discounted cash flow model are projected operating results, weighted-average cost of capital, and terminal value. Significantly impacting these assumptions are the transfer of vessels from our other cruise brands to Pullmantur. Cash flows were calculated using our 2012 projected operating results as a base. To that base we added future years’ cash flows assuming multiple revenue and expense scenarios that reflect the impact on Pullmantur’s reporting unit of different global economic environments beyond 2012. We assigned a probability to each revenue and expense scenario.

We discounted the projected cash flows using rates specific to Pullmantur’s reporting unit based on its weighted-average cost of capital. Based on the probability-weighted discounted cash flows we determined the fair value of the Pullmantur reporting unit exceeded its carrying value. Therefore, we did not proceed to step two of the impairment analysis and we do not consider goodwill to be impaired.

The estimation of fair value utilizing discounted expected future cash flows includes numerous uncertainties which require our significant judgment when making assumptions of expected revenues, operating costs, marketing, selling and administrative expenses, interest rates, ship additions and retirements as well as assumptions regarding the cruise vacation industry’s competitive environment and general economic and business conditions, among other factors. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets. European economies continue to demonstrate instability in light of heightened concerns over sovereign debt issues as well as the impact that proposed austerity measures will have on certain markets. The Spanish economy has been more severely impacted than many other economies around the world where we operate and there is significant uncertainty as to whether or when it will recover. In addition, the recent Costa Concordia incident is having a near term negative impact on our earnings in 2012 while the impact in future years is uncertain. If the Spanish economy weakens further or recovers more slowly than contemplated in our discounted cash flow model, if there are relatively modest changes to our projected future cash flows used in the impairment analyses, especially in Net Yields, or if certain transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur’s reporting unit’s goodwill may be required.

Note 4. Intangible Assets

Intangible assets consist of the following (in thousands):

	2011			2010
Indefinite-life intangible asset – Pullmantur trademarks and trade names	$	225,679		$	241,563
Foreign currency translation adjustment		(6,796	)		(15,884	)
Total	$	218,883		$	225,679

We performed the annual impairment review of our trademarks and trade names during the fourth quarter of 2011 using a discounted cash flow model and the relief-from-royalty method. The royalty rate used is based on comparable royalty agreements in the tourism and hospitality industry. Since these trademarks and trade names relates to Pullmantur, we have used the same discount rate used in valuing the Pullmantur reporting unit in our goodwill impairment test. Based on the discounted cash flow model we determined the fair value of our trademarks and trade names exceeded their carrying value. However, European economies continue to demonstrate instability in light of heightened concerns over sovereign debt issues as well as the impact that proposed austerity measures will have on certain markets. The Spanish economy has been more severely impacted than many other economies around the world where we operate and there is significant uncertainty as to whether or when it will recover. In addition, the recent Costa Concordia incident is having a

F-15

near term negative impact on our earnings in 2012 while the impact in future years is uncertain. If the Spanish economy weakens further or recovers more slowly than contemplated in our discounted cash flow model, if there are relatively modest changes to our projected future cash flows used in the impairment analyses, especially in Net Yields, or if certain transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur’s trademark and trade names may be required.

Finite-life intangible assets and related accumulated amortization are immaterial to our 2011, 2010, and 2009 consolidated financial statements.

Note 5. Property and Equipment

Property and equipment consists of the following (in thousands):

	2011			2010
Ships	$	19,958,127		$	19,536,283
Ship improvements		976,363			918,681
Ships under construction		227,123			253,198
Land, buildings and improvements, including leasehold improvements and port facilities		360,399			314,044
Computer hardware and software, transportation equipment and other		748,102			607,715
Total property and equipment		22,270,114			21,629,921
Less—accumulated depreciation and amortization		(5,335,297	)		(4,858,244	)
	$	16,934,817		$	16,771,677

Ships under construction include progress payments for the construction of new ships as well as planning, design, interest, commitment fees and other associated costs. We capitalized interest costs of $14.0 million, $28.1 million and $41.5 million for the years 2011, 2010 and 2009, respectively.

In November 2010, we sold Bleu de France to an unrelated party for $55.0 million. The sale was recorded in the first quarter of 2011, as we consolidate the operating results of CDF Croisières de France on a two-month lag. (See Note 1. General). As part of the sale agreement, we chartered the Bleu de France from the buyer for a period of one year from the sale date to fulfill existing passenger commitments. The sale resulted in an immaterial gain that was recognized over the charter period.

In February 2011, we sold Celebrity Mercury to TUI Cruises for €234.3 million. We executed certain forward exchange contracts to lock in the sales price at approximately $290.0 million. The sale resulted in a gain of $24.2 million which, due to the related party nature of the transaction, is being recognized primarily over the remaining life of the ship, estimated to be 17 years.

Atlantic Star is currently not in operation. During 2009, we classified the ship as held for sale within other assets in our consolidated balance sheets and recognized a charge of $7.1 million to reduce the carrying value of the ship to its fair value less cost to sell. This amount was recorded within other operating expenses in our consolidated statements of operations. Management continues to actively pursue the sale of the ship.

Note 6. Other Assets

Variable Interest Entities

Variable Interest Entities (“VIEs”), are entities in which the equity investors have not provided enough equity to finance its activities or the equity investors (1) cannot directly or indirectly make decisions about the entity’s activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity’s activities involve or are conducted on behalf of an investor with a disproportionately small voting interest.

F-16

We have determined that our 40% noncontrolling interest in Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair and maintenance facility in which we initially invested in 2001, is a VIE. The facility serves cruise and cargo ships, oil and gas tankers, and offshore units. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. We have determined we are not the primary beneficiary of this facility, as we do not have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of December 31, 2011 and December 31, 2010, the net book value of our investment in Grand Bahama, including equity and loans, was approximately $61.4 million and $64.1 million, respectively, which is also our maximum exposure to loss as we are not contractually required to provide any financial or other support to the facility. The majority of our loans to Grand Bahama are in non-accrual status. During 2011, we received approximately $10.8 million in principal and interest payments from Grand Bahama and recorded income associated with our investment in Grand Bahama. We monitor credit risk associated with these loans through our participation on the facility’s board of directors along with our review of the facility’s financial statements and projected cash flows. Based on this review, we believe the risk of loss associated with these loans is remote as of December 31, 2011.

In conjunction with our acquisition of Pullmantur in 2006, we obtained a 49% noncontrolling interest in Pullmantur Air, S.A. (“Pullmantur Air”), a small air business that operates four aircrafts in support of Pullmantur’s operations. We have determined Pullmantur Air is a VIE for which we are the primary beneficiary as we have the power to direct the activities that most significantly impact its economic performance and we are obligated to absorb its losses. In accordance with authoritative guidance, we have consolidated the assets and liabilities of Pullmantur Air. We do not separately disclose the assets and liabilities of Pullmantur Air as they are immaterial to our December 31, 2011 and December 31, 2010 consolidated financial statements.

We have determined that our 50% interest in the TUI Cruises GmbH joint venture which operates the brand TUI Cruises, is a VIE. As of December 31, 2011 and December 31, 2010, our investment in TUI Cruises, including equity and loans, is substantially our maximum exposure to loss, which was approximately $282.0 million and $190.8 million, respectively, and was included within other assets in our consolidated balance sheets. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

During 2011, we sold Celebrity Mercury to TUI Cruises for €234.3 million to serve as its second ship. The ship was renamed Mein Schiff 2 and began sailing in May 2011. Concurrently with entering into the agreement to sell Celebrity Mercury, we executed certain forward exchange contracts to lock in the sales price at approximately $290.0 million. We deferred the gain on the sale of $24.2 million which will be recognized primarily over the remaining life of the ship, estimated to be 17 years. In connection with the sale, we provided a debt facility to TUI Cruises in the amount of up to €90.0 million. The amount drawn under the facility as of December 31, 2011 was €80.0 million, or approximately $103.8 million based on the exchange rate at December 31, 2011. The loan bears interest at the rate of 9.54% per annum, is payable over seven years, is 50% guaranteed by TUI AG (our joint venture partner) and is secured by second mortgages on both Mein Schiff 1 and Mein Schiff 2. In addition, we and TUI AG each guaranteed the repayment of 50% of an €180.0 million 5-year bank loan provided to TUI Cruises, €170.3 million as of December 31, 2011, in connection with the sale of the ship. The bank loan amortizes quarterly and is secured by first mortgages on both Mein Schiff 1 and Mein Schiff 2. Based on current facts and circumstances, we do not believe potential obligations under this guarantee would be material to our results of operations.

F-17

During 2011, TUI Cruises entered into a construction agreement with STX Finland to build its first newbuild ship, scheduled for delivery in the second quarter of 2014. TUI Cruises has entered into a credit agreement for financing of up to 80% of the contract price of the ship. The remaining portion of the contract price of the ship will be funded through either TUI Cruises’ cash flows from operations or loans and/or equity contributions from us and TUI AG. The construction agreement includes certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through the construction period. In addition, the credit agreement extends this restriction through 2019. TUI Cruises has an option to construct a second ship of the same class, which will expire on October 31, 2012.

Note 7. Long-Term Debt

Long-term debt consists of the following (in thousands):

	2011			2010
$875.0 million unsecured revolving credit facility, LIBOR plus 2.00%, currently 2.28% and a facility fee of 0.42%, due 2016	$	523,000		$	545,000
$525.0 million unsecured revolving credit facility, LIBOR plus 2.75%, currently 3.04% and a facility fee of 0.6875%, due 2014		67,000			—
Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027		2,059,510			2,548,722
€1.0 billion unsecured senior notes, 5.63%, due 2014		1,356,312			1,427,322
Unsecured term loans, LIBOR plus 2.75%, currently 3.05%, due 2013		100,000			100,000
$225 million unsecured term loan, LIBOR plus 1.25%, currently 1.55%, due 2012		32,085			64,238
$570 million unsecured term loan, 4.20%, due through 2013		122,143			203,571
$589 million unsecured term loan, 4.64%, due through 2014		210,358			294,500
$530 million unsecured term loan, LIBOR plus 0.62%, currently 1.21%, due through 2015		265,000			340,714
$519 million unsecured term loan, LIBOR plus 0.45%, currently 1.05%, due through 2020		389,360			432,622
1$420 million unsecured term loan, 5.41%, due through 2021		348,142			385,000
$420 million unsecured term loan, LIBOR plus 2.10%, currently 2.71%, due through 2021		350,000			385,000
1€159.4 million unsecured term loan, EURIBOR plus 1.58%, currently 3.37%, due through 2021		172,463			195,598
$524.5 million unsecured term loan, LIBOR plus 0.50%, currently 0.92%, due through 2021		437,083			480,791
$566.1 million unsecured term loan, LIBOR plus 0.37%, currently 0.96%, due through 2022		495,311			542,483
2$1.1 billion unsecured term loan, LIBOR plus 2.10%, currently 2.71%, due through 2022		844,529			1,130,000
$632.0 million unsecured term loan, LIBOR plus 0.40%, currently 0.81%, due through 2023		631,959			—
$7.3 million unsecured term loan, LIBOR plus 2.5%, currently 2.96%, due through 2023 (7.0%, due through 2022 as of December 31, 2010)		6,343			6,715
$30.3 million unsecured term loan, LIBOR plus 3.75%, currently 4.29%, due through 2021 (due through 2020 as of December 31, 2010)		25,173			9,193
Capital lease obligations		60,082			58,647
		8,495,853			9,150,116
Less — current portion		(638,891	)		(1,198,929	)
Long-term portion	$	7,856,962		$	7,951,187

¹  Corresponds to Oasis of the Seas unsecured term loan. With respect to 60% of the financing, the lenders have the ability to exit the facility on the sixth anniversary of the loan.

² Corresponds to Allure of the Seas unsecured term loan. With respect to 100% of the financing, the lenders have the ability to exit the facility on the seventh anniversary of the loan.

During 2011, we took delivery of Celebrity Silhouette. To finance the purchase, we borrowed $632.0 million under our previously committed unsecured term loan which is 95% guaranteed by Euler Hermes Kreditversicherungs AG (“Hermes”), the official export credit agency of Germany. The loan amortizes semi-annually over 12 years and bears interest at LIBOR plus a margin of 0.40%, currently approximately 0.81%.

During 2011, we amended and restated our $1.225 billion unsecured revolving credit facility which was due to expire in June 2012. We have extended the termination date through July 2016 and reduced the facility amount to $875.0 million. Under the amended facility, advances currently bear interest at LIBOR plus a margin of 2.00%, currently approximately 2.28%, and we are required to pay a facility fee of 0.42% per annum as compared to LIBOR plus 0.80% and a facility fee of 0.20%, as of December 31, 2010.

F-18

During 2011, we amended our unsecured term loans for Oasis of the Seas and Allure of the Seas primarily to reduce the margins on those facilities. The interest rates on the Oasis of the Seas term loan were reduced from LIBOR plus 3.00% to LIBOR plus 2.10%, on the $420.0 million floating rate tranche and from EURIBOR plus 2.25% to EURIBOR plus 1.58%, on the €159.4 million floating rate tranche. The interest rate on the entire $1.1 billion Allure of the Seas term loan was reduced from LIBOR plus 2.20% to LIBOR plus 2.10%, currently approximately 2.71%. In addition, we prepaid $200 million of the Allure of the Seas term loan. We partially funded the prepayment by extending the maturity date of our $100.0 million unsecured floating rate term loan from September 2011 to September 2013. In addition, the interest rate on the term loan was reduced from LIBOR plus 3.00% to LIBOR plus 2.75%.

During 2011, we entered into credit agreements for the financing of the first and second of a new generation of Royal Caribbean International cruise ships, known as “Project Sunshine”, which are scheduled for delivery in the third quarter of 2014 and in the second quarter of 2015, respectively. Refer to Note 15. Subsequent Events for information on our recent order of our second Project Sunshine ship. The credit agreements make available to us for each ship an unsecured term loan in an amount up to the United States dollar equivalent corresponding to approximately €595.0 million, with funding of 50% of each facility subject to syndication prior to delivery. Hermes has agreed to guarantee to the lender payment of 95% of each financing. The loans amortize semi-annually and will mature 12 years following delivery of the applicable ship. Interest on the loans will accrue at our election at either a fixed rate of 4.76% or a floating rate at LIBOR plus a margin of 1.30%.

During 2008, we entered into a credit agreement providing financing for Celebrity Reflection which is scheduled for delivery in the fourth quarter of 2012. The credit agreement provides for an unsecured term loan for up to 80% of the purchase price of the vessel which will be 95% guaranteed by Hermes and will be funded at delivery. The loan will have a 12-year life with semi-annual amortization, and will bear interest at our election of either a fixed rate of 4.13% (inclusive of the applicable margin) or a floating rate at LIBOR plus a margin of 0.40%.

In February 2012, the credit facility we obtained in connection with our purchase of Celebrity Solstice was assigned from Celebrity Solstice Inc., our subsidiary which owns the ship, to Royal Caribbean Cruises Ltd. Similar assignments were simultaneously made from the ship-owning subsidiary level to Royal Caribbean Cruises Ltd. for the facilities relating to Celebrity Equinox, Celebrity Eclipse and Celebrity Silhouette and for the credit agreement relating to Celebrity Reflection, expected to be delivered in the fourth quarter of 2012. Other than the change in borrower, the economic terms of these facilities remain unchanged. These amended facilities each contain covenants substantially similar to the covenants, in our other parent-level ship financing agreements and our revolving credit facilities.

Certain of our unsecured term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed. In consideration for these guarantees, depending on the financing arrangement, we pay to the applicable export credit agency fees that range from either (1) 1.13% to 1.96% per annum based on the outstanding loan balance semi-annually over the term of the loan (subject to adjustment in certain of our facilities based upon our credit ratings) or (2) an upfront fee of approximately 2.3% to 2.37% of the maximum loan amount. We amortize the fees that are paid upfront over the life of the loan and those that are paid semi-annually over the life of the loan over each respective payment period. We classify these fees within Debt issuance costs in our consolidated statement of cash flows. During the second quarter of 2011, we identified errors in the manner in which we were amortizing fees related to three outstanding export credit agency guaranteed loans, and to a much lesser extent, fees associated with our revolving credit facilities. See Note 1. General – Revision of Prior Period Financial Statements for further details.

Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating.

F-19

The unsecured senior notes and senior debentures are not redeemable prior to maturity, except that certain series may be redeemed upon the payment of a make-whole premium.

Following is a schedule of annual maturities on long-term debt including capital leases as of December 31, 2011 for each of the next five years (in thousands):

Year
2012	$	638,891
2013		1,561,662
2014		1,897,852
2015		1,002,784
2016		1,243,495
Thereafter		2,151,169
	$	8,495,853

Note 8. Shareholders’ Equity

In July 2011, our board of directors reinstated our quarterly dividend which had previously been discontinued in the fourth quarter of 2008. We declared and paid a cash dividend on our common stock of $0.10 per share during the third quarter of 2011 and declared a cash dividend on our common stock of $0.10 per share in December 2011, which was paid in the first quarter of 2012.

Note 9. Stock-Based Employee Compensation

We have three stock-based compensation plans, which provide for awards to our officers, directors and key employees. The plans consist of a 1995 Incentive Stock Option Plan, a 2000 Stock Award Plan, and a 2008 Equity Plan. The 1995 Incentive Stock Option Plan terminated by its terms in February 2005. The 2000 Stock Award Plan, as amended, and the 2008 Equity Plan, as amended, provide for the issuance of up to 13,000,000 and 11,000,000 shares of our common stock, respectively, pursuant to grants of (i) incentive and non-qualified stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units and (v) performance shares. During any calendar year, no one individual shall be granted awards of more than 500,000 shares. Options and restricted stock units outstanding as of December 31, 2011 vest in equal installments over four to five years from the date of grant. With certain limited exceptions, options and restricted stock units are forfeited if the recipient ceases to be a director or employee before the shares vest. Options are granted at a price not less than the fair value of the shares on the date of grant and expire not later than ten years after the date of grant.

We also provide an Employee Stock Purchase Plan (“ESPP”) to facilitate the purchase by employees of up to 800,000 shares of common stock in the aggregate. Offerings to employees are made on a quarterly basis. Subject to certain limitations, the purchase price for each share of common stock is equal to 90% of the average of the market prices of the common stock as reported on the New York Stock Exchange on the first business day of the purchase period and the last business day of each month of the purchase period. Shares of common stock of 28,802, 30,054, and 65,005 were issued under the ESPP at a weighted-average price of $29.46, $27.87 and $12.78 during 2011, 2010 and 2009, respectively.

Under the chief executive officer’s employment agreement we previously contributed 10,086 shares of our common stock quarterly to a trust on his behalf. In January 2009, the employment agreement and related trust agreement were amended. Consequently, in January 2009, 768,018 shares were distributed from the trust and since January 2009 quarterly share distributions are issued directly to the chief executive officer.

F-20

Total compensation expense recognized for employee stock-based compensation for the years ended December 31, 2011, 2010 and 2009 were as follows:

	Employee Stock-Based Compensation
Classification of expense	2011		2010		2009
In thousands
Marketing, selling and administrative expenses	$	23,803	$	27,598	$	16,157
Payroll and related expenses		—		475		615
Total Compensation Expense	$	23,803	$	28,073	$	16,772

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The estimated fair value of stock options, less estimated forfeitures, is amortized over the vesting period using the graded-vesting method. The majority of our stock option grants occur early in our fiscal year. The assumptions used in the Black-Scholes option-pricing model are as follows:

	2011			2010			2009
Dividend yield		0.0	%		0.0	%		0.0	%
Expected stock price volatility		46.0	%		45.0	%		55.0	%
Risk-free interest rate		2.6	%		2.6	%		1.8	%
Expected option life		6 years			6 years			5 years

Expected volatility was based on a combination of historical and implied volatilities. The risk-free interest rate was based on United States Treasury zero coupon issues with a remaining term equal to the expected option life assumed at the date of grant. The expected term was calculated based on historical experience and represents the time period options actually remain outstanding. We estimate forfeitures based on historical pre-vesting forfeiture rates and revise those estimates as appropriate to reflect actual experience.

Stock options activity and information about stock options outstanding are summarized in the following tables:

Stock Options Activity	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value1
						(years)		(in thousands)
Outstanding at January 1, 2011		6,160,893		$	28.14		6.62	$	118,283
Granted		522,870		$	45.66
Exercised		(865,396	)	$	22.37
Canceled		(146,709	)	$	28.64
Outstanding at December 31, 2011		5,671,658		$	30.62		6.15	$	21,887
Vested and expected to vest at December 31, 2011		5,405,693		$	30.73		6.06	$	20,812
Options Exercisable at December 31, 2011		3,209,850		$	35.12		4.96	$	7,349

¹  The intrinsic value represents the amount by which the fair value of stock exceeds the option exercise price as of December 31, 2011.

The weighted-average estimated fair value of stock options granted was $21.39, $11.69 and $3.68 during the years ended December 31, 2011, 2010 and 2009, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2011, 2010 and 2009 was $17.3 million, $26.9 million and $0.5 million, respectively. As of December 31, 2011, there was approximately $6.9 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock options granted under our stock incentive plans which is expected to be recognized over a weighted-average period of 0.9 years.

F-21

Restricted stock units are converted into shares of common stock upon vesting on a one-for-one basis. The cost of these awards is determined using the fair value of our common stock on the date of the grant, and compensation expense is recognized over the vesting period. Restricted stock activity is summarized in the following table:

Restricted Stock Activity	Number of Awards			Weighted- Average Grant Date Fair Value
Non-vested share units at January 1, 2011		1,631,850		$	18.43
Granted		349,226		$	45.67
Vested		(572,375	)	$	41.14
Canceled		(36,476	)	$	26.85
Non-vested share units expected to vest as of December 31, 2011		1,372,225		$	15.67

The weighted-average estimated fair value of restricted stock units granted during the year ended December 31, 2010, and 2009 were $25.32 and $7.68, respectively. The total fair value of shares released on the vesting of restricted stock units during the years ended December 31, 2011, 2010 and 2009 was $25.1 million, $12.0 million and $2.5 million, respectively. As of December 31, 2011, we had $8.5 million of total unrecognized compensation expense, net of estimated forfeitures, related to restricted stock unit grants, which will be recognized over the weighted-average period of 1.0 years.

Note 10. Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Year Ended December 31,
	2011		2010		2009
Net income for basic and diluted earnings per share	$	607,421	$	515,653	$	152,485
Weighted-average common shares outstanding		216,983		215,026		213,809
Dilutive effect of stock options and restricted stock awards		2,246		2,685		1,486
Diluted weighted-average shares outstanding		219,229		217,711		215,295
Basic earnings per share:
Net income	$	2.80	$	2.40	$	0.71
Diluted earnings per share:
Net income	$	2.77	$	2.37	$	0.71

Diluted earnings per share did not include options to purchase 2.8 million, 2.6 million and 5.0 million shares for each of the years ended December 31, 2011, 2010 and 2009, respectively, because the effect of including them would have been antidilutive.

Note 11. Retirement Plan

We maintain a defined contribution pension plan covering full-time shoreside employees who have completed the minimum period of continuous service. Annual contributions to the plan are based on fixed percentages of participants’ salaries and years of service, not to exceed certain maximums. Pension expenses were $15.3 million, $13.3 million and $13.6 million for the years ended December 31, 2011, 2010 and 2009, respectively.

F-22

Note 12. Income Taxes

We and the majority of our subsidiaries are currently exempt from United States corporate tax on United States source income from the international operation of ships pursuant to Section 883 of the Internal Revenue Code. Regulations under Section 883 have limited the activities that are considered the international operation of a ship or incidental thereto. Accordingly, our provision for United States federal and state income taxes includes taxes on certain activities not considered incidental to the international operation of our ships.

Additionally, some of our ship-operating subsidiaries are subject to income tax under the tonnage tax regimes of Malta or the United Kingdom. Under these regimes, income from qualifying activities is not subject to corporate income tax. Instead, these subsidiaries are subject to a tonnage tax computed by reference to the tonnage of the ship or ships registered under the relevant provisions of the tax regimes. Income from activities not considered qualifying activities, which we do not consider significant, remains subject to Maltese or United Kingdom corporate income tax.

Income tax (expense) benefit for items not qualifying under Section 883 or under tonnage tax regimes and for the remainder of our subsidiaries was approximately $(20.7) million, $(20.3) million and $5.1 million and was recorded within other income (expense) for the years ended December 31, 2011, 2010 and 2009, respectively. In addition, all interest expense and penalties related to income tax liabilities are classified as income tax expense within other income (expense). During 2009, we recorded an out of period adjustment of approximately $12.3 million to correct an error in the calculation of our deferred tax liability. This correction resulted in the reduction of the deferred tax liability to reflect a change in the enacted Spanish statutory tax rate used to calculate the liability in 2006 which was identified during 2009.

We do not expect to incur income taxes on future distributions of undistributed earnings of foreign subsidiaries. Consequently, no deferred income taxes have been provided for the distribution of these earnings.

Deferred tax assets and liabilities related to our U.S. taxable activities are not material as of December 31, 2011 and 2010. Deferred tax assets and liabilities related to our non-U.S. taxable activities are primarily a result of Pullmantur’s operations. As of December 31, 2011 and 2010, Pullmantur had deferred tax assets of €25.9 million and €26.6 million, or $33.6 million and $35.6 million, respectively, resulting primarily from net operating losses which will expire in years 2024 through 2027. Total losses available for carry forwards as of December 31, 2011 and 2010 are $111.4 million and $118.8 million, respectively.

We regularly review deferred tax assets for recoverability based on our history of earnings, expectations for future earnings, and tax planning strategies. As of December 31, 2011, we believe it is more likely than not that we will recover Pullmantur’s deferred tax assets based on our expectation of future earnings and implementation of tax planning strategies. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income to support the amount of deferred taxes. European economies continue to demonstrate instability in light of heightened concerns over sovereign debt issues as well as the impact that proposed austerity measures will have on certain markets. The Spanish economy has been more severely impacted than many other economies around the world where we operate and there is significant uncertainty as to whether or when it will recover. In addition, the recent Costa Concordia incident is having a near term negative impact on our earnings in 2012 while the impact in future years is uncertain. If the Spanish economy weakens further or recovers more slowly than contemplated in our discounted cash flow model, if there are relatively modest changes to our projected future cash flows used in the impairment analyses, especially in Net Yields, or if certain transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible we may need to establish a valuation allowance for a portion or all of the deferred tax asset balance if future earnings do not meet expectations or we are unable to successfully implement our tax planning strategies.

F-23

Note 13. Fair Value Measurements and Derivative Instruments

Fair Value Measurements

We use quoted prices in active markets when available to estimate the fair value of our financial instruments. The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis are as follows (in thousands):

	At December  31, 2011		At December  31, 2010
Long-term debt (including current portion of long-term debt)	$	8,617,176	$	8,775,875

Long-Term Debt

The fair values of our senior notes and senior debentures were estimated by obtaining quoted market prices. The fair values of all other debt were estimated using the present value of expected future cash flows which incorporates our risk profile.

Other Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at December 31, 2011 and December 31, 2010.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at December 31, 2011 Using								Fair Value Measurements at December 31, 2010 Using
Description	Total		Level 11		Level 22		Level 33		Total		Level 11		Level 22		Level 33
Assets:
Derivative financial instruments4	$	201,130		—		201,130		—	$	195,944		—		195,944		—
Investments5	$	6,941		6,941		—		—	$	7,974		7,974		—		—
Total Assets	$	208,071	$	6,941	$	201,130	$	—	$	203,918	$	7,974	$	195,944	$	—
Liabilities:
Derivative financial instruments6	$	84,344		—		84,344		—	$	88,491		—		88,491		—
Total Liabilities	$	84,344	$	—	$	84,344	$	—	$	88,491	$	—	$	88,491	$	—

^1.  Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

^2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate, cross currency and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms such as maturity, as well as other inputs such as exchange rates, fuel types, fuel curves, interest rate yield curves, creditworthiness of the counterparty and the Company.For fuel call options, fair value is estimated by using the prevailing market price for the instruments consisting of published price quotes for similar assets based on recent transactions in an active market.

^3.  Inputs that are unobservable for the asset or liability. The Company did not use any Level 3 inputs as of December 31, 2011 and December 31, 2010.

^4.  Consists of foreign currency forward contracts, interest rate, cross currency, fuel swaps and fuel call options. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

F-24

^5.  Consists of exchange-traded equity securities and mutual funds.

^6.  Consists of interest rate and fuel swaps and foreign currency forward contracts. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

We do not have financial instruments measured at fair value within the third level of the fair value hierarchy as of December 31, 2011. During the fourth quarter of 2010, we changed our valuation technique for fuel call options to a market approach method which employs inputs that are observable. The fair value for fuel call options is estimated by using the prevailing market price for the instruments consisting of published price quotes for similar assets based on recent transactions in an active market. We believe that Level 2 categorization is appropriate due to an increase in the observability and transparency of significant inputs. Previously, we derived the fair value of our fuel call options using standard option pricing models with inputs based on the options’ contract terms and data either readily available or formulated from public market information. We previously categorized the fuel call options as Level 3, because certain inputs, principally volatility, were unobservable.

The following table presents a reconciliation of the Company’s fuel call options’ beginning and ending balances as of December 31, 2010 (in thousands):

Year Ended December 31, 2010	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fuel Call Options
Balance at January 1, 2010	$	9,998
Total gains or losses (realized /unrealized)
Included in other (expense) income		(2,824	)
Purchases		24,539
Transfers in and/or out of Level 3		(31,713	)
Balance at December 31, 2010	$	—
The amount of total gains or losses for the period included in other (expense) income attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	(2,824	)

The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of December 31, 2011 or December 31, 2010, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

Derivative Instruments

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We manage these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the amount, term and conditions of the derivative instrument with the underlying risk being hedged. We do not hold or issue derivative financial instruments for trading or other speculative purposes. We monitor our derivative positions using techniques including market valuations and sensitivity analyses.

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments.

F-25

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in foreign operations and investments are recognized as a component of accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation.

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e. interest rate, foreign currency and fuel). We perform regression analyses over an observation period commensurate with the contractual life of the derivative instrument, up to three years for interest rate and foreign currency relationships and four years for fuel relationships. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. The determination of ineffectiveness is based on the amount of dollar offset between the change in fair value of the derivative instrument and the change in fair value of the hedged item at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is recognized in earnings immediately and reported in other income (expense) in our consolidated statements of operations.

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments. At December 31, 2011, approximately 40% of our long-term debt was effectively fixed and approximately 60% was floating as compared to 49% and 51% as of December 31, 2010, respectively. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense. We manage the risk that changes in interest rates will have either on the fair value of debt obligations or on the amount of future interest payments by monitoring changes in interest rate exposures and by evaluating hedging opportunities.

Market risk associated with our long-term fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At December 31, 2011 and 2010, we maintained interest rate swap agreements that effectively changed $350.0 million of debt with a fixed rate of 7.25% to LIBOR-based floating rate debt plus a margin of 1.72%, for an interest rate that was approximately

F-26

2.49% as of December 31, 2011. Additionally, during 2011, we entered into interest rate swap agreements on the $420.0 million fixed rate portion of our Oasis of the Seas unsecured amortizing term loan. The interest rate swap agreements effectively changed the unamortized balance of the unsecured term loan, which was $350.0 million at inception of the hedge, with a fixed rate of 5.41% to LIBOR-based floating rate equal to LIBOR plus 3.87%, currently approximately 4.48%. These interest rate swap agreements are accounted for as fair value hedges.

Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. During 2011, we entered into forward-starting interest rate swap agreements that beginning April 2013 effectively convert the interest rate on the Celebrity Reflection unsecured amortizing term loan balance for approximately $627.2 million from LIBOR plus 0.40% to a fixed-rate of 2.85% (inclusive of margin). These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of outstanding debt and on our current financing arrangements related to interest rate swaps as of December 31, 2011 and 2010 was $1.3 billion and $350.0 million, respectively.

Foreign Currency Exchange Rate Risk

Derivative Instruments

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in euros and our growing international business operations. We enter into foreign currency forward contracts and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates. Approximately 43.3% and 2.2% of the aggregate cost of the ships under construction was exposed to fluctuations in the euro exchange rate at December 31, 2011 and December 31, 2010, respectively. The majority of our foreign exchange contracts and our cross currency swap agreements are accounted for as cash flow or fair value hedges depending on the designation of the related hedge.

During 2011, we implemented a strategy for benefiting from anticipated weakness in the euro exchange rate. As part of that strategy we terminated our foreign currency forward contracts for Project Sunshine to allow the exchange rate to float within a predetermined range, essentially creating a floor and a ceiling around our exposure to the euro denominated cost of the vessel. We may adjust the range over time as we feel appropriate. We effected the termination of a portion of the contracts by entering into offsetting foreign currency forward contracts. Neither the original nor the offsetting foreign currency forward contracts are designated as hedging instruments. As a result, subsequent changes in the fair value of the original and offsetting foreign currency forward contracts are recognized in earnings immediately and are reported within other income (expense) in our consolidated statement of operations. We paid $8.7 million to terminate the remaining contracts and deferred a loss of $19.7 million within accumulated other comprehensive income (loss) which we will recognize within depreciation expense over the estimated useful life of the Project Sunshine ship.

At December 31, 2011, we maintained cross currency swap agreements that effectively change €150.0 million of our €1.0 billion debt with a fixed rate of 5.625% to $190.9 million of debt at a fixed rate of 6.68%. Consistent with our strategy for benefiting from anticipated weakness in the euro exchange rate and to further increase the portion of our €1.0 billion debt that we utilize as a net investment hedge of our euro denominated investments in foreign operations, during 2011, we terminated €250.0 million of our cross currency swap agreements. Upon termination of these cross currency swaps, we received net cash proceeds of approximately $12.2 million and we deferred a loss of $3.5 million within accumulated other comprehensive income (loss) which we will recognize within Interest expense, net of capitalized interest over the remaining life of the debt.

During 2011, we entered into foreign currency forward contracts to minimize volatility in earnings resulting from the remeasurement of net monetary assets and payables denominated in a currency other than

F-27

the United States dollar. On a weekly basis, we enter into an average of approximately $262.0 million of these foreign currency forward contracts. These instruments generally settle on a weekly basis and are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts are recognized in earnings within other income (expense) in our consolidated statements of operations.

The notional amount of outstanding foreign exchange contracts including our cross currency swap agreements as of December 31, 2011 and 2010 was $0.9 billion and $2.5 billion, respectively.

Non-Derivative Instruments

We consider our investments in our foreign operations to be denominated in relatively stable currencies and of a long-term nature. We partially address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies. As of December 31, 2011 and 2010, we have assigned debt of approximately €665.0 million and €469.3 million, or approximately $863.2 million and $628.2 million, respectively, as a hedge of our net investment in Pullmantur and TUI Cruises.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements and fuel call options to mitigate the financial impact of fluctuations in fuel prices.

Our fuel swap agreements are accounted for as cash flow hedges. At December 31, 2011, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2015. As of December 31, 2011 and 2010, we have entered into the following fuel swap agreements:

	Fuel Swap Agreements
	As of December 31, 2011			As of December 31, 2010
	(metric tons)
2011		—			766,000
2012		738,000			738,000
2013		644,000			300,000
2014		418,000			—
2015		284,000			—
	Fuel Swap Agreements
Projected fuel purchases for year:	As of December 31, 2011			As of December 31, 2010
	(% hedged)
2011		0	%		58	%
2012		55	%		55	%
2013		47	%		22	%
2014		30	%		—
2015		20	%		—

At December 31, 2011 and 2010, $78.5 million and $83.6 million, respectively, of estimated unrealized net gains associated with our cash flow hedges pertaining to fuel swap agreements were expected to be reclassified to earnings from other accumulated comprehensive (loss) income within the next twelve months. Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.

F-28

Additionally, as of December 31, 2011 and 2010, we have entered into fuel call options on a total of 1.0 million barrels of fuel oil which mature in 2013, and 6.6 million barrels, maturing between 2011 and 2013, respectively, in order to provide protection in the event fuel prices exceed the options’ exercise prices. Our fuel call options are not designated as hedging instruments. As a result, changes in the fair value of our fuel call options are recognized in earnings immediately and are reported in other income (expense) in our consolidated statements of operations. During 2011, we terminated 100% of our fuel call options maturing in 2011 and 2012 in order to monetize previously recorded gains pertaining to the fuel call options’ fair value prior to their expiration. Upon termination of these options, we recognized a gain of approximately $7.3 million and received net cash proceeds of approximately $34.3 million which were reflected as cash flows from investing activities. We accounted for the settlement of these fuel call options by recording the cash received and removing the fair value of the instrument from our balance sheet. As of December 31, 2011, the fuel call options represented 9% of our projected 2013 fuel requirements. As of December 31, 2010, the fuel call options represented 41% of our projected 2011 fuel requirements, 25% of our projected 2012 fuel requirements and 11% of our projected 2013 fuel requirements.

The fair value and line item caption of derivative instruments recorded were as follows:

Fair Value of Derivative Instruments

	Asset Derivatives					Liability Derivatives
		As of December 31, 2011		As of December 31, 2010			As of December 31, 2011		As of December 31, 2010
	Balance Sheet Location	Fair Value		Fair Value		Balance Sheet Location	Fair Value		Fair Value
In thousands
Derivatives designated as hedging instruments under ASC 815-201
Interest rate swaps	Other Assets	$	65,531	$	56,497	Other long- term liabilities	$	11,369	$	—
Cross currency swaps	Other Assets		2,914		13,017	Other long- term liabilities		—		—
Foreign currency forward contracts	Derivative Financial Instruments		1,895		—	Accrued expenses and other liabilities		31,775		68,374
Foreign currency forward contracts	Other Assets		—		8,058	Other long- term liabilities		—		19,630
Fuel swaps	Derivative Financial Instruments		82,747		49,297	Accrued expenses and other liabilities		—		—
Fuel swaps	Other Assets		26,258		37,362	Other long- term liabilities		29,213		487
Total derivatives designated as hedging instruments under 815-20		$	179,345	$	164,231		$	72,357	$	88,491
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Other Assets	$	5,414	$	—	Other long- term liabilities	$	11,987	$	—
Fuel call options	Derivative Financial Instruments		—		7,194	Accrued expenses and other liabilities		—		—
Fuel call options	Other Assets		16,371		24,519	Other long- term liabilities		—		—
Total derivatives not designated as hedging instruments under 815-20		$	21,785	$	31,713		$	11,987	$	—
Total derivatives		$	201,130	$	195,944		$	84,344	$	88,491

¹ Accounting Standard Codification 815-20 “Derivatives and Hedging”.

F-29

The fair value and line item caption of non-derivative instruments recorded was as follows:

Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	Carrying Value
		As of December 31, 2011		As of December 31, 2010
In thousands
Foreign currency debt	Long-term debt	$	863,217	$	628,172
		$	863,217	$	628,172

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statement of operations was as follows:

Derivatives and related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of  Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative					Amount of Gain (Loss) Recognized in Income on Hedged Item
		Year Ended December 31, 2011		Year Ended December 31, 2010			Year Ended December 31, 2011			Year Ended December 31, 2010
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	18,278	$	32,340		$	31,045		$	20,443
Cross currency swaps	Interest expense, net of interest capitalized		—		987			—			—
Interest rate swaps	Other income (expense)		7,817		22,929			(7,223	)		(21,383	)
Cross currency swaps	Other income (expense)		—		(42,284	)		—			47,715
Foreign currency forward contracts	Other income (expense)		22,901		(62,520	)		(23,720	)		63,026
		$	48,996	$	(48,548	)	$	102		$	109,801

F-30

The effect of derivative instruments qualifying and designated as hedging instruments in cash flow hedges on the consolidated financial statements was as follows:

Derivatives under ASC 815- 20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)						Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)					Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing)
	Year Ended December 31, 2011			Year Ended December 31, 2010				Year Ended December 31, 2011			Year Ended December 31, 2010			Year Ended December 31, 2011			Year Ended December 31, 2010
In thousands
Cross currency swaps		(6,013	)		13,016		Other income (expense)		(15,011	)		26,360	Other income (expense)		—			—
Interest rate swaps		(10,131	)		—		Other income (expense)		—			—	Other income (expense)		(21	)		—
Foreign currency forward contracts		(22,263	)		(83,601	)	Depreciation and amortization expenses		(734	)		227	Other income (expense)		(1,015	)		207
Foreign currency forward contracts		(12,375	)		(21,021	)	Other income (expense)		(285	)		1,051	Other income (expense)		—			—
Fuel swaps		121,262			36,729		Fuel		162,616			40,665	Other income (expense)		7,086			7,779
	$	70,480		$	(54,877	)		$	146,586		$	68,303		$	6,050		$	7,986

The effect of non-derivative instruments qualifying and designated as hedging instruments in net investment hedges on the consolidated financial statements was as follows:

Non-derivative instruments under ASC 815-20 Net Investment Hedging Relationships	Amount of Gain  (Loss) Recognized in OCI (Effective Portion)				Location of Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Year Ended December 31, 2011		Year Ended December 31, 2010			Year Ended December 31, 2011		Year Ended December 31, 2010
In thousands
Foreign Currency Debt	$	13,241	$	49,727	Other income (expense)	$	—	$	—
	$	13,241	$	49,727		$	—	$	—

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows:

Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income  on Derivative
		Year Ended December 31, 2011		Year Ended December 31, 2010
In thousands
Foreign exchange contracts	Other income (expense)	$	4,633	$	(50	)
Fuel call options	Other income (expense)		18,915		(2,824	)
		$	23,548	$	(2,874	)

F-31

Credit Related Contingent Features

Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings remain below specified levels. Specifically, if on the fifth anniversary of entering into a derivative transaction and on all succeeding fifth-year anniversaries our credit ratings for our senior unsecured debt were to be below BBB- by Standard & Poor’s and Baa3 by Moody’s, then each counterparty to such derivative transaction with whom we are in a net liability position that exceeds the applicable minimum call amount may demand that we post collateral in an amount equal to the net liability position. The amount of collateral required to be posted following such event will change each time our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior debt is subsequently equal to, or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. Currently, our senior unsecured debt credit rating is BB with a stable outlook by Standard & Poor’s and Ba2 with a stable outlook by Moody’s. We currently have three interest rate derivative transactions that have a term of at least five years. One of these transactions will reach its fifth anniversary in July 2012. All of the instruments relating to this transaction are in a net asset position as of December 31, 2011. Therefore, as of December 31, 2011, we are not required to post collateral for any of our derivative instruments.

Note 14. Commitments and Contingencies

Capital Expenditures

Our future capital commitments consist primarily of new ship orders. As of December 31, 2011, we had Celebrity Reflection and one Project Sunshine ship under construction for an aggregate additional capacity of approximately 7,100 berths.

As of December 31, 2011, the aggregate cost of the two ships currently under construction including amounts due to the shipyard and other ship related costs was approximately $2.0 billion, of which we had deposited $185.8 million as of such date. Approximately 43.3% of the aggregate cost of these two ships was exposed to fluctuations in the euro exchange rate at December 31, 2011. These amounts do not include any costs associated with the construction agreement entered into by TUI Cruises to build its first newbuild ship. (See Note 13. Fair Value Measurements and Derivative Instruments).

We have committed bank financing arrangements for Celebrity Reflection and our two Project Sunshine ships, each of which include sovereign financing guarantees.

Litigation

Between August 1, 2011 and September 8, 2011, three similar purported class action lawsuits were filed against us and certain of our officers in the U.S. District Court of the Southern District of Florida. The cases have since been consolidated and a consolidated amended complaint was filed on February 17, 2012. The consolidated amended complaint was filed on behalf of a purported class of purchasers of our common stock during the period from October 26, 2010 through July 27, 2011 and names the Company, our Chairman and CEO, our CFO and the Presidents and CEOs of our Royal Caribbean International and Celebrity Cruises brands as defendants. The consolidated amended complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 as well as, in the case of the individual defendants, the control person provisions of the Securities Exchange Act. The complaint principally alleges that the defendants knowingly made incorrect statements concerning the Company’s outlook for 2011 by not taking into proper account lagging European and Mediterranean bookings. The consolidated amended complaint seeks unspecified damages, interest, and attorneys’ fees. We believe the claims are without merit and we intend to vigorously defend ourselves against them.

F-32

A class action complaint was filed in June 2011 against Royal Caribbean Cruises Ltd. in the United States District Court for the Southern District of Florida on behalf of a purported class of stateroom attendants employed onboard Royal Caribbean International cruise vessels alleging that they were required to pay other crew members to help with their duties in violation of the U.S. Seaman’s Wage Act. The lawsuit also alleges that certain stateroom attendants were required to work back of house assignments without the ability to earn gratuities in violation of the U.S. Seaman’s Wage Act. Plaintiffs seek judgment for damages, wage penalties and interest in an indeterminate amount. We have filed a Motion to Dismiss the Complaint on the basis that the applicable collective bargaining agreement requires any such claims to be arbitrated. We believe we have meritorious defenses to the lawsuit which we intend to vigorously pursue.

We commenced an action in June 2010 in the United States District Court for Puerto Rico seeking a declaratory judgment that Puerto Rico’s distributorship laws do not apply to our relationship with an international representative located in Puerto Rico. In September 2010, that international representative filed a number of counterclaims against Royal Caribbean Cruises Ltd. and Celebrity Cruises Inc. alleging violations of Puerto Rico’s distributorship laws, bad faith breach of contract, tortious interference with contract, violations of various federal and state antitrust and unfair competition laws. The international representative is seeking in excess of $40.0 million on each of these counterclaims together with treble damages in the amount of $120.0 million on several of the counterclaims as well as injunctive relief and declaratory judgment. We believe that the claims made against us are without merit and we intend to vigorously defend ourselves against them.

In January 2010, we reached a settlement with Rolls Royce in our lawsuit that was pending in the Circuit Court for Miami-Dade County, Florida against Rolls Royce for the recurring Mermaid pod failures. As part of the settlement, each party dismissed the lawsuit with prejudice and released the other from all claims and counterclaims made by each party against the other. Under the terms of the settlement, we received a payment in the first quarter of 2010 of approximately $68.0 million, net of costs and payments to insurers, and will receive an additional $20.0 million that will be payable within five years. We recorded a one-time gain of approximately $85.6 million in the first quarter of 2010 in connection with this settlement, comprised of the $68.0 million payment and the net present value of the $20.0 million receivable or $17.6 million. This amount was recognized within other income (expense) in our consolidated financial statements.

We are routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

Operating Leases

In July 2002, we entered into an operating lease denominated in British pound sterling for the Brilliance of the Seas. The lease payments vary based on sterling LIBOR. The lease has a contractual life of 25 years; however, both the lessor and we have certain rights to cancel the lease at years 10 (i.e. 2012) and 18 (i.e. 2020) upon advance notice given approximately one year prior to cancellation. Accordingly, at the inception of the lease, the lease term for accounting purposes was established to be 10 years. In June 2011, the lessor advised us that it would not exercise its right to cancel the lease in 2012 and we subsequently made a determination that we will not exercise our right to cancel the lease in 2012. As a result, we performed a lease classification analysis and concluded that the lease should continue to be classified as an operating lease. In the event of early termination at year 18, we have the option to cause the sale of the vessel at its fair value and to use the proceeds towards the applicable termination payment. Alternatively, we could opt at such time to make a termination payment of approximately £66.8 million, or approximately $103.8 million based on the exchange rate at December 31, 2011 and relinquish our right to cause the sale of the vessel. This is analogous to a guaranteed residual value. This termination amount, which is our maximum exposure, has been included in the table below for noncancelable operating leases. Under current circumstances we do not believe early termination of this lease is probable.

F-33

Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable determinations which may be made by United Kingdom tax authorities. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances, timing or a combination of events that could trigger such indemnifications. We have been advised by the lessor that the United Kingdom tax authorities are disputing the lessor’s accounting treatment of the lease and that the parties are in discussions on the matter. If the characterization of the lease is ultimately determined to be incorrect, we could be required to indemnify the lessor under certain circumstances. The lessor has advised us that they believe their characterization of the lease is correct. Based on the foregoing and our review of available information, we do not believe an indemnification payment is probable. However, if the lessor loses its dispute and we are required to indemnify the lessor, we cannot at this time predict the impact that such an occurrence would have on our financial condition and results of operations.

In addition, we are obligated under other noncancelable operating leases primarily for offices, warehouses and motor vehicles. As of December 31, 2011, future minimum lease payments under noncancelable operating leases were as follows (in thousands):

Year
2012	$	65,435
2013		62,881
2014		57,264
2015		56,210
2016		54,937
Thereafter		386,394
	$	683,121

Total expense for all operating leases amounted to $60.2 million, $50.8 million and $54.2 million for the years 2011, 2010 and 2009, respectively.

Other

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable.

If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 30% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

F-34

At December 31, 2011, we have future commitments to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts as follows (in thousands):

Year
2012	$	195,680
2013		159,602
2014		93,013
2015		86,145
2016		54,595
Thereafter		157,737
	$	746,772

Note 15. Subsequent Events

In February 2012, we entered into an agreement to bareboat charter our ship Ocean Dream to an unrelated party for a period of six years from the transfer date. The charter agreement provides a renewal option exercisable by the unrelated party for an additional four years. The charter agreement constitutes an operating lease and charter revenue will be recognized on a straight-line basis over the six year charter term. We anticipate delivery of Ocean Dream will take place in April 2012.

In February 2012, we exercised our option under the agreement with Meyer Werft to construct a second Project Sunshine ship with approximately 4,100 berths which is expected to enter service in the second quarter of 2015. Including this recently ordered ship, the aggregate cost of our ships on order is approximately $2.8 billion.

F-35

Note 16. Quarterly Selected Financial Data (Unaudited)

	(In thousands, except per share data)
	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	2011		2010		2011		2010		2011		2010		2011		2010
Total revenues1	$	1,671,995	$	1,485,650	$	1,767,873	$	1,601,697	$	2,321,994	$	2,060,659	$	1,775,401	$	1,604,498
Operating income	$	149,534	$	91,752	$	168,190	$	143,684	$	507,742	$	445,502	$	106,162	$	121,695
Net income2,3	$	78,410	$	79,843	$	93,491	$	53,731	$	398,958	$	350,179	$	36,562	$	31,900
Earnings per share:
Basic3	$	0.36	$	0.37	$	0.43	$	0.25	$	1.84	$	1.63	$	0.17	$	0.15
Diluted3	$	0.36	$	0.37	$	0.43	$	0.25	$	1.82	$	1.61	$	0.17	$	0.15
Dividends declared per share	$	—	$	—	$	—	$	—	$	0.10	$	—	$	0.10	$	—

¹ Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays.

²  The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

³ Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company’s Consolidated Statements of Operations for these respective periods.

The following tables present the effects of the revision on the Company’s Consolidated Statements of Operations for the periods noted above. (See Note 1. General – Revision of Prior Period Financial Statements for further details.)

	Quarter Ended March 31, 2011									Quarter Ended March 31, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(87,483	)	$	(13,142	)	$	(100,625	)	$	(83,924	)	$	(7,604	)	$	(91,528	)
Total other expense		(57,982	)		(13,142	)		(71,124	)		(4,305	)		(7,604	)		(11,909	)
Net Income		91,552			(13,142	)		78,410			87,447			(7,604	)		79,843
Earnings per Share:
Basic	$	0.42		$	(0.06	)	$	0.36		$	0.41		$	(0.04	)	$	0.37
Diluted	$	0.42		$	(0.06	)	$	0.36		$	0.40		$	(0.04	)	$	0.37

	Quarter Ended June 30, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(83,846	)	$	(6,815	)	$	(90,661	)
Total other expense		(83,138	)		(6,815	)		(89,953	)
Net Income		60,546			(6,815	)		53,731
Earnings per Share:
Basic	$	0.28		$	(0.03	)	$	0.25
Diluted	$	0.28		$	(0.03	)	$	0.25

F-36

	Quarter Ended September 30, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(82,494	)	$	(6,588	)	$	(89,082	)
Total other expense		(88,735	)		(6,588	)		(95,323	)
Net Income		356,767			(6,588	)		350,179
Earnings per Share:
Basic	$	1.66		$	(0.03	)	$	1.63
Diluted	$	1.64		$	(0.03	)	$	1.61

	Quarter Ended December 31, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(89,129	)	$	(10,807	)	$	(99,936	)
Total other expense		(78,988	)		(10,807	)		(89,795	)
Net Income (Loss)		42,707			(10,807	)		31,900
Earnings (Loss) per Share:
Basic	$	0.20		$	(0.05	)	$	0.15
Diluted	$	0.20		$	(0.05	)	$	0.15

F-37

EX-10.4

Exhibit 10.4

EXECUTION COPY

ASSIGNMENT AND AMENDMENT DEED TO HULL NO. S-677 CREDIT AGREEMENT

This ASSIGNMENT AND AMENDMENT DEED TO HULL NO. S-677 CREDIT AGREEMENT (this “Deed”), dated February 17, 2012, is among CELEBRITY ECLIPSE INC., a Liberian corporation (the “Existing Borrower), ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation (the “New Borrower) and KFW IPEX-BANK GMBH in its capacity as agent for Hermes (in such capacity, the “Hermes Agent”), in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and in its capacity as lender (in such capacity, the “Lender”).

PRELIMINARY STATEMENTS

(1)           The Existing Borrower, the Lender, the Hermes Agent and the Administrative Agent are parties to a Hull No. S-677 Credit Agreement dated as of November 26, 2009 (such Hull No. S-677 Credit Agreement as in effect immediately prior to giving effect to this Deed, the “Existing Credit Agreement” and as amended hereby, the “Restated Credit Agreement”);

(2)           The Existing Borrower has agreed to assign to the New Borrower all of its rights and transfer by way of novation of all of its obligations under the Existing Credit Agreement, and the New Borrower has agreed to accept the assignment of all of the Existing Borrower’s rights under the Existing Credit Agreement, and to assume all of the obligations of the Existing Borrower under the Existing Credit Agreement; and

(3)           The New Borrower, the Lender and the Administrative Agent have agreed to amend the Existing Credit Agreement as hereinafter set forth herein.

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1.  Assignments.  (a)  Subject to the satisfaction of the conditions set forth in Section 4 of this Deed and effective as of the Restatement Effective Date:

(i) the Existing Borrower hereby assigns, novates, transfers and conveys to the New Borrower all of its rights and obligations under the Existing Credit Agreement (the “Assignment”).

(ii) The New Borrower hereby accepts the Assignment and assumes all of the obligations of the Existing Borrower under the Existing Credit Agreement to the same extent as if the New Borrower had executed the Existing Credit Agreement (the “Assumption”).  The New Borrower hereby agrees to be bound by the terms and provisions of the Existing Credit Agreement as the “Borrower” thereunder and accepts all of the Existing Borrower’s rights and obligations thereunder.

(b)           Upon the execution and delivery hereof by the Existing Borrower, the New Borrower, the Hermes Agent, the Administrative Agent and the Lender accept and agree to the arrangements referred to in (a) above and agree that (i) the New Borrower shall, as of the Restatement Effective Date, succeed to the rights and be obligated to perform the obligations of the Existing Borrower under the Existing Credit Agreement and (ii) the Existing Borrower shall, as of the Restatement Effective Date, be released from its obligations under the Existing Credit Agreement.

BD-#15162448-v2 

SECTION 2.                      Termination and Release of Guarantee.  In consideration of the Assignment and the Assumption, subject to the satisfaction of the conditions set forth in Section 4 of this Deed and effective as of the Restatement Effective Date, the Guarantee in favour of the Lender issued on March 19, 2010 by the New Borrower, in its capacity as Guarantor (as defined under the Existing Credit  Agreement), is hereby terminated in its entirety and the New Borrower is forever released and discharged from its obligations under the Guarantee.

SECTION 3.  Amendment to the Existing Credit Agreement.  In consideration of the mutual covenants in this Deed, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the New Borrower, the Hermes Agent, the Administrative Agent and the Lender agree that the Existing Credit Agreement is, immediately after giving effect to the Assignment and the Assumption and subject to the satisfaction of the conditions precedent set forth in Section 4, hereby amended on the Restatement Effective Date in its entirety to read as set forth in Appendix I hereto.

SECTION 4.  Conditions of Effectiveness of Restated Credit Agreement and Assignment and Assumption.  The transactions contemplated by Sections 1 and 2 of this Deed and the Restated Credit Agreement shall become effective in accordance with the terms of this Deed on the date (the “Restatement Effective Date”) each of the following conditions has been satisfied to the reasonable satisfaction of the Administrative Agent:

(a)           This Deed shall have become effective in accordance with Section 5 and the Administrative Agent shall have received duly executed original signature pages to this Deed from each party hereto.

(b)           The Administrative Agent shall have received from the New Borrower:

(i)           a certificate dated no earlier than the signing date of this Deed of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Deed and as to the truth and completeness of the attached:

(x)           resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Deed and each other Loan Document, and

(y)            Organic Documents of the New Borrower,

and upon which certificate the Lender may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the New Borrower canceling or amending such prior certificate; and

(ii)           a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the New Borrower;

(c)           The Administrative Agent shall have received from the Existing Borrower:

(i)           a certificate dated no earlier than the signing date of this Deed of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Deed and as to the truth and completeness of the attached:

(x)            resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Deed and each other Loan Document, and

(y)           Organic Documents of the Existing Borrower,

and upon which certificate the Lender may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the Existing Borrower canceling or amending such prior certificate; and

(ii)           a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Existing Borrower;

(d)           The Administrative Agent shall have received opinions, addressed to the Administrative Agent and the Lender from:

(i)            Watson, Farley & Williams (New York) LLP, counsel to the New Borrower, as to Liberian Law covering the matters set forth in Exhibit A-1 hereto;

(ii)           Norton Rose LLP, counsel to the Administrative Agent, covering the matters set forth in Exhibit A-2 hereto; and

(iii)            Clifford Chance US LLP, United States tax counsel to the Lenders, covering the matters set forth in Exhibit A-3 hereto.

(e)           The Administrative Agent or the Hermes Agent shall have received to its reasonable satisfaction a duly executed amendment to the Hermes Insurance Policy;

(f)           The Administrative Agent shall have received all invoiced expenses of the Administrative Agent (including the agreed fees and expenses of counsel to the Administrative Agent) required to be paid by the New Borrower pursuant to Section 8 below or that the New Borrower has otherwise agreed in writing to pay to the Administrative Agent, in each case on or prior to the Restatement Effective Date.

(g)           The representations and warranties set forth in Section 6 are true as of the Restatement Effective Date.

The Administrative Agent shall notify the Lender and the New Borrower of the Restatement Effective Date, and such notice shall be conclusive and binding.

SECTION 5.  Conditions of Deed Effectiveness.  This Deed shall become effective as of the date hereof; provided that the Administrative Agent shall have received counterparts of this Deed executed by the Existing Borrower, the New Borrower and the Lender; provided further that the transactions described in Sections 1 and Sections 2 of this Deed shall be deemed to be effective only as of the Restatement Effective Date.

SECTION 6.  Representation and Warranties of the New Borrower. To induce the Lender to enter into this Deed, the New Borrower represents and warrants that, as of the date hereof and as of the Restatement Effective Date:

(a)           The representations and warranties contained in Article VI of the Restated Credit Agreement are true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made, and

(b)           No Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event has occurred and is continuing.

SECTION 7.  Reference to and Effect on the Existing Credit Agreement.  On and after the Restatement Effective Date, each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Existing Credit Agreement, shall mean and be a reference to the Restated Credit Agreement.

SECTION 8.  Costs and Expenses.  The New Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Deed and the other documents to be delivered hereunder (including the reasonable and documented fees and expenses of counsel for the Administrative Agent with respect hereto and thereto as agreed with the Administrative Agent) in accordance with the terms of Section 11.3 of the Restated Credit Agreement.

SECTION 9. Designation. In accordance with the Restated Credit Agreement, the Lender and the Administrative Agent designates this Deed as a Loan Document.

SECTION 10. Third Party Rights. No term of this Deed is enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person who is not party to this Deed.

SECTION 11.  Execution in Counterparts.  This Deed may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Deed by telecopier shall be effective as delivery of a manually executed counterpart of this Deed.

SECTION 12.  Governing Law.  This Deed and any non-contractual obligations arising in connection with it shall be governed by, and construed in accordance with, English law.

SECTION 13.  Incorporation of Terms.  The provisions of Section 11.14.2, 11.14.3 and 11.14.4 of the Restated Credit Agreement shall be incorporated into this Deed as if set out in full in this Deed and as if references in those sections to “this Agreement” were references to this Deed.

SECTION 14.  Defined Terms.  Capitalized terms not otherwise defined in the Deed shall have the same meanings as specified in the Restated Credit Agreement.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, the parties to this Deed have caused this Deed to be duly executed and delivered as of the date first above written.

SIGNED as a Deed by CELEBRITY ECLIPSE INC., as Existing Borrower
By /s/ Antje M. Gibson
	Name: Antje M. Gibson Title: Vice President and Treasurer
In the presence of:
By /s/ Cary Aronovitz
	Name: Cary Aronovitz Title: Holland and Knight, Attorney Address:
SIGNED as a Deed by ROYAL CARIBBEAN CRUISES LTD., as New Borrower
By /s/ Antje M. Gibson
	Name: Antje M. Gibson Title: Vice President and Treasurer
Address: 1050 Caribbean Way Miami, Florida 33132 Facsimile No.:  (305) 539-6400
Email:	agibson@rccl.com
	bstein@rccl.com
Attention:  Vice President and Treasurer With a copy to:  General Counsel
In the presence of:
By /s/ Cary Aronovitz
	Name: Cary Aronovitz Title: Holland and Knight, Attorney Address:

SIGNED as a Deed by KFW IPEX-BANK GMBH, as Hermes Agent, as Administrative Agent and Lender
By	/s/ Claudia Schlipsing Name: Claudia Schlipsing Title: Director	/s/ Claudia Wenzel Name: Claudia Wenzel Title: Assistant Vice President
Address:  Palmengartenstrasse 5-9 D-60325 Frankfurt am Main Germany Facsimile No.:  +49 (69) 7431 3768 Email:            claudia.wenzel@kfw.de Attention:  Shipfinancing Department With a copy to:  Credit Operations Facsimile No.: +49 (69) 7431 2944
In the presence of:
By /s/ Katja Sturm Name: Katja Sturm Title: Analyst Address: KfW IPEX-Bank GmbH Palmengartenstrasse 5-9 60325 Frankfurt am Main

APPENDIX I

EXECUTION COPY

_________________________________________

AMENDED AND RESTATED

HULL NO. S-677 CREDIT AGREEMENT

_________________________________________

dated as of November 26, 2009

and amended and restated on

February 17, 2012

BETWEEN

ROYAL CARIBBEAN CRUISES, LTD.

as the Borrower,

the Lenders from time to time party hereto

and

KFW IPEX-BANK GMBH

as Hermes Agent and Administrative Agent

TABLE OF CONTENTS

		PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1.	Defined Terms	2
SECTION 1.2	Use of Defined Terms	11
SECTION 1.3	Cross-References	11
SECTION 1.4	Accounting and Financial Determinations	11
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES
SECTION 2.1.	Commitment	12
SECTION 2.2.	[RESERVED]	12
SECTION 2.3.	[RESERVED]	12
SECTION 2.4.	Funding	12
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1.	Repayments	12
SECTION 3.2.	Prepayments	12
SECTION 3.3.	Interest Provisions	13
SECTION 3.3.1.	Rates	13
SECTION 3.3.2.	Fixed Rate Periods	13
SECTION 3.3.3.	Post-Maturity Rates	14
SECTION 3.3.4.	Payment Dates	14
SECTION 3.3.5.	Interest Rate Determination; Replacement Reference Banks	14

 i

SECTION 3.4	[RESERVED]	15
SECTION 3.4.1.	[RESERVED]	15
SECTION 3.5.	[RESERVED]	15
ARTICLE IV
SECTION 4.1.	LIBO Rate Lending Unlawful	15
SECTION 4.2.	Deposits Unavailable	15
SECTION 4.3.	Increased LIBO Rate Loan Costs, etc.	16
SECTION 4.4.	Funding Losses	18
SECTION 4.5.	Increased Capital Costs	18
SECTION 4.6.	Taxes	19
SECTION 4.7.	Reserve Costs	21
SECTION 4.8.	Payments, Computations, etc.	22
SECTION 4.9.	Replacement Lenders, etc.	22
SECTION 4.10.	Sharing of Payments	23
SECTION 4.11.	Setoff	23
SECTION 4.12.	Use of Proceeds	24
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1.	Advance of the Loan	24
SECTION 5.2.	Conditions to Effectiveness	24
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1.	Organization, etc.	24
SECTION 6.2.	Due Authorization, Non-Contravention, etc.	24

ii 

SECTION 6.3.	Government Approval, Regulation, etc.	25
SECTION 6.4.	Compliance with Environmental Laws	25
SECTION 6.5	Validity, etc.	25
SECTION 6.6.	No Default, Event of Default or Prepayment Event	25
SECTION 6.7.	Litigation	25
SECTION 6.8	The Purchased Vessel	25
SECTION 6.9.	Obligations rank pari passu	26
SECTION 6.10.	No Filing, etc.	26
SECTION 6.11.	No Immunity	26
SECTION 6.12.	Investment Company Act	26
SECTION 6.13.	Regulation U	26
SECTION 6.14.	Accuracy of Information	26
ARTICLE VII
COVENANTS
SECTION 7.1.	Affirmative Covenants	27
SECTION 7.1.1	Financial Information, Reports, Notices, etc.	27
SECTION 7.1.2.	Approvals and Other Consents	28
SECTION 7.1.3.	Compliance with Laws, etc.	28
SECTION 7.1.4.	The Purchased Vessel	28
SECTION 7.1.5.	Insurance	29
SECTION 7.1.6.	Books and Records	29
SECTION 7.1.7.	Hermes Insurance Policy	29
SECTION 7.2.	Negative Covenants	29
SECTION 7.2.1.	Business Activities	29
SECTION 7.2.2	Indebtedness	30

iii 

SECTION 7.2.3.	Liens	30
SECTION 7.2.4.	Financial Condition	32
SECTION 7.2.5.	Investments	33
SECTION 7.2.6.	Consolidation, Merger, etc.	33
SECTION 7.2.7.	Asset Dispositions, etc.	33
SECTION 7.2.8.	Transactions with Affiliates	34
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1.	Listing of Events of Default	34
SECTION 8.1.1.	Non-Payment of Obligations	34
SECTION 8.1.2.	Breach of Warranty	34
SECTION 8.1.3.	Non-Performance of Certain Covenants and Obligations	35
SECTION 8.1.4.	Default on Other Indebtedness	35
SECTION 8.1.5.	Bankruptcy, Insolvency, etc.	35
SECTION 8.2.	Action if Bankruptcy	36
SECTION 8.3.	Action if Other Event of Default	36
ARTICLE IX
PREPAYMENT EVENTS
SECTION 9.1.	Listing of Prepayment Events	36
SECTION 9.1.1.	Change in Ownership	36
SECTION 9.1.2.	Change in Board	37
SECTION 9.1.3.	Unenforceability	37
SECTION 9.1.4.	Approvals	37
SECTION 9.1.5.	Non-Performance of Certain Covenants and Obligations	37

iv 

SECTION 9.1.6.	Judgments	37
SECTION 9.1.7.	Condemnation, etc.	38
SECTION 9.1.8.	Arrest	38
SECTION 9.1.9.	[RESERVED]	38
SECTION 9.1.10.	Sale/Disposal of the Purchased Vessel	38
SECTION 9.1.11.	[RESERVED]	38
SECTION 9.2.	Mandatory Prepayment	38
ARTICLE X
THE ADMINISTRATIVE AGENT AND THE HERMES AGENT
SECTION 10.1.	Actions	38
SECTION 10.2.	Indemnity	39
SECTION 10.3.	Funding Reliance, etc.	39
SECTION 10.4.	Exculpation	39
SECTION 10.5.	Successor	40
SECTION 10.6.	Loans by the Administrative Agent	41
SECTION 10.7.	Credit Decisions	41
SECTION 10.8.	Copies, etc.	41
SECTION 10.9.	The Agents’ Rights	41
SECTION 10.10.	The Administrative Agent’s Duties	42
SECTION 10.11.	Employment of Agents	42
SECTION 10.12.	Distribution of Payments	42
SECTION 10.13.	Reimbursement	43
SECTION 10.14.	Instructions	43
SECTION 10.15.	Payments	43
SECTION 10.16.	“Know your customer” Checks	43

v 

SECTION 10.17.	No Fiduciary Relationship	43
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1.	Waivers, Amendments, etc.	44
SECTION 11.2.	Notices	44
SECTION 11.3.	Payment of Costs and Expenses	46
SECTION 11.4.	Indemnification	46
SECTION 11.5.	Survival	47
SECTION 11.6.	Severability	48
SECTION 11.7.	Headings	48
SECTION 11.8.	Execution in Counterparts, Effectiveness, etc.	48
SECTION 11.9.	Third Party Rights	48
SECTION 11.10.	Successors and Assigns	48
SECTION 11.11.	Sale and Transfer of the Loan; Participations in the Loan	48
SECTION 11.11.1.	Assignments	48
SECTION 11.11.2.	Participations	50
SECTION 11.11.3.	Register	51
SECTION 11.12.	Other Transactions	51
SECTION 11.13.	Hermes Insurance Policy	51
SECTION 11.13.1.	Terms of Hermes Insurance Policy	51
SECTION 11.13.2.	Obligations of the Hermes Agent and the Lenders	52
SECTION 11.14.	Law and Jurisdiction	52
SECTION 11.14.1.	Governing Law	52
SECTION 11.14.2.	Jurisdiction	53
SECTION 11.14.3.	Alternative Jurisdiction	53

vi 

SECTION 11.14.4.	Service of Process	53
SECTION 11.15.	Confidentiality	53

EXHIBITS
Exhibit A	-	Repayment Schedule
Exhibit B	-	[RESERVED]
Exhibit C	-	[RESERVED]
Exhibit D-1	-	Form of Original Closing Date Opinion of Liberian Counsel to Borrower
Exhibit D-2	-	[RESERVED]
Exhibit D-3	-	[RESERVED]
Exhibit E	-	Form of Lender Assignment Agreement

vii 

AMENDED AND RESTATED CREDIT AGREEMENT

AMENDED AND RESTATED HULL NO. S-677 CREDIT AGREEMENT, dated as of November 26, 2009 and amended and restated on February 17, 2012, is among ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation (as assignee of Celebrity Eclipse Inc., the “Borrower”), KFW IPEX-BANK GMBH in its capacity as agent for the Lenders referred to below in respect of Hermes-related matters (in such capacity, the “Hermes Agent”), in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and in its capacity as lender (in such capacity, together with each of the other Persons that shall become a “Lender” in accordance with Section 11.11.1 hereof, each of them individually a “Lender” and, collectively, the “Lenders”).

W I T N E S S E T H:

WHEREAS,

(A)   The Borrower and Meyer Werft GmbH (formerly known as Jos. L. Meyer GmbH & Co.) (the “Builder”) entered on July 14, 2006 into a Contract for the Construction and Sale of Hull No. S-677 (the “Construction Contract”) pursuant to which the Builder agreed to design, construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number S-677 (the “Purchased Vessel”);

(B)   The Borrower assigned its right to purchase the Purchased Vessel under the Construction Contract to the Celebrity Eclipse Inc., a Liberian Corporation (the “Original Borrower”);

(C)   The Lenders made available to the Original Borrower, upon the terms and conditions contained in the Hull No. S-677 Credit Agreement dated as of November 26, 2009 among the Original Borrower, the Hermes Agent, the Administrative Agent and each Lender from time to time party thereto (the “Original Credit Agreement”), a US dollar loan facility equal to the US Dollar Equivalent of up to eighty per cent (80%) of the Contract Price of the Purchased Vessel, as adjusted from time to time in accordance with the Construction Contract to reflect, among other adjustments, change orders, in an amount not to exceed the US Dollar Equivalent corresponding to EUR 420,000,000;

(D)   The proceeds of such loan facility were provided to the Original Borrower two (2) Business Days prior to the delivery of the Purchased Vessel for the purpose of paying a portion of the Contract Price, as defined in the Construction Contract in connection with the Original Borrower’s purchase of the Purchased Vessel;

(E)   Pursuant to the Assignment and Amendment Deed to Hull No. S-677 Credit Agreement (the “Assignment and Amendment Deed”), the Original Borrower assigned to the Borrower all of its rights under the Original Credit Agreement, and the Borrower assumed all of the Original Borrower’s obligations under the Original Credit Agreement;

(F)   Pursuant to the Assignment and Amendment Deed, and upon satisfaction of the conditions set forth therein, the Original Credit Agreement is being amended and restated in the form of this Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1.Defined Terms.  The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, when capitalized, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

“Accumulated Other Comprehensive Income (Loss)” means at any date the Borrower’s accumulated other comprehensive income (loss) on such date, determined in accordance with GAAP.

“Administrative Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Administrative Agent, and as shall have accepted such appointment, pursuant to Section 10.5.

“Affiliate” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person.  A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Agreement” means, on any date, this credit agreement as originally in effect on the Original Effective Date and amended and restated on the Restatement Effective Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.

“Agreement to Provide Financing” means that certain Agreement to Provide Financing dated as of August 18, 2006 between KfW and the Borrower, as from time to time amended, supplemented, amended and restated, or otherwise modified.

“Applicable Jurisdiction” means the jurisdiction or jurisdictions under which the Borrower is organized, domiciled or resident or from which any of its business activities are conducted or in which any of its properties are located and which has jurisdiction over the subject matter being addressed.

“Approved Appraiser” means any of the following: Barry Rogliano Salles, Paris, H Clarkson & Co. Ltd., London, R.S. Platou Shipbrokers, Norway, or Fearnley AS, Norway.

“Applicable Margin” means, for each Interest Period, 0.37% per annum.

2

“Assignee Lender” is defined in Section 11.11.1.

“Assignment and Amendment Deed” is defined in the preamble.

“Authorized Officer” means those officers of the Borrower authorized to act with respect to the Loan Documents and whose signatures and incumbency shall have been certified to the Administrative Agent by the Secretary or an Assistant Secretary of the Borrower.

“Borrower” is defined in the preamble.

“Business Day” means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City, London or Frankfurt, and if the applicable Business Day relates to an advance of the Loan, an Interest Period, prepayment or conversion, in each case with respect to the Loan bearing interest by reference to the LIBO Rate, a day on which dealings in deposits in Dollars are carried on in the London interbank market.

“Capital Lease Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases.

“Capitalization ” means, as at any date, the sum of (a) Net Debt on such date, plus (b) Stockholders’ Equity on such date.

“Capitalized Lease Liabilities” means the principal portion of all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

“Cash Equivalents” means all amounts other than cash that are included in the “cash and cash equivalents” shown on the Borrower’s balance sheet prepared in accordance with GAAP.

“Citibank Agreement” means the U.S. $875,000,000 amended and restated credit agreement dated as of July 21, 2011 among the Borrower, as borrower, Citigroup Global Markets Inc. and DnB Nor Bank ASA, as co-lead arrangers, and Citibank, N.A., as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

“Commitment” means, relative to any Lender, such Lender’s obligation to make the Loan pursuant to Section 2.1 of the Original Credit Agreement.

“Commitment Fees” is as defined in Section 3.4 of the Original Credit Agreement.

“Construction Contract” is defined in the preamble.

3 

“Contract Price” is as defined in the Construction Contract.

“Covered Taxes” is defined in Section 4.6.

“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

“Dollar” and the sign “$” mean lawful money of the United States.

“Environmental Laws” means all applicable federal, state, local or foreign statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders) relating to the protection of the environment.

“EUR” and the sign “€” mean the currency of participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time.

“Event of Default” is defined in Section 8.1.

“Existing Debt” means the obligations of the Borrower or its Subsidiaries in connection with (i) the Bareboat Charterparty with respect to the vessel BRILLIANCE OF THE SEAS dated July 5, 2002 between Halifax Leasing (September) Limited and RCL (UK) LTD, (ii) that certain credit agreement dated as of May 7, 2009 as amended and restated as of October 9, 2009 among Oasis of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and BNP Paribas, as administrative agent, and (iii) that certain credit agreement dated as of March 15, 2010 among Allure of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and Skandinaviska Enskilda Banken AB (publ), as administrative agent, and the replacement, extension, renewal or amendment of the foregoing without increase in the amount or change in any direct or contingent obligor of such obligations.

“Existing Group” means the following Persons:  (a) A. Wilhelmsen AS., a Norwegian corporation (“Wilhelmsen”); (b) Cruise Associates, a Bahamian general partnership (“Cruise”); and (c) any Affiliate of either or both of Wilhelmsen and Cruise.

“Existing Principal Subsidiaries” means each Subsidiary of the Borrower that is a Principal Subsidiary on the Restatement Effective Date.

“FATCA” means Sections 1471 through 1474 of the Code, as in effect at the date hereof, and any current or future regulations promulgated thereunder or official interpretations thereof.

“Fiscal Quarter” means any quarter of a Fiscal Year.

“Fiscal Year” means any annual fiscal reporting period of the Borrower.

“Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Quarter, the ratio computed for the period of four consecutive Fiscal Quarters ending on the close of such Fiscal Quarter of:

4 

a)   net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to

b)   the sum of:

i)           dividends actually paid by the Borrower during such period (including, without limitation, dividends in respect of preferred stock of the Borrower); plus

ii)            scheduled payments of principal of all debt less New Financings (determined in accordance with GAAP, but in any event including Capitalized Lease Liabilities), in each case, of the Borrower and its Subsidiaries for such period.

“Fixed Rate Direction Notice” is defined in Section 3.3.2.

“Fixed Rate Notice” is defined in Section 3.3.2.

“Fixed Rate Period” is defined in Section 3.3.2.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

“GAAP” is defined in Section 1.4.

“Government-related Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under, or Indebtedness incurred by the Borrower or any Subsidiary of the Borrower to satisfy obligations under, any governmental requirement imposed by any Applicable Jurisdiction that must be complied with to enable the Borrower and its Subsidiaries to continue their business in such Applicable Jurisdiction, excluding, in any event, any taxes imposed on the Borrower or any Subsidiary of the Borrower.

“Hedging Instruments” means options, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof used to hedge interest, foreign currency and commodity exposures.

“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.

“Hermes” means Euler Hermes Kreditversicherungs AG, Friedensallee 254, 22763 Hamburg acting in its capacity as representative of the Federal Republic of Germany in connection with the issuance of export credit guarantees.

“Hermes Agent” is defined in the preamble.

5 

“Hermes Fee” means the fee payable to Hermes under and in respect of the Hermes Insurance Policy.

“Hermes Insurance Policy” means the guarantee (Deckungsdokument) issued by the Federal Republic of Germany, represented by Hermes, in favour of the Lenders.

“Indebtedness” means, for any Person:  (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 180 days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) guarantees by such Person of Indebtedness of others, up to the amount of Indebtedness so guaranteed; (g) obligations of such Person in respect of surety bonds and similar obligations; and (h) liabilities arising under Hedging Instruments.

“Indemnified Liabilities ” is defined in Section 11.4.

“Indemnified Parties ” is defined in Section 11.4.

“Interest Period” means the period between the Original Closing Date and the first Repayment Date, and subsequently each succeeding period between two consecutive Repayment Dates, except that:

a)   Any Interest Period which would otherwise end on a day which is not a Business Day shall end on the next Business Day to occur, except if such Business Day does not fall in the same calendar month, the Interest Period will end on the last Business Day in that calendar month, the interest amount due in respect of the Interest Period in question and in respect of the next following Interest Period being adjusted accordingly; and

b)   If any Interest Period is altered by the application of a) above, the subsequent Interest Period shall end on the day on which it would have ended if the preceding Interest Period had not been so altered.

“Investment” means, relative to any Person,

a)   any loan or advance made by such Person to any other Person (excluding commission, travel, expense and similar advances to officers and employees made in the ordinary course of business); and

b)   any ownership or similar interest held by such Person in any other Person.

6 

“KfW” means KfW of Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Germany acting in its own name for the account of the government of the Federal Republic of Germany.

“KfW IPEX” means KfW IPEX-Bank GmbH of Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Germany.

“Lender Assignment Agreement” means any Lender Assignment Agreement substantially in the form of Exhibit E.

“Lender and Lenders” are defined in the preamble.

“Lending Office” means, relative to any Lender, the office of such Lender designated as such below its signature to the Original Credit Agreement or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining the Loan of such Lender hereunder.

“LIBO Rate” means the rate per annum of the offered quotation for deposits in Dollars for six months (or for such other period as shall be agreed by the Borrower and the Administrative Agent) which appears on Reuters LIBOR01 Page (or any successor page) at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period; provided that:

a)   for the purposes of determining the post-maturity rate of interest under Section 3.3.3, the LIBO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Administrative Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees; and

b)   subject to Section 3.3.5, if no such offered quotation appears on Reuters LIBOR01 Page (or any successor page) at the relevant time, the LIBO Rate shall be the rate per annum certified by the Administrative Agent to be the average of the rates quoted by the Reference Banks as the rate at which each of the Reference Banks was (or would have been) offered deposits of Dollars by prime banks in the London interbank market in an amount approximately equal to the amount of the Loan and for a period of six months.

“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever.

“Loan Document” means this Agreement and the Assignment and Amendment Deed.

“Loan” means the principal sum of  the US Dollar Equivalent of up to eighty per cent (80%) of the Contract Price of the Purchased Vessel (as adjusted from time to time in accordance with the Construction Contract), but in any event in an amount not to exceed the US Dollar

7 

Equivalent corresponding to EUR 420,000,000, advanced by the Lenders to the Borrower on the Original Closing Date upon the terms and conditions of the Original Credit Agreement or the amount thereof for the time being advanced and outstanding under this Agreement (as the context may require).

“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Administrative Agent or any Lender under the Loan Documents or (c) the ability of the Borrower to perform its payment Obligations under the Loan Documents.

“Material Litigation” is defined in Section 6.7.

“Net Debt” means, at any time, the aggregate outstanding principal amount of all debt (including, without limitation, Capitalized Lease Liabilities) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) less the sum of (without duplication);

a)           all cash on hand of the Borrower and its Subsidiaries; plus

b)           all Cash Equivalents.

“Net Debt to Capitalization Ratio” means, as at any date, the ratio of (a) Net Debt on such date to (b) Capitalization on such date.

“New Financings” means proceeds from:

a)            borrowed money (whether by loan or issuance and sale of debt securities), including drawings under this Agreement and any revolving credit facilities of the Borrower, and

b)           the issuance and sale of equity securities.

“Nordea Agreement” means the U.S. $525,000,000 credit agreement dated as of November 19, 2010, as amended by Amendment No. 1 thereto dated as of November 19, 2010, among Royal Caribbean Cruises Ltd., as the borrower, Nordea Bank Finland PLC, Citigroup Global Markets Limited and DnB Nor Markets, Inc., as co-lead arrangers, Nordea Bank Finland PLC, as administrative agent, and DNB Nor Bank ASA, as documentation agent, as amended, restated, supplemented or otherwise modified from time to time.

“Obligations” means all obligations (payment or otherwise) of the Borrower arising under or in connection with this Agreement.

“Organic Document” means, relative to the Borrower, its articles of incorporation (inclusive of any articles of amendment to its articles of incorporation) and its by-laws.

“Original Borrower” is defined in the preamble.

8 

“Original Closing Date” means the date on which the Loan was advanced, which date is April 13, 2010.

“Original Credit Agreement” is defined in the preamble.

“Original Effective Date” means the date the Original Credit Agreement became effective pursuant to Section 11.8, of the Original Credit Agreement, which date is November 26, 2009.

“Participant” is defined in Section 11.11.2.

“Participant Register” is defined in Section 11.11.2.

“Percentage” means, relative to any Lender, the percentage set forth opposite its signature to the Original Credit Agreement or as set out in the applicable Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Section 4.9 or pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.

“Person” means any natural person, corporation, limited liability company, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.

“Prepayment Event” is defined in Section 9.1.

“Principal Subsidiary” means any Subsidiary of the Borrower that owns a Vessel.

“Purchased Vessel” is defined in the preamble.

“Quarterly Payment Date” means, the last day of each of March, June, September and December or, if any such day is not a Business Day, the next succeeding Business Day.

“Reference Banks” means KfW IPEX and each additional Reference Bank and/or each replacement Reference Bank appointed by the Administrative Agent pursuant to Section 3.3.5.

“Repayment Date” means each of the dates for payment of the repayment installments of the Loan specified in Exhibit A, as amended and/or replaced from time to time by the Administrative Agent and the Borrower.

“Required Lenders” means, at any time, Lenders that in the aggregate, hold more than 50% of the aggregate unpaid principal amount of the Loan or, if no such principal amount is then outstanding, Lenders that in the aggregate have more than 50% of the Commitments.

“Restatement Effective Date” means the date on which all of the conditions to the effectiveness of the amendment and restatement of the Original Credit Agreement in the form of this Agreement, which are set forth in Section 4 of the Assignment and Amendment Deed, are satisfied, which date is February ___, 2012.

9 

“Reuters LIBOR01 Page” means the display designated as “Page 01” on the Reuters Money News Service or such other page as may replace Page 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers' Association as the information vendor for the purpose of displaying the British Bankers' Association Interest Settlement Rates for Dollars).

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

“Stockholders’ Equity” means, as at any date, the Borrower’s stockholders’ equity on such date, excluding Accumulated Other Comprehensive Income (Loss), determined in accordance with GAAP, provided that any non-cash charge to Stockholders’ Equity resulting (directly or indirectly) from a change after the Restatement Effective Date in GAAP or in the interpretation thereof shall be disregarded in the computation of Stockholders’ Equity such that the amount of any reduction thereof resulting from such change shall be added back to Stockholders’ Equity.

“Subsidiary” means, with respect to any Person, any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

“Swap Bank” is defined in the definition of Swap Transaction.

“Swap Break Amount” means, as of any date, the cost to (expressed as a positive number) or gain for (expressed as a negative number) a Lender in connection with the full or partial unwinding, liquidation or termination of such Lender’s Swap Transaction (whether or not the relevant Fixed Rate Period has commenced) calculated in accordance with market practice and, if requested by the Borrower, as evidenced by the Swap Bank termination confirmation; provided that if any Lender enters into a Swap Transaction with such Lender’s internal trading desk, such amount shall not exceed the cost or gain that would have resulted had such Lender entered into such Swap Transaction with a third party counterparty, as evidenced by quotes provided to the Borrower by such Lender from at least two independent third party brokers.

“Swap Breakage Gain” means, as to any Lender, the present value of the Swap Break Amount for such Swap Bank if the Swap Break Amount is a negative number.

“Swap Breakage Loss” means, as to any Lender, the present value of the Swap Break Amount for such Swap Bank if the Swap Break Amount is a positive number.

“Swap Transaction” means, in respect of any Fixed Rate Period, for any Lender, the interest rate swap or hedging transaction entered into by such Lender with any bank, financial institution or with such Lender’s internal trading desk (a “Swap Bank”) in order to hedge such Fixed Rate Period exposures under the Loan.

“Taxes” is defined in Section 4.6.

10 

“US Dollar Equivalent” means any EUR amount converted to a corresponding US dollar amount as determined four (4) Business Days prior to delivery of the Purchased Vessel using the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amount of EUR with USD for the payment of the final installment of the Contract Price.  Such rate of exchange to be evidenced by counterparty confirmations.

“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.

“Vessel” means a passenger cruise vessel owned by the Borrower or one of its Subsidiaries.

“Voting Stock” means shares of capital stock of the Borrower of any class or classes (however designated) that have by the terms thereof normal voting power to elect the members of the Board of Directors of the Borrower (other than voting power upon the occurrence of a stated contingency, such as the failure to pay dividends).

SECTION 1.2.Use of Defined Terms.  Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall, when capitalized, have such meanings when used in each notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.

SECTION 1.3.Cross-References.  Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

SECTION 1.4.Accounting and Financial Determinations.  Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared, in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies); provided that if the Borrower elects to apply or is required to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP, upon any such election and notice to the Administrative Agent, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided further that if, as a result of (i) any change in GAAP or IFRS or in the interpretation thereof or (ii) the application by the Borrower of IFRS in lieu of GAAP, in each case, after the Original Effective Date, there is a change in the manner of determining any of the items referred to herein or thereunder that are to be determined by reference to GAAP, and the effect of such change would (in the reasonable opinion of the Borrower or the Administrative Agent) be such as to affect the basis or efficacy of the financial covenants contained in Section 7.2.4 in ascertaining the consolidated financial condition of the Borrower and its Subsidiaries and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any

11 

provision hereof to eliminate such change occurring after the date hereof in GAAP or the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), then such item shall for the purposes of Section 7.2.4 continue to be determined in accordance with GAAP relating thereto as if GAAP were applied immediately prior to such change in GAAP or in the interpretation thereof until such notice shall have been withdrawn or such provision amended in accordance herewith.

ARTICLE II

COMMITMENTS, BORROWING PROCEDURES

SECTION 2.1.Commitment.  On the terms and subject to the conditions of the Original Credit Agreement (including Article V thereof), each Lender severally made its portion of the Loan pursuant to its Commitment described in Section 2.2 of the Original Credit Agreement.

SECTION 2.2.[RESERVED].

SECTION 2.3.[RESERVED].

SECTION 2.4.Funding. Each Lender may, if it so elects, fulfill its obligation to continue its Loan hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to maintain such Loan; provided that such Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility; provided, further, that the Borrower shall not be required to pay any amount under Sections 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had the Lender not caused such branch or Affiliate (or international banking facility) to maintain such Loan.

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

SECTION 3.1.Repayments.  a) Subject to Section 3.1 b), the Borrower shall repay the Loan in the installments and on the dates set out in Exhibit A.

b)   [RESERVED]

c)   No such amounts repaid by the Borrower pursuant to this Section 3.1 may be reborrowed under the terms of this Agreement.

SECTION 3.2.Prepayment.  The Borrower

a)   May, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan; provided that:

12 

i)   all such voluntary prepayments shall require at least five Business Days’ (or, if such prepayment is to be made on the last day of an Interest Period for such Loan, four Business Days’) prior written notice to the Administrative Agent; and

ii)   all such voluntary partial prepayments shall be in an aggregate minimum amount of $10,000,000 and a multiple of $1,000,000 (or the remaining amount of the Loan) and shall be applied pro rata in satisfaction of the repayment installments of the Loan set out in Exhibit A.

b)   Shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to Section 8.2 or 8.3 or the mandatory prepayment of the Loan pursuant to Section 9.2, repay the Loan.

Each prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.  No amounts prepaid by the Borrower may be reborrowed under the terms of this Agreement.

SECTION 3.3.Interest Provisions.  Interest on the outstanding principal amount of the Loan shall accrue and be payable in accordance with this Section 3.3.

SECTION 3.3.1.Rates. The Loan shall accrue interest from the Original Closing Date to the date of repayment or prepayment of the Loan in full to the Lenders at (i) a rate per annum equal to the sum of the LIBO Rate plus the Applicable Margin and/or (ii) a fixed market rate per annum (inclusive of the Applicable Margin) pursuant to Section 3.3.2, in either event payable semi-annually in arrears on the Repayment Dates set out in Exhibit A.  The Loan shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loan. All interest shall be calculated on the basis of the actual number of days elapsed over a year comprised of 360 days.

SECTION 3.3.2.Fixed Rate Periods.  In consultation with the Administrative Agent at any time after the Original Effective Date the Borrower may by not less than five Business Days’ prior notice to the Administrative Agent (which notice may be given before or after the date of drawdown of the Loan) (the “Fixed Rate Notice”) request the Lenders to provide an indication, which will be non-binding, of a fixed rate of interest to be determined in accordance with the provisions of Section 3.3.1 for such amount (which amount shall be no less than 20% of the outstanding principal amount of the Loan) and part of the repayment period as shall be specified in such notice (a “Fixed Rate Period”) subject always to such funds being available to all the Lenders;providedthat no more than one Fixed Rate Period shall be outstanding hereunder at any time.  Such Fixed Rate Period shall:

i)    commence either on the Original Closing Date or on any Repayment Date set out in Exhibit A and specified in the Fixed Rate Notice, except the last Repayment Date;

ii)    end on any of the Repayment Dates set out in Exhibit A and specified in the Fixed Rate Notice; and

iii)    not extend beyond the last Repayment Date set out in Exhibit A.

13 

Upon receipt by the Borrower of an indicative fixed rate for a Fixed Rate Period from the Administrative Agent (the “Indication Notice”), the Borrower may by telephonic notice (such notice, the “Fixed Rate Direction Notice”) to the Administrative Agent request the Lenders to arrange for a conference call to be held on the same day and, if practicable, within two (2) hours of receipt of the Fixed Rate Direction Notice, for the purpose of arranging fixed rate funding for that Fixed Rate Period.  The Fixed Rate Direction Notice shall be provided by the Borrower prior to the later of (A) 3:30 p.m. Frankfurt time on the same day of the conference call and (B) two (2) hours following receipt of the Indication Notice and confirmed in writing following telephonic notice.  The conference call will be attended by representatives of the Borrower, the Lenders and the Administrative Agent (each of whom shall be authorized to arrange such fixed rate funding for that Fixed Rate Period without reference to another person).  It is hereby accepted by the Borrower that any acceptance given by the Borrower during the conference call of a rate provided by the Administrative Agent (acting on the instructions of the Lenders) shall, by virtue of the Borrower’s signature to the Assignment and Amendment Deed, constitute express authority from the Borrower to the Lenders to arrange such funding at the rate so provided by the Administrative Agent and agreed to by the Borrower.  If the Lenders and the Borrower agree upon a fixed rate of interest on such conference call, the Administrative Agent shall confirm such agreed fixed rate of interest to the Borrower by electronic mail immediately after such conference call.  In the absence of manifest error, the fixed rate of interest so confirmed by the Administrative Agent for the relevant Fixed Rate Period shall be final and binding on the Borrower and shall apply to the applicable portion of the Loan during the applicable Fixed Rate Period.

SECTION 3.3.3.Post-Maturity Rates.  After the date any principal amount of the Loan is due and payable (whether on any Repayment Date, upon acceleration or otherwise), or after any other monetary Obligation of the Borrower shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts for each day during the period of such default at a rate per annum certified by the Administrative Agent to the Borrower (which certification shall be conclusive in the absence of manifest error) to be equal to the sum of (a) the Applicable Margin plus (b) the LIBO Rate plus (c) 2% per annum.

SECTION 3.3.4.Payment Dates.  Interest accrued on the Loan shall be payable, without duplication, on the earliest of:

a)   each Repayment Date;

b)   the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and

c)   on that portion of the Loan the repayment of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.

SECTION 3.3.5.Interest Rate Determination; Replacement Reference Banks.  The Administrative Agent shall obtain from each Reference Bank timely information for the purpose of determining the LIBO Rate in the event that no offered quotation appears on Reuters LIBOR01 Page and the LIBO Rate is to be determined by reference to quotations

14 

supplied by the Reference Banks.  If any one or more of the Reference Banks shall fail to furnish in a timely manner such information to the Administrative Agent for any such interest rate, the Administrative Agent shall determine such interest rate on the basis of the information furnished by the remaining Reference Banks.  If the Borrower elects to add an additional Reference Bank hereunder or a Reference Bank ceases for any reason to be able and willing to act as such, the Administrative Agent shall, at the direction of the Required Lenders and after consultation with the Borrower and the Lenders, appoint a replacement for such Reference Bank or, as the case may be, additional Reference Bank, reasonably acceptable to the Borrower, and such replaced Reference Bank shall cease to be a Reference Bank hereunder or, as the case may be, such new Reference Bank shall be an additional Reference Bank.  The Administrative Agent shall furnish to the Borrower and to the Lenders each determination of the LIBO Rate made by reference to quotations of interest rates furnished by Reference Banks.

Interest accrued on the Loan or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether upon acceleration or otherwise) shall be payable upon demand.

SECTION 3.4.[RESERVED]

SECTION 3.5.  [RESERVED]

ARTICLE IV    

CERTAIN LIBO RATE AND OTHER PROVISIONS

SECTION 4.1.LIBO Rate Lending Unlawful. If after the Original Effective Date the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority having jurisdiction over such Lender asserts that it is unlawful, for such Lender to continue or maintain the Loan bearing interest at a rate based on the LIBO Rate, the obligation of such Lender to continue or maintain its Loan bearing interest at a rate based on the LIBO Rate shall, upon notice thereof to the Borrower, the Administrative Agent and each other Lender, forthwith be suspended until the circumstances causing such suspension no longer exist, provided that such Lender’s obligation to continue and maintain its Loan hereunder shall be automatically converted into an obligation to continue and maintain the Loan bearing interest at a rate to be negotiated between such Lender and the Borrower that is the equivalent of the sum of the LIBO Rate for the relevant Interest Period plus the Applicable Margin.

SECTION 4.2.Deposits Unavailable.  If the Administrative Agent shall have determined that:

a)   Dollar deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market; or

15 

b)   by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate loans for the relevant Interest Period; or

c)   in the event the Borrower is paying interest at the floating rate, the cost to Lenders that in the aggregate hold 50% or more of the aggregate unpaid principal amount of the Loan of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the LIBO Rate

then the Administrative Agent shall give notice of such determination (hereinafter called a “Determination Notice”) to the Borrower and each of the Lenders.  The Borrower, the Lenders and the Administrative Agent shall then negotiate in good faith in order to agree upon a mutually satisfactory interest rate and interest period (or interest periods) to be substituted for those which would otherwise have applied under this Agreement.  If the Borrower, the Lenders and the Administrative Agent are unable to agree upon an interest rate (or rates) and interest period (or interest periods) prior to the date occurring fifteen (15) Business Days after the giving of such Determination Notice, the Administrative Agent shall (after consultation with the Lenders) set an interest rate and an interest period (or interest periods), in each case to take effect at the end of the Interest Period current at the date of the Determination Notice, which rate (or rates) shall be equal to the sum of the Applicable Margin and the lesser of (x) the cost to each of the Lenders of funding their respective portions of the Loan (the “Funding Costs”) and (y) the weighted average of the corresponding interest rates at or about 11:00 a.m. (London time) two Business Days before the commencement of the relevant Interest Period on Reuters’ pages KLIEMMM, GARBIC01 and FINA01 (or such other pages as may replace Reuters’ pages KLIEMMM, GARBIC01 or FINA01 on Reuters’ service). The Administrative Agent shall furnish a certificate to the Borrower as soon as reasonably practicable after the Administrative Agent has given such Determination Notice setting forth such rate and certifying that the rate set forth therein accurately reflects the Funding Costs.  In the event that the circumstances described in this Section 4.2 shall extend beyond the end of an interest period agreed or set pursuant hereto, the foregoing procedure shall be repeated as often as may be necessary.

SECTION 4.3.Increased LIBO Rate Loan Costs, etc.  If after the Original Effective Date a change in any applicable treaty, law, regulation or regulatory requirement or in the interpretation thereof or in its application to the Borrower, or if compliance by any Lender with any applicable direction, request, requirement or guideline (whether or not having the force of law) of any governmental or other authority including, without limitation, any agency of the European Union or similar monetary or multinational authority insofar as it may be changed or imposed after the date hereof, shall:

a.   subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in Section 4.6, withholding taxes); or

16 

b.   change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or

c.   impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in Section 4.5 and reserve costs described in Section 4.7) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (provided that such Lender shall, unless prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or

d.   impose on any Lender any other condition affecting its portion of the Loan or any part thereof,

and the result of any of the foregoing is either (i) to increase the cost to such Lender of maintaining the Loan or any part thereof, (ii) to reduce the amount of any payment received by such Lender or its effective return hereunder or on its capital or (iii) to cause such Lender to make any payment or to forego any return based on any amount received or receivable by such Lender hereunder, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the interests of such Lender, (A) such Lender shall (through the Administrative Agent) notify the Borrower of the occurrence of such event and use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid the effects of such law, regulation or regulatory requirement or any change therein or in the interpretation thereof and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender and (B) the Borrower shall forthwith upon such demand pay to the Administrative Agent for the account of such Lender such amount as is necessary to compensate such Lender for such additional cost or such reduction and ancillary expenses, including taxes, incurred as a result of such adjustment. Such notice shall (i) describe in reasonable detail the event leading to such additional cost, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such additional cost, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request is consistent with its treatment of other borrowers that are subject to similar provisions, and (vi) certify that, to the best of its knowledge, such change in circumstance is of general application to the commercial banking industry in such Lender’s jurisdiction of organization or in the relevant jurisdiction in which such Lender does business. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of

17 

retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such cost or reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.4.Funding Losses.  (a) In the event any Lender shall incur any loss or expense (for the avoidance of doubt excluding loss of profit) by reason of the liquidation or reemployment (at not less than the market rate) of deposits or other funds acquired by such Lender to continue or maintain any portion of the principal amount of the Loan as a LIBO Rate Loan as a result of:

i)   any conversion or repayment or prepayment or acceleration of the principal amount of the Loan on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment, whether pursuant to Sections 3.1 and 3.2 or otherwise; or

ii)   [RESERVED]

then, upon the written notice of such Lender to the Borrower (with a copy to the Administrative Agent), the Borrower shall, within five (5) Business Days of its receipt thereof, pay directly to such Lender such amount as will reimburse such Lender for such loss or expense.  Such written notice shall include calculations in reasonable detail setting forth the loss or expense to such Lender.

(b)  In the event any Lender shall incur or obtain a Swap Break Amount by reason of the unwinding, liquidation or termination of a Swap Transaction as a result of:

i)   any conversion or repayment or prepayment or acceleration of the principal amount of the Loan on a date other than the scheduled last day of such Fixed Rate Period or otherwise scheduled date for repayment or payment, whether pursuant to Sections 3.1 and 3.2 or otherwise; or

ii)   [RESERVED]

then, such Lender shall provide written notice to the Borrower and the Administrative Agent of any Swap Breakage Gain or Swap Breakage Loss resulting therefrom.  Such written notice shall include the Swap Bank termination confirmation setting forth the gain or loss to such Lender.  Within five Business Days of receipt of such Notice, the Borrower will pay directly to such Lender any such Swap Breakage Loss, or such Lender will pay directly to the Borrower any such Swap Breakage Gain, as the case may be.

SECTION 4.5.Increased Capital Costs.  If after the Original Effective Date any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority increases the amount of capital required to be maintained by any Lender or any Person controlling such Lender, and the rate of return on its or such controlling Person’s capital as a consequence of its

18 

Commitment or the Loan made by such Lender is reduced to a level below that which such Lender or such controlling Person would have achieved but for the occurrence of any such change in circumstance, then, in any such case upon notice from time to time by such Lender to the Borrower, the Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return.  Any such notice shall (i) describe in reasonable detail the capital adequacy requirements which have been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such lowered return, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request for such additional amounts is consistent with its treatment of other borrowers that are subject to similar provisions and (vi) certify that, to the best of its knowledge, such change in circumstances is of general application to the commercial banking industry in the jurisdictions in which such Lender does business.  In determining such amount, such Lender may use any method of averaging and attribution that it shall, subject to the foregoing sentence, deem applicable.  Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid such reduction in such rate of return and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.6.Taxes.  All payments by the Borrower of principal of, and interest on, the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts of such Lender and franchise taxes imposed in lieu of net income taxes or taxes on receipts, by the jurisdiction under the laws of which such Lender is organized or any political subdivision thereof or the jurisdiction of such Lender’s Lending Office or any political subdivision thereof or any other jurisdiction unless such net income taxes are imposed solely as a result of the Borrower’s activities in such other jurisdiction, and any taxes imposed under FATCA (such non-excluded items being called “Covered Taxes”).  In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Covered Taxes pursuant to any applicable law, rule or regulation, then the Borrower will:

a.   pay directly to the relevant authority the full amount required to be so withheld or deducted;

19 

b.   promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such authority; and

c.   pay to the Administrative Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.

Moreover, if any Covered Taxes are directly asserted against the Administrative Agent or any Lender with respect to any payment received or paid by the Administrative Agent or such Lender hereunder, the Administrative Agent or such Lender may pay such Covered Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Covered Taxes (including any Covered Taxes on such additional amount) shall equal the amount such person would have received had no such Covered Taxes been asserted.

Any Lender claiming any additional amounts payable pursuant to this Section agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

If the Borrower fails to pay any Covered Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent for the account of the respective Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders for any incremental withholding Covered Taxes, interest or penalties that may become payable by any Lender as a result of any such failure (so long as such amount did not become payable as a result of the failure of such Lender to provide timely notice to the Borrower of the assertion of a liability related to the payment of Covered Taxes).  For purposes of this Section 4.6, a distribution hereunder by the Administrative Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.

If any Lender is entitled to any refund, credit, deduction or other reduction in tax by reason of any payment made by the Borrower in respect of any Covered Tax under this Section 4.6 or by reason of any payment made by the Borrower pursuant to Section 4.3, such Lender shall use reasonable efforts to obtain such refund, credit, deduction or other reduction and, promptly after receipt thereof, will pay to the Borrower such amount (plus any interest received by such Lender in connection with such refund, credit, deduction or reduction) as is equal to the net after-tax value to such Lender of such part of such refund, credit, deduction or reduction as such Lender reasonably determines is allocable to such Covered Tax or such payment (less out-of-pocket expenses incurred by such Lender), provided that no Lender shall  be obligated to disclose to the Borrower any information regarding its tax affairs or tax computations.

Each Lender (and each Participant) agrees with the Borrower and the Administrative Agent that it will (i) in the case of a Lender or a Participant organized under the laws of a

20 

jurisdiction other than the United States (a) provide to the Administrative Agent and the Borrower an appropriately executed copy of Internal Revenue Service Form W-8ECI certifying that any payments made to or for the benefit of such Lender or such Participant are effectively connected with a trade or business in the United States (or alternatively, an Internal Revenue Service Form W-8BEN claiming the benefits of a tax treaty, but only if the applicable treaty described in such form provides for a complete exemption from U.S. federal income tax withholding), or any successor form, on or prior to the date hereof (or, in the case of any assignee Lender or Participant, on or prior to the date of the relevant assignment or participation), in each case attached to an Internal Revenue Service Form W-8IMY, if appropriate, (b) notify the Administrative Agent and the Borrower if the certifications made on any form provided pursuant to this paragraph are no longer accurate and true in all material respects and (c) provide such other tax forms or other documents as shall be prescribed by applicable law, if any, or as otherwise reasonably requested, to demonstrate, to the extent applicable, that payments to such Lender (or Participant) hereunder are exempt from withholding under FATCA, and (ii) in all cases, provide such forms, certificates or other documents, as and when reasonably requested by the Borrower, necessary to claim any applicable exemption from, or reduction of, Covered Taxes or any payments made to or for benefit of such Lender or such Participant, provided that the Lender or Participant is legally able to deliver such forms, certificates or other documents.  For any period with respect to which a Lender (or assignee Lender or Participant) has failed to provide the Borrower with the foregoing forms (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided (which, in the case of an Assignee Lender, would be the date on which the original assignor was required to provide such form) or if such form otherwise is not required hereunder) such Lender (or assignee Lender or Participant) shall not be entitled to the benefits of this Section 4.6 with respect to Covered Taxes imposed by reason of such failure.

SECTION 4.7.Reserve Costs.  Without in any way limiting the Borrower’s obligations under Section 4.3, the Borrower shall pay to the Administrative Agent for the account of each Lender on the last day of each Interest Period, so long as the relevant Lending Office of such Lender is required to maintain reserves against “Eurocurrency liabilities” under Regulation D of the F.R.S. Board, upon notice from such Lender, an additional amount equal to the product of the following for the Loan for each day during such Interest Period:

(i)the principal amount of the Loan outstanding on such day; and

(ii)the remainder of (x) a fraction the numerator of which is the rate (expressed as a decimal) at which interest accrues on the Loan for such Interest Period as provided in this Agreement (less the Applicable Margin) and the denominator of which is one minus any increase after the Original Effective Date in the effective rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender minus (y) such numerator; and

(iii)1/360.

Such notice shall (i)  describe in reasonable detail the reserve requirement that has been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the applicable reserve percentage, (iii) certify that such request is consistent with such Lender’s treatment of

21 

other borrowers that are subject to similar provisions and (iv) certify that, to the best of its knowledge, such requirements are of general application in the commercial banking industry in the United States.

Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to avoid the requirement of maintaining such reserves (including by designating a different Lending Office) if such efforts would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

SECTION 4.8.Payments, Computations, etc.  Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the Administrative Agent for the pro rata account of the Lenders entitled to receive such payment.  All such payments required to be made to the Administrative Agent shall be made, without setoff, deduction or counterclaim, not later than 11:00 a.m., New York time, on the date due, in same day or immediately available funds through the New York Clearing House Interbank Payments System (or such other funds as may be customary for the settlement of international banking transactions in Dollars), to such account as the Administrative Agent shall specify from time to time by notice to the Borrower.  Funds received after that time shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day.  The Administrative Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in the immediately preceding sentence, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Administrative Agent for the account of such Lender without any setoff, deduction or counterclaim.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days.  Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (a) of the definition of the term “Interest Period”) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.

SECTION 4.9.Replacement Lenders, etc.  If the Borrower shall be required to make any payment to any Lender pursuant to Section 4.3, 4.4, 4.5, 4.6 or 4.7, the Borrower shall be entitled at any time (so long as no Default and no Prepayment Event shall have occurred and be continuing) within 180 days after receipt of notice from such Lender of such required payment to (a) prepay the affected portion of such Lender’s Loans in full, together with accrued interest thereon through the date of such prepayment (provided that the Borrower shall not prepay any such Lender pursuant to this clause (a) without replacing such Lender pursuant to the following clause (b) until a 30-day period shall have elapsed during which the Borrower and the Administrative Agent shall have attempted in good faith to replace such Lender), and/or (b) replace such Lender with another financial institution reasonably acceptable to the Administrative Agent, provided that (i) each such assignment shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement and (ii) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall

22 

have received one or more payments from either the Borrower or one or more Assignee Lenders in an aggregate amount at least equal to the aggregate outstanding principal amount of the Loans owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement. Each Lender represents and warrants to the Borrower that, as of the date of this Agreement (or, with respect to any Lender not a party hereto on the date hereof, on the date that such Lender becomes a party hereto), there is no existing treaty, law, regulation, regulatory requirement, interpretation, directive, guideline, decision or request pursuant to which such Lender would be entitled to request any payments under any of Sections 4.3, 4.4, 4.5, 4.6 and 4.7 to or for account of such Lender.

SECTION 4.10.Sharing of Payments.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of the Loan (other than pursuant to the terms of Sections 4.3, 4.4, 4.5, 4.6 and 4.7) in excess of its pro rata share of payments then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders such participations in the Loan made by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender’s ratable share (according to the proportion of (a) the amount of such selling Lender’s required repayment to the purchasing Lender to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 4.11) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim.

SECTION 4.11.Setoff.  Upon the occurrence and during the continuance of an Event of Default or a Prepayment Event, each Lender shall have, to the extent permitted by applicable law, the right to appropriate and apply to the payment of the Obligations then due and owing to it any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Lender; provided that any such appropriation and application shall be subject to the provisions of Section 4.10.  Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which such Lender may have.

23 

SECTION 4.12.Use of Proceeds.  The Original Borrower applied the proceeds of the Loan in accordance with Recital (D); without limiting the foregoing, no proceeds of the Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S. Board Regulation U.

ARTICLE V

CONDITIONS PRECEDENT

SECTION 5.1.Advance of the Loan.  The obligation of the Lenders to fund the Loan made on the Original Closing Date was subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in Section 5.1 of the Original Credit Agreement.

SECTION 5.2.Conditions to Effectiveness.  The conditions to the effectiveness of the amendment and restatement of the Original Credit Agreement in the form of this Agreement are set forth in Section 4 of the Assignment and Amendment Deed.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

To induce the Lenders and the Administrative Agent to enter into this Agreement, the Borrower represents and warrants to the Administrative Agent and each Lender as set forth in this Article VI as of the Restatement Effective Date (except as otherwise stated).

SECTION 6.1.Organization, etc.  The Borrower is a corporation validly organized and existing and in good standing under the laws of its jurisdiction of incorporation; the Borrower is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and the Borrower has full power and authority, has taken all corporate action and holds all governmental and creditors’ licenses, permits, consents and other approvals necessary to enter into each Loan Document and to perform the Obligations.

SECTION 6.2.Due Authorization, Non-Contravention, etc.  The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not:

a.   contravene the Borrower’s Organic Documents;

b.   contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;

c.   contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;

24 

d.   contravene any contractual restriction binding on the Borrower or any of its property, except as would not reasonably be expected to result in a Material Adverse Effect; or

e.   result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.3.Government Approval, Regulation, etc.  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document (except for authorizations or approvals not required to be obtained on or prior to the Restatement Effective Date that have been obtained or actions not required to be taken on or prior to the Restatement Effective Date that have been taken).  The Borrower holds all governmental licenses, permits and other approvals required to conduct its business as conducted by it on the Restatement Effective Date, except to the extent the failure to hold any such licenses, permits or other approvals would not have a Material Adverse Effect.

SECTION 6.4.Compliance with Environmental Laws.  The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.

SECTION 6.5.Validity, etc.  This Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles.

SECTION 6.6.No Default, Event of Default or Prepayment Event.  No Default, Event of Default or Prepayment Event has occurred and is continuing.

SECTION 6.7.Litigation.  There is no action, suit, litigation, investigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, that (i) except as set forth in filings made by the Borrower with the SEC in the Borrower’s reasonable opinion might reasonably be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries (taken as a whole) (collectively, “Material Litigation”) or (ii) purports to affect the legality, validity or enforceability of the Loan Documents or the consummation of the transactions contemplated hereby.

SECTION 6.8.The Purchased Vessel.  The Purchased Vessel is:

a.   legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,

b.   registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,

c.   classed as required by Section 7.1.4(b),

25 

d.   free of all recorded Liens, other than Liens permitted by Section 7.2.3,

e.   insured against loss or damage in compliance with Section 7.1.5, and

f.   chartered exclusively to or operated exclusively by the Borrower or one of the Borrower’s wholly owned Subsidiaries, except as otherwise permitted pursuant to Section 7.1.4.

SECTION 6.9.Obligations rank pari passu.  The Obligations rank at least pari passu in right of payment and in all other respects with all other unsecured unsubordinated Indebtedness of the Borrower.

SECTION 6.10.No Filing, etc. Required.  No filing, recording or registration and no payment of any stamp, registration or similar tax is necessary under the laws of any Applicable Jurisdiction to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement or the other Loan Documents (except for filings, recordings, registrations or payments not required to be made on or prior to the Original Closing Date that have been made).

SECTION 6.11.No Immunity.  The Borrower is subject to civil and commercial law with respect to the Obligations.  Neither the Borrower nor any of its properties or revenues is entitled to any right of immunity in any Applicable Jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).

SECTION 6.12.Investment Company Act.  The Borrower is not required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

SECTION 6.13.Regulation U. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U.  Terms for which meanings are provided in F.R.S. Board Regulation U or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.

SECTION 6.14.Accuracy of Information.  All financial projections, if any, that have been or shall be furnished to the Administrative Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with this Agreement have been or will be prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the projections will be realized).  All financial and other information furnished to the Administrative Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or

26 

corporate controller after the date of this Agreement shall have been prepared by the Borrower in good faith.

ARTICLE VII

COVENANTS

SECTION 7.1.Affirmative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, until all Obligations have been paid in full, the Borrower will perform the obligations set forth in this Section 7.1.

SECTION 7.1.1.Financial Information, Reports, Notices, etc.  The Borrower will furnish, or will cause to be furnished, to the Administrative Agent (with sufficient copies for distribution to each Lender) the following financial statements, reports, notices and information:

a.   as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;

b.   as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;

c.   together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in Section 7.2.4 (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Administrative Agent);

d.   as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;

e.   as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;

27 

f.   [RESERVED];

g.   promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and

h.   such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request;

provided that information required to be furnished to the Administrative Agent under subsections (a), (b) and (g) of this Section 7.1.1 shall be deemed furnished to the Administrative Agent when available free of charge on the Borrower’s website at http://www.rclinvestor.com or the SEC’s website at http://www.sec.gov.

SECTION 7.1.2.Approvals and Other Consents.  The Borrower will obtain (or cause to be obtained) all such governmental licenses, authorizations, consents, permits and approvals as may be required for (a) the Borrower to perform its obligations under this Agreement and the other Loan Documents and (b) the operation of the Purchased Vessel in compliance with all applicable laws, except, in each case, to the extent that failure to obtain (or cause to be obtained) such governmental licenses, authorizations, consents, permits and approvals would not be expected to have a Material Adverse Effect.

SECTION 7.1.3.Compliance with Laws, etc.  The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, except (other than as described in clause (a) below) to the extent that the failure to so comply would not have a Material Adverse Effect, which compliance shall in any case include (but not be limited to):

a.   in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of Section 7.2.6;

b.   in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;

c.   the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings; and

d.   compliance with all applicable Environmental Laws.

SECTION 7.1.4.The Purchased Vessel.

The Borrower will:

a.   cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly-owned Subsidiaries, provided that the

28 

Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly-owned Subsidiaries and (ii) for a time charter not to exceed one year in duration;

b.   cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing.

c.   [RESERVED]

d.   [RESERVED]

SECTION 7.1.5.Insurance.  The Borrower will, or will cause one or more of its Subsidiaries to, maintain or cause to be maintained with responsible insurance companies insurance with respect to the Purchased Vessel against such casualties, third-party liabilities and contingencies and in such amounts, in each case, as is customary for other businesses of similar size in the passenger cruise line industry (provided that in no event will the Borrower or any Subsidiary be required to obtain any business interruption, loss of hire or delay in delivery insurance) and will, upon request of the Administrative Agent, furnish to the Administrative Agent (with sufficient copies for distribution to each Lender) at reasonable intervals a certificate of a senior officer of the Borrower setting forth the nature and extent of all insurance maintained or caused to be maintained by the Borrower and the Subsidiaries and certifying as to compliance with this Section.

SECTION 7.1.6.Books and Records.  The Borrower will keep books and records that accurately reflect all of its business affairs and transactions and permit the Administrative Agent and each Lender or any of their respective representatives, at reasonable times and intervals, to visit each of its offices, to discuss its financial matters with its officers and to examine any of its books or other corporate records.

SECTION 7.1.7.Hermes Insurance Policy.  The Borrower shall, on the reasonable request of the Hermes Agent, provide such other information as required under the Hermes Insurance Policy as necessary to enable the Hermes Agent to obtain the full support of Hermes pursuant to the Hermes Insurance Policy.  The Borrower must pay to the Hermes Agent the amount of all reasonable costs and expenses reasonably incurred by it in connection with complying with a request by Hermes for any additional information necessary or desirable in connection with the Hermes Insurance Policy, provided that the Borrower is consulted before the Hermes Agent incurs any such cost or expense.

SECTION 7.2.Negative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, until all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 7.2.

SECTION 7.2.1.Business Activities.  The Borrower will not, and will not permit any of its Subsidiaries to, engage in any principal business activity other than those engaged in by the Borrower and its Subsidiaries on the date hereof and other business activities reasonably related thereto.

29 

SECTION 7.2.2.Indebtedness.  The Borrower will not permit any of the Existing Principal Subsidiaries to create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:

a.   Indebtedness, secured by Liens of the type described in Section 7.2.3;

b.   Indebtedness owing to the Borrower or a wholly owned direct or indirect Subsidiary of the Borrower;

c.   Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Restatement Effective Date;

d.   Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted to be secured under Section 7.2.3(c), at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $450,000,000;

e.   Existing Debt; and

f.   obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.

SECTION 7.2.3.Liens.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:

a.   Liens on the vessel BRILLIANCE OF THE SEAS existing as of the Restatement Effective Date and securing the Existing Debt (and any Lien on BRILLIANCE OF THE SEAS securing any refinancing of the Existing Debt, so long as such vessel was subject to a Lien securing the Indebtedness being refinanced immediately prior to such refinancing);

b.   Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Restatement Effective Date) acquired after the Restatement Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each such Lien is created within three months after the acquisition of the relevant assets;

30 

c.   in addition to other Liens permitted under this Section 7.2.3, Liens securing Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under Section 7.2.2(d), at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $450,000,000, provided that, with respect to each such item of Indebtedness, the fair market value of the assets subject to Liens securing such Indebtedness (determined at the time of the creation of such Lien) shall not exceed two times the aggregate principal amount of such Indebtedness (and for purposes of this clause (c), the fair market value of any assets shall be determined by (i) in the case of any Vessel, by an Approved Appraiser selected by the Borrower and (ii) in the case of any other assets, by an officer of the Borrower or by the board of directors of the Borrower);

d.   Liens on assets acquired after the Restatement Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;

e.   Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Restatement Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;

f.   Liens securing Government-related Obligations;

g.   Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;

h.   Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings;

i.   Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;

j.   Liens for current crew’s wages and salvage;

31 

k.   Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;

l.   Liens on Vessels that:

(i)secure obligations covered (or reasonably expected to be covered) by insurance;

(ii)were incurred in the course of or incidental to trading such Vessel in connection with repairs or other work to such Vessel; or

(iii)were incurred in connection with work to such Vessel that is required to be performed pursuant to applicable law, rule, regulation or order;

provided that, in each case described in this clause (l), such Liens are either (x) discharged in the ordinary course of business or (y) being diligently contested in good faith by appropriate proceedings;

m.   normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;

n.   Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business; and

o.   Liens on cash or Cash Equivalents securing obligations in respect of Hedging Instruments permitted under Section 7.2.2(f) or securing letters of credit that support such obligations.

SECTION 7.2.4.Financial Condition.  The Borrower will not permit:

a.   Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.

b.   Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter.

c.   Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).

32 

SECTION 7.2.5.Investments.  The Borrower will not permit any of the Principal Subsidiaries to make, incur, assume or suffer to exist any Investment in any other Person other than

a.   the Borrower or any direct or indirect wholly owned Subsidiary of the Borrower; and

b.   other Investments by the Principal Subsidiaries in an aggregate amount not to exceed $50,000,000 at any time outstanding.

SECTION 7.2.6.Consolidation, Merger, etc.  The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, or purchase or otherwise acquire all or substantially all of the assets of any Person except:

a.   any such Subsidiary may (i) liquidate or dissolve voluntarily, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by Section 7.2.7; and

b.   so long as no Event of Default or Prepayment Event has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:

(i)after giving effect thereto, the Stockholders’ Equity of the Borrower and its Subsidiaries is at least equal to 90% of such Stockholders’ Equity immediately prior thereto; and

(ii)in the case of a merger involving the Borrower where the Borrower is not the surviving corporation, the surviving corporation shall have assumed in a writing, delivered to the Administrative Agent, all of the Borrower’s obligations hereunder and under the other Loan Documents.

SECTION 7.2.7.Asset Dispositions, etc.  The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, any material asset (including accounts receivable and capital stock of Principal Subsidiaries) to any Person, except:

a.   sales of assets (including, without limitation, Vessels) so long as at the time of any such sale:

(i)the aggregate net book value of all such assets sold during each fiscal year does not exceed an amount equal to the greater of (x) 7.5% of Stockholders’ Equity as at the end of the last Fiscal Quarter, and (y) $400,000,000; and

33 

(ii)to the extent any asset has a fair market value in excess of $50,000,000 the Borrower or Subsidiary selling such asset receives consideration therefor at least equal to the fair market value thereof (as determined in good faith by (x) in the case of any Vessel, the board of directors of the Borrower and (y) in the case of any other asset, an officer of the Borrower or its board of directors);

b.   sales of capital stock of any Principal Subsidiary of the Borrower so long as a sale of all of the assets of such Subsidiary would be permitted under the foregoing clause (a);

c.   sales of capital stock of any Subsidiary other than a Principal Subsidiary;

d.   the sale of the vessels “Celebrity Mercury” and “Bleu de France”;

e.   sales of other assets in the ordinary course of business; and

f.   sales of assets between or among the Borrower and Subsidiaries of the Borrower.

SECTION 7.2.8.Transactions with Affiliates.  The Borrower will not, and will not permit any of the Principal Subsidiaries to, enter into, or cause, suffer or permit to exist any arrangement or contract with any of its Affiliates (other than arrangements or contracts among the Borrower and its Subsidiaries and among the Borrower’s Subsidiaries) unless such arrangement or contract is on an arms’-length basis, provided that, to the extent that the aggregate fair value of the goods furnished or to be furnished or the services performed or to be performed under all such contracts or arrangements in any one Fiscal Year does not exceed $50,000,000, such contracts or arrangements shall not be subject to this Section 7.2.8.

ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.1.Listing of Events of Default.  Each of the following events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.

SECTION 8.1.1.Non-Payment of Obligations.  The Borrower shall default in the payment when due of any principal of or interest on the Loan or any Commitment Fee, or the Borrower shall default in the payment of any fee due and payable under the Agreement to Provide Financing, provided that, in the case of any default in the payment of any interest on the Loan or of any Commitment Fee, such default shall continue unremedied for a period of at least two (2) Business Days after notice thereof shall have been given to the Borrower by the Administrative Agent; and provided further that, in the case of any default in the payment of any fee due and payable under the Agreement to Provide Financing, such default shall continue unremedied for a period of at least ten days after notice thereof shall have been given to the Borrower by the Administrative Agent.

SECTION 8.1.2.Breach of Warranty.  Any representation or warranty of the Borrower made or deemed to be made hereunder (including any certificates delivered pursuant to Article V) is or shall be incorrect in any material respect when made.

34 

SECTION 8.1.3.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document (other than the covenants set forth in Section 7.2.4 and the obligations referred to in Section 8.1.1) and such default shall continue unremedied for a period of five days after notice thereof shall have been given to the Borrower by the Administrative Agent (or, if (a) such default is capable of being remedied within 30 days (commencing on the first day following such five-day period) and (b) the Borrower is actively seeking to remedy the same during such period, such default shall continue unremedied for at least 35 days after such notice to the Borrower).

SECTION 8.1.4.Default on Other Indebtedness.  The Borrower or any of its Principal Subsidiaries shall fail to pay any Indebtedness that is outstanding in a principal amount of at least $50,000,000 (or the equivalent in other currencies) in the aggregate (but excluding Indebtedness hereunder) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument evidencing, securing or relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause or permit the holder or holders of such Indebtedness to cause such Indebtedness to become due and payable prior to its scheduled maturity (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness); or any such Indebtedness shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or by voluntary agreement), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case prior to the scheduled maturity thereof (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness).  For purposes of determining Indebtedness for any Hedging Instrument, the principal amount of the obligations under any such instrument at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Principal Subsidiary would be required to pay if such instrument were terminated at such time.

SECTION 8.1.5.Bankruptcy, Insolvency, etc.  The Borrower or any of the Principal Subsidiaries (or any of its other Subsidiaries to the extent that the relevant event described below would have a Material Adverse Effect) shall:

a.   generally fail to pay, or admit in writing its inability to pay, its debts as they become due;

b.   apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;

c.   in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other

35 

custodian shall not be discharged within 30 days, provided that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any relevant proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents;

d.   permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 30 days undismissed, provided that the Borrower hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any such case or proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents; or

e.   take any corporate action authorizing, or in furtherance of, any of the foregoing.

SECTION 8.2.Action if Bankruptcy.  If any Event of Default described in clauses (b) through (d) of Section 8.1.5 shall occur with respect to the Borrower, the Commitment (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.

SECTION 8.3.Action if Other Event of Default.  If any Event of Default (other than any Event of Default described in clauses (b) through (d) of Section 8.1.5 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall by notice to the Borrower declare the outstanding principal amount of the Loan and other Obligations to be immediately due and payable and/or the Commitment (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations shall be and become immediately due and payable, without further notice, demand or presentment.

ARTICLE IX

PREPAYMENT EVENTS

SECTION 9.1.Listing of Prepayment Events.  Each of the following events or occurrences described in this Section 9.1 shall constitute a “Prepayment Event”.

SECTION 9.1.1.Change in Ownership.  Any Person other than a member of the Existing Group (a “New Shareholder”) shall acquire (whether through legal or beneficial ownership of capital stock, by contract or otherwise), directly or indirectly, effective control over more than 33% of the Voting Stock and:

a.   the members of the Existing Group have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) in the aggregate, directly or

36 

indirectly, effective control over fewer shares of Voting Stock than does such New Shareholder; and

b.   the members of the Existing Group do not collectively have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) the right to elect, or to designate for election, at least a majority of the Board of Directors of the Borrower.

SECTION 9.1.2.Change in Board.  During any period of 24 consecutive months, a majority of the Board of Directors of the Borrower shall no longer be composed of individuals:

a.   who were members of said Board on the first day of such period;

b.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board who were members of said Board on the first day of such period; or

c.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board referred to in the foregoing clauses (a) and (b).

SECTION 9.1.3.Unenforceability.  Any Loan Document shall cease to be the legally valid, binding and enforceable obligation of the Borrower (in each case, other than with respect to provisions of any Loan Document (i) identified as unenforceable in the form of the Original Closing Date opinion of the Borrower’s counsel set forth as Exhibit D-1 or (ii) that a court of competent jurisdiction has determined are not material) and such event shall continue unremedied for 15 days after notice thereof has been given to the Borrower by the Administrative Agent.

SECTION 9.1.4.Approvals.  Any material license, consent, authorization, registration or approval at any time necessary to enable the Borrower or any Principal Subsidiary to conduct its business shall be revoked, withdrawn or otherwise cease to be in full force and effect, unless the same would not have a Material Adverse Effect.

SECTION 9.1.5.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any of the covenants set forth in Section 7.2.4.

SECTION 9.1.6.Judgments.  Any judgment or order for the payment of money in excess of $50,000,000 shall be rendered against the Borrower or any of the Principal Subsidiaries by a court of competent jurisdiction and the Borrower or such Principal Subsidiary shall have failed to satisfy such judgment and either:

a.   enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5) Business Days after the commencement of such enforcement proceedings; or

37 

b.   there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.

SECTION 9.1.7.Condemnation, etc..  The Purchased Vessel shall be condemned or otherwise taken under color of law or requisitioned and the same shall continue unremedied for at least 20 days, unless such condemnation or other taking would not have a Material Adverse Effect.

SECTION 9.1.8.Arrest.  The Purchased Vessel shall be arrested and the same shall continue unremedied for at least 20 days, unless such arrest would not have a Material Adverse Effect.

SECTION 9.1.9.[RESERVED].

SECTION 9.1.10.Sale/Disposal of the Purchased Vessel.  The Purchased Vessel is sold to a company which is not the Borrower or any other Subsidiary of the Borrower (other than for the purpose of a lease back to the Borrower or any other Subsidiary of the Borrower).

SECTION 9.1.11.[RESERVED].

Payment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.

SECTION 9.2.Mandatory Prepayment.  If any Prepayment Event shall occur and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall, by notice to the Borrower, require the Borrower to prepay in full on the date of such notice all principal of and interest on the Loan and all other Obligations (and, in such event, the Borrower agrees to so pay the full unpaid amount of the Loan and all accrued and unpaid interest thereon and all other Obligations).

ARTICLE X

THE ADMINISTRATIVE AGENT AND THE HERMES AGENT

SECTION 10.1.Actions.  Each Lender hereby appoints KfW IPEX, as Administrative Agent and as Hermes Agent, as its agent under and for purposes of this Agreement and each other Loan Document (for purposes of this Article X, the Administrative Agent and the Hermes Agent are referred to collectively as the “Agents”).  Each Lender authorizes the Agents to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agents (with respect to which each Agent agrees that it will comply, except as otherwise provided in this Section 10.1 or as otherwise advised by counsel), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto.  Neither Agent shall be obliged to act on the instructions of any Lender or the Required Lenders if to do so would, in the opinion of such Agent, be contrary to any provision of this

38 

Agreement or any other Loan Document or to any law, or would expose such Agent to any actual or potential liability to any third party.

SECTION 10.2.Indemnity.  Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent, pro rata according to such Lender’s Percentage, from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that be incurred by or asserted or awarded against, such Agent in any way relating to or arising out of this Agreement and any other Loan Document or any action taken or omitted by such Agent under this Agreement or any other Loan Document; provided that no Lender shall be liable for the payment of any portion of such claims, damages, losses, liabilities and expenses which have resulted from such Agent’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower.  In the case of any investigation, litigation or proceeding giving rise to any such indemnified costs, this Section applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party.  Neither Agent shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is expressly required to do so under this Agreement or is indemnified hereunder to its satisfaction.  If any indemnity in favor of an Agent shall be or become, in such Agent’s determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.

SECTION 10.3.Funding Reliance, etc.  Each Lender shall notify the Administrative Agent by 4:00 p.m., Frankfurt time, one day prior to the advance of the Loan if it is not able to fund the following day.  Unless the Administrative Agent shall have been notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., Frankfurt time, on the day prior to the advance of the Loan that such Lender will not make available the amount which would constitute its Percentage of the Loan on the date specified therefor, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent and, in reliance upon such assumption, may, but shall not be obliged to, make available to the Borrower a corresponding amount.  If and to the extent that such Lender shall not have made such amount available to the Administrative Agent, such Lender and the Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Administrative Agent made such amount available to the Borrower to the date such amount is repaid to the Administrative Agent, at the interest rate applicable at the time to the Loan without premium or penalty.

SECTION 10.4.Exculpation.  Neither of the Agents nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence.  Without limitation of the generality of the foregoing, each Agent (i) may consult with legal counsel

39 

(including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it and in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, (iii) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or Prepayment Event or to inspect the property (including the books and records) of the Borrower, (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto, (v) shall incur no liability under or in respect of this Agreement by action upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties, and (vi) shall have no responsibility to the Borrower or any Lender on account of (A) the failure of a Lender or the Borrower to perform any of its obligations under this Agreement or any Loan Document; (B) the financial condition of the Borrower; (C) the completeness or accuracy of any statements, representations or warranties made in or pursuant to this Agreement or any Loan Document, or in or pursuant to any document delivered pursuant to or in connection with this Agreement or any Loan Document; or (D) the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of this Agreement or any Loan Document or of any document executed or delivered pursuant to or in connection with any Loan Document.

SECTION 10.5.Successor.  The Administrative Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders, provided that any such resignation shall not become effective until a successor Administrative Agent has been appointed as provided in this Section 10.5 and such successor Administrative Agent has accepted such appointment.  If the Administrative Agent at any time shall resign, the Required Lenders shall, subject to the immediately preceding proviso and subject to the consent of the Borrower (such consent not to be unreasonably withheld), appoint another Lender as a successor to the Administrative Agent which shall thereupon become such Administrative Agent’s successor hereunder (provided that the Required Lenders shall, subject to the consent of the Borrower unless an Event or Default or a Prepayment Event shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) offer to each of the other Lenders in turn, in the order of their respective Percentages of the Loan, the right to become successor Administrative Agent).  If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the Administrative Agent’s giving notice of resignation, then the Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be one of the Lenders or a commercial banking institution having a combined capital and surplus of at least $1,000,000,000 (or the equivalent in other currencies), subject, in each case, to the consent of the Borrower (such consent not to be unreasonably withheld).  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall be entitled to receive from the resigning Administrative Agent such documents of transfer and assignment as such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the resigning Administrative Agent, and the resigning Administrative

40 

Agent shall be discharged from its duties and obligations under this Agreement.  After any resigning Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of:

(a)      this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement; and

(b)      Section 11.3 and Section 11.4 shall continue to inure to its benefit.

If a Lender acting as the Administrative Agent assigns its Loan to one of its Affiliates, such Administrative Agent may, subject to the consent of the Borrower (such consent not to be unreasonably withheld or delayed) assign its rights and obligations as Administrative Agent to such Affiliate.

SECTION 10.6.Loans by the Administrative Agent.  The Administrative Agent shall have the same rights and powers with respect to the Loan made by it or any of its Affiliates.  The Administrative Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if the Administrative Agent were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.  The Administrative Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Administrative Agent.

SECTION 10.7.Credit Decisions.  Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment.  Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.

SECTION 10.8.Copies, etc.  Each Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to such Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower).  Each Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by such Agent from the Borrower for distribution to the Lenders by such Agent in accordance with the terms of this Agreement.

SECTION 10.9.The Agents’ Rights.  Each Agent may (i) assume that all representations or warranties made or deemed repeated by the Borrower in or pursuant to this Agreement or any Loan Document are true and complete, unless, in its capacity as the Administrative Agent, it has acquired actual knowledge to the contrary, (ii) assume that no Default has occurred unless, in its capacity as an Agent, it has acquired actual knowledge to the

41 

contrary, (iii) rely on any document or notice believed by it to be genuine, (iv) rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it, (v) rely as to any factual matters which might reasonably be expected to be within the knowledge of the Borrower on a certificate signed by or on behalf of the Borrower and (vi) refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Required Lenders) and unless and until such Agent has received from the Lenders any payment which such Agent may require on account of, or any security which such Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.

SECTION 10.10.The Administrative Agent’s Duties.  The Administrative Agent shall (i) if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of this Agreement or any Loan Document by the Borrower as to the existence of an Event of Default and (ii) inform the Lenders promptly of any Event of Default of which the Administrative Agent has actual knowledge.

The Administrative Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by the Borrower or actual knowledge of the occurrence of any Default unless a Lender, or the Borrower shall have given written notice thereof to the Administrative Agent in its capacity as the Administrative Agent.  Any information acquired by the Administrative Agent other than specifically in its capacity as the Administrative Agent shall not be deemed to be information acquired by the Administrative Agent in its capacity as the Administrative Agent.

The Administrative Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with the Borrower or with the Borrower’s subsidiaries or associated companies or with a Lender as if it were not the Administrative Agent.

SECTION 10.11.Employment of Agents.  In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to this Agreement or the Loan Documents, each Agent shall be entitled to employ and pay agents to do anything which such Agent is empowered to do under or pursuant to this Agreement or the Loan Documents (including the receipt of money and documents and the payment of money); provided that, unless otherwise provided herein, including without limitation Section 11.3, the employment of such agents shall be for such Agent’s account, and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by such Agent in good faith to be competent to give such opinion, advice or information.

SECTION 10.12.Distribution of Payments.  The Administrative Agent shall pay promptly to the order of each Lender that Lender’s Percentage Share of every sum of money received by the Administrative Agent pursuant to this Agreement or the Loan Documents (with the exception of any amounts payable pursuant to the Agreement to Provide Financing and any amounts which, by the terms of this Agreement or the Loan Documents, are paid to the Administrative Agent for the account of the Administrative Agent alone or specifically for the

42 

account of one or more Lenders) and until so paid such amount shall be held by the Administrative Agent on trust absolutely for that Lender.

SECTION 10.13.Reimbursement.  The Administrative Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum.  If, however, the Administrative Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Section 10.12 before it has itself received payment of that amount, and the Administrative Agent does not in fact receive payment within five (5) Business Days after the date on which that payment was required to be made by the terms of this Agreement or the Loan Documents, that Lender will, on demand by the Administrative Agent, refund to the Administrative Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Administrative Agent for any amount which the Administrative Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of this Agreement or the Loan Documents and ending on the date on which the Administrative Agent receives reimbursement.

SECTION 10.14.Instructions.  Where an Agent is authorized or directed to act or refrain from acting in accordance with the instructions of the Lenders or of the Required Lenders each of the Lenders shall provide such Agent with instructions within three (3) Business Days of such Agent’s request (which request may be made orally or in writing).  If a Lender does not provide such Agent with instructions within that period, that Lender shall be bound by the decision of such Agent.  Nothing in this Section 10.14 shall limit the right of such Agent to take, or refrain from taking, any action without obtaining the instructions of the Lenders or the Required Lenders if such Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with this Agreement or the Loan Documents.  In that event, such Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Administrative Agent pursuant to this Section 10.14.

SECTION 10.15.Payments.  All amounts payable to a Lender under this Section 10.15 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Administrative Agent.

SECTION 10.16.“Know your customer” Checks.  Each Lender shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself) in order for the Administrative Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in this Agreement or the Loan Documents.

SECTION 10.17.No Fiduciary Relationship.  Except as provided in Section 10.12, no Agent shall have any fiduciary relationship with or be deemed to be a trustee of or for any other person and nothing contained in this Agreement or any Loan Document shall constitute a partnership between any two or more Lenders or between either Agent and any other person.

43 

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.1.  Waivers, Amendments, etc.  The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided that no such amendment, modification or waiver which would:

a.   modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;

b.   modify this Section 11.1 or change the definition of “Required Lenders” shall be made without the consent of each Lender;

c.   increase the Commitment of any Lender shall be made without the consent of such Lender;

d.   reduce any fees described in Article III payable to any Lender shall be made without the consent of such Lender;

e.   [RESERVED]

f.   extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or

g.   affect adversely the interests, rights or obligations of the Administrative Agent in its capacity as such shall be made without consent of the Administrative Agent.

No failure or delay on the part of the Administrative Agent or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by any Agent or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.  The Lenders hereby agree, at any time and from time to time that the Nordea Agreement or the Citibank Agreement is amended or refinanced, to negotiate in good faith to amend this Agreement to conform any representations, warranties, covenants or events of default in this Agreement to the amendments made to any substantively comparable provisions in the Nordea Agreement or the Citibank Agreement or any refinancing thereof.

SECTION 11.2.Notices.

44 

(a)           All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted to such party at its address, facsimile number or electronic mail address set forth below its signature to the Assignment and Amendment Deed or set forth in the Lender Assignment Agreement or at such other address, or facsimile number as may be designated by such party in a notice to the other parties.  Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted provided it is received in legible form; any notice, if transmitted by electronic mail, shall be deemed given upon acknowledgment of receipt by the recipient.

(b)           So long as KfW IPEX is the Administrative Agent, the Borrower may provide to the Administrative Agent all information, documents and other materials that it furnishes to the Administrative Agent hereunder or any other Loan Document (and any guaranties, security agreements and other agreements relating thereto), including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing advance or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder or any other Loan Document prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of the Agreement and/or any advance or other extension of credit hereunder (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Administrative Agent at claudia.wenzel@kfw.de (or such other email address notified by the Administrative Agent to the Borrower); provided that any Communication requested pursuant to Section 7.1.1(h) shall be in a format acceptable to the Borrower and the Administrative Agent.

(1)           The Administrative Agent agrees that the receipt of Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of such Communications to the Administrative Agent for purposes hereunder and any other Loan Document (and any guaranties, security agreements and other agreements relating thereto).

(2)           The Borrower agrees that the Administrative Agent may make such items included in the Communications as the Borrower may specifically agree available to the Lender Parties by posting such notices, at the option of the Borrower, on Intralinks (the “Platform”). Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Administrative Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of

45 

third party rights or freedom from viruses or other code defects, is made by the Facility Agent or any of its Affiliates in connection with the Platform.

SECTION 11.3.Payment of Costs and Expenses.  The Borrower agrees to pay on demand all reasonable expenses of the Administrative Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Administrative Agent and of local counsel, if any, who may be retained by counsel to the Administrative Agent) in connection with any amendments, waivers, consents, supplements or other modifications to, this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated.  In addition, the Borrower agrees to pay reasonable fees and out of pocket expenses of counsel to the Administrative Agent in connection with the funding under this Agreement.  The Borrower further agrees to pay, and to save the Administrative Agent and the Lenders harmless from all liability for, any stamp, recording, documentary or other similar taxes arising from the execution, delivery or enforcement of this Agreement or the borrowing hereunder or any other Loan Documents.  The Borrower also agrees to reimburse the Administrative Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Administrative Agent or such Lender in connection with (x) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.

SECTION 11.4.Indemnification.  In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Borrower hereby indemnifies and holds harmless the Administrative Agent, each Lender and each of their respective Affiliates and their respective officers, advisors, directors and employees (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby or any actual or proposed use of the proceeds of the Loans (collectively, the “Indemnified Liabilities”), except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto.  Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided, that the Borrower shall reimburse such indemnified party for its reasonable out-of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations

46 

to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower  shall consult in good faith with  the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed).  Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower  shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense.  The Borrower acknowledges that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except to the extent such liability is determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings).  If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

SECTION 11.5.Survival.  The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 4.7, 11.3 and 11.4 and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement and the payment in full of all Obligations.  The representations and warranties made by the Borrower in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document.

47 

SECTION 11.6.Severability.  Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 11.7.Headings.  The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.

SECTION 11.8.Execution in Counterparts, Effectiveness, etc.   This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

SECTION 11.9.Third Party Rights.   Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it.

SECTION 11.10.Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that:

a.   except to the extent permitted under Section 7.2.5, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender; and

b.   the rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.

SECTION 11.11.Sale and Transfer of the Loan; Participations in the Loan.  Each Lender may assign, or sell participations in, its Loan to one or more other Persons in accordance with this Section 11.11.

SECTION 11.11.1.Assignments (i) KfW IPEX, as Lender, (A) with the written consent of the Borrower (which consent shall not be unreasonably delayed or withheld but which consent shall be deemed to have been given in the absence of a written notice delivered by the Borrower to KfW IPEX, on or before the fifth Business Day after receipt by the Borrower of KfW IPEX’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions, when taken together with participations sold by KfW IPEX pursuant to Section 11.11.2, up to 50.0% of the aggregate principal amount of the Loan and (B) after having assigned or transferred, when taken together with participations sold by KfW IPEX pursuant to Section 11.11.2, 50.0% of the aggregate principal amount of the Loan (pursuant to the foregoing clause (A) and/or Section 11.11.2, with the written consent of the Borrower (which consent may be withheld at the discretion of the Borrower) may at any time (and from time to time)

48 

 assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions all or any fraction of KfW IPEX’s remaining Loan.

(ii) Any Lender (other than KfW IPEX) with the written consents of the Borrower and the Administrative Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Borrower, shall be deemed to have been given in the absence of a written notice delivered by the Borrower to the Administrative Agent, on or before the fifth Business Day after receipt by the Borrower of such Lender’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions all or any fraction of such Lender’s Loan; provided that any Affiliate of KfW IPEX shall be subject to the provisions of Section 11.11.1(i) and 11.11.2(f) as if such Affiliate were KfW IPEX.

(iii) Any Lender, with notice to the Borrower and the Administrative Agent, and, notwithstanding the foregoing clauses (i) and (ii), without the consent of the Borrower, or the Administrative Agent, may assign or transfer (A) to any of its Affiliates (including, in the case of KfW IPEX, KfW) or (B) following the occurrence and during the continuance of an Event of Default or a Prepayment Event, to any other Person, in either case, all or any fraction of such Lender’s Loan.

(iv) Any Lender may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Administrative Agent) assign or charge all or any portion of its Loan to any Federal Reserve Bank as collateral security pursuant to Regulation A of the F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank all or any fraction of such Lender’s  Loan;

(v) No Lender may (notwithstanding the foregoing clauses) assign or transfer any of its rights under this Agreement unless it has given prior written notification of the transfer to Hermes and has obtained a prior written consent from Hermes.

(vi) Nothing in this Section 11.11.1 shall prejudice the right of the Lender to assign its rights under this Agreement to Hermes, if such assignment is required to be made by that Lender to Hermes in accordance with the Hermes Insurance Policy.

Each Person described in the foregoing clauses as being the Person to whom such assignment or transfer is to be made, is hereinafter referred to as an “Assignee Lender”.  Assignments in a minimum aggregate amount of $25,000,000 (or, if less, all of such Lender’s Loan and Commitment) (which assignment or transfer shall be of a constant, and not a varying, percentage of such Lender’s Loan) are permitted; provided that the Borrower and the Administrative Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned or transferred to an Assignee Lender until:

a.   written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Administrative Agent by such Lender and such Assignee Lender;

49 

b.   such Assignee Lender shall have executed and delivered to the Borrower and the Administrative Agent a Lender Assignment Agreement, accepted by the Administrative Agent; and

c.   the processing fees described below shall have been paid.

From and after the date that the Administrative Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned or transferred to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned or transferred by it, shall be released from its obligations hereunder and under the other Loan Documents, other than any obligations arising prior to the effective date of such assignment.  Except to the extent resulting from a subsequent change in law, in no event shall the Borrower be required to pay to any Assignee Lender any amount under Sections 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no such assignment been made.  Such assignor Lender or such Assignee Lender must also pay a processing fee to the Administrative Agent upon delivery of any Lender Assignment Agreement in the amount of $2,000 (and shall also reimburse the Administrative Agent for any reasonable out-of-pocket costs, including reasonable attorneys’ fees and expenses, incurred in connection with the assignment).

SECTION 11.11.2.Participations.  Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a “Participant”) participating interests in its Loan; provided that:

a.   no participation contemplated in this Section 11.11.2 shall relieve such Lender from its obligations hereunder;

b.   such Lender shall remain solely responsible for the performance of its obligations hereunder;

c.   the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;

d.   no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in clauses (b) through (f) of Section 11.1;

e.   the Borrower shall not be required to pay any amount under Sections 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no participating interest been sold; and

50 

f.   each Lender that sells a participation under this Section 11.11.2 shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest on) each of the Participant’s interest in the Lender’s Advances, Commitments or other interests hereunder (the “Participant Register”).  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.

g.   KfW IPEX may not sell participating interests pursuant to this Section 11.11.2 aggregating, when taken together with Loans and/or Commitments sold by KfW IPEX pursuant to Section 11.11.1, more than 50.0% of the aggregate principal amount of the Loan without the written consent of the Borrower (which consent shall not be required following the occurrence and during the continuance of an Event of Default or a Prepayment Event).

The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6 and clause (e) of 7.1.1, shall be considered a Lender.

SECTION 11.11.3.Register.  The Administrative Agent, acting as agent for the Borrower, shall maintain at its address referred to in Section 11.2 a copy of each Lender Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment(s) of, and principal amount of the Loan owing to, each Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

SECTION 11.12.Other Transactions.  Nothing contained herein shall preclude the Administrative Agent or any Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.

SECTION 11.13.Hermes Insurance Policy.

SECTION 11.13.1.Terms of Hermes Insurance Policy

(a)   95% cover of the Loan.

(b)   The Hermes Fee will not exceed 2.3% of the Loan as advanced on the Original Closing Date.

(c)   The parties entered into the Original Credit Agreement on the basis that the Hermes Insurance Policy contained the terms set forth in Section 11.13.1 of the Original Credit Agreement.

51 

SECTION 11.13.2.Obligations of the Hermes Agent and the Lenders.

(a)   Promptly upon receipt of the Hermes Insurance Policy from Hermes, the Hermes Agent shall (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) send a copy thereof to the Borrower.

(b)   The Hermes Agent shall perform such acts or provide such information, which are, acting reasonably, within its power so to perform or so to provide, as required by Hermes under the Hermes Insurance Policy as necessary to ensure that the Lenders obtain the support of Hermes pursuant to the Hermes Insurance Policy.

(c)   The Hermes Agent shall:

(i)   make written requests to Hermes seeking a reimbursement of the Hermes Fee in the circumstances described in Section 11.13.1(c)(iii) or (iv) promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) provide a copy of the request to the Borrower;

(ii)   use its reasonable endeavours to maximize the amount of any reimbursement of the Hermes Fee to which the Hermes Agent is entitled;

(iii)    pay to the Borrower the full amount of any reimbursement of the Hermes Fee that the Hermes Agent receives from Hermes within two (2) Business Days of receipt with same day value; and

(iv)    relay the good faith concerns of the Borrower to Hermes regarding the amount it is required to pay to Hermes or the amount of any reimbursement to which the Hermes Agent is entitled, it being agreed that the Hermes Agent’s obligation shall be no greater than simply to pass on to Hermes the Borrower’s concerns.

(d)   Each Lender will co operate with the Hermes Agent, the Administrative Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the Hermes Insurance Policy continue in full force and effect and shall indemnify and hold harmless each other Lender in the event that the Hermes Insurance Policy does not continue in full force and effect due to its gross negligence or willful default.

SECTION 11.14.Law and Jurisdiction

SECTION 11.14.1.Governing Law.  This Agreement and any non-contractual obligations arising out of or in respect of this Agreement shall in all respects be governed by and interpreted in accordance with English Law.

 52

SECTION 11.14.2.Jurisdiction.  For the exclusive benefit of the Administrative Agent and the Lenders, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts.  The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Section, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum.

SECTION 11.14.3.Alternative Jurisdiction.  Nothing contained in this Section shall limit the right of the Administrative Agent or the Lenders to commence any proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.

SECTION 11.14.4.Service of Process.  Without prejudice to the right of the Administrative Agent or the Lenders to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to RCL Cruises Ltd., presently at Building 2, Aviator Park, Station Road, Addlestone, Surrey KT15 2PG, Attention: General Counsel, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, at 9:00 am on the third Business Day after posting by prepaid first class registered post.

SECTION 11.15.Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain and to cause its Affiliates to maintain the confidentiality of all information provided to it by the Borrower or any Subsidiary of the Borrower, or by the Administrative Agent on the Borrower’s or such Subsidiary’s behalf, under this Agreement, and neither it nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement or in connection with other business now or hereafter existing or contemplated with the Borrower or any Subsidiary, except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by it or its Affiliates or their respective directors, officers, employees and agents, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or any of its Subsidiaries so long as such source is not, to its knowledge, prohibited from disclosing such information by a legal, contractual or fiduciary obligation to the Borrower or any of its Affiliates; provided, however, that it may disclose such information (A) at the request or pursuant to any requirement of any self-regulatory body, governmental body, agency or official to which the Administrative Agent, any Lender or any of their respective Affiliates is subject or in connection with an examination of the Administrative Agent, such Lender or any of their respective Affiliates by any such authority or body, including without limitation the Federal Republic of Germany; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable requirement of law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Administrative Agent, any Lender or their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder; (F) to the Administrative Agent or such Lender’s independent auditors, counsel, and any other professional advisors of the Administrative Agent or such Lender who are advised of the confidentiality of such information;

53 

(G) to any participant or assignee, provided that such Person agrees to keep such information confidential to the same extent required of the Administrative Agent and the Lenders hereunder; (H) as to the Administrative Agent, any Lender or their respective Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Borrower or any Subsidiary is party with the Administrative Agent, such Lender or such Affiliate; (I) to its Affiliates and its Affiliates’ directors, officers, employees, professional advisors and agents, provided that each such Affiliate, director, officer, employee, professional advisor or agent shall keep such information confidential to the same extent required of the Administrative Agent and the Lenders hereunder; and (J) to any other party to the Agreement.  Each of the Administrative Agent and the Lenders shall be responsible for any breach of this Section 11.15 by any of its Affiliates or any of its or its Affiliates’ directors, officers, employees, professional advisors and agents.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

54 

EXHIBIT A

Preliminary Repayment Schedule
US Dollars ($)
No.		Repayment Dates			Repayment	Loan Balance
	1		6	months after Delivery
	2		12	months after Delivery
	3		18	months after Delivery
	4		24	months after Delivery
	5		30	months after Delivery
	6		36	months after Delivery
	7		42	months after Delivery
	8		48	months after Delivery
	9		54	months after Delivery
	10		60	months after Delivery
	11		66	months after Delivery
	12		72	months after Delivery
	13		78	months after Delivery
	14		84	months after Delivery
	15		90	months after Delivery
	16		96	months after Delivery
	17		102	months after Delivery
	18		108	months after Delivery
	19		114	months after Delivery
	20		120	months after Delivery
	21		126	months after Delivery
	22		132	months after Delivery
	23		138	months after Delivery
	24		144	months after Delivery

A-1 

EXHIBIT D-1

Opinion of Liberian Counsel to the Borrower

D-1-1 

	Watson, Farley & Williams (New York) LLP
	1133 Avenue of the Americas New York, New York 10036
	Tel (212) 922 2200 Fax (212) 922 1512
________, 20__
To the Lenders party to the Credit Agreement referred to below and to KfW IPEX-Bank GmbH as Administrative Agent

Royal Caribbean Cruises Ltd.

Celebrity Eclipse Inc.

Dear Sirs:

We have acted as legal counsel on matters of Liberian law to Celebrity Eclipse Inc., a Liberian corporation (the “Borrower”), in connection with (a) a Hull No S-677 Credit Agreement dated as of November ___, 2009 (the “Credit Agreement”) and made between (1) the Borrower, (2) the Lenders (as defined therein) as several lenders, (3) KfW IPEX-Bank GmbH as Hermes Agent, and (4) KfW IPEX-Bank GmbH as Administrative Agent in respect of a loan facility in an amount not to exceed the US Dollar Equivalent of €420,000,000, and (b) the Guarantee dated ________, 20__ made by Royal Caribbean Cruises Ltd., a Liberian corporation (the “Guarantor”) in favor of the Lenders, the Hermes Agent and the Administrative Agent respecting the obligations of the Borrower under the Credit Agreement (collectively, together with the Credit Agreement, the “Documents”).  Terms defined in the Credit Agreement shall have the same meaning when used herein.

With reference to the Documents you have asked for our opinion on the matters set forth below.  In rendering this opinion we have examined executed copies of the Documents.  We have also examined originals or photostatic copies or certified copies of all such agreements and other instruments, certificates by public officials and certificates of officers of the Borrower and the Guarantor as are relevant and necessary and relevant corporate authorities of the Borrower and the Guarantor.  We have assumed with your approval, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies, the power, authority and legal right of the parties to the Documents other than the Borrower and the Guarantor to enter into and perform their respective obligations under each of the Documents, and the due authorization of the execution of the Documents by all parties thereto other than the Borrower and the Guarantor.  We have further assumed the validity and enforceability of the Documents under all applicable laws other than the law of the Republic of Liberia.

As to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon certificates of public officials and of officers or representatives of the Borrower and the Guarantor.

To the Lenders party to the Credit Agreement	Page 2
and KfW IPEX-GmbH as Administrative Agent
__________, 20___

We are attorneys admitted to practice in the State of New York and do not purport to be experts in the laws of any other jurisdiction.  Insofar as our opinion relates to the law of the Republic of Liberia, we have relied on opinions of counsel in Liberia rendered in transactions which we consider to afford a satisfactory basis for such opinion, and upon our independent examinations of the Liberian Corporation Act of 1948 (Chapter 1 of Title 4 of the Liberian Code of Laws of 1956, effective March 1, 1958 as amended to July, 1973), the Liberian Business Corporation Act of 1976 (Title 5 of the Liberian Code of Laws Revised of 1976, effective January 3, 1977 as amended) (the “Business Corporation Act”), the Liberian Maritime Law (Title 21 of the Liberian Code of Laws of 1956 as amended), and the Revenue Code of Liberia (2000), the regulations thereunder and an opinion dated December 23, 2004 addressed by the Minister of Justice and Attorney General of the Republic of Liberia to the LISCR Trust Company, made available to us by Liberian Corporation Services, Inc. and the Liberian International Ship & Corporate Registry, LLC, and our knowledge and interpretation of analogous laws in the United States.  In rendering our opinion as to the valid existence in good standing of the Borrower and the Guarantor, we have relied on Certificates of Goodstanding issued by order of the Minister of Foreign Affairs of the Republic of Liberia on ________, 20__.

This opinion is limited to the law of the Republic of Liberia.  We express no opinion as to the laws of any other jurisdiction.

Based upon and subject to the foregoing and having regard to the legal considerations which we deem relevant, we are of the opinion that:

1. Each of the Borrower and the Guarantor is a corporation duly incorporated, validly existing under the Business Corporation Act and in good standing under the law of the Republic of Liberia;

2. Each of the Borrower and the Guarantor has full right, power and authority to enter into, execute and deliver the Document to which it is a party and to perform each and all of its obligations under the Document to which it is a party;

3. Each of the Documents has been executed and delivered by a duly authorized signatory of the Borrower or the Guarantor party thereto;

4. Each of the Documents constitutes the legal, valid and binding obligations of the Borrower or the Guarantor party thereto, enforceable against the Borrower or the Guarantor, as the case may be, in accordance with its terms;

5. Neither the execution nor delivery of either of the Documents, nor the transactions contemplated therein, nor compliance with the terms and conditions thereof, will contravene any provisions of Liberian law or violate any provisions of the Articles of Incorporation (inclusive of any articles of amendment thereto) or the Bylaws of the Borrower or of the Guarantor;

6. No consent or approval of, or exemption by, any Liberian governmental or public bodies and authorities are required in connection with the execution and delivery by the Borrower or the Guarantor of the Documents;

To the Lenders party to the Credit Agreement	Page 3
and KfW IPEX-GmbH as Administrative Agent
__________, 20___

7. It is not necessary to file, record or register either of the Documents or any instrument relating thereto or effect any other official action in any public office or elsewhere in the Republic of Liberia to render any such document enforceable against the Borrower or the Guarantor;

8. Assuming neither of the Documents having been executed in the Republic of Liberia, no stamp or registration or similar taxes or charges are payable in the Republic of Liberia in respect of either of the Documents or the enforcement thereof in the courts of Liberia other than (i) customary court fees payable in litigation in the courts of Liberia and (ii) nominal documentary stamp taxes if the Documents are ever submitted to a Liberian court;

9. Assuming that no more than 25% of the total combined voting power and no more than 25% of the total value of the outstanding equity stock of either of the Borrower or the Guarantor is beneficially owned, directly or indirectly, by persons resident in the Republic of Liberia and that neither of the Borrower or the Guarantor, either directly or through agents acting on its behalf, engages in the Republic of Liberia in the pursuit of gain or profit with a degree of continuity or regularity, neither of the Borrower or the Guarantor is required or entitled under any existing applicable law or regulation of the Republic of Liberia to make any withholding or deduction in respect of any tax or otherwise from any payment which it is or may be required to make under any of the Documents;  and

10. Assuming that the shares of the Borrower and the Guarantor are not owned, directly or indirectly, by the Republic of Liberia or any other sovereign under Liberian law, neither the Borrower nor the Guarantor nor the property or assets of either of them is immune from the institution of legal proceedings or the obtaining or execution of a judgment in the Republic of Liberia.

We qualify our opinion to the extent that (i) the enforceability of the rights and remedies provided for in the Documents (a) may be limited by bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting generally the enforcement of creditors’ rights and (b) is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including application by a court of competent jurisdiction of principles of good faith, fair dealing, commercial reasonableness, materiality, unconscionability and conflict with public policy or similar principles, and (ii) while there is nothing in the law of the Republic of Liberia that prohibits a Liberian corporation from submitting to the jurisdiction of a forum other than the Republic of Liberia, the enforceability of such submission to jurisdiction provisions is not dependent upon Liberian law and such provisions may not be enforceable under the law of a particular jurisdiction.

A copy of this opinion letter may be delivered by any of you to any Person that becomes a Lender in accordance with the provisions of the Credit Agreement.  Any such Lender may rely on the opinion expressed above as if this opinion letter were addressed and delivered to such Lender on the date hereof.

This opinion letter speaks only as of the date hereof.  We expressly disclaim any responsibility to advise you or any other Lender who is permitted to rely on the opinion expressed herein as specified in the next preceding paragraph of any development or circumstance of any kind including any

To the Lenders party to the Credit Agreement	Page 4
and KfW IPEX-GmbH as Administrative Agent
__________, 20___

change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter.  Accordingly, any Lender relying on this opinion letter at any time should seek advice of its counsel as to the proper application of this opinion letter at such time.

Very truly yours,

Watson, Farley & Williams (New York) LLP

EXHIBIT E

FORM OF LENDER ASSIGNMENT AGREEMENT

To:           Royal Caribbean Cruises Ltd.

To:           KfW IPEX-Bank GmbH, as Administrative Agent (as defined below)

ROYAL CARIBBEAN CRUISES LTD.

Gentlemen and Ladies:

We refer to clause b of Section 11.11.1 of the Hull No. S-677 Credit Agreement, dated as of November 26, 2009, as amended and restated as of February ___, 2012 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the “Agreement”) among Royal Caribbean Cruises Ltd. (the “Borrower”), KfW IPEX-Bank GmbH as administrative agent (in such capacity, the “Administrative Agent”), and as Hermes agent, and KfW IPEX-Bank GmbH and the various other financial institutions from time to time party thereto as Lenders. Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement.

This agreement is delivered to you pursuant to clause b of Section 11.11.1 of the  Agreement and also constitutes notice to each of you, pursuant to clause a of Section 11.11.1 of the  Agreement, of the assignment and delegation to __________ (the “Assignee”) of __% of the Loan of __________ (the “Assignor”) outstanding under the  Agreement on the date hereof.  After giving effect to the foregoing assignment and delegation, the Assignor’s and the Assignee’s Percentages for the purposes of the  Agreement are set forth opposite such Person’s name on the signature pages hereof.

The Assignee hereby acknowledges and confirms that it has received a copy of the  Agreement and the exhibits related thereto, together with copies of the documents which were required to be delivered under the  Agreement as a condition to the making of the Loans thereunder.  The Assignee further confirms and agrees that in becoming a Lender and in making its Loan under the Agreement, such actions have and will be made without recourse to, or representation or warranty by the Administrative Agent.

Except as otherwise provided in the  Agreement, effective as of the date of acceptance hereof by the Borrower and the Administrative Agent:

(a)           the Assignee

(i)           shall be deemed automatically to have become a party to the  Agreement, have all the rights and obligations of a “Lender” under the  Agreement and the other Loan Documents as if it were an original signatory thereto to the extent specified in the second paragraph hereof;

(ii)            agrees to be bound by the terms and conditions set forth in the Agreement and the other Loan Documents as if it were an original signatory thereto; and

E-1 

(b)           the Assignor shall be released from its obligations under the Agreement and the other Loan Documents to the extent specified in the second paragraph hereof.

The Assignor and the Assignee hereby agree that the [Assignor] [Assignee] will pay to the Administrative Agent the processing fee referred to in Section 11.11.1 of the Agreement upon delivery hereof.

The Assignee hereby advises each of you of the following administrative details with respect to the assigned Loan and requests the Borrower to acknowledge receipt of this document:

(A)            Address for Notices:

Institution Name:

Attention:

Domestic Office:

Telephone:

Facsimile:

Telex (Answerback):

Lending Office:

Telephone:

Facsimile:

Telex (Answerback):

(B)           Payment Instructions:

The Assignee agrees to furnish the tax form required by last paragraph of Section 4.6 (if so required) of the Agreement no later than the date of acceptance hereof by the Borrower and the Administrative Agent.

E-2 

This Agreement may be executed by the Assignor and Assignee in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

E-3 

Adjusted Percentage                                               [ASSIGNOR]

Loan:                      _____%

By:  ________________________          

Title:

Percentage                                                                  [ASSIGNEE]

Loan:                       _____%

By:  ________________________         

Title:

Accepted and Acknowledged this

___ day of ___________, _____.

Royal Caribbean Cruises Ltd.

By:  ________________________          

Title:

KfW IPEX-Bank GmbH, as Administrative Agent

By: ________________________           

Title:

E-4 

Exhibit A-1

WFWNY Draft 02/09/12	Watson, Farley & Williams (New York) LLP
Our reference: 01474.50030/80034574v1	1133 Avenue of the Americas New York, New York 10036
	Tel (212) 922 2200 Fax (212) 922 1512
[●], 2012
To the Lenders party to the Credit Agreement referred to below and to KfW IPEX-Bank GmbH as Administrative Agent

Royal Caribbean Cruises Ltd.

Celebrity Eclipse Inc.

Dear Sirs:

We have acted as legal counsel on matters of Liberian law to Celebrity Eclipse Inc., a Liberian corporation (the “Existing Borrower”), and Royal Caribbean Cruises Ltd., a Liberian corporation (the “New Borrower”), in connection with (a) a Hull No S-677 Credit Agreement dated as of November 26, 2009 (the “Credit Agreement”) and made between (1) the Existing Borrower, (2) the Lenders (as defined therein) as several lenders, (3) KfW IPEX-Bank GmbH as Hermes Agent, and (4) KfW IPEX-Bank GmbH as Administrative Agent in respect of a loan facility in an amount not to exceed the US Dollar Equivalent of €420,000,000, and (b) an Assignment and Amendment Deed to Hull No S-677 Credit Agreement dated as of [●] (the “Assignment and Amendment Deed”) made among the Existing Borrower, the New Borrower, the Lenders, the Hermes Agent and the Administrative Agent providing for the transfer by novation of the rights and obligations of the Existing Borrower under the Credit Agreement to the New Borrower (the Credit Agreement and the Assignment and Amendment Deed, collectively, the “Documents”).  Terms defined in the Credit Agreement as assigned and amended by the Assignment and Amendment Deed shall have the same meaning when used herein.

With reference to the Documents you have asked for our opinion on the matters set forth below.  In rendering this opinion we have examined executed copies of the Documents.  We have also examined originals or photostatic copies or certified copies of all such agreements and other instruments, certificates by public officials and certificates of officers of the Existing Borrower and the New Borrower as are relevant and necessary and relevant corporate authorities of the Existing Borrower and the New Borrower.  We have assumed with your approval, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies, the power, authority and legal right of the parties to the Documents other than the Existing Borrower and the New Borrower to enter into and perform their respective obligations under the Documents, and the due authorization of the execution of the Documents by all parties thereto other than the Existing Borrower and the New Borrower.  We have also assumed that (i) neither of the Existing Borrower or the New Borrower has its management and control in Liberia, or undertakes any business activity in Liberia, and (ii) less than a majority of the direct or indirect shareholders of each of the Existing Borrower and the New Borrower

To the Lenders party to the Credit Agreement	Page 2
and KfW IPEX-Bank GmbH as Administrative Agent
[●], 2012

by vote or value are resident in Liberia.  We have further assumed the validity and enforceability of the Documents under all applicable laws other than the law of the Republic of Liberia.

As to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon certificates of public officials and of officers or representatives of the Existing Borrower and the New Borrower.

We are attorneys admitted to practice in the State of New York and do not purport to be experts in the laws of any other jurisdiction.  Insofar as our opinion relates to the law of the Republic of Liberia, we have relied on opinions of counsel in Liberia rendered in transactions which we consider to afford a satisfactory basis for such opinion, and upon our independent examinations of the Liberian Corporation Act of 1948 (Chapter 1 of Title 4 of the Liberian Code of Laws of 1956, effective March 1, 1958 as amended to July, 1973), the Liberian Business Corporation Act of 1976 (Title 5 of the Liberian Code of Laws Revised of 1976, effective January 3, 1977 as amended) (the “Business Corporation Act”), the Liberian Maritime Law (Title 21 of the Liberian Code of Laws of 1956 as amended), the Revenue Code of Liberia (2000) as amended by the Consolidated Tax Amendments Act of 2011, and the Liberian Commercial Code of 2010, made available to us by Liberian Corporation Services, Inc. and the Liberian International Ship & Corporate Registry, LLC, and our knowledge and interpretation of analogous laws in the United States.  In rendering our opinion as to the valid existence in good standing of the Existing Borrower and the New Borrower, we have relied on Certificates of Goodstanding issued by order of the Minister of Foreign Affairs of the Republic of Liberia on [●], 2012.

This opinion is limited to the law of the Republic of Liberia.  We express no opinion as to the laws of any other jurisdiction.

Based upon and subject to the foregoing and having regard to the legal considerations which we deem relevant, we are of the opinion that:

1. Each of the Existing Borrower and the New Borrower is a corporation duly incorporated, validly existing under the Business Corporation Act and in good standing under the law of the Republic of Liberia;

2. Each of the Existing Borrower and the New Borrower has full right, power and authority to enter into, execute and deliver the Assignment and Amendment Deed and to perform each and all of its obligations under the Credit Agreement as assigned and amended by the Assignment and Amendment Deed;

3. The Assignment and Amendment Deed has been executed and delivered by a duly authorized signatory of each of the Existing Borrower and the New Borrower;

4. The Credit Agreement as assigned and amended by the Assignment and Amendment Deed constitutes the legal, valid and binding obligations of each of the Existing Borrower and the New Borrower, enforceable against the Existing Borrower and the New Borrower, in accordance with its terms;

To the Lenders party to the Credit Agreement	Page 3
and KfW IPEX-Bank GmbH as Administrative Agent
[●], 2012

5. Neither the execution nor delivery of the Documents, nor the transactions contemplated therein, nor compliance with the terms and conditions thereof, will contravene any provisions of Liberian law or violate any provisions of the Articles of Incorporation (inclusive of any articles of amendment thereto) or the Bylaws of the Existing Borrower or of the New Borrower;

6. No consent or approval of, or exemption by, any Liberian governmental or public bodies and authorities are required in connection with the execution and delivery by the Existing Borrower or the New Borrower of the Documents;

7. It is not necessary to file, record or register either of the Documents or any instrument relating thereto or effect any other official action in any public office or elsewhere in the Republic of Liberia to render any such document enforceable against the Existing Borrower or the New Borrower;

8. Assuming neither of the Documents having been executed in the Republic of Liberia, no stamp or registration or similar taxes or charges are payable in the Republic of Liberia in respect of either of the Documents or the enforcement thereof in the courts of Liberia other than (i) customary court fees payable in litigation in the courts of Liberia and (ii) nominal documentary stamp taxes if the Documents are ever submitted to a Liberian court;

9. Neither of the Existing Borrower or the New Borrower is required or entitled under any existing applicable law or regulation of the Republic of Liberia to make any withholding or deduction in respect of any tax or otherwise from any payment which it is or may be required to make under the Documents;

10. Assuming that the shares of the Existing Borrower and the New Borrower are not owned, directly or indirectly, by the Republic of Liberia or any other sovereign under Liberian law, neither the Existing Borrower nor the New Borrower nor the property or assets of either of them is immune from the institution of legal proceedings or the obtaining or execution of a judgment in the Republic of Liberia;  and

11. Under Liberian law the choice by each of the Existing Borrower and the New Borrower of English law to govern the Assignment and Amendment Deed is a valid choice of law and the irrevocable submission thereunder by each of the Existing Borrower and the New Borrower to the jurisdiction of the courts of England is a valid submission to such courts.  In the event a judgment of such courts against either of the Existing Borrower or the New Borrower was obtained after service of process in the manner specified in the Credit Agreement as assigned and amended by the Assignment and Amendment Deed, such judgment would (when duly authenticated) be admissible as evidence in proceedings brought to enforce the Credit Agreement as assigned and amended by the Assignment and Amendment Deed in the courts of Liberia;  provided that each defendant in any such proceeding shall have appeared in person or by an authorized representative before the English court rendering such judgment.

We qualify our opinion to the extent that (i) the enforceability of the rights and remedies provided for in the Documents (a) may be limited by bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting generally the enforcement of creditors’ rights and (b) is subject to

To the Lenders party to the Credit Agreement	Page 4
and KfW IPEX-Bank GmbH as Administrative Agent
[●], 2012

general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including application by a court of competent jurisdiction of principles of good faith, fair dealing, commercial reasonableness, materiality, unconscionability and conflict with public policy or similar principles, and (ii) while there is nothing in the law of the Republic of Liberia that prohibits a Liberian corporation from submitting to the jurisdiction of a forum other than the Republic of Liberia, the enforceability of such submission to jurisdiction provisions is not dependent upon Liberian law and such provisions may not be enforceable under the law of a particular jurisdiction.

A copy of this opinion letter may be delivered by any of you to any Person that becomes a Lender in accordance with the provisions of the Credit Agreement as assigned and amended by the Assignment and Amendment Deed.  Any such Lender may rely on the opinion expressed above as if this opinion letter were addressed and delivered to such Lender on the date hereof.

This opinion letter speaks only as of the date hereof.  We expressly disclaim any responsibility to advise you or any other Lender who is permitted to rely on the opinion expressed herein as specified in the next preceding paragraph of any development or circumstance of any kind including any change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter.  Accordingly, any Lender relying on this opinion letter at any time should seek advice of its counsel as to the proper application of this opinion letter at such time.

Very truly yours,

Watson, Farley & Williams (New York) LLP

Exhibit A-2

NORTON ROSE

[•] February 2012

For the attention of Claudia Wenzel  KfW IPEX-Bank GmbH Palmengartenstrabe 5-9  60325 Frankfurt am Main Germany		Norton Rose LLP 3 More London Riverside London SE1 2AQ United Kingdom
		Tel +44(0)20 7283 6000 Fax +44 (0)20 7283 6500 DX 85 London nortonrose.com
	Your reference	Direct Line +44 (0)20 7444 3436
	Our reference	Email
	SRH/LN50183	simon.hartley@nortonrose.com

Dear Sirs

(1) Assignment and Amendment to Hull No. S-676 Credit Agreement dated [•] February 2012 made between Celebrity Equinox Inc., Royal Caribbean Cruises Ltd., the various financial institutions party thereto and KfW IPEX-Bank GmbH, (2) Assignment and Amendment to Hull No. S-677 Credit Agreement dated [•] February 2012 made between Celebrity Eclipse Inc., Royal Caribbean Cruises Ltd., the various financial institutions party thereto and KfW IPEX-Bank GmbH and (3) Assignment and Amendment to Hull No. S-679 Credit Agreement dated [•] February 2012 made between Celebrity Silhouette Inc., Royal Caribbean Cruises Ltd., the various financial institutions party thereto and KfW IPEX-Bank GmbH, (together, the Transaction)

Our opinion in relation to the Transaction is attached.

Yours faithfully

Norton Rose LLP

1 

1            Background

1.1 This opinion is given in relation to the English law aspects of a transaction (the Transaction) by which:

(a)   KfW IPEX-Bank GmbH in their capacity as a lender (the Lender) has made available a US dollar loan facility in an amount not to exceed the US dollar equivalent corresponding to EUR 412,000,000 to Celebrity Equinox Inc., (the Equinox Borrower) under a credit agreement dated as of April 15, 2009 (the Existing Equinox Credit Agreement) made between the Equinox Borrower, the Lender, KfW IPEX-Bank GmbH in its capacity as agent for Hermes related matters (the Hermes Agent) and KfW IPEX-Bank GmbH in its capacity as administrative agent (the Administrative Agent), the Equinox Borrower has assigned to Royal Caribbean Cruises Ltd. (the New Borrower) all of its rights and the New Borrower has assumed all of the Equinox Borrower's obligations under the Existing Equinox Credit Agreement as amended and restated pursuant to an assignment and amendment deed dated [•] February 2012 (the Equinox Amended and Restated Credit Agreement);

(b)   the Lender has made available a US dollar loan facility in an amount not to exceed the US dollar equivalent corresponding to EUR 420,000,000 to Celebrity Eclipse Inc., (the Eclipse Borrower) under a credit agreement dated as of November 26, 2009 (the Existing Eclipse Credit Agreement) made between the Eclipse Borrower, the Lender, the Hermes Agent and the Administrative Agent, the Eclipse Borrower has assigned to the New Borrower all of its rights and the New Borrower has assumed all of the Eclipse Borrower's obligations under the Existing Eclipse Credit Agreement as amended and restated pursuant to an assignment and amendment deed dated [•] February 2012 (the Eclipse Amended and Restated Credit Agreement); and

(c)   the Lender has made available a US dollar loan facility in an amount not to exceed the US dollar equivalent corresponding to EUR 444,000,000 to Celebrity Silhouette Inc., (the Silhouette Borrower, together with the Equinox Borrower, the Eclipse Borrower and the New Borrower, the Companies and each a Company) under a credit agreement dated as of February 27, 2009 (the Existing Silhouette Credit Agreement) made between the Silhouette Borrower, the Lender, the Hermes Agent and the Administrative Agent, the Silhouette Borrower has assigned to the New Borrower all of its rights and the New Borrower has assumed all of the Silhouette Borrower's obligations under the Existing Silhouette Credit Agreement as amended and restated pursuant to an assignment and amendment deed dated [•] February 2012 (the Silhouette Amended and Restated Credit Agreement and, together with Equinox Amended and Restated Credit Agreement and the Eclipse Amended and Restated Credit Agreement, the Amended and Restated Credit Agreements).

1.2 We have acted as English legal advisers to KfW IPEX-Bank GmbH, acting as agent acting on behalf of the Lender (the Agent), in relation to the Transaction.

1.3           We have examined:

(a)   an original assignment and amendment to Existing Equinox Credit Agreement dated [•] February 2012 (including the Equinox Amended and Restated Credit Agreement scheduled thereto) (the Equinox Assignment and Amendment Deed) made between the Equinox Borrower, the New Borrower, the Lender, the Hermes Agent and the Administrative Agent;

(b)   an original assignment and amendment to Existing Eclipse Credit Agreement dated [•] February 2012 (including the Eclipse Amended and Restated Credit Agreement scheduled thereto) (the Eclipse Assignment and Amendment Deed) made between the Eclipse Borrower, the New Borrower, the Lender, the Hermes Agent and the Administrative Agent; and

2 

(c)    an original assignment and amendment to Existing Silhouette Credit Agreement dated [•] February 2012 (including the Silhouette Amended and Restated Credit Agreement scheduled thereto) (the Silhouette Assignment and Amendment Deed) made between the Silhouette Borrower, the New Borrower, the Lender, the Hermes Agent and the Administrative Agent (the Silhouette Assignment and Amendment Deed together with the Equinox Assignment and Amendment Deed and the Eclipse Assignment and Amendment Deed, the English Documents).

1.4 For the purpose of giving this opinion, we have examined no other documents and have undertaken no other enquiries.

1.5 Our opinions are given in part 2. Part 3 explains their scope, part 4 describes the assumptions on which they are made and part 5 contains the qualifications to which they are subject.

3 

2            Opinions

Based on, and subject to, the other provisions of this opinion, we are of the following opinions:

Effect of the English Documents

2.1 The obligations which the Companies are expressed to assume in the English Documents to which they are a party constitute their legal, valid, binding and enforceable obligations.

2.2 If an English Document is expressed to create a charge over assets of a company that charge is (subject to its terms) effective to the extent that the assets concerned are beneficially owned by the company at the time the charge is created. To the extent they are not, that charge will (subject to its terms) become effective if and when the assets concerned become beneficially owned by that company.

2.3           The effectiveness or admissibility in evidence of the English Documents is not dependent on:

(a)   any registrations, filings, notarisations or similar actions other than those described in part 4; or

(b)   any consents, authorisations, licences or approvals of general application from governmental, judicial or public bodies.

Stamp duty on the English Documents

2.4 No stamp, registration or similar duty or tax is payable in respect of the creation of the English Documents.

Choice of law and jurisdiction

2.5 The choice of English law to govern the English Documents and any non-contractual obligations connected to the English Documents is effective.

2.6 The agreement by the parties in the English Documents that the English courts have jurisdiction in respect of that document or any non-contractual obligations connected to that document is effective.

4 

3            Scope

3.1 This opinion and any non-contractual obligations connected with it are governed by English law and are subject to the exclusive jurisdiction of the English courts.

3.2 This opinion is given only in relation to English law as it is understood at the date of this opinion. We have no duty to keep you informed of subsequent developments which might affect this opinion.

3.3 If a question arises in relation to a cross-border transaction, it may not be the English courts which decide that question and English law may not be used to settle it.

3.4 We express no opinion on, and have taken no account of, the laws of any jurisdiction other than England. In particular, we express no opinion on the effect of documents governed by laws other than English law.

3.5 We express no opinion on matters of fact.

3.6 Our opinion is limited to the matters expressly stated in part 2, and it is not to be extended by implication. In particular, we express no opinion on the accuracy of the assumptions contained in part 4. Each statement which has the effect of limiting our opinion is independent of any other such statement and is not to be impliedly restricted by it. Paragraph headings are to be ignored when construing this opinion.

3.7 Our opinion is given solely for the benefit of the Agent and the Lenders (as that expression is defined in each of the Amended and Restated Credit Agreements) (and including any Affiliate (as that expression is defined in each of the Amended and Restated Credit Agreements) of the Lenders to the extent that such Affiliate becomes a Lender) acting through the Agent. It may not be relied on by any other person.

3.8           This opinion may not be disclosed to any person other than:

(a)   those persons (such as auditors or regulatory authorities) who, in the ordinary course of business of the Agent and the Lenders, have access to their papers and records or are entitled by law to see them; and

(b)   those persons who are considering becoming Lenders,

and on the basis that those persons will make no further disclosure.

5 

4            Assumptions

This opinion is based on the following assumptions:

Effect of the English Documents

4.1           Each person which is expressed to be party to the English Documents:

(a)   is duly incorporated and is validly existing;

(b)   is not the subject of any insolvency proceedings (which includes those relating to bankruptcy, liquidation, administration, administrative receivership and reorganisation) inany jurisdiction;

(c)   has the capacity to execute the English Documents to which it is expressed to be a party and to perform the obligations it is expressed to assume under it;

(d)   has taken all necessary corporate action to authorise it to execute the English Documents to which it is expressed to be a party and to perform the obligations it is expressed to assume under it; and

(e)   has duly executed the English Documents to which it is expressed to be a party.

4.2 The English Documents have been executed in the form provided to us. There has been no variation, waiver or discharge of any of the provisions of the English Documents.

4.3 The English Documents are not (wholly or in part) void, voidable, unenforceable, ineffective or otherwise capable of being affected as a result of any vitiating matter (such as mistake, misrepresentation, duress, undue influence, fraud, breach of directors' duties, illegality or public policy) that is not clear from the terms of the English Documents.

4.4 Each Company is solvent both on a balance sheet and on a cash flow basis, and will remain so immediately after the Transaction has been completed.

Other facts

4.5 There are no other facts relevant to this opinion that do not appear from the documents referred to in part 1.

Other laws

4.6 No law of any jurisdiction other than England has any bearing on the opinion contained in part 2.

6 

5            Qualifications

This opinion is subject to the following qualifications:

Contractual matters

5.1 The enforcement of contractual obligations is subject to the general principles of contractual liability, in particular the matters described in the following paragraphs.

5.2 Apart from claims for the payment of debts (including the repayment of loans), contractual obligations are normally enforced by an award of damages for the loss suffered as a result of a breach of contract; and recoverable loss is restricted by principles such as causation, remoteness and mitigation. The specific performance of contractual obligations is a discretionary remedy and is only available in limited circumstances.

5.3 Contractual obligations can be discharged by matters such as breach of contract or frustration. Claims may become time-barred or may be subject to defences such as set-off or estoppel.

5.4 The interpretation of the meaning and legal effect of any particular provision of a contract is a matter of judgment, which will ultimately be determined by the relevant tribunal. In addition, a document may be capable of being rectified if it does not express the common intention of the parties.

5.5 A clause in a contract which excludes or limits an obligation of one of the parties or the liability for breach of that obligation will be construed restrictively, against the person who wishes to rely on it.

5.6 If a provision of a contract is particularly one-sided it is more likely to be construed against the party who wishes to rely on it.

5.7 A provision of a contract may be ineffective if it is incomplete or uncertain or provides for a matter to be determined by future agreement.

5.8 A provision of a contract which provides for the conclusive certification or determination of a matter by one party may not prevent judicial inquiry into the merits of the claim.

5.9 A provision for the payment of a sum in the event of a breach of contract is unenforceable if it is construed as a penalty rather than a genuine pre-estimate of the loss likely to be suffered as a result of the breach and, if that sum has been paid, it may be repayable in whole or in part.

5.10 A contractual provision for the forfeiture of a proprietary or possessory interest, such as the rights of a lessee under a chattel lease, may be overridden.

5.11 An undertaking to assume liability for stamp duty or similar taxes may be ineffective.

5.12 As a general principle, an authority or power of attorney can be revoked at any time, and will be revoked if the donor enters into insolvency proceedings. This is so even if the authority or power is expressed to be irrevocable and the revocation is therefore made in breach of contract. The main exception to this principle is where the authority or power is granted as part of a security arrangement.

5.13 A provision of a contract which purports to exclude the effect of prior or subsequent agreements, representations or waivers may be ineffective.

5.14 A provision of a contract which provides what will happen in the event of an illegality (including a provision for severance of part of the contract) may not be enforceable.

5.15         An indemnity in respect of criminal liability may not be enforceable.

7 

5.16           An indemnity for the costs of litigation may not be enforceable.

Insolvency

5.17 The parties' rights are subject to laws affecting creditors' rights generally, such as those relating to insolvency (which includes bankruptcy, liquidation, administration, administrative receivership and reorganisation). These laws can apply to persons incorporated or resident outside England, as well as to those incorporated or resident in England.

5.18           In particular, on an insolvency:

(a)   contractual and other personal rights will reduce proportionately with all similar rights, and contractual provisions which would conflict with this principle (such as a pro rata sharing clause) are ineffective;

(b)   transactions entered into in the period before the insolvency starts (that period generally being no longer than two years) may be set aside in certain circumstances; and

(c)   the ability of a secured creditor to enforce its security may be subject to limitations, for instance in an administration.

Choice of law and jurisdiction

5.19 The law which governs a contract and any connected non-contractual obligations is not determinative of all issues which arise in connection with that contract. For instance:

(a)    it may not be relevant to the determination of proprietary issues (such as those relating to security);

(b)   rules which are mandatory (which includes public policy rules) in a jurisdiction which is connected with the contract or in the jurisdiction where the issue is decided may be applied regardless of the provisions of the contract; and

(c)   in insolvency proceedings, the law governing those proceedings may override the law governing the contract.

5.20 There are circumstances in which the English courts may, or must, decline jurisdiction or stay proceedings. Additionally, it may not be possible to commence proceedings because of an inability to comply with service of process requirements. These problems are less likely to occur where one or more of the parties is domiciled in the European Union.

5.21 The English courts have a discretion to accept jurisdiction in an appropriate case even though there is an agreement that other courts have (exclusive or non-exclusive) jurisdiction. This is less likely to occur where the other courts are in the European Union.

5.22 The jurisdiction of the English courts in relation to insolvency matters is not dependent on the submission of the parties to the jurisdiction. The precise scope of that jurisdiction depends on the nature of the insolvency procedure in question.

8 

Exhibit A-3

	CLIFFORD CHANCE US LLP
	31 WEST 52ND STREET NEW YORK, NY 10010-6131
	TEL +1 212 878 8000 FAX +1 212 878 8375
	www.cliffordchance.com
KfW IPEX-Bank GmbH Palmengartenstrasse 5-9
60325 Frankfurt am Main Federal Republic of Germany (“KfW”)	February ●, 2012

Re: Application of U.S. Withholding Tax to Royal Caribbean Cruises Ltd. Payments

This opinion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code and was written to support the promotion or marketing (as defined in IRS Circular 230) of the transactions contemplated in the Documents. Each person considering such transactions should seek advice based on such person’s particular circumstances from an independent tax advisor.

Dear Sirs:

You have asked whether U.S. withholding tax will be imposed on payments made by the U.S. branch of Royal Caribbean Cruises Ltd. (“RCCL”), a corporation organized under the laws of Liberia, to KfW, a financial institution organized under the laws of the Federal Republic of Germany (the “Lender”), under the Amended And Restated Hull No. S-677 Credit Agreement dated as of November 26, 2009 and amended and restated on February ●, 2012 (the “Credit Agreement”) between the Lender, RCCL as borrower and KfW as Hermes agent, administrative agent and a Lender and the Assignment And Amendment Deed to Hull No. S-677 Credit Agrement dated February ●, 2012 between Celebrity Eclipse Inc., a Liberian corporation, RCCL, KfW and the Lender, as defined therein (together with the Credit Agreement the “Documents”).

Under the Credit Agreement, RCCL will owe money to the Lender that was borrowed to help fund the purchase of Hull No. S-677 at Meyer Werft GmbH.

The loan advanced under the Credit Agreement will accrue interest at either a fixed rate or a floating rate in accordance with the provisions set forth in the Credit Agreement.

In connection with rendering this opinion we have reviewed the Documents, and such other documents as we have deemed necessary or appropriate for purposes of rendering this opinion. We have assumed, with your consent, that: (i) all documents reviewed by us are original documents, or true and accurate copies of original documents, and have not been subsequently amended; (ii) the signatures on each original document are genuine; (iii) all representations and statements as to matters of fact set forth in such documents are true and correct; (iv) all obligations imposed by any such documents on the parties thereto have been or will be performed or satisfied in accordance with their terms; and (v) there are no documents relevant to

 CLIFFORD CHANCE US LLP

this opinion to which we have not been given access. We have also assumed, with your consent, that:

(i) each Lender (which term as used in this opinion letter does not include any successor or assign) is and will continue to be eligible to claim benefits as a resident of the jurisdiction in which it was formed under the income tax treaty between the United States and such jurisdiction currently in force (each a “Treaty”);

(ii) no Lender will receive payments under the Documents that are attributable, for purposes of the Treaty under which it is eligible to claim benefits, to a permanent establishment of such Lender in the United States;

(iii) no Lender has made or will make an election, or otherwise taken steps, to be treated as other than a corporation for United States federal income tax purposes;

(iv) each of the Lenders will provide the RCCL or its agent with a properly completed Internal Revenue Service (“IRS”) Form W-8BEN accurately representing that such Lender is eligible to claim benefits under a Treaty for all payments under the Credit Agreement;

(v) if a Lender is receiving payments for a participant, it will provide RCCL with a properly completed IRS Form W-8IMY to which it will attach its own IRS Form W-8BEN and a properly completed IRS Form W-8BEN from each participant accurately representing that the participant is entitled to receive all payments under the Credit Agreement free and clear of U.S. withholding; and

[(vi) each Lender will be eligible to receive payments free of withholding under the provisions of Sections 1471 through 1474 of the U.S. Internal Revenue Code (“FATCA”) and will provide RCCL or its agent with such properly completed IRS forms, certifications and other items as may be required to establish the Lenders’ exemption from withholding under FATCA;} and

(vii) all of the foregoing will continue to be accurate and correct.

Conclusion

We are members of the Bar of the State of New York.  This opinion is limited to the U.S. federal withholding tax treatment of payments by RCCL under the Documents and does not address any other tax or legal consequences of the transactions contemplated in the Documents. This opinion is rendered solely to you and may not be relied upon by any other person, other than your legal advisors.  Our opinion is based on existing authorities as of the date hereof and may change as a result of subsequent legislation, regulations, administrative pronouncements, court opinions or other legal developments, possibly with retroactive effect.  We do not undertake to update this opinion based on any such developments unless specifically engaged by you to do so.  Our opinion is not binding on the IRS, and no assurance can be given that the conclusions expressed herein will not be challenged by the IRS or will be sustained by a court.

Based on the assumptions and limitations set forth above, we are of the view that there will be no U.S. federal withholding tax imposed on payments by RCCL under the Documents to each Lender.  Payments to non-U.S. persons that are not considered to be U.S. source income for U.S.

- 2 - 

 CLIFFORD CHANCE US LLP

federal income tax purposes, generally are not subject to U.S. withholding tax.  Payments by RCCL under the Documents to each Lender, to the extent they are U.S. source income, will be exempt from U.S. withholding tax either under the Interest or Other Income Articles of a relevant Treaty.

Our conclusions are expressions of our professional judgment with respect to U.S. federal income tax law and do not provide any guarantee as to the actual outcome of any U.S. federal income tax controversy.

Sincerely,

- 3 -

EX-10.5

Exhibit 10.5

EXECUTION COPY

ASSIGNMENT AND AMENDMENT DEED TO HULL NO. S-679 CREDIT AGREEMENT

This ASSIGNMENT AND AMENDMENT DEED TO HULL NO. S-679 CREDIT AGREEMENT (this “Deed”), dated February 17, 2012, is among CELEBRITY SILHOUETTE INC., a Liberian corporation (the “Existing Borrower), ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation (the “New Borrower) and KFW IPEX-BANK GMBH in its capacity as agent for Hermes (in such capacity, the “Hermes Agent”), in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and in its capacity as lender (in such capacity, the “Lender”).

PRELIMINARY STATEMENTS

(1)           The Existing Borrower, the Lender, the Hermes Agent and the Administrative Agent are parties to a Hull No. S-679 Credit Agreement dated as of February 27, 2009 (such Hull No. S-679 Credit Agreement as in effect immediately prior to giving effect to this Deed, the “Existing Credit Agreement” and as amended hereby, the “Restated Credit Agreement”);

(2)           The Existing Borrower has agreed to assign to the New Borrower all of its rights and transfer by way of novation of all of its obligations under the Existing Credit Agreement, and the New Borrower has agreed to accept the assignment of all of the Existing Borrower’s rights under the Existing Credit Agreement, and to assume all of the obligations of the Existing Borrower under the Existing Credit Agreement; and

(3)           The New Borrower, the Lender and the Administrative Agent have agreed to amend the Existing Credit Agreement as hereinafter set forth herein.

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1.  Assignments. (a) Subject to the satisfaction of the conditions set forth in Section 4 of this Deed and effective as of the Restatement Effective Date:

(i)   the Existing Borrower hereby assigns, novates, transfers and conveys to the New Borrower all of its rights and obligations under the Existing Credit Agreement (the “Assignment”).

(ii)   The New Borrower hereby accepts the Assignment and assumes all of the obligations of the Existing Borrower under the Existing Credit Agreement to the same extent as if the New Borrower had executed the Existing Credit Agreement (the “Assumption”).  The New Borrower hereby agrees to be bound by the terms and provisions of the Existing Credit Agreement as the “Borrower” thereunder and accepts all of the Existing Borrower’s rights and obligations thereunder.

(b)            Upon the execution and delivery hereof by the Existing Borrower, the New Borrower, the Hermes Agent, the Administrative Agent and the Lender accept and agree to the arrangements referred to in (a) above and agree that (i) the New Borrower shall, as of the Restatement Effective Date, succeed to the rights and be obligated to perform the obligations of the Existing Borrower under the Existing Credit Agreement and (ii) the Existing Borrower shall, as of the Restatement Effective Date, be released from its obligations under the Existing Credit Agreement.

SECTION 2.  Termination and Release of Guarantee.  In consideration of the Assignment and the Assumption, subject to the satisfaction of the conditions set forth in Section 4 of this Deed and effective as of the Restatement Effective Date, the Guarantee in favour of the Lender issued on July13, 2011 by the New Borrower, in its capacity as Guarantor (as defined under the Existing Credit  Agreement), is hereby terminated in its entirety and the New Borrower is forever released and discharged from its obligations under the Guarantee.

SECTION 3.  Amendment to the Existing Credit Agreement.  In consideration of the mutual covenants in this Deed, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the New Borrower, the Hermes Agent, the Administrative Agent and the Lender agree that the Existing Credit Agreement is, immediately after giving effect to the Assignment and the Assumption and subject to the satisfaction of the conditions precedent set forth in Section 4, hereby amended on the Restatement Effective Date in its entirety to read as set forth in Appendix I hereto.

SECTION 4.  Conditions of Effectiveness of Restated Credit Agreement and Assignment and Assumption.  The transactions contemplated by Sections 1 and 2 of this Deed and the Restated Credit Agreement shall become effective in accordance with the terms of this Deed on the date (the “Restatement Effective Date”) each of the following conditions has been satisfied to the reasonable satisfaction of the Administrative Agent:

(a)           This Deed shall have become effective in accordance with Section 5 and the Administrative Agent shall have received duly executed original signature pages to this Deed from each party hereto.

(b)           The Administrative Agent shall have received from the New Borrower:

(i)           a certificate dated no earlier than the signing date of this Deed of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Deed and as to the truth and completeness of the attached:

(x)           resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Deed and each other Loan Document, and

(y)            Organic Documents of the New Borrower,

and upon which certificate the Lender may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the New Borrower canceling or amending such prior certificate; and

(ii)           a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the New Borrower;

(c)           The Administrative Agent shall have received from the Existing Borrower:

(i)           a certificate dated no earlier than the signing date of this Deed of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Deed and as to the truth and completeness of the attached:

(x)            resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Deed and each other Loan Document, and

(y)           Organic Documents of the Existing Borrower,

and upon which certificate the Lender may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the Existing Borrower canceling or amending such prior certificate; and

(ii)           a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Existing Borrower;

(d)           The Administrative Agent shall have received opinions, addressed to the Administrative Agent and the Lender from:

(i)            Watson, Farley & Williams (New York) LLP, counsel to the New Borrower, as to Liberian Law covering the matters set forth in Exhibit A-1 hereto;

(ii)           Norton Rose LLP, counsel to the Administrative Agent, covering the matters set forth in Exhibit A-2 hereto; and

(iii)     Clifford Chance US LLP, United States tax counsel to the Lenders, covering the matters set forth in Exhibit A-3 hereto.

(e)           The Administrative Agent or the Hermes Agent shall have received to its reasonable satisfaction a duly executed amendment to the Hermes Insurance Policy;

(f)           The Administrative Agent shall have received all invoiced expenses of the Administrative Agent (including the agreed fees and expenses of counsel to the Administrative Agent) required to be paid by the New Borrower pursuant to Section 8 below or that the New Borrower has otherwise agreed in writing to pay to the Administrative Agent, in each case on or prior to the Restatement Effective Date.

(g)           The representations and warranties set forth in Section 6 are true as of the Restatement Effective Date.

The Administrative Agent shall notify the Lender and the New Borrower of the Restatement Effective Date, and such notice shall be conclusive and binding.

SECTION 5.  Conditions of Deed Effectiveness.  This Deed shall become effective as of the date hereof; provided that the Administrative Agent shall have received counterparts of this Deed executed by the Existing Borrower, the New Borrower and the Lender; provided further that the transactions described in Sections 1 and Sections 2 of this Deed shall be deemed to be effective only as of the Restatement Effective Date.

SECTION 6.  Representation and Warranties of the New Borrower. To induce the Lender to enter into this Deed, the New Borrower represents and warrants that, as of the date hereof and as of the Restatement Effective Date:

(a)           The representations and warranties contained in Article VI of the Restated Credit Agreement are true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made, and

(b)           No Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event has occurred and is continuing.

SECTION 7.  Reference to and Effect on the Existing Credit Agreement.  On and after the Restatement Effective Date, each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Existing Credit Agreement, shall mean and be a reference to the Restated Credit Agreement.

SECTION 8.  Costs and Expenses.  The New Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Deed and the other documents to be delivered hereunder (including the reasonable and documented fees and expenses of counsel for the Administrative Agent with respect hereto and thereto as agreed with the Administrative Agent) in accordance with the terms of Section 11.3 of the Restated Credit Agreement.

SECTION 9. Designation. In accordance with the Restated Credit Agreement, the Lender and the Administrative Agent designates this Deed as a Loan Document.

SECTION 10. Third Party Rights. No term of this Deed is enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person who is not party to this Deed.

SECTION 11.  Execution in Counterparts.  This Deed may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Deed by telecopier shall be effective as delivery of a manually executed counterpart of this Deed.

SECTION 12.  Governing Law.  This Deed and any non-contractual obligations arising in connection with it shall be governed by, and construed in accordance with, English law.

SECTION 13.  Incorporation of Terms.  The provisions of Section 11.14.2, 11.14.3 and 11.14.4 of the Restated Credit Agreement shall be incorporated into this Deed as if set out in full in this Deed and as if references in those sections to “this Agreement” were references to this Deed.

SECTION 14.  Defined Terms.  Capitalized terms not otherwise defined in the Deed shall have the same meanings as specified in the Restated Credit Agreement.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, the parties to this Deed have caused this Deed to be duly executed and delivered as of the date first above written.

SIGNED as a Deed by CELEBRITY SILHOUETTE INC., as Existing Borrower
By /s/ Antje M. Gibson
	Name: Antje M. Gibson Title: Vice President and Treasurer
In the presence of:
By /s/ Cary Aronovitz
	Name: Cary Aronovitz Title: Attorney, Holland and Knight Address:
SIGNED as a Deed by ROYAL CARIBBEAN CRUISES LTD., as New Borrower
By /s/ Antje M. Gibson
	Name: Antje M. Gibson Title: Vice President and Treasurer
Address: 1050 Caribbean Way Miami, Florida 33132 Facsimile No.:  (305) 539-6400
Email:	agibson@rccl.com
	bstein@rccl.com
Attention:  Vice President and Treasurer With a copy to:  General Counsel
In the presence of:
By /s/ Cary Aronovitz
	Name: Cary Aronovitz Title: Attorney, Holland and Knight Address:

SIGNED as a Deed by KFW IPEX-BANK GMBH, as Hermes Agent, as Administrative Agent and Lender
By	/s/ Claudia Schlipsing Name: Claudia Schlipsing Title: Director	/s/ Claudia Wenzel Name: Claudia Wenzel Title: Assistant Vice President
Address:  Palmengartenstrasse 5-9 D-60325 Frankfurt am Main Germany Facsimile No.:  +49 (69) 7431 3768 Email:            claudia.wenzel@kfw.de Attention:  Shipfinancing Department With a copy to:  Credit Operations Facsimile No.: +49 (69) 7431 2944
In the presence of:
By /s/ Katja Sturm Name: Katja Sturm Title: Analyst Address: KfW IPEX-Bank GmbH Palmengartenstrasse 5-9 60325 Frankfurt am Main

APPENDIX I

EXECUTION COPY

_________________________________________

AMENDED AND RESTATED

HULL NO. S-679 CREDIT AGREEMENT

_________________________________________

dated as of February 27, 2009

and amended and restated on

February 17, 2012

BETWEEN

ROYAL CARIBBEAN CRUISES, LTD.

as the Borrower,

the Lenders from time to time party hereto

and

KFW IPEX-BANK GMBH

as Hermes Agent and Administrative Agent

TABLE OF CONTENTS

		PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1.	Defined Terms		2
SECTION 1.2	Use of Defined Terms		11
SECTION 1.3	Cross-References		11
SECTION 1.4	Application of this Agreement to KfW IPEX as an Option A Lender		11
SECTION 1.5	Accounting and Financial Determinations		12
ARTICLE II
COMMITMENTS AND BORROWING PROCEDURES
SECTION 2.1.	Commitment		12
SECTION 2.2.	[RESERVED]		12
SECTION 2.3.	[RESERVED]		12
SECTION 2.4.	Funding		12
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1.	Repayments		13
SECTION 3.2.	Prepayments		13
SECTION 3.3.	Interest Provisions		13
	SECTION 3.3.1. Rates		13
	SECTION 3.3.2. Election of Floating Rate		14
	SECTION 3.3.3. Conversion to Floating Rate		14
	SECTION 3.3.4. Post-Maturity Rates		14
	SECTION 3.3.5. Payment Dates		14
	SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks		15
SECTION 3.4	[RESERVED]		15

i 

	SECTION 3.4.1 [RESERVED]	15
SECTION 3.5.	[RESERVED]	15
	SECTION 3.5.1 [RESERVED]	15
SECTION 3.6.	[RESERVED]	15
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1.	LIBO Rate Lending Unlawful	15
SECTION 4.2.	Deposits Unavailable	16
SECTION 4.3.	Increased LIBO Rate Loan Costs, etc.	16
SECTION 4.4.	Funding Losses	18
SECTION 4.5.	Increased Capital Costs	19
SECTION 4.6.	Taxes	20
SECTION 4.7.	Reserve Costs	22
SECTION 4.8.	Payments, Computations, etc.	23
SECTION 4.9.	Replacement Lenders, etc.	23
SECTION 4.10.	Sharing of Payments	24
SECTION 4.11.	Setoff	25
SECTION 4.12.	Use of Proceeds	25
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1.	Advance of the Loan	25
SECTION 5.2.	Conditions to Effectiveness	25
SECTION 5.3.	CIRR Requirements	25
ARTICLE VI
REPRESENTATIONS AND WARRANTIES

ii 

SECTION 6.1.	Organization, etc.	26
SECTION 6.2.	Due Authorization, Non-Contravention, etc.	26
SECTION 6.3.	Government Approval, Regulation, etc.	27
SECTION 6.4.	Compliance with Environmental Laws	27
SECTION 6.5	Validity, etc.	27
SECTION 6.6.	No Default, Event of Default or Prepayment Event	27
SECTION 6.7.	Litigation	27
SECTION 6.8	The Purchased Vessel	27
SECTION 6.9.	Obligations rank pari passu	28
SECTION 6.10.	No Filing, etc. Required	28
SECTION 6.11.	No Immunity	28
SECTION 6.12.	Investment Company Act	28
SECTION 6.13.	Regulation U	28
SECTION 6.14.	Accuracy of Information	29
ARTICLE VII
COVENANTS
SECTION 7.1.	Affirmative Covenants	29
	SECTION 7.1.1. Financial Information, Reports, Notices, etc.	29
	SECTION 7.1.2. Approvals and Other Consents	30
	SECTION 7.1.3. Compliance with Laws, etc.	30
	SECTION 7.1.4. The Purchased Vessel	31
	SECTION 7.1.5. Insurance	31
	SECTION 7.1.6. Books and Records	31
.	SECTION 7.1.7. Hermes Insurance Policy	31
SECTION 7.2.	Negative Covenants	32
	SECTION 7.2.1. Business Activities	32
	SECTION 7.2.2. Indebtedness	32
	SECTION 7.2.3. Liens	32
	SECTION 7.2.4. Financial Condition	34
	SECTION 7.2.5. Investments	35

iii 

	SECTION 7.2.6. Consolidation, Merger, etc.	35
	SECTION 7.2.7. Asset Dispositions, etc.	36
	SECTION 7.2.8. Transactions with Affiliates	36
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1.	Listing of Events of Default	36
	SECTION 8.1.1. Non-Payment of Obligations	36
	SECTION 8.1.2. Breach of Warranty	37
	SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations	37
	SECTION 8.1.4. Default on Other Indebtedness	37
	SECTION 8.1.5. Bankruptcy, Insolvency, etc.	38
SECTION 8.2.	Action if Bankruptcy	38
SECTION 8.3.	Action if Other Event of Default	38
ARTICLE IX
PREPAYMENT EVENTS
SECTION 9.1.	Listing of Prepayment Events	39
	SECTION 9.1.1. Change in Ownership	39
	SECTION 9.1.2. Change in Board	39
	SECTION 9.1.3. Unenforceability	39
	SECTION 9.1.4. Approvals	39
	SECTION 9.1.5. Non-Performance of Certain Covenants and Obligations	40
	SECTION 9.1.6. Judgments	40
	SECTION 9.1.7. Condemnation, etc.	40
	SECTION 9.1.8. Arrest	40
	SECTION 9.1.9. [RESERVED]	40
	SECTION 9.1.10. Sale/Disposal of the Purchased Vessel	40
	SECTION 9.1.11. [RESERVED]	40
SECTION 9.2.	Mandatory Prepayment	40
ARTICLE X
THE ADMINISTRATIVE AGENT AND THE HERMES AGENT
SECTION 10.1.	Actions	41
SECTION 10.2.	Indemnity	41
SECTION 10.3.	Funding Reliance, etc.	41

iv 

SECTION 10.4.	Exculpation	42
SECTION 10.5.	Successor	42
SECTION 10.6.	Loans by the Administrative Agent	43
SECTION 10.7.	Credit Decisions	44
SECTION 10.8.	Copies, etc.	44
SECTION 10.9.	The Agents’ Rights	44
SECTION 10.10.	The Administrative Agent’s Duties	44
SECTION 10.11.	Employment of Agents	45
SECTION 10.12.	Distribution of Payments	45
SECTION 10.13.	Reimbursement	45
SECTION 10.14.	Instructions	45
SECTION 10.15.	Payments	46
SECTION 10.16.	“Know your customer” Checks	46
SECTION 10.17.	No Fiduciary Relationship	46
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1.	Waivers, Amendments, etc.	46
SECTION 11.2.	Notices	47
SECTION 11.3.	Payment of Costs and Expenses	48
SECTION 11.4.	Indemnification	49
SECTION 11.5.	Survival	50
SECTION 11.6.	Severability	50
SECTION 11.7.	Headings	50
SECTION 11.8.	Execution in Counterparts, Effectiveness, etc.	50
SECTION 11.9.	Third Party Rights	50

  v

SECTION 11.10.	Successors and Assigns	51
SECTION 11.11.	Sale and Transfer of the Loan; Participations in the Loan	51
	SECTION 11.11.1. Assignments	51
	SECTION 11.11.2. Participations	53
	SECTION 11.11.3. Register	54
SECTION 11.12.	Other Transactions	54
SECTION 11.13.	Hermes Insurance Policy	54
	SECTION 11.13.1. Terms of Hermes Insurance Policy	54
	SECTION 11.13.2. Obligations of the Hermes Agent and the Lenders	54
SECTION 11.14.	Law and Jurisdiction	55
	SECTION 11.14.1. Governing Law	55
	SECTION 11.14.2. Jurisdiction	55
	SECTION 11.14.3. Alternative Jurisdiction	55
	SECTION 11.14.4. Service of Process	56
SECTION 11.15.	Confidentiality	56
SECTION 11.16.	[RESERVED]	57

EXHIBITS
Exhibit A	-	Repayment Schedule
Exhibit B	-	[RESERVED]
Exhibit C	-	[RESERVED]
Exhibit D-1	-	Form of Original Closing Date Opinion of Liberian Counsel to Borrower
Exhibit D-2	-	[RESERVED]
Exhibit D-3	-	[RESERVED]
Exhibit E	-	Form of Lender Assignment Agreement

vi 

AMENDED AND RESTATED CREDIT AGREEMENT

AMENDED AND RESTATED HULL NO. S-679 CREDIT AGREEMENT, dated as of February 27, 2009 and amended and restated on February 17, 2012, is among ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation (as assignee of Celebrity Silhouette Inc., the “Borrower”), KFW IPEX-BANK GMBH in its capacity as agent for the Lenders referred to below in respect of Hermes-related matters (in such capacity, the “Hermes Agent”), in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and in its capacity as lender (in such capacity, together with each of the other Persons that shall become a “Lender” in accordance with Section 11.11.1 hereof, each of them individually a “Lender” and, collectively, the “Lenders”).

W I T N E S S E T H:

WHEREAS,

(A)   The Borrower and Meyer Werft GmbH (formerly known as Jos. L. Meyer GmbH & Co.) (the “Builder”) entered on May 18, 2007 into a Contract for the Construction and Sale of Hull No. S-679 (as amended, the “Construction Contract”) pursuant to which the Builder agreed to design, construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number S-679 (the “Purchased Vessel”);

(B)   The Borrower assigned its right to purchase the Purchased Vessel under the Construction Contract to the Celebrity Silhouette Inc., a Liberian Corporation (the “Original Borrower”);

(C)   The Lenders made available to the Original Borrower, upon the terms and conditions contained in the Hull No. S-679 Credit Agreement dated as of February 27, 2009 among the Original Borrower, the Hermes Agent, the Administrative Agent and each Lender from time to time party thereto (the “Original Credit Agreement”), a US dollar loan facility equal to the US Dollar Equivalent of up to eighty per cent (80%) of the Contract Price of the Purchased Vessel, as adjusted from time to time in accordance with the Construction Contract to reflect, among other adjustments, change orders, in an amount not to exceed the US Dollar Equivalent corresponding to EUR 444,000,000;

(D)   The proceeds of such loan facility were provided to the Original Borrower two (2) Business Days prior to the delivery of the Purchased Vessel for the purpose of paying a portion of the Contract Price, as defined in the Construction Contract in connection with the Original Borrower’s purchase of the Purchased Vessel;

(E)   Pursuant to the Assignment and Amendment Deed to Hull No. S-679 Credit Agreement (the “Assignment and Amendment Deed”), the Original Borrower assigned to the Borrower all of its rights under the Original Credit Agreement, and the Borrower assumed all of the Original Borrower’s obligations under the Original Credit Agreement;

(F)   Pursuant to the Assignment and Amendment Deed, and upon satisfaction of the conditions set forth therein, the Original Credit Agreement is being amended and restated in the form of this Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1.Defined Terms.  The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, when capitalized, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

“Accumulated Other Comprehensive Income (Loss)” means at any date the Borrower’s accumulated other comprehensive income (loss) on such date, determined in accordance with GAAP.

“Administrative Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Administrative Agent, and as shall have accepted such appointment, pursuant to Section 10.5.

“Affiliate” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person.  A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Agreement” means, on any date, this credit agreement as originally in effect on the Original Effective Date and amended and restated on the Restatement Effective Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.

“Agreement to Provide Financing” means that certain Agreement to Provide Financing dated as of June 6, 2007 between KfW and the Borrower, as amended.

“Applicable Jurisdiction” means the jurisdiction or jurisdictions under which the Borrower is organized, domiciled or resident or from which any of its business activities are conducted or in which any of its properties are located and which has jurisdiction over the subject matter being addressed.

“Approved Appraiser” means any of the following: Barry Rogliano Salles, Paris, H Clarkson & Co. Ltd., London, R.S. Platou Shipbrokers, Norway, or Fearnley AS, Norway.

“Assignee Lender” is defined in Section 11.11.1.

2 

“Assignment and Amendment Deed” is defined in the preamble.

“Authorized Officer” means those officers of the Borrower authorized to act with respect to the Loan Documents and whose signatures and incumbency shall have been certified to the Administrative Agent by the Secretary or an Assistant Secretary of the Borrower.

“Borrower” is defined in the preamble.

“Business Day” means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City, London or Frankfurt, and if the applicable Business Day relates to an advance of the Loan, an Interest Period, prepayment or conversion, in each case with respect to the Loan bearing interest by reference to the LIBO Rate, a day on which dealings in deposits in Dollars are carried on in the London interbank market.

“Capital Lease Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases.

“Capitalization ” means, as at any date, the sum of (a) Net Debt on such date, plus (b) Stockholders’ Equity on such date.

“Capitalized Lease Liabilities” means the principal portion of all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

“Cash Equivalents” means all amounts other than cash that are included in the “cash and cash equivalents” shown on the Borrower’s balance sheet prepared in accordance with GAAP.

“CIRR Agent” means KfW, acting in its capacity as CIRR agent in connection with this Agreement.

“Citibank Agreement” means the U.S. $875,000,000 amended and restated credit agreement dated as of July 21, 2011 among the Borrower, as borrower, Citigroup Global Markets Inc. and DnB Nor Bank ASA, as co-lead arrangers, and Citibank, N.A., as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

“Commitment” means, relative to any Lender, such Lender’s obligation to make the Loan pursuant to Section 2.1 of the Original Credit Agreement.

“Commitment Fees” is as defined in Section 3.4 of the Original Credit Agreement.

3 

“Construction Contract” is defined in the preamble.

“Contract Price” is as defined in the Construction Contract.

“Covered Taxes” is defined in Section 4.6.

“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

“Dollar” and the sign “$” mean lawful money of the United States.

“Environmental Laws” means all applicable federal, state, local or foreign statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders) relating to the protection of the environment.

“EUR” and the sign “€” mean the currency of participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time.

“Event of Default” is defined in Section 8.1.

“Existing Debt” means the obligations of the Borrower or its Subsidiaries in connection with (i) the Bareboat Charterparty with respect to the vessel BRILLIANCE OF THE SEAS dated July 5, 2002 between Halifax Leasing (September) Limited and RCL (UK) LTD, (ii) that certain credit agreement dated as of May 7, 2009 as amended and restated as of October 9, 2009 among Oasis of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and BNP Paribas, as administrative agent, and (iii) that certain credit agreement dated as of March 15, 2010 among Allure of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and Skandinaviska Enskilda Banken AB (publ), as administrative agent, and the replacement, extension, renewal or amendment of the foregoing without increase in the amount or change in any direct or contingent obligor of such obligations.

“Existing Group” means the following Persons:  (a) A. Wilhelmsen AS., a Norwegian corporation (“Wilhelmsen”); (b) Cruise Associates, a Bahamian general partnership (“Cruise”); and (c) any Affiliate of either or both of Wilhelmsen and Cruise.

“Existing Principal Subsidiaries” means each Subsidiary of the Borrower that is a Principal Subsidiary on the Restatement Effective Date.

“FATCA” means Sections 1471 through 1474 of the Code, as in effect at the date hereof, and any current or future regulations promulgated thereunder or official interpretations thereof.

“Fiscal Quarter” means any quarter of a Fiscal Year.

“Fiscal Year” means any annual fiscal reporting period of the Borrower.

“Fixed Rate” means a rate per annum equal to the sum of 5.62% per annum plus the Fixed Rate Margin.

4 

“Fixed Rate Margin” means 0.20% per annum.

“Floating Rate” means a rate per annum equal to the sum of the LIBO Rate plus the Floating Rate Margin.

“Floating Rate Indemnity Amount” is defined in Section 4.4.

“Floating Rate Loan” means all or any portion of the Loan bearing interest at the Floating Rate.

“Floating Rate Margin” means, for each Interest Period, 0.40% per annum.

“Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Quarter, the ratio computed for the period of four consecutive Fiscal Quarters ending on the close of such Fiscal Quarter of:

a)   net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to

b)   the sum of:

i)           dividends actually paid by the Borrower during such period (including, without limitation, dividends in respect of preferred stock of the Borrower); plus

ii)            scheduled payments of principal of all debt less New Financings (determined in accordance with GAAP, but in any event including Capitalized Lease Liabilities), in each case, of the Borrower and its Subsidiaries for such period.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

“Funding Losses Event” is defined in Section 4.4.

“GAAP” is defined in Section 1.4.

“Government-related Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under, or Indebtedness incurred by the Borrower or any Subsidiary of the Borrower to satisfy obligations under, any governmental requirement imposed by any Applicable Jurisdiction that must be complied with to enable the Borrower and its Subsidiaries to continue their business in such Applicable Jurisdiction, excluding, in any event, any taxes imposed on the Borrower or any Subsidiary of the Borrower.

“Hedging Instruments” means options, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof used to hedge interest, foreign currency and commodity exposures.

5 

“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.

“Hermes” means Euler Hermes Kreditversicherungs AG, Friedensallee 254, 22763 Hamburg acting in its capacity as representative of the Federal Republic of Germany in connection with the issuance of export credit guarantees.

“Hermes Agent” is defined in the preamble.

“Hermes Fee” means the fee payable to Hermes under and in respect of the Hermes Insurance Policy.

“Hermes Insurance Policy” means the guarantee (Deckungsdokument) issued by the Federal Republic of Germany, represented by Hermes, in favour of the Lenders.

“Indebtedness ” means, for any Person:  (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 180 days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) guarantees by such Person of Indebtedness of others, up to the amount of Indebtedness so guaranteed; (g) obligations of such Person in respect of surety bonds and similar obligations; and (h) liabilities arising under Hedging Instruments.

“Indemnified Liabilities” is defined in Section 11.4.

“Indemnified Parties ” is defined in Section 11.4.

“Interest Make-Up Agreement” means either an Option A Refinancing Agreement or an Option B Interest Make-Up Agreement.

“Interest Period” means the period between the Original Closing Date and the first Repayment Date, and subsequently each succeeding period between two consecutive Repayment Dates, except that:

a)   Any Interest Period which would otherwise end on a day which is not a Business Day shall end on the next Business Day to occur, except if such Business Day does not fall in the same calendar month, the Interest Period will end on the last Business Day in that calendar month, the interest amount

6 

due in respect of the Interest Period in question and in respect of the next following Interest Period being adjusted accordingly; and

b)   If any Interest Period is altered by the application of a) above, the subsequent Interest Period shall end on the day on which it would have ended if the preceding Interest Period had not been so altered.

“Investment” means, relative to any Person,

a)   any loan or advance made by such Person to any other Person (excluding commission, travel, expense and similar advances to officers and employees made in the ordinary course of business); and

b)   any ownership or similar interest held by such Person in any other Person.

“KfW” means KfW of Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Germany acting in its own name for the account of the government of the Federal Republic of Germany.

“KfW IPEX” means KfW IPEX-Bank GmbH of Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Germany.

“Lender Assignment Agreement” means any Lender Assignment Agreement substantially in the form of Exhibit E.

“Lender and Lenders” are defined in the preamble.

“Lending Office” means, relative to any Lender, the office of such Lender designated as such below its signature to the Original Credit Agreement or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining the Loan of such Lender hereunder.

“LIBO Rate” means the rate per annum of the offered quotation for deposits in Dollars for six months (or, in the case of Section 3.3.4(a), for three months) which appears on Reuters LIBOR01 Page (or any successor page) at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period; provided that:

a)   for the purposes of determining the post-maturity rate of interest under Section 3.3.4(b), the LIBO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Administrative Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees; and

b)   subject to Section 3.3.6, if no such offered quotation appears on Reuters LIBOR01 Page (or any successor page) at the relevant time, the LIBO Rate shall be the rate per annum certified by the Administrative Agent to be the average of the rates quoted by the Reference Banks as the rate at which each

7 

of the Reference Banks was (or would have been) offered deposits of Dollars by prime banks in the London interbank market in an amount approximately equal to the amount of the Loan and for a period of six months.

“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever.

“Loan Document” means this Agreement and the Assignment and Amendment Deed.

“Loan” means the principal sum of  the US Dollar Equivalent of up to eighty per cent (80%) of the Contract Price of the Purchased Vessel (as adjusted from time to time in accordance with the Construction Contract), but in any event in an amount not to exceed the US Dollar Equivalent corresponding to EUR 444,000,000, advanced by the Lenders to the Borrower on the Original Closing Date upon the terms and conditions of the Original Credit Agreement or the amount thereof for the time being advanced and outstanding under this Agreement (as the context may require).

“Margin” means the Fixed Rate Margin and/or the Floating Rate Margin.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Administrative Agent or any Lender under the Loan Documents or (c) the ability of the Borrower to perform its payment Obligations under the Loan Documents.

“Material Litigation” is defined in Section 6.7.

“Net Debt” means, at any time, the aggregate outstanding principal amount of all debt (including, without limitation, Capitalized Lease Liabilities) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) less the sum of (without duplication);

a)           all cash on hand of the Borrower and its Subsidiaries; plus

b)           all Cash Equivalents.

“Net Debt to Capitalization Ratio” means, as at any date, the ratio of (a) Net Debt on such date to (b) Capitalization on such date.

“New Financings” means proceeds from:

a)            borrowed money (whether by loan or issuance and sale of debt securities), including drawings under this Agreement and any revolving credit facilities of the Borrower, and

b)           the issuance and sale of equity securities.

8 

“Nordea Agreement” means the U.S. $525,000,000 credit agreement dated as of November 19, 2010, as amended by Amendment No. 1 thereto dated as of November 19, 2010, among Royal Caribbean Cruises Ltd., as the borrower, Nordea Bank Finland PLC, Citigroup Global Markets Limited and DnB Nor Markets, Inc., as co-lead arrangers, Nordea Bank Finland PLC, as administrative agent, and DNB Nor Bank ASA, as documentation agent, as amended, restated, supplemented or otherwise modified from time to time.

“Obligations” means all obligations (payment or otherwise) of the Borrower arising under or in connection with this Agreement.

“Option A Refinancing Agreement” means a refinancing agreement entered into between the Refinancing Bank and any Lender pursuant to Sections 1.2.1 and 1.2.2 of the Terms and Conditions, substantially in the form of Exhibit F hereto.

“Option A Lender” means each Lender that has executed an Option A Refinancing Agreement.

“Option B Interest Make-Up Agreement” means an interest make-up agreement entered into between the CIRR Agent and any Lender pursuant to Section 1.2.4 of the Terms and Conditions.

“Option B Lender” means each Lender that has executed an Option B Interest Make-Up Agreement.

“Organic Document” means, relative to the Borrower, its articles of incorporation (inclusive of any articles of amendment to its articles of incorporation) and its by-laws.

“Original Borrower” is defined in the preamble.

“Original Closing Date” means the date on which the Loan was advanced, which date is July 14, 2011.

“Original Credit Agreement” is defined in the preamble.

“Original Effective Date” means the date the Original Credit Agreement became effective pursuant to Section 11.8, of the Original Credit Agreement, which date is February 27, 2009.

“Participant” is defined in Section 11.11.2.

“Participant Register” is defined in Section 11.11.2.

“Percentage” means, relative to any Lender, the percentage set forth opposite its signature to the Original Credit Agreement or as set out in the applicable Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Section 4.9 or pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.

9 

“Person” means any natural person, corporation, limited liability company, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.

“Prepayment Event” is defined in Section 9.1.

“Principal Subsidiary” means any Subsidiary of the Borrower that owns a Vessel.

“Purchased Vessel” is defined in the preamble.

“Quarterly Payment Date” means, the last day of each of March, June, September and December or, if any such day is not a Business Day, the next succeeding Business Day.

“Reference Banks” means KfW IPEX and each additional Reference Bank and/or each replacement Reference Bank appointed by the Administrative Agent pursuant to Section 3.3.6.

“Refinancing Bank” means KfW in its capacity as the provider of refinancing pursuant to Section 1.2.2 of the Terms and Conditions.

“Repayment Date” means each of the dates for payment of the repayment installments of the Loan specified in Exhibit A, as amended and/or replaced from time to time by the Administrative Agent and the Borrower.

“Required Lenders” means, at any time, Lenders that in the aggregate, hold more than 50% of the aggregate unpaid principal amount of the Loan or, if no such principal amount is then outstanding, Lenders that in the aggregate have more than 50% of the Commitments.

“Restatement Effective Date” means the date on which all of the conditions to the effectiveness of the amendment and restatement of the Original Credit Agreement in the form of this Agreement, which are set forth in Section 4 of the Assignment and Amendment Deed, are satisfied, which date is February ___, 2012.

“Reuters LIBOR01 Page” means the display designated as “Page 01” on the Reuters Money News Service or such other page as may replace Page 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers' Association as the information vendor for the purpose of displaying the British Bankers' Association Interest Settlement Rates for Dollars).

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

“Stockholders’ Equity” means, as at any date, the Borrower’s stockholders’ equity on such date, excluding Accumulated Other Comprehensive Income (Loss), determined in accordance with GAAP, provided that any non-cash charge to Stockholders’ Equity resulting (directly or indirectly) from a change after the Restatement Effective Date in GAAP or in the interpretation thereof shall be disregarded in the computation of Stockholders’ Equity such that the amount of any reduction thereof resulting from such change shall be added back to Stockholders’ Equity.

10 

“Subsidiary” means, with respect to any Person, any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

“Taxes” is defined in Section 4.6.

“Terms and Conditions” means the general terms and conditions for CIRR Interest Make-Up for Ship Financing issued by the Federal Republic of Germany on July 2, 2008.

“US Dollar Equivalent” means any EUR amount converted to a corresponding US dollar amount as determined four (4) Business Days prior to delivery of the Purchased Vessel using the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amount of EUR with USD for the payment of the final installment of the Contract Price.  Such rate of exchange to be evidenced by counterparty confirmations.

“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.

“Vessel” means a passenger cruise vessel owned by the Borrower or one of its Subsidiaries.

“Voting Stock” means shares of capital stock of the Borrower of any class or classes (however designated) that have by the terms thereof normal voting power to elect the members of the Board of Directors of the Borrower (other than voting power upon the occurrence of a stated contingency, such as the failure to pay dividends).

SECTION 1.2.Use of Defined Terms.  Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall, when capitalized, have such meanings when used in each notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.

SECTION 1.3.Cross-References.  Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

Application of this Agreement to KfW IPEX as an Option A Lender.  The parties to this Agreement are aware that KfW IPEX will not enter into an Option A Refinancing Agreement with the CIRR Agent. However, for the purposes of this Agreement, KfW IPEX will be deemed to have entered into an Option A Refinancing Agreement with the CIRR Agent in the form of Exhibit F. Consequently, any reference to an Option A Lender shall include KfW IPEX and any reference to an Option A Refinancing Agreement shall include the Option A Refinancing Agreement deemed to have been entered into by KfW IPEX.

11 

SECTION 1.5. Accounting and Financial Determinations.  Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared, in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies); provided that if the Borrower elects to apply or is required to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP, upon any such election and notice to the Administrative Agent, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided further that if, as a result of (i) any change in GAAP or IFRS or in the interpretation thereof or (ii) the application by the Borrower of IFRS in lieu of GAAP, in each case, after the Original Effective Date, there is a change in the manner of determining any of the items referred to herein or thereunder that are to be determined by reference to GAAP, and the effect of such change would (in the reasonable opinion of the Borrower or the Administrative Agent) be such as to affect the basis or efficacy of the financial covenants contained in Section 7.2.4 in ascertaining the consolidated financial condition of the Borrower and its Subsidiaries and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate such change occurring after the date hereof in GAAP or the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), then such item shall for the purposes of Section 7.2.4 continue to be determined in accordance with GAAP relating thereto as if GAAP were applied immediately prior to such change in GAAP or in the interpretation thereof until such notice shall have been withdrawn or such provision amended in accordance herewith.

ARTICLE II

COMMITMENTS AND BORROWING PROCEDURES

SECTION 2.1.Commitment.  On the terms and subject to the conditions of the Original Credit Agreement (including Article V thereof), each Lender severally made its portion of the Loan pursuant to its Commitment described in Section 2.2 of the Original Credit Agreement.

SECTION 2.2.[RESERVED].

SECTION 2.3.[RESERVED].

SECTION 2.4.Funding. Each Lender may, if it so elects, fulfill its obligation to continue its Loan hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to maintain such Loan; provided that such Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility; provided, further, that the Borrower shall not be required to pay any amount under Sections 4.3, 4.4, 4.5, 4.6 and 4.7

12 

that is greater than the amount which it would have been required to pay had the Lender not caused such branch or Affiliate (or international banking facility) to maintain such Loan.

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

 SECTION 3.1.Repayments.  a) Subject to Section 3.1 b), the Borrower shall repay the Loan in the installments and on the dates set out in Exhibit A.

b)   [RESERVED]

c)   No such amounts repaid by the Borrower pursuant to this Section 3.1 may be reborrowed under the terms of this Agreement.

SECTION 3.2.Prepayment.  The Borrower

a)   May, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan; provided that:

i)   all such voluntary prepayments shall require at least five Business Days’ (or, if such prepayment is to be made on the last day of an Interest Period for such Loan, four Business Days’) prior written notice to the Administrative Agent; and

ii)   all such voluntary partial prepayments shall be in an aggregate minimum amount of $10,000,000 and a multiple of $1,000,000 (or the remaining amount of the Loan) and shall be applied pro rata in satisfaction of the repayment installments of the Loan set out in Exhibit A.

b)   Shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to Section 8.2 or 8.3 or the mandatory prepayment of the Loan pursuant to Section 9.2, repay the Loan.

Each prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.  No amounts prepaid by the Borrower may be reborrowed under the terms of this Agreement.

SECTION 3.3.Interest Provisions.  Interest on the outstanding principal amount of the Loan shall accrue and be payable in accordance with this Section 3.3.

 SECTION 3.3.1.Rates. The Loan shall accrue interest from the Original Closing Date to the date of repayment or prepayment of the Loan in full to the Lenders at the Fixed Rate, subject to (i) any election made by the Borrower to elect the Floating Rate pursuant to Section 3.3.2 or (ii) any conversion of any portion of the Loan held by a Lender to a Floating Rate Loan upon the termination of the Interest Make-Up Agreement to which such Lender is a party in accordance with Section 3.3.3. Interest calculated at the Fixed Rate or the Floating Rate shall be payable semi-annually in arrears on the Repayment Dates set out in Exhibit A. The Loan

13 

shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loan. All interest shall be calculated on the basis of the actual number of days elapsed over a year comprised of 360 days.

 SECTION 3.3.2.Election of Floating Rate.

a)   [RESERVED]

b)   [RESERVED]

c)   By written notice to the Administrative Agent no later then 2:00 p.m. Frankfurt time 30 days prior to the end of an Interest Period, the Borrower may elect to pay interest on the Loan for the remainder of the term of the Loan at the Floating Rate, with effect from the end of that Interest Period.

d)   Any election made under Section 3.3.2.c) may only be made one time during the term of the Loan.

 SECTION 3.3.3.Conversion to Floating Rate.  If, during any Interest Period, the Interest Make-Up Agreement in effect with any Lender is terminated for any reason (other than as a result of the negligence or willful misconduct of such Lender), then the portion of the Loan held by such Lender shall convert to a Floating Rate Loan on the last day of such Interest Period, and the Borrower shall pay interest on such portion of the Loan at the Floating Rate on such portion for the remainder of the term of the Loan. The Borrower shall not incur any liability to make any payments pursuant to Section 4.4 or to pay any other indemnity or compensation obligation in connection with any such conversion.

 SECTION 3.3.4.Post-Maturity Rates.  After the date any principal amount of the Loan is due and payable (whether on any Repayment Date, upon acceleration or otherwise), or after any other monetary Obligation of the Borrower shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts for each day during the period of such default at a rate per annum certified by the Administrative Agent to the Borrower (which certification shall be conclusive in the absence of manifest error) to be equal to (a) in the case of (i) principal of and interest on the Loan payable to each Option A Lender and (ii) interest on the Loan payable to each Option B Lender, the sum of the Floating Rate plus 3% per annum and (b) in the case of any other monetary Obligation, the sum of the Floating Rate plus 2% per annum.

 SECTION 3.3.5.Payment Dates.  Interest accrued on the Loan shall be payable, without duplication, on the earliest of:

a)   each Repayment Date;

b)   the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and

14 

c)   on that portion of the Loan the repayment of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.

SECTION 3.3.6.Interest Rate Determination; Replacement Reference Banks.  The Administrative Agent shall obtain from each Reference Bank timely information for the purpose of determining the LIBO Rate in the event that no offered quotation appears on Reuters LIBOR01 Page and the LIBO Rate is to be determined by reference to quotations supplied by the Reference Banks.  If any one or more of the Reference Banks shall fail to furnish in a timely manner such information to the Administrative Agent for any such interest rate, the Administrative Agent shall determine such interest rate on the basis of the information furnished by the remaining Reference Banks.  If the Borrower elects to add an additional Reference Bank hereunder or a Reference Bank ceases for any reason to be able and willing to act as such, the Administrative Agent shall, at the direction of the Required Lenders and after consultation with the Borrower and the Lenders, appoint a replacement for such Reference Bank or, as the case may be, additional Reference Bank, reasonably acceptable to the Borrower, and such replaced Reference Bank shall cease to be a Reference Bank hereunder or, as the case may be, such new Reference Bank shall be an additional Reference Bank.  The Administrative Agent shall furnish to the Borrower and to the Lenders each determination of the LIBO Rate made by reference to quotations of interest rates furnished by Reference Banks.

Interest accrued on the Loan or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether upon acceleration or otherwise) shall be payable upon demand.

  SECTION 3.4.[RESERVED]

 SECTION 3.5. [RESERVED]

SECTION 3.5.1.[RESERVED]

  SECTION 3.6.[RESERVED]

ARTICLE IV

CERTAIN LIBO RATE AND OTHER PROVISIONS

SECTION 4.1.LIBO Rate Lending Unlawful. If after the Original Effective Date the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority having jurisdiction over such Lender asserts that it is unlawful, for such Lender to continue or maintain the Loan bearing interest at a rate based on the LIBO Rate, the obligation of such Lender to continue or maintain its Loan bearing interest at a rate based on the LIBO Rate shall, upon notice thereof to the Borrower, the Administrative Agent and each other Lender, forthwith be suspended until the circumstances causing such suspension no longer exist, provided that such Lender’s obligation to continue and maintain its Loan hereunder shall be automatically converted into an obligation to continue and maintain the Loan bearing interest at a rate to be negotiated between such Lender and the Borrower that is the

15 

equivalent of the sum of the LIBO Rate for the relevant Interest Period plus the Floating Rate Margin.

SECTION 4.2.Deposits Unavailable.  If, on or after the date the Borrower elects the Floating Rate pursuant to Section 3.3.2 or if any Lender shall have entered into an Option B Interest Make-Up Agreement (an “Option B Lender”), the Administrative Agent shall have determined that:

a)   Dollar deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market; or

b)   by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate loans for the relevant Interest Period,

c)   the cost to the Refinancing Bank, in the event the Borrower has elected the Floating Rate pursuant to Section 3.3.2, or the cost to Option B Lenders that in the aggregate hold more than 50% of the aggregate unpaid principal amount of the Loan then held by Option B Lenders, if any Lender shall have entered into an Option B Interest Make-Up Agreement, in each case of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the LIBO Rate,

then the Administrative Agent shall give notice of such determination (hereinafter called a “Determination Notice”) to the Borrower and each of the Lenders.  The Borrower, the Lenders and the Administrative Agent shall then negotiate in good faith in order to agree upon a mutually satisfactory interest rate and interest period (or interest periods) to be substituted for those which would otherwise have applied under this Agreement.  If the Borrower, the Lenders and the Administrative Agent are unable to agree upon an interest rate (or rates) and interest period (or interest periods) prior to the date occurring fifteen (15) Business Days after the giving of such Determination Notice, the Administrative Agent shall (after consultation with the Lenders) set an interest rate and an interest period (or interest periods), in each case to take effect at the end of the Interest Period current at the date of the Determination Notice, which rate (or rates) shall be equal to the sum of the Floating Rate Margin and the lesser of (x) the cost to the Refinancing Bank of funding the portion of the Loan financed by the Refinancing Bank and (y) the weighted average of the corresponding interest rates at or about 11:00 a.m. (London time) two Business Days before the commencement of the relevant Interest Period on Reuters’ pages KLIEMMM, GARBIC01 and FINA01 (or such other pages as may replace Reuters’ pages KLIEMMM, GARBIC01 or FINA01 on Reuters’ service).  The Administrative Agent shall furnish a certificate to the Borrower as soon as reasonably practicable after the Administrative Agent has given such Determination Notice setting forth such rate.  In the event that the circumstances described in this Section 4.2 shall extend beyond the end of an interest period agreed or set pursuant hereto, the foregoing procedure shall be repeated as often as may be necessary.

SECTION 4.3.Increased LIBO Rate Loan Costs, etc.  If after the Original Effective Date a change in any applicable treaty, law, regulation or regulatory requirement or in the interpretation thereof or in its application to the Borrower, or if compliance by any Lender with any applicable direction, request, requirement or guideline (whether or not having the force

16 

of law) of any governmental or other authority including, without limitation, any agency of the European Union or similar monetary or multinational authority insofar as it may be changed or imposed after the date hereof, shall:

a.   subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in Section 4.6, withholding taxes); or

b.   change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or

c.   impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in Section 4.5 and reserve costs described in Section 4.7) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (provided that such Lender shall, unless prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or

d.   impose on any Lender any other condition affecting its portion of the Loan or any part thereof,

and the result of any of the foregoing is either (i) to increase the cost to such Lender of maintaining the Loan or any part thereof, (ii) to reduce the amount of any payment received by such Lender or its effective return hereunder or on its capital or (iii) to cause such Lender to make any payment or to forego any return based on any amount received or receivable by such Lender hereunder, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the interests of such Lender, (A) such Lender shall (through the Administrative Agent) notify the Borrower of the occurrence of such event and use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid the effects of such law, regulation or regulatory requirement or any change therein or in the interpretation thereof and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender and (B) the Borrower shall forthwith upon such demand pay to the Administrative Agent for the account of such Lender such amount as is necessary to compensate such Lender for such additional cost or such reduction and ancillary expenses, including taxes, incurred as a result of such adjustment. Such notice shall (i) describe in reasonable detail the event leading to such additional cost, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such additional cost, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request is consistent with its treatment of other borrowers that are subject to similar provisions, and (vi) certify that, to the best of its

17 

knowledge, such change in circumstance is of general application to the commercial banking industry in such Lender’s jurisdiction of organization or in the relevant jurisdiction in which such Lender does business. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such cost or reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.4.Funding Losses.  (a) In the event any Lender shall incur any loss or expense (for the avoidance of doubt excluding loss of profit in the event the Borrower has elected the Floating Rate pursuant to Section 3.3.2) by reason of the liquidation or reemployment (at not less than the market rate) of deposits or other funds acquired by such Lender to continue or maintain any portion of the principal amount of the Loan as a result of:

i)   If at the time interest is calculated at the Floating Rate, any conversion or repayment or prepayment or acceleration of the principal amount of the Loan on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment;

ii)   if at the time interest is calculated at the Fixed Rate, any repayment or prepayment or acceleration of the principal amount of the Loan, other than any repayment made on the date scheduled for such repayment;

iii)   an election by the Borrower of the Floating Rate in accordance with Section 3.3.2.c);

iv)   [RESERVED]; or

v)   [RESERVED]

(a “Funding Losses Event”) then, upon the written notice of such Lender to the Borrower (with a copy to the Administrative Agent), the Borrower shall, within five (5) Business Days of its receipt thereof:

a.      if at that time interest is calculated at the Floating Rate, pay directly to the Administrative Agent an amount (the “Floating Rate Indemnity Amount”) equal to the amount by which:

(i)           interest calculated at the Floating Rate which a Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share in the Loan to the last day of the applicable Interest Period,

18 

exceeds:

(ii)           the amount which a Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period.

b.      if at that time interest is calculated at the Fixed Rate, pay to the Administrative Agent for the account of such Lender the sum of (A) an amount equal to the amount by which:

(i)            interest calculated at the Fixed Rate which a Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share of the Loan to the final scheduled date for the repayment of Loan in full pursuant to Section 3.1,

exceeds:

(ii)           the amount by which a Lender would be able to obtain by placing an equal amount to the amount received by it on deposit and receiving interest equal to the money market rate then applicable to  US dollars on the Reuters page “ICAP1” (the “Reinvestment Rate”),

such amount to be discounted to present value at the Reinvestment Rate; and

(B)           if such Lender has entered into an Option B Interest Make-up Agreement, an amount equal to the Floating Rate Indemnity Amount.

Such written notice shall include calculations in reasonable detail setting forth the loss or expense to such Lender.

SECTION 4.5.Increased Capital Costs.  If after the Original Effective Date any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority increases the amount of capital required to be maintained by any Lender or any Person controlling such Lender, and the rate of return on its or such controlling Person’s capital as a consequence of its Commitment or the Loan made by such Lender is reduced to a level below that which such Lender or such controlling Person would have achieved but for the occurrence of any such change in circumstance, then, in any such case upon notice from time to time by such Lender to the Borrower, the Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return.  Any such notice shall (i) describe in reasonable detail the capital adequacy requirements which have been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such lowered return, (iii) describe the manner in which such amount has

19 

been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request for such additional amounts is consistent with its treatment of other borrowers that are subject to similar provisions and (vi) certify that, to the best of its knowledge, such change in circumstances is of general application to the commercial banking industry in the jurisdictions in which such Lender does business.  In determining such amount, such Lender may use any method of averaging and attribution that it shall, subject to the foregoing sentence, deem applicable.  Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid such reduction in such rate of return and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.6.Taxes.  All payments by the Borrower of principal of, and interest on, the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts of such Lender and franchise taxes imposed in lieu of net income taxes or taxes on receipts, by the jurisdiction under the laws of which such Lender is organized or any political subdivision thereof or the jurisdiction of such Lender’s Lending Office or any political subdivision thereof or any other jurisdiction unless such net income taxes are imposed solely as a result of the Borrower’s activities in such other jurisdiction, and any taxes imposed under FATCA (such non-excluded items being called “Covered Taxes”).  In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Covered Taxes pursuant to any applicable law, rule or regulation, then the Borrower will:

a.   pay directly to the relevant authority the full amount required to be so withheld or deducted;

b.   promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such authority; and

c.   pay to the Administrative Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by

20 

each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.

Moreover, if any Covered Taxes are directly asserted against the Administrative Agent or any Lender with respect to any payment received or paid by the Administrative Agent or such Lender hereunder, the Administrative Agent or such Lender may pay such Covered Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Covered Taxes (including any Covered Taxes on such additional amount) shall equal the amount such person would have received had no such Covered Taxes been asserted.

Any Lender claiming any additional amounts payable pursuant to this Section agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

If the Borrower fails to pay any Covered Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent for the account of the respective Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders for any incremental withholding Covered Taxes, interest or penalties that may become payable by any Lender as a result of any such failure (so long as such amount did not become payable as a result of the failure of such Lender to provide timely notice to the Borrower of the assertion of a liability related to the payment of Covered Taxes).  For purposes of this Section 4.6, a distribution hereunder by the Administrative Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.

If any Lender is entitled to any refund, credit, deduction or other reduction in tax by reason of any payment made by the Borrower in respect of any Covered Tax under this Section 4.6 or by reason of any payment made by the Borrower pursuant to Section 4.3, such Lender shall use reasonable efforts to obtain such refund, credit, deduction or other reduction and, promptly after receipt thereof, will pay to the Borrower such amount (plus any interest received by such Lender in connection with such refund, credit, deduction or reduction) as is equal to the net after-tax value to such Lender of such part of such refund, credit, deduction or reduction as such Lender reasonably determines is allocable to such Covered Tax or such payment (less out-of-pocket expenses incurred by such Lender), provided that no Lender shall  be obligated to disclose to the Borrower any information regarding its tax affairs or tax computations.

Each Lender (and each Participant) agrees with the Borrower and the Administrative Agent that it will (i) in the case of a Lender or a Participant organized under the laws of a jurisdiction other than the United States (a) provide to the Administrative Agent and the Borrower an appropriately executed copy of Internal Revenue Service Form W-8ECI certifying that any payments made to or for the benefit of such Lender or such Participant are effectively connected with a trade or business in the United States (or alternatively, an Internal Revenue Service Form W-8BEN claiming the benefits of a tax treaty, but only if the applicable treaty described in such form provides for a complete exemption from U.S. federal income tax

21 

withholding), or any successor form, on or prior to the date hereof (or, in the case of any assignee Lender or Participant, on or prior to the date of the relevant assignment or participation), in each case attached to an Internal Revenue Service Form W-8IMY, if appropriate, (b) notify the Administrative Agent and the Borrower if the certifications made on any form provided pursuant to this paragraph are no longer accurate and true in all material respects and (c) provide such other tax forms or other documents as shall be prescribed by applicable law, if any, or as otherwise reasonably requested, to demonstrate, to the extent applicable, that payments to such Lender (or Participant) hereunder are exempt from withholding under FATCA, and (ii) in all cases, provide such forms, certificates or other documents, as and when reasonably requested by the Borrower, necessary to claim any applicable exemption from, or reduction of, Covered Taxes or any payments made to or for benefit of such Lender or such Participant, provided that the Lender or Participant is legally able to deliver such forms, certificates or other documents.  For any period with respect to which a Lender (or assignee Lender or Participant) has failed to provide the Borrower with the foregoing forms (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided (which, in the case of an Assignee Lender, would be the date on which the original assignor was required to provide such form) or if such form otherwise is not required hereunder) such Lender (or assignee Lender or Participant) shall not be entitled to the benefits of this Section 4.6 with respect to Covered Taxes imposed by reason of such failure.

SECTION 4.7.Reserve Costs.  Without in any way limiting the Borrower’s obligations under Section 4.3, the Borrower shall, on or after the date the Borrower elects the Floating Rate pursuant to Section 3.3.2, pay to the Administrative Agent for the account of each Lender on the last day of each Interest Period, so long as the relevant Lending Office of such Lender is required to maintain reserves against “Eurocurrency liabilities” under Regulation D of the F.R.S. Board, upon notice from such Lender, an additional amount equal to the product of the following for the Loan for each day during such Interest Period:

(i)the principal amount of the Loan outstanding on such day; and

(ii)the remainder of (x) a fraction the numerator of which is the rate (expressed as a decimal) at which interest accrues on the Loan for such Interest Period as provided in this Agreement (less, if applicable, the Floating Rate Margin) and the denominator of which is one minus any increase after the Original Effective Date in the effective rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender minus (y) such numerator; and

(iii)1/360.

Such notice shall (i) describe in reasonable detail the reserve requirement that has been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the applicable reserve percentage, (iii) certify that such request is consistent with such Lender’s treatment of other borrowers that are subject to similar provisions and (iv) certify that, to the best of its knowledge, such requirements are of general application in the commercial banking industry in the United States.

22 

Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to avoid the requirement of maintaining such reserves (including by designating a different Lending Office) if such efforts would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

SECTION 4.8.Payments, Computations, etc.  a)  Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the Administrative Agent for the pro rata account of the Lenders entitled to receive such payment.  All such payments required to be made to the Administrative Agent shall be made, without setoff, deduction or counterclaim, not later than 11:00 a.m., New York time, on the date due, in same day or immediately available funds through the New York Clearing House Interbank Payments System (or such other funds as may be customary for the settlement of international banking transactions in Dollars), to such account as the Administrative Agent shall specify from time to time by notice to the Borrower.  Funds received after that time shall be deemed to have been received by the Lenders on the next succeeding Business Day.

b) (i)  Each Option A Lender hereby instructs the Administrative Agent to remit all payments of interest made with respect to any portion of the Loan held by such Option A Lender to the Refinancing Bank less the Fixed Rate Margin if interest on the Loan made by that Lender is then calculated at the Fixed Rate and less the Floating Rate Margin if interest on that Loan is then calculated at the Floating Rate.

(ii)  Each Option B Lender hereby instructs the Administrative Agent, with respect to any portion of the Loan held by such Option B Lender, to pay to the CIRR Agent interest thereon at the Fixed Rate, if interest on such portion of the Loan is then calculated at the Fixed Rate, and to pay directly to such Lender interest thereon at the Floating Rate, if interest on such portion of the Loan is then calculated at the Floating Rate.

c) The Administrative Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in clause (a) of this Section, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Administrative Agent for the account of such Lender without any setoff, deduction or counterclaim. All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (a) of the definition of the term “Interest Period”) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.

SECTION 4.9.Replacement Lenders, etc.  If the Borrower shall be required to make any payment to any Lender pursuant to Section 4.3, 4.4, 4.5, 4.6 or 4.7, the Borrower shall be entitled at any time (so long as no Default and no Prepayment Event shall have occurred and be continuing) within 180 days after receipt of notice from such Lender of such required

23 

payment to (a) prepay the affected portion of such Lender’s Loans in full, together with accrued interest thereon through the date of such prepayment (provided that the Borrower shall not prepay any such Lender pursuant to this clause (a) without replacing such Lender pursuant to the following clause (b) until a 30-day period shall have elapsed during which the Borrower and the Administrative Agent shall have attempted in good faith to replace such Lender), and/or (b) replace such Lender with another financial institution reasonably acceptable to the Administrative Agent, provided that (i) each such assignment shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement and (ii) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from either the Borrower or one or more Assignee Lenders in an aggregate amount at least equal to the aggregate outstanding principal amount of the Loans owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement. Each Lender represents and warrants to the Borrower that, as of the date of this Agreement (or, with respect to any Lender not a party hereto on the date hereof, on the date that such Lender becomes a party hereto), there is no existing treaty, law, regulation, regulatory requirement, interpretation, directive, guideline, decision or request pursuant to which such Lender would be entitled to request any payments under any of Sections 4.3, 4.4, 4.5, 4.6 and 4.7 to or for account of such Lender.

SECTION 4.10.Sharing of Payments.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of the Loan (other than pursuant to the terms of Sections 4.3, 4.4, 4.5, 4.6 and 4.7) in excess of its pro rata share of payments then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders such participations in the Loan made by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender’s ratable share (according to the proportion of (a) the amount of such selling Lender’s required repayment to the purchasing Lender to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 4.11) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim.

24 

SECTION 4.11.Setoff.  Upon the occurrence and during the continuance of an Event of Default or a Prepayment Event, each Lender shall have, to the extent permitted by applicable law, the right to appropriate and apply to the payment of the Obligations then due and owing to it any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Lender; provided that any such appropriation and application shall be subject to the provisions of Section 4.10.  Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which such Lender may have.

SECTION 4.12.Use of Proceeds.  The Original Borrower applied the proceeds of the Loan in accordance with Recital (D); without limiting the foregoing, no proceeds of the Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S. Board Regulation U.

ARTICLE V

CONDITIONS PRECEDENT

SECTION 5.1.Advance of the Loan.  The obligation of the Lenders to fund the Loan made on the Original Closing Date was subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in Section 5.1 of the Original Credit Agreement.

SECTION 5.2.Conditions to Effectiveness.  The conditions to the effectiveness of the amendment and restatement of the Original Credit Agreement in the form of this Agreement are set forth in Section 4 of the Assignment and Amendment Deed.

SECTION 5.3.CIRR Requirements.

The Borrower acknowledges that:

(i)the government of the Federal Republic of Germany, the Federal Audit Court or any authorized representatives specified by these bodies shall be authorized at any time to inspect and make or demand copies of the records, accounts, documents and other deeds of the Lenders;

(ii)in the course of its activity as the Administrative Agent, the Administrative Agent may:

(a)       provide the government of the Federal Republic of Germany with information concerning the transactions to be handled by it; and

25 

(b)       disclose information concerning the subsidized transaction in the context of internationally agreed consultation/notification proceedings and statutory specifications,

including information received from the Lenders; and

(iii)the Administrative Agent and (to the extent the Lenders have entered into an Option A Refinancing Agreement with the Refinancing Bank) the Lenders are entitled to disclose to the Refinancing Bank:

(a)       circumstances pertaining to the Loan, proper repayment and collateralization;

(b)       extraordinary events which may jeopardize the proper servicing of the Loan;

(c)       any information required by the Refinancing Bank with respect to the proper use of any refinancing funds granted to the respective Lender; and

(d)       the Loan Documents;

provided that the Refinancing Bank agrees to keep such information confidential to the same extent required of Lenders pursuant to Section 11.15.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

To induce the Lenders and the Administrative Agent to enter into this Agreement, the Borrower represents and warrants to the Administrative Agent and each Lender as set forth in this Article VI as of the Restatement Effective Date (except as otherwise stated).

SECTION 6.1.Organization, etc.  The Borrower is a corporation validly organized and existing and in good standing under the laws of its jurisdiction of incorporation; the Borrower is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and the Borrower has full power and authority, has taken all corporate action and holds all governmental and creditors’ licenses, permits, consents and other approvals necessary to enter into each Loan Document and to perform the Obligations.

SECTION 6.2.Due Authorization, Non-Contravention, etc.  The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not:

26 

a.   contravene the Borrower’s Organic Documents;

b.   contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;

c.   contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;

d.   contravene any contractual restriction binding on the Borrower or any of its property, except as would not reasonably be expected to result in a Material Adverse Effect; or

e.   result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.3.Government Approval, Regulation, etc.  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document (except for authorizations or approvals not required to be obtained on or prior to the Restatement Effective Date that have been obtained or actions not required to be taken on or prior to the Restatement Effective Date that have been taken).  The Borrower holds all governmental licenses, permits and other approvals required to conduct its business as conducted by it on the Restatement Effective Date, except to the extent the failure to hold any such licenses, permits or other approvals would not have a Material Adverse Effect.

SECTION 6.4.Compliance with Environmental Laws.  The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.

SECTION 6.5.Validity, etc.  This Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles.

SECTION 6.6.No Default, Event of Default or Prepayment Event.  No Default, Event of Default or Prepayment Event has occurred and is continuing.

SECTION 6.7.Litigation.  There is no action, suit, litigation, investigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, that (i) except as set forth in filings made by the Borrower with the SEC in the Borrower’s reasonable opinion might reasonably be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries (taken as a whole) (collectively, “Material Litigation”) or (ii) purports to affect the legality, validity or enforceability of the Loan Documents or the consummation of the transactions contemplated hereby.

SECTION 6.8.The Purchased Vessel.  The Purchased Vessel is:

27 

a.   legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,

b.   registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,

c.   classed as required by Section 7.1.4(b),

d.   free of all recorded Liens, other than Liens permitted by Section 7.2.3,

e.   insured against loss or damage in compliance with Section 7.1.5, and

f.   chartered exclusively to or operated exclusively by the Borrower or one of the Borrower’s wholly owned Subsidiaries, except as otherwise permitted pursuant to Section 7.1.4.

SECTION 6.9.Obligations rank pari passu.  The Obligations rank at least pari passu in right of payment and in all other respects with all other unsecured unsubordinated Indebtedness of the Borrower.

SECTION 6.10.No Filing, etc. Required.  No filing, recording or registration and no payment of any stamp, registration or similar tax is necessary under the laws of any Applicable Jurisdiction to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement or the other Loan Documents (except for filings, recordings, registrations or payments not required to be made on or prior to the Original Closing Date that have been made).

SECTION 6.11.No Immunity.  The Borrower is subject to civil and commercial law with respect to the Obligations.  Neither the Borrower nor any of its properties or revenues is entitled to any right of immunity in any Applicable Jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).

SECTION 6.12.Investment Company Act.  The Borrower is not required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

SECTION 6.13.Regulation U.  The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U.  Terms for which meanings are provided in F.R.S. Board Regulation U or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.

28 

SECTION 6.14.Accuracy of Information.  All financial projections, if any, that have been or shall be furnished to the Administrative Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with this Agreement have been or will be prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the projections will be realized).  All financial and other information furnished to the Administrative Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller after the date of this Agreement shall have been prepared by the Borrower in good faith.

ARTICLE VII

COVENANTS

SECTION 7.1.Affirmative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, until all Obligations have been paid in full, the Borrower will perform the obligations set forth in this Section 7.1.

 SECTION 7.1.1.Financial Information, Reports, Notices, etc.  The Borrower will furnish, or will cause to be furnished, to the Administrative Agent (with sufficient copies for distribution to each Lender) the following financial statements, reports, notices and information:

a.   as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;

b.   as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;

c.   together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in Section 7.2.4 (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Administrative Agent);

29 

d.   as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;

e.   as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;

f.   [RESERVED];

g.   promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and

h.   such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request;

provided that information required to be furnished to the Administrative Agent under subsections (a), (b) and (g) of this Section 7.1.1 shall be deemed furnished to the Administrative Agent when available free of charge on the Borrower’s website at http://www.rclinvestor.com or the SEC’s website at http://www.sec.gov.

 SECTION 7.1.2.Approvals and Other Consents.  The Borrower will obtain (or cause to be obtained) all such governmental licenses, authorizations, consents, permits and approvals as may be required for (a) the Borrower to perform its obligations under this Agreement and the other Loan Documents and (b) the operation of the Purchased Vessel in compliance with all applicable laws, except, in each case, to the extent that failure to obtain (or cause to be obtained) such governmental licenses, authorizations, consents, permits and approvals would not be expected to have a Material Adverse Effect.

 SECTION 7.1.3.Compliance with Laws, etc.The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, except (other than as described in clause (a) below) to the extent that the failure to so comply would not have a Material Adverse Effect, which compliance shall in any case include (but not be limited to):

a.   in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of Section 7.2.6;

b.   in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;

c.   the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings; and

30 

d.   compliance with all applicable Environmental Laws.

 SECTION 7.1.4.The Purchased Vessel.

The Borrower will:

a.   cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly-owned Subsidiaries, provided that the Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly-owned Subsidiaries and (ii) for a time charter not to exceed one year in duration;

b.   cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing.

c.   [RESERVED]

d.   [RESERVED]

 SECTION 7.1.5.Insurance.  The Borrower will, or will cause one or more of its Subsidiaries to, maintain or cause to be maintained with responsible insurance companies insurance with respect to the Purchased Vessel against such casualties, third-party liabilities and contingencies and in such amounts, in each case, as is customary for other businesses of similar size in the passenger cruise line industry (provided that in no event will the Borrower or any Subsidiary be required to obtain any business interruption, loss of hire or delay in delivery insurance) and will, upon request of the Administrative Agent, furnish to the Administrative Agent (with sufficient copies for distribution to each Lender) at reasonable intervals a certificate of a senior officer of the Borrower setting forth the nature and extent of all insurance maintained or caused to be maintained by the Borrower and the Subsidiaries and certifying as to compliance with this Section.

 SECTION 7.1.6.Books and Records.  The Borrower will keep books and records that accurately reflect all of its business affairs and transactions and permit the Administrative Agent and each Lender or any of their respective representatives, at reasonable times and intervals, to visit each of its offices, to discuss its financial matters with its officers and to examine any of its books or other corporate records.

 SECTION 7.1.7.Hermes Insurance Policy.  The Borrower shall, on the reasonable request of the Hermes Agent or the Administrative Agent, provide such other information as required under the Hermes Insurance Policy and/or the Terms and Conditions as necessary to enable the Hermes Agent or the Administrative Agent to obtain the full support of Hermes and/or the government of the Federal Republic of Germany (as the case may be) pursuant to the Hermes Insurance Policy and/or the Terms and Conditions (as the case may be). The Borrower must pay to the Hermes Agent or the Administrative Agent the amount of all reasonable costs and expenses reasonably incurred by the Hermes Agent or the Administrative Agent in connection with complying with a request by Hermes or the government of the Federal Republic of Germany (as the case may be) for any additional information necessary or desirable in connection with the Hermes Insurance Policy or the Terms and Conditions (as the case may

31 

be); provided that the Borrower is consulted before the Hermes Agent or the CIRR Agent incurs any such cost or expense.

SECTION 7.2.Negative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, until all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 7.2.

 SECTION 7.2.1.Business Activities.  The Borrower will not, and will not permit any of its Subsidiaries to, engage in any principal business activity other than those engaged in by the Borrower and its Subsidiaries on the date hereof and other business activities reasonably related thereto.

 SECTION 7.2.2.Indebtedness.  The Borrower will not permit any of the Existing Principal Subsidiaries to create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:

a.   Indebtedness, secured by Liens of the type described in Section 7.2.3;

b.   Indebtedness owing to the Borrower or a wholly owned direct or indirect Subsidiary of the Borrower;

c.   Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Restatement Effective Date;

d.   Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted to be secured under Section 7.2.3(c), at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $450,000,000;

e.   Existing Debt; and

f.   obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.

 SECTION 7.2.3.Liens.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:

a.   Liens on the vessel BRILLIANCE OF THE SEAS existing as of the Restatement Effective Date and securing the Existing Debt (and any Lien on BRILLIANCE OF THE SEAS securing any refinancing of the Existing Debt, so long as such vessel was subject to a Lien securing the Indebtedness being refinanced immediately prior to such refinancing);

32 

b.   Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Restatement Effective Date) acquired after the Restatement Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each such Lien is created within three months after the acquisition of the relevant assets;

c.   in addition to other Liens permitted under this Section 7.2.3, Liens securing Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under Section 7.2.2(d), at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $450,000,000, provided that, with respect to each such item of Indebtedness, the fair market value of the assets subject to Liens securing such Indebtedness (determined at the time of the creation of such Lien) shall not exceed two times the aggregate principal amount of such Indebtedness (and for purposes of this clause (c), the fair market value of any assets shall be determined by (i) in the case of any Vessel, by an Approved Appraiser selected by the Borrower and (ii) in the case of any other assets, by an officer of the Borrower or by the board of directors of the Borrower);

d.   Liens on assets acquired after the Restatement Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;

e.   Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Restatement Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;

f.   Liens securing Government-related Obligations;

33 

g.   Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;

h.   Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings;

i.   Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;

j.   Liens for current crew’s wages and salvage;

k.   Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;

l.   Liens on Vessels that:

(i)secure obligations covered (or reasonably expected to be covered) by insurance;

(ii)were incurred in the course of or incidental to trading such Vessel in connection with repairs or other work to such Vessel; or

(iii)were incurred in connection with work to such Vessel that is required to be performed pursuant to applicable law, rule, regulation or order;

provided that, in each case described in this clause (l), such Liens are either (x) discharged in the ordinary course of business or (y) being diligently contested in good faith by appropriate proceedings;

m.   normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;

n.   Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business; and

o.   Liens on cash or Cash Equivalents securing obligations in respect of Hedging Instruments permitted under Section 7.2.2(f) or securing letters of credit that support such obligations.

 SECTION 7.2.4.Financial Condition.  The Borrower will not permit:

34 

a.   Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.

b.   Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter.

c.   Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).

 SECTION 7.2.5.Investments.  The Borrower will not permit any of the Principal Subsidiaries to make, incur, assume or suffer to exist any Investment in any other Person other than

a.   the Borrower or any direct or indirect wholly owned Subsidiary of the Borrower; and

b.   other Investments by the Principal Subsidiaries in an aggregate amount not to exceed $50,000,000 at any time outstanding.

 SECTION 7.2.6.Consolidation, Merger, etc.  The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, or purchase or otherwise acquire all or substantially all of the assets of any Person except:

a.   any such Subsidiary may (i) liquidate or dissolve voluntarily, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by Section 7.2.7; and

b.   so long as no Event of Default or Prepayment Event has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:

(i)after giving effect thereto, the Stockholders’ Equity of the Borrower and its Subsidiaries is at least equal to 90% of such Stockholders’ Equity immediately prior thereto; and

(ii)in the case of a merger involving the Borrower where the Borrower is not the surviving corporation, the surviving corporation shall have assumed in a writing, delivered to the Administrative Agent, all of the Borrower’s obligations hereunder and under the other Loan Documents.

35 

 SECTION 7.2.7.Asset Dispositions, etc.  The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, any material asset (including accounts receivable and capital stock of Principal Subsidiaries) to any Person, except:

a.   sales of assets (including, without limitation, Vessels) so long as at the time of any such sale:

(i)the aggregate net book value of all such assets sold during each fiscal year does not exceed an amount equal to the greater of (x) 7.5% of Stockholders’ Equity as at the end of the last Fiscal Quarter, and (y) $400,000,000; and

(ii)to the extent any asset has a fair market value in excess of $50,000,000 the Borrower or Subsidiary selling such asset receives consideration therefor at least equal to the fair market value thereof (as determined in good faith by (x) in the case of any Vessel, the board of directors of the Borrower and (y) in the case of any other asset, an officer of the Borrower or its board of directors);

b.   sales of capital stock of any Principal Subsidiary of the Borrower so long as a sale of all of the assets of such Subsidiary would be permitted under the foregoing clause (a);

c.   sales of capital stock of any Subsidiary other than a Principal Subsidiary;

d.   the sale of the vessels “Celebrity Mercury” and “Bleu de France”;

e.   sales of other assets in the ordinary course of business; and

f.   sales of assets between or among the Borrower and Subsidiaries of the Borrower.

 SECTION 7.2.8.Transactions with Affiliates  The Borrower will not, and will not permit any of the Principal Subsidiaries to, enter into, or cause, suffer or permit to exist any arrangement or contract with any of its Affiliates (other than arrangements or contracts among the Borrower and its Subsidiaries and among the Borrower’s Subsidiaries) unless such arrangement or contract is on an arms’-length basis, provided that, to the extent that the aggregate fair value of the goods furnished or to be furnished or the services performed or to be performed under all such contracts or arrangements in any one Fiscal Year does not exceed $50,000,000, such contracts or arrangements shall not be subject to this Section 7.2.8.

ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.1.Listing of Events of Default.  Each of the following events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.

 SECTION 8.1.1.Non-Payment of Obligations.  The Borrower shall default in the payment when due of any principal of or interest on the Loan or any Commitment

36 

Fee, or the Borrower shall default in the payment of any fee due and payable under the Agreement to Provide Financing, provided that, in the case of any default in the payment of any interest on the Loan or of any Commitment Fee, such default shall continue unremedied for a period of at least two (2) Business Days after notice thereof shall have been given to the Borrower by the Administrative Agent; and provided further that, in the case of any default in the payment of any fee due and payable under the Agreement to Provide Financing, such default shall continue unremedied for a period of at least ten days after notice thereof shall have been given to the Borrower by the Administrative Agent.

SECTION 8.1.2.Breach of Warranty.  Any representation or warranty of the Borrower made or deemed to be made hereunder (including any certificates delivered pursuant to Article V) is or shall be incorrect in any material respect when made.

 SECTION 8.1.3.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document (other than the covenants set forth in Section 7.2.4 and the obligations referred to in Section 8.1.1) and such default shall continue unremedied for a period of five days after notice thereof shall have been given to the Borrower by the Administrative Agent (or, if (a) such default is capable of being remedied within 30 days (commencing on the first day following such five-day period) and (b) the Borrower is actively seeking to remedy the same during such period, such default shall continue unremedied for at least 35 days after such notice to the Borrower).

SECTION 8.1.4.Default on Other Indebtedness.  The Borrower or any of its Principal Subsidiaries shall fail to pay any Indebtedness that is outstanding in a principal amount of at least $50,000,000 (or the equivalent in other currencies) in the aggregate (but excluding Indebtedness hereunder) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument evidencing, securing or relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause or permit the holder or holders of such Indebtedness to cause such Indebtedness to become due and payable prior to its scheduled maturity (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness); or any such Indebtedness shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or by voluntary agreement), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case prior to the scheduled maturity thereof (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness).  For purposes of determining Indebtedness for any Hedging Instrument, the principal amount of the obligations under any such instrument at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Principal Subsidiary would be required to pay if such instrument were terminated at such time.

37 

SECTION 8.1.5.Bankruptcy, Insolvency, etc.  The Borrower or any of the Principal Subsidiaries (or any of its other Subsidiaries to the extent that the relevant event described below would have a Material Adverse Effect) shall:

a.   generally fail to pay, or admit in writing its inability to pay, its debts as they become due;

b.   apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;

c.   in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 30 days, provided that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any relevant proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents;

d.   permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 30 days undismissed, provided that the Borrower hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any such case or proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents; or

e.   take any corporate action authorizing, or in furtherance of, any of the foregoing.

SECTION 8.2.Action if Bankruptcy.  If any Event of Default described in clauses (b) through (d) of Section 8.1.5 shall occur with respect to the Borrower, the Commitment (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.

SECTION 8.3.Action if Other Event of Default.  If any Event of Default (other than any Event of Default described in clauses (b) through (d) of Section 8.1.5 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall by notice to the Borrower declare the outstanding principal amount of the Loan and other Obligations to be immediately due and payable and/or the Commitment (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations shall be and become immediately due and payable, without further notice, demand or presentment.

38 

ARTICLE IX

PREPAYMENT EVENTS

SECTION 9.1.Listing of Prepayment Events.  Each of the following events or occurrences described in this Section 9.1 shall constitute a “Prepayment Event”.

 SECTION 9.1.1.Change in Ownership.  Any Person other than a member of the Existing Group (a “New Shareholder”) shall acquire (whether through legal or beneficial ownership of capital stock, by contract or otherwise), directly or indirectly, effective control over more than 33% of the Voting Stock and:

a.   the members of the Existing Group have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) in the aggregate, directly or indirectly, effective control over fewer shares of Voting Stock than does such New Shareholder; and

b.   the members of the Existing Group do not collectively have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) the right to elect, or to designate for election, at least a majority of the Board of Directors of the Borrower.

 SECTION 9.1.2.Change in Board.  During any period of 24 consecutive months, a majority of the Board of Directors of the Borrower shall no longer be composed of individuals:

a.   who were members of said Board on the first day of such period;

b.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board who were members of said Board on the first day of such period; or

c.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board referred to in the foregoing clauses (a) and (b).

 SECTION 9.1.3.Unenforceability.  Any Loan Document shall cease to be the legally valid, binding and enforceable obligation of the Borrower (in each case, other than with respect to provisions of any Loan Document (i) identified as unenforceable in the form of the Original Closing Date opinion of the Borrower’s counsel set forth as Exhibit D-1 or (ii) that a court of competent jurisdiction has determined are not material) and such event shall continue unremedied for 15 days after notice thereof has been given to the Borrower by the Administrative Agent.

 SECTION 9.1.4.Approvals.  Any material license, consent, authorization, registration or approval at any time necessary to enable the Borrower or any Principal Subsidiary to conduct its business shall be revoked, withdrawn or otherwise cease to be in full force and effect, unless the same would not have a Material Adverse Effect.

39 

 SECTION 9.1.5.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any of the covenants set forth in Section 7.2.4.

 SECTION 9.1.6.Judgments.  Any judgment or order for the payment of money in excess of $50,000,000 shall be rendered against the Borrower or any of the Principal Subsidiaries by a court of competent jurisdiction and the Borrower or such Principal Subsidiary shall have failed to satisfy such judgment and either:

a.   enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5) Business Days after the commencement of such enforcement proceedings; or

b.   there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.

 SECTION 9.1.7.Condemnation, etc..  The Purchased Vessel shall be condemned or otherwise taken under color of law or requisitioned and the same shall continue unremedied for at least 20 days, unless such condemnation or other taking would not have a Material Adverse Effect.

 SECTION 9.1.8.Arrest.  The Purchased Vessel shall be arrested and the same shall continue unremedied for at least 20 days, unless such arrest would not have a Material Adverse Effect.

 SECTION 9.1.9.[RESERVED].

 SECTION 9.1.10.Sale/Disposal of the Purchased Vessel.  The Purchased Vessel is sold to a company which is not the Borrower or any other Subsidiary of the Borrower (other than for the purpose of a lease back to the Borrower or any other Subsidiary of the Borrower).

 SECTION 9.1.11.[RESERVED].

Payment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.

SECTION 9.2.Mandatory Prepayment.  If any Prepayment Event shall occur and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall, by notice to the Borrower, require the Borrower to prepay in full on the date of such notice all principal of and interest on the Loan and all other Obligations (and, in such event, the Borrower agrees to so pay the full unpaid amount of the Loan and all accrued and unpaid interest thereon and all other Obligations).

40 

ARTICLE X 

THE ADMINISTRATIVE AGENT AND THE HERMES AGENT

SECTION 10.1.Actions.  Each Lender hereby appoints KfW IPEX, as Administrative Agent and as Hermes Agent, as its agent under and for purposes of this Agreement and each other Loan Document (for purposes of this Article X, the Administrative Agent and the Hermes Agent are referred to collectively as the “Agents”).  Each Lender authorizes the Agents to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agents (with respect to which each Agent agrees that it will comply, except as otherwise provided in this Section 10.1 or as otherwise advised by counsel), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto.  Neither Agent shall be obliged to act on the instructions of any Lender or the Required Lenders if to do so would, in the opinion of such Agent, be contrary to any provision of this Agreement or any other Loan Document or to any law, or would expose such Agent to any actual or potential liability to any third party.

SECTION 10.2.Indemnity.  Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent, pro rata according to such Lender’s Percentage, from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that be incurred by or asserted or awarded against, such Agent in any way relating to or arising out of this Agreement and any other Loan Document or any action taken or omitted by such Agent under this Agreement or any other Loan Document; provided that no Lender shall be liable for the payment of any portion of such claims, damages, losses, liabilities and expenses which have resulted from such Agent’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower.  In the case of any investigation, litigation or proceeding giving rise to any such indemnified costs, this Section applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party.  Neither Agent shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is expressly required to do so under this Agreement or is indemnified hereunder to its satisfaction.  If any indemnity in favor of an Agent shall be or become, in such Agent’s determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.

SECTION 10.3.Funding Reliance, etc.  Each Lender shall notify the Administrative Agent by 4:00 p.m., Frankfurt time, one day prior to the advance of the Loan if it is not able to fund the following day.  Unless the Administrative Agent shall have been notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., Frankfurt time, on the day prior

41 

to the advance of the Loan that such Lender will not make available the amount which would constitute its Percentage of the Loan on the date specified therefor, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent and, in reliance upon such assumption, may, but shall not be obliged to, make available to the Borrower a corresponding amount.  If and to the extent that such Lender shall not have made such amount available to the Administrative Agent, such Lender and the Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Administrative Agent made such amount available to the Borrower to the date such amount is repaid to the Administrative Agent, at the interest rate applicable at the time to the Loan without premium or penalty.

SECTION 10.4.Exculpation.  Neither of the Agents nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence.  Without limitation of the generality of the foregoing, each Agent (i) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it and in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, (iii) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or Prepayment Event or to inspect the property (including the books and records) of the Borrower, (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto, (v) shall incur no liability under or in respect of this Agreement by action upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties, and (vi) shall have no responsibility to the Borrower or any Lender on account of (A) the failure of a Lender or the Borrower to perform any of its obligations under this Agreement or any Loan Document; (B) the financial condition of the Borrower; (C) the completeness or accuracy of any statements, representations or warranties made in or pursuant to this Agreement or any Loan Document, or in or pursuant to any document delivered pursuant to or in connection with this Agreement or any Loan Document; or (D) the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of this Agreement or any Loan Document or of any document executed or delivered pursuant to or in connection with any Loan Document.

SECTION 10.5.Successor.  The Administrative Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders, provided that any such resignation shall not become effective until a successor Administrative Agent has been appointed as provided in this Section 10.5 and such successor Administrative Agent has accepted such appointment.  If the Administrative Agent at any time shall resign, the Required Lenders shall, subject to the immediately preceding proviso and subject to the consent of the Borrower (such consent not to be unreasonably withheld), appoint another Lender as a successor to the Administrative Agent which shall thereupon become such Administrative Agent’s successor

42

hereunder (provided that the Required Lenders shall, subject to the consent of the Borrower unless an Event or Default or a Prepayment Event shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) offer to each of the other Lenders in turn, in the order of their respective Percentages of the Loan, the right to become successor Administrative Agent).  If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the Administrative Agent’s giving notice of resignation, then the Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be one of the Lenders or a commercial banking institution having a combined capital and surplus of at least $1,000,000,000 (or the equivalent in other currencies), subject, in each case, to the consent of the Borrower (such consent not to be unreasonably withheld).  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall be entitled to receive from the resigning Administrative Agent such documents of transfer and assignment as such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the resigning Administrative Agent, and the resigning Administrative Agent shall be discharged from its duties and obligations under this Agreement.  After any resigning Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of:

(a)      this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement; and

(b)      Section 11.3 and Section 11.4 shall continue to inure to its benefit.

If a Lender acting as the Administrative Agent assigns its Loan to one of its Affiliates, such Administrative Agent may, subject to the consent of the Borrower (such consent not to be unreasonably withheld or delayed) assign its rights and obligations as Administrative Agent to such Affiliate.

SECTION 10.6.Loans by the Administrative Agent.  The Administrative Agent shall have the same rights and powers with respect to the Loan made by it or any of its Affiliates.  The Administrative Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if the Administrative Agent were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.  The Administrative Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Administrative Agent.

43 

SECTION 10.7.Credit Decisions.  Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment.  Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.

SECTION 10.8.Copies, etc.  Each Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to such Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower).  Each Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by such Agent from the Borrower for distribution to the Lenders by such Agent in accordance with the terms of this Agreement.

SECTION 10.9.The Agents’ Rights.  Each Agent may (i) assume that all representations or warranties made or deemed repeated by the Borrower in or pursuant to this Agreement or any Loan Document are true and complete, unless, in its capacity as the Administrative Agent, it has acquired actual knowledge to the contrary, (ii) assume that no Default has occurred unless, in its capacity as an Agent, it has acquired actual knowledge to the contrary, (iii) rely on any document or notice believed by it to be genuine, (iv) rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it, (v) rely as to any factual matters which might reasonably be expected to be within the knowledge of the Borrower on a certificate signed by or on behalf of the Borrower and (vi) refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Required Lenders) and unless and until such Agent has received from the Lenders any payment which such Agent may require on account of, or any security which such Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.

SECTION 10.10.The Administrative Agent’s Duties.  The Administrative Agent shall (i) if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of this Agreement or any Loan Document by the Borrower as to the existence of an Event of Default and (ii) inform the Lenders promptly of any Event of Default of which the Administrative Agent has actual knowledge.

The Administrative Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by the Borrower or actual knowledge of the occurrence of any Default unless a Lender, or the Borrower shall have given written notice thereof to the Administrative Agent in its capacity as the Administrative Agent.  Any information acquired by the Administrative Agent other than

44

specifically in its capacity as the Administrative Agent shall not be deemed to be information acquired by the Administrative Agent in its capacity as the Administrative Agent.

The Administrative Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with the Borrower or with the Borrower’s subsidiaries or associated companies or with a Lender as if it were not the Administrative Agent.

SECTION 10.11.Employment of Agents.  In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to this Agreement or the Loan Documents, each Agent shall be entitled to employ and pay agents to do anything which such Agent is empowered to do under or pursuant to this Agreement or the Loan Documents (including the receipt of money and documents and the payment of money); provided that, unless otherwise provided herein, including without limitation Section 11.3, the employment of such agents shall be for such Agent’s account, and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by such Agent in good faith to be competent to give such opinion, advice or information.

SECTION 10.12.Distribution of Payments.  The Administrative Agent shall pay promptly to the order of each Lender that Lender’s Percentage Share of every sum of money received by the Administrative Agent pursuant to this Agreement or the Loan Documents (with the exception of any amounts payable pursuant to the Agreement to Provide Financing and any amounts which, by the terms of this Agreement or the Loan Documents, are paid to the Administrative Agent for the account of the Administrative Agent alone or specifically for the account of one or more Lenders) and until so paid such amount shall be held by the Administrative Agent on trust absolutely for that Lender.

SECTION 10.13.Reimbursement.  The Administrative Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum.  If, however, the Administrative Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Section 10.12 before it has itself received payment of that amount, and the Administrative Agent does not in fact receive payment within five (5) Business Days after the date on which that payment was required to be made by the terms of this Agreement or the Loan Documents, that Lender will, on demand by the Administrative Agent, refund to the Administrative Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Administrative Agent for any amount which the Administrative Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of this Agreement or the Loan Documents and ending on the date on which the Administrative Agent receives reimbursement.

SECTION 10.14.Instructions.  Where an Agent is authorized or directed to act or refrain from acting in accordance with the instructions of the Lenders or of the Required Lenders each of the Lenders shall provide such Agent with instructions within three (3) Business Days of such Agent’s request (which request may be made orally or in writing).  If a Lender does not provide such Agent with instructions within that period, that Lender shall be bound by the decision of such Agent.  Nothing in this Section 10.14 shall limit the right of such Agent to take,

45 

or refrain from taking, any action without obtaining the instructions of the Lenders or the Required Lenders if such Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with this Agreement or the Loan Documents.  In that event, such Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Administrative Agent pursuant to this Section 10.14.

SECTION 10.15.Payments.  All amounts payable to a Lender under this Section 10.15 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Administrative Agent.

SECTION 10.16.“Know your customer” Checks.  Each Lender shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself) in order for the Administrative Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in this Agreement or the Loan Documents.

SECTION 10.17.No Fiduciary Relationship.  Except as provided in Section 10.12, no Agent shall have any fiduciary relationship with or be deemed to be a trustee of or for any other person and nothing contained in this Agreement or any Loan Document shall constitute a partnership between any two or more Lenders or between either Agent and any other person.

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.1.  Waivers, Amendments, etc.  The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided that no such amendment, modification or waiver which would:

a.   modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;

b.   modify this Section 11.1 or change the definition of “Required Lenders” shall be made without the consent of each Lender;

c.   increase the Commitment of any Lender shall be made without the consent of such Lender;

d.   reduce any fees described in Article III payable to any Lender shall be made without the consent of such Lender;

e.   [RESERVED]

46 

f.   extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or

g.   affect adversely the interests, rights or obligations of the Administrative Agent in its capacity as such shall be made without consent of the Administrative Agent.

No failure or delay on the part of the Administrative Agent or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by any Agent or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.  The Lenders hereby agree, at any time and from time to time that the Nordea Agreement or the Citibank Agreement is amended or refinanced, to negotiate in good faith to amend this Agreement to conform any representations, warranties, covenants or events of default in this Agreement to the amendments made to any substantively comparable provisions in the Nordea Agreement or the Citibank Agreement or any refinancing thereof.

SECTION 11.2.Notices.

(a)           All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted to such party at its address, facsimile number or electronic mail address set forth below its signature to the Assignment and Amendment Deed or set forth in the Lender Assignment Agreement or at such other address, or facsimile number as may be designated by such party in a notice to the other parties.  Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted provided it is received in legible form; any notice, if transmitted by electronic mail, shall be deemed given upon acknowledgment of receipt by the recipient.

(b)            So long as KfW IPEX is the Administrative Agent, the Borrower may provide to the Administrative Agent all information, documents and other materials that it furnishes to the Administrative Agent hereunder or any other Loan Document (and any guaranties, security agreements and other agreements relating thereto), including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing advance or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder or any other Loan Document prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of the Agreement and/or any advance or other extension of credit

47 

hereunder (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Administrative Agent at claudia.wenzel@kfw.de (or such other email address notified by the Administrative Agent to the Borrower); provided that any Communication requested pursuant to Section 7.1.1(h) shall be in a format acceptable to the Borrower and the Administrative Agent.

(1)           The Administrative Agent agrees that the receipt of Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of such Communications to the Administrative Agent for purposes hereunder and any other Loan Document (and any guaranties, security agreements and other agreements relating thereto).

(2)           The Borrower agrees that the Administrative Agent may make such items included in the Communications as the Borrower may specifically agree available to the Lenders by posting such notices, at the option of the Borrower, on Intralinks (the “Platform”). Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Administrative Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Facility Agent or any of its Affiliates in connection with the Platform.

SECTION 11.3.Payment of Costs and Expenses.  The Borrower agrees to pay on demand all reasonable expenses of the Administrative Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Administrative Agent and of local counsel, if any, who may be retained by counsel to the Administrative Agent) in connection with any amendments, waivers, consents, supplements or other modifications to, this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated.  In addition, the Borrower agrees to pay reasonable fees and out of pocket expenses of counsel to the Administrative Agent in connection with the funding under this Agreement.  The Borrower further agrees to pay, and to save the Administrative Agent and the Lenders harmless from all liability for, any stamp, recording, documentary or other similar taxes arising from the execution, delivery or enforcement of this Agreement or the borrowing hereunder or any other Loan Documents.  The Borrower also agrees to reimburse the Administrative Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Administrative Agent or such Lender in connection with (x) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.

48 

SECTION 11.4.Indemnification.  In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Borrower hereby indemnifies and holds harmless the Administrative Agent, each Lender and each of their respective Affiliates and their respective officers, advisors, directors and employees (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby or any actual or proposed use of the proceeds of the Loans (collectively, the “Indemnified Liabilities”), except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto.  Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided, that the Borrower shall reimburse such indemnified party for its reasonable out-of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower  shall consult in good faith with  the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed).  Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall

49 

have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower  shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense.  The Borrower acknowledges that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except to the extent such liability is determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings).  If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

SECTION 11.5.Survival.  The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 4.7, 11.3 and 11.4 and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement and the payment in full of all Obligations.  The representations and warranties made by the Borrower in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document.

SECTION 11.6.Severability.  Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 11.7.Headings.  The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.

SECTION 11.8.Execution in Counterparts, Effectiveness, etc.   This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

SECTION 11.9.Third Party Rights.   Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it.

50 

SECTION 11.10.Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that:

a.   except to the extent permitted under Section 7.2.5, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender; and

b.   the rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.

SECTION 11.11.Sale and Transfer of the Loan; Participations in the Loan.  Each Lender may assign, or sell participations in, its Loan to one or more other Persons (a “New Lender”); provided that such New Lender enters into an Interest Make-Up Agreement; and provided further that such Lender shall use commercially reasonable efforts to assign only to a New Lender that has agreed to enter into an Option A Refinancing Agreement.

SECTION 11.11.1.Assignments  (i) KfW IPEX, as Lender, (A) with the written consent of the Borrower (which consent shall not be unreasonably delayed or withheld but which consent shall be deemed to have been given in the absence of a written notice delivered by the Borrower to KfW IPEX, on or before the fifth Business Day after receipt by the Borrower of KfW IPEX’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions, when taken together with participations sold by KfW IPEX pursuant to Section 11.11.2, up to 50.0% of the aggregate principal amount of the Loan and (B) after having assigned or transferred, when taken together with participations sold by KfW IPEX pursuant to Section 11.11.2, 50.0% of the Loan (pursuant to the foregoing clause (A) and/or Section 11.11.2, with the written consent of the Borrower (which consent may be withheld at the discretion of the Borrower) may at any time (and from time to time) assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions all or any fraction of KfW IPEX’s remaining Loan.

(ii) Any Lender (other than KfW IPEX) with the written consents of the Borrower and the Administrative Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Borrower, shall be deemed to have been given in the absence of a written notice delivered by the Borrower to the Administrative Agent, on or before the fifth Business Day after receipt by the Borrower of such Lender’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions all or any fraction of such Lender’s Loan; provided that any Affiliate of KfW IPEX shall be subject to the provisions of Section 11.11.1(i) and 11.11.2(f) as if such Affiliate were KfW IPEX.

(iii) Any Lender, with notice to the Borrower and the Administrative Agent, and, notwithstanding the foregoing clauses (i) and (ii), without the consent of the Borrower, or the Administrative Agent, may assign or transfer (A) to any of its Affiliates (including, in the case of

51 

KfW IPEX, KfW) or (B) following the occurrence and during the continuance of an Event of Default or a Prepayment Event, to any other Person, in either case, all or any fraction of such Lender’s Loan.

(iv) Any Lender may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Administrative Agent) assign or charge all or any portion of its Loan to any Federal Reserve Bank as collateral security pursuant to Regulation A of the F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank all or any fraction of such Lender’s Loan or (ii) to the Refinancing Bank as collateral security pursuant to the terms of any Option A Refinancing Agreement entered into by such Lender.

(v) No Lender may (notwithstanding the foregoing clauses) assign or transfer any of its rights under this Agreement unless it has given prior written notification of the transfer to Hermes and has obtained a prior written consent from Hermes.

(vi) Nothing in this Section 11.11.1 shall prejudice the right of the Lender to assign its rights under this Agreement to Hermes, if such assignment is required to be made by that Lender to Hermes in accordance with the Hermes Insurance Policy.

Each Person described in the foregoing clauses as being the Person to whom such assignment or transfer is to be made, is hereinafter referred to as an “Assignee Lender”.  Assignments in a minimum aggregate amount of $25,000,000 (or, if less, all of such Lender’s Loan and Commitment) (which assignment or transfer shall be of a constant, and not a varying, percentage of such Lender’s Loan) are permitted; provided that the Borrower and the Administrative Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned or transferred to an Assignee Lender until:

a.   written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Administrative Agent by such Lender and such Assignee Lender;

b.   such Assignee Lender shall have executed and delivered to the Borrower and the Administrative Agent a Lender Assignment Agreement, accepted by the Administrative Agent; and

c.   the processing fees described below shall have been paid.

From and after the date that the Administrative Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned or transferred to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned or transferred by it, shall be released from its obligations hereunder and under the other Loan Documents, other than any obligations arising prior to the effective date of such assignment.  Except to the extent resulting from a subsequent change in law, in no event shall the Borrower be required to pay to any Assignee Lender any amount under Sections 4.3, 4.4, 4.5, 4.6

52 

and 4.7 that is greater than the amount which it would have been required to pay had no such assignment been made.  Such assignor Lender or such Assignee Lender must also pay a processing fee to the Administrative Agent upon delivery of any Lender Assignment Agreement in the amount of $2,000 (and shall also reimburse the Administrative Agent for any reasonable out-of-pocket costs, including reasonable attorneys’ fees and expenses, incurred in connection with the assignment).

 SECTION 11.11.2.Participations.  Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a “Participant”) participating interests in its Loan; provided that:

a.   no participation contemplated in this Section 11.11.2 shall relieve such Lender from its obligations hereunder;

b.   such Lender shall remain solely responsible for the performance of its obligations hereunder;

c.   the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;

d.   no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in clauses (b) through (f) of Section 11.1;

e.   the Borrower shall not be required to pay any amount under Sections 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no participating interest been sold; and

f.   each Lender that sells a participation under this Section 11.11.2 shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest on) each of the Participant’s interest in the Lender’s Advances, Commitments or other interests hereunder (the “Participant Register”).  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.

g.   KfW IPEX may not sell participating interests pursuant to this Section 11.11.2 aggregating, when taken together with Loans and/or Commitments sold by KfW IPEX pursuant to Section 11.11.1, more than 50.0% of the aggregate principal amount of the Loan without the written consent of the Borrower (which consent shall not be required following the occurrence and during the continuance of an Event of Default or a Prepayment Event).

53 

The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6 and clause (e) of 7.1.1, shall be considered a Lender.

 SECTION 11.11.3.Register.  The Administrative Agent, acting as agent for the Borrower, shall maintain at its address referred to in Section 11.2 a copy of each Lender Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment(s) of, and principal amount of the Loan owing to, each Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

SECTION 11.12.Other Transactions.  Nothing contained herein shall preclude the Administrative Agent or any Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.

SECTION 11.13.Hermes Insurance Policy.

 SECTION 11.13.1.Terms of Hermes Insurance Policy

(a)   95% cover of the Loan.

(b)   The Hermes Fee will not exceed 2.3% of the Loan as advanced on the Original Closing Date.

(c)   The parties entered into the Original Credit Agreement on the basis that the Hermes Insurance Policy contained the terms set forth in Section 11.13.1 of the Original Credit Agreement.

 SECTION 11.13.2.Obligations of the Hermes Agent and the Lenders.

(a)   Promptly upon receipt of the Hermes Insurance Policy from Hermes, the Hermes Agent shall (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) send a copy thereof to the Borrower.

(b)   The Hermes Agent shall perform such acts or provide such information, which are, acting reasonably, within its power so to perform or so to provide, as required by Hermes under the Hermes Insurance Policy as necessary to ensure that the Lenders obtain the support of Hermes pursuant to the Hermes Insurance Policy.

54 

(c)   The Hermes Agent shall:

(i)   make written requests to Hermes seeking a reimbursement of the Hermes Fee in the circumstances described in Section 11.13.1(c)(iii) or (iv) promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) provide a copy of the request to the Borrower;

(ii)   use its reasonable endeavours to maximize the amount of any reimbursement of the Hermes Fee to which the Hermes Agent is entitled;

(iii)    pay to the Borrower the full amount of any reimbursement of the Hermes Fee that the Hermes Agent receives from Hermes within two (2) Business Days of receipt with same day value; and

(iv)    relay the good faith concerns of the Borrower to Hermes regarding the amount it is required to pay to Hermes or the amount of any reimbursement to which the Hermes Agent is entitled, it being agreed that the Hermes Agent’s obligation shall be no greater than simply to pass on to Hermes the Borrower’s concerns.

(d)   Each Lender will co operate with the Hermes Agent, the Administrative Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the Hermes Insurance Policy and each Interest Make-Up Agreement (as defined in and entered into in accordance with the Terms and Conditions) continue in full force and effect and shall indemnify and hold harmless each other Lender in the event that the Hermes Insurance Policy or such Interest Make-Up Agreement (as the case may be) does not continue in full force and effect due to its gross negligence or willful default.

 SECTION 11.14.Law and Jurisdiction

 SECTION 11.14.1.Governing Law.  This Agreement and any non-contractual obligations arising out of or in respect of this Agreement shall in all respects be governed by and interpreted in accordance with English Law.

 SECTION 11.14.2.Jurisdiction.  For the exclusive benefit of the Administrative Agent and the Lenders, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts.  The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Section, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum.

 SECTION 11.14.3.Alternative Jurisdiction.  Nothing contained in this Section shall limit the right of the Administrative Agent or the Lenders to commence any

55 

proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.

 SECTION 11.14.4.Service of Process.  Without prejudice to the right of the Administrative Agent or the Lenders to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to RCL Cruises Ltd., presently at Building 2, Aviator Park, Station Road, Addlestone, Surrey KT15 2PG, Attention: General Counsel, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, at 9:00 am on the third Business Day after posting by prepaid first class registered post.

SECTION 11.15.Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain and to cause its Affiliates to maintain the confidentiality of all information provided to it by the Borrower or any Subsidiary of the Borrower, or by the Administrative Agent on the Borrower’s or such Subsidiary’s behalf, under this Agreement, and neither it nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement or in connection with other business now or hereafter existing or contemplated with the Borrower or any Subsidiary, except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by it or its Affiliates or their respective directors, officers, employees and agents, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or any of its Subsidiaries so long as such source is not, to its knowledge, prohibited from disclosing such information by a legal, contractual or fiduciary obligation to the Borrower or any of its Affiliates; provided, however, that it may disclose such information (A) at the request or pursuant to any requirement of any self-regulatory body, governmental body, agency or official to which the Administrative Agent, any Lender or any of their respective Affiliates is subject or in connection with an examination of the Administrative Agent, such Lender or any of their respective Affiliates by any such authority or body, including without limitation the Federal Republic of Germany; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable requirement of law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Administrative Agent, any Lender or their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder; (F) to the Administrative Agent or such Lender’s independent auditors, counsel, and any other professional advisors of the Administrative Agent or such Lender who are advised of the confidentiality of such information; (G) to any participant or assignee, provided that such Person agrees to keep such information confidential to the same extent required of the Administrative Agent and the Lenders hereunder; (H) as to the Administrative Agent, any Lender or their respective Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Borrower or any Subsidiary is party with the Administrative Agent, such Lender or such Affiliate; (I) to its Affiliates and its Affiliates’ directors, officers, employees, professional advisors and agents, provided that each such Affiliate, director, officer, employee, professional advisor or agent shall keep such information confidential to the same extent required of the Administrative Agent and the Lenders hereunder; and (J) to any other party to the Agreement.  Each of the Administrative Agent and the Lenders shall be responsible for any breach of this

56 

Section 11.15 by any of its Affiliates or any of its or its Affiliates’ directors, officers, employees, professional advisors and agents.

 SECTION 11.16.[RESERVED]

[REMAINDER OF PAGE INTENTIONALLY BLANK]

57 

EXHIBIT A

Preliminary Repayment Schedule
US Dollars ($)
No.	Repayment Dates		Repayment	Loan Balance
1	6	months after Delivery
2	12	months after Delivery
3	18	months after Delivery
4	24	months after Delivery
5	30	months after Delivery
6	36	months after Delivery
7	42	months after Delivery
8	48	months after Delivery
9	54	months after Delivery
10	60	months after Delivery
11	66	months after Delivery
12	72	months after Delivery
13	78	months after Delivery
14	84	months after Delivery
15	90	months after Delivery
16	96	months after Delivery
17	102	months after Delivery
18	108	months after Delivery
19	114	months after Delivery
20	120	months after Delivery
21	126	months after Delivery
22	132	months after Delivery
23	138	months after Delivery
24	144	months after Delivery

A-1 

EXHIBIT D-1

Opinion of Liberian Counsel to the Borrower

D-1-1 

	Watson, Farley & Williams (New York) LLP
	100 Park Avenue New York, New York 10017
	Tel (212) 922 2200 Fax (212) 922 1512
[•], 20[•]
To the Lenders party to the Credit Agreement referred to below and to KFW IPEX-Bank GmbH as Administrative Agent

Royal Caribbean Cruises Ltd.

Celebrity Solstice IV Inc.

Dear Sirs:

We have acted as legal counsel on matters of Liberian law to Celebrity Solstice IV Inc., a Liberian corporation (the “Borrower”), in connection with (a) a Hull No S-679 Credit Agreement dated as of February 27, 2009 (the “Credit Agreement”) and made between (1) the Borrower, (2) the Lenders (as defined therein) as several lenders, (3) KFW IPEX-Bank GmbH as Hermes Agent, and (4) KFW IPEX-Bank GmbH as Administrative Agent in respect of a loan facility in an amount not to exceed the US Dollar Equivalent of €444,000,000, and (b) the Guarantee dated [•], 20[•] made by Royal Caribbean Cruises Ltd., a Liberian corporation (the “Guarantor”) in favor of the Lenders, the Hermes Agent and the Administrative Agent respecting the obligations of the Borrower under the Credit Agreement (collectively, together with the Credit Agreement, the “Documents”).  Terms defined in the Credit Agreement shall have the same meaning when used herein.

With reference to the Documents you have asked for our opinion on the matters set forth below.  In rendering this opinion we have examined executed copies of the Documents.  We have also examined originals or photostatic copies or certified copies of all such agreements and other instruments, certificates by public officials and certificates of officers of the Borrower and the Guarantor as are relevant and necessary and relevant corporate authorities of the Borrower and the Guarantor.  We have assumed with your approval, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies, the power, authority and legal right of the parties to the Documents other than the Borrower and the Guarantor to enter into and perform their respective obligations under each of the Documents, and the due authorization of the execution of the Documents by all parties thereto other than the Borrower and the Guarantor.  We have further assumed the validity and enforceability of the Documents under all applicable laws other than the law of the Republic of Liberia.

As to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon certificates of public officials and of officers or representatives of the Borrower and the Guarantor.

To the Lenders party to the Credit Agreement	Page 2
and KfW IPE-Bank GmbH as Administrative Agent
[●], 20[●]

We are attorneys admitted to practice in the State of New York and do not purport to be experts in the laws of any other jurisdiction.  Insofar as our opinion relates to the law of the Republic of Liberia, we have relied on opinions of counsel in Liberia rendered in transactions which we consider to afford a satisfactory basis for such opinion, and upon our independent examinations of the Liberian Corporation Act of 1948 (Chapter 1 of Title 4 of the Liberian Code of Laws of 1956, effective March 1, 1958 as amended to July, 1973), the Liberian Business Corporation Act of 1976 (Title 5 of the Liberian Code of Laws Revised of 1976, effective January 3, 1977 as amended) (the “Business Corporation Act”), the Liberian Maritime Law (Title 21 of the Liberian Code of Laws of 1956 as amended), and the Revenue Code of Liberia (2000), the regulations thereunder and an opinion dated December 23, 2004 addressed by the Minister of Justice and Attorney General of the Republic of Liberia to the LISCR Trust Company, made available to us by Liberian Corporation Services, Inc. and the Liberian International Ship & Corporate Registry, LLC, and our knowledge and interpretation of analogous laws in the United States.  In rendering our opinion as to the valid existence in good standing of the Borrower and the Guarantor, we have relied on Certificates of Goodstanding issued by order of the Minister of Foreign Affairs of the Republic of Liberia on [•], 20[•].

This opinion is limited to the law of the Republic of Liberia.  We express no opinion as to the laws of any other jurisdiction.

Based upon and subject to the foregoing and having regard to the legal considerations which we deem relevant, we are of the opinion that:

1. Each of the Borrower and the Guarantor is a corporation duly incorporated, validly existing under the Business Corporation Act and in good standing under the law of the Republic of Liberia;

2. Each of the Borrower and the Guarantor has full right, power and authority to enter into, execute and deliver the Document to which it is a party and to perform each and all of its obligations under the Document to which it is a party;

3. Each of the Documents has been executed and delivered by a duly authorized signatory of the Borrower or the Guarantor party thereto;

4. Each of the Documents constitutes the legal, valid and binding obligations of the Borrower or the Guarantor party thereto, enforceable against the Borrower or the Guarantor, as the case may be, in accordance with its terms;

5. Neither the execution nor delivery of either of the Documents, nor the transactions contemplated therein, nor compliance with the terms and conditions thereof, will contravene any provisions of Liberian law or violate any provisions of the Articles of Incorporation (inclusive of any articles of amendment thereto) or the Bylaws of the Borrower or of the Guarantor;

6. No consent or approval of, or exemption by, any Liberian governmental or public bodies and authorities are required in connection with the execution and delivery by the Borrower or the Guarantor of the Documents;

To the Lenders party to the Credit Agreement	Page 3
and KfW IPE-Bank GmbH as Administrative Agent
[●], 20[●]

7. It is not necessary to file, record or register either of the Documents or any instrument relating thereto or effect any other official action in any public office or elsewhere in the Republic of Liberia to render any such document enforceable against the Borrower or the Guarantor;

8. Assuming neither of the Documents having been executed in the Republic of Liberia, no stamp or registration or similar taxes or charges are payable in the Republic of Liberia in respect of either of the Documents or the enforcement thereof in the courts of Liberia other than (i) customary court fees payable in litigation in the courts of Liberia and (ii) nominal documentary stamp taxes if the Documents are ever submitted to a Liberian court;

9. Assuming that no more than 25% of the total combined voting power and no more than 25% of the total value of the outstanding equity stock of either of the Borrower or the Guarantor is beneficially owned, directly or indirectly, by persons resident in the Republic of Liberia and that neither of the Borrower or the Guarantor, either directly or through agents acting on its behalf, engages in the Republic of Liberia in the pursuit of gain or profit with a degree of continuity or regularity, neither of the Borrower or the Guarantor is required or entitled under any existing applicable law or regulation of the Republic of Liberia to make any withholding or deduction in respect of any tax or otherwise from any payment which it is or may be required to make under any of the Documents;  and

10. Assuming that the shares of the Borrower and the Guarantor are not owned, directly or indirectly, by the Republic of Liberia or any other sovereign under Liberian law, neither the Borrower nor the Guarantor nor the property or assets of either of them is immune from the institution of legal proceedings or the obtaining or execution of a judgment in the Republic of Liberia.

We qualify our opinion to the extent that (i) the enforceability of the rights and remedies provided for in the Documents (a) may be limited by bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting generally the enforcement of creditors’ rights and (b) is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including application by a court of competent jurisdiction of principles of good faith, fair dealing, commercial reasonableness, materiality, unconscionability and conflict with public policy or similar principles, and (ii) while there is nothing in the law of the Republic of Liberia that prohibits a Liberian corporation from submitting to the jurisdiction of a forum other than the Republic of Liberia, the enforceability of such submission to jurisdiction provisions is not dependent upon Liberian law and such provisions may not be enforceable under the law of a particular jurisdiction.

A copy of this opinion letter may be delivered by any of you to any Person that becomes a Lender in accordance with the provisions of the Credit Agreement.  Any such Lender may rely on the opinion expressed above as if this opinion letter were addressed and delivered to such Lender on the date hereof.

This opinion letter speaks only as of the date hereof.  We expressly disclaim any responsibility to advise you or any other Lender who is permitted to rely on the opinion expressed herein as specified in the next preceding paragraph of any development or circumstance of any kind including any

To the Lenders party to the Credit Agreement	Page 4
and KfW IPE-Bank GmbH as Administrative Agent
[●], 20[●]

change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter.  Accordingly, any Lender relying on this opinion letter at any time should seek advice of its counsel as to the proper application of this opinion letter at such time.

Very truly yours,

Watson, Farley & Williams (New York) LLP

EXHIBIT E

FORM OF LENDER ASSIGNMENT AGREEMENT

To:                  Royal Caribbean Cruises Ltd.

To:                 KfW IPEX-Bank GmbH, as Administrative Agent (as defined below)

ROYAL CARIBBEAN CRUISES LTD.

Gentlemen and Ladies:

We refer to clause b of Section 11.11.1 of the Hull No. S-679 Credit Agreement, dated as of February 27, 2009, as amended and restated as of February ___, 2012 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the “Agreement”) among Royal Caribbean Cruises Ltd. (the “Borrower”), KfW IPEX-Bank GmbH as administrative agent (in such capacity, the “Administrative Agent”), and as Hermes agent, and KfW IPEX-Bank GmbH and the various other financial institutions from time to time party thereto as Lenders. Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement.

This agreement is delivered to you pursuant to clause b of Section 11.11.1 of the Agreement and also constitutes notice to each of you, pursuant to clause a of Section 11.11.1 of the Agreement, of the assignment and delegation to __________ (the “Assignee”) of __% of the Loan of __________ (the “Assignor”) outstanding under the  Agreement on the date hereof.  After giving effect to the foregoing assignment and delegation, the Assignor’s and the Assignee’s Percentages for the purposes of the  Agreement are set forth opposite such Person’s name on the signature pages hereof.

The Assignee hereby acknowledges and confirms that it has received a copy of the  Agreement and the exhibits related thereto, together with copies of the documents which were required to be delivered under the  Agreement as a condition to the making of the Loans thereunder.  The Assignee further confirms and agrees that in becoming a Lender and in making its Loan under the Agreement, such actions have and will be made without recourse to, or representation or warranty by the Administrative Agent.

Except as otherwise provided in the  Agreement, effective as of the date of acceptance hereof by the Borrower and the Administrative Agent:

(a)           the Assignee

 (i)shall be deemed automatically to have become a party to the Agreement, have all the rights and obligations of a “Lender” under the  Agreement and the other Loan Documents as if it were an original signatory thereto to the extent specified in the second paragraph hereof;

 (ii)            agrees to be bound by the terms and conditions set forth in the Agreement and the other Loan Documents as if it were an original signatory thereto; and

E-1 

 (b)           the Assignor shall be released from its obligations under the  Agreement and the other Loan Documents to the extent specified in the second  paragraph hereof.

The Assignor and the Assignee hereby agree that the [Assignor] [Assignee] will pay to the Administrative Agent the processing fee referred to in Section 11.11.1 of the Agreement upon delivery hereof.

The Assignee hereby advises each of you of the following administrative details with respect to the assigned Loan and requests the Borrower to acknowledge receipt of this document:

(A)            Address for Notices:

Institution Name:

Attention:

Domestic Office:

Telephone:

Facsimile:

Telex (Answerback):

Lending Office:

Telephone:

Facsimile:

Telex (Answerback):

(B)           Payment Instructions:

The Assignee agrees to furnish the tax form required by last paragraph of Section 4.6 (if so required) of the Agreement no later than the date of acceptance hereof by the Borrower and the Administrative Agent.

E-2 

This Agreement may be executed by the Assignor and Assignee in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

E-3 

Adjusted Percentage                            [ASSIGNOR]

Loan:                      ____%

By:____________________________

Title:

Percentage                                               [ASSIGNEE]

Loan:                       ____%

By: ____________________________          

Title:

Accepted and Acknowledged this

___ day of ___________, _____.

Royal Caribbean Cruises Ltd.

By: ____________________________           

 Title:

KfW IPEX-Bank GmbH, as Administrative Agent

By: ____________________________           

  Title:

E-4 

Exhibit A-1

WFWNY Draft 02/09/12	Watson, Farley & Williams (New York) LLP
Our reference:   01474.50037/80034575v1	1133 Avenue of the Americas New York, New York 10036
	Tel (212) 922 2200 Fax (212) 922 1512
[●], 2012
To the Lenders party to the Credit Agreement referred to below and to KfW IPEX-Bank GmbH as Administrative Agent

Royal Caribbean Cruises Ltd.

Celebrity Silhouette Inc.

Dear Sirs:

We have acted as legal counsel on matters of Liberian law to Celebrity Silhouette Inc. (formerly named Celebrity Solstice IV Inc.), a Liberian corporation (the “Existing Borrower”), and Royal Caribbean Cruises Ltd., a Liberian corporation (the “New Borrower”), in connection with (a) a Hull No S-679 Credit Agreement dated as of February 27, 2009 (the “Credit Agreement”) and made between (1) the Existing Borrower, (2) the Lenders (as defined therein) as several lenders, (3) KfW IPEX-Bank GmbH as Hermes Agent, and (4) KfW IPEX-Bank GmbH as Administrative Agent in respect of a loan facility in an amount not to exceed the US Dollar Equivalent of €444,000,000, and (b) an Assignment and Amendment Deed to Hull No S-679 Credit Agreement dated as of [●] (the “Assignment and Amendment Deed”) made among the Existing Borrower, the New Borrower, the Lenders, the Hermes Agent and the Administrative Agent providing for the transfer by novation of the rights and obligations of the Existing Borrower under the Credit Agreement to the New Borrower (the Credit Agreement and the Assignment and Amendment Deed, collectively, the “Documents”).  Terms defined in the Credit Agreement as assigned and amended by the Assignment and Amendment Deed shall have the same meaning when used herein.

With reference to the Documents you have asked for our opinion on the matters set forth below.  In rendering this opinion we have examined executed copies of the Documents.   We have also examined originals or photostatic copies or certified copies of all such agreements and other instruments, certificates by public officials and certificates of officers of the Existing Borrower and the New Borrower as are relevant and necessary and relevant corporate authorities of the Existing Borrower and the New Borrower.  We have assumed with your approval, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies, the power, authority and legal right of the parties to the Documents other than the Existing Borrower and the New Borrower to enter into and perform their respective obligations under the Documents, and the due authorization of the execution of the Documents by all parties thereto other than the Existing Borrower and the New Borrower.  We have also assumed that (i) neither of the Existing Borrower or the New Borrower has its management and control in Liberia, or undertakes any business activity in Liberia, and (ii) less than a majority of the direct or indirect shareholders of each of the Existing Borrower and the New Borrower

To the Lenders party to the Credit Agreement	Page 2
and KfW IPE-Bank GmbH as Administrative Agent
[●], 20[●]

by vote or value are resident in Liberia.  We have further assumed the validity and enforceability of the Documents under all applicable laws other than the law of the Republic of Liberia.

As to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon certificates of public officials and of officers or representatives of the Existing Borrower and the New Borrower.

We are attorneys admitted to practice in the State of New York and do not purport to be experts in the laws of any other jurisdiction.  Insofar as our opinion relates to the law of the Republic of Liberia, we have relied on opinions of counsel in Liberia rendered in transactions which we consider to afford a satisfactory basis for such opinion, and upon our independent examinations of the Liberian Corporation Act of 1948 (Chapter 1 of Title 4 of the Liberian Code of Laws of 1956, effective March 1, 1958 as amended to July, 1973), the Liberian Business Corporation Act of 1976 (Title 5 of the Liberian Code of Laws Revised of 1976, effective January 3, 1977 as amended) (the “Business Corporation Act”), the Liberian Maritime Law (Title 21 of the Liberian Code of Laws of 1956 as amended), the Revenue Code of Liberia (2000) as amended by the Consolidated Tax Amendments Act of 2011, and the Liberian Commercial Code of 2010, made available to us by Liberian Corporation Services, Inc. and the Liberian International Ship & Corporate Registry, LLC, and our knowledge and interpretation of analogous laws in the United States.  In rendering our opinion as to the valid existence in good standing of the Existing Borrower and the New Borrower, we have relied on Certificates of Goodstanding issued by order of the Minister of Foreign Affairs of the Republic of Liberia on [●], 2012.

This opinion is limited to the law of the Republic of Liberia.  We express no opinion as to the laws of any other jurisdiction.

Based upon and subject to the foregoing and having regard to the legal considerations which we deem relevant, we are of the opinion that:

1. Each of the Existing Borrower and the New Borrower is a corporation duly incorporated, validly existing under the Business Corporation Act and in good standing under the law of the Republic of Liberia;

2. Each of the Existing Borrower and the New Borrower has full right, power and authority to enter into, execute and deliver the Assignment and Amendment Deed and to perform each and all of its obligations under the Credit Agreement as assigned and amended by the Assignment and Amendment Deed;

3. The Assignment and Amendment Deed has been executed and delivered by a duly authorized signatory of each of the Existing Borrower and the New Borrower;

4. The Credit Agreement as assigned and amended by the Assignment and Amendment Deed constitutes the legal, valid and binding obligations of each of the Existing Borrower and the New Borrower, enforceable against the Existing Borrower and the New Borrower, in accordance with its terms;

To the Lenders party to the Credit Agreement	Page 3
and KfW IPE-Bank GmbH as Administrative Agent
[●], 20[●]

5. Neither the execution nor delivery of the Documents, nor the transactions contemplated therein, nor compliance with the terms and conditions thereof, will contravene any provisions of Liberian law or violate any provisions of the Articles of Incorporation (inclusive of any articles of amendment thereto) or the Bylaws of the Existing Borrower or of the New Borrower;

6. No consent or approval of, or exemption by, any Liberian governmental or public bodies and authorities are required in connection with the execution and delivery by the Existing Borrower or the New Borrower of the Documents;

7. It is not necessary to file, record or register either of the Documents or any instrument relating thereto or effect any other official action in any public office or elsewhere in the Republic of Liberia to render any such document enforceable against the Existing Borrower or the New Borrower;

8. Assuming neither of the Documents having been executed in the Republic of Liberia, no stamp or registration or similar taxes or charges are payable in the Republic of Liberia in respect of either of the Documents or the enforcement thereof in the courts of Liberia other than (i) customary court fees payable in litigation in the courts of Liberia and (ii) nominal documentary stamp taxes if the Documents are ever submitted to a Liberian court;

9. Neither of the Existing Borrower or the New Borrower is required or entitled under any existing applicable law or regulation of the Republic of Liberia to make any withholding or deduction in respect of any tax or otherwise from any payment which it is or may be required to make under the Documents;

10. Assuming that the shares of the Existing Borrower and the New Borrower are not owned, directly or indirectly, by the Republic of Liberia or any other sovereign under Liberian law, neither the Existing Borrower nor the New Borrower nor the property or assets of either of them is immune from the institution of legal proceedings or the obtaining or execution of a judgment in the Republic of Liberia;  and

11. Under Liberian law the choice by each of the Existing Borrower and the New Borrower of English law to govern the Assignment and Amendment Deed is a valid choice of law and the irrevocable submission thereunder by each of the Existing Borrower and the New Borrower to the jurisdiction of the courts of England is a valid submission to such courts.  In the event a judgment of such courts against either of the Existing Borrower or the New Borrower was obtained after service of process in the manner specified in the Credit Agreement as assigned and amended by the Assignment and Amendment Deed, such judgment would (when duly authenticated) be admissible as evidence in proceedings brought to enforce the Credit Agreement as assigned and amended by the Assignment and Amendment Deed in the courts of Liberia;  provided that each defendant in any such proceeding shall have appeared in person or by an authorized representative before the English court rendering such judgment.

We qualify our opinion to the extent that (i) the enforceability of the rights and remedies provided for in the Documents (a) may be limited by bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting generally the enforcement of creditors’ rights and (b) is subject to

To the Lenders party to the Credit Agreement	Page 4
and KfW IPE-Bank GmbH as Administrative Agent
[●], 20[●]

general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including application by a court of competent jurisdiction of principles of good faith, fair dealing, commercial reasonableness, materiality, unconscionability and conflict with public policy or similar principles, and (ii) while there is nothing in the law of the Republic of Liberia that prohibits a Liberian corporation from submitting to the jurisdiction of a forum other than the Republic of Liberia, the enforceability of such submission to jurisdiction provisions is not dependent upon Liberian law and such provisions may not be enforceable under the law of a particular jurisdiction.

A copy of this opinion letter may be delivered by any of you to any Person that becomes a Lender in accordance with the provisions of the Credit Agreement as assigned and amended by the Assignment and Amendment Deed.  Any such Lender may rely on the opinion expressed above as if this opinion letter were addressed and delivered to such Lender on the date hereof.

This opinion letter speaks only as of the date hereof.  We expressly disclaim any responsibility to advise you or any other Lender who is permitted to rely on the opinion expressed herein as specified in the next preceding paragraph of any development or circumstance of any kind including any change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter.  Accordingly, any Lender relying on this opinion letter at any time should seek advice of its counsel as to the proper application of this opinion letter at such time.

Very truly yours,

Watson, Farley & Williams (New York) LLP

Exhibit A-2

NORTON ROSE

[•] February 2012

For the attention of Claudia Wenzel KfW IPEX-Bank GmbH Palmengartenstrabe 5-9 60325 Frankfurt am Main Germany		Norton Rose LLP 3 More London Riverside London SE1 2AQ United Kingdom
		Tel +44(0)20 7283 6000 Fax +44 (0)20 7283 6500 DX 85 London nortonrose.com
	Your reference	Direct Line +44 (0)20 7444 3436
	Our reference  SRH/LN50183	Email simon.hartley@nortonrose.com

Dear Sirs

(1) Assignment and Amendment to Hull No. S-676 Credit Agreement dated [•] February 2012 made between Celebrity Equinox Inc., Royal Caribbean Cruises Ltd., the various financial institutions party thereto and KfW IPEX-Bank GmbH, (2) Assignment and Amendment to Hull No. S-677 Credit Agreement dated [•] February 2012 made between Celebrity Eclipse Inc., Royal Caribbean Cruises Ltd., the various financial institutions party thereto and KfW IPEX-Bank GmbH and (3) Assignment and Amendment to Hull No. S-679 Credit Agreement dated [•] February 2012 made between Celebrity Silhouette Inc., Royal Caribbean Cruises Ltd., the various financial institutions party thereto and KfW IPEX-Bank GmbH, (together, the Transaction)

Our opinion in relation to the Transaction is attached.

Yours faithfully

Norton Rose LLP

1 

1            Background

1.1 This opinion is given in relation to the English law aspects of a transaction (the Transaction) by which:

(a)   KfW IPEX-Bank GmbH in their capacity as a lender (the Lender) has made available a US dollar loan facility in an amount not to exceed the US dollar equivalent corresponding to EUR 412,000,000 to Celebrity Equinox Inc., (the Equinox Borrower) under a credit agreement dated as of April 15, 2009 (the Existing Equinox Credit Agreement) made between the Equinox Borrower, the Lender, KfW IPEX-Bank GmbH in its capacity as agent for Hermes related matters (the Hermes Agent) and KfW IPEX-Bank GmbH in its capacity as administrative agent (the Administrative Agent), the Equinox Borrower has assigned to Royal Caribbean Cruises Ltd. (the New Borrower) all of its rights and the New Borrower has assumed all of the Equinox Borrower's obligations under the Existing Equinox Credit Agreement as amended and restated pursuant to an assignment and amendment deed dated [•] February 2012 (the Equinox Amended and Restated Credit Agreement);

(b)   the Lender has made available a US dollar loan facility in an amount not to exceed the US dollar equivalent corresponding to EUR 420,000,000 to Celebrity Eclipse Inc., (the Eclipse Borrower) under a credit agreement dated as of November 26, 2009 (the Existing Eclipse Credit Agreement) made between the Eclipse Borrower, the Lender, the Hermes Agent and the Administrative Agent, the Eclipse Borrower has assigned to the New Borrower all of its rights and the New Borrower has assumed all of the Eclipse Borrower's obligations under the Existing Eclipse Credit Agreement as amended and restated pursuant to an assignment and amendment deed dated [•] February 2012 (the Eclipse Amended and Restated Credit Agreement); and

(c)   the Lender has made available a US dollar loan facility in an amount not to exceed the US dollar equivalent corresponding to EUR 444,000,000 to Celebrity Silhouette Inc., (the Silhouette Borrower, together with the Equinox Borrower, the Eclipse Borrower and the New Borrower, the Companies and each a Company) under a credit agreement dated as of February 27, 2009 (the Existing Silhouette Credit Agreement) made between the Silhouette Borrower, the Lender, the Hermes Agent and the Administrative Agent, the Silhouette Borrower has assigned to the New Borrower all of its rights and the New Borrower has assumed all of the Silhouette Borrower's obligations under the Existing Silhouette Credit Agreement as amended and restated pursuant to an assignment and amendment deed dated [•] February 2012 (the Silhouette Amended and Restated Credit Agreement and, together with Equinox Amended and Restated Credit Agreement and the Eclipse Amended and Restated Credit Agreement, the Amended and Restated Credit Agreements).

1.2 We have acted as English legal advisers to KfW IPEX-Bank GmbH, acting as agent acting on behalf of the Lender (the Agent), in relation to the Transaction.

1.3           We have examined:

(a)   an original assignment and amendment to Existing Equinox Credit Agreement dated [•] February 2012 (including the Equinox Amended and Restated Credit Agreement scheduled thereto) (the Equinox Assignment and Amendment Deed) made between the Equinox Borrower, the New Borrower, the Lender, the Hermes Agent and the Administrative Agent;

(b)   an original assignment and amendment to Existing Eclipse Credit Agreement dated [•] February 2012 (including the Eclipse Amended and Restated Credit Agreement scheduled thereto) (the Eclipse Assignment and Amendment Deed) made between the Eclipse Borrower, the New Borrower, the Lender, the Hermes Agent and the Administrative Agent; and

2 

(c)    an original assignment and amendment to Existing Silhouette Credit Agreement dated [•] February 2012 (including the Silhouette Amended and Restated Credit Agreement scheduled thereto) (the Silhouette Assignment and Amendment Deed) made between the Silhouette Borrower, the New Borrower, the Lender, the Hermes Agent and the Administrative Agent (the Silhouette Assignment and Amendment Deed together with the Equinox Assignment and Amendment Deed and the Eclipse Assignment and Amendment Deed, the English Documents).

1.4 For the purpose of giving this opinion, we have examined no other documents and have undertaken no other enquiries.

1.5 Our opinions are given in part 2. Part 3 explains their scope, part 4 describes the assumptions on which they are made and part 5 contains the qualifications to which they are subject.

3 

2            Opinions

Based on, and subject to, the other provisions of this opinion, we are of the following opinions:

Effect of the English Documents

2.1 The obligations which the Companies are expressed to assume in the English Documents to which they are a party constitute their legal, valid, binding and enforceable obligations.

2.2 If an English Document is expressed to create a charge over assets of a company that charge is (subject to its terms) effective to the extent that the assets concerned are beneficially owned by the company at the time the charge is created. To the extent they are not, that charge will (subject to its terms) become effective if and when the assets concerned become beneficially owned by that company.

2.3           The effectiveness or admissibility in evidence of the English Documents is not dependent on:

(a)   any registrations, filings, notarisations or similar actions other than those described in part 4; or

(b)   any consents, authorisations, licences or approvals of general application from governmental, judicial or public bodies.

Stamp duty on the English Documents

2.4           No stamp, registration or similar duty or tax is payable in respect of the creation of the English Documents.

Choice of law and jurisdiction

2.5 The choice of English law to govern the English Documents and any non-contractual obligations connected to the English Documents is effective.

2.6 The agreement by the parties in the English Documents that the English courts have jurisdiction in respect of that document or any non-contractual obligations connected to that document is effective.

4 

3            Scope

3.1 This opinion and any non-contractual obligations connected with it are governed by English law and are subject to the exclusive jurisdiction of the English courts.

3.2 This opinion is given only in relation to English law as it is understood at the date of this opinion. We have no duty to keep you informed of subsequent developments which might affect this opinion.

3.3 If a question arises in relation to a cross-border transaction, it may not be the English courts which decide that question and English law may not be used to settle it.

3.4 We express no opinion on, and have taken no account of, the laws of any jurisdiction other than England. In particular, we express no opinion on the effect of documents governed by laws other than English law.

3.5           We express no opinion on matters of fact.

3.6 Our opinion is limited to the matters expressly stated in part 2, and it is not to be extended by implication. In particular, we express no opinion on the accuracy of the assumptions contained in part 4. Each statement which has the effect of limiting our opinion is independent of any other such statement and is not to be impliedly restricted by it. Paragraph headings are to be ignored when construing this opinion.

3.7 Our opinion is given solely for the benefit of the Agent and the Lenders (as that expression is defined in each of the Amended and Restated Credit Agreements) (and including any Affiliate (as that expression is defined in each of the Amended and Restated Credit Agreements) of the Lenders to the extent that such Affiliate becomes a Lender) acting through the Agent. It may not be relied on by any other person.

3.8           This opinion may not be disclosed to any person other than:

(a)   those persons (such as auditors or regulatory authorities) who, in the ordinary course of business of the Agent and the Lenders, have access to their papers and records or are entitled by law to see them; and

(b)   those persons who are considering becoming Lenders,

and on the basis that those persons will make no further disclosure.

5 

4            Assumptions

This opinion is based on the following assumptions:

 Effect of the English Documents

4.1           Each person which is expressed to be party to the English Documents:

(a)   is duly incorporated and is validly existing;

(b)   is not the subject of any insolvency proceedings (which includes those relating to bankruptcy, liquidation, administration, administrative receivership and reorganisation) inany jurisdiction;

(c)   has the capacity to execute the English Documents to which it is expressed to be a party and to perform the obligations it is expressed to assume under it;

(d)   has taken all necessary corporate action to authorise it to execute the English Documents to which it is expressed to be a party and to perform the obligations it is expressed to assume under it; and

(e)   has duly executed the English Documents to which it is expressed to be a party.

4.2 The English Documents have been executed in the form provided to us. There has been no variation, waiver or discharge of any of the provisions of the English Documents.

4.3 The English Documents are not (wholly or in part) void, voidable, unenforceable, ineffective or otherwise capable of being affected as a result of any vitiating matter (such as mistake, misrepresentation, duress, undue influence, fraud, breach of directors' duties, illegality or public policy) that is not clear from the terms of the English Documents.

4.4 Each Company is solvent both on a balance sheet and on a cash flow basis, and will remain so immediately after the Transaction has been completed.

Other facts

4.5           There are no other facts relevant to this opinion that do not appear from the documents referred to in part 1.

Other laws

4.6           No law of any jurisdiction other than England has any bearing on the opinion contained in part 2.

1 

5            Qualifications

This opinion is subject to the following qualifications:

 Contractual matters

5.1 The enforcement of contractual obligations is subject to the general principles of contractual liability, in particular the matters described in the following paragraphs.

5.2 Apart from claims for the payment of debts (including the repayment of loans), contractual obligations are normally enforced by an award of damages for the loss suffered as a result of a breach of contract; and recoverable loss is restricted by principles such as causation, remoteness and mitigation. The specific performance of contractual obligations is a discretionary remedy and is only available in limited circumstances.

5.3 Contractual obligations can be discharged by matters such as breach of contract or frustration. Claims may become time-barred or may be subject to defences such as set-off or estoppel.

5.4 The interpretation of the meaning and legal effect of any particular provision of a contract is a matter of judgment, which will ultimately be determined by the relevant tribunal. In addition, a document may be capable of being rectified if it does not express the common intention of the parties.

5.5 A clause in a contract which excludes or limits an obligation of one of the parties or the liability for breach of that obligation will be construed restrictively, against the person who wishes to rely on it.

5.6 If a provision of a contract is particularly one-sided it is more likely to be construed against the party who wishes to rely on it.

5.7 A provision of a contract may be ineffective if it is incomplete or uncertain or provides for a matter to be determined by future agreement.

5.8 A provision of a contract which provides for the conclusive certification or determination of a matter by one party may not prevent judicial inquiry into the merits of the claim.

5.9 A provision for the payment of a sum in the event of a breach of contract is unenforceable if it is construed as a penalty rather than a genuine pre-estimate of the loss likely to be suffered as a result of the breach and, if that sum has been paid, it may be repayable in whole or in part.

5.10 A contractual provision for the forfeiture of a proprietary or possessory interest, such as the rights of a lessee under a chattel lease, may be overridden.

5.11 An undertaking to assume liability for stamp duty or similar taxes may be ineffective.

5.12 As a general principle, an authority or power of attorney can be revoked at any time, and will be revoked if the donor enters into insolvency proceedings. This is so even if the authority or power is expressed to be irrevocable and the revocation is therefore made in breach of contract. The main exception to this principle is where the authority or power is granted as part of a security arrangement.

5.13 A provision of a contract which purports to exclude the effect of prior or subsequent agreements, representations or waivers may be ineffective.

5.14 A provision of a contract which provides what will happen in the event of an illegality (including a provision for severance of part of the contract) may not be enforceable.

5.15 An indemnity in respect of criminal liability may not be enforceable.

2 

5.16 An indemnity for the costs of litigation may not be enforceable.

Insolvency

5.17 The parties' rights are subject to laws affecting creditors' rights generally, such as those relating to insolvency (which includes bankruptcy, liquidation, administration, administrative receivership and reorganisation). These laws can apply to persons incorporated or resident outside England, as well as to those incorporated or resident in England.

5.18           In particular, on an insolvency:

(a)   contractual and other personal rights will reduce proportionately with all similar rights, and contractual provisions which would conflict with this principle (such as a pro rata sharing clause) are ineffective;

(b)   transactions entered into in the period before the insolvency starts (that period generally being no longer than two years) may be set aside in certain circumstances; and

(c)   the ability of a secured creditor to enforce its security may be subject to limitations, for instance in an administration.

Choice of law and jurisdiction

5.19 The law which governs a contract and any connected non-contractual obligations is not determinative of all issues which arise in connection with that contract. For instance:

(a)    it may not be relevant to the determination of proprietary issues (such as those relating to security);

(b)   rules which are mandatory (which includes public policy rules) in a jurisdiction which is connected with the contract or in the jurisdiction where the issue is decided may be applied regardless of the provisions of the contract; and

(c)   in insolvency proceedings, the law governing those proceedings may override the law governing the contract.

5.20 There are circumstances in which the English courts may, or must, decline jurisdiction or stay proceedings. Additionally, it may not be possible to commence proceedings because of an inability to comply with service of process requirements. These problems are less likely to occur where one or more of the parties is domiciled in the European Union.

5.21 The English courts have a discretion to accept jurisdiction in an appropriate case even though there is an agreement that other courts have (exclusive or non-exclusive) jurisdiction. This is less likely to occur where the other courts are in the European Union.

5.22 The jurisdiction of the English courts in relation to insolvency matters is not dependent on the submission of the parties to the jurisdiction. The precise scope of that jurisdiction depends on the nature of the insolvency procedure in question.

3 

Exhibit A-3

	CLIFFORD CHANCE US LLP
	31 WEST 52ND STREET NEW YORK, NY 10010-6131
	TEL +1 212 878 8000 FAX +1 212 878 8375
	www.cliffordchance.com
KfW IPEX-Bank GmbH Palmengartenstrasse 5-9
60325 Frankfurt am Main Federal Republic of Germany (“KfW”)	February ●, 2012

Re: Application of U.S. Withholding Tax to Royal Caribbean Cruises Ltd. Payments

This opinion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code and was written to support the promotion or marketing (as defined in IRS Circular 230) of the transactions contemplated in the Documents. Each person considering such transactions should seek advice based on such person’s particular circumstances from an independent tax advisor.

Dear Sirs:

You have asked whether U.S. withholding tax will be imposed on payments made by the U.S. branch of Royal Caribbean Cruises Ltd. (“RCCL”), a corporation organized under the laws of Liberia, to KfW, a financial institution organized under the laws of the Federal Republic of Germany (the “Lender”), under the Amended And Restated Hull No. S-679 Credit Agreement dated as of February 27, 2009 and amended and restated on February ●, 2012 (the “Credit Agreement”) between the Lender, RCCL as borrower and KfW as Hermes agent, administrative agent and a Lender and the Assignment And Amendment Deed to Hull No. S-679 Credit Agreement dated February ●, 2012 between Celebrity Silhouette Inc., a Liberian corporation, RCCL, KfW and the Lender, as defined therein (together with the Credit Agreement the “Documents”).

Under the Credit Agreement, RCCL will owe money to the Lender that was borrowed to help fund the purchase of Hull No. S-679 at Meyer Werft GmbH.

The loan advanced under the Credit Agreement will accrue interest at either a fixed rate or a floating rate in accordance with the provisions set forth in the Credit Agreement.

In connection with rendering this opinion we have reviewed the Documents, and such other documents as we have deemed necessary or appropriate for purposes of rendering this opinion. We have assumed, with your consent, that: (i) all documents reviewed by us are original documents, or true and accurate copies of original documents, and have not been subsequently amended; (ii) the signatures on each original document are genuine; (iii) all representations and statements as to matters of fact set forth in such documents are true and correct; (iv) all obligations imposed by any such documents on the parties thereto have been or will be performed or satisfied in accordance with their terms; and (v) there are no documents relevant to

 CLIFFORD CHANCE US LLP

this opinion to which we have not been given access. We have also assumed, with your consent, that:

(i) each Lender (which term as used in this opinion letter does not include any successor or assign) is and will continue to be eligible to claim benefits as a resident of the jurisdiction in which it was formed under the income tax treaty between the United States and such jurisdiction currently in force (each a “Treaty”);

(ii) no Lender will receive payments under the Documents that are attributable, for purposes of the Treaty under which it is eligible to claim benefits, to a permanent establishment of such Lender in the United States;

(iii) no Lender has made or will make an election, or otherwise taken steps, to be treated as other than a corporation for United States federal income tax purposes;

(iv) each of the Lenders will provide the RCCL or its agent with a properly completed Internal Revenue Service (“IRS”) Form W-8BEN accurately representing that such Lender is eligible to claim benefits under a Treaty for all payments under the Credit Agreement;

(v) if a Lender is receiving payments for a participant, it will provide RCCL with a properly completed IRS Form W-8IMY to which it will attach its own IRS Form W-8BEN and a properly completed IRS Form W-8BEN from each participant accurately representing that the participant is entitled to receive all payments under the Credit Agreement free and clear of U.S. withholding;

[(vi) each Lender will be eligible to receive payments free of withholding under the provisions of Sections 1471 through 1474 of the U.S. Internal Revenue Code (“FATCA”) and will provide RCCL or its agent with such properly completed IRS forms, certifications and other items as may be required to establish the Lenders’ exemption from withholding under FATCA;] and

(vii) all of the foregoing will continue to be accurate and correct.

Conclusion

We are members of the Bar of the State of New York.  This opinion is limited to the U.S. federal withholding tax treatment of payments by RCCL under the Documents and does not address any other tax or legal consequences of the transactions contemplated in the Documents. This opinion is rendered solely to you and may not be relied upon by any other person, other than your legal advisors.  Our opinion is based on existing authorities as of the date hereof and may change as a result of subsequent legislation, regulations, administrative pronouncements, court opinions or other legal developments, possibly with retroactive effect.  We do not undertake to update this opinion based on any such developments unless specifically engaged by you to do so.  Our opinion is not binding on the IRS, and no assurance can be given that the conclusions expressed herein will not be challenged by the IRS or will be sustained by a court.

Based on the assumptions and limitations set forth above, we are of the view that there will be no U.S. federal withholding tax imposed on payments by RCCL under the Documents to each Lender.  Payments to non-U.S. persons that are not considered to be U.S. source income for U.S.

- 2 - 

 CLIFFORD CHANCE US LLP

federal income tax purposes, generally are not subject to U.S. withholding tax.  Payments by RCCL under the Documents to each Lender, to the extent they are U.S. source income, will be exempt from U.S. withholding tax either under the Interest or Other Income Articles of a relevant Treaty.

Our conclusions are expressions of our professional judgment with respect to U.S. federal income tax law and do not provide any guarantee as to the actual outcome of any U.S. federal income tax controversy.

Sincerely,

- 3 -

EX-10.6

Exhibit 10.6

EXECUTION COPY

ASSIGNMENT AND AMENDMENT DEED TO HULL NO. S-691 CREDIT AGREEMENT

This ASSIGNMENT AND AMENDMENT DEED TO HULL NO. S-691 CREDIT AGREEMENT (this “Deed”), dated February 17, 2012, is among CELEBRITY SOLSTICE V INC., a Liberian corporation (the “Existing Borrower”), ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation (the “New Borrower”) and KFW IPEX-BANK GMBH in its capacity as agent for Hermes (in such capacity, the “Hermes Agent”), in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and in its capacity as lender (in such capacity, the “Lender”).

PRELIMINARY STATEMENTS

(1)           The Existing Borrower, the Lender, the Hermes Agent and the Administrative Agent are parties to a Hull No. S-691 Credit Agreement dated as of December 19, 2008 (such Hull No. S-691 Credit Agreement as in effect immediately prior to giving effect to this Deed, the “Existing Credit Agreement” and as amended hereby, the “Restated Credit Agreement”);

(2)           The Existing Borrower has agreed to assign to the New Borrower all of its rights and transfer by way of novation of all of its obligations under the Existing Credit Agreement, and the New Borrower has agreed to accept the assignment of all of the Existing Borrower’s rights under the Existing Credit Agreement, and to assume all of the obligations of the Existing Borrower under the Existing Credit Agreement; and

(3)           The New Borrower, the Lender and the Administrative Agent have agreed to amend the Existing Credit Agreement as hereinafter set forth herein.

NOW, THEREFORE, the parties hereto hereby agree as follows:

 SECTION 1.  Assignments.                                                       

(a)           Subject to the satisfaction of the conditions set forth in Section 4 of this Deed and effective as of the Restatement Effective Date (as defined below):

(i)   the Existing Borrower hereby assigns, novates, transfers and conveys to the New Borrower all of its rights and obligations under the Existing Credit Agreement (the “Assignment”); and

(ii)   the New Borrower hereby accepts the Assignment and assumes all of the obligations of the Existing Borrower under the Existing Credit Agreement to the same extent as if the New Borrower had executed the Existing Credit Agreement (the “Assumption”).  The New Borrower hereby agrees to be bound by the terms and provisions of the Existing Credit Agreement as the “Borrower” thereunder and accepts all of the Existing Borrower’s rights and obligations thereunder.

(b)           Upon the execution and delivery hereof by the Existing Borrower, the New Borrower, the Hermes Agent, the Administrative Agent and the Lender accept and agree to the arrangements referred to in (a) above and agree that (i) the New Borrower shall, as of the Restatement Effective Date, succeed to the rights and be obligated to perform the obligations of the Existing Borrower

under the Existing Credit Agreement and (ii) the Existing Borrower shall, as of the Restatement Effective Date, be released from its obligations under the Existing Credit Agreement.

SECTION 2.  [INTENTIONALLY OMITTED]

SECTION 3.  Amendment to the Existing Credit Agreement.  In consideration of the mutual covenants in this Deed, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the New Borrower, the Hermes Agent, the Administrative Agent and the Lender agree that the Existing Credit Agreement is, immediately after giving effect to the Assignment and the Assumption and subject to the satisfaction of the conditions precedent set forth in Section 4, hereby amended on the Restatement Effective Date in its entirety to read as set forth in Appendix I hereto.

The Administrative Agent shall notify the Lender and the New Borrower of the Restatement Effective Date, and such notice shall be conclusive and binding.

SECTION 4.  Conditions of Effectiveness of Restated Credit Agreement and Assignment and Assumption.  The transactions contemplated by Section 1 of this Deed and the Restated Credit Agreement shall become effective in accordance with the terms of this Deed on the date (the “Restatement Effective Date”) each of the following conditions has been satisfied to the reasonable satisfaction of the Administrative Agent:

(a)           This Deed shall have become effective in accordance with Section 5 and the Administrative Agent shall have received duly executed original signature pages to this Deed from each party hereto.

(b)           The Administrative Agent shall have received from the Existing Borrower:

(i)           a certificate dated no earlier than the signing date of this Deed of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Deed and as to the truth and completeness of the attached:

(x)           resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Deed and each other Loan Document, and

(y)           Organic Documents of the Existing Borrower,

and upon which certificate the Lender may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the Existing Borrower canceling or amending such prior certificate; and

 (ii)           a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Existing Borrower.

SECTION 5.  Conditions of Deed Effectiveness.  This Deed shall become effective as of the date hereof; provided that the Administrative Agent shall have received counterparts of this Deed executed by the Existing Borrower, the New Borrower and the Lender; provided further that the transactions described in Sections 1 of this Deed shall be deemed to be effective only as of the Restatement Effective Date.

SECTION 6.  Representation and Warranties of the New Borrower. To induce the Lenderto enter into this Deed, the New Borrower represents and warrants that, as of the date hereof and as of the Restatement Effective Date:

(a)           The representations and warranties contained in Article VI of the Restated Credit Agreement are true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made, and

(b)           No Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event has occurred and is continuing.

SECTION 7.  Reference to and Effect on the Existing Credit Agreement.  On and after the Restatement Effective Date, each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Existing Credit Agreement, shall mean and be a reference to the Restated Credit Agreement.

SECTION 8.  Costs and Expenses.  The New Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Deed and the other documents to be delivered hereunder (including the reasonable and documented fees and expenses of counsel for the Administrative Agent with respect hereto and thereto as agreed with the Administrative Agent) in accordance with the terms of Section 11.3 of the Restated Credit Agreement.

SECTION 9. Designation. In accordance with the Restated Credit Agreement, the Lender and the Administrative Agent designates this Deed as a Loan Document.

SECTION 10. Third Party Rights. No term of this Deed is enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person who is not party to this Deed.

SECTION 11.  Execution in Counterparts.  This Deed may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Deed by telecopier shall be effective as delivery of a manually executed counterpart of this Deed.

SECTION 12.  Governing Law.  This Deed and any non-contractual obligations arising in connection with it shall be governed by, and construed in accordance with, English law.

SECTION 13.  Incorporation of Terms.  The provisions of Section 11.14.2, 11.14.3 and 11.14.4 of the Restated Credit Agreement shall be incorporated into this Deed as if set out in full in this Deed and as if references in those sections to “this Agreement” were references to this Deed.

SECTION 14.  Defined Terms.  Capitalized terms not otherwise defined in the Deed shall have the same meanings as specified in the Restated Credit Agreement.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, the parties to this Deed have caused this Deed to be duly executed and delivered as of the date first above written.

SIGNED as a Deed by CELEBRITY SOLSTICE V INC., as Existing Borrower
By /s/ Antje M. Gibson
	Name: Antje M. Gibson Title: Vice President and Treasurer
In the presence of:
By /s/ Cary Aronovitz
	Name: Cary Aronovitz Title: Attorney, Holland and Knight Address:
SIGNED as a Deed by ROYAL CARIBBEAN CRUISES LTD., as New Borrower
By /s/ Antje M. Gibson
	Name: Antje M. Gibson Title: Vice President and Treasurer
Address: 1050 Caribbean Way Miami, Florida 33132 Facsimile No.:  (305) 539-6400
Email:	agibson@rccl.com
	bstein@rccl.com
Attention:  Vice President and Treasurer With a copy to:  General Counsel
In the presence of:
By /s/ Cary Aronovitz
	Name: Cary Aronovitz Title: Attorney, Holland and Knight Address:

SIGNED as a Deed by KFW IPEX-BANK GMBH, as Hermes Agent, as Administrative Agent and Lender
By	/s/ Claudia Schlipsing Name: Claudia Schlipsing Title: Director	/s/ Claudia Wenzel Name: Claudia Wenzel Title: Assistant Vice President
Address:  Palmengartenstrasse 5-9 D-60325 Frankfurt am Main Germany Facsimile No.:  +49 (69) 7431 3768 Email:            claudia.wenzel@kfw.de Attention:  Shipfinancing Department With a copy to:  Credit Operations Facsimile No.: +49 (69) 7431 2944
In the presence of:
By /s/ Katja Sturm Name: Katja Sturm Title: Analyst Address: KfW IPEX-Bank GmbH Palmengartenstrasse 5-9 60325 Frankfurt am Main

Appendix I

EXECUTION COPY

_________________________________________

AMENDED AND RESTATED

HULL NO. S-691 CREDIT AGREEMENT

_________________________________________

dated as of December 19, 2008

and amended and restated on February 17, 2012

BETWEEN

Royal Caribbean Cruises Ltd.

as the Borrower,

the Lenders from time to time party hereto,

and

KfW IPEX-Bank GmbH

as Hermes Agent and Administrative Agent

TABLE OF CONTENTS

		PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1.	Defined Terms		2
SECTION 1.2.	Use of Defined Terms		12
SECTION 1.3.	Cross-References		12
SECTION 1.4.	Application of this Agreement to KfW IPEX as an Option A Lender		12
SECTION 1.5.	Accounting and Financial Determinations		12
ARTICLE II COMMITMENTS AND BORROWING PROCEDURES
SECTION 2.1.	Commitment		13
SECTION 2.2.	Commitment of the Lenders, Termination and Reduction of Committments		13
SECTION 2.3.	Borrowing Procedure		13
SECTION 2.4.	Funding		14
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1.	Repayments		14
SECTION 3.2.	Prepayments		14
SECTION 3.1.	Interest Provisions		15
SECTION 3.1.1.	Rates		15
SECTION 3.1.2.	Election of Floating Rate		15
SECTION 3.1.3.	Conversion to Floating Rate		16
SECTION 3.1.4.	Post-Maturity Rates		16
SECTION 3.1.5.	Payment Dates		16
SECTION 3.1.6.	Interest Rate Determination; Replacement Reference Banks		16
SECTION 3.2.	Commitment Fees		17

i 

SECTION 3.2.1.	Payment	17
SECTION 3.5.	CIRR Fees	17
SECTION 3.5.1.	Payment	18
SECTION 3.6.	Other Fees	18
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1.	LIBO Rate Lending Unlawful	18
SECTION 4.2.	Deposits Unavailable	18
SECTION 4.3.	Increased LIBO Rate Loan Costs, etc.	19
SECTION 4.4.	Funding Losses	21
SECTION 4.4.1.	Indemnity	21
SECTION 4.5.	Increased Capital Costs	22
SECTION 4.6.	Taxes	23
SECTION 4.7.	Reserve Costs	25
SECTION 4.8.	Payments, Computations, etc.	26
SECTION 4.9.	Replacement Lenders, etc.	27
SECTION 4.10.	Sharing of Payments	27
SECTION 4.11.	Setoff	28
SECTION 4.12.	Use of Proceeds	28
ARTICLE V CONDITIONS TO BORROWING
SECTION 5.1.	Advance of the Loan	28
SECTION 5.1.1.	Resolutions, etc.	28
SECTION 5.1.2.	Opinions of Counsel	29
SECTION 5.1.3.	[RESERVED]	29
SECTION 5.1.4.	Closing Fees, Expenses, etc.	29
SECTION 5.1.5.	Compliance with Warranties, No Default, etc.	29

ii 

SECTION 5.1.6.	Loan Request	30
SECTION 5.1.7.	Hermes Insurance Policy	30
SECTION 5.1.8.	Pledge Agreement	30
SECTION 5.1.9.	CIRR requirements	30
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1.	Organization, etc.	31
SECTION 6.2.	Due Authorization, Non-Contravention, etc.	31
SECTION 6.3.	Government Approval, Regulation, etc.	32
SECTION 6.4.	Compliance with Environmental Laws	32
SECTION 6.5	Validity, etc.	32
SECTION 6.6.	No Default, Event of Default or Prepayment Event	32
SECTION 6.7.	Litigation	32
SECTION 6.8.	The Vessel	32
SECTION 6.9.	Obligations rank pari passu	33
SECTION 6.10.	Withholding, etc.	33
SECTION 6.11.	No Filing, etc. Required	33
SECTION 6.12.	No Immunity	33
SECTION 6.13.	Investment Company Act	33
SECTION 6.14.	Regulation U	33
SECTION 6.15.	Accuracy of Information	34
ARTICLE VII COVENANTS
SECTION 7.1.	Affirmative Covenants	34
SECTION 7.1.1.	Financial Information, Reports, Notices, etc.	34
SECTION 7.1.2.	Approvals and Other Consents	35
SECTION 7.1.3.	Compliance with Laws, etc.	35

iii 

SECTION 7.1.4.	The Vessel	36
SECTION 7.1.5.	Insurance	36
SECTION 7.1.6.	Books and Records	37
SECTION 7.1.7.	Hermes Insurance Policy/Federal Republic of Germany Requirement	37
SECTION 7.2.	Negative Covenants	37
SECTION 7.2.1.	Business Activities	37
SECTION 7.2.2.	Indebtedness	37
SECTION 7.2.3.	Liens	38
SECTION 7.2.4.	Financial Condition	40
SECTION 7.2.5.	Investments	40
SECTION 7.2.6.	Consolidation, Merger, etc.	41
SECTION 7.2.7.	Asset Dispositions, etc.	41
SECTION 7.2.8.	Transactions with Affiliates	42
ARTICLE VIII EVENTS OF DEFAULT
SECTION 8.1.	Listing of Events of Default	42
SECTION 8.1.1.	Non-Payment of Obligations	42
SECTION 8.1.2.	Breach of Warranty	42
SECTION 8.1.3.	Non-Performance of Certain Covenants and Obligations	42
SECTION 8.1.4.	Default on Other Indebtedness	43
SECTION 8.1.5.	Bankruptcy, Insolvency, etc.	43
SECTION 8.2.	Action if Bankruptcy	44
SECTION 8.3.	Action if Other Event of Default	44
ARTICLE IX PREPAYMENT EVENTS
SECTION 9.1.	Listing of Prepayment Events	44
SECTION 9.1.1.	Change in Ownership	44

iv 

SECTION 9.1.2.	Change in Board	44
SECTION 9.1.3.	Unenforceability	45
SECTION 9.1.4.	Approvals	45
SECTION 9.1.5.	Non-Performance of Certain Covenants and Obligations	45
SECTION 9.1.6.	Judgments	45
SECTION 9.1.7.	Condemnation, etc.	45
SECTION 9.1.8.	Arrest	45
SECTION 9.1.9.	Sale/Disposal of the Vessel	46
SECTION 9.1.10.	Delayed Delivery of the Vessel	46
SECTION 9.1.11.	Termination of the Construction Contract	46
SECTION 9.2.	Mandatory Prepayment	46
ARTICLE X THE ADMINISTRATIVE AGENT AND THE HERMES AGENT
SECTION 10.1.	Actions	46
SECTION 10.2.	Indemnity	47
SECTION 10.3.	Funding Reliance, etc.	47
SECTION 10.4.	Exculpation	47
SECTION 10.5.	Successor	48
SECTION 10.6.	Loans by the Administrative Agent	49
SECTION 10.7.	Credit Decisions	49
SECTION 10.8.	Copies, etc.	49
SECTION 10.9.	The Agents’ Rights	49
SECTION 10.10.	The Administrative Agent’s Duties	50
SECTION 10.11.	Employment of Agents	50
SECTION 10.12.	Distribution of Payments	50
SECTION 10.13.	Reimbursement	51

v 

SECTION 10.14.	Instructions	51
SECTION 10.15.	Payments	51
SECTION 10.16.	“Know your customer” Checks	51
SECTION 10.17.	No Fiduciary Relationship	51
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1.	Waivers, Amendments, etc.	52
SECTION 11.2.	Notices	53
SECTION 11.3.	Payment of Costs and Expenses	54
SECTION 11.4.	Indemnification	54
SECTION 11.5.	Survival	56
SECTION 11.6.	Severability	56
SECTION 11.7.	Headings	56
SECTION 11.8.	Execution in Counterparts,	56
SECTION 11.9.	Third Party Rights	56
SECTION 11.10.	Successors and Assigns	56
SECTION 11.11.	Sale and Transfer of the Loan; Participations in the Loan	56
SECTION 11.11.1.	Assignments	56
SECTION 11.11.2.	Participations	58
SECTION 11.12.	Other Transactions	59
SECTION 11.13.	Hermes Insurance Policy	59
SECTION 11.13.1.	Terms of Hermes Insurance Policy	60
SECTION 11.13.2.	Obligations of the Borrower	60
SECTION 11.13.3	Obligations of the Hermes Agent and the Lenders	60
SECTION 11.14.	Law and Jurisdiction	61
SECTION 11.14.1.	Governing Law	62

vi 

SECTION 11.14.2.	Jurisdiction	62
SECTION 11.14.3.	Alternative Jurisdiction	62
SECTION 11.14.4.	Service of Process	62
SECTION 11.15.	Confidentiality	62

vii 

EXHIBITS
Exhibit A	-	Repayment Schedule
Exhibit B	-	Form of Loan Request
Exhibit C	-	[Reserved]
Exhibit D-1	-	Form of Opinion of Liberian Counsel to Borrower
Exhibit D-2	-	Form of Opinion of Counsel to Lenders
Exhibit D-3	-	Form of Opinion of US Tax Counsel to the Lenders
Exhibit E	-	Form of Lender Assignment Agreement
Exhibit F	-	Form of Option A Refinancing Agreement
Exhibit G	-	Form of Pledge Agreement

viii 

AMENDED AND RESTATED CREDIT AGREEMENT

AMENDED AND RESTATED HULL NO. S-691 CREDIT AGREEMENT, dated as of December 19, 2008 as amended and restated on February 17, 2012, is among Royal Caribbean Cruises Ltd., a Liberian corporation (as assignee of Celebrity Solstice V Inc., the “Borrower”), KfW IPEX-Bank GmbH, in its capacity as agent for the Lenders referred to below in respect of Hermes-related matters (in such capacity, the “Hermes Agent”), in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and in its capacity as a lender (in such capacity, together with each of the other Persons that shall become a “Lender” in accordance with Section 11.11.1 of this Agreement, each of them individually a “Lender” and, collectively, the “Lenders”).

W I T N E S S E T H:

  WHEREAS,

(A)   The Borrower and Meyer Werft GmbH, Papenburg (the “Builder”) entered on April 15, 2008 into a Contract for the Construction and Sale of Hull No. S-691 (as amended from time to time, the “Construction Contract”) pursuant to which the Builder agreed to design, construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number S-691 (the “Purchased Vessel”);

(B)   The Lenders have agreed to make available to Celebrity Solstice V Inc., a Liberian Corporation (the “Original Borrower”), upon the terms and conditions contained in the Hull No. S-691 Credit Agreement dated as of December 19, 2008 among the Original Borrower, the Hermes Agent, the Administrative Agent and each Lender from time to time party thereto (the “Original Credit Agreement”), a US dollar loan facility equal to the US Dollar Equivalent of up to eighty per cent (80%) of the Contract Price of the Purchased Vessel, as adjusted from time to time in accordance with the Construction Contract to reflect, among other adjustments, change orders, in an amount not to exceed the US Dollar Equivalent corresponding to EUR 485,600,000;

(C)   The proceeds of such loan facility will be provided to the Borrower two (2) Business Days prior to the delivery of the Vessel for the purpose of paying a portion of the Contract Price, as defined in the Construction Contract in connection with the Borrower’s purchase of the Vessel;

(D)   Pursuant to the Assignment and Amendment Deed to Hull No. S-691 Credit Agreement (the “Assignment and Amendment Deed”), the Original Borrower assigned to the Borrower all of its rights under the Original Credit Agreement, and the Borrower assumed all of the Original Borrower’s obligations under the Original Credit Agreement;

(E)   Pursuant to the Assignment and Amendment Deed, and upon satisfaction of the conditions set forth therein, the Original Credit Agreement is being amended and restated in the form of this Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1.Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, when capitalized, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

“Accumulated Other Comprehensive Income (Loss)” means at any date the Borrower’s accumulated other comprehensive income (loss) on such date, determined in accordance with GAAP.

“Administrative Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Administrative Agent, and as shall have accepted such appointment, pursuant to Section 10.5.

“Affiliate” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person.  A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Agreement” means, on any date, this credit agreement as originally in effect on the Original Effective Date and amended and restated on the Restatement Effective Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.

“Applicable Commitment Rate” means (x) from the Original Effective Date through and including November 15, 2010, 0.05%, (y) from November 16, 2010 through and including November 15, 2011, 0.10%, and (z) from November 16, 2011 until the date the Commitments terminate, 0.20%.

  “Applicable Jurisdiction” means the jurisdiction or jurisdictions under which the Borrower is organized, domiciled or resident or from which any of its business activities are conducted or in which any of its properties are located and which has jurisdiction over the subject matter being addressed.

“Approved Appraiser” means any of the following: Barry Rogliano Salles, Paris, H Clarkson & Co. Ltd., London, R.S. Platou Shipbrokers, Norway, or Fearnley AS, Norway.

“Assignee Lender” is defined in Section 11.11.1.

“Authorized Officer” means those officers of the Borrower authorized to act with respect to the Loan Documents and whose signatures and incumbency shall have been certified to the Administrative Agent by the Secretary or an Assistant Secretary of the Borrower.

2 

“Borrower” is defined in the preamble.

“Builder” is defined in the preamble.

“Business Day” means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City, London or Frankfurt, and if the applicable Business Day relates to an advance of the Loan, an Interest Period, prepayment or conversion, in each case with respect to the Loan bearing interest by reference to the LIBO Rate, a day on which dealings in deposits in Dollars are carried on in the London interbank market.

“Capital Lease Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases.

“Capitalization ” means, at any date, the sum of (a) Net Debt on such date, plus (b) Stockholders’ Equity on such date.

“Capitalized Lease Liabilities” means the principal portion of all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

“Cash Equivalents” means all amounts other than cash that are included in the “cash and cash equivalents” shown on the Borrower’s balance sheet prepared in accordance with GAAP.

“Celebrity Solstice Agreement” means that certain Hull No. S-675 Credit Agreement dated as of August 7, 2008 among Celebrity Solstice Inc., KfW IPEX as administrative agent and KfW IPEX and BNP Paribas S.A. as lenders, as amended, restated, supplemented or otherwise modified from time to time.

“CIRR Agent” means KfW, acting in its capacity as CIRR agent in connection with this Agreement.

“Citibank Agreement” means the U.S. $875,000,000 amended and restated credit agreement dated as of July 21, 2011 among the Borrower, as borrower, Citigroup Global Markets Inc. and DnB Nor Bank ASA, as co-lead arrangers, and Citibank, N.A., as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.

“Closing Date” means the date on which the Loan is advanced; provided that if the Loan is reborrowed pursuant to Section 3.7, then the Closing Date, solely with respect to such reborrowed Loan, shall be the date of such reborrowing.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

3 

“Commitment” means, relative to any Lender, such Lender’s obligation to make the Loan pursuant to Section 2.1.

“Commitment Fees” is defined in Section 3.4.

“Commitment Termination Date” means 240 days beyond November 15, 2012.

“Construction Contract” is defined in the preamble.

“Contract Price” is as defined in the Construction Contract.

“Contractual Delivery Date” means, at any time, the date which at such time is the date specified for delivery of the Vessel under the Construction Contract, as such date may be modified from time to time pursuant to the terms of the Construction Contract.

“Covered Taxes” is defined in Section 4.6.

“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

“Dollar” and the sign “$” mean lawful money of the United States.

 “Environmental Laws” means all applicable federal, state, local or foreign statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders) relating to the protection of the environment.

“EUR” and the sign “€” mean the currency of participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time.

“Event of Default” is defined in Section 8.1.

“Existing Debt” means the obligations of the Borrower or its Subsidiaries in connection with (i) the Bareboat Charterparty with respect to the vessel BRILLIANCE OF THE SEAS dated July 5, 2002 between Halifax Leasing (September) Limited and RCL (UK) LTD, (ii) that certain credit agreement dated as of May 7, 2009 as amended and restated as of October 9, 2009 among Oasis of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and BNP Paribas, as administrative agent and (iii) that certain credit agreement dated as of March 15, 2010 among Allure of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and Skandinaviska Enskilda Banken AB (publ), as administrative agent, and the replacement, extension, renewal or amendment of the foregoing without increase in the amount or change in any direct or contingent obligor of such obligations.

“Existing Group” means the following Persons:  (a) A. Wilhelmsen AS., a Norwegian corporation (“Wilhelmsen”); (b) Cruise Associates, a Bahamian general partnership (“Cruise”); and (c) any Affiliate of either or both of Wilhelmsen and Cruise.

4 

“Existing Principal Subsidiaries” means each Subsidiary of the Borrower that is a Principal Subsidiary on the Restatement Effective Date.

“FATCA” means Sections 1471 through 1474 of the Code, as in effect at the Restatement Effective Date, and any current or future regulations promulgated thereunder or official interpretations thereof.

“Fee Letter” means that certain fee letter dated as of April 15, 2008 between the Administrative Agent and the Borrower.

“Fiscal Quarter” means any quarter of a Fiscal Year.

“Fiscal Year” means any annual fiscal reporting period of the Borrower.

“Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Quarter, the ratio computed for the period of four consecutive Fiscal Quarters ending on the close of such Fiscal Quarter of:

a)   net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to

b)   the sum of:

i)           dividends actually paid by the Borrower during such period (including, without limitation, dividends in respect of preferred stock of the Borrower); plus

ii)            scheduled payments of principal of all debt less New Financings (determined in accordance with GAAP, but in any event including Capitalized Lease Liabilities) of the Borrower and its Subsidiaries for such period.

“Fixed Rate” means a rate per annum equal to the sum of 3.93% per annum plus the Fixed Rate Margin.

“Fixed Rate Margin” means 0.20% per annum.

“Floating Rate” means a rate per annum equal to the sum of the LIBO Rate plus the Floating Rate Margin.

“Floating Rate Indemnity Amount” is defined in Section 4.4.1(a).

“Floating Rate Loan” means all or any portion of the Loan bearing interest at the Floating Rate.

“Floating Rate Margin” means, for each Interest Period, 0.40% per annum.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

5 

“Funding Losses Event” is defined in Section 4.4.1.

“GAAP” is defined in Section 1.5.

“Government-related Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under, or Indebtedness incurred by the Borrower or any Subsidiary of the Borrower to satisfy obligations under, any governmental requirement imposed by any Applicable Jurisdiction that must be complied with to enable the Borrower and its Subsidiaries to continue their business in such Applicable Jurisdiction, excluding, in any event, any taxes imposed on the Borrower or any Subsidiary of the Borrower.

“Hedging Instruments” means options, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof used to hedge interest, foreign currency and commodity exposures.

“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.

“Hermes” means Euler Hermes Kreditversicherungs AG, Friedensallee 254, 22763 Hamburg acting in its capacity as representative of the Federal Republic of Germany in connection with the issuance of export credit guarantees.

“Hermes Agent” is defined in the preamble.

“Hermes Fee” means the fee payable to Hermes under and in respect of the Hermes Insurance Policy.

“Hermes Insurance Policy” means the guarantee (Deckungsdokument) issued by the Federal Republic of Germany, represented by Hermes, in favor of the Lenders.

“Indebtedness” means, for any Person:  (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 180 days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) guarantees by such Person of Indebtedness of others, up to the amount of Indebtedness so guaranteed; (g) obligations of such Person in respect of surety bonds and similar obligations; and (h) liabilities arising under Hedging Instruments.

6 

“Indemnified Liabilities ” is defined in Section 11.4.

“Indemnified Parties ” is defined in Section 11.4.

“Interest Make-Up Agreement” means either an Option A Refinancing Agreement or an Option B Interest Make-Up Agreement

“Interest Period” means the period between the Closing Date and the first Repayment Date, and subsequently each succeeding period between two consecutive Repayment Dates, except that:

a)   Any Interest Period which would otherwise end on a day which is not a Business Day shall end on the next Business Day to occur, except if such Business Day does not fall in the same calendar month, the Interest Period will end on the last Business Day in that calendar month, the interest amount due in respect of the Interest Period in question and in respect of the next following Interest Period being adjusted accordingly; and

b)   If any Interest Period is altered by the application of a) above, the subsequent Interest Period shall end on the day on which it would have ended if the preceding Interest Period had not been so altered.

“Investment” means, relative to any Person,

a)   any loan or advance made by such Person to any other Person (excluding commission, travel, expense and similar advances to officers and employees made in the ordinary course of business); and

b)   any ownership or similar interest held by such Person in any other Person.

“KfW” means KfW of Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Germany acting in its own name for the account of the government of the Federal Republic of Germany.

“KfW IPEX” means KfW IPEX-Bank GmbH of Palmergartenstrasse 5-9, 60325, Frankfurt am Main, Germany.

“Lender Assignment Agreement” means any Lender Assignment Agreement substantially in the form of Exhibit E.

“Lender” and “Lenders” are defined in the preamble.

“Lending Office” means, relative to any Lender, the office of such Lender designated as such below its signature to this Agreement or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining the Loan of such Lender hereunder.

7 

“LIBO Rate” means the rate per annum of the offered quotation for deposits in Dollars for six months (or for such other period as shall be agreed by the Borrower and the Administrative Agent) which appears on Reuters LIBOR01 Page (or any successor page) at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period; provided that:

a)   subject to Section 3.3.6, if no such offered quotation appears on Reuters LIBOR01 Page (or any successor page) at the relevant time, the LIBO Rate shall be the rate per annum certified by the Administrative Agent to be the average of the rates quoted by the Reference Banks as the rate at which each of the Reference Banks was (or would have been) offered deposits of Dollars by prime banks in the London interbank market in an amount approximately equal to the amount of the Loan and for a period of six months; and

b)   for the purposes of determining the post-maturity rate of interest under Section 3.3.4, the LIBO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Administrative Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees.

“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever.

“Loan” means the principal sum of the US Dollar Equivalent of up to eighty per cent (80%) of the Contract Price of the Purchased Vessel (as adjusted from time to time in accordance with the Construction Contract), but in any event in an amount not to exceed the US Dollar Equivalent corresponding to EUR 485,600,000, available to be advanced by the Lenders to the Borrower upon the terms and conditions of this Agreement or the amount thereof for the time being advanced and outstanding under this Agreement (as the context may require).

“Loan Documents” means this Agreement and the Pledge Agreement.

“Loan Request” means the loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit B hereto.

“Margin” means the Fixed Rate Margin and/or the Floating Rate Margin.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Administrative Agent or any Lender under the Loan Documents or (c) the ability of the Borrower to perform its payment Obligations under the Loan Documents.

“Material Litigation” is defined in Section 6.7.

8 

“Net Debt” means, at any time, the aggregate outstanding principal amount of all debt (including, without limitation, Capitalized Lease Liabilities) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) less the sum of (without duplication);

a)           all cash on hand of the Borrower and its Subsidiaries; plus

b)           all Cash Equivalents.

“Net Debt to Capitalization Ratio” means, as at any date, the ratio of (a) Net Debt on such date to (b) Capitalization on such date.

“New Financings” means proceeds from:

a)            borrowed money (whether by loan or issuance and sale of debt securities), including drawings under this Agreement and any revolving credit facilities of the Borrower, and

b)           the issuance and sale of equity securities.

“Nordea Agreement” means the U.S. $525,000,000 credit agreement dated as of November 19, 2010, as amended by Amendment No. 1 thereto dated as of November 19, 2010, among Royal Caribbean Cruises Ltd., as the borrower, Nordea Bank Finland PLC, Citigroup Global Markets Limited and DnB Nor Markets, Inc., as co-lead arrangers, Nordea Bank Finland PLC, as administrative agent, and DNB Nor Bank ASA, as documentation agent, as amended, restated, supplemented or otherwise modified from time to time.

“Obligations” means all obligations (payment or otherwise) of the Borrower arising under or in connection with this Agreement.

“Option A Refinancing Agreement” means a refinancing agreement entered into between the Refinancing Bank and any Lender pursuant to Sections 1.2.1 and 1.2.2 of the Terms and Conditions, substantially in the form of Exhibit F hereto.

“Option A Lender” means each Lender that has executed an Option A Refinancing Agreement.

“Option B Interest Make-Up Agreement” means an interest make-up agreement entered into between the CIRR Agent and any Lender pursuant to Section 1.2.4 of the Terms and Conditions.

“Option B Lender” means each Lender that has executed an Option B Interest Make-Up Agreement.

“Organic Document” means, relative to the Borrower, its articles of incorporation (inclusive of any articles of amendment to its articles of incorporation) and its by-laws.

“Original Borrower” is defined in the preamble.

9 

“Original Credit Agreement” is defined in the preamble.

“Original Effective Date” means the date the Original Credit Agreement became effective pursuant to Section 11.8, of the Original Credit Agreement, which date is December 19, 2008.

“Participant” is defined in Section 11.11.2.

“Participant Register” is defined in Section 11.11.2.

“Percentage” means, relative to any Lender, the percentage set forth opposite its signature to the Original Credit Agreement or as set out in the applicable Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Section 4.9 or pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.

“Person” means any natural person, corporation, limited liability company, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.

“Pledge Agreement” means a pledge agreement substantially in the form of Exhibit G.

“Pledged Account” means the account referred to in the Pledge Agreement.

“Prepayment Event” is defined in Section 9.1.

“Principal Subsidiary” means any Subsidiary of the Borrower that owns a Vessel.

“Purchased Vessel” is defined in the preamble.“Quarterly Payment Date” means the last day of each of March, June, September and December or, if any such day is not a Business Day, the next succeeding Business Day.

“Reference Banks” means KfW IPEX and each additional Reference Bank and/or each replacement Reference Bank appointed by the Administrative Agent pursuant to Section 3.3.6.

“Refinancing Bank” means KfW in its capacity as the provider of refinancing pursuant to Section 1.2.2 of the Terms and Conditions.

“Register” is defined in Section 11.11.3.

“Repayment Date” means each of the dates for payment of the repayment installments of the Loan specified in Exhibit A, as amended and/or replaced from time to time by the Administrative Agent and the Borrower.

“Required Lenders” means, at any time, Lenders that in the aggregate, hold more than 50% of the aggregate unpaid principal amount of the Loan or, if no such principal amount is then outstanding, Lenders that in the aggregate have more than 50% of the Commitments.

10 

“Restatement Effective Date” means the date on which all the conditions to the effectiveness of the amendment and restatement of the Original Credit Agreement in the form of this Agreement, which are set forth in Section 4 of the Assignment and Amendment Deed, are satisfied, which date is February ___, 2012.

“Reuters LIBOR01 Page” means the display designated as “Page 01” on the Reuters Money News Service or such other page as may replace Page 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers' Association as the information vendor for the purpose of displaying the British Bankers' Association Interest Settlement Rates for Dollars).

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

“Stockholders’ Equity” means, as at any date, the Borrower’s stockholders’ equity on such date, excluding Accumulated Other Comprehensive Income (Loss), determined in accordance with GAAP, provided that any non-cash charge to Stockholders’ Equity resulting (directly or indirectly) from a change after the Restatement Effective Date in GAAP or in the interpretation thereof shall be disregarded in the computation of Stockholders’ Equity such that the amount of any reduction thereof resulting from such change shall be added back to Stockholders’ Equity.“Subsidiary” means, with respect to any Person, any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

“Terms and Conditions” means the general terms and conditions for CIRR Interest Make-Up for Ship Financing issued by the Federal Republic of Germany on July 2, 2008.

“US Dollar Equivalent” means any EUR amount converted to a corresponding US dollar amount as determined four (4) Business Days prior to delivery of the Purchased Vessel using the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amount of EUR with USD for the payment of the final installment of the Contract Price. Such rate of exchange to be evidenced by counterparty confirmations.

“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.

“Vessel” means a passenger cruise vessel owned by the Borrower or one of its Subsidiaries.

“Voting Stock” means shares of capital stock of the Borrower of any class or classes (however designated) that have by the terms thereof normal voting power to elect the members of the Board of Directors of the Borrower (other than voting power upon the occurrence of a stated contingency, such as the failure to pay dividends).

11 

SECTION 1.2.Use of Defined Terms.  Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall, when capitalized, have such meanings when used in each Loan Request and each notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.

SECTION 1.3.Cross-References.  Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

SECTION 1.4.Application of this Agreement to KfW IPEX as an Option A Lender.  The parties to this Agreement are aware that KfW IPEX will not enter into an Option A Refinancing Agreement with the CIRR Agent. However, for the purposes of this Agreement, KfW IPEX will be deemed to have entered into an Option A Refinancing Agreement with the CIRR Agent in the form of Exhibit F. Consequently, any reference to an Option A Lender shall include KfW IPEX and any reference to an Option A Refinancing Agreement shall include the Option A Refinancing Agreement deemed to have been entered into by KfW IPEX.

SECTION 1.5. Accounting and Financial Determinations.  Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared, in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies); provided that if the Borrower elects to apply or is required to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP, upon any such election and notice to the Administrative Agent, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided further that if, as a result of (i) any change in GAAP or IFRS or in the interpretation thereof or (ii) the application by the Borrower of IFRS in lieu of GAAP, in each case, after the date of the financial statements referred to in Section 6.6, there is a change in the manner of determining any of the items referred to herein or thereunder that are to be determined by reference to GAAP, and the effect of such change would (in the reasonable opinion of the Borrower or the Administrative Agent) be such as to affect the basis or efficacy of the financial covenants contained in Section 7.2.4 in ascertaining the consolidated financial condition of the Borrower and its Subsidiaries and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate such change occurring after the date hereof in GAAP or the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), then such item shall for the purposes of Section 7.2.4 continue to be determined in accordance with GAAP relating thereto as if GAAP were applied immediately prior to such change in GAAP or in the interpretation thereof until such notice shall have been withdrawn or such provision amended in accordance herewith.

12 

ARTICLE II

COMMITMENTS AND BORROWING PROCEDURES

SECTION 2.1.Commitment.  On the terms and subject to the conditions of this Agreement (including Article V), each Lender severally agrees to make its portion of the Loan pursuant to its Commitment described in Section 2.2. No Lender’s obligation to make the Loan shall be affected by any other Lender’s failure to make the Loan.

SECTION 2.2.Commitment of the Lenders; Termination and Reduction of Commitments.

a)   Each Lender will make its portion of the Loan available to the Borrower in accordance with Section 2.3 two (2) Business Days prior to the delivery of the Purchased Vessel to the Borrower under the Construction Contract. The commitment of each Lender described in this Section 2.2 (herein referred to as its “Commitment”) shall be the commitment of such Lender to make available to the Borrower its portion of the Loan hereunder expressed as the initial amount set forth opposite such Lender’s name on its signature page attached hereto or, in the case of any Lender that becomes a Lender pursuant to an assignment pursuant to Section 11.11.1, the amount set forth as such Lender’s Commitment in the related Lender Assignment Agreement, in each case as such amount may be reduced from time to time pursuant to Section 2.2(b) or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.11.1. Notwithstanding the foregoing, each Lender’s Commitment shall terminate on the earlier of (i) the Commitment Termination Date if the Purchased Vessel is not delivered prior to such date and (ii) upon delivery of the Purchased Vessel.

b)   The Borrower may at any time (i) prior to the date that is not less than 61 days prior to the Contractual Delivery Date, without premium or penalty, terminate, or from time to time reduce, the Commitments and (ii) prior to the date on which the Commitments have been terminated but less than 61 days prior to the Contractual Delivery Date, and subject to Section 4.4, terminate, or from time to time reduce, the Commitments. Any such termination or reduction of the Commitments shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments.

c)   If any Lender shall default in its obligations under Section 2.1, the Administrative Agent shall, at the request of the Borrower, use reasonable efforts to find a bank or financial institution acceptable to the Borrower to replace such Lender.

SECTION 2.3.Borrowing Procedure.

a)   The Borrower shall deliver a Loan Request and the documents required to be delivered pursuant to Section 5.1.1(a) to the Administrative Agent on or before 11:00 a.m., London time, not less than two (2) Business Days in advance of the date that is two (2) Business Days prior to the delivery of the Purchased Vessel. The Administrative Agent shall promptly notify each Lender of any Loan Request by forwarding a copy thereof to each

13 

Lender, together with its attachments. On the terms and subject to the conditions of this Agreement, the Loan shall be made on the Business Day specified in such Loan Request. On or before 11:00 a.m., New York time, on the Business Day specified in such Loan Request, the Lenders shall, without any set-off or counterclaim, deposit with the Administrative Agent same day funds in an amount equal to such Lender’s Percentage of the requested Loan. Such deposit will be made to an account which the Administrative Agent shall specify from time to time by notice to the Lenders. To the extent funds are so received from the Lenders, the Administrative Agent shall, without any set-off or counterclaim, make such funds available to the Borrower on the Business Day specified in the Loan Request by wire transfer of same day funds to the account or accounts the Borrower shall have specified in its Loan Request.

b)   The Borrower shall, upon receipt of the funds into the account or accounts referred to in Section 2.3(a) above, complete the purchase of EUR with its counterparties as set out in the Loan Request and shall pay all EUR proceeds of such transactions to the Pledged Account no later than the Business Day following the Business Day specified in the Loan Request.

SECTION 2.4.Funding.  Each Lender may, if it so elects, fulfill its obligation to make or continue its Loan hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to make or maintain such Loan; provided that such Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility.

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

SECTION 3.1.Repayments.  a) Subject to Section 3.1 b), the Borrower shall repay the Loan in the installments and on the dates set out in Exhibit A.

b)   If, on the date of delivery of the Purchased Vessel, the outstanding principal amount of the Loan exceeds eighty per cent (80%) of the Contract Price of the Purchased Vessel, the Borrower shall repay the Loan in an amount equal to such excess within two (2) Business Days after the date of delivery of the Purchased Vessel.  Any such partial prepayment shall be applied pro rata in satisfaction of the repayment installments of the Loan set out in Exhibit A.

c)   No such amounts repaid by the Borrower pursuant to this Section 3.1 may be reborrowed under the terms of this Agreement.

SECTION 3.2.Prepayment.  The Borrower

a)   May, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan; provided that:

14 

i)   all such voluntary prepayments shall require (x) if prior to delivery of the Purchased Vessel, at least two (2) Business Days’ prior written notice to the Administrative Agent, and (y) if after delivery of the Purchased Vessel, at least five (5) Business Days’ (or, if such prepayment is to be made on the last day of an Interest Period for such Loan, four (4) Business Days’) prior written notice to the Administrative Agent; and

ii)   all such voluntary partial prepayments shall be in an aggregate minimum amount of $10,000,000 and a multiple of $1,000,000 (or the remaining amount of the Loan) and shall be applied pro rata in satisfaction of the repayment installments of the Loan set out in Exhibit A.

b)   Shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to Section 8.2 or 8.3 or the mandatory prepayment of the Loan pursuant to Section 9.2, repay the Loan.

Each prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4. No amounts prepaid by the Borrower may be reborrowed under the terms of this Agreement except as provided in Section 3.7 and the last paragraph of Section 9.1 (which follows Section 9.1.11) .

SECTION 3.3.Interest Provisions.  Interest on the outstanding principal amount of the Loan shall accrue and be payable in accordance with this Section 3.3.

SECTION 3.3.1.Rates.  The Loan shall accrue interest from the Closing Date to the date of repayment or prepayment of the Loan in full to the Lenders at the Fixed Rate, subject to (i) any election made by the Borrower to elect the Floating Rate pursuant to Section 3.3.2 or (ii) any conversion of any portion of the Loan held by a Lender to a Floating Rate Loan upon the termination of the Interest Make-Up Agreement to which such Lender is a party in accordance with Section 3.3.3. Interest calculated at the Fixed Rate or the Floating Rate shall be payable semi-annually in arrears on the Repayment Dates set out in Exhibit A. The Loan shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loan. All interest shall be calculated on the basis of the actual number of days elapsed over a year comprised of 360 days.

SECTION 3.3.2.Election of Floating Rate.

a)   By written notice to the Administrative Agent delivered not less than 61 days prior to the Contractual Delivery Date, the Borrower may elect, without incurring any liability to make any payments pursuant to Section 4.4 or to pay any other indemnity or compensation obligation, to pay interest on the Loan at the Floating Rate.

b)   By written notice to the Administrative Agent delivered less than 61 days prior to the Contractual Delivery Date but not less than 30 days prior to the Contractual Delivery Date, the Borrower may elect to pay interest on the Loan at the Floating Rate.

15 

c)   By written notice to the Administrative Agent no later than 2:00 p.m. Frankfurt time 30 days prior to the end of an Interest Period, the Borrower may elect to pay interest on the Loan for the remainder of the term of the Loan at the Floating Rate, with effect from the end of that Interest Period.

d)   Any election made under Section 3.3.2.b) or Section 3.3.2.c) may only be made one time during the term of the Loan.

SECTION 3.3.3.Conversion to Floating Rate.  If, during any Interest Period, the Interest Make-Up Agreement in effect with any Lender is terminated for any reason (other than as a result of the negligence or willful misconduct of such Lender), then the portion of the Loan held by such Lender shall convert to a Floating Rate Loan on the last day of such Interest Period, and the Borrower shall pay interest on such portion of the Loan at the Floating Rate on such portion for the remainder of the term of the Loan. The Borrower shall not incur any liability to make any payments pursuant to Section 4.4 or to pay any other indemnity or compensation obligation in connection with any such conversion.

SECTION 3.3.4.Post-Maturity Rates.  After the date any principal amount of the Loan is due and payable (whether on any Repayment Date, upon acceleration or otherwise), or after any other monetary Obligation of the Borrower shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts for each day during the period of such default at a rate per annum certified by the Administrative Agent to the Borrower (which certification shall be conclusive in the absence of manifest error) to be equal to (a) in the case of (i) principal of and interest on the Loan payable to each Option A Lender and (ii) interest on the Loan payable to each Option B Lender, the sum of the Floating Rate plus 3% per annum and (b) in the case of any other monetary Obligation, the sum of the Floating Rate plus 2% per annum.

SECTION 3.3.5.Payment Dates.  Interest accrued on the Loan shall be payable, without duplication, on the earliest of:

a)   each Repayment Date;

b)   the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and

c)   on that portion of the Loan the repayment of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.

SECTION 3.3.6.Interest Rate Determination; Replacement Reference Banks.  The Administrative Agent shall obtain from each Reference Bank timely information for the purpose of determining the LIBO Rate in the event that no offered quotation appears on Reuters LIBOR01 Page (or any successor page) and the LIBO Rate is to be determined by reference to quotations supplied by the Reference Banks.  If any one or more of the Reference Banks shall fail to furnish in a timely manner such information to the Administrative Agent for any such interest rate, the Administrative Agent shall determine such interest rate on the basis of the information furnished by the remaining Reference Banks.  If the Borrower elects to add an additional Reference Bank hereunder or a Reference Bank ceases for any reason to be able and

16 

willing to act as such, the Administrative Agent shall, at the direction of the Required Lenders and after consultation with the Borrower and the Lenders, appoint a replacement for such Reference Bank reasonably acceptable to the Borrower, and such replaced Reference Bank shall cease to be a Reference Bank hereunder.  The Administrative Agent shall furnish to the Borrower and to the Lenders each determination of the LIBO Rate made by reference to quotations of interest rates furnished by Reference Banks.

Interest accrued on the Loan or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether upon acceleration or otherwise) shall be payable upon demand.

SECTION 3.4.Commitment Fees.  The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee (the “Commitment Fee”) on its daily unused portion of the Loan, for the period commencing on the Original Effective Date and continuing through the earliest of (i) the Closing Date, (ii) the date upon which the Administrative Agent has provided the Borrower written notice that the Lenders will not advance the Loan because the Commitments shall have been terminated pursuant to Section 8.2 or 8.3, (iii) the Commitment Termination Date and (iv) the date the Commitments shall have been terminated pursuant to Section 2.2(b). Should the Administrative Agent provide the Borrower notice that the Lenders will not advance the Loan because Hermes has cancelled the Hermes Insurance Policy, the Commitment Fees paid by the Borrower for the account of each Lender shall be promptly refunded to the Borrower by such Lender.

SECTION 3.4.1.Payment.  The Commitment Fee shall be payable by the Borrower to the Administrative Agent for the account of each Lender in arrears on each Quarterly Payment Date, commencing with the first such date following the Original Effective Date and ending on the earliest to occur of (i) the Closing Date, (ii) the date the Lenders are no longer obligated to advance the Loan, (iii) the Commitment Termination Date and (iv) the date the Commitments shall have been terminated pursuant to Section 2.2(b). The Commitment Fee shall be the US dollar equivalent (determined pursuant to the immediately following sentence) of an amount equal to the product of the Applicable Commitment Rate, multiplied by EUR 485,600,000 for each day elapsed since the previous Quarterly Payment Date, divided by 360 days. The exchange rate used to convert the fee to US dollars shall be the 10 A.M. midpoint market fixing for the conversion of EUR to US dollars set by the Federal Reserve Bank of New York two (2) Business Days prior to the relevant Quarterly Payment Date.

SECTION 3.5.CIRR Fees.  The Borrower agrees to pay to the Administrative Agent for the account of the CIRR Agent a fee of 0.01% per annum (the “CIRR Fee”) on the amount of the Loan, for the period commencing on October 15, 2008 and continuing until the earliest of (i) the date falling sixty (60) days prior to the Closing Date, (ii) the date on which the Borrower elects the Floating Rate pursuant to Section 3.3.2 or, as to any portion of the Loan converted to a Floating Rate Loan pursuant to Section 3.3.3, the date on which such portion so converts to a Floating Rate Loan, (iii) the date upon which the Administrative Agent has provided written notice to the Borrower that the Lenders will not advance the Loan because the Commitments shall have been terminated pursuant to Section 8.2 or 8.3 and (iv) the date the Commitments shall have been terminated pursuant to Section 2.2(b).

17 

SECTION 3.5.1.Payment.  The CIRR Fee shall be payable by the Borrower in EUR quarterly in arrears from the date of commencement of the period described in Section 3.5 and, if applicable, on the earliest of (i) the date falling sixty (60) days prior to the Closing Date, (ii) the date on which the Borrower elects the Floating Rate pursuant to Section 3.3.2 or, as to any portion of the Loan converted to a Floating Rate Loan pursuant to Section 3.3.3, the date on which such portion so converts to a Floating Rate Loan, (iii) the date upon which the Administrative Agent has provided written notice to the Borrower that the Lenders will not advance the Loan because the Commitments shall have been terminated pursuant to Section 8.2 or 8.3 and (iv) the date the Commitments shall have been terminated pursuant to Section 2.2(b).

SECTION 3.6.Other Fees.  The Borrower agrees to pay to the Administrative Agent the fees set forth in the Fee Letter on the dates and in the amounts set forth therein.

SECTION 3.7.  Temporary Repayment.  If the proceeds of the Loan  have not been utilised directly or indirectly to pay for delivery of the Purchased Vessel within 15 days after the Closing Date and have been deposited in accordance with Section 4.12, the Borrower may, by notice to the Administrative Agent in accordance with Section 3.2(a) and specifying that such prepayment may be reborrowed under this Agreement, prepay the Loan together with accrued interest on the Loan so prepaid.  If the Purchased Vessel is subsequently delivered, the Borrower shall be permitted to submit one additional Loan Request in accordance with Section 2.3 to reborrow the Loan previously prepaid under this Section; provided, however, that the date of funding of any such reborrowed Loan shall not be later than the Commitment Termination Date and provided, further, that such date of funding shall be the Closing Date for all purposes hereunder with respect to such reborrowed Loan.  Prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.

ARTICLE IV

CERTAIN LIBO RATE AND OTHER PROVISIONS

SECTION 4.1.LIBO Rate Lending Unlawful. If after the Original Effective Date the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority having jurisdiction over such Lender asserts that it is unlawful for such Lender to make, continue or maintain the Loan bearing interest at a rate based on the LIBO Rate, the obligation of such Lender to make, continue or maintain its Loan bearing interest at a rate based on the LIBO Rate shall, upon notice thereof to the Borrower, the Administrative Agent and each other Lender, forthwith be suspended until the circumstances causing such suspension no longer exist, provided that such Lender’s obligation to make, continue and maintain its Loan hereunder shall be automatically converted into an obligation to make, continue and maintain the Loan bearing interest at a rate to be negotiated between such Lender and the Borrower that is the equivalent of the sum of the LIBO Rate for the relevant Interest Period plus the Floating Rate Margin.

SECTION 4.2.Deposits Unavailable.  If, on or after the date the Borrower elects the Floating Rate pursuant to Section 3.3.2 or if any Lender shall have entered into an Option B

18 

Interest Make-Up Agreement (an “Option B Lender”), the Administrative Agent shall have determined that:

a)   Dollar deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market, or

b)   by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate loans for the relevant Interest Period, or

c)   the cost to the Refinancing Bank, in the event the Borrower has elected the Floating Rate pursuant to Section 3.3.2, or the cost to Option B Lenders that in the aggregate hold more than 50% of the aggregate unpaid principal amount of the Loan then held by Option B Lenders, if any Lender shall have entered into an Option B Interest Make-Up Agreement, in each case of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the LIBO Rate,

then the Administrative Agent shall give notice of such determination (hereinafter called a “Determination Notice”) to the Borrower and each of the Lenders. The Borrower, the Lenders and the Administrative Agent shall then negotiate in good faith in order to agree upon a mutually satisfactory interest rate and interest period (or interest periods) to be substituted for those which would otherwise have applied under this Agreement. If the Borrower, the Lenders and the Administrative Agent are unable to agree upon an interest rate (or rates) and interest period (or interest periods) prior to the date occurring fifteen (15) Business Days after the giving of such Determination Notice, the Administrative Agent shall (after consultation with the Lenders) set an interest rate and an interest period (or interest periods), in each case to take effect at the end of the Interest Period current at the date of the Determination Notice, which rate (or rates) shall be equal to the sum of the Floating Rate Margin and the lesser of (x) the cost to the Refinancing Bank of funding the portion of the Loan financed by the Refinancing Bank and (y) the weighted average of the corresponding interest rates at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period on Reuters’ pages KLIEMMM, GARBIC01 and FINA01 (or such other pages as may replace Reuters’ pages KLIEMMM, GARBIC01 or FINA01 on Reuters’ service). The Administrative Agent shall furnish a certificate to the Borrower as soon as reasonably practicable after the Administrative Agent has given such Determination Notice setting forth such rate. In the event that the circumstances described in this Section 4.2 shall extend beyond the end of an interest period agreed or set pursuant hereto, the foregoing procedure shall be repeated as often as may be necessary.

SECTION 4.3.Increased LIBO Rate Loan Costs, etc.  If after the Original Effective Date a change in any applicable treaty, law, regulation or regulatory requirement or in the interpretation thereof or in its application to the Borrower, or if compliance by any Lender with any applicable direction, request, requirement or guideline (whether or not having the force of law) of any governmental or other authority including, without limitation, any agency of the European Union or similar monetary or multinational authority insofar as it may be changed or imposed after the Original Effective Date, shall:

19 

a.   subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in Section 4.6, withholding taxes); or

b.   change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or

c.   impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in Section 4.5 and the reserve costs described in Section 4.7) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (provided that such Lender shall, unless prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or

d.   impose on any Lender any other condition affecting its portion of the Loan or any part thereof,

and the result of any of the foregoing is either (i) to increase the cost to such Lender of making the Loan or maintaining the Loan or any part thereof, (ii) to reduce the amount of any payment received by such Lender or its effective return hereunder or on its capital or (iii) to cause such Lender to make any payment or to forego any return based on any amount received or receivable by such Lender hereunder, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the interests of such Lender, (A) such Lender shall (through the Administrative Agent) notify the Borrower of the occurrence of such event and use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid the effects of such law, regulation or regulatory requirement or any change therein or in the interpretation thereof and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender and (B) the Borrower shall forthwith upon such demand pay to the Administrative Agent for the account of such Lender such amount as is necessary to compensate such Lender for such additional cost or such reduction and ancillary expenses, including taxes, incurred as a result of such adjustment.  Such notice shall (i) describe in reasonable detail the event leading to such additional cost, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such additional cost, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request is consistent with its treatment of other borrowers that are subject to similar provisions, and (vi) certify that, to the best of its knowledge, such change in circumstance is of general application to the commercial banking industry in such Lender’s jurisdiction of organization or in the relevant jurisdiction in which such Lender does business.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such

20 

compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such cost or reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.4.Funding Losses.

SECTION 4.4.1.Indemnity.   In the event any Lender shall incur any loss or expense (for the avoidance of doubt excluding loss of profit in the event the Borrower has elected the Floating Rate pursuant to Section 3.3.2), by reason of the liquidation or reemployment (at not less than the market rate) of deposits or other funds acquired by such Lender, to make, continue or maintain any portion of the principal amount of the Loan as a result of:

i)   if at the time interest is calculated at the Floating Rate, any conversion or repayment or prepayment or acceleration of the principal amount of the Loan on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment;

ii)   if at the time interest is calculated at the Fixed Rate, any repayment or prepayment or acceleration of the principal amount of the Loan, other than any repayment made on the date scheduled for such repayment;

iii)   an election by the Borrower of the Floating Rate in accordance with Section 3.3.2.b) or Section 3.3.2.c);

iv)   a reduction or termination of the Commitments by the Borrower pursuant to Section 2.2.b)(ii); or

v)   the Loan not being made in accordance with the Loan Request therefor due to the fault of the Borrower or as a result of any of the conditions precedent set forth in Article V not being satisfied,

(a “Funding Losses Event”) then, upon the written notice of such Lender to the Borrower (with a copy to the Administrative Agent), the Borrower shall, within five (5) Business Days of its receipt thereof:

a.   if at that time interest is calculated at the Floating Rate, pay directly to the Administrative Agent an amount (the “Floating Rate Indemnity Amount”) equal to the amount by which:

(i)   interest calculated at the Floating Rate which a Lender would have received on its share of the amount of the Loan subject to such

21 

Funding Losses Event for the period from the date of receipt of any part of its share in the Loan to the last day of the applicable Interest Period,

exceeds:

(ii)   the amount which a Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period.

b.   if at that time interest is calculated at the Fixed Rate, pay to the Administrative Agent for the account of such Lender the sum of:

(A) an amount equal to the amount by which:

(i)   interest calculated at the Fixed Rate which a Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share of the Loan to the final scheduled date for the repayment of Loan in full pursuant to Section 3.1,

exceeds:

(ii)   the amount by which a Lender would be able to obtain by placing an equal amount to the amount received by it on deposit and receiving interest equal to the money market rate then applicable to Dollars on the Reuters page “ICAP1” (the “Reinvestment Rate”),

such amount to be discounted to present value at the Reinvestment Rate; and

(B) if such Lender has entered into an Option B Interest Make-up Agreement, an amount equal to the Floating Rate Indemnity Amount.

Such written notice shall include calculations in reasonable detail setting forth the loss or expense to such Lender.

SECTION 4.5.Increased Capital Costs.  If after the Original Effective Date any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority increases the amount of capital required to be maintained by any Lender or any Person controlling such Lender, and the rate of return on its or such controlling Person’s capital as a consequence of its Commitment or the Loan made by such Lender is reduced to a level below that which such Lender or such controlling Person would have achieved but for the occurrence of any such

22 

change in circumstance, then, in any such case upon notice from time to time by such Lender to the Borrower, the Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return.  Any such notice shall (i) describe in reasonable detail the capital adequacy requirements which have been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such lowered return, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request for such additional amounts is consistent with its treatment of other borrowers that are subject to similar provisions and (vi) certify that, to the best of its knowledge, such change in circumstances is of general application to the commercial banking industry in the jurisdictions in which such Lender does business.  In determining such amount, such Lender may use any method of averaging and attribution that it shall, subject to the foregoing sentence, deem applicable.  Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid such reduction in such rate of return and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.6.Taxes.  All payments by the Borrower of principal of, and interest on, the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts of such Lender and franchise taxes imposed in lieu of net income taxes or taxes on receipts, by the jurisdiction under the laws of which such Lender is organized or any political subdivision thereof or the jurisdiction of such Lender’s Lending Office or any political subdivision thereof or any other jurisdiction unless such net income taxes are imposed solely as a result of the Borrower’s activities in such other jurisdiction, and any taxes imposed under FATCA (such non-excluded items being called “Covered Taxes”).  In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Covered Taxes pursuant to any applicable law, rule or regulation, then the Borrower will:

a.   pay directly to the relevant authority the full amount required to be so withheld or deducted;

23 

b.   promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such authority; and

c.   pay to the Administrative Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.

Moreover, if any Covered Taxes are directly asserted against the Administrative Agent or any Lender with respect to any payment received or paid by the Administrative Agent or such Lender hereunder, the Administrative Agent or such Lender may pay such Covered Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Covered Taxes (including any Covered Taxes on such additional amount) shall equal the amount such person would have received had no such Covered Taxes been asserted.

Any Lender claiming any additional amounts payable pursuant to this Section agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

If the Borrower fails to pay any Covered Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent for the account of the respective Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders for any incremental withholding Covered Taxes, interest or penalties that may become payable by any Lender as a result of any such failure (so long as such amount did not become payable as a result of the failure of such Lender to provide timely notice to the Borrower of the assertion of a liability related to the payment of Covered Taxes).  For purposes of this Section 4.6, a distribution hereunder by the Administrative Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.

If any Lender is entitled to any refund, credit, deduction or other reduction in tax by reason of any payment made by the Borrower in respect of any Covered Tax under this Section 4.6 or by reason of any payment made by the Borrower pursuant to Section 4.3, such Lender shall use reasonable efforts to obtain such refund, credit, deduction or other reduction and, promptly after receipt thereof, will pay to the Borrower such amount (plus any interest received by such Lender in connection with such refund, credit, deduction or reduction) as is equal to the net after-tax value to such Lender of such part of such refund, credit, deduction or reduction as such Lender reasonably determines is allocable to such Covered Tax or such payment (less out-of-pocket expenses incurred by such Lender), provided that no Lender shall  be obligated to disclose to the Borrower any information regarding its tax affairs or tax computations.

Each Lender (and each Participant) agrees with the Borrower and the Administrative Agent that it will (i) in the case of a Lender or a Participant organized under the laws of a

24 

jurisdiction other than the United States (a) provide to the Administrative Agent and the Borrower an appropriately executed copy of Internal Revenue Service Form W-8ECI certifying that any payments made to or for the benefit of such Lender or such Participant are effectively connected with a trade or business in the United States (or alternatively, an Internal Revenue Service Form W-8BEN claiming the benefits of a tax treaty, but only if the applicable treaty described in such form provides for a complete exemption from U.S. federal income tax withholding), or any successor form, on or prior to the date hereof (or, in the case of any assignee Lender or Participant, on or prior to the date of the relevant assignment or participation), in each case attached to an Internal Revenue Service Form W-8IMY, if appropriate, (b) notify the Administrative Agent and the Borrower if the certifications made on any form provided pursuant to this paragraph are no longer accurate and true in all material respects and (c) provide such other tax forms or other documents as shall be prescribed by applicable law, if any, or as otherwise reasonably requested, to demonstrate, to the extent applicable, that payments to such Lender (or Participant) hereunder are exempt from withholding under FATCA, and (ii) in all cases, provide such forms, certificates or other documents, as and when reasonably requested by the Borrower, necessary to claim any applicable exemption from, or reduction of, Covered Taxes or any payments made to or for benefit of such Lender or such Participant, provided that the Lender or Participant is legally able to deliver such forms, certificates or other documents.  For any period with respect to which a Lender (or assignee Lender or Participant) has failed to provide the Borrower with the foregoing forms (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided (which, in the case of an Assignee Lender, would be the date on which the original assignor was required to provide such form) or if such form otherwise is not required hereunder) such Lender (or assignee Lender or Participant) shall not be entitled to the benefits of this Section 4.6 with respect to Covered Taxes imposed by reason of such failure.

SECTION 4.7.Reserve Costs

.  Without in any way limiting the Borrower’s obligations under Section 4.3, the Borrower shall, on and after the date the Borrower elects the Floating Rate pursuant to Section 3.3.2, pay to the Administrative Agent for the account of each Lender on the last day of each Interest Period, so long as the relevant Lending Office of such Lender is required to maintain reserves against “Eurocurrency liabilities” under Regulation D of the F.R.S. Board, upon notice from such Lender, an additional amount equal to the product of the following for the Loan for each day during such Interest Period:

(i)the principal amount of the Loan outstanding on such day; and

(ii)the remainder of (x) a fraction the numerator of which is the rate (expressed as a decimal) at which interest accrues on the Loan for such Interest Period as provided in this Agreement (less, if applicable, the Floating Rate Margin) and the denominator of which is one minus any increase after the Original Effective Date in the effective rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender minus (y) such numerator; and

(iii)1/360.

25 

Such notice shall (i) describe in reasonable detail the reserve requirement that has been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the applicable reserve percentage, (iii) certify that such request is consistent with such Lender’s treatment of other borrowers that are subject to similar provisions and (iv) certify that, to the best of its knowledge, such requirements are of general application in the commercial banking industry in the United States.

Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to avoid the requirement of maintaining such reserves (including by designating a different Lending Office) if such efforts would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

SECTION 4.8.Payments, Computations, etc.  a. Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the Administrative Agent for the pro rata account of the Lenders entitled to receive such payment.  All such payments required to be made to the Administrative Agent shall be made, without set-off, deduction or counterclaim, not later than 11:00 a.m., New York time, on the date due, in same day or immediately available funds through the New York Clearing House Interbank Payments System (or such other funds as may be customary for the settlement of international banking transactions in Dollars), to such account as the Administrative Agent shall specify from time to time by notice to the Borrower.  Funds received after that time shall be deemed to have been received by the Lenders on the next succeeding Business Day.

b.   (i) Each Option A Lender hereby instructs the Administrative Agent to remit all payments of interest made with respect to any portion of the Loan held by such Option A Lender to the Refinancing Bank less the Fixed Rate Margin if interest on the Loan made by that Lender is then calculated at the Fixed Rate and less the Floating Rate Margin if interest on that Loan is then calculated at the Floating Rate.

(ii)Each Option B Lender hereby instructs the Administrative Agent, with respect to any portion of the Loan held by such Option B Lender, to pay to the CIRR Agent interest thereon at the Fixed Rate, if interest on such portion of the Loan is then calculated at the Fixed Rate, and to pay directly to such Lender interest thereon at the Floating Rate, if interest on such portion of the Loan is then calculated at the Floating Rate.

c.   The Administrative Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in clause (a) of this Section, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Administrative Agent for the account of such Lender without any set-off, deduction or counterclaim.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days.  Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (a) of the definition of the term “Interest Period”) be made on the next

26 

succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.

SECTION 4.9.Replacement Lenders, etc.  If the  Borrower shall be required to make any payment to any Lender pursuant to Section 4.3, 4.4, 4.5, 4.6 or 4.7, the Borrower shall be entitled at any time (so long as no Default and no Prepayment Event shall have occurred and be continuing) within 180 days after receipt of notice from such Lender of such required payment to (a) prepay the affected portion of such Lender’s Loans in full, together with accrued interest thereon through the date of such prepayment (provided that the Borrower shall not prepay any such Lender pursuant to this clause (a) without replacing such Lender pursuant to the following clause (b) until a 30-day period shall have elapsed during which the Borrower and the Administrative Agent shall have attempted in good faith to replace such Lender), and/or (b) replace such Lender with another financial institution reasonably acceptable to the Administrative Agent, provided that (i) each such assignment shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement and (ii) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from either the Borrower or one or more Assignee Lenders in an aggregate amount at least equal to the aggregate outstanding principal amount of the Loans owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement. Each Lender represents and warrants to the Borrower that, as of the date of this Agreement (or, with respect to any Lender not a party hereto on the date hereof, on the date that such Lender becomes a party hereto), there is no existing treaty, law, regulation, regulatory requirement, interpretation, directive, guideline, decision or request pursuant to which such Lender would be entitled to request any payments under any of Sections 4.3, 4.4, 4.5, 4.6 and 4.7 to or for account of such Lender.

SECTION 4.10.Sharing of Payments.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of set-off or otherwise) on account of the Loan (other than pursuant to the terms of Sections 4.3, 4.4, 4.5, 4.6 and 4.7) in excess of its pro rata share of payments then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders such participations in the Loan made by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender’s ratable share (according to the proportion of (a) the amount of such selling Lender’s required repayment to the purchasing Lender to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 4.11) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of

27 

such participation. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim.

SECTION 4.11.Set-off.  Upon the occurrence and during the continuance of an Event of Default or a Prepayment Event, each Lender shall have, to the extent permitted by applicable law, the right to appropriate and apply to the payment of the Obligations then due and owing to it any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Lender; provided that any such appropriation and application shall be subject to the provisions of Section 4.10.  Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set-off under applicable law or otherwise) which such Lender may have.

SECTION 4.12.Use of Proceeds.  The Borrower shall apply the proceeds of the Loan in accordance with Recital (D) and, prior to such application, such proceeds shall be held in the Pledged Account; without limiting the foregoing, no proceeds of the Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S. Board Regulation U.  If the proceeds of the Loan  have not been paid to the Builder or its order or to the Administrative Agent (directly or indirectly) in prepayment of the Loan under Sections 3.2(a) or 3.7 by 9:59 p.m. (London time) on the second Business Day after the Closing Date, such proceeds shall continue to be pledged by the Borrower upon receipt in accordance with Section 2.3(b) as collateral pursuant to the Pledge Agreement.  On or prior to the date that is 15 days after the Closing Date, the Borrower shall notify the Administrative Agent whether the proceeds of the Loan are to be returned to the Administrative Agent as prepayment in accordance with Section 3.7 or to be held as cash collateral until the earlier of (i) disbursement to the Builder and (ii) prepayment of the Loan pursuant to Sections 3.2(a) or 9.2.

ARTICLE V

CONDITIONS TO BORROWING

SECTION 5.1.Advance of the Loan.  The obligation of the Lenders to fund the Loan  shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 5.1. The Administrative Agent shall advise the Lenders of the satisfaction of the conditions precedent set forth in this Section 5.1 prior to funding on the Closing Date.

SECTION 5.1.1.Resolutions, etc.  The Administrative Agent shall have received from the Borrower:

28 

(a)  a certificate of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Agreement and each other Loan Document and as to the truth and completeness of the attached:

(x)  resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement and each other Loan Document, and

(y)  Organic Documents of the Borrower,

and upon which certificate the Lenders may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the Borrower canceling or amending such prior certificate; and

(b)  a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Borrower.

SECTION 5.1.2.Opinions of Counsel.  The Administrative Agent shall have received opinions, addressed to the Administrative Agent and each Lender from:

a.   Watson, Farley & Williams (New York) LLP, counsel to the Borrower, as to Liberian Law, covering the matters set forth in Exhibit D-1 hereto;

b.   Norton Rose LLP, counsel to the Administrative Agent, covering the matters set forth in Exhibit D-2 hereto; and

c.   Clifford Chance US LLP, United States tax counsel to the Lenders, covering the matters set forth in Exhibit D-3 hereto,

each such opinion to be updated to take into account all relevant and applicable Loan Documents at the time of issue thereof.

SECTION 5.1.3.[RESERVED].

SECTION 5.1.4.Closing Fees, Expenses, etc.  The Administrative Agent shall have received for its own account, or for the account of each Lender, as the case may be, all fees that the Borrower shall have agreed in writing to pay to the Administrative Agent (whether for its own account or for the account of any of the Lenders) and all invoiced expenses of the Administrative Agent (including the agreed fees and expenses of counsel to the Administrative Agent and the Hermes Fees) required to be paid by the Borrower pursuant to Section 11.3 or that the Borrower has otherwise agreed in writing to pay to the Administrative Agent, in each case on or prior to the Closing Date.

SECTION 5.1.5.Compliance with Warranties, No Default, etc.  Both before and after giving effect to the funding of the Loan the following statements shall be true and correct:

29 

a.   the representations and warranties set forth in Article VI shall be true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made; and

b.   no Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event shall have then occurred and be continuing.

SECTION 5.1.6.Loan Request.  The Administrative Agent shall have received a Loan Request duly executed by the Borrower.

SECTION 5.1.7.Hermes Insurance Policy. a. The Administrative Agent or the Hermes Agent shall have received the Hermes Insurance Policy duly issued; and

b.           Hermes shall not have, prior to funding the Loan, delivered to the Administrative Agent or the Hermes Agent any notice that the Federal Republic of Germany has determined that the Loan is excluded from cover under the Hermes Insurance Policy.

SECTION 5.1.8.  Pledge Agreement.  The Pledge Agreement shall be duly executed by the parties thereto and delivered to the Administrative Agent on or prior to the Closing Date.

SECTION 5.1.9.CIRR requirements.

The Borrower acknowledges that:

(i)   the government of the Federal Republic of Germany, the Federal Audit Court or any authorized representatives specified by these bodies shall be authorized at any time to inspect and make or demand copies of the records, accounts, documents and other deeds of the Lenders;

(ii)   in the course of its activity as the Administrative Agent, the Administrative Agent may:

(a) provide the government of the Federal Republic of Germany with information concerning the transactions to be handled by it; and

(b) disclose information concerning the subsidized transaction in the context of internationally agreed consultation/notification proceedings and statutory specifications,

including information received from the Lenders; and

30 

(iii)   the Administrative Agent and (to the extent the Lenders have entered into an Option A Refinancing Agreement with the Refinancing Bank) the Lenders are entitled to disclose to the Refinancing Bank:

(a) circumstances pertaining to the Loan, proper repayment and collateralization;

(b) extraordinary events which may jeopardize the proper servicing of the Loan;

(c) any information required by the Refinancing Bank with respect to the proper use of any refinancing funds granted to the respective Lender; and

(d) the Loan Documents;

provided that the Refinancing Bank agrees to keep such information confidential to the same extent required of Lenders pursuant to Section 11.15.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

To induce the Lenders and the Administrative Agent to enter into this Agreement and to make the Loan hereunder, the Borrower represents and warrants to the Administrative Agent and each Lender as set forth in this Article VI as of the Restatement Effective Date and as of the Closing Date (except as otherwise stated).

SECTION 6.1.Organization, etc.  The Borrower is a corporation validly organized and existing and in good standing under the laws of its jurisdiction of incorporation; the Borrower is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and the Borrower has full power and authority, has taken all corporate action and holds all governmental and creditors’ licenses, permits, consents and other approvals necessary to enter into each Loan Document and to perform the Obligations.

SECTION 6.2.Due Authorization, Non-Contravention, etc. The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not:

a.   contravene the Borrower’s Organic Documents;

b.   contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;

31 

c.   contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;

d.   contravene any contractual restriction binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect; or

e.   result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.3.Government Approval, Regulation, etc.  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document (except for authorizations or approvals not required to be obtained on or prior to the Closing Date or that have been obtained or actions not required to be taken on or prior to the Closing Date or that have been taken).  The Borrower holds all governmental licenses, permits and other approvals required to conduct its business as conducted by it on the Closing Date, except to the extent the failure to hold any such licenses, permits or other approvals would not have a Material Adverse Effect.

SECTION 6.4.Compliance with Environmental Laws.  The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.

SECTION 6.5.Validity, etc.  This Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles.

SECTION 6.6. No Default, Event of Default or Prepayment Event.  No Default, Event of Default or Prepayment Event has occurred and is continuing.

SECTION 6.7.Litigation.   There is no action, suit, litigation, investigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, that (i) except as set forth in filings made by the Borrower with the SEC in the Borrower’s reasonable opinion might reasonably be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries (taken as a whole) (collectively, “Material Litigation”) or (ii) purports to affect the legality, validity or enforceability of the Loan Documents or the consummation of the transactions contemplated hereby.

SECTION 6.8.The Purchased Vessel.  Immediately following the delivery of the Purchased Vessel to the Borrower or one of the Borrower's wholly owned Subsidiaries as assignee under the Construction Contract, the Purchased Vessel will be:

a.   legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,

32 

b.   registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,

c.   classed as required by Section 7.1.4(b),

d.   free of all recorded Liens, other than Liens permitted by Section 7.2.3,

e.   insured against loss or damage in compliance with Section 7.1.5, and

f.   exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries.

SECTION 6.9.Obligations rank pari passu.  The Obligations rank at least pari passu in right of payment and in all other respects with all other unsecured unsubordinated Indebtedness of the Borrower.

SECTION 6.10.Withholding, etc..  As of the Restatement Effective Date, no payment to be made by the Borrower under any Loan Document is subject to any withholding or like tax imposed by any Applicable Jurisdiction.

SECTION 6.11. No Filing, etc. Required.  No filing, recording or registration and no payment of any stamp, registration or similar tax is necessary under the laws of any Applicable Jurisdiction to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement or the other Loan Documents (except for filings, recordings, registrations or payments not required to be made on or prior to the Closing Date or that have been made).

SECTION 6.12.No Immunity.  The Borrower is subject to civil and commercial law with respect to the Obligations.  Neither the Borrower nor any of its properties or revenues is entitled to any right of immunity in any Applicable Jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).

SECTION 6.13.Investment Company Act.  The Borrower is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

SECTION 6.14.Regulation U.  The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U.  Terms for which meanings are provided in F.R.S. Board Regulation U or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.

33 

SECTION 6.15.Accuracy of Information.  The financial and other information (other than financial projections or other forward looking information) furnished to the Administrative Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with the negotiation of this Agreement is, when taken as a whole, to the best knowledge and belief of the Borrower, true and correct and contains no misstatement of a fact of a material nature.  All financial projections, if any, that have been furnished to the Administrative Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with this Agreement have been or will be prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the projections will be realized).  All financial and other information furnished to the Administrative Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller after the date of this Agreement shall have been prepared by the Borrower in good faith.

ARTICLE VII

COVENANTS

SECTION 7.1.Affirmative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, from the Restatement Effective Date until all Commitments have terminated and all Obligations have been paid in full, the Borrower will perform the obligations set forth in this Section 7.1.

SECTION 7.1.1.Financial Information, Reports, Notices, etc.  The Borrower will furnish, or will cause to be furnished, to the Administrative Agent (with sufficient copies for distribution to each Lender) the following financial statements, reports, notices and information:

a.   as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;

b.   as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;

34 

c.   together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in Section 7.2.4 (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Administrative Agent);

d.   as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;

e.   as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;

f.   promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and

g.   such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request;

provided that information required to be furnished to the Administrative Agent under subsections (a), (b) and (g) of this Section 7.1.1 shall be deemed furnished to the Administrative Agent when available free of charge on the Borrower’s website at http://www.rclinvestor.com or the SEC’s website at http://www.sec.gov.

SECTION 7.1.2.Approvals and Other Consents. The Borrower will obtain (or cause to be obtained) all such governmental licenses, authorizations, consents, permits and approvals as may be required for (a) the Borrower to perform its obligations under this Agreement and the other Loan Documents and (b) the operation of the Purchased Vessel in compliance with all applicable laws, except, in each case, to the extent that failure to obtain (or cause to be obtained) such governmental licenses, authorizations, consents, permits and approvals would not be expected to have a Material Adverse Effect.

SECTION 7.1.3.Compliance with Laws, etc.The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, except (other than as described in clause (a) below) to the extent that the failure to so comply would not have a Material Adverse Effect, which compliance shall in any case include (but not be limited to):

a.   in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of Section 7.2.6);

35 

b.   in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;

c.   the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings; and

d.   compliance with all applicable Environmental Laws.

SECTION 7.1.4.The Purchased Vessel.  The Borrower will:

a.   cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries, provided that the Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly owned Subsidiaries and (ii) on a time charter with a stated duration not in excess of one year;

b.   cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing;

c.   upon delivery of the Purchased Vessel, provide the following to the Administrative Agent with respect to the Purchased Vessel:

(i)evidence as to the ownership of the Purchased Vessel by the Borrower or one of the Borrower’s wholly owned Subsidiaries;

(ii)evidence of no recorded Liens on the Purchased Vessel, other than Liens permitted pursuant to Section 7.2.3; and

(iii)a copy of the final commercial invoice in respect of the Purchased Vessel as provided by the Builder, certified as a true and complete copy by an Authorized Officer of the Borrower; and

d.   within seven days after delivery of the Purchased Vessel, provide the following to the Administrative Agent with respect to the Purchased Vessel:

(i)evidence of the class of the Purchased Vessel; and

(ii)evidence as to all required insurance being in effect with respect to the Purchased Vessel.

SECTION 7.1.5.Insurance.  The Borrower, will or will cause one or more of its Subsidiaries to, maintain or cause to be maintained with responsible insurance companies insurance with respect to the Purchased Vessel against such casualties, third-party liabilities and contingencies and in such amounts, in each case, as is customary for other businesses of similar size in the passenger cruise line industry (provided that in no event will the Borrower or any Subsidiary be required to obtain any business interruption, loss of hire or delay in delivery insurance) and will, upon request of the Administrative Agent, furnish to the

36 

Administrative Agent (with sufficient copies for distribution to each Lender) at reasonable intervals a certificate of a senior officer of the Borrower setting forth the nature and extent of all insurance maintained or caused to be maintained by the Borrower and the Subsidiaries and certifying as to compliance with this Section.

SECTION 7.1.6.Books and Records.  The Borrower will keep books and records that accurately reflect all of its business affairs and transactions and permit the Administrative Agent and each Lender or any of their respective representatives, at reasonable times and intervals, to visit each of its offices, to discuss its financial matters with its officers and to examine any of its books or other corporate records.

SECTION 7.1.7.Hermes Insurance Policy/Federal Republic of Germany Requirement.  The Borrower shall, on the reasonable request of the Hermes Agent or the Administrative Agent, provide such other information as required under the Hermes Insurance Policy and/or the Terms and Conditions as necessary to enable the Hermes Agent or the Administrative Agent to obtain the full support of Hermes and/or the government of the Federal Republic of Germany (as the case may be) pursuant to the Hermes Insurance Policy and/or the Terms and Conditions (as the case may be).  The Borrower must pay to the Hermes Agent or the Administrative Agent the amount of all reasonable costs and expenses reasonably incurred by the Hermes Agent or the Administrative Agent in connection with complying with a request by Hermes or the government of the Federal Republic of Germany (as the case may be) for any additional information necessary or desirable in connection with the Hermes Insurance Policy or the Terms and Conditions (as the case may be); provided that the Borrower is consulted before the Hermes Agent or the CIRR Agent incurs any such cost or expense.

SECTION 7.2.Negative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, from the Restatement Effective Date until all Commitments have terminated and all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 7.2.

SECTION 7.2.1.Business Activities.  The Borrower will not, and will not permit any of its Subsidiaries to, engage in any principal business activity other than those engaged in by the Borrower and its Subsidiaries on the Restatement Effective Date and other business activities reasonably related thereto.

SECTION 7.2.2.Indebtedness.  The Borrower will not permit any of the Existing Principal Subsidiaries to create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:

a.   Indebtedness, secured by Liens of the type described in Section 7.2.3;

b.   Indebtedness owing to the Borrower or a wholly owned direct or indirect Subsidiary of the Borrower;

c.   Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Restatement Effective Date;

37 

d.   Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under Section 7.2.2(a) and permitted to be secured under Section 7.2.3(c), at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $450,000,000;

e.   Existing Debt; and

f.   obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.

SECTION 7.2.3.Liens.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:

a.   Liens on the vessel BRILLIANCE OF THE SEAS existing as of the Restatement Effective Date and securing the Existing Debt (and any Lien on BRILLIANCE OF THE SEAS securing any refinancing of the Existing Debt, so long as such vessel was subject to a Lien securing the Indebtedness being refinanced immediately prior to such refinancing);

b.   Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Restatement Effective Date) acquired after the Restatement Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each such Lien is created within three months after the acquisition of the relevant assets;

c.   in addition to other Liens permitted under this Section 7.2.3, Liens securing Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under Section 7.2.2(d), at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter or (y) $450,000,000, provided that, with respect to each such item of Indebtedness, the fair market value of the assets subject to Liens securing such

38 

Indebtedness (determined at the time of the creation of such Lien) shall not exceed two times the aggregate principal amount of such Indebtedness (and for purposes of this clause (c), the fair market value of any assets shall be determined by (i) in the case of any Vessel, by an Approved Appraiser selected by the Borrower and (ii) in the case of any other assets, by an officer of the Borrower or by the board of directors of the Borrower);

d.   Liens on assets acquired after the Restatement Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;

e.   Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Restatement Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;

f.   Liens securing Government-related Obligations;

g.   Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;

h.   Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings;

i.   Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;

j.   Liens for current crew’s wages and salvage;

k.   Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;

l.   Liens on Vessels that:

(i)secure obligations covered (or reasonably expected to be covered) by insurance;

39 

(ii)were incurred in the course of or incidental to trading such Vessel in connection with repairs or other work to such Vessel; or

(iii)were incurred in connection with work to such Vessel that is required to be performed pursuant to applicable law, rule, regulation or order;

provided that, in each case described in this clause (l), such Liens are either (x) discharged in the ordinary course of business or (y) being diligently contested in good faith by appropriate proceedings;

m.   normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;

n.   Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business; and

o.   Liens on cash or Cash Equivalents securing obligations in respect of Hedging Instruments permitted under Section 7.2.2(f) or securing letters of credit that support such obligations.

SECTION 7.2.4.Financial Condition.  The Borrower will not permit:

a.   Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.

b.   Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter.

c.   Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).

SECTION 7.2.5.Investments.  The Borrower will not permit any of the Principal Subsidiaries to make, incur, assume or suffer to exist any Investment in any other Person other than

a.   the Borrower or any direct or indirect wholly owned Subsidiary of the Borrower; and

b.   other Investments by the Principal Subsidiaries in an aggregate amount not to exceed $50,000,000 at any time outstanding.

40 

SECTION 7.2.6.Consolidation, Merger, etc.  The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, or purchase or otherwise acquire all or substantially all of the assets of any Person except:

a.   any such Subsidiary may (i) liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by Section 7.2.7; and

b.   so long as no Event of Default or Prepayment Event has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:

 (i)after giving effect thereto, the Stockholders’ Equity of the Borrower and its Subsidiaries is at least equal to 90% of such Stockholders’ Equity immediately prior thereto; and

 (ii)in the case of a merger involving the Borrower where the Borrower is not the surviving corporation, the surviving corporation shall have assumed in a writing, delivered to the Administrative Agent, all of the Borrower’s obligations hereunder and under the other Loan Documents.

SECTION 7.2.7.Asset Dispositions, etc.  The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, any material asset (including accounts receivable and capital stock of Principal Subsidiaries) to any Person, except:

a.   sales of assets (including, without limitation, Vessels) so long as at the time of any such sale:

 (i)the aggregate net book value of all such assets sold during each fiscal year does not exceed an amount equal to the greater of (x) 7.5% of Stockholders’ Equity as at the end of the last Fiscal Quarter, and (y) $400,000,000; and

 (ii)to the extent any asset has a fair market value in excess of $50,000,000 the Borrower or Subsidiary selling such asset receives consideration therefor at least equal to the fair market value thereof (as determined in good faith by (x) in the case of any Vessel, the board of directors of the Borrower and (y) in the case of any other asset, an officer of the Borrower or its board of directors);

b.   sales of capital stock of any Principal Subsidiary of the Borrower so long as a sale of all of the assets of such Subsidiary would be permitted under the foregoing clause (a);

41 

c.   sales of capital stock of any Subsidiary other than a Principal Subsidiary;

d.   the sale of the vessel “Celebrity Mercury”;

e.   sales of other assets in the ordinary course of business; and

f.   sales of assets between or among the Borrower and Subsidiaries of the Borrower.

SECTION 7.2.8.Transactions with Affiliates  The Borrower will not, and will not permit any of the Principal Subsidiaries to, enter into, or cause, suffer or permit to exist any arrangement or contract with any of its Affiliates (other than arrangements or contracts among the Borrower and its Subsidiaries and among the Borrower’s Subsidiaries) unless such arrangement or contract is on an arms’-length basis, provided that, to the extent that the aggregate fair value of the goods furnished or to be furnished or the services performed or to be performed under all such contracts or arrangements in any one Fiscal Year does not exceed $50,000,000, such contracts or arrangements shall not be subject to this Section 7.2.8.

ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.1.Listing of Events of Default.  Each of the following events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.

SECTION 8.1.1.Non-Payment of Obligations.  The Borrower shall default in the payment when due of any principal of or interest on the Loan or any Commitment Fee, or any fee due and payable under the Fee Letter, provided that, in the case of any default in the payment of any interest on the Loan or of any Commitment Fee, such default shall continue unremedied for a period of at least two (2) Business Days after notice thereof shall have been given to the Borrower by the Administrative Agent; and provided further that, in the case of any default in the payment of any fee due and payable under the Fee Letter, such default shall continue unremedied for a period of at least ten days after notice thereof shall have been given to the Borrower by the Administrative Agent.

SECTION 8.1.2.Breach of Warranty.  Any representation or warranty of the Borrower made or deemed to be made hereunder (including any certificates delivered pursuant to Article V) is or shall be incorrect in any material respect when made.

SECTION 8.1.3.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document (other than the covenants set forth in Section 7.2.4 and the obligations referred to in Section 8.1.1) and such default shall continue unremedied for a period of five days after notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender (or, if (a) such default is capable of being remedied within 30 days (commencing on the first day following such five-day period) and (b) the Borrower is actively seeking to remedy the same during such period, such default shall continue unremedied for at least 35 days after such notice to the Borrower).

42 

SECTION 8.1.4.Default on Other Indebtedness.  The Borrower or any of its Principal Subsidiaries shall fail to pay any Indebtedness that is outstanding in a principal amount of at least $50,000,000 (or the equivalent in other currencies) in the aggregate (but excluding Indebtedness hereunder) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument evidencing, securing or relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause or permit the holder or holders of such Indebtedness to cause such Indebtedness to become due and payable prior to its scheduled maturity (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness); or any such Indebtedness shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or by voluntary agreement), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case prior to the scheduled maturity thereof (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness).  For purposes of determining Indebtedness for any Hedging Instrument, the principal amount of the obligations under any such instrument at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Principal Subsidiary would be required to pay if such instrument were terminated at such time.

SECTION 8.1.5.Bankruptcy, Insolvency, etc.  The Borrower or any of the Principal Subsidiaries (or any of its other Subsidiaries to the extent that the relevant event described below would have a Material Adverse Effect) shall:

a.   generally fail to pay, or admit in writing its inability to pay, its debts as they become due;

b.   apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;

c.   in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 30 days, provided that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any relevant proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents;

d.   permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by

43 

the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 30 days undismissed, provided that the Borrower hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any such case or proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents; or

e.   take any corporate action authorizing, or in furtherance of, any of the foregoing.

SECTION 8.2.Action if Bankruptcy. If any Event of Default described in clauses (b) through (d) of Section 8.1.5 shall occur with respect to the Borrower, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.

SECTION 8.3.Action if Other Event of Default.  If any Event of Default (other than any Event of Default described in clauses (b) through (d) of Section 8.1.5 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall by notice to the Borrower declare the outstanding principal amount of the Loan and other Obligations to be immediately due and payable and/or the Commitment (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations shall be and become immediately due and payable, without further notice, demand or presentment.

ARTICLE IX

PREPAYMENT EVENTS

SECTION 9.1.Listing of Prepayment Events.  Each of the following events or occurrences described in this Section 9.1 shall constitute a “Prepayment Event”.

SECTION 9.1.1.Change in Ownership.  Any Person other than a member of the Existing Group (a “New Shareholder”) shall acquire (whether through legal or beneficial ownership of capital stock, by contract or otherwise), directly or indirectly, effective control over more than 33% of the Voting Stock and:

a.   the members of the Existing Group have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) in the aggregate, directly or indirectly, effective control over fewer shares of Voting Stock than does such New Shareholder; and

b.   the members of the Existing Group do not collectively have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) the right to elect, or to designate for election, at least a majority of the Board of Directors of the Borrower.

SECTION 9.1.2.Change in Board.  During any period of 24 consecutive months, a majority of the Board of Directors of the Borrower shall no longer be composed of individuals:

44 

a.   who were members of said Board on the first day of such period;

b.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board who were members of said Board on the first day of such period; or

c.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board referred to in the foregoing clauses (a) and (b).

SECTION 9.1.3.Unenforceability.  Any Loan Document shall cease to be the legally valid, binding and enforceable obligation of the Borrower (in each case, other than with respect to provisions of any Loan Document (i) identified as unenforceable in the form of the opinion of the Borrower’s counsel set forth as Exhibit D-1 or (ii) that a court of competent jurisdiction has determined are not material) and such event shall continue unremedied for 15 days after notice thereof has been given to the Borrower by the Administrative Agent.

SECTION 9.1.4.Approvals.  Any material license, consent, authorization, registration or approval at any time necessary to enable the Borrower or any Principal Subsidiary to conduct its business shall be revoked, withdrawn or otherwise cease to be in full force and effect, unless the same would not have a Material Adverse Effect.

SECTION 9.1.5.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any of the covenants set forth in Sections 4.12 or 7.2.4.

SECTION 9.1.6.Judgments.  Any judgment or order for the payment of money in excess of $50,000,000 shall be rendered against the Borrower or any of the Principal Subsidiaries by a court of competent jurisdiction and the Borrower or such Principal Subsidiary shall have failed to satisfy such judgment and either:

a.   enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5) Business Days after the commencement of such enforcement proceedings; or

b.   there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.

SECTION 9.1.7.Condemnation, etc..  The Purchased Vessel shall be condemned or otherwise taken under color of law or requisitioned and the same shall continue unremedied for at least 20 days, unless such condemnation or other taking would not have a Material Adverse Effect.

SECTION 9.1.8.Arrest.  The Purchased Vessel shall be arrested and the same shall continue unremedied for at least 20 days, unless such arrest would not have a Material Adverse Effect.

45 

SECTION 9.1.9.Sale/Disposal of the Purchased Vessel.  The Purchased Vessel is sold to a company which is not the Borrower or any other Subsidiary of the Borrower (other than for the purpose of a lease back to the Borrower or any other Subsidiary of the Borrower).

SECTION 9.1.10.Delayed Delivery of the Purchased Vessel.  If, within 15 days after the Closing Date, the Loan has not been utilized to pay for delivery of the Purchased Vessel, unless (i) the Loan has been returned to the Administrative Agent as prepayment in accordance with Section 3.2(a) or 3.7 or (ii) the proceeds of the Loan have been deposited to the Pledged Account in accordance with Section 4.12.

SECTION 9.1.11.Termination of the Construction Contract.  If the Construction Contract is terminated in accordance with its terms or by other lawful means prior to delivery of the Purchased Vessel and the parties thereto do not reach an agreement to reinstate the Construction Contract within 30 days after such termination.

Notwithstanding anything else contained in this Agreement, if, prior to delivery of the Purchased Vessel, the Borrower makes a Mandatory Prepayment pursuant to Section 9.2 as a result of Section 9.1.10 or a voluntary prepayment pursuant to Section 3.2(a) and the Purchased Vessel is delivered prior to the Commitment Termination Date, the Borrower shall be entitled to make an additional Loan Request prior to the Commitment Termination Date as if the funds had not been previously advanced. Payment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.

SECTION 9.2.Mandatory Prepayment.  If any Prepayment Event shall occur and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall, by notice to the Borrower, require the Borrower to prepay in full on the date of such notice all principal of and interest on the Loan and all other Obligations (and, in such event, the Borrower agrees to so pay the full unpaid amount of the Loan and all accrued and unpaid interest thereon and all other Obligations).

ARTICLE X

THE ADMINISTRATIVE AGENT AND THE HERMES AGENT

SECTION 10.1.Actions.  Each Lender hereby appoints KfW IPEX, as Administrative Agent and as Hermes Agent, as its agent under and for purposes of this Agreement and each other Loan Document (for purposes of this Article X, the Administrative Agent and the Hermes Agent are referred to collectively as the “Agents”).  Each Lender authorizes the Agents to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agents (with respect to which each Agent agrees that it will comply, except as otherwise provided in this Section 10.1 or as otherwise advised by counsel), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof, together with such powers as may be reasonably incidental

46 

thereto.  Neither Agent shall be obliged to act on the instructions of any Lender or the Required Lenders if to do so would, in the opinion of such Agent, be contrary to any provision of this Agreement or any other Loan Document or to any law, or would expose such Agent to any actual or potential liability to any third party.

SECTION 10.2.Indemnity.  Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent, pro rata according to such Lender’s Percentage, from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that be incurred by or asserted or awarded against, such Agent in any way relating to or arising out of this Agreement and any other Loan Document or any action taken or omitted by such Agent under this Agreement or any other Loan Document; provided that no Lender shall be liable for the payment of any portion of such claims, damages, losses, liabilities and expenses which have resulted from such Agent’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower.  In the case of any investigation, litigation or proceeding giving rise to any such indemnified costs, this Section applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party.  Neither Agent shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is expressly required to do so under this Agreement or is indemnified hereunder to its satisfaction.  If any indemnity in favor of an Agent shall be or become, in such Agent’s determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.

SECTION 10.3.Funding Reliance, etc.  Each Lender shall notify the Administrative Agent by 4:00 p.m., Frankfurt time, one day prior to the advance of the Loan if it is not able to fund the following day.  Unless the Administrative Agent shall have been notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., Frankfurt time, on the day prior to the advance of the Loan that such Lender will not make available the amount which would constitute its Percentage of the Loan on the date specified therefor, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent and, in reliance upon such assumption, may, but shall not be obliged to, make available to the Borrower a corresponding amount.  If and to the extent that such Lender shall not have made such amount available to the Administrative Agent, such Lender and the Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Administrative Agent made such amount available to the Borrower to the date such amount is repaid to the Administrative Agent, at the interest rate applicable at the time to the Loan without premium or penalty.

SECTION 10.4.Exculpation.  Neither of the Agents nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection

47 

herewith or therewith, except for its own willful misconduct or gross negligence.  Without limitation of the generality of the foregoing, each Agent (i) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it and in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, (iii) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or Prepayment Event or to inspect the property (including the books and records) of the Borrower, (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto, (v) shall incur no liability under or in respect of this Agreement by action upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties, and (vi) shall have no responsibility to the Borrower or any Lender on account of (A) the failure of a Lender or the Borrower to perform any of its obligations under this Agreement or any Loan Document; (B) the financial condition of the Borrower; (C) the completeness or accuracy of any statements, representations or warranties made in or pursuant to this Agreement or any Loan Document, or in or pursuant to any document delivered pursuant to or in connection with this Agreement or any Loan Document; or (D) the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of this Agreement or any Loan Document or of any document executed or delivered pursuant to or in connection with any Loan Document.

SECTION 10.5.Successor.  The Administrative Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders, provided that any such resignation shall not become effective until a successor Administrative Agent has been appointed as provided in this Section 10.5 and such successor Administrative Agent has accepted such appointment.  If the Administrative Agent at any time shall resign, the Required Lenders shall, subject to the immediately preceding proviso and subject to the consent of the Borrower (such consent not to be unreasonably withheld), appoint another Lender as a successor to the Administrative Agent which shall thereupon become such Administrative Agent’s successor hereunder (provided that the Required Lenders shall, subject to the consent of the Borrower unless an Event or Default or a Prepayment Event shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) offer to each of the other Lenders in turn, in the order of their respective Percentages of the Loan, the right to become successor Administrative Agent).  If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the Administrative Agent’s giving notice of resignation, then the Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be one of the Lenders or a commercial banking institution having a combined capital and surplus of at least $1,000,000,000 (or the equivalent in other currencies), subject, in each case, to the consent of the Borrower (such consent not to be unreasonably withheld).  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall be entitled to receive from the resigning Administrative Agent such documents of transfer and assignment as such successor Administrative Agent may

48 

reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the resigning Administrative Agent, and the resigning Administrative Agent shall be discharged from its duties and obligations under this Agreement.  After any resigning Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of:

(a)      this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement; and

(b)      Section 11.3 and Section 11.4 shall continue to inure to its benefit.

If a Lender acting as the Administrative Agent assigns its Loan to one of its Affiliates, such Administrative Agent may, subject to the consent of the Borrower (such consent not to be unreasonably withheld or delayed) assign its rights and obligations as Administrative Agent to such Affiliate.

SECTION 10.6.Loans by the Administrative Agent.  The Administrative Agent shall have the same rights and powers with respect to the Loan made by it or any of its Affiliates.  The Administrative Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if the Administrative Agent were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.  The Administrative Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Administrative Agent.

SECTION 10.7.Credit Decisions.  Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment.  Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.

SECTION 10.8.Copies, etc.  Each Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to such Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower).  Each Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by such Agent from the Borrower for distribution to the Lenders by such Agent in accordance with the terms of this Agreement.

SECTION 10.9.The Agents’ Rights.  Each Agent may (i) assume that all representations or warranties made or deemed repeated by the Borrower in or pursuant to this Agreement or any Loan Document are true and complete, unless, in its capacity as the

49 

Administrative Agent, it has acquired actual knowledge to the contrary, (ii) assume that no Default has occurred unless, in its capacity as an Agent, it has acquired actual knowledge to the contrary, (iii) rely on any document or notice believed by it to be genuine, (iv) rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it, (v) rely as to any factual matters which might reasonably be expected to be within the knowledge of the Borrower on a certificate signed by or on behalf of the Borrower and (vi) refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Required Lenders) and unless and until such Agent has received from the Lenders any payment which such Agent may require on account of, or any security which such Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.

SECTION 10.10.The Administrative Agent’s Duties.  The Administrative Agent shall (i) if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of this Agreement or any Loan Document by the Borrower as to the existence of an Event of Default and (ii) inform the Lenders promptly of any Event of Default of which the Administrative Agent has actual knowledge.

The Administrative Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by the Borrower or actual knowledge of the occurrence of any Default unless a Lender, or the Borrower shall have given written notice thereof to the Administrative Agent in its capacity as the Administrative Agent.  Any information acquired by the Administrative Agent other than specifically in its capacity as the Administrative Agent shall not be deemed to be information acquired by the Administrative Agent in its capacity as the Administrative Agent.

The Administrative Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with the Borrower or with the Borrower’s subsidiaries or associated companies or with a Lender as if it were not the Administrative Agent.

SECTION 10.11.Employment of Agents.  In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to this Agreement or the Loan Documents, each Agent shall be entitled to employ and pay agents to do anything which such Agent is empowered to do under or pursuant to this Agreement or the Loan Documents (including the receipt of money and documents and the payment of money); provided that, unless otherwise provided herein, including without limitation Section 11.3, the employment of such agents shall be for such Agent’s account, and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by such Agent in good faith to be competent to give such opinion, advice or information.

SECTION 10.12.Distribution of Payments.  The Administrative Agent shall pay promptly to the order of each Lender that Lender’s Percentage Share of every sum of money received by the Administrative Agent pursuant to this Agreement or the Loan Documents (with the exception of any amounts payable pursuant to the Fee Letter and any amounts which, by the

50 

terms of this Agreement or the Loan Documents, are paid to the Administrative Agent for the account of the Administrative Agent alone or specifically for the account of one or more Lenders) and until so paid such amount shall be held by the Administrative Agent on trust absolutely for that Lender.

SECTION 10.13.Reimbursement.  The Administrative Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum.  If, however, the Administrative Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Section 10.12 before it has itself received payment of that amount, and the Administrative Agent does not in fact receive payment within five (5) Business Days after the date on which that payment was required to be made by the terms of this Agreement or the Loan Documents, that Lender will, on demand by the Administrative Agent, refund to the Administrative Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Administrative Agent for any amount which the Administrative Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of this Agreement or the Loan Documents and ending on the date on which the Administrative Agent receives reimbursement.

SECTION 10.14.Instructions.  Where an Agent is authorized or directed to act or refrain from acting in accordance with the instructions of the Lenders or of the Required Lenders each of the Lenders shall provide such Agent with instructions within three (3) Business Days of such Agent’s request (which request may be made orally or in writing).  If a Lender does not provide such Agent with instructions within that period, that Lender shall be bound by the decision of such Agent.  Nothing in this Section 10.14 shall limit the right of such Agent to take, or refrain from taking, any action without obtaining the instructions of the Lenders or the Required Lenders if such Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with this Agreement or the Loan Documents.  In that event, such Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Administrative Agent pursuant to this Section 10.14.

SECTION 10.15.Payments.  All amounts payable to a Lender under this Section 10.15 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Administrative Agent.

SECTION 10.16.“Know your customer” Checks.  Each Lender shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself) in order for the Administrative Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in this Agreement or the Loan Documents.

SECTION 10.17.No Fiduciary Relationship.  Except as provided in Section 10.12, no Agent shall have any fiduciary relationship with or be deemed to be a trustee of or for any other person and nothing contained in this Agreement or any Loan Document shall

51 

constitute a partnership between any two or more Lenders or between either Agent and any other person.

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.1.  Waivers, Amendments, etc.  The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided that no such amendment, modification or waiver which would:

a.   modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;

b.   modify this Section 11.1 or change the definition of “Required Lenders” shall be made without the consent of each Lender;

c.   increase the Commitment of any Lender shall be made without the consent of such Lender;

d.   reduce any fees described in Article III payable to any Lender shall be made without the consent of such Lender;

e.   extend the Commitment Termination Date of any Lender shall be made without the consent of such Lender;

f.   extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or

g.   affect adversely the interests, rights or obligations of the Administrative Agent in its capacity as such shall be made without consent of the Administrative Agent.

No failure or delay on the part of the Administrative Agent or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by the Administrative Agent, the Hermes Agent or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.  The Lenders hereby agree, at any time and from time to time that the Nordea Agreement or the Citibank Agreement is amended or refinanced, to negotiate in good faith to amend this Agreement to conform any representations, warranties, covenants or events of default

52 

in this Agreement to the amendments made to any substantively comparable provisions in the Nordea Agreement or the Citibank Agreement or any refinancing thereof.

SECTION 11.2.Notices.

(a)           All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted to such party at its address, facsimile number or electronic mail address set forth below its signature to this Agreement or set forth in the Lender Assignment Agreement or at such other address, or facsimile number as may be designated by such party in a notice to the other parties.  Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted provided it is received in legible form; any notice, if transmitted by electronic mail, shall be deemed given upon acknowledgment of receipt by the recipient.

(b)            So long as KfW IPEX is the Administrative Agent, the Borrower may provide to the Administrative Agent all information, documents and other materials that it furnishes to the Administrative Agent hereunder or any other Loan Document (and any guaranties, security agreements and other agreements relating thereto), including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing advance or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder or any other Loan Document prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of the Agreement and/or any advance or other extension of credit hereunder (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Administrative Agent at claudia.wenzel@kfw.de (or such other email address notified by the Administrative Agent to the Borrower); provided that any Communication requested pursuant to Section 7.1.1(h) shall be in a format acceptable to the Borrower and the Administrative Agent.

(1)           The Borrower agrees that the Administrative Agent may make such items included in the Communications as the Borrower may specifically agree available to the Lender by posting such notices, at the option of the Borrower, on Intralinks (the “Platform”).  Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Administrative Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or

53 

the Platform.  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Administrative Agent or any of its Affiliates in connection with the Platform.

(2)            The Administrative Agent agrees that the receipt of Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of such Communications to the Administrative Agent for purposes hereunder and any other Loan Document (and any guaranties, security agreements and other agreements relating thereto).

SECTION 11.3.Payment of Costs and Expenses.  The Borrower agrees to pay on demand all reasonable expenses of the Administrative Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Administrative Agent and of local counsel, if any, who may be retained by counsel to the Administrative Agent) in connection with any amendments, waivers, consents, supplements or other modifications to, this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated.  In addition, the Borrower agrees to pay reasonable fees and out of pocket expenses of counsel to the Administrative Agent in connection with the funding under this Agreement.  The Borrower further agrees to pay, and to save the Administrative Agent and the Lenders harmless from all liability for, any stamp, recording, documentary or other similar taxes arising from the execution, delivery or enforcement of this Agreement or the borrowing hereunder or any other Loan Documents.  The Borrower also agrees to reimburse the Administrative Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Administrative Agent or such Lender in connection with (x) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.

SECTION 11.4.Indemnification.  In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Borrower hereby indemnifies and holds harmless the Administrative Agent, each Lender and each of their respective Affiliates and their respective officers, advisors, directors and employees (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby or any actual or proposed use of the proceeds of the Loans (collectively, the “Indemnified Liabilities”), except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto.  Each Indemnified Party shall (a) furnish the Borrower with prompt

54 

notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided that the Borrower shall reimburse such indemnified party for its reasonable out-of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower  shall consult in good faith with  the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed).  Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower  shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense.  The Borrower acknowledges that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except to the extent such liability is determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings).  If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

55 

SECTION 11.5.Survival. The obligations of the Borrower under Sections 4.3,4.4, 4.5, 4.6, 4.7, 11.3 and 11.4 and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement and the payment in full of all Obligations.  The representations and warranties made by the Borrower in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document.

SECTION 11.6.Severability.  Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 11.7.Headings.  The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.

SECTION 11.8.Execution in Counterparts,   This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

SECTION 11.9.Third Party Rights.   Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it.

SECTION 11.10.Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that:

a.   except to the extent permitted under Section 7.2.5, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender; and

b.   the rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.

SECTION 11.11.Sale and Transfer of the Loan; Participations in the Loan.  Each Lender may assign, or sell participations in, its Loan to one or more other Persons in accordance with this Section 11.11.

 SECTION 11.11.1.Assignments  (i) KfW IPEX, as Lender, (A) with the written consent of the Borrower (which consent shall not be unreasonably delayed or withheld but which consent shall be deemed to have been given in the absence of a written notice delivered by the Borrower to KfW IPEX, on or before the fifth Business Day after receipt by the Borrower of KfW IPEX’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions, when taken together with

56 

participations sold by KfW IPEX pursuant to Section 11.11.2, up to 50.0% of the aggregate principal amount of the Loan or the total aggregate Commitments and (B) after having assigned or transferred, when taken together with participations sold by KfW IPEX pursuant to Section 11.11.2, 50.0% of the aggregate principal amount of the Loan or the total aggregate Commitments (pursuant to the foregoing clause (A) and/or Section 11.11.2, with the written consent of the Borrower (which consent may be withheld at the discretion of the Borrower) may at any time (and from time to time) assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions all or any fraction of KfW IPEX’s remaining Loan or Commitment.

(ii) Any Lender (other than KfW IPEX) with the written consents of the Borrower and the Administrative Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Borrower, shall be deemed to have been given in the absence of a written notice delivered by the Borrower to the Administrative Agent, on or before the fifth Business Day after receipt by the Borrower of such Lender’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions all or any fraction of such Lender’s Loan; provided that any Affiliate of KfW IPEX shall be subject to the provisions of Section 11.11.1(i) and 11.11.2(f) as if such Affiliate were KfW IPEX.

(iii) Any Lender, with notice to the Borrower and the Administrative Agent, and, notwithstanding the foregoing clauses (i) and (ii), without the consent of the Borrower, or the Administrative Agent, may assign or transfer (A) to any of its Affiliates (including, in the case of KfW IPEX, KfW) or (B) following the occurrence and during the continuance of an Event of Default or a Prepayment Event, to any other Person, in either case, all or any fraction of such Lender’s Loan.

(iv) Any Lender may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Administrative Agent) assign and pledge all or any portion of its Loan to (i) any Federal Reserve Bank as collateral security pursuant to Regulation A of the F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank all or any fraction of such Lender’s Loan or (ii) to the Refinancing Bank as collateral security pursuant to the terms of any Option A Refinancing Agreement entered into by such Lender.

(v) No Lender may (notwithstanding the foregoing clauses) assign or transfer any of its rights under this Agreement unless it has given prior written notification of the transfer to Hermes and has obtained a prior written consent from Hermes.

(vi) Nothing in this Section 11.11.1 shall prejudice the right of the Lender to assign its rights under this Agreement to Hermes, if such assignment is required to be made by that Lender to Hermes in accordance with the Hermes Insurance Policy.

Each Person described in the foregoing clauses as being the Person to whom such assignment or transfer is to be made, is hereinafter referred to as an “Assignee Lender”.  Assignments in a minimum aggregate amount of $25,000,000 (or, if less, all of such Lender’s Loan and Commitment) (which assignment or transfer shall be of a constant, and not a varying, percentage

57 

of such Lender’s Loan) are permitted; provided that the Borrower and the Administrative Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned or transferred to an Assignee Lender until:

a.   written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Administrative Agent by such Lender and such Assignee Lender;

b.   such Assignee Lender shall have executed and delivered to the Borrower and the Administrative Agent a Lender Assignment Agreement, accepted by the Administrative Agent; and

c.   the processing fees described below shall have been paid.

From and after the date that the Administrative Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned or transferred to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned or transferred by it, shall be released from its obligations hereunder and under the other Loan Documents, other than any obligations arising prior to the effective date of such assignment.  Except to the extent resulting from a subsequent change in law, in no event shall the Borrower be required to pay to any Assignee Lender any amount under Sections 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no such assignment been made.  Such assignor Lender or such Assignee Lender must also pay a processing fee to the Administrative Agent upon delivery of any Lender Assignment Agreement in the amount of $2,000 (and shall also reimburse the Administrative Agent for any reasonable out-of-pocket costs, including reasonable attorneys’ fees and expenses, incurred in connection with the assignment).

SECTION 11.11.2.Participations.  Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a “Participant”) participating interests in its Loan; provided that:

a.   no participation contemplated in this Section 11.11.2 shall relieve such Lender from its obligations hereunder;

b.   such Lender shall remain solely responsible for the performance of its obligations hereunder;

c.   the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;

58 

d.   no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in clauses (b) through (f) of Section 11.1;

e.   the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no participating interest been sold; and

f.   each Lender that sells a participation under this Section 11.11.2 shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest on) each of the Participant’s interest in the Lender’s Advances, Commitments or other interests hereunder (the “Participant Register”).  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.

g.   KfW IPEX may not sell participating interests pursuant to this Section 11.11.2 aggregating, when taken together with Loans and/or Commitments sold by KfW IPEX pursuant to Section 11.11.1, more than 50.0% of its initial Loan and/or Commitment without the written consent of the Borrower (which consent shall not be required following the occurrence and during the continuance of an Event of Default or a Prepayment Event).

The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and clause (e) of 7.1.1, shall be considered a Lender.

SECTION 11.11.3.  Register.  The Administrative Agent, acting as agent for the Borrower, shall maintain at its address referred to in Section 11.2 a copy of each Lender Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment(s) of, and principal amount of the Loan owing to, each Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

SECTION 11.12.Other Transactions.  Nothing contained herein shall preclude the Administrative Agent or any Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.

SECTION 11.13.Hermes Insurance Policy.

59 

SECTION 11.13.1.Terms of Hermes Insurance Policy

(a)   95% cover of the Loan.

(b)   The Hermes Fee will not exceed 2.3% of the Loan as advanced on the Closing Date.

(c)   The parties have entered into this Agreement on the basis that the Hermes Insurance Policy shall contain the following terms and should such terms not be included within the Hermes Insurance Policy, then the Borrower may cancel the Commitment(s):

(i)   EUR2,792,200 of Hermes Fee (“First Fee”) will be payable to the Hermes Agent or Hermes on demand following the issue of the Hermes Insurance Policy;

(ii)   2.3% of the Loan as advanced on the Closing Date less the First Fee (“Second Fee”) will be payable to the Hermes Agent or Hermes on the Closing Date;

(iii)   if the Commitments are cancelled in full by the Borrower or the Lenders on or prior to the Closing Date, Hermes shall be required to reimburse the Hermes Agent the amount of the First Fee less an administration fee (such administration fee to be no greater than 5% of the amount refunded but in any event not exceeding EUR 2,500); and

(iv)   if, after the Closing Date, the Borrower prepays all or part of the Loan in accordance with this Agreement, Hermes shall be required to reimburse the Hermes Agent an amount equal to all or a corresponding proportion of the unexpired portion of the Hermes Fee, having regard to the amount of the prepayment and the remaining term of the Loan less an administration fee (such fee to be no greater than 5% of the amount refunded but in any event not exceeding EUR 2,500).

SECTION 11.13.2.Obligations of the Borrower.

(a)   Provided that the Hermes Insurance Policy complies with Section 11.13.1, the Borrower shall pay (a) the First Fee to the Hermes Agent or Hermes on demand following the issue of the Hermes Insurance Policy and (b) the Second Fee to the Hermes Agent or Hermes on the Closing Date. In each case, if received by the Hermes Agent, the Hermes Agent shall pay such amount to Hermes.

(b)   Provided that the Hermes Insurance Policy complies with Section 11.13.1, the Borrower shall pay to the Hermes Agent or Hermes an issue fee of EUR 12,500 for the issue of the Hermes Insurance Policy on demand following issue of thethe Hermes Insurance Policy.

SECTION 11.13.3.Obligations of the Hermes Agent and the Lenders.

60 

(a)   Promptly upon receipt of the Hermes Insurance Policy from Hermes, the Hermes Agent shall (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) send a copy thereof to the Borrower.

(b)   The Hermes Agent shall perform such acts or provide such information, which are, acting reasonably, within its power so to perform or so to provide, as required by Hermes under the Hermes Insurance Policy as necessary to ensure that the Lenders obtain the support of Hermes pursuant to the Hermes Insurance Policy.

(c)   The Hermes Agent shall:

(i)   make written requests to Hermes seeking a reimbursement of the Hermes Fee in the circumstances described in  Section 11.13.1(c)(iii) or (iv) promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) provide a copy of the request to the Borrower;

(ii)   use its reasonable endeavours to maximize the amount of any reimbursement of the Hermes Fee to which the Hermes Agent is entitled;

(iii)   pay to the Borrower the full amount of any reimbursement of the Hermes Fee that the Hermes Agent receives from Hermes within two (2) Business Days of receipt with same day value; and

(iv)     relay the good faith concerns of the Borrower to Hermes regarding the amount it is required to pay to Hermes or the amount of any reimbursement to which the Hermes Agent is entitled, it being agreed that the Hermes Agent’s obligation shall be no greater than simply to pass on to Hermes the Borrower’s concerns.

(d)   Each Lender will co-operate with the Hermes Agent, the Administrative Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the Hermes Insurance Policy and each Interest Make-Up Agreement (as defined in and entered into in accordance with the Terms and Conditions) continue in full force and effect and shall indemnify and hold harmless each other Lender in the event that the Hermes Insurance Policy or such Interest Make-Up Agreement (as the case may be) does not continue in full force and effect due to its gross negligence or willful default.

SECTION 11.14.Law and Jurisdiction

61 

SECTION 11.14.1.Governing Law.  This Agreement and any non-contractual obligations arising out of or in respect of this Agreement shall in all respects be governed by and interpreted in accordance with English Law.

SECTION 11.14.2.Jurisdiction.  For the exclusive benefit of the Administrative Agent and the Lenders, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts.  The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Section, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum.

SECTION 11.14.3.Alternative Jurisdiction.  Nothing contained in this Section shall limit the right of the Administrative Agent or the Lenders to commence any proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.

SECTION 11.14.4.Service of Process.  Without prejudice to the right of the Administrative Agent or the Lenders to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to RCL Cruises Ltd., presently at Building 2, Aviator Park, Station Road, Addlestone, Surrey KT15 2PG, Attention: General Counsel, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, at 9:00 am on the third Business Day after posting by prepaid first class registered post.

SECTION 11.15.Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain and to cause its Affiliates to maintain the confidentiality of all non public information provided to it by the Borrower or any Subsidiary of the Borrower, or by the Administrative Agent on the Borrower’s or such Subsidiary’s behalf, under this Agreement, and neither it nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement or in connection with other business now or hereafter existing or contemplated with the Borrower or any Subsidiary, except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by it or its Affiliates or their respective directors, officers, employees and agents, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or any of its Subsidiaries so long as such source is not, to its knowledge, prohibited from disclosing such information by a legal, contractual or fiduciary obligation to the Borrower or any of its Affiliates; provided, however, that it may disclose such information (A) at the request or pursuant to any requirement of any self-regulatory body, governmental body, agency or official to which the Administrative Agent, any Lender or any of their respective Affiliates is subject or in connection with an examination of the Administrative Agent, such Lender or any of their respective Affiliates by any such authority or body, including without limitation the Federal Republic of Germany; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable requirement of law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Administrative

62 

Agent, any Lender or their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder; (F) to the Administrative Agent or such Lender’s independent auditors, counsel, and any other professional advisors of the Administrative Agent or such Lender who are advised of the confidentiality of such information; (G) to any participant or assignee, provided that such Person agrees to keep such information confidential to the same extent required of the Administrative Agent and the Lenders hereunder; (H) as to the Administrative Agent, any Lender or their respective Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Borrower or any Subsidiary is party with the Administrative Agent, such Lender or such Affiliate; (I) to its Affiliates and its Affiliates’ directors, officers, employees, professional advisors and agents, provided that each such Affiliate, director, officer, employee, professional advisor or agent shall keep such information confidential to the same extent required of the Administrative Agent and the Lenders hereunder; and (J) to any other party to the Agreement.  Each of the Administrative Agent and the Lenders shall be responsible for any breach of this Section 11.15 by any of its Affiliates or any of its or its Affiliates’ directors, officers, employees, professional advisors and agents.

63 

EXHIBIT A

Preliminary Repayment Schedule
US Dollars ($)
No.	Repayment Dates		Repayment	Loan Balance
1	6	months after Delivery
2	12	months after Delivery
3	18	months after Delivery
4	24	months after Delivery
5	30	months after Delivery
6	36	months after Delivery
7	42	months after Delivery
8	48	months after Delivery
9	54	months after Delivery
10	60	months after Delivery
11	66	months after Delivery
12	72	months after Delivery
13	78	months after Delivery
14	84	months after Delivery
15	90	months after Delivery
16	96	months after Delivery
17	102	months after Delivery
18	108	months after Delivery
19	114	months after Delivery
20	120	months after Delivery
21	126	months after Delivery
22	132	months after Delivery
23	138	months after Delivery
24	144	months after Delivery

A-1

EXHIBIT B

FORM OF LOAN REQUEST

KfW IPEX-Bank GmbH,

as Administrative Agent

Palmengartenstrasse 5-9

D-60325 Frankfurt am Main

Federal Republic of Germany

Attention:	[Name]
	[Title]

HULL NO. S-691 – NOTICE OF DRAWDOWN

Gentlemen and Ladies:

This Loan Request is delivered to you pursuant to Section 2.3 of the Hull No. S-691 Credit Agreement, dated as of December  19, 2008, as amended  and restated as of February __, 2012 (together with all amendments, if any, from time to time made thereto, the “Agreement”), among Royal Caribbean Cruises Ltd. (the “Borrower”), KfW IPEX-Bank GmbH as administrative agent (in such capacity, the “Administrative Agent”), and as Hermes agent, and KfW IPEX-Bank GmbH, and the various other financial institutions from time to time party thereto as Lenders. Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement.

The Borrower hereby requests that the Loan be made in the aggregate principal amount of [US$ ] on ___________, 201__, which amount does not exceed the US Dollar Equivalent of 80% of the Contract Price of the Vessel (as adjusted from time to time in accordance with the Construction Contract). The US dollar amount is based on the weighted average rate of exchange that the Guarantor has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amount of EUR with Dollars for the payment of the final installment of the Contract Price. True and complete copies of the counterparty confirmations evidencing the rates of exchange that the Guarantor has agreed to pay its counterparties for the purchase of the relevant amount of EUR with Dollars are attached.

Please wire transfer the proceeds of the Loan as follows:

[details to be provided]

The Borrower hereby acknowledges that, pursuant to Section 5.1.5 of the Agreement, each of the delivery of this Loan Request and the acceptance by the Borrower of the proceeds of the Loan requested hereby constitute a representation and warranty by the Borrower that, on the date of such Loan (before and after giving effect thereto and to the application of the proceeds therefrom), all statements set forth in Article VI of the Agreement are true and correct in all material respects.

B-1 

The Borrower agrees that if prior to the time of the borrowing requested hereby any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the borrowing requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct at the date of such borrowing as if then made.

The Borrower has caused this Loan Request to be executed and delivered, and the certification and warranties contained herein to be made, by its duly Authorized Officer this ___ day of ___________, 201__.

	Royal Caribbean Cruises Ltd.
By:	___________________________
	Name:
	Title:

B-2 

EXHIBIT D-1

Opinion of Liberian Counsel to the Borrower

D-1-1 

	Watson, Farley & Williams (New York) LLP
	100 Park Avenue New York, New York 10017
	Tel (212) 922 2200 Fax (212) 922 1512
[.], 20[.]
To the Lenders party to the Credit Agreement referred to below and to KfW IPEX-Bank GmbH as Administrative Agent

Royal Caribbean Cruises Ltd.

Celebrity Solstice V Inc.

Dear Sirs:

We have acted as legal counsel on matters of Liberian law to Celebrity Solstice V Inc., a Liberian corporation (the “Borrower”), in connection with (a) a Hull No S-691 Credit Agreement dated as of [.], 2008 (the “Credit Agreement”) and made between (1) the Borrower, (2) the Lenders (as defined therein) as several lenders, (3) KfW IPEX-Bank GmbH as Hermes Agent, and (4) KfW IPEX-Bank GmbH as Administrative Agent in respect of a loan facility in an amount not to exceed the US Dollar Equivalent of €485,600,000, and (b) the Guarantee dated [.], 20[.] made by Royal Caribbean Cruises Ltd., a Liberian corporation (the “Guarantor”) in favor of the Lenders, the Hermes Agent and the Administrative Agent respecting the obligations of the Borrower under the Credit Agreement (collectively, together with the Credit Agreement, the “Documents”). Terms defined in the Credit Agreement shall have the same meaning when used herein.

With reference to the Documents you have asked for our opinion on the matters set forth below. In rendering this opinion we have examined executed copies of the Documents. We have also examined originals or photostatic copies or certified copies of all such agreements and other instruments, certificates by public officials and certificates of officers of the Borrower and the Guarantor as are relevant and necessary and relevant corporate authorities of the Borrower and the Guarantor. We have assumed with your approval, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies, the power, authority and legal right of the parties to the Documents other than the Borrower and the Guarantor to enter into and perform their respective obligations under each of the Documents, and the due authorization of the execution of the Documents by all parties thereto other than the Borrower and the Guarantor. We have further assumed the validity and enforceability of the Documents under all applicable laws other than the law of the Republic of Liberia.

As to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon certificates of public officials and of officers or representatives of the Borrower and the Guarantor.

To the Lenders party to the Credit Agreement	Page 2
and KfW IPEX-Bank GmbH as Administrative Agent
[●], 20[●]

We are attorneys admitted to practice in the State of New York and do not purport to be experts in the laws of any other jurisdiction. Insofar as our opinion relates to the law of the Republic of Liberia, we have relied on opinions of counsel in Liberia rendered in transactions which we consider to afford a satisfactory basis for such opinion, and upon our independent examinations of the Liberian Corporation Act of 1948 (Chapter 1 of Title 4 of the Liberian Code of Laws of 1956, effective March 1, 1958 as amended to July, 1973), the Liberian Business Corporation Act of 1976 (Title 5 of the Liberian Code of Laws Revised of 1976, effective January 3, 1977 as amended) (the “Business Corporation Act”), the Liberian Maritime Law (Title 21 of the Liberian Code of Laws of 1956 as amended), and the Revenue Code of Liberia (2000), the regulations thereunder and an opinion dated December 23, 2004 addressed by the Minister of Justice and Attorney General of the Republic of Liberia to the LISCR Trust Company, made available to us by Liberian Corporation Services, Inc. and the Liberian International Ship & Corporate Registry, LLC, and our knowledge and interpretation of analogous laws in the United States. In rendering our opinion as to the valid existence in good standing of the Borrower and the Guarantor, we have relied on Certificates of Goodstanding issued by order of the Minister of Foreign Affairs of the Republic of Liberia on [.], 20[.].

This opinion is limited to the law of the Republic of Liberia. We express no opinion as to the laws of any other jurisdiction.

Based upon and subject to the foregoing and having regard to the legal considerations which we deem relevant, we are of the opinion that:

1. Each of the Borrower and the Guarantor is a corporation duly incorporated, validly existing under the Business Corporation Act and in good standing under the law of the Republic of Liberia;

2. Each of the Borrower and the Guarantor has full right, power and authority to enter into, execute and deliver the Document to which it is a party and to perform each and all of its obligations under the Document to which it is a party;

3. Each of the Documents has been executed and delivered by a duly authorized signatory of the Borrower or the Guarantor party thereto;

4. Each of the Documents constitutes the legal, valid and binding obligations of the Borrower or the Guarantor party thereto, enforceable against the Borrower or the Guarantor, as the case may be, in accordance with its terms;

5. Neither the execution nor delivery of either of the Documents, nor the transactions contemplated therein, nor compliance with the terms and conditions thereof, will contravene any provisions of Liberian law or violate any provisions of the Articles of Incorporation (inclusive of any articles of amendment thereto) or the Bylaws of the Borrower or of the Guarantor;

6. No consent or approval of, or exemption by, any Liberian governmental or public bodies and authorities are required in connection with the execution and delivery by the Borrower or the Guarantor of the Documents;

To the Lenders party to the Credit Agreement	Page 3
and KfW IPEX-Bank GmbH as Administrative Agent
[●], 20[●]

7. It is not necessary to file, record or register either of the Documents or any instrument relating thereto or effect any other official action in any public office or elsewhere in the Republic of Liberia to render any such document enforceable against the Borrower or the Guarantor;

8. Assuming neither of the Documents having been executed in the Republic of Liberia, no stamp or registration or similar taxes or charges are payable in the Republic of Liberia in respect of either of the Documents or the enforcement thereof in the courts of Liberia other than (i) customary court fees payable in litigation in the courts of Liberia and (ii) nominal documentary stamp taxes if the Documents are ever submitted to a Liberian court;

9. Assuming that no more than 25% of the total combined voting power and no more than 25% of the total value of the outstanding equity stock of either of the Borrower or the Guarantor is beneficially owned, directly or indirectly, by persons resident in the Republic of Liberia and that neither of the Borrower or the Guarantor, either directly or through agents acting on its behalf, engages in the Republic of Liberia in the pursuit of gain or profit with a degree of continuity or regularity, neither of the Borrower or the Guarantor is required or entitled under any existing applicable law or regulation of the Republic of Liberia to make any withholding or deduction in respect of any tax or otherwise from any payment which it is or may be required to make under any of the Documents; and

10. Assuming that the shares of the Borrower and the Guarantor are not owned, directly or indirectly, by the Republic of Liberia or any other sovereign under Liberian law, neither the Borrower nor the Guarantor nor the property or assets of either of them is immune from the institution of legal proceedings or the obtaining or execution of a judgment in the Republic of Liberia.

We qualify our opinion to the extent that (i) the enforceability of the rights and remedies provided for in the Documents (a) may be limited by bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting generally the enforcement of creditors’ rights and (b) is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including application by a court of competent jurisdiction of principles of good faith, fair dealing, commercial reasonableness, materiality, unconscionability and conflict with public policy or similar principles, and (ii) while there is nothing in the law of the Republic of Liberia that prohibits a Liberian corporation from submitting to the jurisdiction of a forum other than the Republic of Liberia, the enforceability of such submission to jurisdiction provisions is not dependent upon Liberian law and such provisions may not be enforceable under the law of a particular jurisdiction.

A copy of this opinion letter may be delivered by any of you to any Person that becomes a Lender in accordance with the provisions of the Credit Agreement. Any such Lender may rely on the opinion expressed above as if this opinion letter were addressed and delivered to such Lender on the date hereof.

This opinion letter speaks only as of the date hereof. We expressly disclaim any responsibility to advise you or any other Lender who is permitted to rely on the opinion expressed herein as specified in the next preceding paragraph of any development or circumstance of any kind including any

To the Lenders party to the Credit Agreement	Page 4
and KfW IPEX-Bank GmbH as Administrative Agent
[●], 20[●]

change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter. Accordingly, any Lender relying on this opinion letter at any time should seek advice of its counsel as to the proper application of this opinion letter at such time.

Very truly yours,

Watson, Farley & Williams (New York) LLP

EXHIBIT D-2

Opinion of Counsel to the Administrative Agent

D-2-1 

KfW IPEX-Bank GmbH Palmengartenstrasse 5-9 60325 Frankfurt am Main Germany	Email	julie.clegg@shlegal.com
	Direct fax	+44 (0)20 7003 8460
	Reference	1253/01-46-03433
		[                           ] 20[   ]

Dear Sirs

Celebrity Solstice V Inc. (the "Borrower")

Royal Caribbean Cruises Ltd. (the "Guarantor")

We have acted as English legal advisers to KfW IPEX-Bank GmbH in connection with a credit agreement dated [                                ] 2008 in respect of the vessel with Hull No. S-691 (the "Credit Agreement") made by and between the Borrower as borrower, KfW IPEX-Bank GmbH as Hermes agent and administrative agent (the "Administrative Agent") and KfW IPEX-Bank GmbH and the other persons from time to time party thereto as lenders (the "Lenders").  We have been asked to give this opinion pursuant to article V, section 5.1.2 b. of the Credit Agreement.  Terms defined in the Credit Agreement have the same meaning in this opinion.

1   Documents

1.1 We have examined [copies of] the following documents [received from the Borrower] for the purposes of this opinion:

(a)           the Credit Agreement dated [                                ] 2008; and

(b) the letter of guarantee dated [                                ] 20[   ] from the Guarantor in favour of the Administrative Agent and the Lenders.

1.2 "Document" means each document referred to in paragraph 1.1 above.  "Company" means each of the Borrower and the Guarantor.

1.3 We have not examined any document except as described in this opinion or made any enquiries or searches.

2   Scope of Opinion

2.1 This opinion is given solely with respect to the laws of England and Wales as at the date of this letter and as currently applied by the English courts.  We express no opinion as to the law of any other jurisdiction or as to any matters of fact.

2.2 Statements relating to taxation are based on generally published practice of HM Revenue & Customs applying at the date of this opinion.

2.3            This opinion shall be governed by and interpreted in accordance with English law.

Page no 2

3   Opinion

Subject to the assumptions and qualifications set out below, we are of the opinion that:

(a) Obligations binding:  the obligations of each Company under each Document to which it is a party are legally valid and binding obligations enforceable by KfW IPEX-Bank GmbH in the English Courts;

(b) No consents:  no consent authorisation licence or approval of any governmental or public body in England and Wales is required for the validity, enforceability or admission into evidence of any Document;

(c) Form:  each Document is in proper form for enforcement in the English courts;

(d) Filings:  it is not necessary for the validity, enforceability or admissibility in evidence in England of any Document that it be registered or filed with any court, authority or public office;

(e) Stamp Duty:  no United Kingdom ad valorem stamp duty or stamp duty reserve tax is payable by either Company on the execution of the Document to which it is a party; and

(f) Choice of law:  the choice of English lawto govern the Documents will be upheld as a valid choice of law in the English courts.

4   Assumptions

4.1            We have assumed that:

 (a)           Status and capacity:  each party to each Document:

(i) is duly incorporated and validly existing under the laws of its country of incorporation;

(ii) has the necessary corporate power to enter into and perform its obligations under each Document to which it is a party;

(iii) has obtained all necessary consents and authorisations and is qualified and empowered to enter into and perform its obligations under each Document to which it is a party; and

(iv) has taken all action required by its constitutional documents to authorise the execution of and the performance of its obligations under each Document to which it is a party;

(b) Execution:  each Document has been duly executed and delivered on behalf of each party to it;

  Page no 3

(c) Authenticity and conformity:  each Document described as an original is authentic and each Document described as a copy conforms to its original;

(d) Benefit: each Company is acting as principal and entered into each Document to which it is a party in good faith for the purpose of its business and there are reasonable grounds for believing that the transactions contemplated by the Documents will benefit the Company;

(e) Solvency:  each Company is able to pay its debts as they fall due, will not become unable to pay its debts as a consequence of entering into the Documents to which it is a party and no steps have been taken to make either Company the subject of any insolvency procedure or injunction;

(f) No waiver:  no Document has been terminated or varied and no obligation has been waived;

(g) Entire agreement: each Document constitutes the entire agreement between the parties as to the matters referred to in it;

(h) No duress:  the effect of the Documents is not affected by duress, undue influence or mistake and no Document has been entered into by any party in connection with any unlawful activity;

(i) Other laws:  no law or public policy of any place other than England affects the opinions contained in this letter and each Document constitutes legal, valid and binding obligations of each of the parties to it under all applicable laws other than English law;

(j) Facts:   all facts and documents relevant to this opinion have been disclosed to us;

(k) Choice of law: the choice of English law to govern the Documents and the submission by the parties to the jurisdiction of the English courts is a valid choice of law and submission to jurisdiction under the rules governing choice of law and submission to jurisdiction applicable to each such party;

(l) Agent for service of process:  the person specified in the Documents as agent for the service of process on behalf of a Company in England and Wales exists and operates at the address stated, has duly accepted his appointment and such appointment will subsist for so long as any liability is outstanding under the Documents; and

(m) Place of business:  neither Company carries on business in England and Wales or has an established place of business in England and Wales.

4.2            We have taken no steps to verify any of these assumptions.

5   Qualifications

Our opinion is subject to the following qualifications:

Page no 4

(a) Enforceability:  the expression "enforceable" means that the obligations are of a type which English courts enforce and does not mean that they will be enforced in all circumstances or in accordance with their terms;

(b) Insolvency:  the rights of the parties are subject to limitations arising from laws relating to insolvency and other laws affecting the rights of creditors generally;

(c) Penalty:  any provision for the forfeiture of property or the payment of compensation or additional interest which does not represent a genuine pre-estimate of loss may be unenforceable as a penalty;

(d) Equitable remedies:  equitable remedies including specific performance and injunction are granted at the discretion of the Court and are not usually available where damages are considered to be an adequate remedy;

(e) Time-barred claims:  enforcement of the rights of any party may become time-barred by limitation, prescription or laches;

(f) Performance abroad:  an obligation to be performed in a jurisdiction outside England and Wales or by a person subject to the laws of a jurisdiction outside England and Wales may not be enforceable under English law to the extent that such performance would be illegal or contrary to public policy under the laws of that other jurisdiction;

(g) Set-off:  defences of set-off or counterclaim may be available even where such defence is waived;

(h) Discretions:  any party which is vested with a discretion or which may determine any matter in its opinion may be required to exercise such discretion reasonably or to base its opinion on reasonable grounds;

(i) Certificates:  any provision to the effect that a calculation, determination or certificate will be conclusive, binding or final will not prevent judicial enquiry into its accuracy;

(j) Severability:  any provision allowing an invalid, illegal or unenforceable provision to be severed from other provisions may be disregarded by a Court;

(k) Amendments:  Documents may be amended or waived orally despite any provision to the contrary;

(l) Costs:  an undertaking by one party to pay the costs of another in litigation may be unenforceable if the litigation is unsuccessful or the court makes an order for costs;

(m) Stamp duty:  an undertaking or indemnity regarding stamp duty may be unenforceable under section 117 of the Stamp Act 1891;

  Page no 5

(n) Nature of security:  we express no opinion as to the nature of any security interest expressed to be created or acknowledged by any Document, the title of the Company to any asset or the priority or ranking of any security interest;

(o) Foreign currency:  an English court may decline to give judgment in respect of an obligation under any Document in any currency other than sterling and any judgment other than in sterling may be converted to sterling for enforcement purposes and, in an English liquidation, foreign currency claims must be converted into sterling at the rate prevailing at the commencement of liquidation for the purpose of proving for such claims;

(p) Exclusion of liability:  the effectiveness of certain provisions excluding or limiting the liability of a party may be limited by the Unfair Contract Terms Act 1977 or the Unfair Terms in Consumer Contracts Regulations 1999;

(q) Convenient forum:  an English court has power to stay an action where it is shown that it can without injustice to the parties be tried in a more convenient forum except in those cases where jurisdiction is determined in accordance with EC Council Regulation No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters or in the case of Denmark, the Brussels Convention on Jurisdiction in Civil and Commercial Matters 1968 or in the case of Switzerland, Norway and Iceland the Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1988;

(r) Choice of law:  the choice of English law to govern the Documents will not displace mandatory rules of law applicable in another jurisdiction with which the relevant transaction is otherwise solely connected or in which a dispute is being adjudicated and may not be recognised or upheld by the English Courts where to do so would be inconsistent with the EEC Convention on the Law Applicable to Contractual Obligations as applied by the Contracts (Applicable Law) Act 1990; and

(s) Jurisdiction: the English Courts may be required to or may decline jurisdiction in the circumstances set out in  EC Regulation 44/2001 and the Civil Jurisdiction and Judgments Act 1982 (as amended), which gives effect in England to the Brussels and Lugano Conventions.

6   Observations

We make the following observations:

(a) Statements: we express no view as to the accuracy of any statement made in any Document; and

(b) Circumstances:  we have not considered the particular circumstances of any party except to the extent expressly stated in this opinion.

Page no 6

7   Reliance

7.1 This opinion is addressed to you for your sole benefit and may not except as set out below be:

(a)           relied upon by any other person;

(b) disclosed, except to persons who in the ordinary course of your business have access to your records and on the basis that they will make no further disclosure; or

(c) filed with any person or quoted or referred to in any public document.

7.2 A copy of this opinion may be delivered to each person who is or becomes a Lender and be relied on by it for the purposes of the Documents on terms that:

(a) such person accepts the restriction on its ability to disclose or rely on this opinion as set out above; and

(b) we have no liability to such person in any circumstances where we would not be liable to KfW IPEX-Bank GmbH.

Yours faithfully

Stephenson Harwood

EXHIBIT D-3

Opinion of US Tax Counsel to the Lenders as at the Effective Date

D-3-1

[·], 20[·]

KfW IPEX-Bank GmbH

Palmengartenstrasse 5-9

60325 Frankfurt am Main

Federal Republic of Germany (“KfW”)

Re:   Application of U.S. Withholding Tax to Royal Caribbean Cruises Ltd. Payments 

This opinion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code and was written to support the promotion or marketing (as defined in IRS Circular 230) of the transactions contemplated in the Documents. Each person considering such transactions should seek advice based on such person’s particular circumstances from an independent tax advisor.

Dear Sirs:

You have asked whether U.S. withholding tax will be imposed on payments made by [the U.S. branch of] Royal Caribbean Cruises Ltd. (“RCCL”), a corporation organized under the laws of Liberia, to KfW, a financial institution organized under the laws of the Federal Republic of Germany (the “Lenders”), under the Hull No. S-691 Credit Agreement dated December __, 2008 (the “Credit Agreement”) between Celebrity Solstice V Inc., a corporation organized under the laws of Liberia (the “Borrower”) and KfW as the Lender, Hermes agent and administrative agent and the Deed of Guarantee dated [                           ] 200[   ] between RCCL, and KfW as the Lender, Hermes agent and administrative agent (the “Guarantee” and together with the Credit Agreement the “Documents”).

Under the Credit Agreement, the Lenders would lend money to the Borrower to help fund the purchase of Hull No. S-691 at Meyer Werft GmbH.

The loan advanced under the Credit Agreement will accrue interest at either a fixed rate or a floating rate in accordance with the provisions set forth in the Credit Agreement.  RCCL will guarantee the Borrower’s obligations under the Credit Agreement pursuant to the Guarantee.

In connection with rendering this opinion we have reviewed the Documents, and such other documents as we have deemed necessary or appropriate for purposes of rendering this opinion. We have assumed, with your consent, that: (i) all documents reviewed by us are original documents, or true and accurate copies of original documents, and have not been subsequently amended; (ii) the signatures on each original document are genuine; (iii) all representations and statements as to matters of fact set forth in such documents are true and correct; (iv) all obligations imposed by any such documents on the parties thereto have been or will be performed or satisfied in accordance with their terms; and (v) there are no documents relevant to this opinion to which we have not been given access. We have also assumed, with your consent, that:

(i) each Lender (which term as used in this option does not include any successor or assign) is and will continue to be eligible to claim benefits as a resident of the jurisdiction in which it was formed under the income tax treaty between the United States and such jurisdiction currently in force (each a “Treaty”);

(ii) no Lender will receive payments under the Documents that are attributable, for purposes of the Treaty under which it is eligible to claim benefits, to a permanent establishment of such Lender in the United States;

(iii) no Lender has made or will make an election, or otherwise taken steps, to be treated as other than a corporation for United States federal income tax purposes;

(iv) each of the Lenders will provide the Borrower or its agent with a properly completed Internal Revenue Service (“IRS”) Form W-8BEN accurately representing that such Lender is eligible to claim benefits under a Treaty for all payments under the credit agreement;

[(v) if a Lender is receiving payments for a participant, it will provide the Borrower with a properly completed IRS Form W-8IMY to which it will attach its own IRS Form W-8BEN and a properly completed IRS Form W-8BEN from each participant accurately representing that the participant is entitled to receive all payments under the Credit Agreement free and clear of U.S. withholding; and]

(vi) all of the foregoing will continue to be accurate and correct.

Conclusion

We are members of the Bar of the State of New York.  This opinion is limited to the U.S. federal withholding tax treatment of payments by RCCL under the Documents and does not address any other tax or legal consequences of the transactions contemplated in the Documents. This opinion is rendered solely to you and may not be relied upon by any other person, other than your legal advisors.  Our opinion is based on existing authorities as of the date hereof and may change as a result of subsequent legislation, regulations, administrative pronouncements, court opinions or other legal developments, possibly with retroactive effect.  We do not undertake to update this opinion based on any such developments unless specifically engaged by you to do so.  Our opinion is not binding on the IRS, and no assurance can be given that the conclusions expressed herein will not be challenged by the IRS or will be sustained by a court.

Based on the assumptions and limitations set forth above, we are of the view that there will be no U.S. federal withholding tax imposed on payments by the Borrower or RCCL under the Documents to each Lender.  Payments to non-U.S. persons that are not considered to be U.S. source income for U.S. federal income tax purposes, generally are not subject to U.S. withholding tax.  Payments by the Borrower or RCCL under the Documents to each Lender, to the extent they are U.S. source income, will be exempt from U.S. withholding tax either under the Interest or Other Income Articles of a relevant Treaty.

Our conclusions are expressions of our professional judgment with respect to U.S. federal income tax law and do not provide any guarantee as to the actual outcome of any U.S. federal income tax controversy.

Sincerely,

EXHIBIT E

FORM OF LENDER ASSIGNMENT AGREEMENT

To:           Royal Caribbean Cruises Ltd..

To:           KfW IPEX-Bank GmbH, as Administrative Agent (as defined below)

ROYAL CARIBBEAN CRUISES LTD.

Gentlemen and Ladies:

We refer to clause b of Section 11.11.1 of the Hull No. S-691 Credit Agreement, dated as of December 19, 2008, as amended and restated as of February ___, 2012 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the “Agreement”) among Royal Caribbean Cruises Ltd. (the “Borrower”), KfW IPEX-Bank GmbH as administrative agent (in such capacity, the “Administrative Agent”), and as Hermes agent, and KfW IPEX-Bank GmbH and the various other financial institutions from time to time party thereto as Lenders. Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the  Agreement.

This agreement is delivered to you pursuant to clause b of Section 11.11.1 of the  Agreement and also constitutes notice to each of you, pursuant to clause a of Section 11.11.1 of the  Agreement, of the assignment and delegation to __________ (the “Assignee”) of __% of the Loan of __________ (the “Assignor”) outstanding under the  Agreement on the date hereof.  After giving effect to the foregoing assignment and delegation, the Assignor’s and the Assignee’s Percentages for the purposes of the  Agreement are set forth opposite such Person’s name on the signature pages hereof.

The Assignee hereby acknowledges and confirms that it has received a copy of   the  Agreement and the exhibits related thereto, together with copies of the documents which were required to be delivered under the  Agreement as a condition to the making of the Loans thereunder.  The Assignee further confirms and agrees that in becoming a Lender and in making its Loan under the Agreement, such actions have and will be made without recourse to, or representation or warranty by the Administrative Agent.

Except as otherwise provided in the  Agreement, effective as of the date of acceptance hereof by the Borrower and the Administrative Agent:

(a)           the Assignee

(i)           shall be deemed automatically to have become a party to the  Agreement, have all the rights and obligations of a “Lender” under the  Agreement and the other Loan Documents as if it were an original signatory thereto to the extent specified in the second paragraph hereof;

(ii)            agrees to be bound by the terms and conditions set forth in the  Agreement and the other Loan Documents as if it were an original signatory thereto; and

E-1 

(b)           the Assignor shall be released from its obligations under the  Agreement and the other Loan Documents to the extent specified in the second paragraph hereof.

The Assignor and the Assignee hereby agree that the [Assignor] [Assignee] will pay to the Administrative Agent the processing fee referred to in Section 11.11.1 of the Agreement upon delivery hereof.

The Assignee hereby advises each of you of the following administrative details with respect to the assigned Loan and requests the Borrower to acknowledge receipt of this document:

(A)                      Address for Notices:

Institution Name:

Attention:

Domestic Office:

Telephone:

Facsimile:

Telex (Answerback):

Lending Office:

Telephone:

Facsimile:

Telex (Answerback):

(B)                      Payment Instructions:

The Assignee agrees to furnish the tax form required by last paragraph of Section 4.6 (if so required) of the  Agreement no later than the date of acceptance hereof by the Borrower and the Administrative Agent.

E-2 

This Agreement may be executed by the Assignor and Assignee in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

E-3 

Adjusted Percentage[ASSIGNOR]

Loan:                       _____%

By:           _________________________

Title:

Percentage  [ASSIGNEE]

Loan:                       _____%

By:           _________________________

Title:

Accepted and Acknowledged this

___ day of ___________, _____.

Royal Caribbean Cruises Ltd.

By:            ____________________

Title:

KfW IPEX-Bank GmbH, as Administrative Agent

By:            ____________________

Title:

E-4 

EXHIBIT F

OPTION A REFINANCING AGREEMENT

REFINANCING AGREEMENT

dated

between

KfW

Frankfurt am Main

represented by

KfW IPEX - Bank GmbH

Frankfurt am Main

("KfW")

and

[    "Bank"  ]

[city]

(“Bank”)

on the

financing of

[description of delivery item]

for

[buyer]

Registry no [    ]

Overview
1	Preamble	3
2	Shipbuilding contract and Loan Agreement data	4
3	General Terms and Conditions	5
4	Amount and purpose	5
5	Disbursement and conditions precedent to disbursement	6
6	Interest, charges and calculation	6
7	Repayment and prepayment; adjustment of the refinancing interest rate	7
8	Collateral	8
9	Duty to inform and right to inspect	8
10	Termination	9
11	Representations	9
12	Other regulations	9
Annex 1: Disbursement Request Form		11
Annex 2: General Terms and Conditions		12
Annex 3: List of facts relevant to subsidies pertaining to the provision of interest adjustment guarantees in connection with sales financing for ships		13

Page 2 of 13 

1           Preamble

The Federal Republic of Germany ("German Government") grants financial institutions an interest make-up guarantee to cover a portion of the interest rate risk involved in refinancing CIRR loans for the construction of ships by shipbuilders based in Germany ("CIRR for Ships Programme" or "Programme"). This guarantee is provided in accordance with the "Guidelines for the assumption of guarantees to hedge the interest rate risk associated with refinancing CIRR shipbuilding loans (interest make-up guarantees)" and with the related general terms and conditions for interest rate make-up in ship financing schemes at the CIRR ("General Terms and Conditions").

The German Government is represented by the Federal Ministry of Economics and Technology and by the Federal Ministry of Finance, both of which are represented by KfW as agent, acting  under a mandate from the German Government. KfW, in turn, has assigned KfW IPEX-Bank GmbH ("IPEX") to handle the Programme.

The Bank, as lender, entered into a loan agreement as at [             ] (hereinafter, including addenda, the "Loan Agreement") and granted the borrower the loan described in more detail in Section 2.2   for a total of [             ] ("Loan"). The sole purpose of this Loan is to finance the shipbuilding project described in more detail below (post-delivery financing).

In accordance with Section 1.2.1. of the General Terms and Conditions the Bank decided to refinance with KfW (Option A) and applied to KfW for both accreditation and a limit.

On this basis the Bank and KfW hereby agree as follows:

Page 3 of 13 

2           Shipbuilding contract and Loan Agreement data

The Bank hereby confirms the following data pertaining to the shipbuilding contract and the Loan:

2.1           Shipbuilding contract data

2.1.1	Seller/shipbuilder:	_____________________________
2.1.2	Date of the shipbuilding contract:	_____________________________
2.1.3	Contract value:	_____________________________
2.1.4	Payment terms:	_____________________________
2.1.5	Customer/buyer:	_____________________________
2.1.6	Object of the shipbuilding contract:	_____________________________
2.1.7	Scheduled date of delivery:	_____________________________

2.2            Loan Agreement data:

2.2.1	Financing structure:	_____________________________
2.2.2	Borrower:	_____________________________
2.2.3	Loan currency:	_____________________________
2.2.4	Loan amount:	_____________________________

Page 4 of 13 

2.2.5	Disbursement profile:	_____________________________
2.2.6	End of the disbursement period:	_____________________________
2.2.7	Loan term/repayment profile:	_____________________________
2.2.8	Prevailing CIRR rate:	_____________________________
2.2.9	Maturity and calculation basis of the interest:	_____________________________
2.2.10	Fee for administrative expenses incurred by the Bank ("Margin"):	_____________________________
2.2.11	Refinancing interest rate (=prevailing CIRR rate less the Margin):	_____________________________
2.2.12	Date of application by the Bank for an interest make-up guarantee:	_____________________________
2.2.12	Latest date pursuant to the General Terms and Conditions:	_____________________________

3            General Terms and Conditions

Insofar as this Agreement does not contain any provisions stating otherwise, the General Terms and Conditions (attached as Annex 2) will apply to the make-up of the interest rates for ship financing at the CIRR. By signing this Refinancing Agreement the Bank expressly declares its consent to the validity of the General Terms and Conditions.

Amendments of, or addenda to, this Agreement and any statements and notices delivered under this Agreement must be in writing.

4            Amount and purpose

4.1 KfW grants the Bank a refinancing loan ("Refinancing Loan") in an amount equal to the loan amount as stated in Section 2.2.4. The funds utilised under the Refinancing Loan serve to refinance the Bank's Loan Agreement as stated in Section 2.2, which the Bank concluded with the borrower and for which a guarantee is issued under the CIRR for Ships Programme.

Page 5 of 13   

4.2 The Bank administers its Loan including all collateral at own expense and on its own behalf. In granting and administering the Loan, including the collection of loan receivables, and in administering and enforcing collateral, including the exercise of rights, obligations and responsibilities in connection with the German Government's export credit insurance scheme, the Bank acts with the care customary in banking practice.

5           Disbursement and conditions precedent to disbursement

5.1 The Bank verifies the fulfilment of the conditions precedent to disbursement under the Loan Agreement and, upon disbursement of the Refinancing Loan, will provide KfW with written confirmation that said conditions precedent have been fulfilled in accordance with the Loan Agreement and that a request for disbursement under the Loan Agreement has been submitted for the corresponding amount.

5.2 The request for disbursement as stated in Annex 1 must be submitted to KfW at least two banking days in Frankfurt am Main prior to the disbursement date.

5.3 The Bank will transfer the disbursements made under the Refinancing Loan to the borrower without delay.

5.4 Disbursements made under the Refinancing Loan will be rendered in the loan currency as stated in Section 2.2.

5.5 Notwithstanding the stipulations of the General Terms and Conditions (Section 10.) KfW may refuse disbursement if

5.5.1 the amount of the Refinancing Loan would be exceeded as a result of the disbursement;

5.5.2 the corresponding disbursement request form has not been fully completed and submitted at least two banking days in Frankfurt am Main prior to the desired disbursement date;

5.5.3 payments rendered by the Bank to KfW under this Agreement are outstanding and  said default cannot be identified as being of a technical nature;

 5.5.4 there are extraordinary grounds for termination (as stated in Section 9.).

6            Interest, charges and calculation

In addition to the charges and fees provided for in the General Terms and Conditions (Section 7.) in connection with the granting of the interest make-up guarantee, the following costs will be due and payable for the Refinancing Loan:

Page 6 of 13   

6.1 Interest for loan amounts under this Refinancing Loan will be calculated from the disbursement date until the date on which the repayment instalment is credited to the account stated in Section 7.2.

6.2           The refinancing rate stated in Section 2.2.11 will be applied as the interest rate.

6.3 Utilised loan amounts will be based on a 360-day year and a month comprising the actual number of days elapsed.

6.4 KfW is entitled to 50% of the commitment fee negotiated by the Bank under the Loan Agreement. The Bank is obliged to pay KfW the commitment fee to which KfW is entitled on the due date, regardless of whether payment has been received from the borrower.

6.5 If payments of amounts payable under the Refinancing Loan fall due on a day that is a banking day neither in Frankfurt am Main nor - in the event of foreign currency -in the city in which the foreign currency account is kept, payment must be rendered on the ensuing banking day in Frankfurt am Main and - in the event of foreign currency - in the city in which the foreign currency account is kept unless said day falls in the next calendar month. In the latter case the payment must be rendered on the latest banking day prior to the due date.

7           Repayment and prepayment; adjustment of the refinancing interest rate

7.1 Notwithstanding any payments made under the Loan Agreement the Bank undertakes to repay the Refinancing Loan in accordance with the following repayment schedule:

Date:                                                                  Amount:

_________________________   ______________________________

_________________________              ______________________________

_________________________              ______________________________

_________________________              ______________________________

_________________________              ______________________________

_________________________              _____________________________

7.2 The Bank is released from its payment obligations under this Agreement as soon and insofar as the relevant amounts have been made freely available to KfW in the agreed currency without any deductions in the corresponding stated account number [        ] with KfW IPEX - Bank GmbH, Frankfurt am Main, bank sort code 500 204 00. The Bank must, upon KfW's first request, reimburse KfW for any and all costs it incurs owing to late payments.

Page 7 of 13   

7.3 If the payments payable by the Bank are not rendered as at the correct value date, KfW may charge the Bank default interest amounting to 3% p.a above the prevailing 3-month EURIBOR starting from the respective payment due date. The Bank undertakes to pay the default interest upon KfW's first request.

7.4 Pursuant to Section 8. of the General Terms and Conditions the Bank is entitled to render prepayments. Should the event stated in Section 8.3. (non-acceptance compensation) arise, KfW will calculate the compensation on a same-day basis.

7.5 If the Bank exercises its right pursuant to Section 8.2. of the General Terms and Conditions, the refinancing interest rate as stated in Section 2.2.11 of this Agreement must be adjusted accordingly as at the end of the expiring interest make-up period. The refinancing interest rate to be applied in such an event will correspond to the rate that would be applied by KfW for banks with a comparable rating.

8            Collateral

8.1 In order to secure its claims under the Refinancing Loan, KfW is entitled to demand additional collateral in accordance with its criteria for on-lending banks in the domestic lending business insofar as KfW deems this necessary. This may also take place retroactively.

8.2 The Bank holds this collateral, in particular pledges, liens, fiduciary transfers of assets - insofar as they are not transferred to KfW by law - and such collateral for which claims cannot be assigned - in trust for KfW at its own expense insofar as the collateral serves to secure claims under the Loan Agreement. KfW is entitled to issue instructions regarding the assets being held in trust at any time. Upon KfW's request, the Bank will provide KfW with disclosures and information of all kinds in relation to said collateral.

9           Duty to inform and right to inspect

In addition to the Bank's obligations as stated in Section 11. of the General Terms and Conditions the following provisions will apply:

9.1 The Bank will make disclosures of circumstances pertaining to the Loan, its proper repayment or collateralisation available to KfW on a regular basis. The Bank must inform KfW immediately and of its own accord about extraordinary events that may jeopardise the proper servicing of the Loan and of which it becomes aware.

9.2           The Bank will notify KfW of all amendments and addenda to the Loan Agreement.

9.3           The Bank undertakes to inform the borrower about this Agreement concluded with KfW.

9.4   KfW is entitled to inspect the proper use of the refinancing funds at the Bank, to request corresponding information from the Bank and to inspect the loan documents.

Page 8 of 13   

9.5 The Bank will send KfW its certified annual report including the annex, the management report and the notes following its completion but no later than six months after the end of its financial year.

10            Termination

Notwithstanding the provisions of the General Terms and Conditions KfW may terminate this Agreement for good cause, particularly in the event of

10.1           a significant deterioration in the Bank's financial situation;

10.2           a breach of the Bank's payment obligations or duties to inform;

10.3 a disruption in the basis of trust required for the continuation of the contractual relationship that is significant for another reason.

11            Representations

By signing this Agreement, the Bank assures that

a) in the Loan Agreement the prevailing CIRR was agreed to be the minimum interest rate;

b) it is aware that facts on which the approval, grant, reclamation, renewal or continuation of the interest make-up amounts depend qualify as facts that are relevant to subsidies within the meaning of Section 264 of the German Criminal Code (Strafgesetzbuch/StGB). These facts are listed in Annex 3. Particular mention is made of the provisions set forth in Sections 3, 4 and 5 of the German Subsidy Act (Subventionsgesetz/SubvG).

12            Other regulations

12.1 This Agreement enters into force and effect upon being signed and ends when the Refinancing Loan has been repaid in full including any enforcement of security interests that may be necessary.

12.2 This Agreement is governed by German law. It has been translated into English for information purposes only and the German version and language will prevail. The place of performance and of jurisdiction is Frankfurt am Main.

12.3 If any provision of this Agreement is invalid or inexecutable, this will not affect the remaining provisions. Any gap in the provisions is to be filled with a legally valid provision which comes as close as possible to the spirit and purpose of this Agreement.

12.4 Rights and obligations under this Agreement may not be assigned or pledged without the prior written consent of the corresponding contracting party.

Page 9 of 13   

12.5 Representations or notices relating to this Agreement must be affixed with a legally binding signature and dispatched by post or facsimile to the following addresses or, if so agreed, by remote data transfer:

For KfW: KfW IPEX-Bank GmbH

Palmengartenstrasse 5-9

60325 Frankfurt am Main/Germany

Tel: (++49-69) 74 31 - xxxx

Fax: (++49-69) 74 31 - xxxx

For the Bank:

Done in two originals, one for each party.

Frankfurt am Main, this ___ day of _________, 200x          __________________________________ KfW IPEX-Bank GmbH (duly authorised by KfW)      Place], this ____ day of , _________, 200x       _____________________________   [Bank]

Page 10 of 13   

Annex 1: Disbursement Request Form

Bank

To

KfW

c/o KfW IPEX-Bank GmbH

Att: X4b

Postfach 11 11 41

60046 Frankfurt am Main/Germany

or fax: (++49-69) 7431 - xxxx

Request for disbursement under the Refinancing Loan / CIRR for ship financing

dated ______________

Registry number [   ]

Contact person at the Bank:

KfW loan account number:

Borrower:

(Name and KfW business partner number):

We hereby confirm that all of the conditions agreed for the Refinancing Loan have been fulfilled. We therefore request the transfer of

_______                       ____________                                   _________________

currency and amount (at far right written out)

as at: [           ] value date (no earlier than two banking days following submission of

this request)

to the following account: (bank name, sort code and account number)

__________________

__________________

__________________

Place, date, legally binding signature of the Bank __________________

Page 11 of 13 

Annex 2: General Terms and Conditions

Page 12 of 13 

Annex 3: List of facts relevant to subsidies pertaining to the provision of interest adjustment guarantees in connection with sales financing for ships

Facts relevant to subsidies within the meaning of Section 264 of the German Criminal Code (StGB) in conjunction with Section 2 of the German Subsidy Act (SubvG) of 29 July 1976 are:

(a) the prices and terms of payment agreed with the buyer (Sections 2.1.3 and 2.1.4 of the interest make-up agreement);

(b) the amount of the Loan granted and the terms and conditions agreed for the Loan (Sections 2.2.3 and 2.2.4 of the interest make-up agreement);

(c) all cases in which deadlines and amounts that either determine or change one of the variables listed in (a) or (b) are laid down or altered, in particular:

-all data on disbursements and disbursement amounts as well as all data on repayments and repayment amounts;

-the calculation of underlying exchange rates (if any);

-the fixing of interest or changes in the agreed reference base for interest rates;

-receipt of off-schedule repayments, insurance payments, realisation proceeds and other payments as a result of which the outstanding claim is reduced;

-agreements on amendments to the Loan Agreement;

(d) the prohibition of the transfer of the Margin for administrative expenses to the borrower in accordance with Section 1.5. of the General Terms and Conditions.

Page 13 of 13 

EXHIBIT G

NORTON ROSE

CONFIDENTIAL

Dated                  [·]

ACCOUNT PLEDGE AGREEMENT

(Kontoverpfändung) in relation to the Hull No.

S-691 Credit Agreement

Royal Caribbean Cruises Ltd.

as Pledgor

KfW IPEX-Bank GmbH

as Facility Agent

and

KfW IPEX-Bank GmbH

as Lender

Norton Rose LLP

Theatinerstraße 11

80333 Munich

Germany

Contents
Clause		Page
1	Headings, Capitalised Terms, References, and Language	3
2	Abstract Acknowledgement of Debt	5
3	Grant of Pledges	5
4	Operation of Accounts	6
5	Secured Obligations	7
6	Representations and Warranties	7
7	Protection of Collateral	7
8	Enforcement of Collateral	8
9	Release of Collateral	9
10	Waivers of Pledgor	9
11	Assignment and Transfer	10
12	Substitution of a Pledgee	10
13	Further Assurance	10
14	Costs and Expenses	11
15	Severability, Duration and other Matters	11
16	Notification	12
17	Notices and Other Matters	12
18	Partial Invalidity	13
19	Changes and Amendments	13
20	Choice of Law and Jurisdiction	14
21	Entire Agreement	14
22	Process Agent	14
Schedule 1 Address details of the parties		15
Schedule 2 The Pledged Accounts		16
Schedule 3 Notification Letter		17
Schedule 4 Acknowledgement Letter		19
Schedule 5 Instruction to Account Bank		21

1 

Schedule 6 Form of delivery payment letter 23

2 

THIS ACCOUNT PLEDGE AGREEMENT (hereinafter referred to as the Account Pledge Agreement) is made on __________ .

BETWEEN:

  (1) ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation  incorporated under the laws of Liberia and registered in the Register of Companies of Liberia under [NB Registration details to be provided by Borrower], whose registered office is at [NB Address details to be provided by Borrower] Liberia, as pledgor (hereinafter referred to as the Pledgor);

  (2) KfW IPEX-Bank GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of the Federal Republic of Germany (Germany), whose registered office is at Palmengartenstraße 5-9, 60325 Frankfurt am Main, Germany, in its capacity as facility agent (hereinafter referred to as the Facility Agent); and

  (3) KFW IPEX-BANK GMBH, in its capacity as lender (hereinafter referred to as the Lender, and together with the Facility Agent the Pledgees).

WHEREAS

(A) The Pledgor and KfW IPEX-Bank GmbH as Hermes agent, Facility Agent and Lender have entered into a loan agreement dated 19 December 2008 as amended by an assignment and amendment deed dated [·] February 2012 (as amended, varied, novated, supplemented, superseded or extended from time to time, hereinafter referred to as the Credit Agreement), pursuant to which the Lender has agreed to make available to the Borrower loan facilities in connection with the financing of a passenger cruise vessel bearing Meyer Werft GmbH’s hull number S-691 (the Vessel) (the Transaction).

(B) The Pledgor has opened or will open certain bank accounts at the Account Bank for payments to be made to it in relation to the Transaction.

(C) The pledge provided for in this Account Pledge Agreement is a condition precedent to the utilisation of the facility by the Pledgor under the Credit Agreement.

NOW, THEREFORE IT IS HEREBY AGREED as follows:

1            Headings, Capitalised Terms, References, and Language

1.1 Headings are for ease of reference only and shall not affect the construction of this Account Pledge Agreement.

1.2 Unless otherwise defined herein or unless the context otherwise requires, capitalised terms defined in the Credit Agreement shall have the same meaning when used in this Account Pledge Agreement.

3 

1.3 In addition, in this Account Pledge Agreement

Abstract Acknowledgement has the meaning given to such term in Clause 2 (Abstract Acknowledgement of Debt);

Account Bank means [Norddeutsche Landesbank Girozentrale, a financial institution organised and existing under the laws of the Federal Republic of Germany acting through its office at Friedrichswall 10, 30159 Hannover, Germany] [NB Account Bank to be confirmed];

Builder means Meyer Werft GmbH, Papenburg, Germany;

Collateral has the meaning given to such term in clause 3.1;

Discharge Date has the meaning given to such term in clause 9.1;

Enforcement Event has the meaning given to such term in clause 8.1;

Finance Parties means the Lenders, the Hermes Agent and the Facility Agent each of such terms as defined in the Credit Agreement, each of them individually a Finance Party;

Security Grantor means any person granting a security for the Secured Obligations;

Pledges means the pledges created by clause 3 (Grant of Pledges);

Pledged Accounts has the meaning given to such term in clause 3.1;

Purchased Vessel means the passenger cruise vessel bearing Builder’s hull number S-691;

Secured Obligations means all financial obligations, promises and other liabilities, owing or incurred by the Pledgor vis-à-vis the Pledgees, whether due or hereinafter to become due, including, but not limited to, all future and contingent obligations, promises and other liabilities, of whatever nature (including claims for unjust enrichment (ungerechtfertigte Bereicherung)), under or in connection with the Loan Documents (including but not limited to the Abstract Acknowledgement of Debt pursuant to clause 2); and

Security Period means the period from the date of this Account Pledge Agreement to and including the earliest of (i) the date on which the Commitments have reduced to zero and all Indebtedness under the Loan Documents has been fully paid and discharged, (ii) the date on which the proceeds of the Loan (as such proceeds may have been exchanged from US Dollars to Euro) shall have been paid out by way of partial payment of the Contract Price pursuant to clause 4.1(a) and (iii) the date on which the proceeds of the Loan shall have been paid to the relevant account pursuant to clause 4.1(b).

1.4          Words importing the plural shall include the singular and vice versa.

4 

1.5 This Account Pledge Agreement is made in the English language. For the avoidance of doubt, the English language version of this Account Pledge Agreement shall prevail over any translation of this Account Pledge Agreement. However, where a German translation of a word or phrase appears in the text of this Account Pledge Agreement, the German translation of such word or phrase shall prevail.

1.6          In this Account Pledge Agreement, any reference to:

(a) a defined document is a reference to that defined document as from time to time amended, varied, novated, restated, supplemented or extended;

(b) promptly means without undue delay (unverzüglich) as contemplated by Section 121 of the German Civil Code (Bürgerliches Gesetzbuch - BGB); and

(c) clauses and schedules are to be construed as references to clauses of and schedules to this Account Pledge Agreement.

2           Abstract Acknowledgement of Debt

The Pledgor acknowledges by way of an abstract acknowledgement of debt (abstraktes Schuldanerkenntnis) (the Abstract Acknowledgement), that each and every obligation of the Pledgor towards a Finance Party under this Agreement, the Credit Agreement, the other Loan Documents and any ancillary document thereto (together, but for the avoidance of doubt excluding the Abstract Acknowledgment, hereinafter referred to as the Original Obligations)shall also be owing in full to the Facility Agent and that, accordingly, the Facility Agent will have its own independent right to demand performance by the Pledgor of those obligations. Without in any way prejudicing the legally independent nature of the Abstract Acknowledgement, the Parties hereto agree, that payment by the Pledgor of the obligations under the Abstract Acknowledgement shall to the same extent be deemed to decrease and discharge the Original Obligations owing to the relevant Finance Parties and payment by the Pledgor of its Original Obligations to the relevant Finance Parties shall to the same extent be deemed to decrease and discharge the amounts owed under the Abstract Acknowledgement owing by it to the Facility Agent.  For the avoidance of doubt, the obligations under the Abstract Acknowledgements shall only be due and payable when the obligations under the Original Obligations are due and payable.

3           Grant of Pledges

3.1 The Pledgor hereby pledges (verpfändet) to each of the Pledgees all of its rights and claims in the current and future amounts standing to the credit of its accounts stated in Schedule 2 (The Pledged Accounts) hereto (including all sub-accounts thereto), (hereinafter together referred to

5 

as the Pledged Accounts), in particular, but not limited to, the right to claim payment from the Account Bank, and in each case including all interest accruing thereon (together the Collateral).

3.2          Each of the Pledgees hereby accepts the Pledges created under clause 3.1 above.

3.3 For the avoidance of doubt, the Parties agree that nothing in this Account Pledge Agreement shall exclude a transfer of all or part of the Pledges created hereunder by operation of law upon the assignment or transfer (including by way of assignment and assumption (Vertragsübernahme)) of all or part of the Secured Obligations by any Pledgee in accordance with the Loan Documents.

4           Operation of Accounts

4.1 Unless the Facility Agent has notified the Account Bank that an Event of Default has occurred and is continuing, the Pledgor shall be entitled on and after the commencement of the Security Period, without the consent of the Pledgees, to request that the Facility Agent instructs the Account Bank (which the Facility Agent agrees to do) in the form set out in Schedule 5 or in such other form the Facility Agent and Account Bank may agree to disburse all or any of the moneys standing to the credit of the Pledged Account, either to:

(a) an account of the Builder by way of a partial payment of the Contract Price payable by the Pledgor on delivery of the Purchased Vessel in accordance with the terms of this Account Pledge Agreement and a delivery payment letter to be entered into between the Pledgor and the Builder in the form set out in Schedule 6 or in such other form as may be approved by the Facility Agent that is to be executed and delivered at the time of delivery of the Purchased Vessel where delivery occurs after the commencement of the Security Period; or

(b) such account as the Facility Agent may specify as prepayment, in whole or in part, in accordance with section 3.2, 3.7 or 9.2 of the Credit Agreement.  For the purposes of this clause 4.1(b), if the Pledgor shall prepay the Loan in whole or in part pursuant to sections 3.2, 3.7 or 9.2 of the Credit Agreement, the Facility Pledgees will consent to the disbursement of funds to third party counterparties for the purpose of foreign exchange, so long as such exchanged funds are paid directly to such account as may be designated by the Facility Agent.

4.2 Unless the Facility Agent has notified the Account Bank that an Event of Default has occurred and is continuing, all interest earned on the Pledged Account shall be paid to the Pledgor or to its order to such account as the Pledgor may direct and the Pledgor shall be entitled to instruct the Account Bank accordingly.

6 

5 Secured Obligations

The Collateral shall serve as security for the Secured Obligations.

6           Representations and Warranties

The Pledgor represents and warrants to each of the Pledgees that:

6.1 it is duly organised and validly existing under the laws of Liberia, it has obtained all licenses and authorisations to carry out its business as it is now being conducted, all necessary or recommendable corporate action authorising the conclusion and performance of this Account Pledge Agreement has been taken, all consents, approvals or permits which are required or recommendable in connection with the conclusion and performance of this Account Pledge Agreement have been obtained and this Account Pledge Agreement constitutes legal, valid and binding obligations of the Pledgor enforceable in accordance with its terms;

6.2 subject to the provisions in the general terms and conditions of the Account Bank, it is the sole legal and beneficial owner of the Collateral, has full title thereto and is entitled to pledge the Collateral to the Pledgees; and

6.3 subject to the provisions in the general terms and conditions of the Account Bank, this Account Pledge Agreement constitutes a first priority right in the Collateral and the Collateral is not subject to any prior or pari passu rights, including, but not limited to, rights of pledge, rights of usufruct and attachment.

7          Protection of Collateral

During the term of this Account Pledge Agreement, the Pledgor undertakes towards each of the Pledgees:

7.1 not to assign, encumber or otherwise dispose of any of the Collateral or any interest therein or offer to do so, except as herein provided and subject to the provisions in the general terms and conditions of the Account Bank;

7.2 to refrain from any acts or omissions which would result in the Collateral being encumbered or further encumbered, except as herein provided and subject to the provisions in the general terms and conditions of the Account Bank;

7.3 to record the Pledges immediately in its books and records and to refrain from any acts or omissions which could prevent third parties who may have a legitimate interest in obtaining knowledge of the Pledges from obtaining knowledge thereof;

7 

7.4 not to otherwise defeat or impair the rights of the Pledgees under or in connection with this Account Pledge Agreement;

7.5 to open a new account to hold the proceeds of the Loan disbursed or to be disbursed under the Credit Agreement only with prior written consent of the Facility Agent, and in accordance with the Credit Agreement. In such a case, the Pledgor shall grant a corresponding account pledge to the Pledgees over the newly established account;

7.6 to inform the Pledgees, by written notice to the Facility Agent, as soon as possible in the case the Pledgees’ rights in respect of the Collateral are prejudiced or jeopardised by attachment or are prejudiced or jeopardised by other material actions of third parties. Such information shall be accompanied, in the case of any attachment, by a copy of the order for attachment as well as all documents required for the filing of an objection against the attachment, and, in case of any other actions by third parties, by copies evidencing which actions have been or will be taken, respectively, as well as all documents required for the filing of an objection against such actions. The Pledgor shall further be obliged to inform as soon as possible the attaching creditors or other third parties asserting rights with respect to the Collateral in writing of the Pledgees’ rights in respect of the Collateral. All reasonable and adequately documented costs and expenses for countermeasures of the Pledgees shall be borne by the Pledgor. This shall also apply to the institution of legal action which any of the Pledgees reasonably considers necessary;

7.7 to inform the Pledgees, by written notice to the Facility Agent, promptly of any subsequent material changes in the value of the Pledged Accounts resulting from any set off or other reasons, after becoming aware of such changes other than in the ordinary course of business; and

7.8 to notify the Pledgees, by written notice to the Facility Agent, promptly of any event or circumstance which might be expected to have a material adverse effect on the validity or enforceability of this Account Pledge Agreement.

8           Enforcement of Collateral

8.1 Following the occurrence of an Event of Default and, in addition, if and when the requirements of Section 1204 et seq. of the German Civil Code (BGB) (Pfandreife) are met in respect of the Secured Obligations (or any part thereof) (an Enforcement Event), the Pledgees, acting through the Facility Agent, shall be entitled, after having given one week's notice to the Pledgor, to avail themselves of all rights and remedies of a pledgee (Pfandgläubiger) hereunder without prior court ruling and released from Section 1277 of the German Civil Code (BGB). However, the Pledgees will only make use of their rights to the extent necessary to cover the Secured Obligations.

8 

8.2 In the case of the occurrence of an Enforcement Event, the Pledgees, acting through the Facility Agent, shall in particular be entitled to

(a) collect the monies standing to the credit of the Pledged Accounts;

(b) request that all documents relating to the Pledges be handed over to the Facility Agent and the Pledgor hereby agrees to comply promptly with any such request; and

(c) take any other actions not mentioned in clauses (a) and (b) above which are necessary or appropriate for the purpose of realising the security granted by the Pledgor in accordance with this Account Pledge Agreement, to the extent that such actions are permissible under the applicable law and not restricted by any other Loan Document.

8.3 The Facility Agent shall apply such amounts in accordance with the provisions of the Credit Agreement and the other Loan Documents.

9          Release of Collateral

9.1 Upon (a) complete and irrevocable satisfaction of the Secured Obligations or (b) the end of the Security Period, the Pledgees, acting through the Facility Agent, will, upon request of the Pledgor, declare the release of the Pledges (Pfandfreigabe) to the Pledgor as a matter of record. For the avoidance of doubt, the Parties are aware that upon complete and irrevocable satisfaction of the Secured Obligations, the Pledges, due to their accessory nature (Akzessorietät), cease to exist by operation of law (the Discharge Date).

9.2 At any time when the total value of the aggregate security granted by the Pledgor and any of the other Security Grantors to secure the Secured Obligations which can be expected to be realised in the event of an enforcement of the Security (realisierbarer Wert) not only temporarily exceeds 110% of the Secured Obligations (hereinafter referred to as the Limit), the Facility Agent, acting on behalf of the Pledgees, shall on demand of the Pledgor release such part of the security (Sicherheitenfreigabe) as the Facility Agent may in its reasonable discretion determine so as to reduce the realisable value of the security to the Limit.

9.3 If the Pledgees are required to release any security prior to the Discharge Date, they shall be free to select the security to be released, taking into consideration the legitimate interest of the Pledgor.

10           Waivers of Pledgor

10.1 The Pledgor hereby expressly waives, to the fullest extent legally admissible, all defences of voidability (Anfechtbarkeit, Sections 1211, 770 of the German Civil Code (BGB)) and set-off (Aufrechenbarkeit, Sections 1211, 770 of the German Civil Code (BGB)) and any other defences that a pledgor may have under German law, including, but not limited to, all defences,

9 

to the fullest extent possible, in terms of Section 1211 of the German Civil Code (BGB), with the exception that the waiver shall not apply to set-offs or counterclaims that are (i) uncontested, or (ii) based on an unappealable court decision.

10.2       In case of enforcement of the Pledges under this Account Pledge Agreement, as long as any of the Secured Obligations remain outstanding, no rights of the Pledgees shall pass to the Pledgor or third parties by subrogation or otherwise, such rights being hereby waived by the Pledgor under this Account Pledge Agreement and relating to all forms of subrogation and all kind of security interest, including, but not limited to, pledges and guarantees (Bürgschaften). In particular, but not limited to, the Pledgor hereby waives, to the fullest extent legally admissible, any rights to subrogation in terms of Section 1225 of the German Civil Code (BGB).

11   Assignment and Transfer

11.1 Each of the Pledgees shall, at any time have the right to assign, to transfer, or to dispose of its rights in the Secured Obligations together with the rights and obligations under this Account Pledge Agreement (other than the Pledges which will be transferred by operation of law in the event the Secured Obligations are transferred) to any person who is, or may become, a Finance Party pursuant to and in accordance with the Credit Agreement. The Pledgor hereby already explicitly and irrevocably consents to such assignment, transfer or disposal.

11.2 The Facility Agent shall, at any time have the right to assign, to transfer, or to dispose of its rights and obligations under this Account Pledge Agreement to any person who becomes a Facility Agent pursuant to and in accordance with the Credit Agreement. The Pledgor hereby already explicitly and irrevocably consents to such assignment, transfer or disposal.

11.3 The Pledgor shall not be entitled to assign, to transfer, or to dispose of all or any part of its rights or obligations or both hereunder.

12 Substitution of a Pledgee

The Pledgor undertakes to enter into any agreement reasonably required by the relevant Pledgee and otherwise to do whatever is reasonably required by the relevant Pledgee in case such Pledgee legitimately transfers its rights and obligations under the Loan Documents in accordance with the Loan Documents wholly or partially to a third party by creating new pledges over the Collateral or agreeing to mechanics of distribution of proceeds on an equal basis or otherwise.

13           Further Assurance

13.1 Should any further actions and/or declarations be necessary in order to validly pledge the Collateral or any part thereof to the Pledgees, the Pledgor undertakes to take such actions and/or to provide such declarations upon the Pledgees’ demand.

10 

13.2 The Pledgor herewith irrevocably authorises (bevollmächtigt unwiderruflich) the Facility Agent (including the right to grant sub-power of attorney (Untervollmacht)) to perform actions and declarations set out in clauses 12 and 13.1 above also in the Pledgor's name. The Facility Agent is herewith exempted from the restrictions of Section 181 of the German Civil Code (BGB).

14          Costs and Expenses

All costs and expenses arising from the execution of this Account Pledge Agreement, from amendments or prolongations thereof or any costs arising from the enforcement or preservation of the Pledgees’ rights hereunder shall be borne by the Pledgor, whereby the Facility Agent, acting on behalf of the Pledgees, is entitled to mandate a third party to perform such actions in its own name but for the Pledgor's account.

15          Severability, Duration and other Matters

15.1 The validity and effect of each of the Pledges created hereunder shall be independent from the validity and the effect of any of the other Pledges created hereunder.

15.2 This Account Pledge Agreement shall remain in full force and effect until the Secured Obligations have been completely satisfied.  The Pledges shall not cease to exist if the Secured Obligations have only temporarily been satisfied.

15.3 As long as the Secured Obligations are not completely satisfied and not all facilities which may give rise to the Secured Obligations have been terminated, the Pledgor shall not assert any claims against any other person which might arise from the fulfilment of its obligations according to this Account Pledge Agreement, either contractual or statutory. The monies which are transferred to or debited by the Pledgor from such other person shall be received by the Pledgor on trust (treuhänderisch) and transferred by it on trust to the Facility Agent.

15.4 This Account Pledge Agreement shall create a continuing security and no change or amendment in the Transaction Documents shall affect the validity and the scope of this Account Pledge Agreement or the obligations which are imposed on the Pledgor pursuant to it.

15.5 Subject to anything expressed to the contrary in this Account Pledge Agreement, the Pledges are independent from and granted in addition to any other security or guarantee which may have been given to the Pledgees with respect to any of the Secured Obligations. None of such other security interests shall prejudice, or shall be prejudiced by, or shall be merged in any way with, this Account Pledge Agreement.

15.6 This Account Pledge Agreement shall inure to the benefit of the Pledgees, their respective successors and assigns.

11 

16 Notification

16.1 In order to comply with the requirement of Section 1280 of the German Civil Code (BGB)the Pledgor shall notify the Account Bank of the Pledge created hereunder by delivery to the Account Bank of a notification letter as set out in Schedule 3 to this Account Pledge Agreement on the date of this Account Pledge Agreement.

16.2 The Pledgor shall use all reasonable endeavours to procure that the Account Bank confirms receipt of the notification letter by signing the acknowledgement letter as set out in Schedule 4 of this Account Pledge Agreement.

17           Notices and Other Matters

17.1           Notices

(a)	Any notice or communication to be made under or in connection with this Account Pledge Agreement shall be made in writing and, unless otherwise stated, may be made by prepaid letter or fax.
(b)	Address for notices
	The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party to this Account Pledge Agreement for any communication or document to be made or delivered under or in connection with this Account Pledge Agreement is as set out in Schedule 1 (Address details of the Parties) or any such substitute address, fax number, or department or officer as the relevant party to this Account Pledge Agreement may notify to the Facility Agent (or the Facility Agent may notify to the other parties to this Account Pledge Agreement, if a change is made by the Facility Agent) by not less than five (5) Business Days' notice.
(c)	Delivery of notices
	Any commcommunications or document made or delivered by one party to another under or in connection with this Account Pledge Agreement will only be regarded as effective
	(i)	if by way of fax, when received in complete and legible form; or
	(ii)	if by way of letter, when received by its addressee,
	and, if a particular department or officer is specified as part of its address details provided under clause (b) above, if addressed to that department or officer.

12

17.2           No implied waiver, remedies cumulative

No failure or delay on the part of a Pledgee or the Facility Agent to exercise any power, right or remedy under this Account Pledge Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by a Pledgee or the Facility Agent of any power, right or remedy preclude any other or further exercise thereof or the exercise of any power, right or remedy. The remedies provided in this Account Pledge Agreement are cumulative and are not exclusive of any remedies provided by law.

17.3          English translations

All documents to be delivered under or supplied in connection with this Account Pledge Agreement shall be in the English language or shall be accompanied by a certified translation into English upon which the recipient shall be entitled to rely.

17.4           Counterparts

This Account Pledge Agreement may be executed in any number of counterparts (whether by facsimile or otherwise, but, if by facsimile, with the original signed pages being promptly sent to the Facility Agent by prepaid letter (and the Facility Agent is hereby authorised to incorporate such pages into bound originals)) and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original, but all counterparts shall together constitute one and the same agreement.

18           Partial Invalidity

If at any time, any one or more of the provisions of this Account Pledge Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, such provision shall as to such jurisdiction, be ineffective to the extent necessary without affecting or impairing the validity, legality and enforceability of the remaining provisions hereof or of such provisions in any other jurisdiction. The invalid, illegal or unenforceable provision shall be deemed to be replaced with such valid, legal or enforceable provision which comes as close as possible to the original intent of the parties and the invalid, illegal or unenforceable provision. Should an omission (Regelungslücke) become evident in this Account Pledge Agreement, such omission shall, without affecting or impairing the validity, legality and enforceability of the remaining provisions hereof, be deemed to be filled in with such provision which comes as close as possible to the original intent of parties.

19          Changes and Amendments

Changes to and amendments of this Account Pledge Agreement including this clause 19 (Changes and Amendments) must be made in writing, signed by all of the parties hereto.

13 

20           Choice of Law and Jurisdiction

20.1 This Account Pledge Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with the laws of the Federal Republic of Germany.

20.2 The place of jurisdiction shall be Frankfurt am Main, Germany, provided, however, that each of the Pledgees shall also be entitled to take legal action against the Pledgor before any other court of competent jurisdiction.

21           Entire Agreement

This Account Pledge Agreement constitutes the entire agreement of the parties hereto with regard to the pledges contemplated under this Account Pledge Agreement and supersedes all oral, written or other type of agreements thereon.

22          Process Agent

22.1 For the purpose of any suit, action, proceeding or settlement of dispute in the German courts, the Pledgor hereby undertakes to appoint (zu bestellen) and to authorise (bevollmächtigen) [NB Address details of Process Agent in Germany to be added] Germany, as process agent (Zustellungsbevollmächtigten) to accept service of process in respect of any such suit, action, proceeding or settlement of dispute in connection with this Account Pledge Agreement. The Pledgor shall furnish the Facility Agent with written confirmation from the process agent that the process agent has accepted such appointment.

22.2 If for any reason, such process agent no longer serves as agent to receive process in the Federal Republic of Germany, the Pledgor shall promptly notify the Facility Agent and within a period of 30 days appoint a substitute process agent acceptable to the Facility Agent.

14 

Schedule 1

Address details of the parties

Party	Name	Details
		Address for Notices 1050 Caribbean Way Florida, 33132, Miami United States of America
		Attention:	Vice President of Treasury
Pledgor	Royal Caribbean Cruises Ltd.		[A. Gibson]/[B. Stein]
		Facsimile:	+1 (305) 539-6400
		Email:	agibson@rccl.com
			bstein@rccl.com
		Address for notices Palmengartenstraße 5-9 60325 Frankfurt am Main Germany
Facility Agent	KfW IPEX-Bank GmbH	Attention:	Shipfinancing Department with a
			copy to Credit Operations
			Mrs. Claudia Wenzel
		Fax:	+49 (69) 7431 3768 with a copy to
			+49 (69) 7431 2944
		Email:	claudia.wenzel@kfw.de

15 

Schedule 2

The Pledged Accounts

Account name	Account Bank	Account Holder	Account Number	IBAN
[  ]	Norddeutsche Landesbank Girozentrale	Borrower	[  ]	[  ]

[NB Account details and Account Bank to be provided by KfW]

16 

Schedule 3

Notification Letter

[Norddeutsche Landesbank Girozentrale

Attn. [  ]

Friedrichswall 10

30159 Hannover

Germany] [NB to be confirmed]

[·]

Dear Sirs,

1   Royal Caribbean Cruises Ltd. (the Pledgor) hereby gives you notice in accordance with Section 1280 German Civil Code (BGB) that by an accounts pledge agreement dated [·] it has pledged in favour of KfW IPEX-Bank GmbH in its capacity as facility agent (the Facility Agent) and KfW IPEX-Bank GmbH in its capacity as lender (the Lender) (the Facility Agent and the Lender are hereinafter referred together to as the Pledgees) (the Accounts Pledge Agreement) all of its rights, interests and claims in the current and future amounts standing to credit of the following accounts held in the name of the Pledgor with you:

·   Account number [  ] (IBAN DE[  ]);

(the Pledged Account).

2   The Pledgor hereby requests that you deliver to the Pledgor and the Pledgees confirmation of receipt of this notice in the form attached to this letter (the Acknowledgement Letter) and further request that you provide to the Pledgees all information which they request from time to time concerning the Pledged Account.

3   The Pledgor hereby further requests you to agree:

(a)   not to make any set-off or deduction from the Pledged Account or invoke any rights of retention in relation to the Pledged Account during the existence of the Account Pledge Agreement, other than in relation to (i) charges payable in connection with the maintenance of the Pledged Account in the ordinary course of business relating thereto or (ii) other bank charges or fees payable in relation to reverse and correction entries and/or amounts arising from the return of direct debits or cheques credited to an account, in each case to the extent relating to such Pledged Account; and

(b)  that the pledge in your favour over the Pledged Account granted pursuant to your general business conditions shall rank for the time the Account Pledge Agreement is in force

17 

behind the pledge over the Pledged Account granted to the Pledgees by the Pledgor pursuant to the Account Pledge Agreement and that you agree to be treated in all respect as if the pledge granted pursuant to your general business conditions would have been created after the pledge under the Account Pledge Agreement has been perfected.

4   Please confirm that you have neither received any previous notice of pledge relating to the Pledged Account nor are aware of any third party rights in relation to the Pledged Account.

5   We hereby confirm that you will be only entitled to follow the instructions of the Facility Agent in relation to the Pledged Account.

6   This Notice shall be governed by and construed in accordance with the laws of Germany.

7   Place of jurisdiction shall be Frankfurt am Main, Germany.

Yours faithfully

____________________                                                                             ___________________

Royal Caribbean Cruises Ltd.

____________________                                                                             ___________________

KfW IPEX-Bank GmbH in its capacity as Facility Agent

____________________                                                                             ___________________

KfW IPEX-Bank GmbH in its capacity as Lender

18 

Schedule 4

Acknowledgement Letter

From:

[Norddeutsche Landesbank Girozentrale

Attn. [  ]

Friedrichswall 10

30159 Hannover

Germany] [NB to be confirmed]

(the Account Bank)

To:

KfW IPEX Bank in its capacities as Facility Agent and Lender each of such terms as defined in the

Accounts Pledge Agreement as defined in the Notice

Palmengartenstraße 5-9

60325 Frankfurt am Main

Germany

(the Pledgees)

Copy:

Royal Caribbean Cruises Ltd.

[NB Address details to be added]

(the Pledgor)

Date: [·]

Dear Sirs,

We hereby confirm (a) receipt of a notice (the Notice) in accordance with Section 1280 of the German Civil Code (BGB) that by an account pledge agreement dated [·] the Pledgor has pledged in your favour all its rights and claims in the current and future amounts standing to credit of the account held in its name with us and specified in such notice (the Account), (b) our consent to the terms of the Notice including but not limited to Clause 3 (b) thereof, (c) our agreement in relation to the limitation of our rights to retain amounts standing to the credit of the Account, as set forth in paragraph 3 (a) of the Notice and (d) that we have neither received any previous notice of pledge relating to the Account nor are aware of any third party rights in relation to the Accounts.

This Acknowledgement Letter shall be governed by and construed in accordance with the laws of Germany. Place of jurisdiction shall be Frankfurt am Main, Germany.

19 

Yours faithfully

____________________                                                                             ____________________

Norddeutsche Landesbank Girozentrale

20 

Schedule 5

Instruction to Account Bank

To:

[Norddeutsche Landesbank Girozentrale

Attn. [  ]

Friedrichswall 10

30159 Hannover

Germany] [NB to be confirmed]

Dear Sirs:

Payment Instruction

We refer to the account pledge agreement dated [•] and entered into between KfW IPEX-Bank GmbH in its capacities as facility agent (the Facility Agent) and lender as pledgees (the Pledgees) and Royal Caribbean Cruises Ltd as pledgor (the Pledgor) pursuant to which the Pledgor has pledged in favour of the Pledgees all of its rights, interests and claims in the current and future amounts standing to credit of the following account held in the name of the Pledgor with you:

•   Account number [  ] (IBAN DE[  ]);

(the Pledged Account).

We as Facility Agent herby instructs you to pay, on this very day the __ of _________, the following funds you are holding on the Pledged Account to the following account:

Account Holder	[  ]
Bank Name	[  ]
IBAN	[  ]
SWIFT	[  ]
Amount	[  ]
Reference	[  ]

Bank fees shall be borne by the Pledgor.

21 

Date ……___________

____________________                                                                    ___________________

KfW IPEX-Bank GmbH in its capacity as Facility Agent

22 

Schedule 6

Form of delivery payment letter

To:            Meyer Werft GmbH

[Date]

Dear Sirs

m.v. [·] (formerly Hull No. S-691)

We, [Pledgor’s Bank], hereby confirm to you that we will unconditionally and irrevocably credit in freely available funds for value today, [Date], the sum of €[·] to your account, number [·] with [Builder’s bank] (Swift [·]).

Yours faithfully

……………………………………

for and on behalf of

[Pledgor’s bank]

23

EX-10.10

Exhibit 10.10 

Private & Confidential

Dated 17 February 2012

Royal Caribbean Cruises Ltd. (the Borrower)	(1)
KfW IPEX-Bank GmbH (the Hermes Agent)	(2)
KfW IPEX-Bank GmbH (the Facility Agent)	(3)
KfW IPEX-Bank GmbH (the Initial Mandated Lead Arranger)	(4)
and
certain financial institutions (the Lenders)	(5)

Amendment Agreement in connection with the

Credit Agreement in respect of Hull S-698

NORTON ROSE

Contents
Clause		Page
1	Interpretation and definitions	1
2	Amendment of the Credit Agreement	2
3	Representations and warranties	2
4	Incorporation of Terms	2
5	Counterparts	2
6	Governing Law	2
Schedule 1 - Amended and Restated Credit Agreement		3

THIS AMENDMENT AGREEMENT (this Agreement) is dated 17 February 2012 and made BETWEEN:

(1)   ROYAL CARIBBEAN CRUISES LTD. (a corporation organised and existing under the laws of The Republic of Liberia) (the Borrower);

(2)   KfW IPEX-Bank GmbH as facility agent (the Facility Agent);

(3)   KfW IPEX-Bank GmbH as Hermes agent (the Hermes Agent);

(4)   KfW IPEX-Bank GmbH as initial mandated lead arranger (the Initial Mandated Lead Arranger); and

(5)   The financial institutions party thereto as lenders from time to time (the Lenders).

WHEREAS:

(A)   The Borrower, the Facility Agent, the Initial Mandated Lead Arranger, the Hermes Agent and the Lenders are parties to a credit agreement dated 8 June 2011 (the Credit Agreement), in respect of the vessel with Hull number S-698 (currently under construction at Meyer Werft GmbH, Papenburg, Germany) (the Vessel) whereby it was agreed that the Lenders would make available to the Borrower, upon the terms and conditions therein, a US dollar loan facility calculated on the amount equal to the sum of (a) up to eighty per cent (80%) of the Contract Price (as defined in the Credit Agreement) of the Vessel but which Contract Price will not exceed EURO 725,000,000 and (b) up to 100% of the Hermes Fee (as defined therein).

(B)   The Parties wish to amend the Credit Agreement to the extent set out in this Agreement.

NOW IT IS AGREED as follows:

1. Interpretation and definitions

1.1 Definitions in the Credit Agreement

(a)   Unless the context otherwise requires or unless otherwise defined in this Agreement, words and expressions defined in the Credit Agreement shall have the same meanings when used in this Agreement.

(b)   The principles of construction set out in the Credit Agreement shall have effect as if set out in this Agreement.

1.2 In this Agreement:

Amended Agreement means the Credit Agreement as amended in accordance with this Agreement.

1.3 Third party rights

Other than the CIRR Representative in respect of the rights of the CIRR Representative under the Loan Documents, unless expressly provided to the contrary in a Loan Document, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person who is not a party to this Agreement.

1

1.4 Designation

In accordance with the Credit Agreement, each of the Lenders and the Facility Agent designates this Agreement as a Loan Document.

2 Amendment of the Credit Agreement

In consideration of the mutual covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree that the Credit Agreement shall, with effect from the  17 February 2012 (the Effective Date), be amended so as to read in accordance with the form of the amended and restated Credit Agreement set out in Schedule 1 (and as so amended) will continue to be binding upon each of the parties hereto in accordance with its terms as so amended and restated.

3 Representations and warranties

The representations and warranties in Article VI of the Credit Agreement (excluding Section 6.10 of the Credit Agreement) are deemed to be made by the Borrower (by reference to the facts and circumstances then existing) on the date of this Agreement, in each case as if reference to the Loan Documents in each such representation and warranty was a reference to this Agreement.

4 Incorporation of Terms

The provisions of Section 11.2 (Notices), Section 11.6 (Severability) and Section 11.14 (Law and Jurisdiction) of the Credit Agreement shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those sections to “this Agreement” or “the Loan Documents” were references to this Agreement.

5 Counterparts

This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.

6 Governing Law

This Agreement, and all non-contractual obligations arising in connection with it, shall be governed by and construed in accordance with English law.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

2 

Schedule 1

Amended and Restated Credit Agreement

3 

EXECUTION COPY

_________________________________________

HULL NO. S-698 CREDIT AGREEMENT

_________________________________________

dated as of June 8, 2011

amended and restated on February 17, 2012

BETWEEN

Royal Caribbean Cruises Ltd.

as the Borrower,

the Lenders from time to time party hereto,

KfW IPEX-Bank GmbH

as Hermes Agent and Facility Agent

and

KfW IPEX-Bank GmbH

as Initial Mandated Lead Arranger

TABLES OF CONTENTS

		PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1.	Defined Terms		2
SECTION 1.2	Use of Defined Terms		12
SECTION 1.3	Cross-References		12
SECTION 1.4	Application of this Agreement to KfW IPEX as an Option A Lender		13
SECTION 1.5	Accounting and Financial Determinations		13
ARTICLE II COMMITMENTS, BORROWING PROCEDURES
SECTION 2.1.	Commitment		13
SECTION 2.2.	Commitment of the Lenders, Termination and Reduction of Committments		13
SECTION 2.3.	Borrowing Procedure		14
SECTION 2.4.	Funding		16
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1.	Repayments		16
SECTION 3.2.	Prepayments		16
SECTION 3.3.	Interest Provisions		17
SECTION 3.3.1.	Rates		17
SECTION 3.3.2.	Election of Floating Rate		18
SECTION 3.3.3.	Conversion to Floating Rate		18
SECTION 3.3.4.	Post-Maturity Rates		18
SECTION 3.3.5	Payment Dates		18
SECTION 3.3.6.	Interest Rate Determination; Replacement Reference Banks		19
SECTION 3.4	Commitment Fees		19

i 

SECTION 3.4.1.	Payment	19
SECTION 3.5.	CIRR Fees	20
SECTION 3.5.1	Payment	20
SECTION 3.6	Other Fees	20
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1.	LIBO Rate Lending Unlawful	21
SECTION 4.2.	Deposits Unavailable	21
SECTION 4.3.	Increased LIBO Rate Loan Costs, etc.	22
SECTION 4.4.	Funding Losses	23
SECTION 4.4.1	Indemnity	23
SECTION 4.5.	Increased Capital Costs	25
SECTION 4.6.	Taxes	26
SECTION 4.7.	Reserve Costs	28
SECTION 4.8.	Payments, Computations, etc.	28
SECTION 4.9.	Replacement Lenders, etc.	29
SECTION 4.10.	Sharing of Payments	30
SECTION 4.11.	Setoff	30
SECTION 4.12.	Use of Proceeds	30
ARTICLE V CONDITIONS PRECEDENT
SECTION 5.1.	Initial Advance of the Loan	31
SECTION 5.1.1.	Resolutions, etc.	31
SECTION 5.1.2.	Opinions of Counsel	32
SECTION 5.1.3.	Hermes Insurance Policy	32
SECTION 5.1.4	CIRR requierments	32
SECTION 5.2.	Advance of the Loan	33

ii 

SECTION 5.2.1.	Closing Fees, Expenses, etc.	33
SECTION 5.2.2.	Compliance with Warranties, No Defaults, etc.	33
SECTION 5.2.3.	Loan Request	34
SECTION 5.2.4.	Hermes Insurance Policy	34
SECTION 5.2.5.	Foreign Exchange Counterparty Confirmations	34
SECTION 5.3.	Advance of the Loan on the Final Disbursement Date	34
SECTION 5.4.		34
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1.	Organization, etc.	34
SECTION 6.2.	Due Authorization, Non-Contravention, etc.	35
SECTION 6.3.	Government Approval, Regulation, etc.	35
SECTION 6.4.	Compliance with Environmental Laws	35
SECTION 6.5	Validity, etc.	35
SECTION 6.6.	No Default, Event of Default or Prepayment Event	35
SECTION 6.7.	Litigation	35
SECTION 6.8	The Purchased Vessel	36
SECTION 6.9.	Obligations rank pari passu	36
SECTION 6.10	Withholding, etc.	36
SECTION 6.11.	No Filing, etc.	36
SECTION 6.12.	No Immunity	36
SECTION 6.13.	Investment Company Act	36
SECTION 6.14.	Regulation U	37
SECTION 6.15.	Accuracy of Information	37
ARTICLE VII COVENANTS
SECTION 7.1.	Affirmative Covenants	37

iii 

SECTION 7.1.1	Financial Information, Reports, Notices, etc.	37
SECTION 7.1.2.	Approvals and Other Consents	38
SECTION 7.1.3.	Compliance with Laws, etc.	39
SECTION 7.1.4.	The Purchased Vessel	39
SECTION 7.1.5.	Insurance	40
SECTION 7.1.6.	Books and Records	40
SECTION 7.1.7.	Hermes Insurance Policy/Federal Republic of Germany Requirement	40
SECTION 7.2.	Negative Covenants	40
SECTION 7.2.1.	Business Activities	40
SECTION 7.2.2	Indebtedness	40
SECTION 7.2.3.	Liens	41
SECTION 7.2.4.	Financial Condition	43
SECTION 7.2.5.	Investments	43
SECTION 7.2.6.	Consolidation, Merger, etc.	44
SECTION 7.2.7.	Asset Dispositions, etc.	44
SECTION 7.2.8.	Transactions with Affiliates	45
ARTICLE VIII EVENTS OF DEFAULT
SECTION 8.1.	Listing of Events of Default	45
SECTION 8.1.1.	Non-Payment of Obligations	45
SECTION 8.1.2.	Breach of Warranty	45
SECTION 8.1.3.	Non-Performance of Certain Covenants and Obligations	45
SECTION 8.1.4.	Default on Other Indebtedness	46
SECTION 8.1.5.	Bankruptcy, Insolvency, etc.	46
SECTION 8.2.	Action if Bankruptcy	47
SECTION 8.3.	Action if Other Event of Default	47

iv 

ARTICLE IX PREPAYMENT EVENTS
SECTION 9.1.	Listing of Prepayment Events	47
SECTION 9.1.1.	Change in Ownership	47
SECTION 9.1.2.	Change in Board	48
SECTION 9.1.3.	Unenforceability	48
SECTION 9.1.4.	Approvals	48
SECTION 9.1.5.	Non-Performance of Certain Covenants and Obligations	48
SECTION 9.1.6.	Judgments	48
SECTION 9.1.7.	Condemnation, etc.	48
SECTION 9.1.8.	Arrest	49
SECTION 9.1.9.	Sale/Disposal of the Vessel	49
SECTION 9.1.10.	Delayed Delivery of the Vessel	49
SECTION 9.1.11.	Termination of Construction Contract	49
SECTION 9.2.	Mandatory Prepayment	49
ARTICLE X THE FACILITY AGENT AND THE HERMES AGENT
SECTION 10.1.	Actions	49
SECTION 10.2.	Indemnity	50
SECTION 10.3.	Funding Reliance, etc.	50
SECTION 10.4.	Exculpation	51
SECTION 10.5.	Successor	51
SECTION 10.6.	Loans by the Facility Agent	52
SECTION 10.7.	Credit Decisions	52
SECTION 10.8.	Copies, etc.	52
SECTION 10.9.	The Agents’ Rights	53
SECTION 10.10.	The Facility Agent’s Duties	53

v 

SECTION 10.11.	Employment of Agents	53
SECTION 10.12.	Distribution of Payments	54
SECTION 10.13.	Reimbursement	54
SECTION 10.14.	Instructions	54
SECTION 10.15.	Payments	54
SECTION 10.16.	“Know your customer” Checks	54
SECTION 10.17.	No Fiduciary Relationship	54
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1.	Waivers, Amendments, etc.	55
SECTION 11.2.	Notices	56
SECTION 11.3.	Payment of Costs and Expenses	57
SECTION 11.4.	Indemnification	57
SECTION 11.5.	Survival	58
SECTION 11.6.	Severability	59
SECTION 11.7.	Headings	59
SECTION 11.8.	Execution in Counterparts,	59
SECTION 11.9.	Third Party Rights	59
SECTION 11.10.	Successors and Assigns	59
SECTION 11.11.	Sale and Transfer of the Loan; Participations in the Loan	59
SECTION 11.11.1.	Assignments	59
SECTION 11.11.2.	Participations	61
SECTION 11.12.	Other Transactions	62
SECTION 11.13.	Hermes Insurance Policy	63
SECTION 11.13.1.	Terms of Hermes Insurance Policy	63
SECTION 11.13.2.	Obligations of the Borrower	64

vi 

SECTION 11.13.3	Obligations of the Hermes Agent and the Lenders	64
SECTION 11.14.	Law and Jurisdiction	65
SECTION 11.14.1.	Governing Law	65
SECTION 11.14.2.	Jurisdiction	65
SECTION 11.14.3.	Alternative Jurisdiction	65
SECTION 11.14.4.	Service of Process	66
SECTION 11.15.	Confidentiality	66

vii 

EXHIBITS
Exhibit A	-	Repayment Schedule
Exhibit B	-	Form of Loan Request
Exhibit C	-	[Reserved]
Exhibit D-1	-	Form of Opinion of Liberian Counsel to Borrower
Exhibit D-2	-	Form of Opinion of Counsel to Lenders
Exhibit D-3	-	Form of Opinion of US Tax Counsel to the Lenders
Exhibit E	-	Form of Lender Assignment Agreement
Exhibit F	-	Form of Option A Refinancing Agreement
Exhibit G	-	Form of Pledge Agreement
Exhibit H	-	Form of Opinion of German Counsel

viii 

CREDIT AGREEMENT

HULL NO. S-698 CREDIT AGREEMENT, dated as of June 8, 2011 as amended and restated on February 17, 2012, is among Royal Caribbean Cruises Ltd., a Liberian corporation (the “Borrower”), KfW IPEX-Bank GmbH, in its capacity as agent for the Lenders referred to below in respect of Hermes-related matters (in such capacity, the “Hermes Agent”), in its capacity as facility agent (in such capacity, the “Facility Agent”) and in its capacity as a lender (in such capacity, together with each of the other Persons that shall become a “Lender” in accordance with Section 11.11.1 hereof, each of them individually a “Lender” and, collectively, the “Lenders”).

W I T N E S S E T H:

WHEREAS,

(A)   The Borrower and Meyer Werft GmbH, Papenburg (the “Builder”) have entered on February 14, 2011 into a Contract for the Construction and Sale of Hull No. S-698 (as amended from time to time, the “Construction Contract”) pursuant to which the Builder has agreed to design , construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number S-698 (the “Purchased Vessel”);

(B)   The Lenders have agreed to make available to the Borrower, upon the terms and conditions contained herein, a US dollar loan facility calculated on the amount (the “Maximum Loan Amount”) equal to the sum of (x) up to eighty per cent (80%) of the Contract Price (as defined below) of the Purchased Vessel (as defined below), as adjusted from time to time in accordance with the Construction Contract to reflect, among other adjustments, change orders, but which Contract Price shall not exceed for this purpose EUR 725,000,000 (the “Contract Price Proceeds”) and (y) up to 100% of the Hermes Fee (as defined below) (the “Hermes Fee Proceeds”) and being made available in the US Dollar Equivalent of that Maximum Loan Amount;

(C)   Except as otherwise provided below under the Alternative Disbursement Option (as defined below), the Contract Price Proceeds will be provided to the Borrower two (2) Business Days prior to the delivery of the Purchased Vessel for the purpose of paying a portion of the Contract Price in connection with the Borrower’s purchase of the Purchased Vessel.  The Hermes Fee Proceeds will be provided on the First Disbursement Date, with 75% of such Hermes Fee Proceeds to be disbursed directly to the Hermes Agent for Hermes’ account for the payment of the Second Fee (as defined below) and 25% to be disbursed to the Borrower for reimbursement of the First Fee (as defined below) .

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1.Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, when capitalized, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

“Accumulated Other Comprehensive Income (Loss)” means at any date the Borrower’s accumulated other comprehensive income (loss) on such date, determined in accordance with GAAP.

“Affiliate” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person.  A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Agreement” means, on any date, this credit agreement as originally in effect on the Effective Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.

“Alternative Disbursement Option” means the option of the Borrower to request the making of the Loan in multiple advances (in an aggregate principal amount not to exceed the US Dollar Maximum Loan Amount) (i) prior to delivery of the Purchased Vessel, on each date on which the Borrower is required to make a pre-delivery installment payment to the Builder (other than, for the avoidance of doubt, the first such pre-delivery installment) and (ii) on the Final Disbursement Date.

“Amendment Agreement” means the agreement dated February ___, 2012 and made between the parties hereto pursuant to which this Agreement was amended and restated.

“Applicable Commitment Rate” means (x) from the Effective Date through and including October 28, 2012, 0.15% per annum, (y) from October 29, 2012 through and including October 28, 2013, 0.25% per annum, and (z) from October 29, 2013 until the Final Disbursement Date, 0.30% per annum.

“Applicable Jurisdiction” means the jurisdiction or jurisdictions under which the Borrower is organized, domiciled or resident or from which any of its business activities are conducted or in which any of its properties are located and which has jurisdiction over the subject matter being addressed.

“Approved Appraiser” means any of the following: Barry Rogliano Salles, Paris, H Clarkson & Co. Ltd., London, R.S. Platou Shipbrokers, Norway, or Fearnley AS, Norway.

“Assignee Lender” is defined in Section 11.11.1.

2 

“Authorized Officer” means those officers of the Borrower authorized to act with respect to the Loan Documents and whose signatures and incumbency shall have been certified to the Facility Agent by the Secretary or an Assistant Secretary of the Borrower.

“Borrower” is defined in the preamble.

“Builder” is defined in the preamble.

“Business Day” means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City, London or Frankfurt, and if the applicable Business Day relates to an advance of all or part of the Loan, an Interest Period, prepayment or conversion, in each case with respect to the Loan bearing interest by reference to the LIBO Rate, a day on which dealings in deposits in Dollars are carried on in the London interbank market.

“Capital Lease Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases.

“Capitalization ” means, at any date, the sum of (a) Net Debt on such date, plus (b) Stockholders’ Equity on such date.

“Capitalized Lease Liabilities” means the principal portion of all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

“Cash Equivalents” means all amounts other than cash that are included in the “cash and cash equivalents” shown on the Borrower’s balance sheet prepared in accordance with GAAP.

“Celebrity Solstice Agreement” means that certain Hull No. S-675 Credit Agreement dated as of August 7, 2008 among Celebrity Solstice Inc., KfW IPEX as administrative agent and KfW IPEX and BNP Paribas S.A. as lenders, as amended, restated, supplemented or otherwise modified from time to time.

“CIRR Representative” means KfW, acting in its capacity as CIRR mandatary in connection with this Agreement.

“Citibank Agreement” means the U.S. $875,000,000 amended and restated credit agreement dated as of July 21, 2011 among the Borrower, as borrower, Citigroup Global Markets Inc. and DnB Nor Bank ASA, as co-lead arrangers, and Citibank, N.A., as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

3 

“Commitment” means, relative to any Lender, such Lender’s obligation to make the Loan pursuant to Section 2.1.

“Commitment Fees” is defined in Section 3.4.

“Commitment Termination Date” means January 11, 2016.

“Construction Contract” is defined in the preamble.

“Contract Price” is as defined in the Construction Contract.

“Contractual Delivery Date” means, at any time, the date which at such time is the date specified for delivery of the Purchased Vessel under the Construction Contract, as such date may be modified from time to time pursuant to the terms of the Construction Contract.

“Covered Taxes” is defined in Section 4.6.

“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

“Dollar” and the sign “$” mean lawful money of the United States.

“Effective Date” means June 8, 2011.

“Environmental Laws” means all applicable federal, state, local or foreign statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders) relating to the protection of the environment.

“EUR” and the sign “€” mean the currency of participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time.

“Event of Default” is defined in Section 8.1.

“Existing Debt” means the obligations of the Borrower or its Subsidiaries in connection with (i) the Bareboat Charterparty with respect to the vessel BRILLIANCE OF THE SEAS dated July 5, 2002 between Halifax Leasing (September) Limited and RCL (UK) LTD, (ii) the Celebrity Solstice Agreement, (iii) that certain Hull No. S-676 Credit Agreement dated as of April 15, 2009 among Celebrity Equinox Inc., the lenders from time to time party thereto and KfW IPEX-Bank GmbH (“KfW”), as Hermes agent and administrative agent, (iv) that certain credit agreement dated as of May 7, 2009 as amended and restated as of October 9, 2009 among Oasis of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and BNP Paribas, as administrative agent, (v) that certain Hull No. S-677 Credit Agreement dated as of November 26, 2009 among Celebrity Eclipse Inc., the lenders from time to time party thereto and KfW, as Hermes agent and administrative agent and (vi) that certain credit agreement dated as of March 15, 2010 among Allure of the Seas Inc., the Borrower, as guarantor, the lenders from time to time party thereto and Skandinaviska Enskilda Banken AB (publ), as

4 

administrative agent, and the replacement, extension, renewal or amendment of the foregoing without increase in the amount or change in any direct or contingent obligor of such obligations.

“Existing Group” means the following Persons:  (a) A. Wilhelmsen AS., a Norwegian corporation (“Wilhelmsen”); (b) Cruise Associates, a Bahamian general partnership (“Cruise”); and (c) any Affiliate of either or both of Wilhelmsen and Cruise.

“Existing Principal Subsidiaries” means each Subsidiary of the Borrower that is a Principal Subsidiary on the Effective Date.

“Facility Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Facility Agent, and as shall have accepted such appointment, pursuant to Section 10.5.

“FATCA” means Sections 1471 through 1474 of the Code, as in effect at the date hereof, and any current or future regulations promulgated thereunder or official interpretations thereof.

“Fee Letter” means any letter entered into by reference to this Agreement between any or all of the Facility Agent, the Initial Mandated Lead Arranger, the Lenders and/or the Borrower setting out the amount of certain fees referred to in, or payable in connection with, this Agreement.

“Final Disbursement Date” means the date on which the Loan is advanced, or, if the Borrower elects the Alternative Disbursement Option in accordance with Section 2.3(b), the date on which the final balance of the Loan is advanced in connection with delivery of the Purchased Vessel under the Construction Contract; provided that if the Loan is, or as the case may be, the final balance of the Loan is reborrowed pursuant to Section 3.7, then the Final Disbursement Date, solely with respect to such reborrowed Loan, shall be the date of such reborrowing.

“Final Maturity” means twelve (12) years after the Contractual Delivery Date.

“First Disbursement Date” means the date on which the Loan is advanced, or, if the Borrower elects the Alternative Disbursement Option in accordance with Section 2.3(b), the date on which the first advance of the Loan is made.

“First Fee” is defined in Section 11.13.

“Fiscal Quarter” means any quarter of a Fiscal Year.

“Fiscal Year” means any annual fiscal reporting period of the Borrower.

“Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Quarter, the ratio computed for the period of four consecutive Fiscal Quarters ending on the close of such Fiscal Quarter of:

a)   net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to

5 

b)   the sum of:

i)           dividends actually paid by the Borrower during such period (including, without limitation, dividends in respect of preferred stock of the Borrower); plus

ii)            scheduled payments of principal of all debt less New Financings (determined in accordance with GAAP, but in any event including Capitalized Lease Liabilities) of the Borrower and its Subsidiaries for such period.

“Fixed Rate” means a rate per annum equal to the sum of 3.66% per annum plus the Fixed Rate Margin.

“Fixed Rate Loan” means the Loan bearing interest at the Fixed Rate, or that portion of the Loan that continues to bear interest at the Fixed Rate after the termination of any Interest Make-Up Agreement pursuant to Section 3.3.3.

“Fixed Rate Margin” means 1.10% per annum.

“Floating Rate” means a rate per annum equal to the sum of the LIBO Rate plus the Floating Rate Margin.

“Floating Rate Indemnity Amount” is defined in Section 4.4.1(a).

“Floating Rate Loan” means all or any portion of the Loan bearing interest at the Floating Rate.

“Floating Rate Margin” means, for each Interest Period, 1.30% per annum.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

“Funding Losses Event” is defined in Section 4.4.1.

“GAAP” is defined in Section 1.5.

“Government-related Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under, or Indebtedness incurred by the Borrower or any Subsidiary of the Borrower to satisfy obligations under, any governmental requirement imposed by any Applicable Jurisdiction that must be complied with to enable the Borrower and its Subsidiaries to continue their business in such Applicable Jurisdiction, excluding, in any event, any taxes imposed on the Borrower or any Subsidiary of the Borrower.

“Hedging Instruments” means options, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof used to hedge interest, foreign currency and commodity exposures.

6 

“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.

“Hermes” means Euler Hermes Kreditversicherungs AG, Friedensallee 254, 22763 Hamburg acting in its capacity as representative of the Federal Republic of Germany in connection with the issuance of export credit guarantees.

“Hermes Agent” is defined in the preamble.

“Hermes Fee” means the fee payable to Hermes under and in respect of the Hermes Insurance Policy.

“Hermes Insurance Policy” means the guarantee (Deckungsdokument) issued by the Federal Republic of Germany, represented by Hermes, in favor of the Lenders.

“Indebtedness ” means, for any Person:  (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 180 days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) guarantees by such Person of Indebtedness of others, up to the amount of Indebtedness so guaranteed; (g) obligations of such Person in respect of surety bonds and similar obligations; and (h) liabilities arising under Hedging Instruments.

“Indemnified Liabilities” is defined in Section 11.4.

“Indemnified Parties ” is defined in Section 11.4.

“Interest Make-Up Agreement” means either an Option A Refinancing Agreement or an Option B Interest Make-Up Agreement

“Interest Payment Date” means, if the Borrower exercises the Alternative Disbursement Option, (i) prior to the Final Disbursement Date, each day that falls at a six (6)-month interval after the First Disbursement Date and (ii) the Final Disbursement Date.

“Interest Period” means:

(i) if the Borrower exercises the Alternative Disbursement Option, for the period from the First Disbursement Date to the Final Disbursement Date, the period between the First

7 

Disbursement Date and the first Interest Payment Date, and subsequently, each succeeding period between two consecutive Interest Payment Dates and (ii) from and after the Final Disbursement Date, the period between the Final Disbursement Date and the first Repayment Date, and subsequently each succeeding period between two consecutive Repayment Dates, except that:

a)   Any Interest Period which would otherwise end on a day which is not a Business Day shall end on the next Business Day to occur, except if such Business Day does not fall in the same calendar month, the Interest Period will end on the last Business Day in that calendar month, the interest amount due in respect of the Interest Period in question and in respect of the next following Interest Period being adjusted accordingly; and

b)   If any Interest Period is altered by the application of a) above, the subsequent Interest Period shall end on the day on which it would have ended if the preceding Interest Period had not been so altered.

“Investment” means, relative to any Person,

a)   any loan or advance made by such Person to any other Person (excluding commission, travel, expense and similar advances to officers and employees made in the ordinary course of business); and

b)   any ownership or similar interest held by such Person in any other Person.

“KfW” means KfW of Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Germany acting in its own name for the account of the government of the Federal Republic of Germany.

“KfW IPEX” means KfW IPEX-Bank GmbH.

“Lender Assignment Agreement” means any Lender Assignment Agreement substantially in the form of Exhibit E.

“Lender” and “Lenders” are defined in the preamble.

“Lending Office” means, relative to any Lender, the office of such Lender designated as such below its signature hereto or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Facility Agent, whether or not outside the United States, which shall be making or maintaining the Loan of such Lender hereunder.

“LIBO Rate” means the rate per annum of the offered quotation for deposits in Dollars for six months (or for such other period as shall be agreed by the Borrower and the Facility Agent) which appears on Reuters LIBOR01 Page (or any successor page) at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period; provided that:

8

a)   subject to Section 3.3.6, if no such offered quotation appears on Reuters LIBOR01 Page (or any successor page) at the relevant time, the LIBO Rate shall be the rate per annum certified by the Facility Agent to be the average of the rates quoted by the Reference Banks as the rate at which each of the Reference Banks was (or would have been) offered deposits of Dollars by prime banks in the London interbank market in an amount approximately equal to the amount of the Loan and for a period of six months; and

b)   for the purposes of determining the post-maturity rate of interest under Section 3.3.4, the LIBO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Facility Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees.

“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever.

“Loan” means the advances made by the Lenders under this Agreement from time to time in an aggregate amount not to exceed the US Dollar Maximum Loan Amount or, as the case may be, the aggregate outstanding amount of such advances from time to time.

“Loan Documents” means this Agreement, the Amendment Agreement, the Pledge Agreement, the Syndication Side Letter and the Fee Letters.

“Loan Request” means the loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit B hereto.

“Margin” means the Fixed Rate Margin and/or the Floating Rate Margin.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Facility Agent or any Lender under the Loan Documents or (c) the ability of the Borrower to perform its payment Obligations under the Loan Documents.

“Material Litigation” is defined in Section 6.7.

“Maximum Loan Amount” is defined in the preamble.

“Net Debt” means, at any time, the aggregate outstanding principal amount of all debt (including, without limitation, the principal portion of all capitalized leases) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) less the sum of (without duplication);

a)           all cash on hand of the Borrower and its Subsidiaries; plus

b)           all Cash Equivalents.

9

“Net Debt to Capitalization Ratio” means, as at any date, the ratio of (a) Net Debt on such date to (b) Capitalization on such date.

“New Financings” means proceeds from:

a)           borrowed money (whether by loan or issuance and sale of debt securities), including drawings under this Agreement and any revolving credit facilities of the Borrower, and

b)           the issuance and sale of equity securities.

“Nordea Agreement” means the U.S. $525,000,000 credit agreement dated as of November 19, 2010, as amended by Amendment No. 1 thereto dated as of November 19, 2010, among Royal Caribbean Cruises Ltd., as the borrower, Nordea Bank Finland PLC, Citigroup Global Markets Limited and DnB Nor Markets, Inc., as co-lead arrangers, Nordea Bank Finland PLC, as administrative agent, and DNB Nor Bank ASA, as documentation agent, as amended, restated, supplemented or otherwise modified from time to time.

“Obligations” means all obligations (payment or otherwise) of the Borrower arising under or in connection with this Agreement.

“Option A Refinancing Agreement” means a refinancing agreement entered into between the Refinancing Bank and any Lender pursuant to Sections 1.2.1 and 1.2.2 of the Terms and Conditions, substantially in the form of Exhibit F hereto.

“Option A Lender” means each Lender that has executed an Option A Refinancing Agreement.

“Option B Interest Make-Up Agreement” means an interest make-up agreement entered into between the CIRR Representative and any Lender pursuant to Section 1.2.4 of the Terms and Conditions.

“Option B Lender” means each Lender that has executed an Option B Interest Make-Up Agreement.

“Organic Document” means, relative to the Borrower, its articles of incorporation (inclusive of any articles of amendment to its articles of incorporation) and its by-laws.

“Participant ” is defined in Section 11.11.2.

“Participant Register ” is defined in Section 11.11.2.

“Percentage” means, relative to any Lender, the percentage set forth opposite its signature hereto or as set out in the applicable Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Section 4.9 or pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.

10 

“Person” means any natural person, corporation, limited liability company, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.

“Pledge Agreement” means a pledge agreement substantially in the form of Exhibit G.

“Pledged Account” means the account referred to in the Pledge Agreement.

“Prepayment Event” is defined in Section 9.1.

“Principal Subsidiary” means any Subsidiary of the Borrower that owns a Vessel.

“Purchased Vessel” is defined in the preamble.

“Quarterly Payment Date” means the last day of each March, June, September and December or, if any such day is not a Business Day, the next succeeding Business Day.

“Reference Banks” means KfW IPEX and each additional Reference Bank and/or each replacement Reference Bank appointed by the Facility Agent pursuant to Section 3.3.6.

“Refinancing Bank” means KfW in its capacity as the provider of refinancing pursuant to Section 1.2.2 of the Terms and Conditions.

“Register” is defined in Section 11.11.3.

“Repayment Date” means each of the dates for payment of the repayment installments of the Loan specified in Exhibit A, as amended and/or replaced from time to time by the Facility Agent and the Borrower.

“Required Lenders” means, at any time, Lenders that in the aggregate, hold more than 50% of the aggregate unpaid principal amount of the Loan or, if no such principal amount is then outstanding, Lenders that in the aggregate have more than 50% of the Commitments.

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

“Second Fee” is defined in Section 11.13.

“Stockholders’ Equity” means, as at any date, the Borrower’s stockholders’ equity on such date, excluding Accumulated Other Comprehensive Income (Loss), determined in accordance with GAAP, provided that any non-cash charge to Stockholders’ Equity resulting (directly or indirectly) from a change after the Effective Date in GAAP or in the interpretation thereof shall be disregarded in the computation of Stockholders’ Equity such that the amount of any reduction thereof resulting from such change shall be added back to Stockholders’ Equity.

“Subsidiary” means, with respect to any Person, any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class

11 

or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

“Syndication Side Letter” means the side letter dated as of  the date of this Agreement entered into between KfW IPEX, in its capacity as Lender, and the Borrower.

“Terms and Conditions” means the general terms and conditions for CIRR Interest Make-Up for Ship Financing issued by the Federal Republic of Germany on May 12, 2009.

“US Dollar Equivalent” means the EUR amount converted to a corresponding Dollar amount as determined using the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amount of EUR with Dollars (x) with respect to any advance made under the Alternate Disbursement Option to fund a pre-delivery installment of the Contract Price, for the payment of such pre-delivery installment of the Contract Price and (y) otherwise, for the payment of the final installment of the Contract Price; provided that the US Dollar Equivalent of any advances made in respect of the Hermes Fee shall be determined in accordance with Section 2.3(d).  Such rate of exchange shall be evidenced by foreign exchange counterparty confirmations. The US Dollar Equivalent of any advance shall be calculated by the Borrower in consultation with the Facility Agent no less than two (2) Business Days prior to the making of such advance.

“US Dollar Maximum Loan Amount” means the US Dollar Equivalent of the Maximum Loan Amount.

“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.

“Vessel” means a passenger cruise vessel owned by the Borrower or one of its Subsidiaries.

“Voting Stock” means shares of capital stock of the Borrower of any class or classes (however designated) that have by the terms thereof normal voting power to elect the members of the Board of Directors of the Borrower (other than voting power upon the occurrence of a stated contingency, such as the failure to pay dividends).

SECTION 1.2.Use of Defined Terms.  Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall, when capitalized, have such meanings when used in each Loan Request and each notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.

SECTION 1.3.Cross-References.  Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

12 

SECTION 1.4.Application of this Agreement to KfW IPEX as an Option A Lender.  The parties to this Agreement are aware that KfW IPEX will not enter into an Option A Refinancing Agreement with the CIRR Representative.  However, for the purposes of this Agreement, KfW IPEX will be deemed to have entered into an Option A Refinancing Agreement with the CIRR Representative in the form of Exhibit F.  Consequently, any reference to an Option A Lender shall include KfW IPEX and any reference to an Option A Refinancing Agreement shall include the Option A Refinancing Agreement deemed to have been entered into by KfW IPEX.

SECTION 1.5.Accounting and Financial Determinations.  Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared, in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies); provided that if the Borrower elects to apply or is required to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP, upon any such election and notice to the Facility Agent, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided further that if, as a result of (i) any change in GAAP or IFRS or in the interpretation thereof or (ii) the application by the Borrower of IFRS in lieu of GAAP, in each case, after the date of the financial statements referred to in Section 6.6, there is a change in the manner of determining any of the items referred to herein or thereunder that are to be determined by reference to GAAP, and the effect of such change would (in the reasonable opinion of the Borrower or the Facility Agent) be such as to affect the basis or efficacy of the financial covenants contained in Section 7.2.4 in ascertaining the consolidated financial condition of the Borrower and its Subsidiaries and the Borrower notifies the Facility Agent that the Borrower requests an amendment to any provision hereof to eliminate such change occurring after the date hereof in GAAP or the application thereof on the operation of such provision (or if the Facility Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), then such item shall for the purposes of Section 7.2.4 continue to be determined in accordance with GAAP relating thereto as if GAAP were applied immediately prior to such change in GAAP or in the interpretation thereof until such notice shall have been withdrawn or such provision amended in accordance herewith.

ARTICLE II

COMMITMENTS AND BORROWING PROCEDURES

SECTION 2.1.Commitment.  On the terms and subject to the conditions of this Agreement (including Article V), each Lender severally agrees to make its portion of the Loan pursuant to its Commitment described in Section 2.2.  No Lender’s obligation to make the Loan shall be affected by any other Lender’s failure to make the Loan.

SECTION 2.2.Commitment of the Lenders; Termination and Reduction of Commitments.

13

a)   Each Lender will make its portion of the Loan available to the Borrower in accordance with Section 2.3 either (i) two (2) Business Days prior to the delivery of the Purchased Vessel to the Borrower under the Construction Contract pursuant to Section 2.3(a) or (ii) if the Borrower elects the Alternative Disbursement Option in accordance with Section 2.3(b), as set forth in Section 2.3(b).  The commitment of each Lender described in this Section 2.2 (herein referred to as its “Commitment”) shall be the commitment of such Lender to make available to the Borrower its portion of the Loan hereunder expressed as the initial amount set forth opposite such Lender’s name on its signature page attached hereto or, in the case of any Lender that becomes a Lender pursuant to an assignment pursuant to Section 11.11.1, the amount set forth as such Lender’s Commitment in the related Lender Assignment Agreement, in each case as such amount may be reduced from time to time pursuant to Section 2.2(b) or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.11.1.  Notwithstanding the foregoing, each Lender’s Commitment shall terminate on the earlier of (i) the Commitment Termination Date if the Purchased Vessel is not delivered prior to such date and (ii) the delivery of the Purchased Vessel.

b)   The Borrower may, by notice to the Facility Agent, at any time (i) prior to the date that is not less than 61 days prior to the First Disbursement Date, without premium or penalty, terminate, or from time to time reduce, the Commitments and (ii) prior to the date on which the Commitments have been terminated but less than 61 days prior to the First Disbursement Date, and subject to Section 4.4, terminate, or from time to time reduce, the Commitments.  Any such termination or reduction of the Commitments shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments.

c)   If any Lender shall default in its obligations under Section 2.1, the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Lender.

SECTION 2.3.Borrowing Procedure..

a)   Unless the Borrower has elected the Alternative Disbursement Option in accordance with Section 2.3(b), the Borrower shall deliver a Loan Request and the documents required to be delivered pursuant to Section 5.1.1(a) to the Facility Agent on or before 11:00 a.m., London time, not less than two (2) Business Days in advance of the date that is two (2) Business Days prior to the anticipated delivery date of the Purchased Vessel.  The aggregate amount of the Loan to be advanced shall not exceed the US Dollar Maximum Loan Amount.

b)   The Borrower may, subject to Section 4.12(b), at any time prior to the Contractual Delivery Date, elect the Alternative Disbursement Option by written notice to the Facility Agent delivered ten (10) Business Days prior to the requested date of the first such advance to be made following such election.  If so elected, the Borrower shall deliver a Loan Request and, in the case of the First Disbursement Date, the documents required to be delivered pursuant to Section 5.1.1(a) to the Facility Agent on or before 11:00 a.m. London time, not less than two (2) Business Days in advance of the date on which the

14 

Borrower is required to make a pre-delivery installment to the Builder (other than, for the avoidance of doubt, the first such pre-delivery installment due under the Construction Contract) or, in the case of the advance on the Final Disbursement Date, not less than two (2) Business Days in advance of the date that is two (2) Business Days prior to the anticipated delivery date of the Purchased Vessel.  Each such advance of a portion of the Loan shall not exceed the US Dollar Equivalent of 80% of the installment payment owing to the Builder on such date; provided, however, that (i) the advance to be made on the First Disbursement Date may be increased by up to 100% of the total amount of the Hermes Fee, (ii) the advance to be made on the Final Disbursement Date may be in an amount up to the excess of the US Dollar Maximum Loan Amount over the aggregate amount of all advances made prior to the Final Disbursement Date, and (iii) the aggregate amount of all such advances shall not exceed the US Dollar Maximum Loan Amount.

c)   The Facility Agent shall promptly notify each Lender of any Loan Request by forwarding a copy thereof to each Lender, together with its attachments.  On the terms and subject to the conditions of this Agreement, the Loan (or portion thereof, as specified by the Borrower) shall be made on the Business Day specified in such Loan Request.  On or before 11:00 a.m., New York time, on the Business Day specified in such Loan Request, the Lenders shall, without any set-off or counterclaim, deposit with the Facility Agent same day funds in an amount equal to such Lender’s Percentage of the requested Loan or portion thereof.  Such deposit will be made to an account which the Facility Agent shall specify from time to time by notice to the Lenders.  To the extent funds are so received from the Lenders, the Facility Agent shall, without any set-off or counterclaim, make such funds available to the Borrower on the Business Day specified in the Loan Request by wire transfer of same day funds to the account or accounts the Borrower shall have specified in its Loan Request.

d)   The Borrower shall, upon receipt of the funds into the account or accounts referred to in Section 2.3(c) above, complete the purchase of EUR with its counterparties as set out in the Loan Request and shall pay all EUR proceeds of such transactions (i) in the case of an advance on the Final Disbursement Date, to the Pledged Account no later than the Business Day following the Business Day specified in the Loan Request or (ii) to the extent applicable, in the case of any other advance, to such account and on the Business Day in each case specified in the Loan Request.

e)   If the Borrower elects to finance all or any part of the Hermes Fee with a portion of the advance made on the First Disbursement Date, the Borrower shall indicate such election in its Loan Request with respect to such advance. The amount of the advance in Dollars (the “US Dollar Hermes Advance Amount”) that will fund the Hermes Fee shall be equal to the Dollar amount that corresponds to the EUR amount of the Hermes Fee to be financed with such advance, which amount shall be reasonably determined by the Facility Agent based on the spot rate for EUR-Dollar exchanges on the date such Loan Request is delivered, which spot rate shall be determined by reference to a publicly available market service like Bloomberg that can be independently verified by the Borrower. The Facility Agent shall notify the Borrower and the Lenders of the US Dollar Hermes Advance Amount on the date such Loan Request is delivered, and the Lenders shall deposit such US Dollar Hermes Advance Amount with the Facility Agent in accordance with Section

15 

2.3.c). The Facility Agent shall furnish a certificate to the Borrower on the date such Loan Request is delivered setting forth such spot rate, its derivation and the calculation of the US Dollar Hermes Advance Amount. If the Borrower elects to so finance the Hermes Fee, the Borrower will be deemed to have directed the Facility Agent to pay over directly to Hermes on behalf of the Borrower that portion of the EUR amount of the Second Fee to be financed with the proceeds of the advance on the First Disbursement Date and to retain for its own account deposits made by the Lenders in Dollars in an amount equal to the portion of the US Dollar Hermes Advance Amount attributable to the Second Fee paid by the Facility Agent to Hermes on behalf of the Borrower.

SECTION 2.4.Funding.  Each Lender may, if it so elects, fulfill its obligation to make or continue its Loan hereunder by causing a branch or Affiliate (or an international banking facility created by such Lender) other than that indicated next to its signature to this Agreement or, as the case may be, in the relevant Lender Assignment Agreement, to make or maintain such Loan; provided that such Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility; provided, further, that the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had the Lender not caused such branch or Affiliate (or international banking facility) to make or maintain such Loan.

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

SECTION 3.1.Repayments.  a) Subject to Section 3.1 b), the Borrower shall repay the Loan in the installments and on the dates set out in Exhibit A.

b)   If, on the date of delivery of the Purchased Vessel, the outstanding principal amount of the Loan exceeds the US Dollar Maximum Loan Amount (as a result of a reduction in the Contract Price after the Final Disbursement Date and before the delivery of the Purchased Vessel), the Borrower shall repay the Loan in an amount equal to such excess within two (2) Business Days after the date of delivery of the Purchased Vessel.  Any such partial prepayment shall be applied pro rata in satisfaction of the repayment installments of the Loan set out in Exhibit A.

c)   No such amounts repaid by the Borrower pursuant to this Section 3.1 may be reborrowed under the terms of this Agreement.

SECTION 3.2.Prepayment.  The Borrower

a)   May, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan; provided that:

i)   all such voluntary prepayments shall require (x) for prepayments on or after the Final Disbursement Date made prior to delivery of the Purchased Vessel in respect of the

16 

 advance made on such Final Disbursement Date, at least two (2) Business Days’ prior written notice to the Facility Agent, and (y) for all other prepayments, at least 30 calendar days’ prior written notice, if all or any portion of the Loan is a Fixed Rate Loan, and at least five (5) Business Days’ (or, if such prepayment is to be made on the last day of an Interest Period for such Loan, four (4) Business Days’) prior written notice, if the Loan is a Floating Rate Loan, in each case to the Facility Agent; and

ii)   all such voluntary partial prepayments shall be in an aggregate minimum amount of $10,000,000 and a multiple of $1,000,000 (or in the remaining amount of the Loan) and shall be applied in inverse order of maturity or ratably among all remaining installments, as the Borrower shall designate to the Facility Agent,in satisfaction of the repayment installments of the Loan set out in Exhibit A.

b)   Shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to Section 8.2 or 8.3 or the mandatory prepayment of the Loan pursuant to Section 9.2, repay the Loan.

Each prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.  No amounts prepaid by the Borrower may be reborrowed under the terms of this Agreement except as provided in Section 3.7 and the last paragraph of Section 9.1 (which follows Section 9.1.10).

the last paragraph of Section 9.1 (which follows Section 9.1.10).

SECTION 3.3.Interest Provisions.  Interest on the outstanding principal amount of the Loan shall accrue and be payable in accordance with this Section 3.3.

SECTION 3.3.1.Rates.  The Loan shall accrue interest from the First Disbursement Date to the date of repayment or prepayment of the Loan in full to the Lenders at the Fixed Rate, subject to (i) any election made by the Borrower to elect the Floating Rate pursuant to Section 3.3.2 or (ii) any conversion of any portion of the Loan held by a Lender to a Floating Rate Loan upon the termination of the Interest Make-Up Agreement to which such Lender is a party in accordance with Section 3.3.3.  Interest calculated at the Fixed Rate or the Floating Rate shall be payable semi-annually in arrears on each Interest Payment Date and on the Repayment Dates set out in Exhibit A (for purposes of clarification, it being understood that if the Borrower exercises the Alternative Disbursement Option, the period of time between (x) the making of any advance after the First Disbursement Date and the next following Interest Payment Date and/or (y) the final Interest Payment Date and the immediately preceding Interest Payment Date may be less than six months, and that the reference period for the LIBO Rate for such advances during such periods shall be adjusted accordingly).  The Loan shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loan.  All interest shall be calculated on the basis of the actual number of days elapsed over a year comprised of 360 days.

17

SECTION 3.3.2.Election of Floating Rate.

a)   By written notice to the Facility Agent delivered prior to the date that is not less than 61 days prior to the First Disbursement Date, the Borrower may elect, without incurring any liability to make any payments pursuant to Section 4.4 or to pay any other indemnity or compensation obligation, to pay interest on the Loan at the Floating Rate.

b)   By written notice to the Facility Agent delivered less than 61 days prior to the First Disbursement Date but not less than 30 days prior to the First Disbursement Date, the Borrower may elect, subject to Section 4.4, to pay interest on the Loan at the Floating Rate.

c)   By written notice to the Facility Agent no later than 2:00 p.m. Frankfurt time 30 days prior to the end of an Interest Period, the Borrower may elect, subject to Section 4.4, to pay interest on the Loan for the remainder of the term of the Loan at the Floating Rate, with effect from the end of that Interest Period.

d)   Any election made under any of Section 3.3.2.a), Section 3.3.2.b) or Section 3.3.2.c) may only be made one time during the term of the Loan.

SECTION 3.3.3.Conversion to Floating Rate.  If, during any Interest Period, the Interest Make-Up Agreement in effect with any Lender is terminated for any reason (other than as a result of the negligence or willful misconduct of such Lender), then the portion of the Loan held by such Lender shall convert to a Floating Rate Loan on the last day of such Interest Period, and the Borrower shall pay interest on such portion of the Loan at the Floating Rate on such portion for the remainder of the term of the Loan.  The Borrower shall not incur any liability to make any payments pursuant to Section 4.4 or to pay any other indemnity or compensation obligation in connection with any such conversion. For the avoidance of doubt, Section 3.3.3 shall not apply as a result of any action by the Borrower, including the termination of Commitment, any voluntary or mandatory prepayment other than pursuant to Section 9.1.10 or Section 3.2(a)(i)(x), as the case may be, acceleration of the Loan due to the occurrence of an Event of Default or an election by the Borrower pursuant to Section 3.3.2.

SECTION 3.3.4.Post-Maturity Rates.  After the date any principal amount of the Loan is due and payable (whether on any Repayment Date, upon acceleration or otherwise), or after any other monetary Obligation of the Borrower shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts for each day during the period of such default at a rate per annum certified by the Facility Agent to the Borrower (which certification shall be conclusive in the absence of manifest error) to be equal to (a) in the case of (i) principal of and interest on the Loan payable to each Option A Lender and (ii) interest on the Loan payable to each Option B Lender, the sum of the Floating Rate plus 3% per annum and (b) in the case of any other monetary Obligation, the sum of the Floating Rate plus 2% per annum.

SECTION 3.3.5.Payment Dates.  Interest accrued on the Loan shall be payable, without duplication, on the earliest of:

18

a)   each Interest Payment Date;

b)   each Repayment Date;

c)   the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and

d)   on that portion of the Loan the repayment of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.

SECTION 3.3.6.Interest Rate Determination; Replacement Reference Banks

.  The Facility Agent shall obtain from each Reference Bank timely information for the purpose of determining the LIBO Rate in the event that no offered quotation appears on Reuters LIBOR01 Page (or any successor page) and the LIBO Rate is to be determined by reference to quotations supplied by the Reference Banks.  If any one or more of the Reference Banks shall fail to furnish in a timely manner such information to the Facility Agent for any such interest rate, the Facility Agent shall determine such interest rate on the basis of the information furnished by the remaining Reference Banks.  If the Borrower elects to add an additional Reference Bank hereunder or a Reference Bank ceases for any reason to be able and willing to act as such, the Facility Agent shall, at the direction of the Required Lenders and after consultation with the Borrower and the Lenders, appoint a replacement for such Reference Bank reasonably acceptable to the Borrower, and such replaced Reference Bank shall cease to be a Reference Bank hereunder.  The Facility Agent shall furnish to the Borrower and to the Lenders each determination of the LIBO Rate made by reference to quotations of interest rates furnished by Reference Banks.

Interest accrued on the Loan or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether upon acceleration or otherwise) shall be payable upon demand.

SECTION 3.4.Commitment Fees.  The Borrower agrees to pay to the Facility Agent for the account of each Lender a commitment fee (the “Commitment Fee”) on its daily unused portion of the Maximum Loan Amount (as such Maximum Loan Amount may be adjusted from time to time), for the period commencing on the Effective Date and continuing through the earliest of (i) the Final Disbursement Date, (ii) the date upon which the Facility Agent has provided the Borrower with written notice that the Lenders will not advance the Loan because the Commitments shall have been terminated pursuant to Section 8.2 or 8.3, (iii) the Commitment Termination Date and (iv) the date the Commitments shall have been terminated pursuant to Section 2.2(b).  Should the Facility Agent provide the Borrower notice that the Lenders will not advance the Loan because Hermes has cancelled the Hermes Insurance Policy, the Commitment Fees paid by the Borrower for the account of each Lender shall be promptly refunded to the Borrower by such Lender.

SECTION 3.4.1.Payment.  The Commitment Fee shall be payable by the Borrower to the Facility Agent for the account of each Lender in arrears on each Quarterly Payment Date, commencing with the first such date following the Effective Date and ending on the earliest to occur of (i) the Final Disbursement Date, (ii) the date the Lenders are no longer

19 

obligated to advance the Loan, (iii) the Commitment Termination Date and (iv) the date the Commitments shall have been terminated pursuant to Section 2.2(b).  The Commitment Fee shall be in the amount in EUR equal to the product of the Applicable Commitment Rate, multiplied by, for each day elapsed since the previous Quarterly Payment Date, the difference between the Maximum Loan Amount and the aggregate amount of all advances made on or prior to such day, divided by 360 days; provided that the Borrower may elect to pay the Commitment Fee on any Quarterly Payment Date in the Dollars by giving notice to the Facility Agent five (5) Business Days before such Quarterly Payment Date.  If the Borrower elects to pay the Commitment Fee in Dollars, the exchange rate used to convert the fee from EUR to Dollars shall be the 10 A.M. midpoint market fixing for the conversion of EUR to Dollars set by the Federal Reserve Bank of New York two (2) Business Days prior to the relevant Quarterly Payment Date.

SECTION 3.5.CIRR Fees.  The Borrower agrees to pay to the Facility Agent for the account of the CIRR Representative a fee of 0.01% per annum (the “CIRR Fee”) on the Maximum Loan Amount (as such Maximum Loan Amount may be adjusted from time to time), for the period commencing on August 14, 2011 and continuing until the earliest of (i) the date falling sixty (60) days prior to the First Disbursement Date, (ii) the date falling 30 days after the date on which the Borrower elects the Floating Rate pursuant to Section 3.3.2 or, as to any portion of the Loan converted to a Floating Rate Loan pursuant to Section 3.3.3, the date on which such portion so converts to a Floating Rate Loan, (iii) the date upon which the Facility Agent has provided written notice to the Borrower that the Lenders will not advance the Loan because the Commitments shall have been terminated pursuant to Section 8.2 or 8.3 and (iv) any other date on which the Commitments shall have been terminated.

SECTION 3.5.1.Payment.  The CIRR Fee shall be payable by the Borrower in EUR quarterly in arrears from the date of commencement of the period described in Section 3.5 and, if applicable, on the earliest of (i) the date falling sixty (60) days prior to the First Disbursement Date, (ii) the date falling 30 days after the date on which the Borrower elects the Floating Rate pursuant to Section 3.3.2 or, as to any portion of the Loan converted to a Floating Rate Loan pursuant to Section 3.3.3, the date on which such portion so converts to a Floating Rate Loan, (iii) the date upon which the Facility Agent has provided written notice to the Borrower that the Lenders will not advance the Loan because the Commitments shall have been terminated pursuant to Section 8.2 or 8.3 and (iv) any other date on which the Commitments shall have been terminated.

SECTION 3.6.Other Fees.  The Borrower agrees to pay to the Facility Agent the agreed-upon fees set forth in the Fee Letters on the dates and in the amounts set forth therein.

SECTION 3.7.  Temporary Repayment.  If the proceeds of the Loan (or, if applicable, the balance of the Loan) have not been utilised directly or indirectly to pay for delivery of the Purchased Vessel within 15 days after the initial Final Disbursement Date and have been deposited in accordance with Section 4.12, the Borrower may, by notice to the Facility Agent in accordance with Section 3.2(a) and specifying that such prepayment may be reborrowed under this Agreement, prepay the Loan together with accrued interest on the Loan so prepaid.  If the Purchased Vessel is subsequently delivered, the Borrower shall be permitted to submit one additional Loan Request in accordance with Section 2.3 to reborrow the Loan previously prepaid under this Section; provided, however, that the date of funding of any such reborrowed Loan

20 

shall not be later than 28 July 2015 and provided, further, that such date of funding shall be the Final Disbursement Date for all purposes hereunder with respect to such reborrowed Loan.  Prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.

ARTICLE IV

CERTAIN LIBO RATE AND OTHER PROVISIONS

SECTION 4.1.LIBO Rate Lending Unlawful. If after the Effective Date the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority having jurisdiction over such Lender asserts that it is unlawful for such Lender to make, continue or maintain the Loan bearing interest at a rate based on the LIBO Rate, the obligation of such Lender to make, continue or maintain its Loan bearing interest at a rate based on the LIBO Rate shall, upon notice thereof to the Borrower, the Facility Agent and each other Lender, forthwith be suspended until the circumstances causing such suspension no longer exist, provided that such Lender’s obligation to make, continue and maintain its Loan hereunder shall be automatically converted into an obligation to make, continue and maintain the Loan bearing interest at a rate to be negotiated between such Lender and the Borrower that is the equivalent of the sum of the LIBO Rate for the relevant Interest Period plus the Floating Rate Margin.

SECTION 4.2.Deposits Unavailable.  If, on or after the date the Borrower elects the Floating Rate pursuant to Section 3.3.2 or if any Lender shall have entered into an Option B Interest Make-Up Agreement (an “Option B Lender”), the Facility Agent shall have determined that:

a)   Dollar deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market, or

b)   by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate loans for the relevant Interest Period, or

c)   the cost to Option B Lenders that in the aggregate hold more than 50% of the aggregate outstanding principal amount of the Loan then held by Option B Lenders, if any Lender shall have entered into an Option B Interest Make-Up Agreement, of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the LIBO Rate (provided, that no Option B Lender may exercise its rights pursuant to this Section 4.2.c) for amounts up to the difference between such Option B Lender’s cost of obtaining matching deposits on the date such Option B Lender becomes a Lender hereunder less the LIBO Rate on such date),

then the Facility Agent shall give notice of such determination (hereinafter called a “Determination Notice”) to the Borrower and each of the Lenders.  The Borrower, the Lenders and the Facility Agent shall then negotiate in good faith in order to agree upon a mutually

21 

satisfactory interest rate and interest period (or interest periods) to be substituted for those which would otherwise have applied under this Agreement.  If the Borrower, the Lenders and the Facility Agent are unable to agree upon an interest rate (or rates) and interest period (or interest periods) prior to the date occurring fifteen (15) Business Days after the giving of such Determination Notice, the Facility Agent shall (after consultation with the Lenders) set an interest rate and an interest period (or interest periods), in each case to take effect at the end of the Interest Period current at the date of the Determination Notice, which rate (or rates) shall be equal to the sum of the Floating Rate Margin and the weighted average of the corresponding interest rates at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period on Reuters’ pages KLIEMMM, GARBIC01 and FINA01 (or such other pages as may replace Reuters’ pages KLIEMMM, GARBIC01 or FINA01 on Reuters’ service) (or, in the case of clause (c) above, the lesser of (x) the cost to the Option B Lenders of funding the portion of the Loan held by such Option B Lenders and (y) such weighted average).  The Facility Agent shall furnish a certificate to the Borrower as soon as reasonably practicable after the Facility Agent has given such Determination Notice setting forth such rate.  In the event that the circumstances described in this Section 4.2 shall extend beyond the end of an interest period agreed or set pursuant hereto, the foregoing procedure shall be repeated as often as may be necessary.

SECTION 4.3.Increased LIBO Rate Loan Costs, etc.  If after the Effective Date a change in any applicable treaty, law, regulation or regulatory requirement or in the interpretation thereof or in its application to the Borrower, or if compliance by any Lender with any applicable direction, request, requirement or guideline (whether or not having the force of law) of any governmental or other authority including, without limitation, any agency of the European Union or similar monetary or multinational authority insofar as it may be changed or imposed after the date hereof, shall:

a.   subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in Section 4.6, withholding taxes); or

b.   change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or

c.   impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in Section 4.5 and the reserve costs described in Section 4.7) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (provided that such Lender shall, unless prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or

22 

d.   impose on any Lender any other condition affecting its portion of the Loan or any part thereof,

and the result of any of the foregoing is either (i) to increase the cost to such Lender of making the Loan or maintaining the Loan or any part thereof, (ii) to reduce the amount of any payment received by such Lender or its effective return hereunder or on its capital or (iii) to cause such Lender to make any payment or to forego any return based on any amount received or receivable by such Lender hereunder, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the interests of such Lender, (A) such Lender shall (through the Facility Agent) notify the Borrower of the occurrence of such event and use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid the effects of such law, regulation or regulatory requirement or any change therein or in the interpretation thereof and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender and (B) the Borrower shall forthwith upon such demand pay to the Facility Agent for the account of such Lender such amount as is necessary to compensate such Lender for such additional cost or such reduction and ancillary expenses, including taxes, incurred as a result of such adjustment.  Such notice shall (i) describe in reasonable detail the event leading to such additional cost, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such additional cost, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request is consistent with its treatment of other borrowers that are subject to similar provisions, and (vi) certify that, to the best of its knowledge, such change in circumstance is of general application to the commercial banking industry in such Lender’s jurisdiction of organization or in the relevant jurisdiction in which such Lender does business.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such cost or reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.4.Funding Losses.

SECTION 4.4.1.Indemnity.  In the event any Lender shall incur any loss or expense (for the avoidance of doubt excluding loss of profit in the event the Borrower has elected the Floating Rate pursuant to Section 3.3.2), by reason of the liquidation or reemployment (at not less than the market rate) of deposits or other funds acquired by such Lender, to make, continue or maintain any portion of the principal amount of the Loan as a result of:

23

i)   if at the time interest is calculated at the Floating Rate, any conversion or repayment or prepayment or acceleration of the principal amount of the Loan on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment (including payments made in accordance with Section 3.1(b);

ii)   if at the time interest is calculated at the Fixed Rate, any repayment or prepayment or acceleration of the principal amount of the Loan, other than any repayment made on the date scheduled for such repayment;

iii)   an election by the Borrower of the Floating Rate in accordance with Section 3.3.2.b) or Section 3.3.2.c);

iv)   a reduction or termination of the Commitments by the Borrower pursuant to Section 2.2.b)(ii); or

v)   the Loan not being made in accordance with the Loan Request therefor due to the fault of the Borrower or as a result of any of the conditions precedent set forth in Article V not being satisfied,

(a “Funding Losses Event”) then, upon the written notice of such Lender to the Borrower (with a copy to the Facility Agent), the Borrower shall, within five (5) Business Days of its receipt thereof:

a.   if at that time interest is calculated at the Floating Rate, pay directly to the Facility Agent an amount (the “Floating Rate Indemnity Amount”) equal to the amount by which:

(i)   interest calculated at the Floating Rate which a Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share in the Loan to the last day of the applicable Interest Period,

exceeds:

(ii)   the amount which a Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period.

b.   if at that time interest is calculated at the Fixed Rate, pay to the Facility Agent for the account of such Lender the sum of:

(A) an amount equal to the amount by which:

(i)   interest calculated at the Fixed Rate which a Lender would have received on its share of the amount of the Loan subject to such

24 

Funding Losses Event for the period from the date of receipt of any part of its share of the Loan to the final scheduled date for the repayment of Loan in full pursuant to Section 3.1,

exceeds:

(ii)   the amount by which a Lender would be able to obtain by placing an equal amount to the amount received by it on deposit and receiving interest equal to the money market rate then applicable to Dollars on the Reuters page “ICAP1” (the “Reinvestment Rate”),

such amount to be discounted to present value at the Reinvestment Rate; and

(B) if such Lender has entered into an Option B Interest Make-up Agreement, an amount equal to the Floating Rate Indemnity Amount.

Such written notice shall include calculations in reasonable detail setting forth the loss or expense to such Lender.

SECTION 4.5.Increased Capital Costs.  If after the Effective Date any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority increases the amount of capital required to be maintained by any Lender or any Person controlling such Lender, and the rate of return on its or such controlling Person’s capital as a consequence of its Commitment or the Loan made by such Lender is reduced to a level below that which such Lender or such controlling Person would have achieved but for the occurrence of any such change in circumstance, then, in any such case upon notice from time to time by such Lender to the Borrower, the Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return.  Any such notice shall (i) describe in reasonable detail the capital adequacy requirements which have been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such lowered return, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request for such additional amounts is consistent with its treatment of other borrowers that are subject to similar provisions and (vi) certify that, to the best of its knowledge, such change in circumstances is of general application to the commercial banking industry in the jurisdictions in which such Lender does business.  In determining such amount, such Lender may use any method of averaging and attribution that it shall, subject to the foregoing sentence, deem applicable.  Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid such reduction in such rate of return and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to

25 

demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor.

SECTION 4.6.Taxes.  All payments by the Borrower of principal of, and interest on, the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts of such Lender and franchise taxes imposed in lieu of net income taxes or taxes on receipts, by the jurisdiction under the laws of which such Lender is organized or any political subdivision thereof or the jurisdiction of such Lender’s Lending Office or any political subdivision thereof or any other jurisdiction unless such net income taxes are imposed solely as a result of the Borrower’s activities in such other jurisdiction, and any taxes imposed under FATCA (such non-excluded items being called “Covered Taxes”).  In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Covered Taxes pursuant to any applicable law, rule or regulation, then the Borrower will:

a.   pay directly to the relevant authority the full amount required to be so withheld or deducted;

b.   promptly forward to the Facility Agent an official receipt or other documentation satisfactory to the Facility Agent evidencing such payment to such authority; and

c.   pay to the Facility Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.

Moreover, if any Covered Taxes are directly asserted against the Facility Agent or any Lender with respect to any payment received or paid by the Facility Agent or such Lender hereunder, the Facility Agent or such Lender may pay such Covered Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Covered Taxes (including any Covered Taxes on such additional amount) shall equal the amount such person would have received had no such Covered Taxes been asserted.

Any Lender claiming any additional amounts payable pursuant to this Section agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Lending Office if the making of such a change would avoid the

26 

need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

If the Borrower fails to pay any Covered Taxes when due to the appropriate taxing authority or fails to remit to the Facility Agent for the account of the respective Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders for any incremental withholding Covered Taxes, interest or penalties that may become payable by any Lender as a result of any such failure (so long as such amount did not become payable as a result of the failure of such Lender to provide timely notice to the Borrower of the assertion of a liability related to the payment of Covered Taxes).  For purposes of this Section 4.6, a distribution hereunder by the Facility Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.

If any Lender is entitled to any refund, credit, deduction or other reduction in tax by reason of any payment made by the Borrower in respect of any Covered Tax under this Section 4.6 or by reason of any payment made by the Borrower pursuant to Section 4.3, such Lender shall use reasonable efforts to obtain such refund, credit, deduction or other reduction and, promptly after receipt thereof, will pay to the Borrower such amount (plus any interest received by such Lender in connection with such refund, credit, deduction or reduction) as is equal to the net after-tax value to such Lender of such part of such refund, credit, deduction or reduction as such Lender reasonably determines is allocable to such Covered Tax or such payment (less out-of-pocket expenses incurred by such Lender), provided that no Lender shall  be obligated to disclose to the Borrower any information regarding its tax affairs or tax computations.

Each Lender (and each Participant) agrees with the Borrower and the Facility Agent that it will (i) in the case of a Lender or a Participant organized under the laws of a jurisdiction other than the United States (a) provide to the Facility Agent and the Borrower an appropriately executed copy of Internal Revenue Service Form W-8ECI certifying that any payments made to or for the benefit of such Lender or such Participant are effectively connected with a trade or business in the United States (or alternatively, an Internal Revenue Service Form W-8BEN claiming the benefits of a tax treaty, but only if the applicable treaty described in such form provides for a complete exemption from U.S. federal income tax withholding), or any successor form, on or prior to the date hereof (or, in the case of any assignee Lender or Participant, on or prior to the date of the relevant assignment or participation), in each case attached to an Internal Revenue Service Form W-8IMY, if appropriate, (b) notify the Facility Agent and the Borrower if the certifications made on any form provided pursuant to this paragraph are no longer accurate and true in all material respects and (c) provide such other tax forms or other documents as shall be prescribed by applicable law, if any, or as otherwise reasonably requested, to demonstrate, to the extent applicable, that payments to such Lender Party (or Participant) hereunder are exempt from withholding under FATCA, and (ii) in all cases, provide such forms, certificates or other documents, as and when reasonably requested by the Borrower, necessary to claim any applicable exemption from, or reduction of, Covered Taxes or any payments made to or for benefit of such Lender Party or such Participant, provided that the Lender Party or Participant is legally able to deliver such forms, certificates or other documents.  For any period with respect to which a Lender (or assignee Lender or Participant) has failed to provide the Borrower with the foregoing forms (other than if such failure is due to a change in law occurring after the date on

27 

which a form originally was required to be provided (which, in the case of an Assignee Lender, would be the date on which the original assignor was required to provide such form) or if such form otherwise is not required hereunder) such Lender (or assignee Lender or Participant) shall not be entitled to the benefits of this Section 4.6 with respect to Covered Taxes imposed by reason of such failure.

SECTION 4.7.Reserve Costs.  Without in any way limiting the Borrower’s obligations under Section 4.3, the Borrower shall, on and after the date the Borrower elects the Floating Rate pursuant to Section 3.3.2, pay to the Facility Agent for the account of each Lender on the last day of each Interest Period, so long as the relevant Lending Office of such Lender is required to maintain reserves against “Eurocurrency liabilities” under Regulation D of the F.R.S. Board, upon notice from such Lender, an additional amount equal to the product of the following for the Loan for each day during such Interest Period:

(i)the principal amount of the Loan outstanding on such day; and

(ii)the remainder of (x) a fraction the numerator of which is the rate (expressed as a decimal) at which interest accrues on the Loan for such Interest Period as provided in this Agreement (less, if applicable, the Floating Rate Margin) and the denominator of which is one minus any increase after the Effective Date in the effective rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender minus (y) such numerator; and

(iii)1/360.

Such notice shall (i) describe in reasonable detail the reserve requirement that has been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the applicable reserve percentage, (iii) certify that such request is consistent with such Lender’s treatment of other borrowers that are subject to similar provisions and (iv) certify that, to the best of its knowledge, such requirements are of general application in the commercial banking industry in the United States.

Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to avoid the requirement of maintaining such reserves (including by designating a different Lending Office) if such efforts would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

SECTION 4.8.Payments, Computations, etc. a. Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the Facility Agent for the pro rata account of the Lenders entitled to receive such payment.  All such payments required to be made to the Facility Agent shall be made, without set-off, deduction or counterclaim, not later than 11:00 a.m., New York time, on the date due, in same day or immediately available funds through the New York Clearing House Interbank Payments System (or such other funds as may be customary for the settlement of international banking transactions in Dollars), to such account as the Facility Agent shall specify from time to time by notice to the Borrower.  Funds received after that time shall be deemed to have been received by the Lenders on the next succeeding Business Day.

28

b.   (i) Each Option A Lender hereby instructs the Facility Agent to remit all payments of interest made with respect to any portion of the Loan held by such Option A Lender to the Refinancing Bank less (x) the margin for Fixed Rate Loans of 1.10% and (y) the CIRR administrative fee of 0.20% if interest on the Loan made by that Lender is then calculated at the Fixed Rate and less the Floating Rate Margin if interest on that Loan is then calculated at the Floating Rate.

(ii)Each Option B Lender hereby instructs the Facility Agent, with respect to any portion of the Loan held by such Option B Lender, to pay to the CIRR Representative interest thereon at the Fixed Rate, if interest on such portion of the Loan is then calculated at the Fixed Rate, and to pay directly to such Lender interest thereon at the Floating Rate, if interest on such portion of the Loan is then calculated at the Floating Rate.

c.   The Facility Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in clause (a) of this Section, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Facility Agent for the account of such Lender without any set-off, deduction or counterclaim.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days.  Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (a) of the definition of the term “Interest Period”) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.

SECTION 4.9.Replacement Lenders, etc.  If the Borrower shall be required to make any payment to any Lender pursuant to Section 4.2(c), 4.3, 4.4, 4.5, 4.6 or 4.7, the Borrower shall be entitled at any time (so long as no Default and no Prepayment Event shall have occurred and be continuing) within 180 days after receipt of notice from such Lender of such required payment to (a) terminate such Lenders Commitment (where upon the Percentage of each other Lender shall automatically be adjusted to an amount equal to such Lender’s ratable share of the remaining Commitments), (b) prepay the affected portion of such Lender’s Loans in full, together with accrued interest thereon through the date of such prepayment (provided that the Borrower shall not terminate any Lender’s Commitment pursuant to clause (a) or prepay any such Lender pursuant to this clause (b) without replacing such Lender pursuant to the following clause (c) until a 30-day period shall have elapsed during which the Borrower and the Facility Agent shall have attempted in good faith to replace such Lender), and/or (c) replace such Lender with another financial institution reasonably acceptable to the Facility Agent (which replacement Lender shall meet the criteria set out in Section 2.1 of the Terms and Conditions), provided that (i) each such assignment shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement and (ii) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more

29 

payments from either the Borrower or one or more Assignee Lenders in an aggregate amount at least equal to the aggregate outstanding principal amount of the Loans owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement.  Each Lender represents and warrants to the Borrower that, as of the date of this Agreement (or, with respect to any Lender not a party hereto on the date hereof, on the date that such Lender becomes a party hereto), there is no existing treaty, law, regulation, regulatory requirement, interpretation, directive, guideline, decision or request pursuant to which such Lender would be entitled to request any payments under any of Sections 4.3, 4.4, 4.5, 4.6 and 4.7 to or for account of such Lender.

SECTION 4.10.Sharing of Payments.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of set-off or otherwise) on account of the Loan (other than pursuant to the terms of Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7) in excess of its pro rata share of payments then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders such participations in the Loan made by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender’s ratable share (according to the proportion of (a) the amount of such selling Lender’s required repayment to the purchasing Lender to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 4.11) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim.

SECTION 4.11.Set-off.  Upon the occurrence and during the continuance of an Event of Default or a Prepayment Event, each Lender shall have, to the extent permitted by applicable law, the right to appropriate and apply to the payment of the Obligations then due and owing to it any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Lender; provided that any such appropriation and application shall be subject to the provisions of Section 4.10.  Each Lender agrees promptly to notify the Borrower and the Facility Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set-off under applicable law or otherwise) which such Lender may have.

SECTION 4.12.Use of Proceeds.  a,  The Borrower shall apply the proceeds of the Loan in accordance with Recital (C) and, in relation to the Final Disbursement Date, prior to

30 

such application, such proceeds shall be held in the Pledged Account; without limiting the foregoing, no proceeds of the Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S. Board Regulation U.  If the proceeds of the Loan (or, if applicable, the balance of the Loan) have not been paid to the Builder or its order or to the Facility Agent (directly or indirectly) in prepayment of the Loan under Sections 3.2(a) or 3.7 by 9:59 p.m. (London time) on the second Business Day after the Final Disbursement Date, such proceeds shall continue to be pledged by the Borrower upon receipt in accordance with clause 2.3(d) as collateral pursuant to the Pledge Agreement.  On or prior to the date that is 15 days after the initial Final Disbursement Date, the Borrower shall notify the Facility Agent whether the proceeds of the Loan are to be returned to the Facility Agent as prepayment in accordance with Section 3.7 or to be held as cash collateral until the earlier of (i) disbursement to the Builder and (ii) prepayment of the Loan pursuant to Sections 3.2(a) or 9.2.

b.           If the Borrower wishes to elect the Alternative Disbursement Option pursuant to Section 2.3(b), the proceeds of the Loan to be made available on the Final Disbursement Date pursuant to that election shall be required to be paid and applied in the same way as the advance of the Loan is to be paid and applied on the Final Disbursement Date had the Alternative Disbursement Option not been exercised.

ARTICLE V

CONDITIONS TO BORROWING

SECTION 5.1.Initial Advance of the Loan.  The obligation of the Lenders to fund all or any portion of the Loan on the First Disbursement Date shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 5.1 on or prior to the First Disbursement Date.  The Facility Agent shall advise the Lenders of the satisfaction of the conditions precedent set forth in this Section 5.1 prior to funding on the First Disbursement Date.

SECTION 5.1.1.Resolutions, etc. The Facility Agent shall have received from the Borrower:

(a)  a certificate of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Agreement and each other Loan Document and as to the truth and completeness of the attached:

(x)  resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement and each other Loan Document, and

(y)  Organic Documents of the Borrower,

and upon which certificate the Lenders may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the Borrower canceling or amending such prior certificate; and

31 

(b)  a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Borrower.

SECTION 5.1.2.Opinions of Counsel.  The Facility Agent shall have received opinions, addressed to the Facility Agent and each Lender from:

a.   Watson, Farley & Williams (New York) LLP, counsel to the Borrower, as to Liberian Law, covering the matters set forth in Exhibit D-1 hereto;

b.   Norton Rose LLP, counsel to the Facility Agent, covering the matters set forth in Exhibit D-2 hereto; and

c.   Clifford Chance US LLP, United States tax counsel to the Lenders, covering the matters set forth in Exhibit D-3 hereto,

each such opinion to be updated to take into account all relevant and applicable Loan Documents at the time of issue thereof.

SECTION 5.1.3.Hermes Insurance Policy.  The Facility Agent or the Hermes Agent shall have received the Hermes Insurance Policy duly issued.

SECTION 5.1.4.CIRR requirements.

The Borrower acknowledges that:

(i)   the government of the Federal Republic of Germany, the Federal Audit Court or any authorized representatives specified by these bodies shall be authorized at any time to inspect and make or demand copies of the records, accounts, documents and other deeds of the Lenders;

(ii)   in the course of its activity as the Facility Agent, the Facility Agent may:

(a) provide the government of the Federal Republic of Germany with information concerning the transactions to be handled by it; and

(b) disclose information concerning the subsidized transaction in the context of internationally agreed consultation/notification proceedings and statutory specifications,

including information received from the Lenders; and

(iii)   the Facility Agent and (to the extent the Lenders have entered into an Option A Refinancing Agreement with the Refinancing Bank) the Lenders are entitled to disclose to the Refinancing Bank:

32

(a) circumstances pertaining to the Loan, proper repayment and collateralization;

(b) extraordinary events which may jeopardize the proper servicing of the Loan;

(c) any information required by the Refinancing Bank with respect to the proper use of any refinancing funds granted to the respective Lender; and

(d) the Loan Documents;

provided that the Refinancing Bank agrees to keep such information confidential to the same extent required of Lenders pursuant to Section 11.15.

SECTION 5.2.Advance of the Loan.  The obligation of the Lenders to fund all or any portion of the Loan on the occasion of any funding of the Loan (including the funding on the First Disbursement Date or pursuant to a reborrowing under Section 3.7 except as expressly provided for in Section 5.2.6) shall be subject to the satisfaction of each of the conditions precedent set forth in this Section 5.2 on or prior to the date of such funding.  The Facility Agent shall advise the Lenders of the satisfaction of the conditions precedent set forth in this Section 5.2 prior to any such funding.

SECTION 5.2.1.Closing Fees, Expenses, etc.  The Facility Agent shall have received for its own account, or for the account of each Lender, as the case may be, all fees that the Borrower shall have agreed in writing to pay to the Facility Agent (whether for its own account or for the account of any of the Lenders) that are due and owing as of the date of such funding and all invoiced expenses of the Facility Agent (including the agreed fees and expenses of counsel to the Facility Agent and the Hermes Fees) required to be paid by the Borrower pursuant to Section 11.3 or that the Borrower has otherwise agreed in writing to pay to the Facility Agent, in each case on or prior to the date of such funding.

SECTION 5.2.2.Compliance with Warranties, No Default, etc.  Both before and after giving effect to the funding of all or any portion of the Loan the following statements shall be true and correct:

a.   the representations and warranties set forth in Article VI (excluding, however, those set forth in Section 6.10) shall be true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made; and

b.   no Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event shall have then occurred and be continuing.

33

SECTION 5.2.3.Loan Request.  The Facility Agent shall have received a Loan Request duly executed by the Borrower.

SECTION 5.2.4.Hermes Insurance Policy.  Hermes shall not have, prior to funding the Loan, delivered to the Facility Agent or the Hermes Agent any notice that the Federal Republic of Germany has determined that the Loan is excluded from cover under the Hermes Insurance Policy.

SECTION 5.2.5.Foreign Exchange Counterparty Confirmations. The Facility Agent shall have received a copy of each foreign exchange counterparty confirmation entered into by the Borrower in respect of a payment of any installment of the Contract Price.

SECTION 5.2.6.  Pledge Agreement.  The Pledge Agreement shall be duly executed by the parties thereto and delivered to the Facility Agent on or prior to the Final Disbursement Date.

SECTION 5.2.7.  Opinion of Counsel.  The Facility Agent shall have received from Norton Rose LLP, counsel to the Facility Agent as to German law, an opinion addressed to the Facility Agent and each Lender substantially in the form of Exhibit H hereto.

SECTION 5.3.Advance of the Loan on the Final Disbursement Date.  If the Borrower has used the Alternative Disbursement Option to finance any installment of the Contract Price, the obligation of the Lenders to fund all or any portion of the Loan on the Final Disbursement Date shall be subject to the receipt by the Facility Agent of a certificate of the Borrower that  its expected liquidity position on the Contractual Delivery Date will, in the Borrower’s judgment, permit the Borrower to pay the portion of the final installment of the Contract Price due on the Contractual Delivery Date that will not be funded with the proceeds of the advance made on the Final Disbursement Date.  The Facility Agent shall advise the Lenders of the satisfaction of this condition precedent prior to any such funding.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

To induce the Lenders and the Facility Agent to enter into this Agreement and to make the Loan hereunder, the Borrower represents and warrants to the Facility Agent and each Lender as set forth in this Article VI as of the Effective Date, the First Disbursement Date and the date of each additional advance of any portion of the Loan after the First Disbursement Date (except as otherwise stated).

SECTION 6.1.Organization, etc.  The Borrower is a corporation validly organized and existing and in good standing under the laws of its jurisdiction of incorporation; the Borrower is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and the Borrower has full power and authority, has taken all corporate action and holds all governmental and creditors’ licenses, permits, consents and other approvals necessary to enter into each Loan Document and to perform the Obligations.

34 

SECTION 6.2.Due Authorization, Non-Contravention, etc.  The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not:

a.   contravene the Borrower’s Organic Documents;

b.   contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;

c.   contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;

d.   contravene any contractual restriction binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect; or

e.   result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.3.Government Approval, Regulation, etc. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document (except for authorizations or approvals not required to be obtained on or prior to the First Disbursement Date or that have been obtained or actions not required to be taken on or prior to the First Disbursement Date or that have been taken).  The Borrower holds all governmental licenses, permits and other approvals required to conduct its business as conducted by it on the First Disbursement Date, except to the extent the failure to hold any such licenses, permits or other approvals would not have a Material Adverse Effect.

SECTION 6.4.Compliance with Environmental Laws.  The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.

SECTION 6.5.Validity, etc. This Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles.

SECTION 6.6.No Default, Event of Default or Prepayment Event.  No Default, Event of Default or Prepayment Event has occurred and is continuing.

SECTION 6.7.Litigation.  There is no action, suit, litigation, investigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, that (i) except as set forth in filings made by the Borrower with the SEC in the Borrower’s reasonable opinion might reasonably be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries (taken as a whole) (collectively,

35 

“Material Litigation”) or (ii) purports to affect the legality, validity or enforceability of the Loan Documents or the consummation of the transactions contemplated hereby.

SECTION 6.8.The Purchased Vessel.  Immediately following the delivery of the Purchased Vessel to the Borrower under the Construction Contract, the Purchased Vessel will be:

a.   legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,

b.   registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,

c.   classed as required by Section 7.1.4(b),

d.   free of all recorded Liens, other than Liens permitted by Section 7.2.3,

e.   insured against loss or damage in compliance with Section 7.1.5, and

f.   exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries.

SECTION 6.9.Obligations rank pari passu.  The Obligations rank at least pari passu in right of payment and in all other respects with all other unsecured unsubordinated Indebtedness of the Borrower.

SECTION 6.10.Withholding, etc..  As of the date hereof, no payment to be made by the Borrower under any Loan Document is subject to any withholding or like tax imposed by any Applicable Jurisdiction.

SECTION 6.11.No Filing, etc. Required.  No filing, recording or registration and no payment of any stamp, registration or similar tax is necessary under the laws of any Applicable Jurisdiction to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement or the other Loan Documents (except for filings, recordings, registrations or payments not required to be made on or prior to the First Disbursement Date or that have been made).

SECTION 6.12.No Immunity.  The Borrower is subject to civil and commercial law with respect to the Obligations.  Neither the Borrower nor any of its properties or revenues is entitled to any right of immunity in any Applicable Jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).

SECTION 6.13.Investment Company Act.  The Borrower is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

36 

SECTION 6.14.Regulation U.  The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U.  Terms for which meanings are provided in F.R.S. Board Regulation U or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.

SECTION 6.15.Accuracy of Information.  The financial and other information (other than financial projections or other forward looking information) furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with the negotiation of this Agreement is, when taken as a whole, to the best knowledge and belief of the Borrower, true and correct and contains no misstatement of a fact of a material nature.  All financial projections, if any, that have been furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with this Agreement have been or will be prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the projections will be realized).  All financial and other information furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller after the date of this Agreement shall have been prepared by the Borrower in good faith.

ARTICLE VII

COVENANTS

SECTION 7.1.Affirmative Covenants.  The Borrower agrees with the Facility Agent and each Lender that, from the Effective Date until all Commitments have terminated and all Obligations have been paid in full, the Borrower will perform the obligations set forth in this Section 7.1.

SECTION 7.1.1.Financial Information, Reports, Notices, etc.  The Borrower will furnish, or will cause to be furnished, to the Facility Agent (with sufficient copies for distribution to each Lender) the following financial statements, reports, notices and information:

a.   as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;

b.   as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any

37 

successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;

c.   together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in Section 7.2.4 (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Facility Agent);

d.   as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;

e.   as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;

f.   as soon as the Borrower becomes aware thereof, notice of any event which, in its reasonable opinion, would be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole;

g.   promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and

h.   such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Facility Agent may from time to time reasonably request;

provided that information required to be furnished to the Facility Agent under subsections (a), (b) and (g) of this Section 7.1.1 shall be deemed furnished to the Facility Agent when available free of charge on the Borrower’s website at http://www.rclinvestor.com or the SEC’s website at http://www.sec.gov.

SECTION 7.1.2.Approvals and Other Consents.The Borrower will obtain (or cause to be obtained) all such governmental licenses, authorizations, consents, permits and approvals as may be required for (a) the Borrower to perform its obligations under this Agreement and the other Loan Documents and (b) the operation of the Purchased Vessel in compliance with all applicable laws, except, in each case, to the extent that failure to obtain (or cause to be obtained) such governmental licenses, authorizations, consents, permits and approvals would not be expected to have a Material Adverse Effect.

38 

SECTION 7.1.3.Compliance with Laws, etc.The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, except (other than as described in clause (a) below) to the extent that the failure to so comply would not have a Material Adverse Effect, which compliance shall in any case include (but not be limited to):

a.   in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of Section 7.2.6);

b.   in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;

c.   the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings; and

d.   compliance with all applicable Environmental Laws.

SECTION 7.1.4.The Purchased Vessel.  The Borrower will:

a.   cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries, provided that the Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly owned Subsidiaries and (ii) on a time charter with a stated duration not in excess of one year;

b.   cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing;

c.   upon delivery of the Purchased Vessel, provide the following to the Facility Agent with respect to the Purchased Vessel:

(i)evidence as to the ownership of the Purchased Vessel by the Borrower or one of the Borrower’s wholly owned Subsidiaries;

(ii)evidence of no recorded Liens on the Purchased Vessel, other than Liens permitted pursuant to Section 7.2.3; and

(iii)a copy of the final commercial invoice in respect of the Purchased Vessel as provided by the Builder, certified as a true and complete copy by an Authorized Officer of the Borrower; and

d.   within seven days after delivery of the Purchased Vessel, provide the following to the Facility Agent with respect to the Purchased Vessel:

(i)evidence of the class of the Purchased Vessel; and

39

(ii)evidence as to all required insurance being in effect with respect to the Purchased Vessel.

SECTION 7.1.5.Insurance.  The Borrower will maintain or cause to be maintained with responsible insurance companies insurance with respect to the Purchased Vessel against such casualties, third-party liabilities and contingencies and in such amounts, in each case, as is customary for other businesses of similar size in the passenger cruise line industry (provided that in no event will the Borrower or any Subsidiary be required to obtain any business interruption, loss of hire or delay in delivery insurance) and will, upon request of the Facility Agent, furnish to the Facility Agent (with sufficient copies for distribution to each Lender) at reasonable intervals a certificate of a senior officer of the Borrower setting forth the nature and extent of all insurance maintained by the Borrower and certifying as to compliance with this Section.

SECTION 7.1.6.Books and Records.  The Borrower will keep books and records that accurately reflect all of its business affairs and transactions and permit the Facility Agent and each Lender or any of their respective representatives, at reasonable times and intervals, to visit each of its offices, to discuss its financial matters with its officers and to examine any of its books or other corporate records.

SECTION 7.1.7.Hermes Insurance Policy/Federal Republic of Germany Requirement.  The Borrower shall, on the reasonable request of the Hermes Agent or the Facility Agent, provide such other information as required under the Hermes Insurance Policy and/or the Terms and Conditions as necessary to enable the Hermes Agent or the Facility Agent to obtain the full support of Hermes and/or the government of the Federal Republic of Germany (as the case may be) pursuant to the Hermes Insurance Policy and/or the Terms and Conditions (as the case may be).  The Borrower must pay to the Hermes Agent or the Facility Agent the amount of all reasonable costs and expenses reasonably incurred by the Hermes Agent or the Facility Agent in connection with complying with a request by Hermes or the government of the Federal Republic of Germany (as the case may be) for any additional information necessary or desirable in connection with the Hermes Insurance Policy or the Terms and Conditions (as the case may be); provided that the Borrower is consulted before the Hermes Agent or the CIRR Representative incurs any such cost or expense.

SECTION 7.2.Negative Covenants.  The Borrower agrees with the Facility Agent and each Lender that, from the Effective Date until all Commitments have terminated and all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 7.2.

SECTION 7.2.1.Business Activities.  The Borrower will not, and will not permit any of its Subsidiaries to, engage in any principal business activity other than those engaged in by the Borrower and its Subsidiaries on the date hereof and other business activities reasonably related thereto.

SECTION 7.2.2.Indebtedness.  The Borrower will not permit any of the Existing Principal Subsidiaries to create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:

40

a.   Indebtedness, secured by Liens of the type described in Section 7.2.3;

b.   Indebtedness owing to the Borrower or a wholly owned direct or indirect Subsidiary of the Borrower;

c.   Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Effective Date;

d.   Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under Section 7.2.2(a) and permitted to be secured under Section 7.2.3(c), at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $450,000,000;

e.   Existing Debt; and

f.   obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.

SECTION 7.2.3.Liens. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:

a.   Liens on the vessel BRILLIANCE OF THE SEAS existing as of the Effective Date and securing the Existing Debt (and any Lien on BRILLIANCE OF THE SEAS securing any refinancing of the Existing Debt, so long as such vessel was subject to a Lien securing the Indebtedness being refinanced immediately prior to such refinancing);

b.   Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Effective Date) acquired after the Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each such Lien is created within three months after the acquisition of the relevant assets;

c.   in addition to other Liens permitted under this Section 7.2.3, Liens securing Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under Section 7.2.2(d), at any one time outstanding not

41 

exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) (x) 3.5% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter or (y) $450,000,000, provided that, with respect to each such item of Indebtedness, the fair market value of the assets subject to Liens securing such Indebtedness (determined at the time of the creation of such Lien) shall not exceed two times the aggregate principal amount of such Indebtedness (and for purposes of this clause (c), the fair market value of any assets shall be determined by (i) in the case of any Vessel, by an Approved Appraiser selected by the Borrower and (ii) in the case of any other assets, by an officer of the Borrower or by the board of directors of the Borrower);

d.   Liens on assets acquired after the Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;

e.   Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;

f.   Liens securing Government-related Obligations;

g.   Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;

h.   Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings;

i.   Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;

j.   Liens for current crew’s wages and salvage;

k.   Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;

42

l.   Liens on Vessels that:

(i)secure obligations covered (or reasonably expected to be covered) by insurance;

(ii)were incurred in the course of or incidental to trading such Vessel in connection with repairs or other work to such Vessel; or

(iii)were incurred in connection with work to such Vessel that is required to be performed pursuant to applicable law, rule, regulation or order;

provided that, in each case described in this clause (l), such Liens are either (x) discharged in the ordinary course of business or (y) being diligently contested in good faith by appropriate proceedings;

m.   normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;

n.   Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business; and

o.   Liens on cash or Cash Equivalents securing obligations in respect of Hedging Instruments permitted under Section 7.2.2(f) or securing letters of credit that support such obligations.

SECTION 7.2.4.Financial Condition.  The Borrower will not permit:

a.   Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.

b.   Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter.

c.   Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).

SECTION 7.2.5.Investments.  The Borrower will not permit any of the Principal Subsidiaries to make, incur, assume or suffer to exist any Investment in any other Person other than

a.   the Borrower or any direct or indirect wholly owned Subsidiary of the Borrower; and

43

b.   other Investments by the Principal Subsidiaries in an aggregate amount not to exceed $50,000,000 at any time outstanding.

SECTION 7.2.6.Consolidation, Merger, etc. The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, or purchase or otherwise acquire all or substantially all of the assets of any Person except:

a.   any such Subsidiary may (i) liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by Section 7.2.7; and

b.   so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:

(i)after giving effect thereto, the Stockholders’ Equity of the Borrower and its Subsidiaries is at least equal to 90% of such Stockholders’ Equity immediately prior thereto; and

(ii)in the case of a merger involving the Borrower where the Borrower is not the surviving corporation, the surviving corporation shall have assumed in a writing, delivered to the Facility Agent, all of the Borrower’s obligations hereunder and under the other Loan Documents.

SECTION 7.2.7.Asset Dispositions, etc.  The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, any material asset (including accounts receivable and capital stock of Principal Subsidiaries) to any Person, except:

a.   sales of assets (including, without limitation, Vessels) so long as at the time of any such sale:

(i)the aggregate net book value of all such assets sold during each fiscal year does not exceed an amount equal to the greater of (x) 7.5% of Stockholders’ Equity as at the end of the last Fiscal Quarter, and (y) $400,000,000; and

(ii)to the extent any asset has a fair market value in excess of $50,000,000 the Borrower or Subsidiary selling such asset receives consideration therefor at least equal to the fair market value thereof (as determined in good faith by (x) in the case of any Vessel, the board of directors of the Borrower and (y) in the case of any other asset, an officer of the Borrower or its board of directors);

44

b.   sales of capital stock of any Principal Subsidiary of the Borrower so long as a sale of all of the assets of such Subsidiary would be permitted under the foregoing clause (a);

c.   sales of capital stock of any Subsidiary other than a Principal Subsidiary;

d.   the sale of the vessel “Celebrity Mercury”;

e.   sales of other assets in the ordinary course of business; and

f.   sales of assets between or among the Borrower and Subsidiaries of the Borrower.

SECTION 7.2.8.Transactions with Affiliates The Borrower will not, and will not permit any of the Principal Subsidiaries to, enter into, or cause, suffer or permit to exist any arrangement or contract with any of its Affiliates (other than arrangements or contracts among the Borrower and its Subsidiaries and among the Borrower’s Subsidiaries) unless such arrangement or contract is on an arms’-length basis, provided that, to the extent that the aggregate fair value of the goods furnished or to be furnished or the services performed or to be performed under all such contracts or arrangements in any one Fiscal Year does not exceed $50,000,000, such contracts or arrangements shall not be subject to this Section 7.2.8.

ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.1.Listing of Events of Default.  Each of the following events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.

SECTION 8.1.1.Non-Payment of Obligations.  The Borrower shall default in the payment when due of any principal of or interest on the Loan or any Commitment Fee, or the Borrower shall default in the payment of any fee due and payable under the Fee Letter, provided that, in the case of any default in the payment of any interest on the Loan or of any Commitment Fee, such default shall continue unremedied for a period of at least two (2) Business Days after notice thereof shall have been given to the Borrower by the Facility Agent; and provided further that, in the case of any default in the payment of any fee due and payable under the Fee Letter, such default shall continue unremedied for a period of at least ten days after notice thereof shall have been given to the Borrower by the Facility Agent.

SECTION 8.1.2.Breach of Warranty.  Any representation or warranty of the Borrower made or deemed to be made hereunder (including any certificates delivered pursuant to Article V) is or shall be incorrect in any material respect when made.

SECTION 8.1.3.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document (other than the covenants set forth in Section 7.2.4 and the obligations referred to in Section 8.1.1) and such default shall continue unremedied for a period of five days after notice thereof shall have been given to the Borrower by the Facility Agent or any Lender (or, if (a) such default is capable of being remedied within 30 days (commencing on the first day following such five-day period) and (b)

45 

the Borrower is actively seeking to remedy the same during such period, such default shall continue unremedied for at least 35 days after such notice to the Borrower).

SECTION 8.1.4.Default on Other Indebtedness.  The Borrower or any of its Principal Subsidiaries shall fail to pay any Indebtedness  that is outstanding in a principal amount of at least $50,000,000 (or the equivalent in other currencies) in the aggregate (but excluding Indebtedness hereunder) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument evidencing, securing or relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause or permit the holder or holders of such Indebtedness to cause such Indebtedness to become due and payable prior to its scheduled maturity; or any such Indebtedness shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or by voluntary agreement), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case prior to the scheduled maturity thereof.  For purposes of determining Indebtedness for any Hedging Instrument, the principal amount of the obligations under any such instrument at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Principal Subsidiary would be required to pay if such instrument were terminated at such time.

SECTION 8.1.5.Bankruptcy, Insolvency, etc.  The Borrower or any of the Principal Subsidiaries (or any of its other Subsidiaries to the extent that the relevant event described below would have a Material Adverse Effect) shall:

a.   generally fail to pay, or admit in writing its inability to pay, its debts as they become due;

b.   apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;

c.   in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 30 days, provided that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any relevant proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents;

d.   permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by

46 

the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 30 days undismissed, provided that the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any such case or proceeding during such 30-day period to preserve, protect and defend their respective rights under the Loan Documents; or

e.   take any corporate action authorizing, or in furtherance of, any of the foregoing.

SECTION 8.2.Action if Bankruptcy. If any Event of Default described in clauses (b) through (d) of Section 8.1.5 shall occur with respect to the Borrower, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.

SECTION 8.3.Action if Other Event of Default.  If any Event of Default (other than any Event of Default described in clauses (b) through (d) of Section 8.1.5 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Facility Agent, upon the direction of the Required Lenders, shall by notice to the Borrower declare all of the outstanding principal amount of the Loan and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations shall be and become immediately due and payable, without further notice, demand or presentment, and/or, as the case may be, the Commitments shall terminate.

ARTICLE IX

PREPAYMENT EVENTS

SECTION 9.1.Listing of Prepayment Events.  Each of the following events or occurrences described in this Section 9.1 shall constitute a “Prepayment Event”.

SECTION 9.1.1.Change in Ownership.  Any Person other than a member of the Existing Group (a “New Shareholder”) shall acquire (whether through legal or beneficial ownership of capital stock, by contract or otherwise), directly or indirectly, effective control over more than 33% of the Voting Stock and:

a.   the members of the Existing Group have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) in the aggregate, directly or indirectly, effective control over fewer shares of Voting Stock than does such New Shareholder; and

b.   the members of the Existing Group do not collectively have (whether through legal or beneficial ownership of capital stock, by contract or otherwise) the right to elect, or to designate for election, at least a majority of the Board of Directors of the Borrower.

47

SECTION 9.1.2.Change in Board.  During any period of 24 consecutive months, a majority of the Board of Directors of the Borrower shall no longer be composed of individuals:

a.   who were members of said Board on the first day of such period;

b.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board who were members of said Board on the first day of such period; or

c.   whose election or nomination to said Board was approved by a vote of at least two-thirds of the members of said Board referred to in the foregoing clauses (a) and (b).

SECTION 9.1.3.Unenforceability.  Any Loan Document shall cease to be the legally valid, binding and enforceable obligation of the Borrower (in each case, other than with respect to provisions of any Loan Document (i) identified as unenforceable in the form of the opinion of the Borrower’s counsel set forth as Exhibit D-1 or (ii) that a court of competent jurisdiction has determined are not material) and such event shall continue unremedied for 15 days after notice thereof has been given to the Borrower by the Facility Agent.

SECTION 9.1.4.Approvals.  Any material license, consent, authorization, registration or approval at any time necessary to enable the Borrower or any Principal Subsidiary to conduct its business shall be revoked, withdrawn or otherwise cease to be in full force and effect, unless the same would not have a Material Adverse Effect.

SECTION 9.1.5.Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any of the covenants set forth in Sections 4.12 or 7.2.4.

SECTION 9.1.6.Judgments.  Any judgment or order for the payment of money in excess of $50,000,000 shall be rendered against the Borrower or any of the Principal Subsidiaries by a court of competent jurisdiction and the Borrower or such Principal Subsidiary shall have failed to satisfy such judgment and either:

a.   enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5) Business Days after the commencement of such enforcement proceedings; or

b.   there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.

SECTION 9.1.7.Condemnation, etc.

.  The Purchased Vessel shall be condemned or otherwise taken under color of law or requisitioned and the same shall continue unremedied for at least 20 days, unless such condemnation or other taking would not have a Material Adverse Effect.

48

SECTION 9.1.8.Arrest.  The Purchased Vessel shall be arrested and the same shall continue unremedied for at least 20 days, unless such arrest would not have a Material Adverse Effect.

SECTION 9.1.9.Sale/Disposal of the Purchased Vessel.  The Purchased Vessel is sold to a company which is not the Borrower or any other Subsidiary of the Borrower (other than for the purpose of a lease back to the Borrower or any other Subsidiary of the Borrower).

SECTION 9.1.10.Delayed Delivery of the Purchased Vessel.  If, (a) within 15 days after the Final Disbursement Date, the Loan has not been utilized to pay for delivery of the Purchased Vessel, unless (i) the Loan has been returned to the Facility Agent as prepayment in accordance with Section 3.2(a) or 3.7 or (ii) the proceeds of the Loan have been deposited to the Pledged Account in accordance with Section 4.12 or (b) within 10 days after any other advance, the proceeds of such advance have not been utilized to pay the relevant instalment payment.

SECTION 9.1.11.Termination of the Construction Contract.  If the Construction Contract is terminated in accordance with its terms or by other lawful means prior to delivery of the Purchased Vessel and the parties thereto do not reach an agreement to reinstate the Construction Contract within 30 days after such termination.

Notwithstanding anything else contained in this Agreement, if, prior to delivery of the Purchased Vessel, the Borrower makes a Mandatory Prepayment pursuant to Section 9.2 as a result of Section 9.1.10 or a voluntary prepayment pursuant to Section 3.2(a) and the Purchased Vessel is delivered prior to the Commitment Termination Date, the Borrower shall be entitled to make an additional Loan Request prior to the Commitment Termination Date as if the funds had not been previously advanced. Payment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.

SECTION 9.2.Mandatory Prepayment.  If any Prepayment Event shall occur and be continuing, the Facility Agent, upon the direction of the Required Lenders, shall by notice to the Borrower (a) require the Borrower to prepay in full on the date of such notice all principal of and interest on the Loan and all other Obligations or, in the case of a Prepayment Event under Section 9.1.10, all principal of and interest on the relevant advance (and, in such event, the Borrower agrees to so pay the full unpaid amount of the Loan or the full unpaid amount of the relevant advance, as the case may be, and all accrued and unpaid interest thereon and all other Obligations) and (b) except in the case of a Prepayment Event under Section 9.1.10, terminate the Commitments (if not theretofore terminated).

ARTICLE X

THE FACILITY AGENT AND THE HERMES AGENT

SECTION 10.1.Actions.  Each Lender hereby appoints KfW IPEX, as Facility Agent and as Hermes Agent, as its agent under and for purposes of this Agreement and each other Loan Document (for purposes of this Article X, the Facility Agent and the Hermes Agent

49 

are referred to collectively as the “Agents”).  Each Lender authorizes the Agents to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agents (with respect to which each Agent agrees that it will comply, except as otherwise provided in this Section 10.1 or as otherwise advised by counsel), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto.  Neither Agent shall be obliged to act on the instructions of any Lender or the Required Lenders if to do so would, in the opinion of such Agent, be contrary to any provision of this Agreement or any other Loan Document or to any law, or would expose such Agent to any actual or potential liability to any third party.

SECTION 10.2.Indemnity.  Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent, pro rata according to such Lender’s Percentage, from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that be incurred by or asserted or awarded against, such Agent in any way relating to or arising out of this Agreement and any other Loan Document or any action taken or omitted by such Agent under this Agreement or any other Loan Document; provided that no Lender shall be liable for the payment of any portion of such claims, damages, losses, liabilities and expenses which have resulted from such Agent’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower.  In the case of any investigation, litigation or proceeding giving rise to any such indemnified costs, this Section applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party.  Neither Agent shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is expressly required to do so under this Agreement or is indemnified hereunder to its satisfaction.  If any indemnity in favor of an Agent shall be or become, in such Agent’s determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.

SECTION 10.3.Funding Reliance, etc. Each Lender shall notify the Facility Agent by 4:00 p.m., Frankfurt time, one day prior to the advance of the Loan if it is not able to fund the following day.  Unless the Facility Agent shall have been notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., Frankfurt time, on the day prior to the advance of the Loan that such Lender will not make available the amount which would constitute its Percentage of the Loan on the date specified therefor, the Facility Agent may assume that such Lender has made such amount available to the Facility Agent and, in reliance upon such assumption, may, but shall not be obliged to, make available to the Borrower a corresponding amount.  If and to the extent that such Lender shall not have made such amount available to the Facility Agent, such Lender and the Borrower severally agree to repay the Facility Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Facility

50 

Agent made such amount available to the Borrower to the date such amount is repaid to the Facility Agent, at the interest rate applicable at the time to the Loan without premium or penalty.

SECTION 10.4. Exculpation.  Neither of the Agents nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence.  Without limitation of the generality of the foregoing, each Agent (i) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it and in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, (iii) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or Prepayment Event or to inspect the property (including the books and records) of the Borrower, (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto, (v) shall incur no liability under or in respect of this Agreement by action upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties, and (vi) shall have no responsibility to the Borrower or any Lender on account of (A) the failure of a Lender or the Borrower to perform any of its obligations under this Agreement or any Loan Document; (B) the financial condition of the Borrower; (C) the completeness or accuracy of any statements, representations or warranties made in or pursuant to this Agreement or any Loan Document, or in or pursuant to any document delivered pursuant to or in connection with this Agreement or any Loan Document; or (D) the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of this Agreement or any Loan Document or of any document executed or delivered pursuant to or in connection with any Loan Document.

SECTION 10.5. Successor.  The Facility Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders, provided that any such resignation shall not become effective until a successor Facility Agent has been appointed as provided in this Section 10.5 and such successor Facility Agent has accepted such appointment.  If the Facility Agent at any time shall resign, the Required Lenders shall, subject to the immediately preceding proviso and subject to the consent of the Borrower (such consent not to be unreasonably withheld), appoint another Lender as a successor to the Facility Agent which shall thereupon become such Facility Agent’s successor hereunder (provided that the Required Lenders shall, subject to the consent of the Borrower unless an Event or Default or a Prepayment Event shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) offer to each of the other Lenders in turn, in the order of their respective Percentages of the Loan, the right to become successor Facility Agent).  If no successor Facility Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the Facility Agent’s giving notice of resignation, then the Facility Agent may, on behalf of the Lenders, appoint a successor Facility Agent, which shall be one of the Lenders or a commercial banking institution having a combined capital and surplus of at least

51 

$1,000,000,000 (or the equivalent in other currencies), subject, in each case, to the consent of the Borrower (such consent not to be unreasonably withheld).  Upon the acceptance of any appointment as Facility Agent hereunder by a successor Facility Agent, such successor Facility Agent shall be entitled to receive from the resigning Facility Agent such documents of transfer and assignment as such successor Facility Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the resigning Facility Agent, and the resigning Facility Agent shall be discharged from its duties and obligations under this Agreement.  After any resigning Facility Agent’s resignation hereunder as the Facility Agent, the provisions of:

(a)      this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Facility Agent under this Agreement; and

(b)      Section 11.3 and Section 11.4 shall continue to inure to its benefit.

If a Lender acting as the Facility Agent assigns its Loan to one of its Affiliates, such Facility Agent may, subject to the consent of the Borrower (such consent not to be unreasonably withheld or delayed) assign its rights and obligations as Facility Agent to such Affiliate.

SECTION 10.6.Loans by the Facility Agent.  The Facility Agent shall have the same rights and powers with respect to the Loan made by it or any of its Affiliates.  The Facility Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if the Facility Agent were not the Facility Agent hereunder and without any duty to account therefor to the Lenders.  The Facility Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Facility Agent.

SECTION 10.7.Credit Decisions.  Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment.  Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.

SECTION 10.8.Copies, etc.  Each Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to such Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower).  Each Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by such Agent from the Borrower for distribution to the Lenders by such Agent in accordance with the terms of this Agreement.

52

SECTION 10.9.The Agents’ Rights.  Each Agent may (i) assume that all representations or warranties made or deemed repeated by the Borrower in or pursuant to this Agreement or any Loan Document are true and complete, unless, in its capacity as the Facility Agent, it has acquired actual knowledge to the contrary, (ii) assume that no Default has occurred unless, in its capacity as an Agent, it has acquired actual knowledge to the contrary, (iii) rely on any document or notice believed by it to be genuine, (iv) rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it, (v) rely as to any factual matters which might reasonably be expected to be within the knowledge of the Borrower on a certificate signed by or on behalf of the Borrower and (vi) refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Required Lenders) and unless and until such Agent has received from the Lenders any payment which such Agent may require on account of, or any security which such Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.

SECTION 10.10.The Facility Agent’s Duties.  The Facility Agent shall (i) if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of this Agreement or any Loan Document by the Borrower or as to the existence of an Event of Default and (ii) inform the Lenders promptly of any Event of Default of which the Facility Agent has actual knowledge.

The Facility Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by the Borrower or actual knowledge of the occurrence of any Default unless a Lender or the Borrower shall have given written notice thereof to the Facility Agent in its capacity as the Facility Agent.  Any information acquired by the Facility Agent other than specifically in its capacity as the Facility Agent shall not be deemed to be information acquired by the Facility Agent in its capacity as the Facility Agent.

The Facility Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with the Borrower or with the Borrower’s subsidiaries or associated companies or with a Lender as if it were not the Facility Agent.

SECTION 10.11.Employment of Agents.  In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to this Agreement or the Loan Documents, each Agent shall be entitled to employ and pay agents to do anything which such Agent is empowered to do under or pursuant to this Agreement or the Loan Documents (including the receipt of money and documents and the payment of money); provided that, unless otherwise provided herein, including without limitation Section 11.3, the employment of such agents shall be for such Agent’s account, and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by such Agent in good faith to be competent to give such opinion, advice or information.

53

SECTION 10.12.Distribution of Payments. The Facility Agent shall pay promptly to the order of each Lender that Lender’s Percentage Share of every sum of money received by the Facility Agent pursuant to this Agreement or the Loan Documents (with the exception of any amounts payable pursuant to the Fee Letter and any amounts which, by the terms of this Agreement or the Loan Documents, are paid to the Facility Agent for the account of the Facility Agent alone or specifically for the account of one or more Lenders) and until so paid such amount shall be held by the Facility Agent on trust absolutely for that Lender.

SECTION 10.13.Reimbursement. The Facility Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum.  If, however, the Facility Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Section 10.12 before it has itself received payment of that amount, and the Facility Agent does not in fact receive payment within five (5) Business Days after the date on which that payment was required to be made by the terms of this Agreement or the Loan Documents, that Lender will, on demand by the Facility Agent, refund to the Facility Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Facility Agent for any amount which the Facility Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of this Agreement or the Loan Documents and ending on the date on which the Facility Agent receives reimbursement.

SECTION 10.14.Instructions.  Where an Agent is authorized or directed to act or refrain from acting in accordance with the instructions of the Lenders or of the Required Lenders each of the Lenders shall provide such Agent with instructions within three (3) Business Days of such Agent’s request (which request may be made orally or in writing).  If a Lender does not provide such Agent with instructions within that period, that Lender shall be bound by the decision of such Agent.  Nothing in this Section 10.14 shall limit the right of such Agent to take, or refrain from taking, any action without obtaining the instructions of the Lenders or the Required Lenders if such Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with this Agreement or the Loan Documents.  In that event, such Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Facility Agent pursuant to this Section 10.14.

SECTION 10.15.Payments.  All amounts payable to a Lender under this Section 10.15 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Facility Agent.

SECTION 10.16.“Know your customer” Checks.  Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in this Agreement or the Loan Documents.

SECTION 10.17.No Fiduciary Relationship.  Except as provided in Section 10.12, no Agent shall have any fiduciary relationship with or be deemed to be a trustee of or for any

54 

other person and nothing contained in this Agreement or any Loan Document shall constitute a partnership between any two or more Lenders or between either Agent and any other person.

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.1.Waivers, Amendments, etc. The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided that no such amendment, modification or waiver which would:

a.   modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;

b.   modify this Section 11.1 or change the definition of “Required Lenders” shall be made without the consent of each Lender;

c.   increase the Commitment of any Lender shall be made without the consent of such Lender;

d.   reduce any fees described in Article III payable to any Lender shall be made without the consent of such Lender;

e.   extend the Commitment Termination Date of any Lender shall be made without the consent of such Lender;

f.   extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or

g.   affect adversely the interests, rights or obligations of the Facility Agent in its capacity as such shall be made without consent of the Facility Agent.

No failure or delay on the part of the Facility Agent or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by any the Facility Agent or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.  The Lenders hereby agree, at any time and from time to time that the Nordea Agreement or the Citibank Agreement is amended or refinanced, to negotiate in good faith to amend this Agreement to conform any representations, warranties, covenants or events of default in this Agreement to the amendments

55 

made to any substantively comparable provisions in the Nordea Agreement or the Citibank Agreement or any refinancing thereof.

SECTION 11.2.Notices.

(a)           All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted to such party at its address, facsimile number or electronic mail address set forth below its signature hereto or set forth in the Lender Assignment Agreement or at such other address, or facsimile number as may be designated by such party in a notice to the other parties.  Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted provided it is received in legible form; any notice, if transmitted by electronic mail, shall be deemed given upon acknowledgment of receipt by the recipient.

(b)            So long as KfW IPEX is the Facility Agent, the Borrower may provide to the Facility Agent all information, documents and other materials that it furnishes to the Facility Agent hereunder or any other Loan Document (and any guaranties, security agreements and other agreements relating thereto), including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing advance or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder or any other Loan Document prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of the Agreement and/or any advance or other extension of credit hereunder (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Facility Agent at claudia.wenzel@kfw.de (or such other email address notified by the Facility Agent to the Borrower); provided that any Communication requested pursuant to Section 7.1.1(h) shall be in a format acceptable to the Borrower and the Facility Agent.

(1)            The Borrower agrees that the Facility Agent may make such items included in the Communications as the Borrower may specifically agree available to the Lender Parties by posting such notices, at the option of the Borrower, on Intralinks (the “Platform”).  Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Facility Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform.  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of

56 

third party rights or freedom from viruses or other code defects, is made by the Facility Agent or any of its Affiliates in connection with the Platform.

(2)            The Facility Agent agrees that the receipt of Communications by the Facility Agent at its e-mail address set forth above shall constitute effective delivery of such Communications to the Facility Agent for purposes hereunder and any other Loan Document (and any guaranties, security agreements and other agreements relating thereto).

SECTION 11.3.Payment of Costs and Expenses.  The Borrower agrees to pay on demand all reasonable expenses of the Facility Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Facility Agent and of local counsel, if any, who may be retained by counsel to the Facility Agent) in connection with any amendments, waivers, consents, supplements or other modifications to, this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated.  In addition, the Borrower agrees to pay reasonable fees and out of pocket expenses of counsel to the Facility Agent in connection with the funding under this Agreement.  The Borrower further agrees to pay, and to save the Facility Agent and the Lenders harmless from all liability for, any stamp, recording, documentary or other similar taxes arising from the execution, delivery or enforcement of this Agreement or the borrowing hereunder or any other Loan Documents.  The Borrower also agrees to reimburse the Facility Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Facility Agent or such Lender in connection with (x) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.

SECTION 11.4.Indemnification.  In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Borrower hereby indemnifies and holds harmless the Facility Agent, each Lender and each of their respective Affiliates and their respective officers, advisors, directors and employees (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby or any actual or proposed use of the proceeds of the Loans (collectively, the “Indemnified Liabilities”), except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto.  Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim

57 

(provided that the Borrower shall reimburse such indemnified party for its reasonable out-of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower  shall consult in good faith with  the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed).  Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower  shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense.  The Borrower acknowledges that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except to the extent such liability is determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings).  If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

SECTION 11.5.Survival. The obligations of the Borrower under Sections 4.3,4.4, 4.5, 4.6, 4.7, 11.3 and 11.4 and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement and the payment in full of all Obligations. The representations and warranties made by the Borrower in this Agreement and in each other Loan

58 

Document shall survive the execution and delivery of this Agreement and each such other Loan Document.

SECTION 11.6.Severability.  Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 11.7.Headings.  The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.

SECTION 11.8.Execution in Counterparts,.   This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

SECTION 11.9.Third Party Rights.   Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it.

SECTION 11.10.Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that:

a.   except to the extent permitted under Section 7.2.5, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Facility Agent and each Lender; and

b.   the rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.

SECTION 11.11.Sale and Transfer of the Loan; Participations in the Loan.  Each Lender may assign its Loan to one or more other Persons (a “New Lender”), or sell participations in its Loan to one or more other Persons; provided that, in the case of assignments, such New Lender enters into an Interest Make-Up Agreement; and provided further that, in the case of assignments, such Lender shall use commercially reasonable efforts to assign only to a New Lender that has agreed to enter into an Option A Refinancing Agreement.

SECTION 11.11.1.Assignments  (i) KfW IPEX, as Lender, (A)(1) with the written consent of the Borrower (which consent shall not be unreasonably delayed or withheld but which consent shall be deemed to have been given in the absence of a written notice delivered by the Borrower to KfW IPEX, on or before the fifth Business Day after receipt by the Borrower of KfW IPEX’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions, when taken together with participations sold by KfW IPEX pursuant to Section 11.11.2, up to 50.0% of the aggregate principal amount of the Loan or the total aggregate

59 

Commitments and (2) after having assigned or transferred, when taken together with participations sold by KfW IPEX pursuant to Section 11.11.2, 50.0% of the aggregate principal amount of the Loan or total aggregate Commitments (pursuant to the foregoing clause (1) and/or Section 11.11.2, with the written consent of the Borrower (which consent may be withheld at the discretion of the Borrower) may at any time (and from time to time) assign or transfer (including by way of novation) to one or more commercial banks or other financial institutions all or any fraction of KfW IPEX’s remaining Loan or Commitment and (B) in connection with the primary syndication of the Loan, at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions identified by the Borrower in consultation with KfW IPEX that fraction of KfW IPEX’s Loan or Commitment that it is directed by the Borrower to assign or transfer.

(ii) Any Lender (other than KfW IPEX) with the written consents of the Borrower and the Facility Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Borrower, shall be deemed to have been given in the absence of a written notice delivered by the Borrower to the Facility Agent, on or before the fifth Business Day after receipt by the Borrower of such Lender’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions all or any fraction of such Lender’s Loan; provided that any Affiliate of KfW IPEX shall be subject to the provisions of Section 11.11.1(i) and 11.11.2(f) as if such Affiliate were KfW IPEX.

(iii) Any Lender, with notice to the Borrower and the Facility Agent, and, notwithstanding the foregoing clauses (i) and (ii), without the consent of the Borrower, or the Facility Agent may assign or transfer (A) to any of its Affiliates (including, in the case of KfW IPEX, KfW) or (B) following the occurrence and during the continuance of an Event of Default or a Prepayment Event, to any other Person, in either case, all or any fraction of such Lender’s Loan.

(iv) Any Lender may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Facility Agent) assign or charge all or any portion of its Loan to (i) any Federal Reserve Bank as collateral security pursuant to Regulation A of the F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank all or any fraction of such Lender’s Loan or (ii) to the Refinancing Bank as collateral security pursuant to the terms of any Option A Refinancing Agreement entered into by such Lender.

(v) No Lender, may (notwithstanding the foregoing clauses) assign or transfer any of its rights under this Agreement unless it has given prior written notification of the transfer to Hermes and has obtained a prior written consent from Hermes.

(vi) Nothing in this Section 11.11.1 shall prejudice the right of the Lender to assign its rights under this Agreement to Hermes, if such assignment is required to be made by that Lender to Hermes in accordance with the Hermes Insurance Policy.

Each Person described in the foregoing clauses as being the Person to whom such assignment or transfer is to be made, is hereinafter referred to as an “Assignee Lender”.  Assignments in a

60 

minimum aggregate amount of $25,000,000 (or, if less, all of such Lender’s Loan and Commitment) (which assignment or transfer shall be of a constant, and not a varying, percentage of such Lender’s Loan) are permitted; provided that the Borrower and the Facility Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned or transferred to an Assignee Lender until:

a.   written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Facility Agent by such Lender and such Assignee Lender;

b.   such Assignee Lender shall have executed and delivered to the Borrower and the Facility Agent a Lender Assignment Agreement, accepted by the Facility Agent and, if the Loan is a Fixed Rate Loan, any other agreements required by the Facility Agent or the CIRR Representative in connection therewith; and

c.   the processing fees described below shall have been paid.

From and after the date that the Facility Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned or transferred to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned or transferred by it, shall be released from its obligations hereunder and under the other Loan Documents, other than any obligations arising prior to the effective date of such assignment.  Except to the extent resulting from a subsequent change in law, in no event shall the Borrower be required to pay to any Assignee Lender any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no such assignment been made.  Such assignor Lender or such Assignee Lender must also pay a processing fee to the Facility Agent upon delivery of any Lender Assignment Agreement in the amount of $2,000 (and shall also reimburse the Facility Agent and the CIRR Representative for any reasonable out-of-pocket costs, including reasonable attorneys’ fees and expenses, incurred in connection with the assignment).

SECTION 11.11.2.Participations.  Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a “Participant”) participating interests in its Loan; provided that:

a.   no participation contemplated in this Section 11.11.2 shall relieve such Lender from its obligations hereunder;

b.   such Lender shall remain solely responsible for the performance of its obligations hereunder;

61

c.   the Borrower and the Facility Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;

d.   no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in clauses (b) through (f) of Section 11.1;

e.   the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no participating interest been sold; and

f.   each Lender Party that sells a participation under this Section 11.11.2 shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest on) each of the Participant’s interest in the Lender Party’s Advances, Commitments or other interests hereunder (the “Participant Register”).  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.

g.   KfW IPEX may not sell participating interests pursuant to this Section 11.11.2 aggregating, when taken together with Loans and/or Commitments sold by KfW IPEX pursuant to Section 11.11.1, more than 50.0% the aggregate principal amount of the Loan and/or the aggregate Commitments without the written consent of the Borrower (which consent shall not be required following the occurrence and during the continuance of an Event of Default or a Prepayment Event).

The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and clause (e) of 7.1.1, shall be considered a Lender.

SECTION 11.11.3.  Register.  The Facility Agent, acting as agent for the Borrower, shall maintain at its address referred to in Section 11.2 a copy of each Lender Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment(s) of, and principal amount of the Loan owing to, each Lender Party from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Facility Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

SECTION 11.12.Other Transactions. Nothing contained herein shall preclude the Facility Agent or any Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in

62 

which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.

SECTION 11.13.Hermes Insurance Policy.

SECTION 11.13.1.Terms of Hermes Insurance Policy

(a)   95% cover of the Loan.

(b)   If the Borrower does not exercise the Alternative Disbursement Option, the Hermes Fee will not exceed 2.37% of the aggregate principal amount of the Loan as advanced on or prior to the Final Disbursement Date. Before exercising the Alternative Disbursement Option, the Borrower may request that the Hermes Agent obtain an indication of the new Hermes Fee (which it is anticipated will apply if the Borrower exercises the Alternative Disbursement Option) before it delivers notice of its option to exercise the Alternative Disbursement Option, which request shall not be considered to be notice of the Borrower’s intent to exercise the Alternative Disbursement Option. Such new Hermes Fee shall become effective only if the Borrower delivers notice of its option to exercise the Alternative Disbursement Option.  If the Hermes Fee is so increased, each Lender agrees that its Commitment shall be increased by an amount equal to its pro rata share of the excess of the new Hermes Fee over the old Hermes Fee.

(c)   The parties have entered into this Agreement on the basis that the Hermes Insurance Policy shall contain the following terms and should such terms not be included within the Hermes Insurance Policy, then the Borrower may cancel the Commitment(s):

(i)   25% of the Hermes Fee as in effect on the date of issuance of the Hermes Insurance Policy (“First Fee”) will be payable to the Hermes Agent or Hermes on demand following the issue of the Hermes Insurance Policy;

(ii)   2.37% (or such higher percentage as determined under Section 11.13.1(b) if the Borrower exercises the Alternative Disbursement Option) of the Maximum Loan Amount less the First Fee (“Second Fee”) will be payable to the Hermes Agent or Hermes on the First Disbursement Date;

(iii)   if the Commitments are cancelled in full by the Borrower or the Lenders on or prior to the First Disbursement Date, Hermes shall be required to reimburse the Hermes Agent the amount of the First Fee less an administration fee (such administration fee to be no greater than 5% of the amount refunded but in any event not exceeding EUR 2,500);

(iv)   if the Commitments are cancelled in part by the Borrower on or prior to the First Disbursement Date, Hermes shall be required to reimburse the

63 

Hermes Agent an amount equal to a corresponding proposition of the First Fee, based on the proportion of the aggregate Commitments prior to such cancellation to the aggregate Commitments after giving effect to such cancellation, less an administration fee (such administration fee to be no greater than 5% of the amount refunded but in any event not exceeding  EUR 2,500); and

(v)   if, after the First Disbursement Date, the Borrower reduces the Commitments and/or prepays all or part of the Loan in accordance with this Agreement, Hermes shall be required to reimburse the Hermes Agent an amount equal to all or a corresponding proportion of the unexpired portion of the Hermes Fee, having regard to the amount of the reduction in Commitments and/or prepayment and the remaining term of the Loan less the sum of (x) a break funding fee equal to 20% of the unexpired portion of the Hermes Fee and (y) an administration fee (such fee to be no greater than 5% of the amount refunded but in any event not exceeding EUR 2,500).

SECTION 11.13.2.Obligations of the Borrower.

(a)   Provided that the Hermes Insurance Policy complies with Section 11.13.1, the Borrower shall pay (a) the First Fee to the Hermes Agent or Hermes on demand following the issue of the Hermes Insurance Policy and (b) the Second Fee to the Hermes Agent or Hermes on the First Disbursement Date.  In each case, if received by the Hermes Agent, the Hermes Agent shall pay such amount to Hermes.

(b)   Provided that the Hermes Insurance Policy complies with Section 11.13.1, the Borrower shall pay to the Hermes Agent or Hermes an issue fee of EUR 12,500 for the issue of the Hermes Insurance Policy on demand following issue of the Hermes Insurance Policy.

SECTION 11.13.3.Obligations of the Hermes Agent and the Lenders.

(a)   Promptly upon receipt of the Hermes Insurance Policy from Hermes, the Hermes Agent shall (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) send a copy thereof to the Borrower.

(b)   The Hermes Agent shall perform such acts or provide such information, which are, acting reasonably, within its power so to perform or so to provide, as required by Hermes under the Hermes Insurance Policy as necessary to ensure that the Lenders obtain the support of Hermes pursuant to the Hermes Insurance Policy.

(c)   The Hermes Agent shall:

64

(i)   make written requests to Hermes seeking a reimbursement of the Hermes Fee in the circumstances described in  Section 11.13.1(c)(iii), (iv) or (v) promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) provide a copy of the request to the Borrower;

(ii)   use its reasonable endeavours to maximize the amount of any reimbursement of the Hermes Fee to which the Hermes Agent is entitled;

(iii)   pay to the Borrower the full amount of any reimbursement of the Hermes Fee that the Hermes Agent receives from Hermes within two (2) Business Days of receipt with same day value; and

(iv)   relay the good faith concerns of the Borrower to Hermes regarding the amount it is required to pay to Hermes or the amount of any reimbursement to which the Hermes Agent is entitled, it being agreed that the Hermes Agent’s obligation shall be no greater than simply to pass on to Hermes the Borrower’s concerns.

(d)   Each Lender will co-operate with the Hermes Agent, the Facility Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the Hermes Insurance Policy and each Interest Make-Up Agreement (as defined in and entered into in accordance with the Terms and Conditions) continue in full force and effect and shall indemnify and hold harmless each other Lender in the event that the Hermes Insurance Policy or such Interest Make-Up Agreement (as the case may be) does not continue in full force and effect due to its gross negligence or willful default.

SECTION 11.14.Law and Jurisdiction

SECTION 11.14.1.Governing Law.  This Agreement and any non-contractual obligations arising out of or in respect of this Agreement shall in all respects be governed by and interpreted in accordance with English Law.

SECTION 11.14.2.Jurisdiction.  For the exclusive benefit of the Facility Agent and the Lenders, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts.  The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Section, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum.

SECTION 11.14.3.Alternative Jurisdiction.  Nothing contained in this Section shall limit the right of the Facility Agent or the Lenders to commence any proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of

65 

any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.

SECTION 11.14.4.Service of Process.  Without prejudice to the right of the Facility Agent or the Lenders to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to RCL Cruises Ltd., presently at Building 2, Aviator Park, Station Road, Addlestone, Surrey KT15 2PG, Attention: General Counsel, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, at 9:00 am on the third Business Day after posting by prepaid first class registered post.

SECTION 11.15.Confidentiality.  Each of the Facility Agent and the Lenders agrees to maintain and to cause its Affiliates to maintain the confidentiality of all information provided to it by the Borrower or any Subsidiary of the Borrower, or by the Facility Agent on the Borrower’s or such Subsidiary’s behalf, under this Agreement, and neither it nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement or in connection with other business now or hereafter existing or contemplated with the Borrower or any Subsidiary, except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by it or its Affiliates or their respective directors, officers, employees and agents, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or any of its Subsidiaries so long as such source is not, to its knowledge, prohibited from disclosing such information by a legal, contractual or fiduciary obligation to the Borrower or any of its Affiliates; provided, however, that it may disclose such information (A) at the request or pursuant to any requirement of any self-regulatory body, governmental body, agency or official to which the Facility Agent, any Lender or any of their respective Affiliates is subject or in connection with an examination of the Facility Agent, such Lender or any of their respective Affiliates by any such authority or body, including without limitation the Federal Republic of Germany; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable requirement of law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Facility Agent, any Lender or their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder; (F) to the Facility Agent or such Lender’s independent auditors, counsel, and any other professional advisors of the Facility Agent or such Lender who are advised of the confidentiality of such information; (G) to any participant or assignee, provided that such Person agrees to keep such information confidential to the same extent required of the Facility Agent and the Lenders hereunder; (H) as to the Facility Agent, any Lender or their respective Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Borrower or any Subsidiary is party with the Facility Agent, such Lender or such Affiliate; (I) to its Affiliates and its Affiliates’ directors, officers, employees, professional advisors and agents, provided that each such Affiliate, director, officer, employee, professional advisor or agent shall keep such information confidential to the same extent required of the Facility Agent and the Lenders hereunder; and (J) to any other party to the Agreement.  Each of the Facility Agent and the Lenders shall be responsible for any breach of this Section 11.15 by any of its Affiliates or any of its or its Affiliates’ directors, officers, employees, professional advisors and agents.

66 

IN WITNESS WHEREOF, the parties hereto have caused this Hull No. S-698 Credit Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

ROYAL CARIBBEAN CRUISES LTD.

By _________________________

Name:

Title:

Address: 1050 Caribbean Way

Miami, Florida 33132

Facsimile No.:  (305) 539-6400

Email:     agibson@rccl.com

bstein@rccl.com

Attention:  Vice President of Treasury

With a copy to:  General Counsel

	KfW IPEX-BANK GMBH, as Hermes Agent, Facility Agent and Lender
Commitment
100% of the US Dollar Maximum Loan Amount	By__________________________ Name: Title:
	By__________________________ Name: Title:
	Address: Palmengartenstrasse 5-9 D-60325 Frankfurt am Main Germany Facsimile No.: +49 (69) 7431 3768 Email:    claudia wenzel@kfw.de Attention: Shipfinancing Department With a copy to: Credit Operations Facsimile No.: +49 (60) 7431 2944

EXHIBIT A

Preliminary Repayment Schedule
US Dollars ($)
No.	Repayment Dates		Repayment	Loan Balance
1	6	months after Delivery
2	12	months after Delivery
3	18	months after Delivery
4	24	months after Delivery
5	30	months after Delivery
6	36	months after Delivery
7	42	months after Delivery
8	48	months after Delivery
9	54	months after Delivery
10	60	months after Delivery
11	66	months after Delivery
12	72	months after Delivery
13	78	months after Delivery
14	84	months after Delivery
15	90	months after Delivery
16	96	months after Delivery
17	102	months after Delivery
18	108	months after Delivery
19	114	months after Delivery
20	120	months after Delivery
21	126	months after Delivery
22	132	months after Delivery
23	138	months after Delivery
24	144	months after Delivery

A-1 

EXHIBIT B

FORM OF LOAN REQUEST

KfW IPEX-Bank GmbH,

as Facility Agent

Palmengartenstrasse 5-9

D-60325 Frankfurt am Main

Federal Republic of Germany

Attention:             [Name]

                               [Title]

HULL NO. S-698 – NOTICE OF DRAWDOWN

Gentlemen and Ladies:

This Loan Request is delivered to you pursuant to Section 2.3 of the Hull No. S-698 Credit Agreement, dated as of June 8, 2011 (together with all amendments, if any, from time to time made thereto, the “Agreement”), among Royal Caribbean Cruises Ltd. (the “Borrower”), KfW IPEX-Bank GmbH as Facility Agent (in such capacity, the “Facility Agent”), and as Hermes agent, and KfW IPEX-Bank GmbH and the various other financial institutions from time to time party thereto as Lenders.  Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement.

The Borrower hereby requests that [an advance in respect of] the Loan be made in the [aggregate] principal amount of US$              [plus the Dollar amount that corresponds to [   ]% of the EUR amount of the Hermes Fee, as determined pursuant to Section 2.3(d) of the Agreement]1 on ___________, 20__, which amount does not exceed [the US Dollar Maximum Loan Amount]2 [the US Dollar Equivalent of 80% of the installment payment owing to the Builder under the Construction Contract on such date [plus the Dollar amount that corresponds to [   ]% of the EUR amount of the Hermes Fee]3]4 [the excess of the US Dollar Maximum Loan Amount over the aggregate amount of all advances made prior to the Final Disbursement Date]5  The Dollar amount is based on the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amount of EUR with Dollars [for the payment of the pre-delivery installment owing on such date]6 [for the payment of the final installment of the Contract Price]7.  True and

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

1 For the First Disbursement Date only, if the Hermes Fee will be financed with proceeds of the Loan.

2 If the Alternative Disbursement Option is not elected.

3 For the First Disbursement Date only, if the Hermes Fee will be financed with proceeds of the Loan.

4 If the Alternative Disbursement Option is elected, other than for the advance on the Final Disbursement Date.

5 If the Alternative Disbursement Option is elected, for the Final Disbursement Date.

6 For pre-delivery installment advances under the Alternative Disbursement Option.

B-1 

complete copies of the counterparty confirmations evidencing the rates of exchange that the Borrower has agreed to pay its counterparties for the purchase of the relevant amount of EUR with Dollars are attached.

Please wire transfer the proceeds of the Loan [(other than any proceeds to be retained by the Facility Agent in accordance with Section 2.3(d) of the Agreement)]8 as follows:

[details to be provided]

The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the Agreement, each of the delivery of this Loan Request and the acceptance by the Borrower of the proceeds of the borrowing requested hereby constitute a representation and warranty by the Borrower that, on the date of such borrowing (before and after giving effect thereto and to the application of the proceeds therefrom), all statements set forth in Article VI of the Agreement (excluding, however, those set forth in Section 6.10) are true and correct in all material respects.

The Borrower agrees that if prior to the time of the borrowing requested hereby any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify the Facility Agent.  Except to the extent, if any, that prior to the time of the borrowing requested hereby the Facility Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct at the date of such borrowing as if then made.

The Borrower has caused this Loan Request to be executed and delivered, and the certification and warranties contained herein to be made, by its duly Authorized Officer this ___ day of ___________, 20__.

Royal Caribbean Cruises Ltd.

By:  _____________________________         

Name:

Title:

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

7For all other advances.

8For the First Disbursement Date only, if the Hermes Fee will be financed with proceeds of the Loan.

B-2 

EXHIBIT D-1

Opinion of Liberian Counsel to the Borrower

D-1

WFWNY Draft 06/07/11	Watson, Farley & Williams (New York) LLP
Our reference:                                01474.50036/19127730 v4	1133 Avenue of the Americas New York, New York 10036
	Tel (212) 922 2200 Fax (212) 922 1512
[l], 2011
To the Lenders party to the Credit Agreement referred to below and to KfW IPEX-Bank GmbH as Facility Agent

Royal Caribbean Cruises Ltd.

Dear Sirs:

We have acted as legal counsel on matters of Liberian law to Royal Caribbean Cruises Ltd., a Liberian corporation (the “Borrower”), in connection with (a) a Hull No S-698 Credit Agreement dated as of June 8, 2011 (the “Credit Agreement”) and made between (1) the Borrower, (2) the Lenders (as defined therein) as several lenders, (3) KfW IPEX-Bank GmbH as Hermes Agent, and (4) KfW IPEX-Bank GmbH as Facility Agent in respect of a loan facility in an amount not to exceed the US Dollar Equivalent of €580,000,000 plus the US dollar amount corresponding to up to 100% of the Hermes Fee (as defined in the Credit Agreement), and (b) a letter agreement dated June 8, 2011 between the Borrower and KfW IPEX-Bank GmbH in its several capacities as Hermes Agent, Facility Agent, Lender and Initial Mandated Lead Arranger relating to certain syndication arrangements in respect of the Credit Agreement (collectively, together with the Credit Agreement, the “Documents”).  Terms defined in the Credit Agreement shall have the same meaning when used herein.

With reference to the Documents you have asked for our opinion on the matters set forth below.  In rendering this opinion we have examined an executed copy of the Documents.  We have also examined originals or photostatic copies or certified copies of all such agreements and other instruments, certificates by public officials and certificates of officers of the Borrower as are relevant and necessary and relevant corporate authorities of the Borrower.  We have assumed with your approval, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies, the power, authority and legal right of the parties to the Documents other than the Borrower to enter into and perform their respective obligations under each of the Documents, and the due authorization of the execution of the Documents by all parties thereto other than the Borrower.  We have also assumed that (i) the Borrower does not have its management and control in Liberia, or undertake any business activity in Liberia, and (ii) less than a majority of the shareholders of the Borrower by vote or value are resident in Liberia.  We have

D-1-1 

further assumed the validity and enforceability of the Documents under all applicable laws other than the law of the Republic of Liberia.

As to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon certificates of public officials and of officers or representatives of the Borrower.

We are attorneys admitted to practice in the State of New York and do not purport to be experts in the laws of any other jurisdiction.  Insofar as our opinion relates to the law of the Republic of Liberia, we have relied on opinions of counsel in Liberia rendered in transactions which we consider to afford a satisfactory basis for such opinion, and upon our independent examinations of the Liberian Corporation Act of 1948 (Chapter 1 of Title 4 of the Liberian Code of Laws of 1956, effective March 1, 1958 as amended to July, 1973), the Liberian Business Corporation Act of 1976 (Title 5 of the Liberian Code of Laws Revised of 1976, effective January 3, 1977 as amended) (the “Business Corporation Act”), the Liberian Maritime Law (Title 21 of the Liberian Code of Laws of 1956 as amended), the Revenue Code of Liberia (2000), the regulations thereunder and an opinion dated December 23, 2004 addressed by the Minister of Justice and Attorney General of the Republic of Liberia to the LISCR Trust Company, and the Liberian Commercial Code Act of 2010, made available to us by Liberian Corporation Services, Inc. and the Liberian International Ship & Corporate Registry, LLC, and our knowledge and interpretation of analogous laws in the United States.  In rendering our opinion as to the valid existence in good standing of the Borrower, we have relied on a Certificate of Goodstanding issued by order of the Minister of Foreign Affairs of the Republic of Liberia on [l], 2011.

This opinion is limited to the law of the Republic of Liberia.  We express no opinion as to the laws of any other jurisdiction.

Based upon and subject to the foregoing and having regard to the legal considerations which we deem relevant, we are of the opinion that:

1. The Borrower is a corporation duly incorporated, validly existing under the Business Corporation Act and in good standing under the law of the Republic of Liberia;

2. The Borrower has full right, power and authority to enter into, execute and deliver each of the Documents and to perform each and all of its obligations under each of the Documents;

3. Each of the Documents has been executed and delivered by a duly authorized signatory of the Borrower;

4. Each of the Documents constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms;

D-1-2 

5. Neither the execution nor delivery of the Documents, nor the transactions contemplated therein, nor compliance with the terms and conditions thereof, will contravene any provisions of Liberian law or violate any provisions of the Articles of Incorporation (inclusive of any articles of amendment thereto) or the Bylaws of the Borrower;

6. No consent or approval of, or exemption by, any Liberian governmental or public bodies and authorities are required in connection with the execution and delivery by the Borrower of the Documents;

7. It is not necessary to file, record or register either of the Documents or any instrument relating thereto or effect any other official action in any public office or elsewhere in the Republic of Liberia to render any such document enforceable against the Borrower;

8. Assuming neither of the Documents having been executed in the Republic of Liberia, no stamp or registration or similar taxes or charges are payable in the Republic of Liberia in respect of either of the Documents or the enforcement thereof in the courts of Liberia other than (i) customary court fees payable in litigation in the courts of Liberia and (ii) nominal documentary stamp taxes if the Documents are ever submitted to a Liberian court;

9. Assuming that no more than 25% of the total combined voting power and no more than 25% of the total value of the outstanding equity stock of the Borrower is beneficially owned, directly or indirectly, by persons resident in the Republic of Liberia and that the Borrower does not, either directly or through agents acting on its behalf, engage in the Republic of Liberia in the pursuit of gain or profit with a degree of continuity or regularity, the Borrower is not required or entitled under any existing applicable law or regulation of the Republic of Liberia to make any withholding or deduction in respect of any tax or otherwise from any payment which it is or may be required to make under either of the Documents;  and

10. Assuming that the shares of the Borrower are not owned, directly or indirectly, by the Republic of Liberia or any other sovereign under Liberian law, neither the Borrower nor its property or assets is immune from the institution of legal proceedings or the obtaining or execution of a judgment in the Republic of Liberia.

We qualify our opinion to the extent that (i) the enforceability of the rights and remedies provided for in the Documents (a) may be limited by bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting generally the enforcement of creditors’ rights and (b) is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including application by a court of competent jurisdiction of principles of good faith, fair dealing, commercial reasonableness, materiality, unconscionability and conflict with public policy or similar principles, and (ii) while there is nothing in the law of the Republic of Liberia

D-1-3 

that prohibits a Liberian corporation from submitting to the jurisdiction of a forum other than the Republic of Liberia, the enforceability of such submission to jurisdiction provisions is not dependent upon Liberian law and such provisions may not be enforceable under the law of a particular jurisdiction.

A copy of this opinion letter may be delivered by any of you to any Person that becomes a Lender in accordance with the provisions of the Credit Agreement.  Any such Lender may rely on the opinion expressed above as if this opinion letter were addressed and delivered to such Lender on the date hereof.

This opinion letter speaks only as of the date hereof.  We expressly disclaim any responsibility to advise you or any other Lender who is permitted to rely on the opinion expressed herein as specified in the next preceding paragraph of any development or circumstance of any kind including any change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter.  Accordingly, any Lender relying on this opinion letter at any time should seek advice of its counsel as to the proper application of this opinion letter at such time.

Very truly yours,

Watson, Farley & Williams (New York) LLP

D-1-4 

EXHIBIT D-2

Opinion of Counsel to the Facility Agent

(see attached)

(

D-2 

[●]		NORTON ROSE
To the Lenders party to the Credit Agreement referred to below and to KfW IPEX-Bank GmbH as Agent KfW IPEX-Bank GmbH Palmengartenstrasse 5-9 60325 Frankfurt am Main Germany		Norton Rose LLP 3 More London Riverside London SE1 2AQ United Kingdom
		Tel +44 (0)20 7283 6000 Fax +44 (0)20 7283 6500 DX 85 London nortonrose.com
	Your reference	Direct line +44 (0)20 7444 3436
	Our reference SRH/LN45781	Email simon.hartley@nortonrose.com

Dear Sirs

Project Sunshine

In accordance with section 5.1.2b of the Credit Agreement (as hereinafter defined), please find

enclosed our opinion in relation to the English law documents involved in this transaction.

Yours faithfully

Norton Rose LLP

1 

1            Background

1.1 This opinion is given at the request of our client KfW IPEX-Bank GmbH (the Agent) in relation to the English law aspects of a loan transaction (the Transaction) by which certain banks party thereto as lenders (the Lenders) have made available a credit facility of up toEUR€725,000,000 to Royal Caribbean Cruises Ltd. as borrower (the Company) pursuant to a Credit Agreement (as defined in Schedule 1).

1.2 We have acted as English legal advisers to the Agent and the Lenders in relation to the Transaction.

1.3 We have examined the original documents relating to the Transaction governed by English law described in Schedule 1 (the English Documents).

1.4 For the purpose of giving this opinion, we have examined no other documents and have undertaken no other enquiries.

1.5 Our opinions are given in part 2. Part 3 explains their scope, part 4 describes the assumptions on which they are made and part 5 contains the qualifications to which they are subject.

2 

2            Opinions

Based on, and subject to, the other provisions of this opinion, we are of the following opinions:

 Effect of the English Documents

2.1 The obligations which the Company is expressed to assume in each English Document to which it is a party constitute its legal, valid, binding and enforceable obligations.

2.2 The effectiveness or admissibility in evidence of the English Documents is not dependent on:

(a) any registrations, filings, notarisations or similar actions; or

(b) any consents, authorisations, licences or approvals of general application from governmental, judicial or public bodies.

 Stamp duty on the English Documents

2.3 No stamp, registration or similar duty or tax is payable in respect of the creation of any English Document.

 Choice of law and jurisdiction

2.4 The choice of English law to govern the English Documents and any non-contractual obligations connected to the English Documents is effective.

2.5 The agreement by the Company in an English Document that the English courts have jurisdiction in respect of that document or any non-contractual obligations connected to that document is effective.

3 

3            Scope

3.1 This opinion and any non-contractual obligations connected with it are governed by English law and are subject to the exclusive jurisdiction of the English courts.

3.2 This opinion is given only in relation to English law as it is understood at the date of this opinion. We have no duty to keep you informed of subsequent developments which might affect this opinion.

3.3 If a question arises in relation to a cross-border transaction, it may not be the English courts which decide that question and English law may not be used to settle it.

3.4 We express no opinion on, and have taken no account of, the laws of any jurisdiction other than England. In particular, we express no opinion on the effect of documents governed by laws other than English law.

3.5 We express no opinion on matters of fact.

3.6 Our opinion is limited to the matters expressly stated in part 2, and it is not to be extended by implication. In particular, we express no opinion on the accuracy of the assumptions contained in part 4. Each statement which has the effect of limiting our opinion is independent of any other such statement and is not to be impliedly restricted by it. Paragraph headings are to be ignored when construing this opinion.

3.7 Our opinion is given solely for the benefit of the Agent and the Lenders from time to time (as that expression is defined in the Credit Agreement) acting through the Agent. It may not be relied on by any other person.

3.8 This opinion may not be disclosed to any person other than:

(a) those persons (such as auditors or regulatory authorities) who, in the ordinary course of business of the Agent and the Lenders, have access to their papers and records or are entitled by law to see them; and

(b) those persons who are considering becoming Lenders, and on the basis that those persons will make no further disclosure.

4 

4            Assumptions

This opinion is based on the following assumptions:

Effect of the English Documents

4.1           Each person which is expressed to be party to the English Documents:

(a) is duly incorporated and is validly existing;

(b) is not the subject of any insolvency proceedings (which includes those relating to bankruptcy, liquidation, administration, administrative receivership and reorganisation) in any jurisdiction;

(c) has the capacity to execute each English Document to which it is expressed to be a party and to perform the obligations it is expressed to assume under it;

(d) has taken all necessary corporate action to authorise it to execute each English Document to which it is expressed to be a party and to perform the obligations it is expressed to assume under it; and

(e) has duly executed each English Document to which it is expressed to be a party.

4.2 The English Documents have been or will be executed in the form provided to us. There has been no variation, waiver or discharge of any of the provisions of the English Documents.

4.3 None of the English Documents is (wholly or in part) void, voidable, unenforceable, ineffective or otherwise capable of being affected as a result of any vitiating matter (such as mistake, misrepresentation, duress, undue influence, fraud, breach of directors’ duties, illegality or public policy) that is not clear from the terms of the English Documents.

4.4 The Company is solvent both on a balance sheet and on a cash-flow basis, and will remain so immediately after the Transaction has been completed.

Other facts

4.5 There are no other facts relevant to this opinion that do not appear from the documents referred to in part 1.

Other laws

4.6 No law of any jurisdiction other than England has any bearing on the opinion contained in part 2

5 

5            Qualifications

This opinion is subject to the following qualifications:

Contractual matters

5.1 The enforcement of contractual obligations is subject to the general principles of contractual liability, in particular the matters described in the following paragraphs.

5.2 Apart from claims for the payment of debts (including the repayment of loans), contractual obligations are normally enforced by an award of damages for the loss suffered as a result of a breach of contract; and recoverable loss is restricted by principles such as causation, remoteness and mitigation. The specific performance of contractual obligations is a discretionary remedy and is only available in limited circumstances.

5.3 Contractual obligations can be discharged by matters such as breach of contract or frustration. Claims may become time-barred or may be subject to defences such as set-off or estoppel.

5.4 The interpretation of the meaning and legal effect of any particular provision of a contract is a matter of judgment, which will ultimately be determined by the relevant tribunal. In addition, a document may be capable of being rectified if it does not express the common intention of the parties.

5.5 English law has traditionally been protective of guarantors and has developed a number of defences for them. Although guarantees generally purport to exclude many of these defences, a guarantee, and any third party security generally, will be construed in favour of the guarantor or grantor of security where possible.

5.6 A clause in a contract which excludes or limits an obligation of one of the parties or the liability for breach of that obligation will be construed restrictively, against the person who wishes to rely on it. In addition, a contractual provision which excludes the liability of a trustee (including a security trustee) may not be enforceable in all circumstances.

5.7 If a provision of a contract is particularly one-sided it is more likely to be construed against the party who wishes to rely on it.

5.8 A provision of a contract may be ineffective if it is incomplete or uncertain or provides for a matter to be determined by future agreement.

5.9 A provision of a contract which provides for the conclusive certification or determination of a matter by one party may not prevent judicial inquiry into the merits of the claim.

5.10 A provision for the payment of a sum in the event of a breach of contract is unenforceable if it is construed as a penalty rather than a genuine pre-estimate of the loss likely to be suffered as a result of the breach and, if that sum has been paid, it may be repayable in whole or in part.

5.11 A contractual provision for the forfeiture of a proprietary or possessory interest, such as the rights of a lessee under a chattel lease, may be overridden.

5.12 An undertaking to assume liability for stamp duty or similar taxes may be ineffective. 5.13 As a general principle, an authority or power of attorney can be revoked at any time, and will be revoked if the donor enters into insolvency proceedings. This is so even if the authority or power is expressed to be irrevocable and the revocation is therefore made in breach of contract. The main exception to this principle is where the authority or power is granted as part of a security arrangement.

5.14 A provision of a contract which purports to exclude the effect of prior or subsequent agreements, representations or waivers may be ineffective.

6 

5.15 A provision of a contract which provides what will happen in the event of an illegality (including a provision for severance of part of the contract) may not be enforceable.

5.16 An indemnity in respect of criminal liability may not be enforceable.

5.17 An indemnity for the costs of litigation may not be enforceable.

Insolvency

5.18 The parties’ rights are subject to laws affecting creditors’ rights generally, such as those relating to insolvency (which includes bankruptcy, liquidation, administration, administrative receivership and reorganisation). These laws can apply to persons incorporated or resident outside England, as well as to those incorporated or resident in England.

5.19           In particular, on an insolvency:

(a) contractual and other personal rights will reduce proportionately with all similar rights, and contractual provisions which would conflict with this principle (such as a pro rata sharing clause) are ineffective;

(b) transactions entered into in the period before the insolvency starts (that period generally being no longer than two years) may be set aside in certain circumstances; and

(c) the ability of a secured creditor to enforce its security may be subject to limitations, for instance in an administration.

Choice of law and jurisdiction

5.20 The law which governs a contract and any connected non-contractual obligations is not determinative of all issues which arise in connection with that contract. For instance:

(a) it may not be relevant to the determination of proprietary issues (such as those relating to security);

(b) rules which are mandatory (which includes public policy rules) in a jurisdiction which is connected with the contract or in the jurisdiction where the issue is decided may be applied regardless of the provisions of the contract; and

(c) in insolvency proceedings, the law governing those proceedings may override the law governing the contract.

5.21 There are circumstances in which the English courts may, or must, decline jurisdiction or stay proceedings. Additionally, it may not be possible to commence proceedings because of an inability to comply with service of process requirements. These problems are less likely to occur where one or more of the parties is domiciled in the European Union.

5.22 The English courts have a discretion to accept jurisdiction in an appropriate case even though there is an agreement that other courts have (exclusive or non-exclusive) jurisdiction. This is less likely to occur where the other courts are in the European Union.

5.23 The jurisdiction of the English courts in relation to insolvency matters is not dependent on the submission of the parties to the jurisdiction. The precise scope of that jurisdiction depends on the nature of the insolvency procedure in question.

7 

Schedule

The English Documents

1 A credit agreement dated 8 June 2011 (the Credit Agreement) made between (1) Royal Caribbean Cruises Ltd. as borrower (the Borrower), (2) KfW IPEX-Bank GmbH (KfW IPEX) as initial mandated lead arranger, facility agent, Hermes agent, original lender and (c) the financial institutions party thereto as lenders from time to time, to provide a term loan to partly finance the construction of Hull no. S-698 at Meyer Werft.

2 A syndication letter dated 8 June 2011 made between (1) KfW IPEX and (2) the Borrower.

3 Two fee letters both dated 8 June 2011 made between (1) KfW IPEX and (2) the Borrower in relation to certain of the fees payable in respect of the Credit Agreement.

8 

EXHIBIT D-3

Opinion of US Tax Counsel to the Lenders as at the Effective Date

[●, 2011]

KfW IPEX-Bank GmbH

Palmengartenstrasse 5-9

60325 Frankfurt am Main

Federal Republic of Germany (“KfW”)

Re: Application of U.S. Withholding Tax to Royal Caribbean Cruises Ltd. Payments

This opinion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code and was written to support the promotion or marketing (as defined in IRS Circular 230) of the transactions contemplated in the Credit Agreement (as defined below). Each person considering such transactions should seek advice based on such person’s particular circumstances from an independent tax advisor.

Dear Sirs:

You have asked whether U.S. withholding tax will be imposed on payments made by the U.S. branch of Royal Caribbean Cruises Ltd. (“RCCL”), a corporation organized under the laws of Liberia, to KfW, a financial institution organized under the laws of the Federal Republic of Germany (the “Lender”), under the Hull No. S-698 Credit Agreement dated ●, 2011 (the “Credit Agreement”) between RCCL as borrower and KfW as the Lender, Hermes Agent and Facilities Agent.

Under the Credit Agreement, the Lender would lend money to RCCL to help fund the purchase of Hull No. S-698 at Meyer Werft GmbH.

The loan advanced under the Credit Agreement will accrue interest at either a fixed rate or a floating rate in accordance with the provisions set forth in the Credit Agreement.

In connection with rendering this opinion we have reviewed the Credit Agreement, and such other documents as we have deemed necessary or appropriate for purposes of rendering this opinion. We have assumed, with your consent, that: (i) all documents reviewed by us are original documents, or true and accurate copies of original documents, and have not been subsequently amended; (ii) the signatures on each original document are genuine; (iii) all representations and statements as to matters of fact set forth in such documents are true and correct; (iv) all obligations imposed by any such documents on the parties thereto have been or will be performed or satisfied in accordance with their terms; and (v) there are no documents relevant to this opinion to which we have not been given access. We have also assumed, with your consent, that:

D-3-1 

(i) the Lender (which term as used in this opinion letter does not include any successor or assign) is and will continue to be eligible to claim benefits as a resident of the jurisdiction in which it was formed under the income tax treaty between the United States and such jurisdiction currently in force (the “Treaty”);

(ii) the Lender will not receive payments under the Credit Agreement that are attributable, for purposes of the Treaty, to a permanent establishment of the Lender in the United States;

(iii) the Lender has not made and will not make an election, or otherwise take steps, to be treated as other than a corporation for United States federal income tax purposes;

(iv) the Lender will provide the RCCL or its agent with a properly completed Internal Revenue Service (“IRS”) Form W-8BEN accurately representing that the Lender is eligible to claim benefits under the Treaty for all payments under the Credit Agreement;

 (v) if the Lender is receiving payments for a participant, it will provide RCCL with a properly completed IRS Form W-8IMY to which it will attach its own IRS Form W-8BEN and a properly completed IRS Form W-8BEN from each participant accurately representing that the participant is entitled to receive all payments under the Credit Agreement free and clear of U.S. withholding;

(vi) the Lender will be eligible to receive payments free of withholding under the provisions of Sections 1471 through 1474 of the U.S. Internal Revenue Code (“FATCA”) and will provide RCCL or its agent with such properly completed IRS forms, certifications and other items as may be required to establish the Lender’s exemption from withholding under FATCA; and

(vii) all of the foregoing will continue to be accurate and correct.

Conclusion

We are members of the Bar of the State of New York.  This opinion is limited to the U.S. federal withholding tax treatment of payments by RCCL under the Credit Agreement and does not address any other tax or legal consequences of the transactions contemplated in the Credit Agreement. This opinion is rendered solely to you and may not be relied upon by any other person, other than your legal advisors.  Our opinion is based on existing authorities as of the date hereof and may change as a result of subsequent legislation, regulations, administrative pronouncements, court opinions or other legal developments, possibly with retroactive effect.  We do not undertake to update this opinion based on any such developments unless specifically engaged by you to do so.  Our opinion is not binding on the IRS, and no assurance can be given that the conclusions expressed herein will not be challenged by the IRS or will be sustained by a court.

Based on the assumptions and limitations set forth above, we are of the view that there will be no U.S. federal withholding tax imposed on payments by RCCL under the Credit Agreement to the Lender.  Payments to non-U.S. persons that are not considered to be U.S. source income for U.S. federal income tax purposes, generally are not subject to U.S. withholding tax.  Payments by RCCL under the Credit Agreement to the Lender, to the extent they are U.S. source income, will be exempt from U.S. withholding tax either under the Interest or Other Income Articles of the Treaty.

Our conclusions are expressions of our professional judgment with respect to U.S. federal income tax law and do not provide any guarantee as to the actual outcome of any U.S. federal income tax controversy.

Sincerely,

D-3-2 

EXHIBIT E

FORM OF LENDER ASSIGNMENT AGREEMENT

To:           Royal Caribbean Cruises Ltd.

To:           KfW IPEX-Bank GmbH, as Facility Agent (as defined below)

ROYAL CARIBBEAN CRUISES LTD.

Gentlemen and Ladies:

We refer to clause b of Section 11.11.1 of the Hull No. S-698 Credit Agreement, dated as of June 8, 2011 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the “Agreement”) among Royal Caribbean Cruises Ltd. (the “Borrower”), KfW IPEX-Bank GmbH as Facility Agent (in such capacity, the “Facility Agent”), and as Hermes agent, and KfW IPEX-Bank GmbH and the various other financial institutions from time to time party thereto as Lenders. Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the  Agreement.

This agreement is delivered to you pursuant to clause b of Section 11.11.1 of the  Agreement and also constitutes notice to each of you, pursuant to clause a of Section 11.11.1 of the  Agreement, of the assignment and transfer by way of novation to __________ (the “Assignee”) of __% of the Loan/Commitment of __________ (the “Assignor”) outstanding under the  Agreement on the date hereof.  After giving effect to the foregoing assignment and transfer, the Assignor’s and the Assignee’s Percentages for the purposes of the  Agreement are set forth opposite such Person’s name on the signature pages hereof.

The Assignee hereby acknowledges and confirms that it has received a copy of the  Agreement and the exhibits related thereto, together with copies of any documents which have been required to be delivered under the  Agreement as a condition to the making of the Loan thereunder.  The Assignee further confirms and agrees that in becoming a Lender and in making its contribution to the Loan under the Agreement, such actions have and will be made without recourse to, or representation or warranty by the Facility Agent.

Except as otherwise provided in the  Agreement, effective as of the date of acceptance hereof by the Borrower and the Facility Agent:

(a)           the Assignee

(i)          shall be deemed automatically to have become a party to the  Agreement, have all the rights and obligations of a “Lender” under the

E-1 

Agreement and the other Loan Documents as if it were an original signatory thereto to the extent specified in the second paragraph hereof;

(ii)          agrees to be bound by the terms and conditions set forth in the  Agreement and the other Loan Documents as if it were an original signatory thereto; and

(b)           the Assignor shall be released from its obligations under the  Agreement and the other Loan Documents to the extent of the relevant percentage of the Loan/Commitment specified in the second paragraph hereof.

The Assignor and the Assignee hereby agree that the [Assignor] [Assignee] will pay to the Facility Agent the processing fee and expenses referred to in Section 11.11.1 of the Agreement upon delivery hereof.

The Assignee hereby advises each of you of the following administrative details with respect to the assigned Loan/Commitment and requests the Borrower to acknowledge receipt of this document:

(A)                       Address for Notices:

Institution Name:

Attention:

Domestic Office:

Telephone:

Facsimile:

Telex (Answerback):

Lending Office:

Telephone:

Facsimile:

Telex (Answerback):

(B)                      Payment Instructions:

The Assignee agrees to furnish the tax form required by last paragraph of Section 4.6 (if so required) of the  Agreement no later than the date of acceptance hereof by the Borrower and the Facility Agent.

E-2

This Agreement may be executed by the Assignor and Assignee in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law

Adjusted Percentage [ASSIGNOR]

        Loan/Commitment:   _____%

By: ____________________________           

Title:

Percentage                                                                [ASSIGNEE]

        Loan/Commitment:   _____%

By: ____________________________           

Title:

Accepted and Acknowledged this

___ day of ___________, _____.

Royal Caribbean Cruises Ltd.

By:  ____________________________         

Title:

KfW IPEX-Bank GmbH, as Facility Agent

By: ____________________________           

Title:

E-3 

EXHIBIT F

OPTION A REFINANCING AGREEMENT

(see attached)

REFINANCING AGREEMENT

dated

between

KfW

Frankfurt am Main

represented by

KfW IPEX - Bank GmbH

Frankfurt am Main

("KfW")

and

[    "Bank"  ] [city]

(“Bank”)

on the

financing of

[description of delivery item]

for [buyer]

Registry no [    ]

Overview
1	Preamble	3
2	Shipbuilding contract and Loan Agreement data	4
3	General Terms and Conditions	5
4	Amount and purpose	6
5	Disbursement and conditions precedent to disbursement	6
6	Interest, charges and calculation	7
7	Repayment and prepayment; adjustment of the refinancing interest rate	7
8	Collateral	8
9	Duty to inform and right to inspect	9
10	Termination	9
11	Representations	9
12	Other regulations	10
Annex 1:	Disbursement Request Form	11
Annex 2:	General Terms and Conditions	12
Annex 3:	List of facts relevant to subsidies pertaining to the provision of interest adjustment guarantees in connection with sales financing for ships	13

Page 2 of 13 

1            Preamble

The Federal Republic of Germany ("German Government") grants financial institutions an interest make-up guarantee to cover a portion of the interest rate risk involved in refinancing CIRR loans    for the construction of ships by shipbuilders based in Germany ("CIRR for Ships Programme" or "Programme"). This guarantee is provided in accordance with the "Guidelines for the assumption    of guarantees to hedge the interest rate risk associated with refinancing CIRR shipbuilding loans (interest make-up guarantees)" and with the related general terms and conditions for interest rate make-up in ship financing schemes at the CIRR ("General Terms and Conditions").

The German Government is represented by the Federal Ministry of Economics and Technology   and by the Federal Ministry of Finance, both of which are represented by KfW as agent, acting  under a mandate from the German Government. KfW, in turn, has assigned KfW IPEX-Bank    GmbH ("IPEX") to handle the Programme.

The Bank, as lender, entered into a loan agreement as at [             ] (hereinafter, including addenda, the "Loan Agreement") and granted the borrower the loan described in more detail in Section 2.2   for a total of [             ] ("Loan"). The sole purpose of this Loan is to finance the shipbuilding project described in more detail below (post-delivery financing).

In accordance with Section 1.2.1. of the General Terms and Conditions the Bank decided to refinance with KfW (Option A) and applied to KfW for both accreditation and a limit.

On this basis the Bank and KfW hereby agree as follows:

Page 3 of 13   

2           Shipbuilding contract and Loan Agreement data

The Bank hereby confirms the following data pertaining to the shipbuilding contract and the Loan:

2.1            Shipbuilding contract data

2.1.1	Seller/shipbuilder:	____________________
2.1.2	Date of the shipbuilding contact:	____________________
2.1.3	Contract value:	____________________
2.1.4	Payment terms:	____________________
2.1.5	Customer/buyer:	____________________
2.1.6	Object of the shipbuilding contract:	____________________
2.1.7	Scheduled date of delivery:	____________________

2.2            Loan Agreement data:

2.2.1	Financing structure:	____________________
2.2.2	Borrower:	____________________
2.2.3	Loan currency:	____________________
2.2.4	Loan amount:	____________________

Page 4 of 13   

2.2.5	Disbursement profile:	____________________
2.2.6	End of the disbursement period:	____________________
2.2.7	Loan term/repayment profile:	____________________
2.2.8	Prevailing CIRR rate:	____________________
2.2.9	Maturity and calculation basis of the interest:	____________________
2.2.10	Fee for administrative expenses
	incurred by the Bank ("Margin"):	____________________
2.2.11	Refinancing mark-up incurred by KfW
	(pursuant to Section 1.2.2. of the
	General Terms and Conditions)	____________________
2.2.12	Refinancing interest rate (=prevailing	% p.a. plus the refinancing mark-up
	CIRR rate less the Margin):	pursuant to Section 2.2.11
2.2.13	Date of application by the Bank for an
	interest make-up guarantee:	____________________
2.2.14	Latest date pursuant to the General
	Terms and Conditions:	____________________

3           General Terms and Conditions

Insofar as this Agreement does not contain any provisions stating otherwise, the General Terms and Conditions (attached as Annex 2) will apply to the make-up of the interest rates for ship financing at the CIRR. By signing this Refinancing Agreement the Bank expressly declares its consent to the validity of the General Terms and Conditions.

Amendments of, or addenda to, this Agreement and any statements and notices delivered under this Agreement must be in writing.

Page 5 of 13   

4            Amount and purpose

4.1 KfW grants the Bank a refinancing loan ("Refinancing Loan") in an amount equal to the loan amount as stated in Section 2.2.4. The funds utilised under the Refinancing Loan serve to refinance the Bank's Loan Agreement as stated in Section 2.2, which the Bank concluded with the borrower and for which a guarantee is issued under the CIRR for Ships Programme.

4.2 The Bank administers its Loan including all collateral at own expense and on its own behalf. In granting and administering the Loan, including the collection of loan receivables, and in administering and enforcing collateral, including the exercise of rights, obligations and responsibilities in connection with the German Government's export credit insurance scheme, the Bank acts with the care customary in banking practice.

5            Disbursement and conditions precedent to disbursement

5.1 The Bank verifies the fulfilment of the conditions precedent to disbursement under the Loan Agreement and, upon disbursement of the Refinancing Loan, will provide KfW with written confirmation that said conditions precedent have been fulfilled in accordance with the Loan Agreement and that a request for disbursement under the Loan Agreement has been submitted for the corresponding amount.

5.2 The request for disbursement as stated in Annex 1 must be submitted to KfW at least two banking days in Frankfurt am Main prior to the disbursement date.

5.3 The Bank will transfer the disbursements made under the Refinancing Loan to the borrower without delay.

5.4 Disbursements made under the Refinancing Loan will be rendered in the loan currency as stated in Section 2.2.

5.5 Notwithstanding the stipulations of the General Terms and Conditions (Section 10.) KfW may refuse disbursement if

5.5.1 the amount of the Refinancing Loan would be exceeded as a result of the disbursement;

5.5.2 the corresponding disbursement request form has not been fully completed and submitted at least two banking days in Frankfurt am Main prior to the desired disbursement date;

5.5.3 payments rendered by the Bank to KfW under this Agreement are outstanding and  said default cannot be identified as being of a technical nature;

5.5.4 there are extraordinary grounds for termination (as stated in Section 9.).

Page 6 of 13   

6            Interest, charges and calculation

In addition to the charges and fees provided for in the General Terms and Conditions (Section 7.) in connection with the granting of the interest make-up guarantee, the following costs will be due and payable for the Refinancing Loan:

6.1 Interest for loan amounts under this Refinancing Loan will be calculated from the disbursement date until the date on which the repayment instalment is credited to the account stated in Section 7.2.

6.2           The refinancing rate stated in Section 2.2.11 will be applied as the interest rate.

6.3 Utilised loan amounts will be based on a 360-day year and a month comprising the actual number of days elapsed.

6.4 KfW is entitled to 50% of the commitment fee negotiated by the Bank under the Loan Agreement. The Bank is obliged to pay KfW the commitment fee to which KfW is entitled on the due date, regardless of whether payment has been received from the borrower.

6.5 If payments of amounts payable under the Refinancing Loan fall due on a day that is a banking day neither in Frankfurt am Main nor - in the event of foreign currency -in the city in which the foreign currency account is kept, payment must be rendered on the ensuing banking day in Frankfurt am Main and - in the event of foreign currency - in the city in which the foreign currency account is kept unless said day falls in the next calendar month. In the latter case the payment must be rendered on the latest banking day prior to the due date.

7           Repayment and prepayment; adjustment of the refinancing interest rate

7.1 Notwithstanding any payments made under the Loan Agreement the Bank undertakes to repay the Refinancing Loan in accordance with the following repayment schedule:

Date:                                                       Amount:

_________________________                   ______________________________

_________________________                   ______________________________

_________________________                   ______________________________

7.2 The Bank is released from its payment obligations under this Agreement as soon and insofar as the relevant amounts have been made freely available to KfW in the agreed currency without any deductions in the corresponding stated account number [        ] with KfW IPEX - Bank GmbH, Frankfurt am Main, bank sort code 500 204 00. The Bank must, upon KfW's first request, reimburse KfW for any and all costs it incurs owing to late payments.

Page 7 of 13   

7.3 If the payments payable by the Bank are not rendered as at the correct value date, KfW may charge the Bank default interest amounting to 3% p.a above the prevailing 3-month EURIBOR starting from the respective payment due date. The Bank undertakes to pay the default interest upon KfW's first request.

7.4 Pursuant to Section 8. of the General Terms and Conditions the Bank is entitled to render prepayments. Should the event stated in Section 8.3. (non-acceptance compensation) arise, KfW will calculate the compensation on a same-day basis.

7.5 If the Bank exercises its right pursuant to Section 8.2. of the General Terms and Conditions, the refinancing interest rate as stated in Section 2.2.11 of this Agreement must be adjusted accordingly as at the end of the expiring interest make-up period. The refinancing interest rate to be applied in such an event will correspond to the rate that would be applied by KfW for banks with a comparable rating.

8            Collateral

8.1 In order to secure its claims under the Refinancing Loan, KfW is entitled to demand additional collateral in accordance with its criteria for on-lending banks in the domestic lending business insofar as KfW deems this necessary. This may also take place retroactively.

8.2 The Bank holds this collateral, in particular pledges, liens, fiduciary transfers of assets - insofar as they are not transferred to KfW by law - and such collateral for which claims cannot be assigned - in trust for KfW at its own expense insofar as the collateral serves to secure claims under the Loan Agreement. KfW is entitled to issue instructions regarding the assets being held in trust at any time. Upon KfW's request, the Bank will provide KfW with disclosures and information of all kinds in relation to said collateral.

Page 8 of 13   

9            Duty to inform and right to inspect

In addition to the Bank's obligations as stated in Section 11. of the General Terms and Conditions the following provisions will apply:

9.1 The Bank will make disclosures of circumstances pertaining to the Loan, its proper repayment or collateralisation available to KfW on a regular basis. The Bank must inform KfW immediately and of its own accord about extraordinary events that may jeopardise the proper servicing of the Loan and of which it becomes aware.

9.2           The Bank will notify KfW of all amendments and addenda to the Loan Agreement.

9.3           The Bank undertakes to inform the borrower about this Agreement concluded with KfW.

9.4   KfW is entitled to inspect the proper use of the refinancing funds at the Bank, to request corresponding information from the Bank and to inspect the loan documents.

9.5 The Bank will send KfW its certified annual report including the annex, the management report and the notes following its completion but no later than six months after the end of its financial year.

10            Termination

Notwithstanding the provisions of the General Terms and Conditions KfW may terminate this Agreement for good cause, particularly in the event of

10.1           a significant deterioration in the Bank's financial situation;

10.2           a breach of the Bank's payment obligations or duties to inform;

10.3 a disruption in the basis of trust required for the continuation of the contractual relationship that is significant for another reason.

11            Representations

By signing this Agreement, the Bank assures that

a) in the Loan Agreement the prevailing CIRR was agreed to be the minimum interest rate;

b) it is aware that facts on which the approval, grant, reclamation, renewal or continuation of the interest make-up amounts depend qualify as facts that are relevant to subsidies within the meaning of Section 264 of the German Criminal Code (Strafgesetzbuch/StGB). These facts are listed in Annex 3. Particular mention is made of the provisions set forth in Sections 3, 4 and 5 of the German Subsidy Act (Subventionsgesetz/SubvG).

Page 9 of 13   

12           Other regulations

12.1 This Agreement enters into force and effect upon being signed and ends when the Refinancing Loan has been repaid in full including any enforcement of security interests that may be necessary.

12.2 This Agreement is governed by German law. It has been translated into English for information purposes only and the German version and language will prevail. The place of performance and of jurisdiction is Frankfurt am Main.

12.3 If any provision of this Agreement is invalid or inexecutable, this will not affect the remaining provisions. Any gap in the provisions is to be filled with a legally valid provision which comes as close as possible to the spirit and purpose of this Agreement.

12.4 Rights and obligations under this Agreement may not be assigned or pledged without the prior written consent of the corresponding contracting party.

12.5 Representations or notices relating to this Agreement must be affixed with a legally binding signature and dispatched by post or facsimile to the following addresses or, if so agreed, by remote data transfer:

For KfW: KfW IPEX-Bank GmbH

Palmengartenstrasse 5-9

60325 Frankfurt am Main/Germany

Tel: (++49-69) 74 31 - xxxx

Fax: (++49-69) 74 31 - xxxx

For the Bank:

Done in two originals, one for each party.

Frankfurt am Main, this ___ day of	[Place], this ____ day of ______,
________, 200x	200x
______________________________	___________________________________
KfW IPEX-Bank GmbH	[Bank]
(duly authorized by KfW)

Page 10 of 13   

Annex 1: Disbursement Request Form

Bank

To

KfW

c/o KfW IPEX-Bank GmbH

Att: X4b

Postfach 11 11 41

60046 Frankfurt am Main/Germany

or fax: (++49-69) 7431 - xxxx

Request for disbursement under the Refinancing Loan / CIRR for ship financing

dated ______________

Registry number [   ]

Contact person at the Bank:

KfW loan account number:

Borrower:

(Name and KfW business partner number):

We hereby confirm that all of the conditions agreed for the Refinancing Loan have been fulfilled. We therefore request the transfer of

_______                       ____________                                   _________________

currency and amount (at far right written out)

as at: [           ] value date (no earlier than two banking days following submission of

this request)

to the following account: (bank name, sort code and account number)

__________________

__________________

__________________

Place, date, legally binding signature of the Bank __________________

Page 11 of 13   

Annex 2: General Terms and Conditions

Page 12 of 13   

Annex 3: List of facts relevant to subsidies pertaining to the provision of interest adjustment guarantees in connection with sales financing for ships

Facts relevant to subsidies within the meaning of Section 264 of the German Criminal Code (StGB) in conjunction with Section 2 of the German Subsidy Act (SubvG) of 29 July 1976 are:

(a)           the prices and terms of payment agreed with the buyer (Sections 2.1.3 and 2.1.4 of the interest make-up agreement);

(b)           the amount of the Loan granted and the terms and conditions agreed for the Loan (Sections 2.2.3 and 2.2.4 of the interest make-up agreement);

(c)           all cases in which deadlines and amounts that either determine or change one of the variables listed in (a) or (b) are laid down or altered, in particular:

-all data on disbursements and disbursement amounts as well as all data on repayments and repayment amounts;

-the calculation of underlying exchange rates (if any);

-the fixing of interest or changes in the agreed reference base for interest rates;

-receipt of off-schedule repayments, insurance payments, realisation proceeds and other payments as a result of which the outstanding claim is reduced;

-agreements on amendments to the Loan Agreement;

(d)           the prohibition of the transfer of the Margin for administrative expenses to the borrower in accordance with Section 1.5. of the General Terms and Conditions.

Page 13 of 13   

EXHIBIT G

NORTON ROSE

CONFIDENTIAL

Dated                  [·]

ACCOUNT PLEDGE AGREEMENT

(Kontoverpfändung) in relation to the Hull No. S-698 Credit Agreement

Royal Caribbean Cruises Ltd.

as Pledgor

KfW IPEX-Bank GmbH

as Facility Agent

and

KfW IPEX-Bank GmbH

as Lender

Norton Rose LLP

Theatinerstraße 11

80333 Munich

Germany

Contents
Clause		Page
1	Headings, Capitalised Terms, References, and Language	3
2	Abstract Acknowledgement of Debt	5
3	Grant of Pledges	5
4	Operation of Accounts	6
5	Secured Obligations	7
6	Representations and Warranties	7
7	Protection of Collateral	7
8	Enforcement of Collateral	8
9	Release of Collateral	9
10	Waivers of Pledgor	9
11	Assignment and Transfer	10
12	Substitution of a Pledgee	10
13	Further Assurance	10
14	Costs and Expenses	11
15	Severability, Duration and other Matters	11
16	Notification	12
17	Notices and Other Matters	12
18	Partial Invalidity	13
19	Changes and Amendments	13
20	Choice of Law and Jurisdiction	14
21	Entire Agreement	14
22	Process Agent	14
Schedule 1 Address details of the parties		15
Schedule 2 The Pledged Accounts		16
Schedule 3 Notification Letter		17
Schedule 4 Acknowledgement Letter		19
Schedule 5 Instruction to Account Bank		21

1 

Schedule 6 Form of delivery payment letter 23

2 

THIS ACCOUNT PLEDGE AGREEMENT (hereinafter referred to as the Account Pledge Agreement) is made on __________ .

BETWEEN:

(1) ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation  incorporated under the laws of Liberia and registered in the Register of Companies of Liberia under [NB Registration details to be provided by Borrower], whose registered office is at [NB Address details to be provided by Borrower] Liberia, as pledgor (hereinafter referred to as the Pledgor);

(2) KfW IPEX-Bank GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of the Federal Republic of Germany (Germany), whose registered office is at Palmengartenstraße 5-9, 60325 Frankfurt am Main, Germany, in its capacity as facility agent (hereinafter referred to as the Facility Agent); and

(3) KFW IPEX-BANK GMBH, in its capacity as lender (hereinafter referred to as the Lender, and together with the Facility Agent the Pledgees).

WHEREAS

(A) The Pledgor and KfW IPEX-Bank GmbH as Hermes agent, Facility Agent and Lender have entered into a loan agreement dated 8 June 2011 as amended by an amendment agreement dated [·] February 2012 (as amended, varied, novated, supplemented, superseded or extended from time to time, hereinafter referred to as the Credit Agreement), pursuant to which the Lender has agreed to make available to the Borrower loan facilities in connection with the financing of a passenger cruise vessel bearing Meyer Werft GmbH’s hull number S-698 (the Vessel) (the Transaction).

(B) The Pledgor has opened or will open certain bank accounts at the Account Bank for payments to be made to it in relation to the Transaction.

(C) The pledge provided for in this Account Pledge Agreement is a condition precedent to the utilisation of the facility by the Pledgor under the Credit Agreement.

NOW, THEREFORE IT IS HEREBY AGREED as follows:

1            Headings, Capitalised Terms, References, and Language

1.1 Headings are for ease of reference only and shall not affect the construction of this Account Pledge Agreement.

1.2 Unless otherwise defined herein or unless the context otherwise requires, capitalised terms defined in the Credit Agreement shall have the same meaning when used in this Account Pledge Agreement.

3 

1.3 In addition, in this Account Pledge Agreement

Abstract Acknowledgement has the meaning given to such term in Clause 2 (Abstract Acknowledgement of Debt);

Account Bank means [Norddeutsche Landesbank Girozentrale, a financial institution organised and existing under the laws of the Federal Republic of Germany acting through its office at Friedrichswall 10, 30159 Hannover, Germany] [NB Account Bank to be confirmed];

Builder means Meyer Werft GmbH, Papenburg, Germany;

Collateral has the meaning given to such term in clause 3.1;

Discharge Date has the meaning given to such term in clause 9.1;

Enforcement Event has the meaning given to such term in clause 8.1;

Finance Parties means the Lenders, the Hermes Agent and the Facility Agent each of such terms as defined in the Credit Agreement, each of them individually a Finance Party;

Security Grantor means any person granting a security for the Secured Obligations;

Pledges means the pledges created by clause 3 (Grant of Pledges);

Pledged Accounts has the meaning given to such term in clause 3.1;

Purchased Vessel means the passenger cruise vessel bearing Builder’s hull number S-698;

Secured Obligations means all financial obligations, promises and other liabilities, owing or incurred by the Pledgor vis-à-vis the Pledgees, whether due or hereinafter to become due, including, but not limited to, all future and contingent obligations, promises and other liabilities, of whatever nature (including claims for unjust enrichment (ungerechtfertigte Bereicherung)), under or in connection with the Loan Documents (including but not limited to the Abstract Acknowledgement of Debt pursuant to clause 2); and

Security Period means the period from the date of this Account Pledge Agreement to and including the earliest of (i) the date on which the Commitments have reduced to zero and all Indebtedness under the Loan Documents has been fully paid and discharged, (ii) the date on which the proceeds of the Loan (as such proceeds may have been exchanged from US Dollars to Euro) shall have been paid out by way of partial payment of the Contract Price pursuant to clause 4.1(a) and (iii) the date on which the proceeds of the Loan shall have been paid to the relevant account pursuant to clause 4.1(b).

1.4          Words importing the plural shall include the singular and vice versa.

4 

1.5 This Account Pledge Agreement is made in the English language. For the avoidance of doubt, the English language version of this Account Pledge Agreement shall prevail over any translation of this Account Pledge Agreement. However, where a German translation of a word or phrase appears in the text of this Account Pledge Agreement, the German translation of such word or phrase shall prevail.

1.6          In this Account Pledge Agreement, any reference to:

(a) a defined document is a reference to that defined document as from time to time amended, varied, novated, restated, supplemented or extended;

(b) promptly means without undue delay (unverzüglich) as contemplated by Section 121 of the German Civil Code (Bürgerliches Gesetzbuch - BGB); and

(c) clauses and schedules are to be construed as references to clauses of and schedules to this Account Pledge Agreement.

2           Abstract Acknowledgement of Debt

The Pledgor acknowledges by way of an abstract acknowledgement of debt (abstraktes Schuldanerkenntnis) (the Abstract Acknowledgement), that each and every obligation of the Pledgor towards a Finance Party under this Agreement, the Credit Agreement, the other Loan Documents and any ancillary document thereto (together, but for the avoidance of doubt excluding the Abstract Acknowledgment, hereinafter referred to as the Original Obligations)shall also be owing in full to the Facility Agent and that, accordingly, the Facility Agent will have its own independent right to demand performance by the Pledgor of those obligations. Without in any way prejudicing the legally independent nature of the Abstract Acknowledgement, the Parties hereto agree, that payment by the Pledgor of the obligations under the Abstract Acknowledgement shall to the same extent be deemed to decrease and discharge the Original Obligations owing to the relevant Finance Parties and payment by the Pledgor of its Original Obligations to the relevant Finance Parties shall to the same extent be deemed to decrease and discharge the amounts owed under the Abstract Acknowledgement owing by it to the Facility Agent.  For the avoidance of doubt, the obligations under the Abstract Acknowledgements shall only be due and payable when the obligations under the Original Obligations are due and payable.

3           Grant of Pledges

3.1 The Pledgor hereby pledges (verpfändet) to each of the Pledgees all of its rights and claims in the current and future amounts standing to the credit of its accounts stated in Schedule 2 (The Pledged Accounts) hereto (including all sub-accounts thereto), (hereinafter together referred to

5 

as the Pledged Accounts), in particular, but not limited to, the right to claim payment from the Account Bank, and in each case including all interest accruing thereon (together the Collateral).

3.2 Each of the Pledgees hereby accepts the Pledges created under clause 3.1 above.

3.3 For the avoidance of doubt, the Parties agree that nothing in this Account Pledge Agreement shall exclude a transfer of all or part of the Pledges created hereunder by operation of law upon the assignment or transfer (including by way of assignment and assumption (Vertragsübernahme)) of all or part of the Secured Obligations by any Pledgee in accordance with the Loan Documents.

4           Operation of Accounts

4.1 Unless the Facility Agent has notified the Account Bank that an Event of Default has occurred and is continuing, the Pledgor shall be entitled on and after the commencement of the Security Period, without the consent of the Pledgees, to request that the Facility Agent instructs the Account Bank (which the Facility Agent agrees to do) in the form set out in Schedule 5 or in such other form the Facility Agent and Account Bank may agree to disburse all or any of the moneys standing to the credit of the Pledged Account, either to:

(a) an account of the Builder by way of a partial payment of the Contract Price payable by the Pledgor on delivery of the Purchased Vessel in accordance with the terms of this Account Pledge Agreement and a delivery payment letter to be entered into between the Pledgor and the Builder in the form set out in Schedule 6 or in such other form as may be approved by the Facility Agent that is to be executed and delivered at the time of delivery of the Purchased Vessel where delivery occurs after the commencement of the Security Period; or

(b) such account as the Facility Agent may specify as prepayment, in whole or in part, in accordance with section 3.2, 3.7 or 9.2 of the Credit Agreement.  For the purposes of this clause 4.1(b), if the Pledgor shall prepay the Loan in whole or in part pursuant to sections 3.2, 3.7 or 9.2 of the Credit Agreement, the Facility Pledgees will consent to the disbursement of funds to third party counterparties for the purpose of foreign exchange, so long as such exchanged funds are paid directly to such account as may be designated by the Facility Agent.

4.2 Unless the Facility Agent has notified the Account Bank that an Event of Default has occurred and is continuing, all interest earned on the Pledged Account shall be paid to the Pledgor or to its order to such account as the Pledgor may direct and the Pledgor shall be entitled to instruct the Account Bank accordingly.

6 

5 Secured Obligations

The Collateral shall serve as security for the Secured Obligations.

6           Representations and Warranties

The Pledgor represents and warrants to each of the Pledgees that:

6.1 it is duly organised and validly existing under the laws of Liberia, it has obtained all licenses and authorisations to carry out its business as it is now being conducted, all necessary or recommendable corporate action authorising the conclusion and performance of this Account Pledge Agreement has been taken, all consents, approvals or permits which are required or recommendable in connection with the conclusion and performance of this Account Pledge Agreement have been obtained and this Account Pledge Agreement constitutes legal, valid and binding obligations of the Pledgor enforceable in accordance with its terms;

6.2 subject to the provisions in the general terms and conditions of the Account Bank, it is the sole legal and beneficial owner of the Collateral, has full title thereto and is entitled to pledge the Collateral to the Pledgees; and

6.3 subject to the provisions in the general terms and conditions of the Account Bank, this Account Pledge Agreement constitutes a first priority right in the Collateral and the Collateral is not subject to any prior or pari passu rights, including, but not limited to, rights of pledge, rights of usufruct and attachment.

7          Protection of Collateral

During the term of this Account Pledge Agreement, the Pledgor undertakes towards each of the Pledgees:

7.1 not to assign, encumber or otherwise dispose of any of the Collateral or any interest therein or offer to do so, except as herein provided and subject to the provisions in the general terms and conditions of the Account Bank;

7.2 to refrain from any acts or omissions which would result in the Collateral being encumbered or further encumbered, except as herein provided and subject to the provisions in the general terms and conditions of the Account Bank;

7.3 to record the Pledges immediately in its books and records and to refrain from any acts or omissions which could prevent third parties who may have a legitimate interest in obtaining knowledge of the Pledges from obtaining knowledge thereof;

7 

7.4 not to otherwise defeat or impair the rights of the Pledgees under or in connection with this Account Pledge Agreement;

7.5 to open a new account to hold the proceeds of the Loan disbursed or to be disbursed under the Credit Agreement only with prior written consent of the Facility Agent, and in accordance with the Credit Agreement. In such a case, the Pledgor shall grant a corresponding account pledge to the Pledgees over the newly established account;

7.6 to inform the Pledgees, by written notice to the Facility Agent, as soon as possible in the case the Pledgees’ rights in respect of the Collateral are prejudiced or jeopardised by attachment or are prejudiced or jeopardised by other material actions of third parties. Such information shall be accompanied, in the case of any attachment, by a copy of the order for attachment as well as all documents required for the filing of an objection against the attachment, and, in case of any other actions by third parties, by copies evidencing which actions have been or will be taken, respectively, as well as all documents required for the filing of an objection against such actions. The Pledgor shall further be obliged to inform as soon as possible the attaching creditors or other third parties asserting rights with respect to the Collateral in writing of the Pledgees’ rights in respect of the Collateral. All reasonable and adequately documented costs and expenses for countermeasures of the Pledgees shall be borne by the Pledgor. This shall also apply to the institution of legal action which any of the Pledgees reasonably considers necessary;

7.7 to inform the Pledgees, by written notice to the Facility Agent, promptly of any subsequent material changes in the value of the Pledged Accounts resulting from any set off or other reasons, after becoming aware of such changes other than in the ordinary course of business; and

7.8 to notify the Pledgees, by written notice to the Facility Agent, promptly of any event or circumstance which might be expected to have a material adverse effect on the validity or enforceability of this Account Pledge Agreement.

8           Enforcement of Collateral

8.1 Following the occurrence of an Event of Default and, in addition, if and when the requirements of Section 1204 et seq. of the German Civil Code (BGB) (Pfandreife) are met in respect of the Secured Obligations (or any part thereof) (an Enforcement Event), the Pledgees, acting through the Facility Agent, shall be entitled, after having given one week's notice to the Pledgor, to avail themselves of all rights and remedies of a pledgee (Pfandgläubiger) hereunder without prior court ruling and released from Section 1277 of the German Civil Code (BGB). However, the Pledgees will only make use of their rights to the extent necessary to cover the Secured Obligations.

8 

8.2 In the case of the occurrence of an Enforcement Event, the Pledgees, acting through the Facility Agent, shall in particular be entitled to

(a) collect the monies standing to the credit of the Pledged Accounts;

(b) request that all documents relating to the Pledges be handed over to the Facility Agent and the Pledgor hereby agrees to comply promptly with any such request; and

(c) take any other actions not mentioned in clauses (a) and (b) above which are necessary or appropriate for the purpose of realising the security granted by the Pledgor in accordance with this Account Pledge Agreement, to the extent that such actions are permissible under the applicable law and not restricted by any other Loan Document.

8.3 The Facility Agent shall apply such amounts in accordance with the provisions of the Credit Agreement and the other Loan Documents.

9          Release of Collateral

9.1 Upon (a) complete and irrevocable satisfaction of the Secured Obligations or (b) the end of the Security Period, the Pledgees, acting through the Facility Agent, will, upon request of the Pledgor, declare the release of the Pledges (Pfandfreigabe) to the Pledgor as a matter of record. For the avoidance of doubt, the Parties are aware that upon complete and irrevocable satisfaction of the Secured Obligations, the Pledges, due to their accessory nature (Akzessorietät), cease to exist by operation of law (the Discharge Date).

9.2 At any time when the total value of the aggregate security granted by the Pledgor and any of the other Security Grantors to secure the Secured Obligations which can be expected to be realised in the event of an enforcement of the Security (realisierbarer Wert) not only temporarily exceeds 110% of the Secured Obligations (hereinafter referred to as the Limit), the Facility Agent, acting on behalf of the Pledgees, shall on demand of the Pledgor release such part of the security (Sicherheitenfreigabe) as the Facility Agent may in its reasonable discretion determine so as to reduce the realisable value of the security to the Limit.

9.3 If the Pledgees are required to release any security prior to the Discharge Date, they shall be free to select the security to be released, taking into consideration the legitimate interest of the Pledgor.

10           Waivers of Pledgor

10.1 The Pledgor hereby expressly waives, to the fullest extent legally admissible, all defences of voidability (Anfechtbarkeit, Sections 1211, 770 of the German Civil Code (BGB)) and set-off (Aufrechenbarkeit, Sections 1211, 770 of the German Civil Code (BGB)) and any other defences that a pledgor may have under German law, including, but not limited to, all defences,

9 

to the fullest extent possible, in terms of Section 1211 of the German Civil Code (BGB), with the exception that the waiver shall not apply to set-offs or counterclaims that are (i) uncontested, or (ii) based on an unappealable court decision.

10.2.1   In case of enforcement of the Pledges under this Account Pledge Agreement, as long as any of the Secured Obligations remain outstanding, no rights of the Pledgees shall pass to the Pledgor or third parties by subrogation or otherwise, such rights being hereby waived by the Pledgor under this Account Pledge Agreement and relating to all forms of subrogation and all kind of security interest, including, but not limited to, pledges and guarantees (Bürgschaften). In particular, but not limited to, the Pledgor hereby waives, to the fullest extent legally admissible, any rights to subrogation in terms of Section 1225 of the German Civil Code (BGB).

11 Assignment and Transfer

11.1 Each of the Pledgees shall, at any time have the right to assign, to transfer, or to dispose of its rights in the Secured Obligations together with the rights and obligations under this Account Pledge Agreement (other than the Pledges which will be transferred by operation of law in the event the Secured Obligations are transferred) to any person who is, or may become, a Finance Party pursuant to and in accordance with the Credit Agreement. The Pledgor hereby already explicitly and irrevocably consents to such assignment, transfer or disposal.

11.2 The Facility Agent shall, at any time have the right to assign, to transfer, or to dispose of its rights and obligations under this Account Pledge Agreement to any person who becomes a Facility Agent pursuant to and in accordance with the Credit Agreement. The Pledgor hereby already explicitly and irrevocably consents to such assignment, transfer or disposal.

11.3 The Pledgor shall not be entitled to assign, to transfer, or to dispose of all or any part of its rights or obligations or both hereunder.

12 Substitution of a Pledgee

The Pledgor undertakes to enter into any agreement reasonably required by the relevant Pledgee and otherwise to do whatever is reasonably required by the relevant Pledgee in case such Pledgee legitimately transfers its rights and obligations under the Loan Documents in accordance with the Loan Documents wholly or partially to a third party by creating new pledges over the Collateral or agreeing to mechanics of distribution of proceeds on an equal basis or otherwise.

13           Further Assurance

13.1 Should any further actions and/or declarations be necessary in order to validly pledge the Collateral or any part thereof to the Pledgees, the Pledgor undertakes to take such actions and/or to provide such declarations upon the Pledgees’ demand.

10 

13.2 The Pledgor herewith irrevocably authorises (bevollmächtigt unwiderruflich) the Facility Agent (including the right to grant sub-power of attorney (Untervollmacht)) to perform actions and declarations set out in clauses 12 and 13.1 above also in the Pledgor's name. The Facility Agent is herewith exempted from the restrictions of Section 181 of the German Civil Code (BGB).

14          Costs and Expenses

All costs and expenses arising from the execution of this Account Pledge Agreement, from amendments or prolongations thereof or any costs arising from the enforcement or preservation of the Pledgees’ rights hereunder shall be borne by the Pledgor, whereby the Facility Agent, acting on behalf of the Pledgees, is entitled to mandate a third party to perform such actions in its own name but for the Pledgor's account.

15          Severability, Duration and other Matters

15.1 The validity and effect of each of the Pledges created hereunder shall be independent from the validity and the effect of any of the other Pledges created hereunder.

15.2 This Account Pledge Agreement shall remain in full force and effect until the Secured Obligations have been completely satisfied.  The Pledges shall not cease to exist if the Secured Obligations have only temporarily been satisfied.

15.3 As long as the Secured Obligations are not completely satisfied and not all facilities which may give rise to the Secured Obligations have been terminated, the Pledgor shall not assert any claims against any other person which might arise from the fulfilment of its obligations according to this Account Pledge Agreement, either contractual or statutory. The monies which are transferred to or debited by the Pledgor from such other person shall be received by the Pledgor on trust (treuhänderisch) and transferred by it on trust to the Facility Agent.

15.4 This Account Pledge Agreement shall create a continuing security and no change or amendment in the Transaction Documents shall affect the validity and the scope of this Account Pledge Agreement or the obligations which are imposed on the Pledgor pursuant to it.

15.5 Subject to anything expressed to the contrary in this Account Pledge Agreement, the Pledges are independent from and granted in addition to any other security or guarantee which may have been given to the Pledgees with respect to any of the Secured Obligations. None of such other security interests shall prejudice, or shall be prejudiced by, or shall be merged in any way with, this Account Pledge Agreement.

15.6 This Account Pledge Agreement shall inure to the benefit of the Pledgees, their respective successors and assigns.

11 

16 Notification

16.1 In order to comply with the requirement of Section 1280 of the German Civil Code (BGB)the Pledgor shall notify the Account Bank of the Pledge created hereunder by delivery to the Account Bank of a notification letter as set out in Schedule 3 to this Account Pledge Agreement on the date of this Account Pledge Agreement.

16.2 The Pledgor shall use all reasonable endeavours to procure that the Account Bank confirms receipt of the notification letter by signing the acknowledgement letter as set out in Schedule 4 of this Account Pledge Agreement.

17           Notices and Other Matters

17.1           Notices

(a) Any notice or communication to be made under or in connection with this Account Pledge Agreement shall be made in writing and, unless otherwise stated, may be made by prepaid letter or fax.

(b)       Addresses for notices

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party to this Account Pledge Agreement for any communication or document to be made or delivered under or in connection with this Account Pledge Agreement is as set out in Schedule 1 (Address details of the Parties) or any such substitute address, fax number, or department or officer as the relevant party to this Account Pledge Agreement may notify to the Facility Agent (or the Facility Agent may notify to the other parties to this Account Pledge Agreement, if a change is made by the Facility Agent) by not less than five (5) Business Days' notice.

(c)       Delivery of notices

Any communications or document made or delivered by one party to another under or in connection with this Account Pledge Agreement will only be regarded as effective

(i)   if by way of fax, when received in complete and legible form; or

(ii)   if by way of letter, when received by its addressee,

and, if a particular department or officer is specified as part of its address details provided under clause (b) above, if addressed to that department or officer.

12

17.2           No implied waiver, remedies cumulative

No failure or delay on the part of a Pledgee or the Facility Agent to exercise any power, right or remedy under this Account Pledge Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by a Pledgee or the Facility Agent of any power, right or remedy preclude any other or further exercise thereof or the exercise of any power, right or remedy. The remedies provided in this Account Pledge Agreement are cumulative and are not exclusive of any remedies provided by law.

17.3          English translations

All documents to be delivered under or supplied in connection with this Account Pledge Agreement shall be in the English language or shall be accompanied by a certified translation into English upon which the recipient shall be entitled to rely.

17.4           Counterparts

This Account Pledge Agreement may be executed in any number of counterparts (whether by facsimile or otherwise, but, if by facsimile, with the original signed pages being promptly sent to the Facility Agent by prepaid letter (and the Facility Agent is hereby authorised to incorporate such pages into bound originals)) and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original, but all counterparts shall together constitute one and the same agreement.

18           Partial Invalidity

If at any time, any one or more of the provisions of this Account Pledge Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, such provision shall as to such jurisdiction, be ineffective to the extent necessary without affecting or impairing the validity, legality and enforceability of the remaining provisions hereof or of such provisions in any other jurisdiction. The invalid, illegal or unenforceable provision shall be deemed to be replaced with such valid, legal or enforceable provision which comes as close as possible to the original intent of the parties and the invalid, illegal or unenforceable provision. Should an omission (Regelungslücke) become evident in this Account Pledge Agreement, such omission shall, without affecting or impairing the validity, legality and enforceability of the remaining provisions hereof, be deemed to be filled in with such provision which comes as close as possible to the original intent of parties.

19          Changes and Amendments

Changes to and amendments of this Account Pledge Agreement including this clause 19 (Changes and Amendments) must be made in writing, signed by all of the parties hereto.

13 

20           Choice of Law and Jurisdiction

20.1 This Account Pledge Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with the laws of the Federal Republic of Germany.

20.2 The place of jurisdiction shall be Frankfurt am Main, Germany, provided, however, that each of the Pledgees shall also be entitled to take legal action against the Pledgor before any other court of competent jurisdiction.

21           Entire Agreement

This Account Pledge Agreement constitutes the entire agreement of the parties hereto with regard to the pledges contemplated under this Account Pledge Agreement and supersedes all oral, written or other type of agreements thereon.

22          Process Agent

22.1 For the purpose of any suit, action, proceeding or settlement of dispute in the German courts, the Pledgor hereby undertakes to appoint (zu bestellen) and to authorise (bevollmächtigen) [NB Address details of Process Agent in Germany to be added] Germany, as process agent (Zustellungsbevollmächtigten) to accept service of process in respect of any such suit, action, proceeding or settlement of dispute in connection with this Account Pledge Agreement. The Pledgor shall furnish the Facility Agent with written confirmation from the process agent that the process agent has accepted such appointment.

22.2 If for any reason, such process agent no longer serves as agent to receive process in the Federal Republic of Germany, the Pledgor shall promptly notify the Facility Agent and within a period of 30 days appoint a substitute process agent acceptable to the Facility Agent.

14 

Schedule 1

Address details of the parties

Party	Name	Details
		Address for Notices 1050 Caribbean Way Florida, 33132, Miami United States of America
		Attention:	Vice President of Treasury
Pledgor	Royal Caribbean Cruises Ltd.		[A. Gibson]/[B. Stein]
		Facsimile:	+1 (305) 539-6400
		Email:	agibson@rccl.com
			bstein@rccl.com
		Address for notices Palmengartenstraße 5-9 60325 Frankfurt am Main Germany
Facility Agent	KfW IPEX-Bank GmbH	Attention:	Shipfinancing Department with a
			copy to Credit Operations
			Mrs. Claudia Wenzel
		Fax:	+49 (69) 7431 3768 with a copy to
			+49 (69) 7431 2944
		Email:	claudia.wenzel@kfw.de

15 

Schedule 2

The Pledged Accounts

Account name	Account Bank	Account Holder	Account Number	IBAN
[  ]	Norddeutsche Landesbank Girozentrale	Borrower	[  ]	[  ]

[NB Account details and Account Bank to be provided by KfW]

16 

Schedule 3

Notification Letter

[Norddeutsche Landesbank Girozentrale

Attn. [  ]

Friedrichswall 10

30159 Hannover

Germany] [NB to be confirmed]

[·]

Dear Sirs,

1   Royal Caribbean Cruises Ltd. (the Pledgor) hereby gives you notice in accordance with Section 1280 German Civil Code (BGB) that by an accounts pledge agreement dated [·] it has pledged in favour of KfW IPEX-Bank GmbH in its capacity as facility agent (the Facility Agent) and KfW IPEX-Bank GmbH in its capacity as lender (the Lender) (the Facility Agent and the Lender are hereinafter referred together to as the Pledgees) (the Accounts Pledge Agreement) all of its rights, interests and claims in the current and future amounts standing to credit of the following accounts held in the name of the Pledgor with you:

·   Account number [  ] (IBAN DE[  ]);

(the Pledged Account).

2   The Pledgor hereby requests that you deliver to the Pledgor and the Pledgees confirmation of receipt of this notice in the form attached to this letter (the Acknowledgement Letter) and further request that you provide to the Pledgees all information which they request from time to time concerning the Pledged Account.

3   The Pledgor hereby further requests you to agree:

(a)   not to make any set-off or deduction from the Pledged Account or invoke any rights of retention in relation to the Pledged Account during the existence of the Account Pledge Agreement, other than in relation to (i) charges payable in connection with the maintenance of the Pledged Account in the ordinary course of business relating thereto or (ii) other bank charges or fees payable in relation to reverse and correction entries and/or amounts arising from the return of direct debits or cheques credited to an account, in each case to the extent relating to such Pledged Account; and

(b)   that the pledge in your favour over the Pledged Account granted pursuant to your general business conditions shall rank for the time the Account Pledge Agreement is in force

17 

behind the pledge over the Pledged Account granted to the Pledgees by the Pledgor pursuant to the Account Pledge Agreement and that you agree to be treated in all respect as if the pledge granted pursuant to your general business conditions would have been created after the pledge under the Account Pledge Agreement has been perfected.

4   Please confirm that you have neither received any previous notice of pledge relating to the Pledged Account nor are aware of any third party rights in relation to the Pledged Account.

5   We hereby confirm that you will be only entitled to follow the instructions of the Facility Agent in relation to the Pledged Account.

6   This Notice shall be governed by and construed in accordance with the laws of Germany.

7   Place of jurisdiction shall be Frankfurt am Main, Germany.

Yours faithfully

____________________                                                                             ___________________

Royal Caribbean Cruises Ltd.

____________________                                                                             ___________________

KfW IPEX-Bank GmbH in its capacity as Facility Agent

____________________                                                                             ___________________

KfW IPEX-Bank GmbH in its capacity as Lender

18 

Schedule 4

Acknowledgement Letter

From:

[Norddeutsche Landesbank Girozentrale

Attn. [  ]

Friedrichswall 10

30159 Hannover

Germany] [NB to be confirmed]

(the Account Bank)

To:

KfW IPEX Bank in its capacities as Facility Agent and Lender each of such terms as defined in the Accounts Pledge Agreement as defined in the Notice

Palmengartenstraße 5-9

60325 Frankfurt am Main

Germany

(the Pledgees)

Copy:

Royal Caribbean Cruises Ltd.

[NB Address details to be added]

(the Pledgor)

Date: [·]

Dear Sirs,

We hereby confirm (a) receipt of a notice (the Notice) in accordance with Section 1280 of the German Civil Code (BGB) that by an account pledge agreement dated [·] the Pledgor has pledged in your favour all its rights and claims in the current and future amounts standing to credit of the account held in its name with us and specified in such notice (the Account), (b) our consent to the terms of the Notice including but not limited to Clause 3 (b) thereof, (c) our agreement in relation to the limitation of our rights to retain amounts standing to the credit of the Account, as set forth in paragraph 3 (a) of the Notice and (d) that we have neither received any previous notice of pledge relating to the Account nor are aware of any third party rights in relation to the Accounts.

This Acknowledgement Letter shall be governed by and construed in accordance with the laws of Germany. Place of jurisdiction shall be Frankfurt am Main, Germany.

19 

Yours faithfully

____________________                                                                             ____________________

Norddeutsche Landesbank Girozentrale

20 

Schedule 5

Instruction to Account Bank

To:

[Norddeutsche Landesbank Girozentrale

Attn. [  ]

Friedrichswall 10

30159 Hannover

Germany] [NB to be confirmed]

Dear Sirs:

Payment Instruction

We refer to the account pledge agreement dated [•] and entered into between KfW IPEX-Bank GmbH in its capacities as facility agent (the Facility Agent) and lender as pledgees (the Pledgees) and Royal Caribbean Cruises Ltd as pledgor (the Pledgor) pursuant to which the Pledgor has pledged in favour of the Pledgees all of its rights, interests and claims in the current and future amounts standing to credit of the following account held in the name of the Pledgor with you:

•   Account number [  ] (IBAN DE[  ]);

(the Pledged Account).

We as Facility Agent herby instructs you to pay, on this very day the __ of _________, the following funds you are holding on the Pledged Account to the following account:

Account Holder	[  ]
Bank Name	[  ]
IBAN	[  ]
SWIFT	[  ]
Amount	[  ]
Reference	[  ]

Bank fees shall be borne by the Pledgor.

21 

Date ……___________

____________________                                                                    ___________________

KfW IPEX-Bank GmbH in its capacity as Facility Agent

22 

Schedule 6

Form of delivery payment letter

To:            Meyer Werft GmbH

[Date]

Dear Sirs

m.v. [·] (formerly Hull No. S-698)

We, [Pledgor’s Bank], hereby confirm to you that we will unconditionally and irrevocably credit in freely available funds for value today, [Date], the sum of €[·] to your account, number [·] with [Builder’s bank] (Swift [·]).

Yours faithfully

……………………………………

for and on behalf of

[Pledgor’s bank]

23 

IN WITNESS whereof the parties to this Account Pledge Agreement have caused this Account Pledge Agreement to be duly executed on the date first above written

The Pledgor

ROYAL CARIBBEAN CRUISES LTD.

acting by:

________________________________________	________________________________________
Name:	Name:
Title:	Title:

The Lender

KFW IPEX-BANK GMBH

acting by:

________________________________________	________________________________________
Name:	Name:
Title:	Title:

The Facility Agent

KFW IPEX-BANK GMBH

acting by:

________________________________________	________________________________________
Name:	Name:
Title:	Title:

24 

KfW IPEX-Bank GmbH (in its capacity as Facility Agent and Hermes Agent) Palmengartenstrasse 5-9 60325 Frankfurt am Main Germany	Norton Rose LLP Rechtsanwalte Theatinerstrasse 11 80333 Munich
	Tel: Fax:	+49 (0)89 212148-0 +49 (0)89 212148-900
	www.nortonrose.com
	From: Tel: Fax: Email: Our ref. Your ref	Dr. Ralf Springer +49 (0)89 212148-470 +49 (0)89 212148-506 ralf.springer@nortonrose.com MRAD/FPLE/MU04089

[  ]

Dear Sirs

Financing of one (1) passenger cruise vessel with Meyer Werft GmbH’s hull number S-698 (the

Vessel)

We have acted as German legal counsel of KfW IPEX-Bank GmbH in connection with the above referenced project in respect of a pledge over bank accounts dated [ ] and entered into between Royal Caribbean Cruises Ltd., as pledgor (the Pledgor), KfW IPEX-Bank GmbH in its capacity as Facility Agent and KfW IPEX-Bank GmbH in its capacity as Lender as pledgees (the Pledgees) (the Document).

In connection therewith, we have been requested to render a legal opinion in respect of certain issues

related to the Document and to address this opinion to you.

1           Interpretation

1.1 Unless otherwise defined herein or unless the context otherwise requires, capitalised terms defined in the Document shall have the same meanings when used in this opinion.

1.2 Headings and sub-headings in this opinion are for ease of reference only and do not affect the interpretation of this opinion.

1.3 In this opinion as well as in the Document which is in the English language, German legal concepts are expressed and described in the English language rather than in their original German form and such expressions and/or descriptions may not be identical in their meaning to the underlying German

law concepts. Accordingly, any issues of interpretation arising in respect of this opinion or the Document which is in the English language will be determined by German courts in accordance with German law and we express no opinion on the interpretation that German courts may give to any such expressions or descriptions.

2 Scope of examination

2.1 In connection with this opinion, we have examined only the Document but not any other document or agreement referred to therein. Accordingly, we express no opinion as to any agreement, instrument or other document other than the Document as specified herein or as to any provision of the Document to the extent it cross-refers to an agreement, instrument or other document.

2.2 In giving this opinion we have relied exclusively upon the Document and have not independently verified its accuracy. This opinion is based upon and confined to the facts at the date hereof and to the law of the Federal Republic of Germany presently in force, as currently applied and construed by the German courts. This opinion does not relate to facts or laws or to the interpretation of laws after the date hereof and we do not assume any obligation to update this opinion or to inform you of any changes to facts or laws. We have made no investigation of, and this opinion does not address, the laws of any other jurisdiction.

2.3 We have not been responsible for, or assisted in, the investigation or verification of any statements of fact (including statements as to any law other than German law or the reasonableness of any assumption or statement of opinion).

2.4 We express no opinion as to matters of fact or the valuation of assets provided as security nor does this opinion address matters relating to tax.

3 Assumptions

In rendering the opinion set out below we have, without independent verification, relied on the following assumptions:

3.1           Veracity and general matters

3.1.1 The Document submitted to us as photocopy or via fax or email conforms to the respective original Document; the original of such photocopy is an authentic and complete document.

3.1.2 Where the Document has been examined by us in draft or specimen form, it will be or has been executed or delivered, as applicable, in the form of that draft or specimen (i.e. no change has been or will be made to the terms and conditions thereof).

2 

3.1.3 There are no written or oral agreements or arrangements which would expand, modify, or otherwise affect the respective rights, duties, and/or obligations of the parties as set forth in the Document and which would have an effect on the opinions rendered herein.

3.1.4 The Document has not been supplemented, amended or revoked after its date and prior to the execution hereof but remains accurate in all respects.

3.1.5 All signatures are genuine.

3.1.6 Any natural person acting as representative for the parties in the context of the execution of the Document was of sound mind when executing it.

3.1.7 Upon execution of the Document, the relevant parties and their respective directors, employees, agents and advisers did not act in bad faith or fraud, mistake or undue influence.

3.1.8 The other documents referred to in the Document are legal, valid and binding and their provisions do not contradict any of the provisions of the Document.

3.1.9 Each of the statements of matters of fact contained in the Document in relation to each of the parties to the Document is true, accurate and complete at all relevant times.

3.1.10 All of the representations and warranties given by any of the parties to the Document are, and, at the time they are repeated, will be at all relevant times, true and accurate and any representation or warranty given by any of the parties to the Document that it is not aware of or has no notice of any act, matter, thing or circumstance means that the same does not exist or has not occurred, as the case may be.

3.1.11 All consents, authorisations, licenses, approvals, registrations or other actions by or with any governmental authority (other than in Germany) required to be obtained for the execution and/or performance of the Document have been obtained.

3.1.12 All parties to the Document have all public permits, licenses and approvals to run, perform and carry on their relevant business.

3.2 Corporate power, authorisation and execution

3.2.1 Each of the parties to the Document is a duly incorporated or, as the case may be, established, and validly existing legal entity under its governing laws.

3.2.2 The Document has been duly executed by each party thereto.

3 

3.3            Document

3.3.1 The Pledgor was, at the time of the Document coming into effect (Wirksamwerden) and, subject to the pledge granted under the Document, will remain the unrestricted owner of the assets, claims and/or rights serving as security under the Document which at the time were and, subject as aforesaid, will remain unencumbered.

3.3.2 The bank accounts and other assets referred to in the Document exist and are held by the Pledgor, the bank account details are correct and the other assets are also sufficiently and correctly described.

3.3.3 Any disputes arising in connection with the Document will be decided by German courts applying German conflict of law rules. We have not examined whether courts outside Germany may have jurisdiction regarding such disputes, nor do we express any opinion as to how such courts would construe and interpret the Document.

3.3.4 The Secured Obligations are validly existing, binding and enforceable obligations of the relevant persons towards the Pledgees.

3.3.5 That each and every clause of the Document has been specifically negotiated (individuell ausgehandelt) as between the parties thereto and has not been unilaterally imposed (einseitig gestellt) on any party by any other party thereto.

3.3.6 That the pledges created under the Document have been notified by the Pledgor to the relevant account bank in accordance with the Document.

3.4 Solvency and relationship to other creditors

3.4.1 As of the date of this opinion and as a consequence of doing any act or thing which the Document contemplates, permits or requires, the Pledgor is not, nor will be deemed, unable to pay any of its debts when due (Zahlungsunfähigkeit) and the Pledgor is not facing over-indebtedness (Überschuldung) or is subject to imminent illiquidity (drohende Zahlungsunfähigkeit).

3.4.2 No party to the Document is aware of any circumstances which would indicate that or give reason to enquire further whether or not any party to the Document is or would be, close to a situation of being presumably unable to pay its debts as they fall due (including German law drohende Zahlungsunfähigkeit or wirtschaftlicher Zusammenbruch).

3.4.3 As of the date of this opinion, no insolvency or winding up resolution or petition has been presented or an order has been made or rejected on grounds of insufficiency of assets (Abweisung mangels Masse) by a court or by directly applicable law for the winding up, dissolution or administration of the Pledgor.

3.4.4 No party enters into the Document or any transaction contemplated therein with bad faith or with the intention to prejudice, defraud or damage any creditor of the Pledgor.

4 

4             Opinion

In reliance upon the foregoing and subject to the qualifications, limitations, exceptions and descriptions set out below and having regard for such legal considerations as we have deemed relevant we are of the opinion that:

4.1 The Document, if implemented in accordance with its terms and subject to the in rem prior pledge of the Account Bank (as defined in the Document) under its standard terms and conditions, validly creates the security interest described therein.

4.2 The obligations of the Pledgor under the Document are legal, valid, binding and enforceable in accordance with their terms.

4.3 The Document is in proper form for its enforcement in the German courts (except for the fact that it is written in a language other than the German language which will require an official translation to be obtained for enforcement purposes).

4.4 No consent, authorisation, license, or approval of governmental or public bodies in Germany is required with regard to the entry into and the performance of the Document by the parties thereto.

4.5 To ensure the validity, enforceability and admissibility in evidence of the Document, it is not necessary that it or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in Germany.

5 Qualifications

In addition to the other qualifications set forth in this opinion, this opinion is subject to the following qualifications:

5.1           General matters

5.1.1 We are lawyers admitted to practise in the Federal Republic of Germany. Therefore, this opinion is expressly limited to German law as applied by German courts and as it exists at the date hereof. It is given on the basis that it will be governed by and construed in accordance with German law. We have not examined any other laws and we do not express any opinion on such other laws. We have assumed, however, that there is no provision in such other laws which could affect this opinion.

5.1.2 This opinion is based on the facts existing on the date hereof of which we are aware and the opinions set forth herein shall not be deemed to relate to facts and conditions prevailing after the date hereof.

5.1.3 There is no final judicial precedent in Germany for holding facsimile or e-mail communications legal, valid and binding in all circumstances (in particular where there is a legal requirement for written form,

5 

a signature by way of a facsimile signing has been held insufficient to satisfy such requirement). However, where there are no particular legal requirements as to the form of such communication (unless the requirement of actual receipt has been validly waived), the German Federal Court of Justice (Bundesgerichtshof, the Supreme Court) has held that any facsimile communication received by the addressee will be deemed validly given (widerlegbare Vermutung).

5.1.4 The authenticity or completeness, and therefore the value as evidence, of any message or data in electronic form (even if saved on a medium of data storage) is in principle capable of being challenged as evidence in German courts on, inter alia, the grounds that:

(a) its content; and/or

(b) the sender; and/or

(c) the date and time of its issue,

may have been altered or manipulated and cannot be certified.

5.1.5 Any authorisation or instruction provided for in the Document may be revoked or terminated for important cause (aus wichtigem Grund) even if such authorisation or instruction has been made irrevocably. The same is true for any appointment of an agent under the Document.

5.1.6 Any provision in the Document providing that certain certifications or determinations will be conclusive, binding and authoritative will not necessarily prevent judicial enquiry into the merits of any claim by any aggrieved party.

5.1.7 Where contractual or legal consequences are attached to the occurrence or non-occurrence of an event a German court would have discretion to decide (upon evidence being brought to it) whether such event has occurred.

5.2 Enforceability, choice of law

5.2.1 The term “enforceable” or any other word of similar import, where used herein, means that the obligations assumed by any person expressed to be a party to the Document are of a type which the courts of the Federal Republic of Germany generally enforce, subject to and limited by the provisions of any applicable bankruptcy, insolvency, liquidation, reorganisation, moratorium or other laws of general application from time to time in effect relating to or affecting the creditors’ rights and remedies generally.

5.2.2 Any enforcement of the Document in the Federal Republic of Germany will be subject to the rules of civil procedure arising by operation of law as applied by German courts or other competent authority of the Federal Republic of Germany.

6 

5.2.3 A German court might hold that any provision of the Document stating that any representation or communication shall be deemed to have been made or delivered is void or voidable.

5.2.4 Enforceability of contractual obligations can be affected by matters such as breach of contract or frustration (Unmöglichkeit). Claims may be subject to defences such as for instance set-off, rights of retention or estoppel.

5.2.5 The German law principle of Treu und Glauben requires that contracts are performed in good faith. For example, a German court may, in certain situations, regard the execution of contractual rights as untimely or abusive. Actions which have to be considered to constitute bad faith or which are contra bonos mores may provide certain rights in favour of a contracting party or may render contracts or commitments void or voidable.

5.2.6 Where a party under the Document is vested with discretion or may determine a matter in its opinion, such discretion must be exercised reasonably or such opinion must be based on reasonable grounds, in order for such discretionary decision or opinion to be binding on other parties.

5.2.7 Claims under the Document may become statutorily barred by limitation periods or under the doctrine of waiver (Verwirkung) or may become subject to set-off or counter-claims.

5.2.8 We express no opinion with respect to the enforceability and validity of provisions in the Document to the extent that they may provide for indemnification or reimbursement for losses caused by acts or omissions which the beneficiary of such provisions is directly or indirectly responsible for. This may constitute a violation of Section 254 of the Germany Civil Code (Bürgerliches Gesetzbuch, BGB) (contributory negligence) or Section 276 BGB (prohibition on limitations or exclusions of liability for one’s own wilful behaviour) and may not be enforced by a German court.

5.2.9 We express no opinion with respect to the limitations of a party’s set-off rights under the Document. Under German law, a right of set-off may be asserted notwithstanding an explicit waiver of such right, provided that the claim to be set-off has been recognised in a final and binding judgment or such claim is undisputed between the parties.

5.2.10 Provisions in the Document which provide that any determination, certificate or statement of account made or given by any party is to be final, conclusive or binding may not be enforced and will not prevent judicial enquiry into the merits of the matter and the basis on which such determination, certificate or statement of account is made.

5.2.11 We have not examined whether courts outside Germany may have jurisdiction regarding disputes arising in connection with the Document, nor do we express any opinion as to how such courts would construe and interpret the Document.

7 

5.3 Priority of security, disposals by grantor of security, pledges

5.3.1 Pledges under the standard terms and conditions of the Account Bank (as defined in the Document) may rank prior to the pledges of bank accounts under the Document. However, in the acknowledgement to the notice to the Document, the Account Bank (as defined in the Document) undertakes that any rights of pledge under its standard terms and conditions are subordinated to the pledges created under the Document. However, please note that such subordination agreement is of contractual nature only and does not change the ranking in rem.

5.3.2 The assets, claims and/or rights which are subject to a security created by the Document may consist of rights and/or claims against third parties which are subject to contractual or statutory provisions. To the extent they do, the security is subject to the terms of those rights and/or claims and may be subject to the rights and/or claims of those third parties (who may, for instance, have rights of set-off).

5.3.3 We did not carry out any due diligence investigations with regard to the assets, claims and rights to be transferred, assigned, pledged or otherwise encumbered under the Document. Therefore, no opinion is expressed herein as to the existence of or (unrestricted) title to any of the assets which serve as security under the Document or as to the priority of the security.

5.3.4 To the extent to which the Document secures the abstract acknowledgement provided for in the Document we note that the creation of an abstract (parallel) debt as basis for accessory security interests (akzessorische Sicherheiten) (such as pledges) has not been the subject of German court rulings. In this regard we have relied on general principles of German law on security interests.

5.3.5 Pledges of payment claims only become valid under German law if the pledgor in its capacity as creditor of the relevant claim gives notice to the debtor of the claim of the pledge and the identity of the pledge.

5.3.6 If the performance of an obligation of the Pledgor under or in connection with the Document is contrary to the exchange control regulation of a member state of the International Monetary Fund, that obligation might be unenforceable in the Federal Republic of Germany according to Article VIII Section 2(b) of the International Monetary Fund Agreement. In the case of unenforceability of an obligation, security interests which shall secure this obligation can be unenforceable as well. This is in particular true for accessory security interests (akzessorische Sicherheiten) such as the Document.

5.4 Security contra bonos mores, excessive security

5.4.1 The security created under the Document is not valid and enforceable if the granting of such security is “against good morals” (“gegen die guten Sitten”), Section 138 BGB. For example, this may be the case if the security recipient knew or should have known that the borrower for whose debts the security is created is not or will not be able to repay such debt, so that the enforcement of the security is already foreseeable at the time the security is granted and at the same time the security recipient knows or should have known that, as a result thereof, the claims of other third party creditors are jeopardised.

8 

5.4.2 The granting of security might be against public morals if the grantor of security, due to the granting of several security interests, loses its capacity to (freely) run its business (Knebelung). From the face of the Document, we do not believe that such a situation is given in the matter at hand.

5.4.3 The Document can be void if it constitutes an initial over-collateralisation (anfängliche Übersicherung)  which is so excessive that it must be considered as being “against good morals” (“gegen die guten Sitten”). If at the time of entering into a security agreement it is already certain that the realisable value of the security is significantly out of proportion to the claim secured, then there is a risk that the entire German security would be regarded as an initially excessive collateralisation. The German courts have not given any guidelines as to which loan to security ratio amounts to excessive collateralisation. A decision by the Supreme Court indicates that the loan-to-security ratio would be well beyond the threshold applied to subsequently excessive collateralisation, i.e. more than 150 per cent of the amount of the secured obligations. The actual valuation, however, will be based on the realizable value and therefore needs to take into account any possible discount on the current market value, arising, e.g. from the circumstances of a distress sale. In addition, the over-collateralisation, in order to be regarded as against good morals, must be based on a lender's reprehensible and condemnable state of mind (verwerfliche Gesinnung), which is assumed if a lender, out of self-interest, displays a morally unbearable recklessness as against a borrower.

6 Limitation, benefit of opinion and governing law

6.1 This opinion is limited to the matters stated herein, and no opinion is implied or may be inferred beyond the matters stated herein. In particular, this opinion does not cover any tax-related issues. We undertake no obligation to supplement or amend the opinion expressed herein based on facts, circumstances, or events which only come to our attention after the date hereof. For the purpose of rendering this opinion we have not conducted any investigation as to factual circumstances but have relied exclusively on the Document.

6.2 This opinion is solely for your benefit and each of your permitted successors and assignees during primary syndication in the next twelve (12) months from the date hereof in connection with the Document and the transactions contemplated thereby. This opinion is not intended to create third party rights pursuant to Section 328 et seq. BGB (Vertrag zugunsten Dritter oder Vertrag mit Schutzwirkung für Dritte) and may not be relied upon by anyone other than you and each of your permitted successors and assignees during primary syndication in the next twelve (12) months from the date hereof.

9 

6.3 Neither this opinion nor any copy of this opinion may be delivered to any other person, nor may be recorded or referred to in any public document or filed with anyone without our express prior written consent, unless such delivery, recoding or filing is required by law, any other binding regulation or to safeguard the legitimate interests of the relevant beneficiary of this opinion.

6.4 This opinion and all non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with German law. Exclusive place of jurisdiction is Munich, Germany.

Yours faithfully

Norton Rose LLP

10 

SIGNATORIES

The Borrower
For and on behalf of	)
ROYAL CARIBBEAN CRUISES LTD.	)	/s/ Antje M. Gibson
Name:	)	Antje M. Gibson
Title:	)	Vice President and Treasurer
The Facility Agent and Lender
For and on behalf of	)
KfW IPEX-BANK GmbH	)	___________________
Name:	)
Title:	)
The Hermes Agent
For and on behalf of	)
KfW IPEX-BANK GmbH	)	___________________
Name:	)
Title:	)
The Initial Mandated Lead Arranger
For and on behalf of	)
KfW IPEX-BANK GmbH	)	___________________
Name:	)
Title:	)

The Borrower
For and on behalf of	)
ROYAL CARIBBEAN CRUISES LTD.	)	___________________
Name:	)
Title:	)
The Facility Agent and Lender
For and on behalf of	)
KfW IPEX-BANK GmbH	)	/s/ Aida Welker	/s/ Claudia Wenzel
Name:	)	Aida Welker	Claudia Wenzel
Title:	)	Director	Assistant Vice President
The Hermes Agent
For and on behalf of	)
KfW IPEX-BANK GmbH	)	/s/ Aida Welker	/s/ Claudia Wenzel
Name:	)	Aida Welker	Claudia Wenzel
Title:	)	Director	Assistant Vice President
The Initial Mandated Lead Arranger
For and on behalf of	)
KfW IPEX-BANK GmbH	)	/s/ Aida Welker	/s/ Claudia Wenzel
Name:	)	Aida Welker	Claudia Wenzel
Title:	)	Director	Assistant Vice President

EX-12.1

Exhibit 12.1

Royal Caribbean Cruises Ltd.

Ratio of Earnings to Fixed Charges

(in thousands, except ratios)

	Years Ended December 31,
	2011			2010			2009			2008			2007
Earnings
Net income	$	607,421		$	515,653	(3)	$	152,485	(3)	$	573,722		$	603,405
Income tax expense (benefit)		20,673			20,266			(5,053	)		2,617			2,524
(Income) loss from equity investees, net of distributions		(118	)		(200	)		15,244			(4,042	)		(7,837	)
Fixed charges		409,246			409,065			363,277			392,596			394,503
Capitalized interest		(13,986	)		(28,093	) (3)		(41,473	) (3)		(44,341	)		(39,939	)
Earnings	$	1,023,236		$	916,691		$	484,480		$	920,552		$	952,656
Fixed Charges
Interest expense (1)	$	396,402		$	399,300	(3)	$	351,421	(3)	$	371,654		$	373,723
Interest portion of rent expense (2)		12,844			9,765			11,856			20,942			20,780
Fixed charges	$	409,246		$	409,065		$	363,277		$	392,596		$	394,503
Ratio of Earnings to Fixed Charges		2.5x			2.2x			1.3x			2.3x			2.4x

⁽¹⁾  Interest expense includes capitalized interest and amortization of deferred financing expenses.

⁽²⁾  Interest portion of rent expense represents actual interest charges for the Brilliance of the Seas operating lease and, for all other rentals, we have assumed that one-third of rent expense is representative of the interest factor.

⁽³⁾  Amounts for 2010 and 2009 include a revision for the correction of errors in the manner in which we were amortizing certain guarantee fees related to three outstanding export credit agency guaranteed loans, and to a much lesser extent, fees associated with our revolving credit facilities. Refer to Note 1. “General – Revision of Prior Period Financial Statements” to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further details included in our Annual Report on Form 10-K for the year ended December 31, 2011.

EX-21.1

Exhibit 21.1

LIST OF SUBSIDIARIES

The following is a list of all our subsidiaries, their jurisdiction of incorporation and the names under which they do business. This list does not include those subsidiaries that, in the aggregate, would not have been a “significant subsidiary” as of December 31, 2011.

NAME	INCORPORATION
Adventure of the Seas Inc.	Liberia
Allure of the Seas Inc.	Liberia
Azamara Journey Inc.	Liberia
Azamara Quest Inc.	Liberia
Blue Sapphire Marine Inc.	Liberia
CDF Croisieres de France, SAS	France
Celebrity Cruise Lines Inc.	Cayman Islands
Celebrity Cruises Holdings Inc.	Liberia
Celebrity Cruises Inc., doing business as Celebrity Cruises	Liberia
Celebrity Eclipse Inc.	Liberia
Celebrity Equinox Inc.	Liberia
Celebrity Silhouette Inc.	Liberia
Celebrity Solstice Inc.	Liberia
Constellation Inc.	Liberia
Enchantment of the Seas Inc.	Liberia
Explorer of the Seas Inc.	Liberia
Freedom of the Seas Inc.	Liberia
Galapagos Cruises Inc.	Liberia
GG Operations Inc	Delaware
Grandeur of the Seas Inc.	Liberia
Independence of the Seas Inc.	Liberia
Infinity Inc.	Liberia
Island for Science, Inc.	Indiana
Islas Galapagos Turismo y Vapores CA	Ecuador
Jewel of the Seas Inc.	Liberia
Labadee Investments Ltd.	Cayman Islands
Legend of the Seas Inc.	Liberia
Liberty of the Seas Inc.	Liberia
Majesty of the Seas Inc.	Liberia
Mariner of the Seas Inc.	Liberia
Millennium Inc.	Liberia
Monarch of the Seas Inc.	Liberia
Nautalia Viajes, S.L. (f/k/a Mundinauta Viajes Espana S.L.)	Spain
Navigator of the Seas Inc.	Liberia
Oasis of the Seas Inc.	Liberia
Pullmantur, S.A.	Spain
Pullmantur Cruises, S.L.	Spain
Pullmantur Cruises Atlantic Limited	Malta
Pullmantur Cruises Empress Limited	Malta
Pullmantur Cruises Pacific Dream Limited	Malta
Pullmantur Cruises Ship Management Ltd.	Malta

NAME	INCORPORATION
Pullmantur Cruises Sky Wonder Limited	Malta
Pullmantur Cruises Sovereign Limited	Malta
Pullmantur Cruises Zenith Limited	Malta
Pullmantur Ship Management, Ltd.	Bahamas
Radiance of the Seas Inc.	Liberia
RCL Cruises Ltd.	England and Wales
RCL Holdings Cooperatif U.A.	Netherlands
RCL Investments Ltd.	England and Wales
RCL (UK) Ltd.	England and Wales
Rhapsody of the Seas Inc.	Liberia
Royal Caribbean Cruise Lines AS	Norway
Royal Caribbean Cruises (Asia) Pte. Ltd.	Singapore
Royal Caribbean Cruises (Australia) Pty. Ltd	Australia
Royal Caribbean Holdings de Espana S.L.	Spain
Royal Celebrity Tours Inc.	Delaware
Serenade of the Seas Inc.	Liberia
Societe Labadee Nord, S.A.	Haiti
Splendour of the Seas Inc.	Liberia
Summit Inc.	Liberia
Vision of the Seas Inc.	Liberia
Voyager of the Seas Inc.	Liberia

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-158161) and Forms S-8 (Nos. 333-170170, 333-84982, 333-84980, 333-157097, 333-42070, 333-42072, 33-71956, 33-95224, 333-7288) of Royal Caribbean Cruises, Ltd. of our report dated February 29, 2012 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Miami, Florida

February 29, 2012

EX-23.2

Exhibit 23.2

January 23, 2012

Royal Caribbean Cruises Ltd.

1050 Caribbean Way

Miami, FL 33132

Form 10-K for Year Ended December 31, 2011

Dear Sirs and Mesdames:

You have asked for our opinion on certain U.S. Federal income tax matters relating to Royal Caribbean Cruises Ltd. (the “Company”). With respect to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon information provided by representatives of the Company and of shareholders of the Company.

Certain Factual Assumptions

In issuing our opinion, we have relied upon representations and/or publicly available information that:

(1) the Company and each of its direct and indirect wholly-owned subsidiaries that operate, own or charter a ship or ships consist of (a) corporations formed under the laws of Liberia or Malta, each of which is a country that exempts from taxation all international shipping income (including bareboat charter income) of U.S. corporations, and (b) a United Kingdom company (the “UK Subsidiary”) for which a valid and timely election was filed with the Internal Revenue Service (the “IRS”) on Form 8832, effective as of September 6, 2010, for the company to be classified as a partnership for U.S. Federal income tax purposes, and the equity interests in which are owned by the Company and an indirect wholly-owned subsidiary that is a Liberian corporation;

(2) the common stock of the Company is the Company’s only outstanding class of stock;

(3) all outstanding shares of common stock of the Company are listed for trading on the New York Stock Exchange (the “NYSE”), where those shares are regularly quoted by dealers making a market in the stock (by regularly and actively offering to make, and making, purchases and sales of such shares in the ordinary course of business to and from customers who are not related persons with respect to the dealers), and on the Oslo Stock Exchange; and Company shares are not traded on any non-U.S. securities market other than the Oslo Stock Exchange;

Royal Caribbean Cruises Ltd

January 23, 2012

Page 2

(4) trades of Company common stock are effected on each of the NYSE and the Oslo Stock Exchange in other than de minimis quantities on at least 60 days during each year, and the aggregate number of such shares traded on each of the NYSE and the Oslo Stock Exchange each year equals or exceeds 10% of the average number of shares of Company common stock outstanding during the year;

(5) the NYSE is a national securities exchange that is registered under section 6 of the Securities Act of 1934;

(6) the Oslo Stock Exchange is officially recognized, sanctioned or supervised by a governmental authority of Norway and has an annual trading volume in excess of $1 billion;

(7) more than 50% of the outstanding shares of Company common stock are (and will be for at least 183 days during the current year) owned by persons each of whom owns less than 5% of such outstanding shares (treating as one person for this purpose any two or more persons who are related within the meaning of section 267(b) of the Internal Revenue Code of 1986, as amended (the “Code”))^,1 and no such shares are in bearer form;

(8) more than 19% of the outstanding shares of Company common stock are (and will be for at least 183 days during the current year) owned directly by the Company’s largest shareholder, which is a Norwegian company; individuals who are residents of Norway are (and will be for at least 183 days during the current year) the ultimate indirect beneficial owners of more than 25% of the outstanding shares of stock of such company, by value; none of the relevant shares in that chain of ownership are in bearer form; and those individuals are prepared to provide such statements under penalties of perjury, regarding their name, address, tax residency and information on the chain of ownership, as are necessary to comply with applicable documentation requirements;²

¹ Code §267(b) describes a number of relationships between two or more persons, including members of the same family, a grantor and a fiduciary of a trust, a fiduciary and a beneficiary of a trust, and various other relationships between individuals and entities and between entities. Additional attribution rules applicable under Code§267(b) are set forth in Code §267(c).

² Regulations under Code §883 provide, in relevant part, that an individual is a “resident” of a qualifying foreign country such as Norway only if the individual is fully liable to tax as a resident in that country and (1) has a “tax home” there for 183 days or more of the taxable year or (2) is treated as a resident of that country under the income tax treaty, if any, between that country and the United States. Treas. Regs.§§1.883-4(b)(2)(i), (b)(3). An individual’s tax home is his regular or principal place of business or, in the absence of such a place of business, his regular place of abode in a real and substantial sense. Treas. Reg.§1.883-4(b)(2)(ii).

Royal Caribbean Cruises Ltd

January 23, 2012

Page 3

(9) the Company’s certificate of incorporation precludes any person from acquiring more than 4.9% of the outstanding shares of Company’s common stock (treating as one person for this purpose any two or more persons who are related within the meaning of Code section 267(b)), except that this restriction does not apply to existing 5% shareholders of the Company and may not apply, under Liberian law, to shares that were not voted in favor of the adoption of such restriction;

(10) the Company and one of its subsidiaries referred to above own, in the aggregate, all the issued and outstanding equity interests in the UK Subsidiary; and

(11) the Company and each relevant subsidiary will comply with all applicable substantiation and reporting requirements set forth in Treasury Regulation §1.883-1(c)(3).

Discussion

Under Code section 883, certain foreign corporations are exempt from Federal income or branch profits tax on income derived from or incidental to the international operation of a ship or ships, including income from the leasing of such ships. A foreign corporation will qualify for the benefits of section 883 if, in relevant part, (1) the foreign country in which the foreign corporation is organized grants an equivalent exemption to corporations organized in the United States and (2) (a) more than 50% of the value of the corporation’s capital stock is owned, directly or indirectly, by individuals who are residents of a foreign country or countries that grant such an equivalent exemption to corporations organized in the United States or (b) the stock of the corporation (or the direct or indirect corporate parent thereof) is “primarily and regularly traded on an established securities market” in the United States or another qualifying country.

The Company and each of its subsidiaries that owns, charters or operates a ship or ships other than the UK Subsidiary will meet the requirements of clause (1) above because Liberia and Malta are countries that grant an equivalent exemption for all relevant categories of international shipping income.³ The UK Subsidiary will be treated

³ Rev. Rul. 2008-17, 2008-1 C.B. 626; see Exchange of Notes Between Liberia Ministry of Foreign Affairs, dated Oct. 7, 1987, and U.S. Embassy, Monrovia, Liberia, dated Oct. 23, 1987, reprinted at 1988-1 C.B. 463; Exchange of Notes Between Liberia Ministry of Foreign Affairs, dated Dec. 9, 2004, and U.S. Embassy, Monrovia, Liberia, dated June 4, 2005; Exchange of Notes Between Embassy of Malta, Washington, D.C., dated Dec. 26, 1996, and U.S. Department of State, dated Mar. 11, 1997, reprinted at 1997-1 C.B. 314.

Royal Caribbean Cruises Ltd

January 23, 2012

Page 4

as a partnership for U.S. Federal income tax purposes.⁴ Income earned through a partnership will qualify as income derived from or incidental to the international operation of a ship or ships to the same extent as the income would so qualify if earned directly by the partners.⁵ Thus, income earned through the UK Subsidiary will qualify for exemption under section 883 to the same extent as if it were earned directly by the owners of the UK Subsidiary.

With respect to the requirements of clause (2)(b) above, regulations and other guidance under Code section 883 set forth the tests applicable to determine whether a corporation’s shares of stock should be considered “primarily and regularly traded on an established securities market” in the United States or another qualifying country.

The Company’s shares are traded on an established securities market in the United States and on an established securities market in Norway, which is a qualifying country for section 883 purposes. The NYSE constitutes an established securities market for purposes of section 883 because it is a “national securities exchange that is registered under section 6 of the Securities Act of 1934.”⁶ Likewise, the Oslo Stock Exchange constitutes an established securities market because it is “officially recognized, sanctioned, or supervised by a governmental authority of [Norway], and has an annual value of shares traded on the exchange exceeding $1 billion.”⁷ Norway is a qualifying country for section 883 purposes with respect to all relevant categories of international shipping income.⁸

The Company’s shares are considered “primarily” traded on either the NYSE or the Oslo Stock Exchange, because the number of such shares traded on one of those markets during the year exceeds the number of such shares traded on any other established securities market during that year.⁹

Stock will generally be considered “regularly traded” on a securities market if trades in more than de minimis quantities occur on the market on at least sixty

⁴ Treas. Reg. §§301.7701-2(b)(8)(i), 301.7701-3.

⁵ Treas. Reg. §1.883-1(g)(4).

⁶ Treas. Reg. §1.883-2(b)(1)(ii).

⁷ Treas. Reg. §1.883-2(b)(1)(i).

⁸ Rev. Rul. 2008-17, 2008-1 C.B. 626; see Exchange of Notes Between U.S. Department of State, dated May 22, 1990, and Royal Norwegian Embassy, dated May 24, 1990, reprinted at 1991-1 C.B. 304.

⁹ Treas. Reg. §1.883-2(c).

Royal Caribbean Cruises Ltd

January 23, 2012

Page 5

days of the year, and the annual trading volume on the market equals or exceeds 10% of the outstanding shares.¹⁰ The Company’s shares meet this test with respect to both the NYSE and the Oslo Stock Exchange. The Company’s shares also meet an alternative basis for such a conclusion with respect to the NYSE, inasmuch as the stock is regularly quoted by dealers making a market in the stock.¹¹

If, for at least half the number of days in the year, 50% or more of a corporation’s outstanding shares are owned by 5% or greater shareholders other than registered investment companies (a “closely-held group”), the regulations under Code section 883 provide that the shares generally will fail to be treated as “regularly traded” unless the corporation can identify sufficient qualified direct or indirect shareholders within the closely-held group as to reduce to 50% or less the aggregate shares owned by the closely-held group that are not owned, directly or indirectly, by qualified shareholders.¹² Less than 50% of the Company’s outstanding shares are (and have been) owned by such 5% or greater shareholders, so the Company will not be disqualified by reason of the closely-held exception. Moreover, even if the Company’s closely-held group would otherwise exceed that 50% threshold in aggregate, the percentage of shares owned by the Company’s largest shareholder, a Norwegian company, and indirectly owned by Norwegian residents, could be deducted for this purpose.¹³

Conclusion

Based upon, and subject to the factual representations and assumptions described above, and the legal authorities and limitations set forth below, it is our opinion that the income of the Company, and its subsidiaries who own, charter or operate a ship or ships, to the extent derived from or incidental to the operation of a ship or ships, is exempt from Federal income tax pursuant to Code section 883.

*                    *                     *                    *                     *

¹⁰ Treas. Reg. §1.883-2(d)(1)(ii).

¹¹ Treas. Reg. §1.883-2(d)(2).

¹² Treas. Reg. §1.883-2(d)(3).

¹³ To document the portion of the shares of a closely-held group that are owned directly or indirectly by qualified individuals, the corporation must generally obtain a statement signed under penalties of perjury by each of those individuals, setting forth the individual’s name, permanent address and country of residence for tax purposes, and information on the relevant chain of ownership (which cannot include any bearer shares). Treas. Regs. §§1.883-2(e)(1), 1.883-4(d)(1), 1.883-4(d)(4)(i). The required documentation must be made available for inspection by the IRS on 60-days notice. Treas. Regs. §§1.883-1(c)(3)(ii), 1.883-2(e)(2).

Royal Caribbean Cruises Ltd

January 23, 2012

Page 6

This opinion represents our best legal judgment, but it has no binding effect or official status of any kind, and no assurance can be given that contrary positions may not be taken by the Internal Revenue Service or a court considering the issues. We express no opinion relating to any Federal income tax matter except on the basis of the facts described above, and any changes in such facts could require a reconsideration and modification of our opinion. We also express no opinion regarding tax consequences under foreign, state or local laws. In issuing our opinion, we have relied solely upon existing provisions of the Code, existing and proposed regulations under it, and current administrative positions and judicial decisions. Those laws, regulations, administrative positions and judicial decisions are subject to change at any time. Any such changes could affect the validity of the opinion set forth above. Also, future changes in Federal tax laws and the interpretation thereof can have retroactive effect.

Our firm includes lawyers admitted to practice in the Commonwealth of Pennsylvania, the States of California, Delaware, Illinois, New Jersey, New York and Wisconsin, and the District of Columbia. We do not purport to be experts in the laws of any other jurisdiction, aside from U.S. Federal law.

Very truly yours,

/s/ Drinker Biddle & Reath LLP

DRINKER BIDDLE & REATH LLP

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

DIRECTORS OF

ROYAL CARIBBEAN CRUISES LTD.

The undersigned directors of Royal Caribbean Cruises Ltd., a Liberian corporation (the “Company”), hereby constitute and appoint Richard D. Fain and Brian J. Rice and each of them (with full power to each of them to act alone), the true and lawful attorneys-in-fact and agents for the undersigned, and on behalf of the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign the Annual Report on Form 10-K for the fiscal year ended December 31, 2011 to be filed by the Company with the Securities and Exchange Commission under the provisions of the Securities Exchange Act of 1934, and any and all amendments, applications, or other documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as the undersigned could do if personally present. The undersigned hereby ratify and confirm all that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue hereof.

EXECUTED as of the 29th day of February 2012.

/s/ Morten Arntzen	/s/ Thomas J. Pritzker
Morten Arntzen Director	Thomas J. Pritzker Director
/s/ Bernard W. Aronson	/s/ William K. Reilly
Bernard W. Aronson Director	William K. Reilly Director
/s/ William L. Kimsey	/s/ Bernt Reitan
William L. Kimsey Director	Bernt Reitan Director
/s/ Gert W. Munthe	/s/ Vagn O. Sørensen
Gert W. Munthe Director	Vagn O. Sørensen Director
	/s/ Arne Alexander Wilhelmsen
Eyal Ofer Director	Arne Alexander Wilhelmsen Director

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Richard D. Fain, certify that:

1. I have reviewed this annual report on Form 10-K of Royal Caribbean Cruises Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 29, 2012

/s/ Richard D. Fain

Richard D. Fain

Chairman and

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Brian J. Rice, certify that:

1. I have reviewed this annual report on Form 10-K of Royal Caribbean Cruises Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 29, 2012

/s/ Brian J. Rice

Brian J. Rice

Executive Vice President and

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

In connection with the annual report on Form 10-K for the year ended December 31, 2011 as filed by Royal Caribbean Cruises Ltd. with the Securities and Exchange Commission on the date hereof (the “Report”), Richard D. Fain, Chairman and Chief Executive Officer, and Brian J. Rice, Executive Vice President and Chief Financial Officer, each certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Royal Caribbean Cruises Ltd.

Date: February 29, 2012

By:	/s/ Richard D. Fain
	Richard D. Fain Chairman and Chief Executive Officer (Principal Executive Officer)
By:	/s/ Brian J. Rice
	Brian J. Rice Executive Vice President and Chief Financial Officer (Principal Financial Officer)

XML

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011 Brand	Dec. 31, 2010	Dec. 31, 2009
Significant Accounting Policies [Line Items]
Gross amount of port costs included in passenger ticket revenues	$ 442,900,000	$ 398,000,000	$ 303,200,000
Exchange gains (losses) recorded in other income (expense)	(1,600,000)	(9,500,000)	(21,100,000)
Exposure under foreign currency contracts, fuel call options, interest rate and fuel swap agreements	135,500,000
Number of cruise brands owned	5
(Gain) loss on fuel call options	(18,920,000)	2,826,000	2,538,000
TUI Cruises
Significant Accounting Policies [Line Items]
Investment in a joint venture, percentage of interest	50.00%
Ships
Significant Accounting Policies [Line Items]
Property plant equipment, useful life	30
Projected residual value	15.00%
Ships | Lower Limit
Significant Accounting Policies [Line Items]
Estimated drydock period, maximum	30 months
Ships | Upper Limit
Significant Accounting Policies [Line Items]
Estimated drydock period, maximum	60 months
Media advertising
Significant Accounting Policies [Line Items]
Advertising costs	193,700,000	166,000,000	152,200,000
Brochure, production and direct mail costs
Significant Accounting Policies [Line Items]
Advertising costs	$ 124,300,000	$ 104,100,000	$ 92,000,000

XML

Assumptions Used in Black-Scholes Option-pricing Model (Detail)	12 Months Ended
	Dec. 31, 2011 Year	Dec. 31, 2010 Year	Dec. 31, 2009 Year
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%
Expected stock price volatility	46.00%	45.00%	55.00%
Risk-free interest rate	2.60%	2.60%	1.80%
Expected option life	6	6	5

XML

Long Term Debt (Parenthetical) (Detail) In Millions, unless otherwise specified	12 Months Ended		12 Months Ended		12 Months Ended												12 Months Ended		12 Months Ended						12 Months Ended		12 Months Ended						12 Months Ended		12 Months Ended				12 Months Ended		12 Months Ended		12 Months Ended				12 Months Ended			12 Months Ended
	Dec. 31, 2011 Unsecured revolving credit facility LIBOR plus 2.00% due 2016 USD ($)	Dec. 31, 2010 Unsecured revolving credit facility LIBOR plus 2.00% due 2016 USD ($)	Dec. 31, 2011 Unsecured revolving credit facility LIBOR plus 2.75% due 2014 USD ($)	Dec. 31, 2010 Unsecured revolving credit facility LIBOR plus 2.75% due 2014 USD ($)	Dec. 31, 2011 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027	Dec. 31, 2010 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027	Dec. 31, 2011 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Lower Limit	Dec. 31, 2010 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Lower Limit	Dec. 31, 2011 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Upper Limit Period 1	Dec. 31, 2010 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Upper Limit Period 1	Dec. 31, 2011 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Upper Limit Period 2	Dec. 31, 2010 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Upper Limit Period 2	Dec. 31, 2011 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Upper Limit Period 3	Dec. 31, 2010 Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027 Upper Limit Period 3	Dec. 31, 2011 Unsecured senior notes 5.63% due 2014 EUR (€)	Dec. 31, 2010 Unsecured senior notes 5.63% due 2014 EUR (€)	Dec. 31, 2011 Unsecured term loan LIBOR plus 2.75% due 2013	Dec. 31, 2010 Unsecured term loan LIBOR plus 2.75% due 2013	Dec. 31, 2011 Unsecured term loan LIBOR plus 1.25% due through 2012 USD ($)	Dec. 31, 2010 Unsecured term loan LIBOR plus 1.25% due through 2012 USD ($)	Dec. 31, 2011 Unsecured term loan 4.20% due through 2013 USD ($)	Dec. 31, 2010 Unsecured term loan 4.20% due through 2013 USD ($)	Dec. 31, 2011 Unsecured term loan 4.64% due through 2014 USD ($)	Dec. 31, 2010 Unsecured term loan 4.64% due through 2014 USD ($)	Dec. 31, 2011 Unsecured term loan LIBOR plus 0.62% due through 2015 USD ($)	Dec. 31, 2010 Unsecured term loan LIBOR plus 0.62% due through 2015 USD ($)	Dec. 31, 2011 Unsecured term loan LIBOR plus 0.45% due through 2020 USD ($)	Dec. 31, 2010 Unsecured term loan LIBOR plus 0.45% due through 2020 USD ($)	Dec. 31, 2011 Unsecured term loan 5.41%, due through 2021 USD ($)		Dec. 31, 2010 Unsecured term loan 5.41%, due through 2021 USD ($)		Dec. 31, 2011 Unsecured term loan LIBOR plus 2.10% due through 2021 USD ($)	Dec. 31, 2010 Unsecured term loan LIBOR plus 2.10% due through 2021 USD ($)	Dec. 31, 2011 Unsecured term loan EURIBOR plus 1.58% due through 2021 EUR (€)		Dec. 31, 2010 Unsecured term loan EURIBOR plus 1.58% due through 2021 EUR (€)		Dec. 31, 2011 Unsecured term loan LIBOR plus 0.50% due through 2021 USD ($)	Dec. 31, 2010 Unsecured term loan LIBOR plus 0.50% due through 2021 USD ($)	Dec. 31, 2011 Unsecured term loan LIBOR plus 0.37% due through 2022 USD ($)	Dec. 31, 2010 Unsecured term loan LIBOR plus 0.37% due through 2022 USD ($)	Dec. 31, 2011 Unsecured term loan LIBOR plus 2.10% due through 2022 USD ($)		Dec. 31, 2010 Unsecured term loan LIBOR plus 2.10% due through 2022		Dec. 31, 2011 Unsecured term loan LIBOR plus 0.40% due through 2023 USD ($)	Dec. 31, 2011 Unsecured term loan LIBOR plus 2.5% due through 2023 USD ($)	Dec. 31, 2010 Unsecured term loan 7.0% due through 2022	Dec. 31, 2011 Unsecured term loan LIBOR plus 3.75% due through 2021 USD ($)	Dec. 31, 2010 Unsecured term loan LIBOR plus 3.75% due through 2020	Dec. 31, 2011 Unsecured Term Loan Facility USD ($)	Dec. 31, 2011 Unsecured Term Loan Facility Oasis of the Seas	Dec. 31, 2011 Unsecured Term Loan Facility Allure Of The Seas
Debt Instrument [Line Items]
Long term debt, principal amount	$ 875.0	$ 875.0	$ 525.0	$ 525.0											€ 1,000.0	€ 1,000.0			$ 225.0	$ 225.0	$ 570.0	$ 570.0	$ 589.0	$ 589.0	$ 530.0	$ 530.0	$ 519.0	$ 519.0	$ 420.0	[1]	$ 420.0	[1]	$ 420.0	$ 420.0	€ 159.4	[1]	€ 159.4	[1]	$ 524.5	$ 524.5	$ 566.1	$ 566.1	$ 1,100.0	[2]			$ 632.0	$ 7.3		$ 30.3		$ 100.0
Long term debt, current rate	2.28%		3.04%														3.05%		1.55%						1.21%		1.05%						2.71%		3.37%	[1]			0.92%		0.96%		2.71%	[2]			0.81%	2.96%		4.29%
Long term debt, stated interest rate															5.63%	5.63%					4.20%	4.20%	4.64%	4.64%					5.41%	[1]	5.41%	[1]																	7.00%
Long term debt, facility fee	0.42%	0.42%	0.6875%	0.6875%
Long term debt, variable rate	2.00%	2.00%	2.75%														2.75%		1.25%	1.25%					0.62%	0.62%	0.45%	0.45%					2.10%		1.58%	[1]			0.50%	0.50%	0.37%	0.37%	2.10%	[2]			0.40%	2.50%		3.75%	3.75%
Long term debt, due date (year)	2016	2016	2014	2014			2013	2013	2016	2016	2018	2018	2027	2027	2014	2014	2013	2013	2012	2012	2013	2013	2014	2014	2015	2015	2020	2020	2021	[1]	2021	[1]	2021	2021	2021	[1]	2021	[1]	2021	2021	2022	2022	2022	[2]	2022	[2]	2023	2023	2022	2021	2020
Long term debt, minimum stated interest rate					6.88%	6.88%
Long term debt, maximum stated interest rate					11.88%	11.88%
Percentage of financing, lenders ability to exit facility on sixth anniversary																																																					60.00%
Percentage of financing, lenders ability to exit facility on seventh anniversary																																																						100.00%

[1] Corresponds to Oasis of the Seas unsecured term loan. With respect to 60% of the financing, the lenders have the ability to exit the facility on the sixth anniversary of the loan.

[2] Corresponds to Allure of the Seas unsecured term loan. With respect to 100% of the financing, the lenders have the ability to exit the facility on the seventh anniversary of the loan.

XML

Effect of Non-derivative Instruments Qualifying and Designated as Hedging Instruments in Net Investment Hedges on the Consolidated Financial Statements (Detail) (Non-derivative instruments, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	$ 13,241	$ 49,727
Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency forward contracts | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	13,241	49,727
Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)

XML

Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Year
Number of Options
Outstanding at January 1, 2011	6,160,893
Granted	522,870
Exercised	(865,396)
Canceled	(146,709)
Outstanding at December 31, 2011	5,671,658
Vested and expected to vest at December 31, 2011	5,405,693
Options Exercisable at December 31, 2011	3,209,850
Weighted-Average Exercise Price
Outstanding at January 1, 2011	$ 28.14
Granted	$ 45.66
Exercised	$ 22.37
Canceled	$ 28.64
Outstanding at December 31, 2011	$ 30.62
Vested and expected to vest at December 31, 2011	$ 30.73
Options Exercisable at December 31, 2011	$ 35.12
Weighted-Average Remaining Contractual Term
Outstanding at January 1, 2011	6.62
Outstanding at December 31, 2011	6.15
Vested and expected to vest at December 31, 2011	6.06
Options Exercisable at December 31, 2011	4.96
Aggregate Intrinsic Value
Outstanding at January 1, 2011	$ 118,283	[1]
Outstanding at December 31, 2011	21,887	[1]
Vested and expected to vest at December 31, 2011	20,812	[1]
Options Exercisable at December 31, 2011	$ 7,349	[1]

[1] The intrinsic value represents the amount by which the fair value of stock exceeds the option exercise price as of December 31, 2011.

XML

Quarterly Information of Effects of Revision on Consolidated Statements of Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest expense, net of interest capitalized							$ (100,625)		$ (99,936)		$ (89,082)		$ (90,661)		$ (91,528)		$ (382,416)	$ (371,207)	$ (309,948)
Total other expense							(71,124)		(89,795)		(95,323)		(89,953)		(11,909)		(324,207)	(286,980)	(336,026)
Net income	36,562	[1],[2]	398,958	[1],[2]	93,491	[1],[2]	78,410	[1],[2]	31,900	[1],[2]	350,179	[1],[2]	53,731	[1],[2]	79,843	[1],[2]	607,421	515,653	152,485
Earnings (Loss) per Share:
Basic	$ 0.17	[1]	$ 1.84	[1]	$ 0.43	[1]	$ 0.36	[1]	$ 0.15	[1]	$ 1.63	[1]	$ 0.25	[1]	$ 0.37	[1]	$ 2.80	$ 2.40	$ 0.71
Diluted	$ 0.17	[1]	$ 1.82	[1]	$ 0.43	[1]	$ 0.36	[1]	$ 0.15	[1]	$ 1.61	[1]	$ 0.25	[1]	$ 0.37	[1]	$ 2.77	$ 2.37	$ 0.71
As Previously Reported
Interest expense, net of interest capitalized							(87,483)		(89,129)		(82,494)		(83,846)		(83,924)			(339,393)	(300,012)
Total other expense							(57,982)		(78,988)		(88,735)		(83,138)		(4,305)			(255,166)	(326,090)
Net income							91,552		42,707		356,767		60,546		87,447			547,467	162,421
Earnings (Loss) per Share:
Basic							$ 0.42		$ 0.20		$ 1.66		$ 0.28		$ 0.41			$ 2.55	$ 0.76
Diluted							$ 0.42		$ 0.20		$ 1.64		$ 0.28		$ 0.40			$ 2.51	$ 0.75
Adjustment
Interest expense, net of interest capitalized							(13,142)		(10,807)		(6,588)		(6,815)		(7,604)			(31,814)	(9,936)
Total other expense							(13,142)		(10,807)		(6,588)		(6,815)		(7,604)			(31,814)	(9,936)
Net income							$ (13,142)		$ (10,807)		$ (6,588)		$ (6,815)		$ (7,604)			$ (31,814)	$ (9,936)
Earnings (Loss) per Share:
Basic							$ (0.06)		$ (0.05)		$ (0.03)		$ (0.03)		$ (0.04)			$ (0.15)	$ (0.05)
Diluted							$ (0.06)		$ (0.05)		$ (0.03)		$ (0.03)		$ (0.04)			$ (0.15)	$ (0.05)

[1] Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company's Consolidated Statements of Operations for these respective periods.

[2] The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

XML

Other Assets - Additional Information (Detail)	12 Months Ended			12 Months Ended			12 Months Ended			1 Months Ended		12 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2011 Pullmantur Air Variable Interest Entity, Primary Beneficiary AirCraft	Dec. 31, 2011 Ship Repair And Maintenance Facility Variable Interest Entity, Not Primary Beneficiary USD ($)	Dec. 31, 2010 Ship Repair And Maintenance Facility Variable Interest Entity, Not Primary Beneficiary USD ($)	Dec. 31, 2011 TUI Cruises	Dec. 31, 2011 TUI Cruises Variable Interest Entity, Not Primary Beneficiary USD ($)	Dec. 31, 2010 TUI Cruises Variable Interest Entity, Not Primary Beneficiary USD ($)	Dec. 31, 2011 TUI Cruises Variable Interest Entity, Not Primary Beneficiary Lower Limit	Feb. 28, 2011 TUI Cruises Celebrity Mercury USD ($) Year	Feb. 28, 2011 TUI Cruises Celebrity Mercury EUR (€)	Dec. 31, 2011 TUI Cruises Celebrity Mercury Variable Interest Entity, Not Primary Beneficiary USD ($) Year	Dec. 31, 2011 TUI Cruises Celebrity Mercury Variable Interest Entity, Not Primary Beneficiary EUR (€)	Dec. 31, 2011 TUI Cruises Celebrity Mercury Variable Interest Entity, Not Primary Beneficiary Line of Credit	Dec. 31, 2011 TUI Cruises Celebrity Mercury Variable Interest Entity, Not Primary Beneficiary Bank Loan Obligations
Variable Interest Entity [Line Items]
Investments in entity							$ 282,000,000	$ 190,800,000
Percentage of ownership interest				40.00%		50.00%	50.00%	50.00%
Investment in entity				61,400,000	64,100,000
Principal and Interest payments received from Grand Bahama (VIE)				10,800,000
Noncontrolling interest percentage			49.00%
Number of aircrafts			4
Sale of ships	345,000,000	290,928,000									234,300,000		234,300,000
Forward contracts										290,000,000		290,000,000
Deferred gain on sale of ship										24,200,000		24,200,000
Estimated life of ship										17	17	17	17
Debt facility													90,000,000
Amount withdrawn under debt facility												103,800,000	80,000,000
Debt facility interest rate per annum												9.54%	9.54%
Debt, guaranteed percentage												50.00%	50.00%
Bank loan													180,000,000
Amount outstanding on bank loan													€ 170,300,000
Debt payable period														7 years	5 years
Bank financing commitment percentage							80.00%
Ship construction commitment option expiration date							Oct. 31, 2012
Reduction of current ownership interest									37.50%

XML

Fair Value Measurements and Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2011

Estimated Fair Value of Financial Instruments that are not Measured at Fair Value on a Recurring Basis

The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis are as follows (in thousands):

	At December  31, 2011		At December  31, 2010
Long-term debt (including current portion of long-term debt)	$	8,617,176	$	8,775,875

Company's Financial Instruments Recorded at Fair Value on a Recurring Basis

The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at December 31, 2011 Using								Fair Value Measurements at December 31, 2010 Using
Description	Total		Level 11		Level 22		Level 33		Total		Level 11		Level 22		Level 33
Assets:
Derivative financial instruments4	$	201,130		—		201,130		—	$	195,944		—		195,944		—
Investments5	$	6,941		6,941		—		—	$	7,974		7,974		—		—
Total Assets	$	208,071	$	6,941	$	201,130	$	—	$	203,918	$	7,974	$	195,944	$	—
Liabilities:
Derivative financial instruments6	$	84,344		—		84,344		—	$	88,491		—		88,491		—
Total Liabilities	$	84,344	$	—	$	84,344	$	—	$	88,491	$	—	$	88,491	$	—

^1.  Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

^2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate, cross currency and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms such as maturity, as well as other inputs such as exchange rates, fuel types, fuel curves, interest rate yield curves, creditworthiness of the counterparty and the Company. For fuel call options, fair value is estimated by using the prevailing market price for the instruments consisting of published price quotes for similar assets based on recent transactions in an active market^.

^3.  Inputs that are unobservable for the asset or liability^. The Company did not use any Level 3 inputs as of December 31, 2011 and December 31, 2010.

^4.  Consists of foreign currency forward contracts, interest rate, cross currency, fuel swaps and fuel call options. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

^5.  Consists of exchange-traded equity securities and mutual funds.

^6.  Consists of interest rate and fuel swaps and foreign currency forward contracts. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

Reconciliation of Company's Fuel Call Options

The following table presents a reconciliation of the Company’s fuel call options’ beginning and ending balances as of December 31, 2010 (in thousands):

Year Ended December 31, 2010	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fuel Call Options
Balance at January 1, 2010	$	9,998
Total gains or losses (realized /unrealized)
Included in other (expense) income		(2,824	)
Purchases		24,539
Transfers in and/or out of Level 3		(31,713	)
Balance at December 31, 2010	$	—
The amount of total gains or losses for the period included in other (expense) income attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	(2,824	)

Fuel Swap Agreements

As of December 31, 2011 and 2010, we have entered into the following fuel swap agreements:

	Fuel Swap Agreements
	As of December 31, 2011			As of December 31, 2010
	(metric tons)
2011		—			766,000
2012		738,000			738,000
2013		644,000			300,000
2014		418,000			—
2015		284,000			—
	Fuel Swap Agreements
Projected fuel purchases for year:	As of December 31, 2011			As of December 31, 2010
	(% hedged)
2011		0	%		58	%
2012		55	%		55	%
2013		47	%		22	%
2014		30	%		—
2015		20	%		—

Fair Value And Line item Caption of Derivative Instruments

The fair value and line item caption of derivative instruments recorded were as follows:

Fair Value of Derivative Instruments

	Asset Derivatives					Liability Derivatives
		As of December 31, 2011		As of December 31, 2010			As of December 31, 2011		As of December 31, 2010
	Balance Sheet Location	Fair Value		Fair Value		Balance Sheet Location	Fair Value		Fair Value
In thousands
Derivatives designated as hedging instruments under ASC 815-201
Interest rate swaps	Other Assets	$	65,531	$	56,497	Other long- term liabilities	$	11,369	$	—
Cross currency swaps	Other Assets		2,914		13,017	Other long- term liabilities		—		—
Foreign currency forward contracts	Derivative Financial Instruments		1,895		—	Accrued expenses and other liabilities		31,775		68,374
Foreign currency forward contracts	Other Assets		—		8,058	Other long- term liabilities		—		19,630
Fuel swaps	Derivative Financial Instruments		82,747		49,297	Accrued expenses and other liabilities		—		—
Fuel swaps	Other Assets		26,258		37,362	Other long- term liabilities		29,213		487
Total derivatives designated as hedging instruments under 815-20		$	179,345	$	164,231		$	72,357	$	88,491
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Other Assets	$	5,414	$	—	Other long- term liabilities	$	11,987	$	—
Fuel call options	Derivative Financial Instruments		—		7,194	Accrued expenses and other liabilities		—		—
Fuel call options	Other Assets		16,371		24,519	Other long- term liabilities		—		—
Total derivatives not designated as hedging instruments under 815-20		$	21,785	$	31,713		$	11,987	$	—
Total derivatives		$	201,130	$	195,944		$	84,344	$	88,491

¹ Accounting Standard Codification 815-20 “Derivatives and Hedging”.

The Fair Value and Line Item Caption of Non-derivative Instruments

The fair value and line item caption of non-derivative instruments recorded was as follows:

Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	Carrying Value
		As of December 31, 2011		As of December 31, 2010
In thousands
Foreign currency debt	Long-term debt	$	863,217	$	628,172
		$	863,217	$	628,172

Effect of Non-derivative Instruments Qualifying and Designated as Hedging Instruments in Net Investment Hedges on the Consolidated Financial Statements

The effect of non-derivative instruments qualifying and designated as hedging instruments in net investment hedges on the consolidated financial statements was as follows:

Non-derivative instruments under ASC 815-20 Net Investment Hedging Relationships	Amount of Gain  (Loss) Recognized in OCI (Effective Portion)				Location of Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Year Ended December 31, 2011		Year Ended December 31, 2010			Year Ended December 31, 2011		Year Ended December 31, 2010
In thousands
Foreign Currency Debt	$	13,241	$	49,727	Other income (expense)	$	—	$	—
	$	13,241	$	49,727		$	—	$	—

Not Designated as Hedging Instrument

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows:

Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income  on Derivative
		Year Ended December 31, 2011		Year Ended December 31, 2010
In thousands
Foreign exchange contracts	Other income (expense)	$	4,633	$	(50	)
Fuel call options	Other income (expense)		18,915		(2,824	)
		$	23,548	$	(2,874	)

Fair Value Hedge

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statement of operations was as follows:

Derivatives and related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of  Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative					Amount of Gain (Loss) Recognized in Income on Hedged Item
		Year Ended December 31, 2011		Year Ended December 31, 2010			Year Ended December 31, 2011			Year Ended December 31, 2010
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	18,278	$	32,340		$	31,045		$	20,443
Cross currency swaps	Interest expense, net of interest capitalized		—		987			—			—
Interest rate swaps	Other income (expense)		7,817		22,929			(7,223	)		(21,383	)
Cross currency swaps	Other income (expense)		—		(42,284	)		—			47,715
Foreign currency forward contracts	Other income (expense)		22,901		(62,520	)		(23,720	)		63,026
		$	48,996	$	(48,548	)	$	102		$	109,801

Cash Flow Hedging

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivative instruments qualifying and designated as hedging instruments in cash flow hedges on the consolidated financial statements was as follows:

Derivatives under ASC 815- 20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)						Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)					Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing)
	Year Ended December 31, 2011			Year Ended December 31, 2010				Year Ended December 31, 2011			Year Ended December 31, 2010			Year Ended December 31, 2011			Year Ended December 31, 2010
In thousands
Cross currency swaps		(6,013	)		13,016		Other income (expense)		(15,011	)		26,360	Other income (expense)		—			—
Interest rate swaps		(10,131	)		—		Other income (expense)		—			—	Other income (expense)		(21	)		—
Foreign currency forward contracts		(22,263	)		(83,601	)	Depreciation and amortization expenses		(734	)		227	Other income (expense)		(1,015	)		207
Foreign currency forward contracts		(12,375	)		(21,021	)	Other income (expense)		(285	)		1,051	Other income (expense)		—			—
Fuel swaps		121,262			36,729		Fuel		162,616			40,665	Other income (expense)		7,086			7,779
	$	70,480		$	(54,877	)		$	146,586		$	68,303		$	6,050		$	7,986

XML

Future Minimum Lease Payments under Noncancelable Operating Leases (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Operating Leased Assets [Line Items]
2012	$ 65,435
2013	62,881
2014	57,264
2015	56,210
2016	54,937
Thereafter	386,394
Operating Leases, Future Minimum Payments Due, Total	$ 683,121

XML

Reconciliation between Basic and Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Earnings Per Share Disclosure [Line Items]
Net income for basic and diluted earnings per share	$ 36,562	[1],[2]	$ 398,958	[1],[2]	$ 93,491	[1],[2]	$ 78,410	[1],[2]	$ 31,900	[1],[2]	$ 350,179	[1],[2]	$ 53,731	[1],[2]	$ 79,843	[1],[2]	$ 607,421	$ 515,653	$ 152,485
Weighted-average common shares outstanding																	216,983	215,026	213,809
Dilutive effect of stock options and restricted stock awards																	2,246	2,685	1,486
Diluted weighted-average shares outstanding																	219,229	217,711	215,295
Basic earnings per share:
Net income	$ 0.17	[1]	$ 1.84	[1]	$ 0.43	[1]	$ 0.36	[1]	$ 0.15	[1]	$ 1.63	[1]	$ 0.25	[1]	$ 0.37	[1]	$ 2.80	$ 2.40	$ 0.71
Diluted earnings per share:
Net income	$ 0.17	[1]	$ 1.82	[1]	$ 0.43	[1]	$ 0.36	[1]	$ 0.15	[1]	$ 1.61	[1]	$ 0.25	[1]	$ 0.37	[1]	$ 2.77	$ 2.37	$ 0.71

[1] Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company's Consolidated Statements of Operations for these respective periods.

[2] The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

XML

Quarterly Selected Financial Data (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Quarterly Financial Information [Line Items]
Total revenues	$ 1,775,401	[1]	$ 2,321,994	[1]	$ 1,767,873	[1]	$ 1,671,995	[1]	$ 1,604,498	[1]	$ 2,060,659	[1]	$ 1,601,697	[1]	$ 1,485,650	[1]	$ 7,537,263	$ 6,752,504	$ 5,889,826
Operating income	106,162		507,742		168,190		149,534		121,695		445,502		143,684		91,752		931,628	802,633	488,511
Net income	$ 36,562	[2],[3]	$ 398,958	[2],[3]	$ 93,491	[2],[3]	$ 78,410	[2],[3]	$ 31,900	[2],[3]	$ 350,179	[2],[3]	$ 53,731	[2],[3]	$ 79,843	[2],[3]	$ 607,421	$ 515,653	$ 152,485
Earnings per share:
Basic	$ 0.17	[2]	$ 1.84	[2]	$ 0.43	[2]	$ 0.36	[2]	$ 0.15	[2]	$ 1.63	[2]	$ 0.25	[2]	$ 0.37	[2]	$ 2.80	$ 2.40	$ 0.71
Diluted	$ 0.17	[2]	$ 1.82	[2]	$ 0.43	[2]	$ 0.36	[2]	$ 0.15	[2]	$ 1.61	[2]	$ 0.25	[2]	$ 0.37	[2]	$ 2.77	$ 2.37	$ 0.71
Dividends declared per share	$ 0.10		$ 0.10														$ 0.10

[1] Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere's summer months and holidays.

[2] Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company's Consolidated Statements of Operations for these respective periods.

[3] The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

XML

Quarterly Selected Financial Data (Parenthetical) (Detail) (Rolls Royce, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2010
Rolls Royce
Quarterly Financial Information [Line Items]
Gain on litigation settlement	$ 85.6

XML

Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Financial Statements (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative	$ 23,548	$ (2,874)
Foreign exchange contracts | Other income (expense)
Derivative [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative	4,633	(50)
Fuel call options | Other income (expense)
Derivative [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative	$ 18,915	$ (2,824)

XML

Quarterly Selected Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2011

Schedule of Error Corrections and Prior Period Adjustments

The following tables present the effects of the revision on the Company’s Consolidated Statements of Operations for the periods noted above. (See Note 1. General – Revision of Prior Period Financial Statements for further details.)

	Quarter Ended March 31, 2011									Quarter Ended March 31, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(87,483	)	$	(13,142	)	$	(100,625	)	$	(83,924	)	$	(7,604	)	$	(91,528	)
Total other expense		(57,982	)		(13,142	)		(71,124	)		(4,305	)		(7,604	)		(11,909	)
Net Income		91,552			(13,142	)		78,410			87,447			(7,604	)		79,843
Earnings per Share:
Basic	$	0.42		$	(0.06	)	$	0.36		$	0.41		$	(0.04	)	$	0.37
Diluted	$	0.42		$	(0.06	)	$	0.36		$	0.40		$	(0.04	)	$	0.37

	Quarter Ended June 30, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(83,846	)	$	(6,815	)	$	(90,661	)
Total other expense		(83,138	)		(6,815	)		(89,953	)
Net Income		60,546			(6,815	)		53,731
Earnings per Share:
Basic	$	0.28		$	(0.03	)	$	0.25
Diluted	$	0.28		$	(0.03	)	$	0.25

	Quarter Ended September 30, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(82,494	)	$	(6,588	)	$	(89,082	)
Total other expense		(88,735	)		(6,588	)		(95,323	)
Net Income		356,767			(6,588	)		350,179
Earnings per Share:
Basic	$	1.66		$	(0.03	)	$	1.63
Diluted	$	1.64		$	(0.03	)	$	1.61

	Quarter Ended December 31, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(89,129	)	$	(10,807	)	$	(99,936	)
Total other expense		(78,988	)		(10,807	)		(89,795	)
Net Income (Loss)		42,707			(10,807	)		31,900
Earnings (Loss) per Share:
Basic	$	0.20		$	(0.05	)	$	0.15
Diluted	$	0.20		$	(0.05	)	$	0.15

Quarterly Selected Financial Data

Quarterly Selected Financial Data (Unaudited)

	(In thousands, except per share data)
	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	2011		2010		2011		2010		2011		2010		2011		2010
Total revenues1	$	1,671,995	$	1,485,650	$	1,767,873	$	1,601,697	$	2,321,994	$	2,060,659	$	1,775,401	$	1,604,498
Operating income	$	149,534	$	91,752	$	168,190	$	143,684	$	507,742	$	445,502	$	106,162	$	121,695
Net income2,3	$	78,410	$	79,843	$	93,491	$	53,731	$	398,958	$	350,179	$	36,562	$	31,900
Earnings per share:
Basic3	$	0.36	$	0.37	$	0.43	$	0.25	$	1.84	$	1.63	$	0.17	$	0.15
Diluted3	$	0.36	$	0.37	$	0.43	$	0.25	$	1.82	$	1.61	$	0.17	$	0.15
Dividends declared per share	$	—	$	—	$	—	$	—	$	0.10	$	—	$	0.10	$	—

¹ Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays.

²  The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

³ Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company’s Consolidated Statements of Operations for these respective periods.

Income Statement

Schedule of Error Corrections and Prior Period Adjustments

The following table presents the effects of the revision on the Company’s Consolidated Statements of Operations for the respective annual periods. Please refer to Note 16. Quarterly Selected Financial Data (Unaudited) for the respective quarterly periods.

	Year Ended December 31, 2010									Year Ended December 31, 2009
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(339,393	)	$	(31,814	)	$	(371,207	)	$	(300,012	)	$	(9,936	)	$	(309,948	)
Total other expense		(255,166	)		(31,814	)		(286,980	)		(326,090	)		(9,936	)		(336,026	)
Net Income		547,467			(31,814	)		515,653			162,421			(9,936	)		152,485
Earnings per Share:
Basic	$	2.55		$	(0.15	)	$	2.40		$	0.76		$	(0.05	)	$	0.71
Diluted	$	2.51		$	(0.15	)	$	2.37		$	0.75		$	(0.05	)	$	0.71

Balance Sheet

Schedule of Error Corrections and Prior Period Adjustments

The following table presents the effect the revision had on the Consolidated Balance Sheet at December 31, 2010:

	As of December 31, 2010
	(in thousands)
	As Previously Reported		Adjustment			As Revised
Property and equipment, net	$	16,769,181	$	2,496		$	16,771,677
Other assets		1,151,324		(43,571	)		1,107,753
Total assets		19,694,904		(41,075	)		19,653,829
Accrued expenses and other liabilities		552,543		675			553,218
Total current liabilities		3,444,498		675			3,445,173
Retained earnings		5,301,748		(41,750	)		5,259,998
Total shareholders’ equity		7,942,502		(41,750	)		7,900,752
Total liabilities and shareholders’ equity		19,694,904		(41,075	)		19,653,829

Cash Flow

Schedule of Error Corrections and Prior Period Adjustments

The following table presents the effect on the individual line items within operating cash flows on the Company’s Consolidated Statement of Cash Flows for December 31, 2010 and 2009:

	Year Ended December 31, 2010											Year Ended December 31, 2009
	(in thousands)
	As Previously Reported			Adjustment			Reclassification1			As Revised		As Previously Reported		Adjustment			Reclassification1			As Revised
Net Income	$	547,467		$	(31,814	)	$	—		$	515,653	$	162,421	$	(9,936	)	$	—		$	152,485
Increase in accrued expenses and other liabilities		72,161			(192	)		—			71,969		15,391		867			—			16,258
Other, net		(22,415	)		32,006			(2,826	)		6,765		49,738		9,069			(2,538	)		56,269

¹  Please refer to Note 2. Summary of Significant Accounting Policies for discussion.

XML

Schedule of Annual Maturities on Long-Term Debt Including Capital Leases (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Debt Instrument [Line Items]
2012	$ 638,891
2013	1,561,662
2014	1,897,852
2015	1,002,784
2016	1,243,495
Thereafter	2,151,169
Debt amount	$ 8,495,853	$ 9,150,116

XML

Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended					12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Royal Caribbean International Cruise Ships	Dec. 31, 2010 Royal Caribbean International Cruise Ships	Dec. 31, 2009 Royal Caribbean International Cruise Ships	Dec. 31, 2011 Pullmantur	Dec. 31, 2010 Pullmantur
Goodwill [Line Items]
Beginning balance	$ 759,328	$ 792,373	$ 283,723	$ 283,723	$ 283,723	$ 475,605	$ 508,650
Foreign currency translation adjustment	(12,791)	(33,045)				(12,791)	(33,045)
Ending balance	$ 746,537	$ 759,328	$ 283,723	$ 283,723	$ 283,723	$ 462,814	$ 475,605

XML

Subsequent Events - Additional Information (Detail) (USD $) In Billions, unless otherwise specified	12 Months Ended	1 Months Ended
	Dec. 31, 2011 Passenger	Feb. 29, 2012 New Contract Ocean Dream	Feb. 29, 2012 Capital expenditure, contracted Project Sunshine Passenger
Subsequent Event [Line Items]
Charter term		6 years
Additional charter term after renewal of agreement		4 years
Anticipate ship delivery date (month and year)		2012-04
Aggregate additional capacity	7,100		4,100
Expected service start period			Second quarter of 2015
Aggregate cost of ships expected to enter service	$ 2.0		$ 2.8

XML

Effect of Revision on Consolidated Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Property and equipment, net	$ 16,934,817	$ 16,771,677
Other assets	1,153,763	1,107,753
Total assets	19,804,405	19,653,829
Accrued expenses and other liabilities	564,272	553,218
Total current liabilities	3,067,642	3,445,173
Retained earnings	5,823,430	5,259,998
Total shareholders' equity	8,407,823	7,900,752	7,489,781	6,803,012
Total liabilities and shareholders' equity	19,804,405	19,653,829
As Previously Reported
Property and equipment, net		16,769,181
Other assets		1,151,324
Total assets		19,694,904
Accrued expenses and other liabilities		552,543
Total current liabilities		3,444,498
Retained earnings		5,301,748
Total shareholders' equity		7,942,502
Total liabilities and shareholders' equity		19,694,904
Adjustment
Property and equipment, net		2,496
Other assets		(43,571)
Total assets		(41,075)
Accrued expenses and other liabilities		675
Total current liabilities		675
Retained earnings		(41,750)
Total shareholders' equity		(41,750)
Total liabilities and shareholders' equity		$ (41,075)

XML

Stock-Based Employee Compensation - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended			1 Months Ended	3 Months Ended	12 Months Ended				12 Months Ended
	Dec. 31, 2011 CompensationPlan	Dec. 31, 2010	Dec. 31, 2009	Jan. 31, 2009 Chief Executive Officer	Dec. 31, 2008 Chief Executive Officer	Dec. 31, 2011 Lower Limit	Dec. 31, 2011 Upper Limit	Dec. 31, 2011 2000 Stock Award Plan	Dec. 31, 2011 2008 Equity Plan	Dec. 31, 2011 Stock Option Year	Dec. 31, 2011 Restricted stock units Year	Dec. 31, 2010 Restricted stock units	Dec. 31, 2009 Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock-based compensation plans	3
Maximum number of award to be granted per individual	500,000
Purchase price for each share of common stock as percentage of the average of the market price	90.00%
Shares of common stock issued under the ESPP plan	28,802	30,054	65,005
Weighted-average price of shares of common stock issued under the ESPP plan	$ 29.46	$ 27.87	$ 12.78
Weighted-average estimated fair value of stock options granted	$ 21.39	$ 11.69	$ 3.68
Total intrinsic value of stock options exercised	$ 17.3	$ 26.9	$ 0.5
Maximum number of shares authorized for issuance under stock-based compensation plans								13,000,000	11,000,000
Vesting period for options and restricted stock						4 years	5 years
Maximum expiry period for options							10 years
Maximum aggregate number of shares available under the employee stock purchase plan							800,000
Quarterly contribution of common stock to a trust on behalf of chief executive officer					10,086
Number of shares distributed from the trust				768,018
Weighted-average estimated fair value of restricted stock units granted											$ 45.67	$ 25.32	$ 7.68
Fair value of shares released on vesting of restricted stock units											25.1	12.0	2.5
Total unrecognized compensation cost										$ 6.9	$ 8.5
Weighted-average period of unrecognized compensation cost to be recognized										0.9	1.0

XML

The Fair Value and Line Item Caption of Non-derivative Instruments (Detail) (Non-derivative instruments, USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Carrying Value of Non-derivative instrument Designated as hedging instrument	$ 863,217	$ 628,172
Foreign Currency Debt | Long-term Debt
Derivative [Line Items]
Carrying Value of Non-derivative instrument Designated as hedging instrument	$ 863,217	$ 628,172

XML

Estimated Fair Value of Financial Instruments that are not Measured at Fair Value on a Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt (including current portion of long-term debt)	$ 8,617,176	$ 8,775,875

XML

Long Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Debt Instrument [Line Items]
Long term debt	$ 8,495,853		$ 9,150,116
Less - current portion	(638,891)		(1,198,929)
Long-term portion	7,856,962		7,951,187
Unsecured revolving credit facility LIBOR plus 2.00% due 2016
Debt Instrument [Line Items]
Long term debt	523,000		545,000
Unsecured revolving credit facility LIBOR plus 2.75% due 2014
Debt Instrument [Line Items]
Long term debt	67,000
Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027
Debt Instrument [Line Items]
Long term debt	2,059,510		2,548,722
Unsecured senior notes 5.63% due 2014
Debt Instrument [Line Items]
Long term debt	1,356,312		1,427,322
Unsecured term loan LIBOR plus 2.75% due 2013
Debt Instrument [Line Items]
Long term debt	100,000		100,000
Unsecured term loan LIBOR plus 1.25% due through 2012
Debt Instrument [Line Items]
Long term debt	32,085		64,238
Unsecured term loan 4.20% due through 2013
Debt Instrument [Line Items]
Long term debt	122,143		203,571
Unsecured term loan 4.64% due through 2014
Debt Instrument [Line Items]
Long term debt	210,358		294,500
Unsecured term loan LIBOR plus 0.62% due through 2015
Debt Instrument [Line Items]
Long term debt	265,000		340,714
Unsecured term loan LIBOR plus 0.45% due through 2020
Debt Instrument [Line Items]
Long term debt	389,360		432,622
Unsecured term loan 5.41%, due through 2021
Debt Instrument [Line Items]
Long term debt	348,142	[1]	385,000	[1]
Unsecured term loan LIBOR plus 2.10% due through 2021
Debt Instrument [Line Items]
Long term debt	350,000		385,000
Unsecured term loan EURIBOR plus 1.58% due through 2021
Debt Instrument [Line Items]
Long term debt	172,463	[1]	195,598	[1]
Unsecured term loan LIBOR plus 0.50% due through 2021
Debt Instrument [Line Items]
Long term debt	437,083		480,791
Unsecured term loan LIBOR plus 0.37% due through 2022
Debt Instrument [Line Items]
Long term debt	495,311		542,483
Unsecured term loan LIBOR plus 2.10% due through 2022
Debt Instrument [Line Items]
Long term debt	844,529	[2]	1,130,000	[2]
Unsecured term loan LIBOR plus 0.40% due through 2023
Debt Instrument [Line Items]
Long term debt	631,959
Unsecured term loan LIBOR plus 2.5% due through 2023
Debt Instrument [Line Items]
Long term debt	6,343
Unsecured term loan 7.0% due through 2022
Debt Instrument [Line Items]
Long term debt			6,715
Unsecured term loan LIBOR plus 3.75% due through 2021
Debt Instrument [Line Items]
Long term debt	25,173
Unsecured term loan LIBOR plus 3.75% due through 2020
Debt Instrument [Line Items]
Long term debt			9,193
Capital lease obligations
Debt Instrument [Line Items]
Long term debt	$ 60,082		$ 58,647

[1] Corresponds to Oasis of the Seas unsecured term loan. With respect to 60% of the financing, the lenders have the ability to exit the facility on the sixth anniversary of the loan.

[2] Corresponds to Allure of the Seas unsecured term loan. With respect to 100% of the financing, the lenders have the ability to exit the facility on the seventh anniversary of the loan.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Revenues and Expenses

Deposits received on sales of passenger cruises are initially recorded as customer deposit liabilities on our balance sheet. Customer deposits are subsequently recognized as passenger ticket revenues, together with revenues from onboard and other goods and services and all associated direct costs of a voyage, upon completion of voyages with durations of ten days or less, and on a pro-rata basis for voyages in excess of ten days. Revenues and expenses include port costs that vary with guest head counts. The amounts included in passenger ticket revenues on a gross basis were $442.9 million, $398.0 million and $303.2 million for the years 2011, 2010 and 2009, respectively.

Cash and Cash Equivalents

Cash and cash equivalents include cash and marketable securities with original maturities of less than 90 days.

Inventories

Inventories consist of provisions, supplies and fuel carried at the lower of cost (weighted-average) or market.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. We capitalize interest as part of the cost of acquiring certain assets. Improvement costs that we believe add value to our ships are capitalized as additions to the ship and depreciated over the shorter of the improvements’ estimated useful lives or that of the associated ship. The estimated cost and accumulated depreciation of replaced or refurbished ship components are written off and any resulting losses are recognized in cruise operating expenses. Liquidated damages received from shipyards as a result of the late delivery of a new ship are recorded as reductions to the cost basis of the ship.

Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the asset. The useful lives of our ships are generally 30 years, net of a 15% projected residual value. The 30 year useful life of our newly constructed ships and 15% associated residual value are both based on the weighted-average of all major components of a ship. Depreciation for assets under capital leases is computed using the shorter of the lease term or related asset life. (See Note 5. Property and Equipment.)

Depreciation of property and equipment is computed utilizing the following useful lives:

	Years
Ships	30
Ship improvements	Shorter of remaining ship life or useful life (3-20)
Buildings and improvements	10-40
Computer hardware and software	3-5
Transportation equipment and other	3-30
Leasehold improvements	Shorter of remaining lease term or useful life (3-30)

We review long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying amount of these assets may not be fully recoverable. We evaluate asset impairment for our ships on an individual basis in accordance with ASC 360-10-35-23, (Property, Plant and Equipment), which requires that, for purposes of recognition and measurement of an impairment loss, long-lived assets be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The lowest level for which we maintain identifiable cash flows that are independent of the cash flows of other assets and liabilities is at the ship level.

We use the deferral method to account for drydocking costs. Under the deferral method, drydocking costs incurred are deferred and charged to expense on a straight-line basis over the period to the next scheduled drydock, which we estimate to be a period of thirty to sixty months based on the vessel’s age as required by Class. Deferred drydock costs consist of the costs to drydock the vessel and other costs incurred in connection with the drydock which are necessary to maintain the vessel’s Class certification. Class certification is necessary in order for our cruise ships to be flagged in a specific country, obtain liability insurance and legally operate as passenger cruise ships. The activities associated with those drydocking costs cannot be performed while the vessel is in service and, as such, are done during a drydock as a planned major maintenance activity. The significant deferred drydock costs consist of hauling and wharfage services provided by the drydock facility, hull inspection and related activities (e.g. scraping, pressure cleaning, bottom painting), maintenance to steering propulsion, stabilizers, thruster equipment and ballast tanks, port services such as tugs, pilotage and line handling, and freight associated with these items. We perform a detailed analysis of the various activities performed for each drydock and only defer those costs that are directly related to planned major maintenance activities necessary to maintain Class. The costs deferred are not otherwise routinely periodically performed to maintain a vessel’s designed and intended operating capability. Repairs and maintenance activities are charged to expense as incurred.

Goodwill

Goodwill represents the excess of cost over the fair value of net tangible and identifiable intangible assets acquired. We review goodwill for impairment at the reporting unit level annually or, when events or circumstances dictate, more frequently. The impairment review for goodwill consists of a qualitative assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount, followed by a two-step process of determining the fair value of the reporting unit and comparing it to the carrying value of the net assets allocated to the reporting unit. Factors to consider when performing the qualitative assessment include general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. If the qualitative assessment demonstrates that it is more-likely-than-not that the estimated fair value of the reporting unit exceeds its carrying value, it is not necessary to perform the two-step goodwill impairment test. We began performing this qualitative assessment in the fourth quarter of 2011 as allowable per the newly issued authoritative guidance described under the heading Recently Adopted Accounting Standards below. We may elect to bypass the qualitative assessment and proceed directly to step one, for any reporting unit, in any period. We can resume the qualitative assessment for any reporting unit in any subsequent period. When performing the two-step process, if the fair value of the reporting unit exceeds its carrying value, no further analysis or write-down of goodwill is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the implied fair value of the reporting unit is allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value.

Intangible Assets

In connection with our acquisitions, we have acquired certain intangible assets of which value has been assigned to them based on our estimates. Intangible assets that are deemed to have an indefinite life are not amortized, but are subject to an annual impairment test, or when events or circumstances dictate, more frequently. The indefinite-life intangible asset impairment test consists of a comparison of the fair value of the indefinite-life intangible asset with its carrying amount. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the fair value exceeds its carrying amount, the indefinite-life intangible asset is not considered impaired.

Other intangible assets assigned finite useful lives are amortized on a straight-line basis over their estimated useful lives.

Contingencies—Litigation

On an ongoing basis, we assess the potential liabilities related to any lawsuits or claims brought against us. While it is typically very difficult to determine the timing and ultimate outcome of such actions, we use our best judgment to determine if it is probable that we will incur an expense related to the settlement or final adjudication of such matters and whether a reasonable estimation of such probable loss, if any, can be made. In assessing probable losses, we take into consideration estimates of the amount of insurance recoveries, if any. We accrue a liability when we believe a loss is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recoveries, it is possible that certain matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made.

Advertising Costs

Advertising costs are expensed as incurred except those costs which result in tangible assets, such as brochures, which are treated as prepaid expenses and charged to expense as consumed. Advertising costs consist of media advertising as well as brochure, production and direct mail costs. Media advertising was $193.7 million, $166.0 million and $152.2 million, and brochure, production and direct mail costs were $124.3 million, $104.1 million and $92.0 million for the years 2011, 2010 and 2009, respectively.

Derivative Instruments

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. Our derivative instruments are not held for trading or speculative purposes.

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a recognized asset or liability, or a firm commitment is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings.

The foreign-currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in our foreign operations or investments are recognized as a component of accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation.

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is recognized in earnings immediately and reported in other income (expense) in our consolidated statements of operations.

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

Foreign Currency Translations and Transactions

We translate assets and liabilities of our foreign subsidiaries whose functional currency is the local currency, at exchange rates in effect at the balance sheet date. We translate revenues and expenses at weighted-average exchange rates for the period. Equity is translated at historical rates and the resulting foreign currency translation adjustments are included as a component of accumulated other comprehensive (loss) income, which is reflected as a separate component of shareholders’ equity. Exchange gains or losses arising from the remeasurement of monetary assets and liabilities denominated in a currency other than the functional currency of the entity involved are immediately included in our earnings, except for certain liabilities that have been designated to act as a hedge of a net investment in a foreign operation or investment. Exchange losses were $1.6 million, $9.5 million and $21.1 million for the years 2011, 2010 and 2009, respectively, and were recorded within other income (expense). The majority of our transactions are settled in United States dollars. Gains or losses resulting from transactions denominated in other currencies are recognized in income at each balance sheet date.

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our revolving credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies with which we have long-term relationships and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. In addition, our exposure under foreign currency contracts, fuel call options, interest rate and fuel swap agreements that are in-the-money, which is approximately $135.5 million as of December 31, 2011, is limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contract, all of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines regarding credit ratings and instrument maturities that we follow to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share incorporates the incremental shares issuable upon the assumed exercise of stock options and conversion of potentially dilutive securities. (See Note 10. Earnings Per Share.)

Stock-Based Employee Compensation

We measure and recognize compensation expense at the fair value of employee stock awards. Compensation expense for awards and the related tax effects are recognized as they vest. We use the estimated amount of expected forfeitures to calculate compensation costs for all outstanding awards.

Segment Reporting

We operate five wholly-owned cruise brands, Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, Pullmantur and CDF Croisières de France. In addition, we have a 50% investment in a joint venture which operates the brand TUI Cruises with TUI AG. We believe our global brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry. Although each of our brands has its own marketing style as well as ships and crews of various sizes, the nature of the products sold and services delivered by our brands share a common base (i.e. the sale and provision of cruise vacations). Our brands also have similar itineraries as well as similar cost and revenue components. In addition, our brands source passengers from similar markets around the world and operate in similar economic environments with a significant degree of commercial overlap. As a result, our brands (including TUI Cruises) have been aggregated as a single reportable segment based on the similarity of their economic characteristics, types of consumers, regulatory environment, maintenance requirements, supporting systems and processes as well as products and services provided. Our Chairman and Chief Executive Officer has been identified as the chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analyses of the Company as a whole.

Information by geographic area is shown in the table below. Passenger ticket revenues are attributed to geographic areas based on where the reservation originates.

	2011			2010			2009
Passenger ticket revenues:
United States		51	%		55	%		54	%
All other countries		49	%		45	%		46	%

Recently Adopted Accounting Standards

In January 2011, we adopted the remaining provisions of authoritative guidance issued in 2010 which requires enhanced disclosures for fair value measurements. The remaining provisions of this guidance became effective for our fiscal year 2011 interim and annual consolidated financial statements and require entities to present information about purchases, sales, issuances and settlements of financial instruments measured at fair value within the third level of the fair value hierarchy on a gross basis. See Note 13. Fair Value Measurements and Derivative Instruments for our disclosures required under this guidance.

In January 2011, we also adopted the remaining provisions of authoritative guidance issued in 2010 which requires enhanced and disaggregated disclosures about the credit quality of financing receivables and the allowance for credit losses. The remaining provisions of this guidance became effective for our fiscal year 2011 interim and annual consolidated financial statements and require entities to disclose reporting period activity for financing receivables and the allowance for credit losses. The adoption of this guidance did not have an impact on our consolidated financial statements.

In July 2011, we adopted authoritative guidance issued to clarify when a modification or restructuring of a receivable constitutes a troubled debt restructuring. In evaluating whether such a modification or restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that two conditions exist: (1) the modification or restructuring constitutes a concession and (2) the debtor is experiencing financial difficulties. The guidance became effective for our interim and annual reporting periods beginning after June 15, 2011 and was applied retrospectively for all of fiscal year 2011. The adoption of this guidance did not have an impact on our consolidated financial statements.

In September 2011, we adopted authoritative guidance regarding the periodic testing of goodwill for impairment. The new guidance allows an entity to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired and based on this assessment determine whether it is necessary to perform the two-step goodwill impairment test. This guidance is effective for our annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. We early adopted this guidance when performing our annual goodwill impairment testing in the fourth quarter of 2011. See Note 3. Goodwill for our disclosures related to this guidance.

Recent Accounting Pronouncements

In May 2011, authoritative guidance was issued to achieve consistent fair value measurements and to clarify certain disclosure requirements for fair value measurements. The new guidance includes clarification about when the concept of highest and best use is applicable to fair value measurements, requires quantitative disclosures about inputs used and qualitative disclosures about the sensitivity of recurring Level 3 measurements, and requires the classification of all assets and liabilities measured at fair value in the fair value hierarchy, including those assets and liabilities which are not recorded at fair value but for which fair value is disclosed. The guidance will be effective for our interim and annual reporting periods beginning after December 15, 2011. Based on our current fair value measurements, the adoption of this issued guidance is not expected to have an impact on our consolidated financial statements.

In June 2011, authoritative guidance was issued on the presentation of comprehensive income. Specifically, the guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. This guidance must be applied retrospectively and will be effective for our interim and annual reporting periods beginning after December 15, 2011. We expect to add a new primary consolidated statement of other comprehensive income which will immediately follow our consolidated statements of operations to our filings beginning in the first quarter of 2012. In addition, the original guidance issued required that any reclassifications from comprehensive income to net income to be shown on the face of the income statement by income statement line item, however, in December 2011, this guidance was deferred until further notice.

Reclassifications

During 2011, we separately presented gains on our fuel call options of $18.9 million in our consolidated statement of cash flows. As a result, the related prior year amounts were reclassified from other, net to (gain) loss on fuel call options within net cash flows provided by operating activities in order to conform to the current year presentation.

XML

Company's Financial Instruments Recorded at Fair Value on a Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Assets:
Derivative financial instruments	$ 201,130	[1]	$ 195,944	[1]
Investments	6,941	[2]	7,974	[2]
Total Assets	208,071		203,918
Liabilities:
Derivative financial instruments	84,344	[3]	88,491	[3]
Total Liabilities	84,344		88,491
Level 1
Assets:
Investments	6,941	[2],[4]	7,974	[2],[4]
Total Assets	6,941	[4]	7,974	[4]
Level 2
Assets:
Derivative financial instruments	201,130	[1],[5]	195,944	[1],[5]
Total Assets	201,130	[5]	195,944	[5]
Liabilities:
Derivative financial instruments	84,344	[3],[5]	88,491	[3],[5]
Total Liabilities	$ 84,344	[5]	$ 88,491	[5]

[1] Consists of foreign currency forward contracts, interest rate, cross currency, fuel swaps and fuel call options. Please refer to the "Fair Value of Derivative Instruments" table for breakdown by instrument type.

[2] Consists of exchange-traded equity securities and mutual funds.

[3] Consists of interest rate and fuel swaps and foreign currency forward contracts. Please refer to the "Fair Value of Derivative Instruments" table for breakdown by instrument type.

[4] Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

[5] Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate, cross currency and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms such as maturity, as well as other inputs such as exchange rates, fuel types, fuel curves, interest rate yield curves, creditworthiness of the counterparty and the Company. For fuel call options, fair value is estimated by using the prevailing market price for the instruments consisting of published price quotes for similar assets based on recent transactions in an active market.

XML

Intangible assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Indefinite-lived Intangible Assets by Major Class [Line Items]
Foreign currency translation adjustment	$ (6,796)	$ (15,884)
Indefinite-life intangible asset	218,883	225,679
Pullmantur | Trademarks and trade names
Indefinite-lived Intangible Assets by Major Class [Line Items]
Indefinite-life intangible asset	$ 225,679	$ 241,563

XML

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2011

Property and equipment

Property and equipment consists of the following (in thousands):

	2011			2010
Ships	$	19,958,127		$	19,536,283
Ship improvements		976,363			918,681
Ships under construction		227,123			253,198
Land, buildings and improvements, including leasehold improvements and port facilities		360,399			314,044
Computer hardware and software, transportation equipment and other		748,102			607,715
Total property and equipment		22,270,114			21,629,921
Less—accumulated depreciation and amortization		(5,335,297	)		(4,858,244	)
	$	16,934,817		$	16,771,677

XML

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2011

Intangible assets

Intangible assets consist of the following (in thousands):

	2011			2010
Indefinite-life intangible asset – Pullmantur trademarks and trade names	$	225,679		$	241,563
Foreign currency translation adjustment		(6,796	)		(15,884	)
Total	$	218,883		$	225,679

XML

Summary of Restricted Stock Activity (Detail) (Restricted stock units, USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Restricted stock units
Number of Awards
Non-vested share units at January 1, 2011	1,631,850
Granted	349,226
Vested	(572,375)
Canceled	(36,476)
Non-vested share units expected to vest as of December 31, 2011	1,372,225	1,631,850
Weighted-Average Grant Date Fair Value
Non-vested share units at January 1, 2011	$ 18.43
Granted	$ 45.67	$ 25.32	$ 7.68
Vested	$ 41.14
Canceled	$ 26.85
Non-vested share units expected to vest as of December 31, 2011	$ 15.67	$ 18.43

XML

Property and equipment (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Property, Plant and Equipment [Line Items]
Ships	$ 19,958,127	$ 19,536,283
Ship improvements	976,363	918,681
Ships under construction	227,123	253,198
Land, buildings and improvements, including leasehold improvements and port facilities	360,399	314,044
Computer hardware and software, transportation equipment and other	748,102	607,715
Total property and equipment	22,270,114	21,629,921
Less-accumulated depreciation and amortization	(5,335,297)	(4,858,244)
Property and equipment, net	$ 16,934,817	$ 16,771,677

XML

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2011

Long Term Debt

Long-term debt consists of the following (in thousands):

	2011			2010
$875.0 million unsecured revolving credit facility, LIBOR plus 2.00%, currently 2.28% and a facility fee of 0.42%, due 2016	$	523,000		$	545,000
$525.0 million unsecured revolving credit facility, LIBOR plus 2.75%, currently 3.04% and a facility fee of 0.6875%, due 2014		67,000			—
Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027		2,059,510			2,548,722
€1.0 billion unsecured senior notes, 5.63%, due 2014		1,356,312			1,427,322
Unsecured term loans, LIBOR plus 2.75%, currently 3.05%, due 2013		100,000			100,000
$225 million unsecured term loan, LIBOR plus 1.25%, currently 1.55%, due 2012		32,085			64,238
$570 million unsecured term loan, 4.20%, due through 2013		122,143			203,571
$589 million unsecured term loan, 4.64%, due through 2014		210,358			294,500
$530 million unsecured term loan, LIBOR plus 0.62%, currently 1.21%, due through 2015		265,000			340,714
$519 million unsecured term loan, LIBOR plus 0.45%, currently 1.05%, due through 2020		389,360			432,622
1$420 million unsecured term loan, 5.41%, due through 2021		348,142			385,000
$420 million unsecured term loan, LIBOR plus 2.10%, currently 2.71%, due through 2021		350,000			385,000
1€159.4 million unsecured term loan, EURIBOR plus 1.58%, currently 3.37%, due through 2021		172,463			195,598
$524.5 million unsecured term loan, LIBOR plus 0.50%, currently 0.92%, due through 2021		437,083			480,791
$566.1 million unsecured term loan, LIBOR plus 0.37%, currently 0.96%, due through 2022		495,311			542,483
2$1.1 billion unsecured term loan, LIBOR plus 2.10%, currently 2.71%, due through 2022		844,529			1,130,000
$632.0 million unsecured term loan, LIBOR plus 0.40%, currently 0.81%, due through 2023		631,959			—
$7.3 million unsecured term loan, LIBOR plus 2.5%, currently 2.96%, due through 2023 (7.0%, due through 2022 as of December 31, 2010)		6,343			6,715
$30.3 million unsecured term loan, LIBOR plus 3.75%, currently 4.29%, due through 2021 (due through 2020 as of December 31, 2010)		25,173			9,193
Capital lease obligations		60,082			58,647
		8,495,853			9,150,116
Less — current portion		(638,891	)		(1,198,929	)
Long-term portion	$	7,856,962		$	7,951,187

¹  Corresponds to Oasis of the Seas unsecured term loan. With respect to 60% of the financing, the lenders have the ability to exit the facility on the sixth anniversary of the loan.

² Corresponds to Allure of the Seas unsecured term loan. With respect to 100% of the financing, the lenders have the ability to exit the facility on the seventh anniversary of the loan.

Schedule of Annual Maturities on Long-Term Debt Including Capital Leases

Following is a schedule of annual maturities on long-term debt including capital leases as of December 31, 2011 for each of the next five years (in thousands):

Year
2012	$	638,891
2013		1,561,662
2014		1,897,852
2015		1,002,784
2016		1,243,495
Thereafter		2,151,169
	$	8,495,853

XML

Stock-Based Employee Compensation (Tables)

12 Months Ended

Dec. 31, 2011

Total Compensation Expense Recognized for Employee Stock-based Compensation

Total compensation expense recognized for employee stock-based compensation for the years ended December 31, 2011, 2010 and 2009 were as follows:

	Employee Stock-Based Compensation
Classification of expense	2011		2010		2009
In thousands
Marketing, selling and administrative expenses	$	23,803	$	27,598	$	16,157
Payroll and related expenses		—		475		615
Total Compensation Expense	$	23,803	$	28,073	$	16,772

Assumptions Used in Black-Scholes Option-pricing Model

The assumptions used in the Black-Scholes option-pricing model are as follows:

	2011			2010			2009
Dividend yield		0.0	%		0.0	%		0.0	%
Expected stock price volatility		46.0	%		45.0	%		55.0	%
Risk-free interest rate		2.6	%		2.6	%		1.8	%
Expected option life		6 years			6 years			5 years

Summary Stock Option Activity

Stock options activity and information about stock options outstanding are summarized in the following tables:

Stock Options Activity	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value1
						(years)		(in thousands)
Outstanding at January 1, 2011		6,160,893		$	28.14		6.62	$	118,283
Granted		522,870		$	45.66
Exercised		(865,396	)	$	22.37
Canceled		(146,709	)	$	28.64
Outstanding at December 31, 2011		5,671,658		$	30.62		6.15	$	21,887
Vested and expected to vest at December 31, 2011		5,405,693		$	30.73		6.06	$	20,812
Options Exercisable at December 31, 2011		3,209,850		$	35.12		4.96	$	7,349

¹  The intrinsic value represents the amount by which the fair value of stock exceeds the option exercise price as of December 31, 2011.

Summary of Restricted Stock Activity

Restricted stock activity is summarized in the following table:

Restricted Stock Activity	Number of Awards			Weighted- Average Grant Date Fair Value
Non-vested share units at January 1, 2011		1,631,850		$	18.43
Granted		349,226		$	45.67
Vested		(572,375	)	$	41.14
Canceled		(36,476	)	$	26.85
Non-vested share units expected to vest as of December 31, 2011		1,372,225		$	15.67

XML

General

12 Months Ended

Dec. 31, 2011

General

Note 1. General

Description of Business

We are a global cruise company. We own five cruise brands, Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, and CDF Croisières de France with a combined total of 39 ships in operation at December 31, 2011. Our ships operate on a selection of worldwide itineraries that call on approximately 460 destinations. In addition, we have a 50% investment in a joint venture which operates the brand TUI Cruises with TUI AG, a German-based multinational travel and tourism company.

Basis for Preparation of Consolidated Financial Statements

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates.

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. See Note 6. Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method. We consolidate the operating results of Pullmantur and its wholly-owned subsidiary, CDF Croisières de France, on a two-month lag to allow for more timely preparation of our consolidated financial statements. No material events or transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of November 2011 and December 2011 that would require disclosure or adjustment to our consolidated financial statements as of December 31, 2011.

Revision of Prior Period Financial Statements

In connection with the preparation of our consolidated financial statements for the second quarter of 2011, we identified and corrected errors in the manner in which we were amortizing guarantee fees related to three outstanding export credit agency guaranteed loans, and to a much lesser extent, fees associated with our revolving credit facilities. Previously, these fees were amortized on a straight-line basis over the life of the respective loan. Following identification of the errors, in the second quarter of 2011 we corrected our method of amortizing these guarantee fees based on the timing of their payment, which payments are made semi-annually and vary in amount depending on a number of factors, including the relevant outstanding loan balance and our credit rating. In accordance with accounting guidance found in ASC 250-10 (SEC Staff Accounting Bulletin No. 99, Materiality), we assessed the materiality of the errors and concluded that the errors were not material to any of our previously issued financial statements. In accordance with accounting guidance found in ASC 250-10 (SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), we have revised all affected periods. These non-cash errors did not impact our operating income or cash flows for any prior period.

The following table presents the effects of the revision on the Company’s Consolidated Statements of Operations for the respective annual periods. Please refer to Note 16. Quarterly Selected Financial Data (Unaudited) for the respective quarterly periods.

	Year Ended December 31, 2010									Year Ended December 31, 2009
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(339,393	)	$	(31,814	)	$	(371,207	)	$	(300,012	)	$	(9,936	)	$	(309,948	)
Total other expense		(255,166	)		(31,814	)		(286,980	)		(326,090	)		(9,936	)		(336,026	)
Net Income		547,467			(31,814	)		515,653			162,421			(9,936	)		152,485
Earnings per Share:
Basic	$	2.55		$	(0.15	)	$	2.40		$	0.76		$	(0.05	)	$	0.71
Diluted	$	2.51		$	(0.15	)	$	2.37		$	0.75		$	(0.05	)	$	0.71

The following table presents the effect the revision had on the Consolidated Balance Sheet at December 31, 2010:

	As of December 31, 2010
	(in thousands)
	As Previously Reported		Adjustment			As Revised
Property and equipment, net	$	16,769,181	$	2,496		$	16,771,677
Other assets		1,151,324		(43,571	)		1,107,753
Total assets		19,694,904		(41,075	)		19,653,829
Accrued expenses and other liabilities		552,543		675			553,218
Total current liabilities		3,444,498		675			3,445,173
Retained earnings		5,301,748		(41,750	)		5,259,998
Total shareholders’ equity		7,942,502		(41,750	)		7,900,752
Total liabilities and shareholders’ equity		19,694,904		(41,075	)		19,653,829

The correction did not have an effect on the Company’s total operating cash flows. The following table presents the effect on the individual line items within operating cash flows on the Company’s Consolidated Statement of Cash Flows for December 31, 2010 and 2009:

	Year Ended December 31, 2010											Year Ended December 31, 2009
	(in thousands)
	As Previously Reported			Adjustment			Reclassification1			As Revised		As Previously Reported		Adjustment			Reclassification1			As Revised
Net Income	$	547,467		$	(31,814	)	$	—		$	515,653	$	162,421	$	(9,936	)	$	—		$	152,485
Increase in accrued expenses and other liabilities		72,161			(192	)		—			71,969		15,391		867			—			16,258
Other, net		(22,415	)		32,006			(2,826	)		6,765		49,738		9,069			(2,538	)		56,269

¹  Please refer to Note 2. Summary of Significant Accounting Policies for discussion.

XML

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2011

Reconciliation Between Basic and Diluted Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Year Ended December 31,
	2011		2010		2009
Net income for basic and diluted earnings per share	$	607,421	$	515,653	$	152,485
Weighted-average common shares outstanding		216,983		215,026		213,809
Dilutive effect of stock options and restricted stock awards		2,246		2,685		1,486
Diluted weighted-average shares outstanding		219,229		217,711		215,295
Basic earnings per share:
Net income	$	2.80	$	2.40	$	0.71
Diluted earnings per share:
Net income	$	2.77	$	2.37	$	0.71

XML

Useful Lives of Property and Equipment Used in Computation of Depreciation (Detail)	12 Months Ended
	Dec. 31, 2011 Year
Ships
Property, Plant and Equipment [Line Items]
Property plant equipment, useful life	30
Ship improvements
Property, Plant and Equipment [Line Items]
Property Plant Equipment, useful lives	Shorter of remaining ship life or useful life (3-20)
Property Plant Equipment, useful life minimum	3
Property Plant Equipment, useful life maximum	20
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property Plant Equipment, useful life minimum	10
Property Plant Equipment, useful life maximum	40
Computer hardware and software
Property, Plant and Equipment [Line Items]
Property Plant Equipment, useful life minimum	3
Property Plant Equipment, useful life maximum	5
Transportation equipment and other
Property, Plant and Equipment [Line Items]
Property Plant Equipment, useful life minimum	3
Property Plant Equipment, useful life maximum	30
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property Plant Equipment, useful lives	Shorter of remaining lease term or useful life (3-30)
Property Plant Equipment, useful life minimum	3
Property Plant Equipment, useful life maximum	30

XML

Total Compensation Expense Recognized for Employee Stock-based Compensation (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Employee Stock-Based Compensation	$ 23,803	$ 28,073	$ 16,772
Marketing, selling and administrative expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Employee Stock-Based Compensation	23,803	27,598	16,157
Payroll and related expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Employee Stock-Based Compensation		$ 475	$ 615

XML

Commitments and Contingencies - Additional Information (Detail)	1 Months Ended			12 Months Ended			3 Months Ended			1 Months Ended
	Sep. 08, 2011 LegalMatter	Jul. 31, 2002 USD ($)	Jul. 31, 2002 GBP (£)	Dec. 31, 2011 USD ($) Passenger CruiseShip	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Mar. 31, 2010 Rolls Royce USD ($)	Dec. 31, 2011 Line of Credit	Dec. 31, 2011 Debt Securities	Jul. 31, 2002 Lower Limit	Jul. 31, 2002 Upper Limit	Sep. 30, 2010 United States District Court for Puerto Rico USD ($)	Sep. 30, 2010 United States District Court for Puerto Rico Lower Limit USD ($)
Commitments and Contingencies Disclosure [Line Items]
Aggregate additional capacity				7,100
Number of ships under construction				2
Aggregate cost of ships expected to enter service				$ 2,000,000,000
Deposit for the purchase of ships expected to enter service				185,800,000
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate				43.30%	2.20%
Total operating leases expense				60,200,000	50,800,000	54,200,000
Common stock ownership description				If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 30% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms.
Number of class action lawsuits filed	3
Consolidated amended complaint filed date	Feb. 17, 2012
Claim amounts sought													40,000,000
Treble damages sought by international representative												120,000,000
Payment received from settlement of lawsuit							68,000,000
Undiscounted value of addition payment receivable from settlement of lawsuit							20,000,000
Addition payment receivable from settlement of lawsuit (in year)							5 years
Gain on litigation settlement							85,600,000
Present value of addition payment receivable from settlement of lawsuit							17,600,000
Initial lease contractual life		25 years	25 years
Lease term		10 years	10 years
Future payment if lease terminated		$ 103,800,000	£ 66,800,000
Optional lease cancelation period										10 years	18 years
Optional lease cancelation year										2012	2020
Debt instrument covenant, percentage of ownership by a person								30.00%	50.00%

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Passenger ticket revenues	$ 5,525,904	$ 4,908,644	$ 4,205,709
Onboard and other revenues	2,011,359	1,843,860	1,684,117
Total revenues	7,537,263	6,752,504	5,889,826
Cruise operating expenses:
Commissions, transportation and other	1,299,713	1,175,522	1,028,867
Onboard and other	535,501	480,564	457,772
Payroll and related	825,676	767,586	681,852
Food	424,308	388,205	345,272
Fuel	764,758	646,998	600,203
Other operating	1,092,651	999,201	957,136
Total cruise operating expenses	4,942,607	4,458,076	4,071,102
Marketing, selling and administrative expenses	960,602	848,079	761,999
Depreciation and amortization expenses	702,426	643,716	568,214
Costs and Expenses, Total	6,605,635	5,949,871	5,401,315
Operating Income	931,628	802,633	488,511
Other income (expense):
Interest income	25,318	9,243	7,016
Interest expense, net of interest capitalized	(382,416)	(371,207)	(309,948)
Other income (expense)	32,891	74,984	(33,094)
Total other expense	(324,207)	(286,980)	(336,026)
Net Income	$ 607,421	$ 515,653	$ 152,485
Basic earnings per share:
Net income	$ 2.80	$ 2.40	$ 0.71
Diluted earnings per share:
Net income	$ 2.77	$ 2.37	$ 0.71

XML

Property and Equipment - Additional Information (Detail)	12 Months Ended			1 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Nov. 30, 2010 Bleu De France USD ($)	Feb. 28, 2011 Celebrity Mercury TUI Cruises USD ($) Year	Feb. 28, 2011 Celebrity Mercury TUI Cruises EUR (€)	Dec. 31, 2009 Atlantic Star USD ($)
Property, Plant and Equipment [Line Items]
Capitalized interest cost	$ 14,000,000	$ 28,100,000	$ 41,500,000
Sale of ship	345,000,000		290,928,000	55,000,000		234,300,000
Forward contracts					290,000,000
Deferred gain on sale of ship					24,200,000
Estimated life of ship					17	17
Recognition of charge to reduce carrying value of ship to fair value less cost to sell							$ 7,100,000

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands		Total	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Beginning Balance at Dec. 31, 2008		$ 6,803,012	$ 2,239	$ 2,952,540	$ 4,592,529	$ (319,936)	$ (424,360)
Issuance under employee related plans		20,959	4	20,955
Distribution of Rabbi Trust shares		10,656					10,656
Changes related to cash flow derivative hedges		458,220				458,220
Change in defined benefit plans		(2,562)				(2,562)
Foreign currency translation adjustments		47,011				47,011
Net income		152,485			152,485
Ending Balance at Dec. 31, 2009		7,489,781	2,243	2,973,495	4,745,014	182,733	(413,704)
Issuance under employee related plans		53,654	19	53,635
Dividends declared by Pullmantur Air, S.A.	[1]	(669)			(669)
Changes related to cash flow derivative hedges		(123,180)				(123,180)
Change in defined benefit plans		(5,422)				(5,422)
Foreign currency translation adjustments		(29,065)				(29,065)
Net income		515,653			515,653
Ending Balance at Dec. 31, 2010		7,900,752	2,262	3,027,130	5,259,998	25,066	(413,704)
Issuance under employee related plans		44,643	14	44,629
Common Stock dividends		(43,435)			(43,435)
Dividends declared by Pullmantur Air, S.A.	[1]	(554)			(554)
Changes related to cash flow derivative hedges		(76,106)				(76,106)
Change in defined benefit plans		(6,698)				(6,698)
Foreign currency translation adjustments		(18,200)				(18,200)
Net income		607,421			607,421
Ending Balance at Dec. 31, 2011		$ 8,407,823	$ 2,276	$ 3,071,759	$ 5,823,430	$ (75,938)	$ (413,704)

[1] Dividends declared by Pullmantur Air, S.A. to its non-controlling shareholder. See Note 6. Other Assets for further information regarding Pullmantur Air, S.A.'s ownership structure.

XML

Retirement Plan - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan Disclosure [Line Items]
Pension expenses	$ 15.3	$ 13.3	$ 13.6

XML

General - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2011 Location CruiseShip Brand
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of cruise brands owned	5
Number of ships in operation	39
Number of destinations	460
TUI Cruises
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Investment in a joint venture, percentage of interest	50.00%

XML

Fuel Swap Agreements (Detail)	Dec. 31, 2011	Dec. 31, 2010 MetricTon
Fuel Swap Agreement 2011
Derivative [Line Items]
Fuel Swap Agreements (metric tons)		766,000
Fuel Swap Agreements (% hedged)	0.00%	58.00%
Fuel Swap Agreement 2012
Derivative [Line Items]
Fuel Swap Agreements (metric tons)	738,000	738,000
Fuel Swap Agreements (% hedged)	55.00%	55.00%
Fuel Swap Agreement 2013
Derivative [Line Items]
Fuel Swap Agreements (metric tons)	644,000	300,000
Fuel Swap Agreements (% hedged)	47.00%	22.00%
Fuel Swap Agreement 2014
Derivative [Line Items]
Fuel Swap Agreements (metric tons)	418,000
Fuel Swap Agreements (% hedged)	30.00%
Fuel Swap Agreement 2015
Derivative [Line Items]
Fuel Swap Agreements (metric tons)	284,000
Fuel Swap Agreements (% hedged)	20.00%

XML

Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events

Note 15. Subsequent Events

In February 2012, we entered into an agreement to bareboat charter our ship Ocean Dream to an unrelated party for a period of six years from the transfer date. The charter agreement provides a renewal option exercisable by the unrelated party for an additional four years. The charter agreement constitutes an operating lease and charter revenue will be recognized on a straight-line basis over the six year charter term. We anticipate delivery of Ocean Dream will take place in April 2012.

In February 2012, we exercised our option under the agreement with Meyer Werft to construct a second Project Sunshine ship with approximately 4,100 berths which is expected to enter service in the second quarter of 2015. Including this recently ordered ship, the aggregate cost of our ships on order is approximately $2.8 billion.

XML

Effects of Revision on Consolidated Statements of Operations for Respective Annual Periods (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest expense, net of interest capitalized							$ (100,625)		$ (99,936)		$ (89,082)		$ (90,661)		$ (91,528)		$ (382,416)	$ (371,207)	$ (309,948)
Total other expense							(71,124)		(89,795)		(95,323)		(89,953)		(11,909)		(324,207)	(286,980)	(336,026)
Net income	36,562	[1],[2]	398,958	[1],[2]	93,491	[1],[2]	78,410	[1],[2]	31,900	[1],[2]	350,179	[1],[2]	53,731	[1],[2]	79,843	[1],[2]	607,421	515,653	152,485
Earnings (Loss) per Share:
Basic	$ 0.17	[1]	$ 1.84	[1]	$ 0.43	[1]	$ 0.36	[1]	$ 0.15	[1]	$ 1.63	[1]	$ 0.25	[1]	$ 0.37	[1]	$ 2.80	$ 2.40	$ 0.71
Diluted	$ 0.17	[1]	$ 1.82	[1]	$ 0.43	[1]	$ 0.36	[1]	$ 0.15	[1]	$ 1.61	[1]	$ 0.25	[1]	$ 0.37	[1]	$ 2.77	$ 2.37	$ 0.71
As Previously Reported
Interest expense, net of interest capitalized							(87,483)		(89,129)		(82,494)		(83,846)		(83,924)			(339,393)	(300,012)
Total other expense							(57,982)		(78,988)		(88,735)		(83,138)		(4,305)			(255,166)	(326,090)
Net income							91,552		42,707		356,767		60,546		87,447			547,467	162,421
Earnings (Loss) per Share:
Basic							$ 0.42		$ 0.20		$ 1.66		$ 0.28		$ 0.41			$ 2.55	$ 0.76
Diluted							$ 0.42		$ 0.20		$ 1.64		$ 0.28		$ 0.40			$ 2.51	$ 0.75
Adjustment
Interest expense, net of interest capitalized							(13,142)		(10,807)		(6,588)		(6,815)		(7,604)			(31,814)	(9,936)
Total other expense							(13,142)		(10,807)		(6,588)		(6,815)		(7,604)			(31,814)	(9,936)
Net income							$ (13,142)		$ (10,807)		$ (6,588)		$ (6,815)		$ (7,604)			$ (31,814)	$ (9,936)
Earnings (Loss) per Share:
Basic							$ (0.06)		$ (0.05)		$ (0.03)		$ (0.03)		$ (0.04)			$ (0.15)	$ (0.05)
Diluted							$ (0.06)		$ (0.05)		$ (0.03)		$ (0.03)		$ (0.04)			$ (0.15)	$ (0.05)

[1] Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company's Consolidated Statements of Operations for these respective periods.

[2] The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2011

Revenues and Expenses

Revenues and Expenses

Deposits received on sales of passenger cruises are initially recorded as customer deposit liabilities on our balance sheet. Customer deposits are subsequently recognized as passenger ticket revenues, together with revenues from onboard and other goods and services and all associated direct costs of a voyage, upon completion of voyages with durations of ten days or less, and on a pro-rata basis for voyages in excess of ten days. Revenues and expenses include port costs that vary with guest head counts. The amounts included in passenger ticket revenues on a gross basis were $442.9 million, $398.0 million and $303.2 million for the years 2011, 2010 and 2009, respectively.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash and marketable securities with original maturities of less than 90 days.

Inventories

Inventories

Inventories consist of provisions, supplies and fuel carried at the lower of cost (weighted-average) or market.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. We capitalize interest as part of the cost of acquiring certain assets. Improvement costs that we believe add value to our ships are capitalized as additions to the ship and depreciated over the shorter of the improvements’ estimated useful lives or that of the associated ship. The estimated cost and accumulated depreciation of replaced or refurbished ship components are written off and any resulting losses are recognized in cruise operating expenses. Liquidated damages received from shipyards as a result of the late delivery of a new ship are recorded as reductions to the cost basis of the ship.

Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the asset. The useful lives of our ships are generally 30 years, net of a 15% projected residual value. The 30 year useful life of our newly constructed ships and 15% associated residual value are both based on the weighted-average of all major components of a ship. Depreciation for assets under capital leases is computed using the shorter of the lease term or related asset life. (See Note 5. Property and Equipment.)

Depreciation of property and equipment is computed utilizing the following useful lives:

	Years
Ships	30
Ship improvements	Shorter of remaining ship life or useful life (3-20)
Buildings and improvements	10-40
Computer hardware and software	3-5
Transportation equipment and other	3-30
Leasehold improvements	Shorter of remaining lease term or useful life (3-30)

We review long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying amount of these assets may not be fully recoverable. We evaluate asset impairment for our ships on an individual basis in accordance with ASC 360-10-35-23, (Property, Plant and Equipment), which requires that, for purposes of recognition and measurement of an impairment loss, long-lived assets be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The lowest level for which we maintain identifiable cash flows that are independent of the cash flows of other assets and liabilities is at the ship level.

We use the deferral method to account for drydocking costs. Under the deferral method, drydocking costs incurred are deferred and charged to expense on a straight-line basis over the period to the next scheduled drydock, which we estimate to be a period of thirty to sixty months based on the vessel’s age as required by Class. Deferred drydock costs consist of the costs to drydock the vessel and other costs incurred in connection with the drydock which are necessary to maintain the vessel’s Class certification. Class certification is necessary in order for our cruise ships to be flagged in a specific country, obtain liability insurance and legally operate as passenger cruise ships. The activities associated with those drydocking costs cannot be performed while the vessel is in service and, as such, are done during a drydock as a planned major maintenance activity. The significant deferred drydock costs consist of hauling and wharfage services provided by the drydock facility, hull inspection and related activities (e.g. scraping, pressure cleaning, bottom painting), maintenance to steering propulsion, stabilizers, thruster equipment and ballast tanks, port services such as tugs, pilotage and line handling, and freight associated with these items. We perform a detailed analysis of the various activities performed for each drydock and only defer those costs that are directly related to planned major maintenance activities necessary to maintain Class. The costs deferred are not otherwise routinely periodically performed to maintain a vessel’s designed and intended operating capability. Repairs and maintenance activities are charged to expense as incurred.

Goodwill

Goodwill

Goodwill represents the excess of cost over the fair value of net tangible and identifiable intangible assets acquired. We review goodwill for impairment at the reporting unit level annually or, when events or circumstances dictate, more frequently. The impairment review for goodwill consists of a qualitative assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount, followed by a two-step process of determining the fair value of the reporting unit and comparing it to the carrying value of the net assets allocated to the reporting unit. Factors to consider when performing the qualitative assessment include general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. If the qualitative assessment demonstrates that it is more-likely-than-not that the estimated fair value of the reporting unit exceeds its carrying value, it is not necessary to perform the two-step goodwill impairment test. We began performing this qualitative assessment in the fourth quarter of 2011 as allowable per the newly issued authoritative guidance described under the heading Recently Adopted Accounting Standards below. We may elect to bypass the qualitative assessment and proceed directly to step one, for any reporting unit, in any period. We can resume the qualitative assessment for any reporting unit in any subsequent period. When performing the two-step process, if the fair value of the reporting unit exceeds its carrying value, no further analysis or write-down of goodwill is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the implied fair value of the reporting unit is allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value.

Intangible Assets

Intangible Assets

In connection with our acquisitions, we have acquired certain intangible assets of which value has been assigned to them based on our estimates. Intangible assets that are deemed to have an indefinite life are not amortized, but are subject to an annual impairment test, or when events or circumstances dictate, more frequently. The indefinite-life intangible asset impairment test consists of a comparison of the fair value of the indefinite-life intangible asset with its carrying amount. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the fair value exceeds its carrying amount, the indefinite-life intangible asset is not considered impaired.

Other intangible assets assigned finite useful lives are amortized on a straight-line basis over their estimated useful lives.

Contingencies - Litigation

Contingencies—Litigation

On an ongoing basis, we assess the potential liabilities related to any lawsuits or claims brought against us. While it is typically very difficult to determine the timing and ultimate outcome of such actions, we use our best judgment to determine if it is probable that we will incur an expense related to the settlement or final adjudication of such matters and whether a reasonable estimation of such probable loss, if any, can be made. In assessing probable losses, we take into consideration estimates of the amount of insurance recoveries, if any. We accrue a liability when we believe a loss is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recoveries, it is possible that certain matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred except those costs which result in tangible assets, such as brochures, which are treated as prepaid expenses and charged to expense as consumed. Advertising costs consist of media advertising as well as brochure, production and direct mail costs. Media advertising was $193.7 million, $166.0 million and $152.2 million, and brochure, production and direct mail costs were $124.3 million, $104.1 million and $92.0 million for the years 2011, 2010 and 2009, respectively.

Derivative Instruments

Derivative Instruments

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. Our derivative instruments are not held for trading or speculative purposes.

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a recognized asset or liability, or a firm commitment is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings.

The foreign-currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in our foreign operations or investments are recognized as a component of accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation.

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is recognized in earnings immediately and reported in other income (expense) in our consolidated statements of operations.

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

Foreign Currency Translations and Transactions

Foreign Currency Translations and Transactions

We translate assets and liabilities of our foreign subsidiaries whose functional currency is the local currency, at exchange rates in effect at the balance sheet date. We translate revenues and expenses at weighted-average exchange rates for the period. Equity is translated at historical rates and the resulting foreign currency translation adjustments are included as a component of accumulated other comprehensive (loss) income, which is reflected as a separate component of shareholders’ equity. Exchange gains or losses arising from the remeasurement of monetary assets and liabilities denominated in a currency other than the functional currency of the entity involved are immediately included in our earnings, except for certain liabilities that have been designated to act as a hedge of a net investment in a foreign operation or investment. Exchange losses were $1.6 million, $9.5 million and $21.1 million for the years 2011, 2010 and 2009, respectively, and were recorded within other income (expense). The majority of our transactions are settled in United States dollars. Gains or losses resulting from transactions denominated in other currencies are recognized in income at each balance sheet date.

Concentrations of Credit Risk

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our revolving credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies with which we have long-term relationships and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. In addition, our exposure under foreign currency contracts, fuel call options, interest rate and fuel swap agreements that are in-the-money, which is approximately $135.5 million as of December 31, 2011, is limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contract, all of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines regarding credit ratings and instrument maturities that we follow to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

Earnings Per Share

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share incorporates the incremental shares issuable upon the assumed exercise of stock options and conversion of potentially dilutive securities. (See Note 10. Earnings Per Share.)

Stock-Based Employee Compensation

Stock-Based Employee Compensation

We measure and recognize compensation expense at the fair value of employee stock awards. Compensation expense for awards and the related tax effects are recognized as they vest. We use the estimated amount of expected forfeitures to calculate compensation costs for all outstanding awards.

Segment Reporting

Segment Reporting

We operate five wholly-owned cruise brands, Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, Pullmantur and CDF Croisières de France. In addition, we have a 50% investment in a joint venture which operates the brand TUI Cruises with TUI AG. We believe our global brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry. Although each of our brands has its own marketing style as well as ships and crews of various sizes, the nature of the products sold and services delivered by our brands share a common base (i.e. the sale and provision of cruise vacations). Our brands also have similar itineraries as well as similar cost and revenue components. In addition, our brands source passengers from similar markets around the world and operate in similar economic environments with a significant degree of commercial overlap. As a result, our brands (including TUI Cruises) have been aggregated as a single reportable segment based on the similarity of their economic characteristics, types of consumers, regulatory environment, maintenance requirements, supporting systems and processes as well as products and services provided. Our Chairman and Chief Executive Officer has been identified as the chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analyses of the Company as a whole.

Information by geographic area is shown in the table below. Passenger ticket revenues are attributed to geographic areas based on where the reservation originates.

	2011			2010			2009
Passenger ticket revenues:
United States		51	%		55	%		54	%
All other countries		49	%		45	%		46	%

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In January 2011, we adopted the remaining provisions of authoritative guidance issued in 2010 which requires enhanced disclosures for fair value measurements. The remaining provisions of this guidance became effective for our fiscal year 2011 interim and annual consolidated financial statements and require entities to present information about purchases, sales, issuances and settlements of financial instruments measured at fair value within the third level of the fair value hierarchy on a gross basis. See Note 13. Fair Value Measurements and Derivative Instruments for our disclosures required under this guidance.

In January 2011, we also adopted the remaining provisions of authoritative guidance issued in 2010 which requires enhanced and disaggregated disclosures about the credit quality of financing receivables and the allowance for credit losses. The remaining provisions of this guidance became effective for our fiscal year 2011 interim and annual consolidated financial statements and require entities to disclose reporting period activity for financing receivables and the allowance for credit losses. The adoption of this guidance did not have an impact on our consolidated financial statements.

In July 2011, we adopted authoritative guidance issued to clarify when a modification or restructuring of a receivable constitutes a troubled debt restructuring. In evaluating whether such a modification or restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that two conditions exist: (1) the modification or restructuring constitutes a concession and (2) the debtor is experiencing financial difficulties. The guidance became effective for our interim and annual reporting periods beginning after June 15, 2011 and was applied retrospectively for all of fiscal year 2011. The adoption of this guidance did not have an impact on our consolidated financial statements.

In September 2011, we adopted authoritative guidance regarding the periodic testing of goodwill for impairment. The new guidance allows an entity to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired and based on this assessment determine whether it is necessary to perform the two-step goodwill impairment test. This guidance is effective for our annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. We early adopted this guidance when performing our annual goodwill impairment testing in the fourth quarter of 2011. See Note 3. Goodwill for our disclosures related to this guidance.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2011, authoritative guidance was issued to achieve consistent fair value measurements and to clarify certain disclosure requirements for fair value measurements. The new guidance includes clarification about when the concept of highest and best use is applicable to fair value measurements, requires quantitative disclosures about inputs used and qualitative disclosures about the sensitivity of recurring Level 3 measurements, and requires the classification of all assets and liabilities measured at fair value in the fair value hierarchy, including those assets and liabilities which are not recorded at fair value but for which fair value is disclosed. The guidance will be effective for our interim and annual reporting periods beginning after December 15, 2011. Based on our current fair value measurements, the adoption of this issued guidance is not expected to have an impact on our consolidated financial statements.

In June 2011, authoritative guidance was issued on the presentation of comprehensive income. Specifically, the guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. This guidance must be applied retrospectively and will be effective for our interim and annual reporting periods beginning after December 15, 2011. We expect to add a new primary consolidated statement of other comprehensive income which will immediately follow our consolidated statements of operations to our filings beginning in the first quarter of 2012. In addition, the original guidance issued required that any reclassifications from comprehensive income to net income to be shown on the face of the income statement by income statement line item, however, in December 2011, this guidance was deferred until further notice.

Reclassifications

Reclassifications

During 2011, we separately presented gains on our fuel call options of $18.9 million in our consolidated statement of cash flows. As a result, the related prior year amounts were reclassified from other, net to (gain) loss on fuel call options within net cash flows provided by operating activities in order to conform to the current year presentation.

XML

Effect of Derivative Instruments Qualifying and Designated as Hedging Instruments and the Related Hedged Items in Fair Value Hedges on the Consolidated Statement of Operations (Detail) (Fair Value Hedging, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative	$ 48,996	$ (48,548)
Amount of Gain (Loss) Recognized in Income on Hedged Item	102	109,801
Interest rate swaps | Interest expense, net of interest capitalized
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative	18,278	32,340
Amount of Gain (Loss) Recognized in Income on Hedged Item	31,045	20,443
Interest rate swaps | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative	7,817	22,929
Amount of Gain (Loss) Recognized in Income on Hedged Item	(7,223)	(21,383)
Cross currency swaps | Interest expense, net of interest capitalized
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative		987
Cross currency swaps | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative		(42,284)
Amount of Gain (Loss) Recognized in Income on Hedged Item		47,715
Foreign currency forward contracts | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative	22,901	(62,520)
Amount of Gain (Loss) Recognized in Income on Hedged Item	$ (23,720)	$ 63,026

XML

Statement of Other Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011		Mar. 31, 2011		Dec. 31, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Net income	$ 36,562	[1],[2]	$ 78,410	[1],[2]	$ 31,900	[1],[2]	$ 79,843	[1],[2]	$ 607,421	$ 515,653	$ 152,485
Changes related to cash flow derivative hedges									(76,106)	(123,180)	458,220
Change in defined benefit plans									(6,698)	(5,422)	(2,562)
Foreign currency translation adjustments									(18,200)	(29,065)	47,011
Total comprehensive income									506,417	357,986	655,154
Accumulated net gain (loss) on cash flow derivative hedges at beginning of year			42,848				166,028		42,848	166,028	(292,192)
Net (loss) gain on cash flow derivative hedges									70,480	(54,877)	376,128
Net (gain) loss reclassified into earnings									(146,586)	(68,303)	82,092
Accumulated net gain (loss) on cash flow derivative hedges at end of year	(33,258)				42,848				(33,258)	42,848	166,028
Accumulated other comprehensive gain at beginning of the year			25,066						25,066
Current-period change									(101,004)
Accumulated other comprehensive gain at end of year	(75,938)				25,066				(75,938)	25,066
Changes related to cash flow derivative hedges
Accumulated other comprehensive gain at beginning of the year			42,848						42,848
Current-period change									(76,106)
Accumulated other comprehensive gain at end of year	(33,258)								(33,258)
Change in defined benefit plans
Accumulated other comprehensive gain at beginning of the year			(23,558)						(23,558)
Current-period change									(6,698)
Accumulated other comprehensive gain at end of year	(30,256)								(30,256)
Foreign currency translation adjustments
Accumulated other comprehensive gain at beginning of the year			5,776						5,776
Current-period change									(18,200)
Accumulated other comprehensive gain at end of year	$ (12,424)								$ (12,424)

[1] Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company's Consolidated Statements of Operations for these respective periods.

[2] The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 262,186	$ 419,929
Trade and other receivables, net	292,447	266,710
Inventories	144,553	126,797
Prepaid expenses and other assets	185,460	145,144
Derivative financial instruments	84,642	56,491
Total current assets	969,288	1,015,071
Property and equipment, net	16,934,817	16,771,677
Goodwill	746,537	759,328
Other assets	1,153,763	1,107,753
Total assets	19,804,405	19,653,829
Current liabilities
Current portion of long-term debt	638,891	1,198,929
Accounts payable	304,623	249,047
Accrued interest	123,853	160,906
Accrued expenses and other liabilities	564,272	553,218
Customer deposits	1,436,003	1,283,073
Total current liabilities	3,067,642	3,445,173
Long-term debt	7,856,962	7,951,187
Other long-term liabilities	471,978	356,717
Commitments and contingencies (Note 14)
Shareholders' equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)
Common stock ($0.01 par value; 500,000,000 shares authorized; 227,366,165 and 226,211,731 shares issued, December 31, 2011 and December 31, 2010, respectively)	2,276	2,262
Paid-in capital	3,071,759	3,027,130
Retained earnings	5,823,430	5,259,998
Accumulated other comprehensive (loss) income	(75,938)	25,066
Treasury stock (10,308,683 common shares at cost, December 31, 2011 and December 31, 2010)	(413,704)	(413,704)
Total shareholders' equity	8,407,823	7,900,752
Total liabilities and shareholders' equity	$ 19,804,405	$ 19,653,829

XML

Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share

Note 10. Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Year Ended December 31,
	2011		2010		2009
Net income for basic and diluted earnings per share	$	607,421	$	515,653	$	152,485
Weighted-average common shares outstanding		216,983		215,026		213,809
Dilutive effect of stock options and restricted stock awards		2,246		2,685		1,486
Diluted weighted-average shares outstanding		219,229		217,711		215,295
Basic earnings per share:
Net income	$	2.80	$	2.40	$	0.71
Diluted earnings per share:
Net income	$	2.77	$	2.37	$	0.71

Diluted earnings per share did not include options to purchase 2.8 million, 2.6 million and 5.0 million shares for each of the years ended December 31, 2011, 2010 and 2009, respectively, because the effect of including them would have been antidilutive.

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Feb. 27, 2012	Jun. 30, 2011
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	RCL
Entity Registrant Name	ROYAL CARIBBEAN CRUISES LTD
Entity Central Index Key	0000884887
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		0
Entity Public Float			$ 5,080,000,000

XML

Retirement Plan

12 Months Ended

Dec. 31, 2011

Retirement Plan

Note 11. Retirement Plan

We maintain a defined contribution pension plan covering full-time shoreside employees who have completed the minimum period of continuous service. Annual contributions to the plan are based on fixed percentages of participants’ salaries and years of service, not to exceed certain maximums. Pension expenses were $15.3 million, $13.3 million and $13.6 million for the years ended December 31, 2011, 2010 and 2009, respectively.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	227,366,165	226,211,731
Treasury stock, common shares	10,308,683	10,308,683

XML

Property and Equipment

12 Months Ended

Dec. 31, 2011

Property and Equipment

Note 5. Property and Equipment

Property and equipment consists of the following (in thousands):

	2011			2010
Ships	$	19,958,127		$	19,536,283
Ship improvements		976,363			918,681
Ships under construction		227,123			253,198
Land, buildings and improvements, including leasehold improvements and port facilities		360,399			314,044
Computer hardware and software, transportation equipment and other		748,102			607,715
Total property and equipment		22,270,114			21,629,921
Less—accumulated depreciation and amortization		(5,335,297	)		(4,858,244	)
	$	16,934,817		$	16,771,677

Ships under construction include progress payments for the construction of new ships as well as planning, design, interest, commitment fees and other associated costs. We capitalized interest costs of $14.0 million, $28.1 million and $41.5 million for the years 2011, 2010 and 2009, respectively.

In November 2010, we sold Bleu de France to an unrelated party for $55.0 million. The sale was recorded in the first quarter of 2011, as we consolidate the operating results of CDF Croisières de France on a two-month lag. (See Note 1. General). As part of the sale agreement, we chartered the Bleu de France from the buyer for a period of one year from the sale date to fulfill existing passenger commitments. The sale resulted in an immaterial gain that was recognized over the charter period.

In February 2011, we sold Celebrity Mercury to TUI Cruises for €234.3 million. We executed certain forward exchange contracts to lock in the sales price at approximately $290.0 million. The sale resulted in a gain of $24.2 million which, due to the related party nature of the transaction, is being recognized primarily over the remaining life of the ship, estimated to be 17 years.

Atlantic Star is currently not in operation. During 2009, we classified the ship as held for sale within other assets in our consolidated balance sheets and recognized a charge of $7.1 million to reduce the carrying value of the ship to its fair value less cost to sell. This amount was recorded within other operating expenses in our consolidated statements of operations. Management continues to actively pursue the sale of the ship.

XML

Intangible Assets

12 Months Ended

Dec. 31, 2011

Intangible Assets

Note 4. Intangible Assets

Intangible assets consist of the following (in thousands):

	2011			2010
Indefinite-life intangible asset – Pullmantur trademarks and trade names	$	225,679		$	241,563
Foreign currency translation adjustment		(6,796	)		(15,884	)
Total	$	218,883		$	225,679

We performed the annual impairment review of our trademarks and trade names during the fourth quarter of 2011 using a discounted cash flow model and the relief-from-royalty method. The royalty rate used is based on comparable royalty agreements in the tourism and hospitality industry. Since these trademarks and trade names relates to Pullmantur, we have used the same discount rate used in valuing the Pullmantur reporting unit in our goodwill impairment test. Based on the discounted cash flow model we determined the fair value of our trademarks and trade names exceeded their carrying value. However, European economies continue to demonstrate instability in light of heightened concerns over sovereign debt issues as well as the impact that proposed austerity measures will have on certain markets. The Spanish economy has been more severely impacted than many other economies around the world where we operate and there is significant uncertainty as to whether or when it will recover. In addition, the recent Costa Concordia incident is having a near term negative impact on our earnings in 2012 while the impact in future years is uncertain. If the Spanish economy weakens further or recovers more slowly than contemplated in our discounted cash flow model, if there are relatively modest changes to our projected future cash flows used in the impairment analyses, especially in Net Yields, or if certain transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur’s trademark and trade names may be required.

Finite-life intangible assets and related accumulated amortization are immaterial to our 2011, 2010, and 2009 consolidated financial statements.

XML

Quarterly Selected Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Selected Financial Data (Unaudited)

Note 16. Quarterly Selected Financial Data (Unaudited)

	(In thousands, except per share data)
	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	2011		2010		2011		2010		2011		2010		2011		2010
Total revenues1	$	1,671,995	$	1,485,650	$	1,767,873	$	1,601,697	$	2,321,994	$	2,060,659	$	1,775,401	$	1,604,498
Operating income	$	149,534	$	91,752	$	168,190	$	143,684	$	507,742	$	445,502	$	106,162	$	121,695
Net income2,3	$	78,410	$	79,843	$	93,491	$	53,731	$	398,958	$	350,179	$	36,562	$	31,900
Earnings per share:
Basic3	$	0.36	$	0.37	$	0.43	$	0.25	$	1.84	$	1.63	$	0.17	$	0.15
Diluted3	$	0.36	$	0.37	$	0.43	$	0.25	$	1.82	$	1.61	$	0.17	$	0.15
Dividends declared per share	$	—	$	—	$	—	$	—	$	0.10	$	—	$	0.10	$	—

¹ Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays.

²  The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

³ Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company’s Consolidated Statements of Operations for these respective periods.

The following tables present the effects of the revision on the Company’s Consolidated Statements of Operations for the periods noted above. (See Note 1. General – Revision of Prior Period Financial Statements for further details.)

	Quarter Ended March 31, 2011									Quarter Ended March 31, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(87,483	)	$	(13,142	)	$	(100,625	)	$	(83,924	)	$	(7,604	)	$	(91,528	)
Total other expense		(57,982	)		(13,142	)		(71,124	)		(4,305	)		(7,604	)		(11,909	)
Net Income		91,552			(13,142	)		78,410			87,447			(7,604	)		79,843
Earnings per Share:
Basic	$	0.42		$	(0.06	)	$	0.36		$	0.41		$	(0.04	)	$	0.37
Diluted	$	0.42		$	(0.06	)	$	0.36		$	0.40		$	(0.04	)	$	0.37

	Quarter Ended June 30, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(83,846	)	$	(6,815	)	$	(90,661	)
Total other expense		(83,138	)		(6,815	)		(89,953	)
Net Income		60,546			(6,815	)		53,731
Earnings per Share:
Basic	$	0.28		$	(0.03	)	$	0.25
Diluted	$	0.28		$	(0.03	)	$	0.25

	Quarter Ended September 30, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(82,494	)	$	(6,588	)	$	(89,082	)
Total other expense		(88,735	)		(6,588	)		(95,323	)
Net Income		356,767			(6,588	)		350,179
Earnings per Share:
Basic	$	1.66		$	(0.03	)	$	1.63
Diluted	$	1.64		$	(0.03	)	$	1.61

	Quarter Ended December 31, 2010
	(in thousands, except per share data)
	As Previously Reported			Adjustment			As Revised
Interest expense, net of interest capitalized	$	(89,129	)	$	(10,807	)	$	(99,936	)
Total other expense		(78,988	)		(10,807	)		(89,795	)
Net Income (Loss)		42,707			(10,807	)		31,900
Earnings (Loss) per Share:
Basic	$	0.20		$	(0.05	)	$	0.15
Diluted	$	0.20		$	(0.05	)	$	0.15

XML

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Note 12. Income Taxes

We and the majority of our subsidiaries are currently exempt from United States corporate tax on United States source income from the international operation of ships pursuant to Section 883 of the Internal Revenue Code. Regulations under Section 883 have limited the activities that are considered the international operation of a ship or incidental thereto. Accordingly, our provision for United States federal and state income taxes includes taxes on certain activities not considered incidental to the international operation of our ships.

Additionally, some of our ship-operating subsidiaries are subject to income tax under the tonnage tax regimes of Malta or the United Kingdom. Under these regimes, income from qualifying activities is not subject to corporate income tax. Instead, these subsidiaries are subject to a tonnage tax computed by reference to the tonnage of the ship or ships registered under the relevant provisions of the tax regimes. Income from activities not considered qualifying activities, which we do not consider significant, remains subject to Maltese or United Kingdom corporate income tax.

Income tax (expense) benefit for items not qualifying under Section 883 or under tonnage tax regimes and for the remainder of our subsidiaries was approximately $(20.7) million, $(20.3) million and $5.1 million and was recorded within other income (expense) for the years ended December 31, 2011, 2010 and 2009, respectively. In addition, all interest expense and penalties related to income tax liabilities are classified as income tax expense within other income (expense). During 2009, we recorded an out of period adjustment of approximately $12.3 million to correct an error in the calculation of our deferred tax liability. This correction resulted in the reduction of the deferred tax liability to reflect a change in the enacted Spanish statutory tax rate used to calculate the liability in 2006 which was identified during 2009.

We do not expect to incur income taxes on future distributions of undistributed earnings of foreign subsidiaries. Consequently, no deferred income taxes have been provided for the distribution of these earnings.

Deferred tax assets and liabilities related to our U.S. taxable activities are not material as of December 31, 2011 and 2010. Deferred tax assets and liabilities related to our non-U.S. taxable activities are primarily a result of Pullmantur’s operations. As of December 31, 2011 and 2010, Pullmantur had deferred tax assets of €25.9 million and €26.6 million, or $33.6 million and $35.6 million, respectively, resulting primarily from net operating losses which will expire in years 2024 through 2027. Total losses available for carry forwards as of December 31, 2011 and 2010 are $111.4 million and $118.8 million, respectively.

We regularly review deferred tax assets for recoverability based on our history of earnings, expectations for future earnings, and tax planning strategies. As of December 31, 2011, we believe it is more likely than not that we will recover Pullmantur’s deferred tax assets based on our expectation of future earnings and implementation of tax planning strategies. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income to support the amount of deferred taxes. European economies continue to demonstrate instability in light of heightened concerns over sovereign debt issues as well as the impact that proposed austerity measures will have on certain markets. The Spanish economy has been more severely impacted than many other economies around the world where we operate and there is significant uncertainty as to whether or when it will recover. In addition, the recent Costa Concordia incident is having a near term negative impact on our earnings in 2012 while the impact in future years is uncertain. If the Spanish economy weakens further or recovers more slowly than contemplated in our discounted cash flow model, if there are relatively modest changes to our projected future cash flows used in the impairment analyses, especially in Net Yields, or if certain transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible we may need to establish a valuation allowance for a portion or all of the deferred tax asset balance if future earnings do not meet expectations or we are unable to successfully implement our tax planning strategies.

XML

Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity

Note 8. Shareholders’ Equity

In July 2011, our board of directors reinstated our quarterly dividend which had previously been discontinued in the fourth quarter of 2008. We declared and paid a cash dividend on our common stock of $0.10 per share during the third quarter of 2011 and declared a cash dividend on our common stock of $0.10 per share in December 2011, which was paid in the first quarter of 2012.

XML

Income Taxes - Additional Information (Detail) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2011 Lower Limit	Dec. 31, 2011 Upper Limit	Dec. 31, 2011 Pullmantur USD ($)	Dec. 31, 2011 Pullmantur EUR (€)	Dec. 31, 2010 Pullmantur USD ($)	Dec. 31, 2010 Pullmantur EUR (€)
Income Taxes [Line Items]
Income tax (expense) benefit	$ (20.7)	$ (20.3)	$ 5.1
Error corrections and prior period adjustments deferred tax liabilities			12.3
Deferred tax assets, resulting from net operating losses						33.6	25.9	35.6	26.6
Net operating loss carry forwards, expiration date				2024	2027
Total operating Loss carry forwards	$ 111.4	$ 118.8

XML

Other Assets

12 Months Ended

Dec. 31, 2011

Other Assets

Note 6. Other Assets

Variable Interest Entities

Variable Interest Entities (“VIEs”), are entities in which the equity investors have not provided enough equity to finance its activities or the equity investors (1) cannot directly or indirectly make decisions about the entity’s activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity’s activities involve or are conducted on behalf of an investor with a disproportionately small voting interest.

We have determined that our 40% noncontrolling interest in Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair and maintenance facility in which we initially invested in 2001, is a VIE. The facility serves cruise and cargo ships, oil and gas tankers, and offshore units. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. We have determined we are not the primary beneficiary of this facility, as we do not have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of December 31, 2011 and December 31, 2010, the net book value of our investment in Grand Bahama, including equity and loans, was approximately $61.4 million and $64.1 million, respectively, which is also our maximum exposure to loss as we are not contractually required to provide any financial or other support to the facility. The majority of our loans to Grand Bahama are in non-accrual status. During 2011, we received approximately $10.8 million in principal and interest payments from Grand Bahama and recorded income associated with our investment in Grand Bahama. We monitor credit risk associated with these loans through our participation on the facility’s board of directors along with our review of the facility’s financial statements and projected cash flows. Based on this review, we believe the risk of loss associated with these loans is remote as of December 31, 2011.

In conjunction with our acquisition of Pullmantur in 2006, we obtained a 49% noncontrolling interest in Pullmantur Air, S.A. (“Pullmantur Air”), a small air business that operates four aircrafts in support of Pullmantur’s operations. We have determined Pullmantur Air is a VIE for which we are the primary beneficiary as we have the power to direct the activities that most significantly impact its economic performance and we are obligated to absorb its losses. In accordance with authoritative guidance, we have consolidated the assets and liabilities of Pullmantur Air. We do not separately disclose the assets and liabilities of Pullmantur Air as they are immaterial to our December 31, 2011 and December 31, 2010 consolidated financial statements.

We have determined that our 50% interest in the TUI Cruises GmbH joint venture which operates the brand TUI Cruises, is a VIE. As of December 31, 2011 and December 31, 2010, our investment in TUI Cruises, including equity and loans, is substantially our maximum exposure to loss, which was approximately $282.0 million and $190.8 million, respectively, and was included within other assets in our consolidated balance sheets. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

During 2011, we sold Celebrity Mercury to TUI Cruises for €234.3 million to serve as its second ship. The ship was renamed Mein Schiff 2 and began sailing in May 2011. Concurrently with entering into the agreement to sell Celebrity Mercury, we executed certain forward exchange contracts to lock in the sales price at approximately $290.0 million. We deferred the gain on the sale of $24.2 million which will be recognized primarily over the remaining life of the ship, estimated to be 17 years. In connection with the sale, we provided a debt facility to TUI Cruises in the amount of up to €90.0 million. The amount drawn under the facility as of December 31, 2011 was €80.0 million, or approximately $103.8 million based on the exchange rate at December 31, 2011. The loan bears interest at the rate of 9.54% per annum, is payable over seven years, is 50% guaranteed by TUI AG (our joint venture partner) and is secured by second mortgages on both Mein Schiff 1 and Mein Schiff 2. In addition, we and TUI AG each guaranteed the repayment of 50% of an €180.0 million 5-year bank loan provided to TUI Cruises, €170.3 million as of December 31, 2011, in connection with the sale of the ship. The bank loan amortizes quarterly and is secured by first mortgages on both Mein Schiff 1 and Mein Schiff 2. Based on current facts and circumstances, we do not believe potential obligations under this guarantee would be material to our results of operations.

During 2011, TUI Cruises entered into a construction agreement with STX Finland to build its first newbuild ship, scheduled for delivery in the second quarter of 2014. TUI Cruises has entered into a credit agreement for financing of up to 80% of the contract price of the ship. The remaining portion of the contract price of the ship will be funded through either TUI Cruises’ cash flows from operations or loans and/or equity contributions from us and TUI AG. The construction agreement includes certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through the construction period. In addition, the credit agreement extends this restriction through 2019. TUI Cruises has an option to construct a second ship of the same class, which will expire on October 31, 2012.

XML

Long-Term Debt

12 Months Ended

Dec. 31, 2011

Long-Term Debt

Note 7. Long-Term Debt

Long-term debt consists of the following (in thousands):

	2011			2010
$875.0 million unsecured revolving credit facility, LIBOR plus 2.00%, currently 2.28% and a facility fee of 0.42%, due 2016	$	523,000		$	545,000
$525.0 million unsecured revolving credit facility, LIBOR plus 2.75%, currently 3.04% and a facility fee of 0.6875%, due 2014		67,000			—
Unsecured senior notes and senior debentures, 6.88% to 11.88%, due 2013 through 2016, 2018 and 2027		2,059,510			2,548,722
€1.0 billion unsecured senior notes, 5.63%, due 2014		1,356,312			1,427,322
Unsecured term loans, LIBOR plus 2.75%, currently 3.05%, due 2013		100,000			100,000
$225 million unsecured term loan, LIBOR plus 1.25%, currently 1.55%, due 2012		32,085			64,238
$570 million unsecured term loan, 4.20%, due through 2013		122,143			203,571
$589 million unsecured term loan, 4.64%, due through 2014		210,358			294,500
$530 million unsecured term loan, LIBOR plus 0.62%, currently 1.21%, due through 2015		265,000			340,714
$519 million unsecured term loan, LIBOR plus 0.45%, currently 1.05%, due through 2020		389,360			432,622
1$420 million unsecured term loan, 5.41%, due through 2021		348,142			385,000
$420 million unsecured term loan, LIBOR plus 2.10%, currently 2.71%, due through 2021		350,000			385,000
1€159.4 million unsecured term loan, EURIBOR plus 1.58%, currently 3.37%, due through 2021		172,463			195,598
$524.5 million unsecured term loan, LIBOR plus 0.50%, currently 0.92%, due through 2021		437,083			480,791
$566.1 million unsecured term loan, LIBOR plus 0.37%, currently 0.96%, due through 2022		495,311			542,483
2$1.1 billion unsecured term loan, LIBOR plus 2.10%, currently 2.71%, due through 2022		844,529			1,130,000
$632.0 million unsecured term loan, LIBOR plus 0.40%, currently 0.81%, due through 2023		631,959			—
$7.3 million unsecured term loan, LIBOR plus 2.5%, currently 2.96%, due through 2023 (7.0%, due through 2022 as of December 31, 2010)		6,343			6,715
$30.3 million unsecured term loan, LIBOR plus 3.75%, currently 4.29%, due through 2021 (due through 2020 as of December 31, 2010)		25,173			9,193
Capital lease obligations		60,082			58,647
		8,495,853			9,150,116
Less — current portion		(638,891	)		(1,198,929	)
Long-term portion	$	7,856,962		$	7,951,187

¹  Corresponds to Oasis of the Seas unsecured term loan. With respect to 60% of the financing, the lenders have the ability to exit the facility on the sixth anniversary of the loan.

² Corresponds to Allure of the Seas unsecured term loan. With respect to 100% of the financing, the lenders have the ability to exit the facility on the seventh anniversary of the loan.

During 2011, we took delivery of Celebrity Silhouette. To finance the purchase, we borrowed $632.0 million under our previously committed unsecured term loan which is 95% guaranteed by Euler Hermes Kreditversicherungs AG (“Hermes”), the official export credit agency of Germany. The loan amortizes semi-annually over 12 years and bears interest at LIBOR plus a margin of 0.40%, currently approximately 0.81%.

During 2011, we amended and restated our $1.225 billion unsecured revolving credit facility which was due to expire in June 2012. We have extended the termination date through July 2016 and reduced the facility amount to $875.0 million. Under the amended facility, advances currently bear interest at LIBOR plus a margin of 2.00%, currently approximately 2.28%, and we are required to pay a facility fee of 0.42% per annum as compared to LIBOR plus 0.80% and a facility fee of 0.20%, as of December 31, 2010.

During 2011, we amended our unsecured term loans for Oasis of the Seas and Allure of the Seas primarily to reduce the margins on those facilities. The interest rates on the Oasis of the Seas term loan were reduced from LIBOR plus 3.00% to LIBOR plus 2.10%, on the $420.0 million floating rate tranche and from EURIBOR plus 2.25% to EURIBOR plus 1.58%, on the €159.4 million floating rate tranche. The interest rate on the entire $1.1 billion Allure of the Seas term loan was reduced from LIBOR plus 2.20% to LIBOR plus 2.10%, currently approximately 2.71%. In addition, we prepaid $200 million of the Allure of the Seas term loan. We partially funded the prepayment by extending the maturity date of our $100.0 million unsecured floating rate term loan from September 2011 to September 2013. In addition, the interest rate on the term loan was reduced from LIBOR plus 3.00% to LIBOR plus 2.75%.

During 2011, we entered into credit agreements for the financing of the first and second of a new generation of Royal Caribbean International cruise ships, known as “Project Sunshine”, which are scheduled for delivery in the third quarter of 2014 and in the second quarter of 2015, respectively. Refer to Note 15. Subsequent Events for information on our recent order of our second Project Sunshine ship. The credit agreements make available to us for each ship an unsecured term loan in an amount up to the United States dollar equivalent corresponding to approximately €595.0 million, with funding of 50% of each facility subject to syndication prior to delivery. Hermes has agreed to guarantee to the lender payment of 95% of each financing. The loans amortize semi-annually and will mature 12 years following delivery of the applicable ship. Interest on the loans will accrue at our election at either a fixed rate of 4.76% or a floating rate at LIBOR plus a margin of 1.30%.

During 2008, we entered into a credit agreement providing financing for Celebrity Reflection which is scheduled for delivery in the fourth quarter of 2012. The credit agreement provides for an unsecured term loan for up to 80% of the purchase price of the vessel which will be 95% guaranteed by Hermes and will be funded at delivery. The loan will have a 12-year life with semi-annual amortization, and will bear interest at our election of either a fixed rate of 4.13% (inclusive of the applicable margin) or a floating rate at LIBOR plus a margin of 0.40%.

In February 2012, the credit facility we obtained in connection with our purchase of Celebrity Solstice was assigned from Celebrity Solstice Inc., our subsidiary which owns the ship, to Royal Caribbean Cruises Ltd. Similar assignments were simultaneously made from the ship-owning subsidiary level to Royal Caribbean Cruises Ltd. for the facilities relating to Celebrity Equinox, Celebrity Eclipse and Celebrity Silhouette and for the credit agreement relating to Celebrity Reflection, expected to be delivered in the fourth quarter of 2012. Other than the change in borrower, the economic terms of these facilities remain unchanged. These amended facilities each contain covenants substantially similar to the covenants, in our other parent-level ship financing agreements and our revolving credit facilities.

Certain of our unsecured term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed. In consideration for these guarantees, depending on the financing arrangement, we pay to the applicable export credit agency fees that range from either (1) 1.13% to 1.96% per annum based on the outstanding loan balance semi-annually over the term of the loan (subject to adjustment in certain of our facilities based upon our credit ratings) or (2) an upfront fee of approximately 2.3% to 2.37% of the maximum loan amount. We amortize the fees that are paid upfront over the life of the loan and those that are paid semi-annually over the life of the loan over each respective payment period. We classify these fees within Debt issuance costs in our consolidated statement of cash flows. During the second quarter of 2011, we identified errors in the manner in which we were amortizing fees related to three outstanding export credit agency guaranteed loans, and to a much lesser extent, fees associated with our revolving credit facilities. See Note 1. General – Revision of Prior Period Financial Statements for further details.

Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating.

The unsecured senior notes and senior debentures are not redeemable prior to maturity, except that certain series may be redeemed upon the payment of a make-whole premium.

Following is a schedule of annual maturities on long-term debt including capital leases as of December 31, 2011 for each of the next five years (in thousands):

Year
2012	$	638,891
2013		1,561,662
2014		1,897,852
2015		1,002,784
2016		1,243,495
Thereafter		2,151,169
	$	8,495,853

XML

Stock-Based Employee Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Employee Compensation

Note 9. Stock-Based Employee Compensation

We have three stock-based compensation plans, which provide for awards to our officers, directors and key employees. The plans consist of a 1995 Incentive Stock Option Plan, a 2000 Stock Award Plan, and a 2008 Equity Plan. The 1995 Incentive Stock Option Plan terminated by its terms in February 2005. The 2000 Stock Award Plan, as amended, and the 2008 Equity Plan, as amended, provide for the issuance of up to 13,000,000 and 11,000,000 shares of our common stock, respectively, pursuant to grants of (i) incentive and non-qualified stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units and (v) performance shares. During any calendar year, no one individual shall be granted awards of more than 500,000 shares. Options and restricted stock units outstanding as of December 31, 2011 vest in equal installments over four to five years from the date of grant. With certain limited exceptions, options and restricted stock units are forfeited if the recipient ceases to be a director or employee before the shares vest. Options are granted at a price not less than the fair value of the shares on the date of grant and expire not later than ten years after the date of grant.

We also provide an Employee Stock Purchase Plan (“ESPP”) to facilitate the purchase by employees of up to 800,000 shares of common stock in the aggregate. Offerings to employees are made on a quarterly basis. Subject to certain limitations, the purchase price for each share of common stock is equal to 90% of the average of the market prices of the common stock as reported on the New York Stock Exchange on the first business day of the purchase period and the last business day of each month of the purchase period. Shares of common stock of 28,802, 30,054, and 65,005 were issued under the ESPP at a weighted-average price of $29.46, $27.87 and $12.78 during 2011, 2010 and 2009, respectively.

Under the chief executive officer’s employment agreement we previously contributed 10,086 shares of our common stock quarterly to a trust on his behalf. In January 2009, the employment agreement and related trust agreement were amended. Consequently, in January 2009, 768,018 shares were distributed from the trust and since January 2009 quarterly share distributions are issued directly to the chief executive officer.

Total compensation expense recognized for employee stock-based compensation for the years ended December 31, 2011, 2010 and 2009 were as follows:

	Employee Stock-Based Compensation
Classification of expense	2011		2010		2009
In thousands
Marketing, selling and administrative expenses	$	23,803	$	27,598	$	16,157
Payroll and related expenses		—		475		615
Total Compensation Expense	$	23,803	$	28,073	$	16,772

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The estimated fair value of stock options, less estimated forfeitures, is amortized over the vesting period using the graded-vesting method. The majority of our stock option grants occur early in our fiscal year. The assumptions used in the Black-Scholes option-pricing model are as follows:

	2011			2010			2009
Dividend yield		0.0	%		0.0	%		0.0	%
Expected stock price volatility		46.0	%		45.0	%		55.0	%
Risk-free interest rate		2.6	%		2.6	%		1.8	%
Expected option life		6 years			6 years			5 years

Expected volatility was based on a combination of historical and implied volatilities. The risk-free interest rate was based on United States Treasury zero coupon issues with a remaining term equal to the expected option life assumed at the date of grant. The expected term was calculated based on historical experience and represents the time period options actually remain outstanding. We estimate forfeitures based on historical pre-vesting forfeiture rates and revise those estimates as appropriate to reflect actual experience.

Stock options activity and information about stock options outstanding are summarized in the following tables:

Stock Options Activity	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value1
						(years)		(in thousands)
Outstanding at January 1, 2011		6,160,893		$	28.14		6.62	$	118,283
Granted		522,870		$	45.66
Exercised		(865,396	)	$	22.37
Canceled		(146,709	)	$	28.64
Outstanding at December 31, 2011		5,671,658		$	30.62		6.15	$	21,887
Vested and expected to vest at December 31, 2011		5,405,693		$	30.73		6.06	$	20,812
Options Exercisable at December 31, 2011		3,209,850		$	35.12		4.96	$	7,349

¹  The intrinsic value represents the amount by which the fair value of stock exceeds the option exercise price as of December 31, 2011.

The weighted-average estimated fair value of stock options granted was $21.39, $11.69 and $3.68 during the years ended December 31, 2011, 2010 and 2009, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2011, 2010 and 2009 was $17.3 million, $26.9 million and $0.5 million, respectively. As of December 31, 2011, there was approximately $6.9 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock options granted under our stock incentive plans which is expected to be recognized over a weighted-average period of 0.9 years.

Restricted stock units are converted into shares of common stock upon vesting on a one-for-one basis. The cost of these awards is determined using the fair value of our common stock on the date of the grant, and compensation expense is recognized over the vesting period. Restricted stock activity is summarized in the following table:

Restricted Stock Activity	Number of Awards			Weighted- Average Grant Date Fair Value
Non-vested share units at January 1, 2011		1,631,850		$	18.43
Granted		349,226		$	45.67
Vested		(572,375	)	$	41.14
Canceled		(36,476	)	$	26.85
Non-vested share units expected to vest as of December 31, 2011		1,372,225		$	15.67

The weighted-average estimated fair value of restricted stock units granted during the year ended December 31, 2010, and 2009 were $25.32 and $7.68, respectively. The total fair value of shares released on the vesting of restricted stock units during the years ended December 31, 2011, 2010 and 2009 was $25.1 million, $12.0 million and $2.5 million, respectively. As of December 31, 2011, we had $8.5 million of total unrecognized compensation expense, net of estimated forfeitures, related to restricted stock unit grants, which will be recognized over the weighted-average period of 1.0 years.

XML

Fair Value Measurements and Derivative Instruments - Additional Information (Detail)	12 Months Ended												12 Months Ended							12 Months Ended						12 Months Ended							12 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2011 Standard & Poor's, BBB- Rating	Dec. 31, 2011 Moody's, Baa3 Rating	Dec. 31, 2011 Standard & Poor's, BB Rating	Dec. 31, 2011 Moody's, Ba2 Rating	Dec. 31, 2011 Lower Limit Standard & Poor's, BBB- Rating	Dec. 31, 2011 Pullmantur and TUI Cruises USD ($)	Dec. 31, 2011 Pullmantur and TUI Cruises EUR (€)	Dec. 31, 2010 Pullmantur and TUI Cruises USD ($)	Dec. 31, 2010 Pullmantur and TUI Cruises EUR (€)	Dec. 31, 2011 Interest Rate	Dec. 31, 2011 Foreign exchange contracts	Dec. 31, 2011 Fuel relationships	Dec. 31, 2011 Interest rate swaps Fair Value Hedging	Dec. 31, 2010 Interest rate swaps Fair Value Hedging	Dec. 31, 2011 Interest rate swaps Fair Value Hedging Fixed Rate 7. 25% USD ($)	Dec. 31, 2010 Interest rate swaps Fair Value Hedging Fixed Rate 7. 25% USD ($)	Dec. 31, 2011 Interest rate swaps Fair Value Hedging Long-term Debt, Fixed Rate	Dec. 31, 2010 Interest rate swaps Fair Value Hedging Long-term Debt, Fixed Rate	Dec. 31, 2011 Interest rate swaps Oasis of the Seas Fair Value Hedging	Dec. 31, 2011 Interest rate swaps Oasis of the Seas Fair Value Hedging Long-term Debt, Fixed Rate	Dec. 31, 2011 Interest rate swaps Oasis of the Seas Fair Value Hedging Fixed Rate 5.41% USD ($)	Dec. 31, 2011 Interest rate swaps Oasis of the Seas Term Loan Fair Value Hedging USD ($)	Dec. 31, 2011 Interest rate swaps Celebrity Reflection USD ($)	Dec. 31, 2011 Foreign currency forward contracts USD ($)	Dec. 31, 2011 Cross currency swaps USD ($)	Dec. 31, 2011 Cross currency swaps EUR (€)	Dec. 31, 2011 Forward Contracts USD ($)	Dec. 31, 2011 Fuel swaps USD ($)	Dec. 31, 2010 Fuel swaps USD ($)	Dec. 31, 2011 Fuel call options USD ($) MMbbl	Dec. 31, 2010 Fuel call options MMbbl	Dec. 31, 2011 Fuel call options Forecasted in 2011	Dec. 31, 2010 Fuel call options Forecasted in 2011	Dec. 31, 2011 Fuel call options Forecasted in 2012	Dec. 31, 2010 Fuel call options Forecasted in 2012	Dec. 31, 2011 Fuel call options Forecasted in 2013	Dec. 31, 2010 Fuel call options Forecasted in 2013	Dec. 31, 2011 Fuel call options Lower Limit	Dec. 31, 2010 Fuel call options Lower Limit	Dec. 31, 2010 Fuel call options Upper Limit
Derivative [Line Items]
Derivative instrument, contractual life													3 years	3 years	4 years
Percentage of long-term debt with fixed interest rate	40.00%	49.00%
Percentage of long-term debt with floating interest rate	60.00%	51.00%
Notional amount of outstanding debt related to interest rate swap	$ 1,300,000,000	$ 350,000,000
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate	43.30%	2.20%
Debt amount	8,495,853,000	9,150,116,000																350,000,000	350,000,000
Notional amount of outstanding foreign exchange contracts	900,000,000	2,500,000,000																											150,000,000
Interest rate swap agreements, effective date																										2013-04
Cash received (paid) on settlement of derivative financial instruments	(16,307,000)	91,325,000	(110,830,000)																								(8,700,000)
Unsecured debt																								350,000,000		627,200,000			1,000,000,000
Curreny swap agreement, fixed rate																												5.625%
Additional interest above LIBOR rate																1.72%	1.72%					3.87%				0.40%
Curreny swap agreement, fair value																												190,900,000
Debt instrument interest rate																2.49%				7.25%	7.25%	4.48%	5.41%			2.85%
Curreny swap agreement, weighted average fixed rate																												6.68%
Termination of curreny swap agreement																													250,000,000
Net cash proceeds received upon termination of curreny swap																												12,200,000
Deferred gain (loss) on settlement of derivative financial instruments																											(19,700,000)	(3,500,000)
Unsecured term loan																									420,000,000
Amount of foreign currency forward contracts not designated as hedging instruments																														262,000,000
Debt assigned as a hedge of net investment									863,200,000	665,000,000	628,200,000	469,300,000
Estimated unrealized net gains associated with cash flow hedges pertaining to fuel swap agreements expected to be reclassified to earnings from other accumulated comprehensive income (loss)																															78,500,000	83,600,000
Fuel call options, in barrels																																	1,000,000	6,600,000
Gain from Termination of Fuel swap options																																	7,300,000
Net cash proceeds received upon termination of fuel swaps																																	$ 34,300,000
Maturity of fuel call option agreement																																									2013	2011	2013
Percentage of fuel call options terminated																																			100.00%		100.00%
Percentage of projected fuel requirements																																				41.00%		25.00%	9.00%	11.00%
Credit ratings for senior debt				Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor's and Moody's credit ratings remain below specified levels.
Credit ratings for senior debt				BBB-	Baa3	BB	Ba2
Interest rate instrument term								5 years

XML

Fair Value And Line item Caption of Derivative Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Asset Derivatives
Asset Derivatives	$ 201,130		$ 195,944
Liability Derivatives
Liability Derivatives	84,344		88,491
Designated as Hedging Instrument
Asset Derivatives
Asset Derivatives	179,345	[1]	164,231	[1]
Liability Derivatives
Liability Derivatives	72,357	[1]	88,491	[1]
Designated as Hedging Instrument | Interest rate swaps | Other Assets
Asset Derivatives
Asset Derivatives	65,531	[1]	56,497	[1]
Designated as Hedging Instrument | Interest rate swaps | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	11,369	[1]
Designated as Hedging Instrument | Cross currency swaps | Other Assets
Asset Derivatives
Asset Derivatives	2,914	[1]	13,017	[1]
Designated as Hedging Instrument | Foreign currency forward contracts | Other Assets
Asset Derivatives
Asset Derivatives			8,058	[1]
Designated as Hedging Instrument | Foreign currency forward contracts | Derivative Financial Instruments
Asset Derivatives
Asset Derivatives	1,895	[1]
Designated as Hedging Instrument | Foreign currency forward contracts | Other long-term Liabilities
Liability Derivatives
Liability Derivatives			19,630	[1]
Designated as Hedging Instrument | Foreign currency forward contracts | Accrued expenses and other liabilities
Liability Derivatives
Liability Derivatives	31,775	[1]	68,374	[1]
Designated as Hedging Instrument | Fuel swaps | Other Assets
Asset Derivatives
Asset Derivatives	26,258	[1]	37,362	[1]
Designated as Hedging Instrument | Fuel swaps | Derivative Financial Instruments
Asset Derivatives
Asset Derivatives	82,747	[1]	49,297	[1]
Designated as Hedging Instrument | Fuel swaps | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	29,213	[1]	487	[1]
Not Designated as Hedging Instrument
Asset Derivatives
Asset Derivatives	21,785		31,713
Liability Derivatives
Liability Derivatives	11,987
Not Designated as Hedging Instrument | Foreign currency forward contracts | Other Assets
Asset Derivatives
Asset Derivatives	5,414
Not Designated as Hedging Instrument | Foreign currency forward contracts | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	11,987
Not Designated as Hedging Instrument | Fuel call options | Other Assets
Asset Derivatives
Asset Derivatives	16,371		24,519
Not Designated as Hedging Instrument | Fuel call options | Derivative Financial Instruments
Asset Derivatives
Asset Derivatives			$ 7,194

[1] Accounting Standard Codification 815-20 "Derivatives and Hedging".

XML

Reconciliation of Company's Fuel Call Options (Detail) (Fuel call options, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010
Fuel call options
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning Balance	$ 9,998
Total gains or losses (realized /unrealized) Included in other (expense) income	(2,824)
Purchases	24,539
Transfers in and/or out of Level 3	(31,713)
The amount of total gains or losses for the period included in other (expense) income attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$ (2,824)

XML

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2011

Future Minimum Lease Payments under Noncancelable Operating Leases

As of December 31, 2011, future minimum lease payments under noncancelable operating leases were as follows (in thousands):

Year
2012	$	65,435
2013		62,881
2014		57,264
2015		56,210
2016		54,937
Thereafter		386,394
	$	683,121

Future Commitments to Pay for Usage of Certain Port Facilities, Marine Consumables, Services and Maintenance Contracts

At December 31, 2011, we have future commitments to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts as follows (in thousands):

Year
2012	$	195,680
2013		159,602
2014		93,013
2015		86,145
2016		54,595
Thereafter		157,737
	$	746,772

XML

Shareholders' Equity - Additional Information (Detail) (USD $)	3 Months Ended
	Sep. 30, 2011	Dec. 31, 2011
Stockholders Equity Note [Line Items]
Declared and paid a cash dividend on common stock	$ 0.10
Declared a cash dividend common stock	$ 0.10	$ 0.10
Dividend payable, payment period		In the first quarter of 2012

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

Note 14. Commitments and Contingencies

Capital Expenditures

Our future capital commitments consist primarily of new ship orders. As of December 31, 2011, we had Celebrity Reflection and one Project Sunshine ship under construction for an aggregate additional capacity of approximately 7,100 berths.

As of December 31, 2011, the aggregate cost of the two ships currently under construction including amounts due to the shipyard and other ship related costs was approximately $2.0 billion, of which we had deposited $185.8 million as of such date. Approximately 43.3% of the aggregate cost of these two ships was exposed to fluctuations in the euro exchange rate at December 31, 2011. These amounts do not include any costs associated with the construction agreement entered into by TUI Cruises to build its first newbuild ship. (See Note 13. Fair Value Measurements and Derivative Instruments).

We have committed bank financing arrangements for Celebrity Reflection and our two Project Sunshine ships, each of which include sovereign financing guarantees.

Litigation

Between August 1, 2011 and September 8, 2011, three similar purported class action lawsuits were filed against us and certain of our officers in the U.S. District Court of the Southern District of Florida. The cases have since been consolidated and a consolidated amended complaint was filed on February 17, 2012. The consolidated amended complaint was filed on behalf of a purported class of purchasers of our common stock during the period from October 26, 2010 through July 27, 2011 and names the Company, our Chairman and CEO, our CFO and the Presidents and CEOs of our Royal Caribbean International and Celebrity Cruises brands as defendants. The consolidated amended complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 as well as, in the case of the individual defendants, the control person provisions of the Securities Exchange Act. The complaint principally alleges that the defendants knowingly made incorrect statements concerning the Company’s outlook for 2011 by not taking into proper account lagging European and Mediterranean bookings. The consolidated amended complaint seeks unspecified damages, interest, and attorneys’ fees. We believe the claims are without merit and we intend to vigorously defend ourselves against them.

A class action complaint was filed in June 2011 against Royal Caribbean Cruises Ltd. in the United States District Court for the Southern District of Florida on behalf of a purported class of stateroom attendants employed onboard Royal Caribbean International cruise vessels alleging that they were required to pay other crew members to help with their duties in violation of the U.S. Seaman’s Wage Act. The lawsuit also alleges that certain stateroom attendants were required to work back of house assignments without the ability to earn gratuities in violation of the U.S. Seaman’s Wage Act. Plaintiffs seek judgment for damages, wage penalties and interest in an indeterminate amount. We have filed a Motion to Dismiss the Complaint on the basis that the applicable collective bargaining agreement requires any such claims to be arbitrated. We believe we have meritorious defenses to the lawsuit which we intend to vigorously pursue.

We commenced an action in June 2010 in the United States District Court for Puerto Rico seeking a declaratory judgment that Puerto Rico’s distributorship laws do not apply to our relationship with an international representative located in Puerto Rico. In September 2010, that international representative filed a number of counterclaims against Royal Caribbean Cruises Ltd. and Celebrity Cruises Inc. alleging violations of Puerto Rico’s distributorship laws, bad faith breach of contract, tortious interference with contract, violations of various federal and state antitrust and unfair competition laws. The international representative is seeking in excess of $40.0 million on each of these counterclaims together with treble damages in the amount of $120.0 million on several of the counterclaims as well as injunctive relief and declaratory judgment. We believe that the claims made against us are without merit and we intend to vigorously defend ourselves against them.

In January 2010, we reached a settlement with Rolls Royce in our lawsuit that was pending in the Circuit Court for Miami-Dade County, Florida against Rolls Royce for the recurring Mermaid pod failures. As part of the settlement, each party dismissed the lawsuit with prejudice and released the other from all claims and counterclaims made by each party against the other. Under the terms of the settlement, we received a payment in the first quarter of 2010 of approximately $68.0 million, net of costs and payments to insurers, and will receive an additional $20.0 million that will be payable within five years. We recorded a one-time gain of approximately $85.6 million in the first quarter of 2010 in connection with this settlement, comprised of the $68.0 million payment and the net present value of the $20.0 million receivable or $17.6 million. This amount was recognized within other income (expense) in our consolidated financial statements.

We are routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

Operating Leases

In July 2002, we entered into an operating lease denominated in British pound sterling for the Brilliance of the Seas. The lease payments vary based on sterling LIBOR. The lease has a contractual life of 25 years; however, both the lessor and we have certain rights to cancel the lease at years 10 (i.e. 2012) and 18 (i.e. 2020) upon advance notice given approximately one year prior to cancellation. Accordingly, at the inception of the lease, the lease term for accounting purposes was established to be 10 years. In June 2011, the lessor advised us that it would not exercise its right to cancel the lease in 2012 and we subsequently made a determination that we will not exercise our right to cancel the lease in 2012. As a result, we performed a lease classification analysis and concluded that the lease should continue to be classified as an operating lease. In the event of early termination at year 18, we have the option to cause the sale of the vessel at its fair value and to use the proceeds towards the applicable termination payment. Alternatively, we could opt at such time to make a termination payment of approximately £66.8 million, or approximately $103.8 million based on the exchange rate at December 31, 2011 and relinquish our right to cause the sale of the vessel. This is analogous to a guaranteed residual value. This termination amount, which is our maximum exposure, has been included in the table below for noncancelable operating leases. Under current circumstances we do not believe early termination of this lease is probable.

Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable determinations which may be made by United Kingdom tax authorities. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances, timing or a combination of events that could trigger such indemnifications. We have been advised by the lessor that the United Kingdom tax authorities are disputing the lessor’s accounting treatment of the lease and that the parties are in discussions on the matter. If the characterization of the lease is ultimately determined to be incorrect, we could be required to indemnify the lessor under certain circumstances. The lessor has advised us that they believe their characterization of the lease is correct. Based on the foregoing and our review of available information, we do not believe an indemnification payment is probable. However, if the lessor loses its dispute and we are required to indemnify the lessor, we cannot at this time predict the impact that such an occurrence would have on our financial condition and results of operations.

In addition, we are obligated under other noncancelable operating leases primarily for offices, warehouses and motor vehicles. As of December 31, 2011, future minimum lease payments under noncancelable operating leases were as follows (in thousands):

Year
2012	$	65,435
2013		62,881
2014		57,264
2015		56,210
2016		54,937
Thereafter		386,394
	$	683,121

Total expense for all operating leases amounted to $60.2 million, $50.8 million and $54.2 million for the years 2011, 2010 and 2009, respectively.

Other

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable.

If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 30% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

At December 31, 2011, we have future commitments to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts as follows (in thousands):

Year
2012	$	195,680
2013		159,602
2014		93,013
2015		86,145
2016		54,595
Thereafter		157,737
	$	746,772

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2011

Useful Lives of Property and Equipment Used in Computation of Depreciation

Depreciation of property and equipment is computed utilizing the following useful lives:

	Years
Ships	30
Ship improvements	Shorter of remaining ship life or useful life (3-20)
Buildings and improvements	10-40
Computer hardware and software	3-5
Transportation equipment and other	3-30
Leasehold improvements	Shorter of remaining lease term or useful life (3-30)

Passenger Ticket Revenues Attributed to Geographic Areas Based on Where Reservation Originates

Information by geographic area is shown in the table below. Passenger ticket revenues are attributed to geographic areas based on where the reservation originates.

	2011			2010			2009
Passenger ticket revenues:
United States		51	%		55	%		54	%
All other countries		49	%		45	%		46	%

XML

Long-Term Debt - Additional Information (Detail) In Millions, unless otherwise specified	12 Months Ended																				12 Months Ended				12 Months Ended
	Dec. 31, 2011 Lower Limit	Dec. 31, 2011 Lower Limit Up-front Payment Arrangement	Dec. 31, 2011 Upper Limit	Dec. 31, 2011 Upper Limit Up-front Payment Arrangement	Dec. 31, 2011 Unsecured Revolving Credit Facility Debt Instrument Amended And Restated	Dec. 31, 2010 Unsecured Revolving Credit Facility Debt Instrument Amended And Restated	Dec. 31, 2011 Unsecured Revolving Credit Facility Debt Instrument Amended And Restated Before Amendment USD ($)	Dec. 31, 2011 Unsecured Revolving Credit Facility Debt Instrument Amended And Restated After Amendment USD ($)	Dec. 31, 2011 Unsecured Term Loan Facility USD ($)	Dec. 31, 2011 Unsecured Term Loan Facility Before Amendment	Dec. 31, 2011 Unsecured Term Loan Facility After Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Debt Instrument Amended And Restated USD ($)	Dec. 31, 2011 Unsecured Term Loan Facility Debt Instrument Amended And Restated LIBOR Before Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Debt Instrument Amended And Restated LIBOR After Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Oasis of the Seas Debt Instrument Amended And Restated Variable Rate Debt EUR (€)	Dec. 31, 2011 Unsecured Term Loan Facility Oasis of the Seas Debt Instrument Amended And Restated LIBOR Before Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Oasis of the Seas Debt Instrument Amended And Restated LIBOR After Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Oasis of the Seas Debt Instrument Amended And Restated LIBOR Variable Rate Debt USD ($)	Dec. 31, 2011 Unsecured Term Loan Facility Oasis of the Seas Debt Instrument Amended And Restated Euribor Future Before Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Oasis of the Seas Debt Instrument Amended And Restated Euribor Future After Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Allure Of The Seas USD ($)	Dec. 31, 2011 Unsecured Term Loan Facility Allure Of The Seas LIBOR	Dec. 31, 2011 Unsecured Term Loan Facility Allure Of The Seas Debt Instrument Amended And Restated LIBOR Before Amendment	Dec. 31, 2011 Unsecured Term Loan Facility Allure Of The Seas Debt Instrument Amended And Restated LIBOR After Amendment	Dec. 31, 2011 Celebrity Silhouette USD ($)	Dec. 31, 2011 Royal Caribbean International Cruise Ships EUR (€)	Dec. 31, 2011 Royal Caribbean International Cruise Ships Long-term Debt, Fixed Rate	Dec. 31, 2011 Royal Caribbean International Cruise Ships First New Generation	Dec. 31, 2011 Royal Caribbean International Cruise Ships Second New Generation	Dec. 31, 2008 Celebrity Reflection	Dec. 31, 2008 Celebrity Reflection Long-term Debt, Fixed Rate
Debt Instrument [Line Items]
Scheduled to enter service																												Third quarter of 2014	Second quarter of 2015	Fourth quarter of 2012
Debt termination month and year							2012-06	2016-07		2011-09	2013-09
Percentage of purchase price provided by the loan agreement																														80.00%
Long term debt							$ 1,225.0	$ 875.0	$ 100.0			$ 1,100.0			€ 159.4			$ 420.0							$ 632.0	€ 595.0
Percentage of loan subject to syndication prior to delivery																										50.00%
Percentage of unsecured term loan guaranteed by Hermes																									95.00%	95.00%				95.00%
Unsecured term loan, amortization period (in year)																									12 years	12 years				12 years
Additional interest					2.00%	0.80%							3.00%	2.75%		3.00%	2.10%		2.25%	1.58%			2.20%	2.10%	0.40%	1.30%				0.40%
Unsecured term loan, interest rate					2.28%																	2.71%			0.81%		4.76%				4.13%
Unsecured revolving credit facility fee					0.42%	0.20%
Repayment of term loan																					$ 200
Credit agency fees, percentage of outstanding loan balance	1.13%		1.96%
Credit agency fees, percentage of maximum loan amount payable		2.30%		2.37%

XML

Passenger Ticket Revenues Attributed to Geographic Areas Based on Where Reservation Originates (Detail)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
United States
Passengers ticket revenue, percentage
Passengers ticket revenue, percentage	51.00%	55.00%	54.00%
All other countries
Passengers ticket revenue, percentage
Passengers ticket revenue, percentage	49.00%	45.00%	46.00%

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating Activities
Net income	$ 607,421	$ 515,653	$ 152,485
Adjustments:
Depreciation and amortization	702,426	643,716	568,214
(Gain) loss on fuel call options	(18,920)	2,826	2,538
Changes in operating assets and liabilities:
Decrease (increase) in trade and other receivables, net	87,872	146,498	(3,633)
Increase in inventories	(18,423)	(20,274)	(11,295)
Increase in prepaid expenses and other assets	(17,052)	(10,954)	(3,085)
Increase (decrease) in accounts payable	56,755	(15,507)	16,424
(Decrease) increase in accrued interest	(28,553)	13,359	18,668
Increase in accrued expenses and other liabilities	25,318	71,969	16,258
Increase in customer deposits	19,482	135,975	32,038
Cash received on early settlement of derivative financial instruments	12,200	172,993
Dividends received from unconsolidated affiliates	21,147
Other, net	6,066	6,765	56,269
Net cash provided by operating activities	1,455,739	1,663,019	844,881
Investing Activities
Purchases of property and equipment	(1,173,626)	(2,187,189)	(2,477,549)
Cash received (paid) on settlement of derivative financial instruments	16,307	(91,325)	110,830
Loans and equity contributions to unconsolidated affiliates	(110,660)		(181,683)
Proceeds from sale of ships	345,000		290,928
Other, net	(1,586)	(9,404)	(16,983)
Net cash used in investing activities	(924,565)	(2,287,918)	(2,274,457)
Financing Activities
Debt proceeds	1,578,368	2,420,262	2,317,158
Debt issuance costs	(84,381)	(90,782)	(61,157)
Repayments of debt	(2,179,046)	(1,600,265)	(948,467)
Dividends paid	(21,707)
Proceeds from exercise of common stock options	19,463	26,158	569
Other, net	10,788	1,587	4,103
Net cash (used in) provided by financing activities	(676,515)	756,960	1,312,206
Effect of exchange rate changes on cash	(12,402)	3,249	(889)
Net (decrease) increase in cash and cash equivalents	(157,743)	135,310	(118,259)
Cash and cash equivalents at beginning of year	419,929	284,619	402,878
Cash and cash equivalents at end of year	262,186	419,929	284,619
Cash paid during the year for:
Interest, net of amount capitalized	$ 360,892	$ 297,477	$ 288,458

XML

Goodwill

12 Months Ended

Dec. 31, 2011

Goodwill

Note 3. Goodwill

In 2011, 2010 and 2009, we completed our annual goodwill impairment test and determined there was no impairment. The carrying amount of goodwill attributable to our Royal Caribbean International and the Pullmantur reporting units was as follows (in thousands):

	Royal Caribbean International		Pullmantur			Total
Balance at December 31, 2009		283,723		508,650			792,373
Foreign currency translation adjustment		—		(33,045	)		(33,045	)
Balance at December 31, 2010	$	283,723	$	475,605		$	759,328
Foreign currency translation adjustment		—		(12,791	)		(12,791	)
Balance at December 31, 2011	$	283,723	$	462,814		$	746,537

During the fourth quarter of 2011, we performed a qualitative assessment of whether it was more-likely-than-not that our Royal Caribbean International reporting unit’s fair value was less than its carrying amount before applying the two-step goodwill impairment test. The qualitative analysis included assessing the impact of certain factors such as general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. Based on our qualitative assessment, we concluded that it was more-likely-than-not that the estimated fair value of the Royal Caribbean International reporting unit exceeded its carrying value as of December 31, 2011 and thus, did not proceed to the two-step goodwill impairment test. No indicators of impairment exist primarily because the reporting unit’s fair value has consistently exceeded its carrying value by a significant margin, its financial performance has been solid in the face of mixed economic environments and forecasts of operating results generated by the reporting unit appear sufficient to support its carrying value.

In addition, during the fourth quarter of 2011, we performed our annual impairment review of goodwill for Pullmantur’s reporting unit. We did not perform a qualitative assessment but instead proceeded directly to the two-step goodwill impairment test. We estimated the fair value of the Pullmantur reporting unit using a probability-weighted discounted cash flow model. The principal assumptions used in the discounted cash flow model are projected operating results, weighted-average cost of capital, and terminal value. Significantly impacting these assumptions are the transfer of vessels from our other cruise brands to Pullmantur. Cash flows were calculated using our 2012 projected operating results as a base. To that base we added future years’ cash flows assuming multiple revenue and expense scenarios that reflect the impact on Pullmantur’s reporting unit of different global economic environments beyond 2012. We assigned a probability to each revenue and expense scenario.

We discounted the projected cash flows using rates specific to Pullmantur’s reporting unit based on its weighted-average cost of capital. Based on the probability-weighted discounted cash flows we determined the fair value of the Pullmantur reporting unit exceeded its carrying value. Therefore, we did not proceed to step two of the impairment analysis and we do not consider goodwill to be impaired.

The estimation of fair value utilizing discounted expected future cash flows includes numerous uncertainties which require our significant judgment when making assumptions of expected revenues, operating costs, marketing, selling and administrative expenses, interest rates, ship additions and retirements as well as assumptions regarding the cruise vacation industry’s competitive environment and general economic and business conditions, among other factors. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets. European economies continue to demonstrate instability in light of heightened concerns over sovereign debt issues as well as the impact that proposed austerity measures will have on certain markets. The Spanish economy has been more severely impacted than many other economies around the world where we operate and there is significant uncertainty as to whether or when it will recover. In addition, the recent Costa Concordia incident is having a near term negative impact on our earnings in 2012 while the impact in future years is uncertain. If the Spanish economy weakens further or recovers more slowly than contemplated in our discounted cash flow model, if there are relatively modest changes to our projected future cash flows used in the impairment analyses, especially in Net Yields, or if certain transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur’s reporting unit’s goodwill may be required.

XML

Earnings Per Share - Additional Information (Detail) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares not included in diluted earnings per share	2.8	2.6	5.0

XML

Effect of Derivative Instruments Qualifying and Designated as Hedging Instruments in Cash Flow Hedges on the Consolidated Financial Statements (Detail) (Cash Flow Hedging, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	$ 70,480	$ (54,877)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	146,586	68,303
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing)	6,050	7,986
Cross currency swaps | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	(6,013)	13,016
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(15,011)	26,360
Interest rate swaps | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	(10,131)
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing)	(21)
Foreign currency forward contracts | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	(12,375)	(21,021)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(285)	1,051
Foreign currency forward contracts | Depreciation and amortization expenses
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	(22,263)	(83,601)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(734)	227
Foreign currency forward contracts | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing)	(1,015)	207
Fuel swaps | Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing)	7,086	7,779
Fuel swaps | Fuel
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	121,262	36,729
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	$ 162,616	$ 40,665

XML

Goodwill (Tables)

12 Months Ended

Dec. 31, 2011

Carrying Amount of Goodwill

The carrying amount of goodwill attributable to our Royal Caribbean International and the Pullmantur reporting units was as follows (in thousands):

	Royal Caribbean International		Pullmantur			Total
Balance at December 31, 2009		283,723		508,650			792,373
Foreign currency translation adjustment		—		(33,045	)		(33,045	)
Balance at December 31, 2010	$	283,723	$	475,605		$	759,328
Foreign currency translation adjustment		—		(12,791	)		(12,791	)
Balance at December 31, 2011	$	283,723	$	462,814		$	746,537

XML

Future Commitments to Pay for Usage of Certain Port Facilities, Marine Consumables, Services and Maintenance Contracts (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Commitments and Contingencies Disclosure [Line Items]
2012	$ 195,680
2013	159,602
2014	93,013
2015	86,145
2016	54,595
Thereafter	157,737
Future Non Cancelable Purchase Commitments, Total	$ 746,772

XML

Effect of Correction on the Individual Line Items within Operating Cash Flows on the Company's Consolidated Statement of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended										12 Months Ended
	Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010		Dec. 31, 2009
Net income	$ 78,410	[1],[2]	$ 31,900	[1],[2]	$ 350,179	[1],[2]	$ 53,731	[1],[2]	$ 79,843	[1],[2]	$ 607,421	$ 515,653		$ 152,485
Increase in accrued expenses and other liabilities											25,318	71,969		16,258
Other, net											6,066	6,765		56,269
As Previously Reported
Net income	91,552		42,707		356,767		60,546		87,447			547,467		162,421
Increase in accrued expenses and other liabilities												72,161		15,391
Other, net												(22,415)		49,738
Adjustment
Net income	(13,142)		(10,807)		(6,588)		(6,815)		(7,604)			(31,814)		(9,936)
Increase in accrued expenses and other liabilities												(192)		867
Other, net												32,006		9,069
Reclassifications
Other, net												$ (2,826)	[3]	$ (2,538)	[3]

[1] Amounts for 2010 and amounts for the first quarter of 2011 include a revision for the correction of an error in the manner in which we were amortizing certain guarantee fees. Refer to the tables below which present the effects of the revision on the Company's Consolidated Statements of Operations for these respective periods.

[2] The first quarter of 2010 included a one-time gain of approximately $85.6 million, net of costs and payments to insurers, related to the settlement of our case against Rolls Royce.

[3] Please refer to Note 2. Summary of Significant Accounting Policies for discussion.

XML

Fair Value Measurements and Derivative Instruments

12 Months Ended

Dec. 31, 2011

Fair Value Measurements and Derivative Instruments

Note 13. Fair Value Measurements and Derivative Instruments

Fair Value Measurements

We use quoted prices in active markets when available to estimate the fair value of our financial instruments. The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis are as follows (in thousands):

	At December  31, 2011		At December  31, 2010
Long-term debt (including current portion of long-term debt)	$	8,617,176	$	8,775,875

Long-Term Debt

The fair values of our senior notes and senior debentures were estimated by obtaining quoted market prices. The fair values of all other debt were estimated using the present value of expected future cash flows which incorporates our risk profile.

Other Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at December 31, 2011 and December 31, 2010.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at December 31, 2011 Using								Fair Value Measurements at December 31, 2010 Using
Description	Total		Level 11		Level 22		Level 33		Total		Level 11		Level 22		Level 33
Assets:
Derivative financial instruments4	$	201,130		—		201,130		—	$	195,944		—		195,944		—
Investments5	$	6,941		6,941		—		—	$	7,974		7,974		—		—
Total Assets	$	208,071	$	6,941	$	201,130	$	—	$	203,918	$	7,974	$	195,944	$	—
Liabilities:
Derivative financial instruments6	$	84,344		—		84,344		—	$	88,491		—		88,491		—
Total Liabilities	$	84,344	$	—	$	84,344	$	—	$	88,491	$	—	$	88,491	$	—

^1.  Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

^2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate, cross currency and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms such as maturity, as well as other inputs such as exchange rates, fuel types, fuel curves, interest rate yield curves, creditworthiness of the counterparty and the Company. For fuel call options, fair value is estimated by using the prevailing market price for the instruments consisting of published price quotes for similar assets based on recent transactions in an active market^.

^3.  Inputs that are unobservable for the asset or liability^. The Company did not use any Level 3 inputs as of December 31, 2011 and December 31, 2010.

^4.  Consists of foreign currency forward contracts, interest rate, cross currency, fuel swaps and fuel call options. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

^5.  Consists of exchange-traded equity securities and mutual funds.

^6.  Consists of interest rate and fuel swaps and foreign currency forward contracts. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

We do not have financial instruments measured at fair value within the third level of the fair value hierarchy as of December 31, 2011. During the fourth quarter of 2010, we changed our valuation technique for fuel call options to a market approach method which employs inputs that are observable. The fair value for fuel call options is estimated by using the prevailing market price for the instruments consisting of published price quotes for similar assets based on recent transactions in an active market. We believe that Level 2 categorization is appropriate due to an increase in the observability and transparency of significant inputs. Previously, we derived the fair value of our fuel call options using standard option pricing models with inputs based on the options’ contract terms and data either readily available or formulated from public market information. We previously categorized the fuel call options as Level 3, because certain inputs, principally volatility, were unobservable.

The following table presents a reconciliation of the Company’s fuel call options’ beginning and ending balances as of December 31, 2010 (in thousands):

Year Ended December 31, 2010	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fuel Call Options
Balance at January 1, 2010	$	9,998
Total gains or losses (realized /unrealized)
Included in other (expense) income		(2,824	)
Purchases		24,539
Transfers in and/or out of Level 3		(31,713	)
Balance at December 31, 2010	$	—
The amount of total gains or losses for the period included in other (expense) income attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	(2,824	)

The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of December 31, 2011 or December 31, 2010, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

Derivative Instruments

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We manage these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the amount, term and conditions of the derivative instrument with the underlying risk being hedged. We do not hold or issue derivative financial instruments for trading or other speculative purposes. We monitor our derivative positions using techniques including market valuations and sensitivity analyses.

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments.

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in foreign operations and investments are recognized as a component of accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation.

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e. interest rate, foreign currency and fuel). We perform regression analyses over an observation period commensurate with the contractual life of the derivative instrument, up to three years for interest rate and foreign currency relationships and four years for fuel relationships. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. The determination of ineffectiveness is based on the amount of dollar offset between the change in fair value of the derivative instrument and the change in fair value of the hedged item at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is recognized in earnings immediately and reported in other income (expense) in our consolidated statements of operations.

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments. At December 31, 2011, approximately 40% of our long-term debt was effectively fixed and approximately 60% was floating as compared to 49% and 51% as of December 31, 2010, respectively. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense. We manage the risk that changes in interest rates will have either on the fair value of debt obligations or on the amount of future interest payments by monitoring changes in interest rate exposures and by evaluating hedging opportunities.

Market risk associated with our long-term fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At December 31, 2011 and 2010, we maintained interest rate swap agreements that effectively changed $350.0 million of debt with a fixed rate of 7.25% to LIBOR-based floating rate debt plus a margin of 1.72%, for an interest rate that was approximately 2.49% as of December 31, 2011. Additionally, during 2011, we entered into interest rate swap agreements on the $420.0 million fixed rate portion of our Oasis of the Seas unsecured amortizing term loan. The interest rate swap agreements effectively changed the unamortized balance of the unsecured term loan, which was $350.0 million at inception of the hedge, with a fixed rate of 5.41% to LIBOR-based floating rate equal to LIBOR plus 3.87%, currently approximately 4.48%. These interest rate swap agreements are accounted for as fair value hedges.

Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. During 2011, we entered into forward-starting interest rate swap agreements that beginning April 2013 effectively convert the interest rate on the Celebrity Reflection unsecured amortizing term loan balance for approximately $627.2 million from LIBOR plus 0.40% to a fixed-rate of 2.85% (inclusive of margin). These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of outstanding debt and on our current financing arrangements related to interest rate swaps as of December 31, 2011 and 2010 was $1.3 billion and $350.0 million, respectively.

Foreign Currency Exchange Rate Risk

Derivative Instruments

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in euros and our growing international business operations. We enter into foreign currency forward contracts and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates. Approximately 43.3% and 2.2% of the aggregate cost of the ships under construction was exposed to fluctuations in the euro exchange rate at December 31, 2011 and December 31, 2010, respectively. The majority of our foreign exchange contracts and our cross currency swap agreements are accounted for as cash flow or fair value hedges depending on the designation of the related hedge.

During 2011, we implemented a strategy for benefiting from anticipated weakness in the euro exchange rate. As part of that strategy we terminated our foreign currency forward contracts for Project Sunshine to allow the exchange rate to float within a predetermined range, essentially creating a floor and a ceiling around our exposure to the euro denominated cost of the vessel. We may adjust the range over time as we feel appropriate. We effected the termination of a portion of the contracts by entering into offsetting foreign currency forward contracts. Neither the original nor the offsetting foreign currency forward contracts are designated as hedging instruments. As a result, subsequent changes in the fair value of the original and offsetting foreign currency forward contracts are recognized in earnings immediately and are reported within other income (expense) in our consolidated statement of operations. We paid $8.7 million to terminate the remaining contracts and deferred a loss of $19.7 million within accumulated other comprehensive income (loss) which we will recognize within depreciation expense over the estimated useful life of the Project Sunshine ship.

At December 31, 2011, we maintained cross currency swap agreements that effectively change €150.0 million of our €1.0 billion debt with a fixed rate of 5.625% to $190.9 million of debt at a fixed rate of 6.68%. Consistent with our strategy for benefiting from anticipated weakness in the euro exchange rate and to further increase the portion of our €1.0 billion debt that we utilize as a net investment hedge of our euro denominated investments in foreign operations, during 2011, we terminated €250.0 million of our cross currency swap agreements. Upon termination of these cross currency swaps, we received net cash proceeds of approximately $12.2 million and we deferred a loss of $3.5 million within accumulated other comprehensive income (loss) which we will recognize within Interest expense, net of capitalized interest over the remaining life of the debt.

During 2011, we entered into foreign currency forward contracts to minimize volatility in earnings resulting from the remeasurement of net monetary assets and payables denominated in a currency other than the United States dollar. On a weekly basis, we enter into an average of approximately $262.0 million of these foreign currency forward contracts. These instruments generally settle on a weekly basis and are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts are recognized in earnings within other income (expense) in our consolidated statements of operations.

The notional amount of outstanding foreign exchange contracts including our cross currency swap agreements as of December 31, 2011 and 2010 was $0.9 billion and $2.5 billion, respectively.

Non-Derivative Instruments

We consider our investments in our foreign operations to be denominated in relatively stable currencies and of a long-term nature. We partially address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies. As of December 31, 2011 and 2010, we have assigned debt of approximately €665.0 million and €469.3 million, or approximately $863.2 million and $628.2 million, respectively, as a hedge of our net investment in Pullmantur and TUI Cruises.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements and fuel call options to mitigate the financial impact of fluctuations in fuel prices.

Our fuel swap agreements are accounted for as cash flow hedges. At December 31, 2011, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2015. As of December 31, 2011 and 2010, we have entered into the following fuel swap agreements:

	Fuel Swap Agreements
	As of December 31, 2011			As of December 31, 2010
	(metric tons)
2011		—			766,000
2012		738,000			738,000
2013		644,000			300,000
2014		418,000			—
2015		284,000			—
	Fuel Swap Agreements
Projected fuel purchases for year:	As of December 31, 2011			As of December 31, 2010
	(% hedged)
2011		0	%		58	%
2012		55	%		55	%
2013		47	%		22	%
2014		30	%		—
2015		20	%		—

At December 31, 2011 and 2010, $78.5 million and $83.6 million, respectively, of estimated unrealized net gains associated with our cash flow hedges pertaining to fuel swap agreements were expected to be reclassified to earnings from other accumulated comprehensive (loss) income within the next twelve months. Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.

Additionally, as of December 31, 2011 and 2010, we have entered into fuel call options on a total of 1.0 million barrels of fuel oil which mature in 2013, and 6.6 million barrels, maturing between 2011 and 2013, respectively, in order to provide protection in the event fuel prices exceed the options’ exercise prices. Our fuel call options are not designated as hedging instruments. As a result, changes in the fair value of our fuel call options are recognized in earnings immediately and are reported in other income (expense) in our consolidated statements of operations. During 2011, we terminated 100% of our fuel call options maturing in 2011 and 2012 in order to monetize previously recorded gains pertaining to the fuel call options’ fair value prior to their expiration. Upon termination of these options, we recognized a gain of approximately $7.3 million and received net cash proceeds of approximately $34.3 million which were reflected as cash flows from investing activities. We accounted for the settlement of these fuel call options by recording the cash received and removing the fair value of the instrument from our balance sheet. As of December 31, 2011, the fuel call options represented 9% of our projected 2013 fuel requirements. As of December 31, 2010, the fuel call options represented 41% of our projected 2011 fuel requirements, 25% of our projected 2012 fuel requirements and 11% of our projected 2013 fuel requirements.

The fair value and line item caption of derivative instruments recorded were as follows:

Fair Value of Derivative Instruments

	Asset Derivatives					Liability Derivatives
		As of December 31, 2011		As of December 31, 2010			As of December 31, 2011		As of December 31, 2010
	Balance Sheet Location	Fair Value		Fair Value		Balance Sheet Location	Fair Value		Fair Value
In thousands
Derivatives designated as hedging instruments under ASC 815-201
Interest rate swaps	Other Assets	$	65,531	$	56,497	Other long- term liabilities	$	11,369	$	—
Cross currency swaps	Other Assets		2,914		13,017	Other long- term liabilities		—		—
Foreign currency forward contracts	Derivative Financial Instruments		1,895		—	Accrued expenses and other liabilities		31,775		68,374
Foreign currency forward contracts	Other Assets		—		8,058	Other long- term liabilities		—		19,630
Fuel swaps	Derivative Financial Instruments		82,747		49,297	Accrued expenses and other liabilities		—		—
Fuel swaps	Other Assets		26,258		37,362	Other long- term liabilities		29,213		487
Total derivatives designated as hedging instruments under 815-20		$	179,345	$	164,231		$	72,357	$	88,491
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Other Assets	$	5,414	$	—	Other long- term liabilities	$	11,987	$	—
Fuel call options	Derivative Financial Instruments		—		7,194	Accrued expenses and other liabilities		—		—
Fuel call options	Other Assets		16,371		24,519	Other long- term liabilities		—		—
Total derivatives not designated as hedging instruments under 815-20		$	21,785	$	31,713		$	11,987	$	—
Total derivatives		$	201,130	$	195,944		$	84,344	$	88,491

¹ Accounting Standard Codification 815-20 “Derivatives and Hedging”.

The fair value and line item caption of non-derivative instruments recorded was as follows:

Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	Carrying Value
		As of December 31, 2011		As of December 31, 2010
In thousands
Foreign currency debt	Long-term debt	$	863,217	$	628,172
		$	863,217	$	628,172

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statement of operations was as follows:

Derivatives and related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of  Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative					Amount of Gain (Loss) Recognized in Income on Hedged Item
		Year Ended December 31, 2011		Year Ended December 31, 2010			Year Ended December 31, 2011			Year Ended December 31, 2010
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	18,278	$	32,340		$	31,045		$	20,443
Cross currency swaps	Interest expense, net of interest capitalized		—		987			—			—
Interest rate swaps	Other income (expense)		7,817		22,929			(7,223	)		(21,383	)
Cross currency swaps	Other income (expense)		—		(42,284	)		—			47,715
Foreign currency forward contracts	Other income (expense)		22,901		(62,520	)		(23,720	)		63,026
		$	48,996	$	(48,548	)	$	102		$	109,801

The effect of derivative instruments qualifying and designated as hedging instruments in cash flow hedges on the consolidated financial statements was as follows:

Derivatives under ASC 815- 20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)						Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)					Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing)
	Year Ended December 31, 2011			Year Ended December 31, 2010				Year Ended December 31, 2011			Year Ended December 31, 2010			Year Ended December 31, 2011			Year Ended December 31, 2010
In thousands
Cross currency swaps		(6,013	)		13,016		Other income (expense)		(15,011	)		26,360	Other income (expense)		—			—
Interest rate swaps		(10,131	)		—		Other income (expense)		—			—	Other income (expense)		(21	)		—
Foreign currency forward contracts		(22,263	)		(83,601	)	Depreciation and amortization expenses		(734	)		227	Other income (expense)		(1,015	)		207
Foreign currency forward contracts		(12,375	)		(21,021	)	Other income (expense)		(285	)		1,051	Other income (expense)		—			—
Fuel swaps		121,262			36,729		Fuel		162,616			40,665	Other income (expense)		7,086			7,779
	$	70,480		$	(54,877	)		$	146,586		$	68,303		$	6,050		$	7,986

The effect of non-derivative instruments qualifying and designated as hedging instruments in net investment hedges on the consolidated financial statements was as follows:

Non-derivative instruments under ASC 815-20 Net Investment Hedging Relationships	Amount of Gain  (Loss) Recognized in OCI (Effective Portion)				Location of Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Year Ended December 31, 2011		Year Ended December 31, 2010			Year Ended December 31, 2011		Year Ended December 31, 2010
In thousands
Foreign Currency Debt	$	13,241	$	49,727	Other income (expense)	$	—	$	—
	$	13,241	$	49,727		$	—	$	—

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows:

Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income  on Derivative
		Year Ended December 31, 2011		Year Ended December 31, 2010
In thousands
Foreign exchange contracts	Other income (expense)	$	4,633	$	(50	)
Fuel call options	Other income (expense)		18,915		(2,824	)
		$	23,548	$	(2,874	)

Credit Related Contingent Features

Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings remain below specified levels. Specifically, if on the fifth anniversary of entering into a derivative transaction and on all succeeding fifth-year anniversaries our credit ratings for our senior unsecured debt were to be below BBB- by Standard & Poor’s and Baa3 by Moody’s, then each counterparty to such derivative transaction with whom we are in a net liability position that exceeds the applicable minimum call amount may demand that we post collateral in an amount equal to the net liability position. The amount of collateral required to be posted following such event will change each time our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior debt is subsequently equal to, or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. Currently, our senior unsecured debt credit rating is BB with a stable outlook by Standard & Poor’s and Ba2 with a stable outlook by Moody’s. We currently have three interest rate derivative transactions that have a term of at least five years. One of these transactions will reach its fifth anniversary in July 2012. All of the instruments relating to this transaction are in a net asset position as of December 31, 2011. Therefore, as of December 31, 2011, we are not required to post collateral for any of our derivative instruments.