NOTE 11  COMMITMENTS AND CONTINGENCIES Fleet Expansion On March 16, 2020, the Company took possession of the National Geographic Endurance . The final balance due on the vessel, at the time of delivery, was primarily paid by borrowing $107.7 million under the Companys Export Credit Agreement (See Note 5  Long-term Debt for more information). In February 2019, the Company entered into an agreement, which was amended in December 2019, with Ulstein Verft, to construct a second polar ice class vessel, the National Geographic Resolution , with a total purchase price of 1,291.0 million NOK. The purchase price is subject to potential adjustments from contract specifications for variations in speed, dead weight, fuel consumption and delivery date. The purchase price is due in installments, with the first 20% paid shortly after execution of the agreement, 50% to be paid over the duration of the build, including $30.5 million paid in September of 2019, $30.6 million paid in April of 2020 and $15.5 million due in April 2021, and the final 30% due upon delivery and acceptance of the vessel. In March 2019, the Company entered into foreign exchange forward contracts to lock in a purchase price for the second polar ice class vessel of $153.5 million, subject to potential contract specification adjustments. The vessel is scheduled to be delivered in the fourth quarter of 2021. Royalty Agreement  National Geographic The Company is party to an alliance and license agreement with National Geographic, which allows the Company to use the National Geographic name and logo. In return for these rights, the Company is charged a royalty fee. The royalty fee is included within selling and marketing expense on the accompanying condensed consolidated statements of operations. The amount is calculated based upon a percentage of certain ticket revenues less travel agent commission, including the revenues received from cancellation fees and any revenues received from the sale of pre- and post-expedition extensions. Royalty expense for the three months ended March 31, 2020 and 2019 was $1.2 million and $1.4 million, respectively. The royalty balances outstanding to National Geographic as of March 31, 2020 and December 31, 2019 were $1.2 million and $2.2 million, respectively, and are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets. Royalty Agreement  World Wildlife Fund Natural Habitat has a license agreement with WWF, which allows it to use the WWF name and logo. In return for these rights, Natural Habitat is charged a royalty fee and a fee based on annual gross sales. The fees are included within selling and marketing expense on the accompanying condensed consolidated statements of operations. This royalty fee expense was $0.2 million for the three months ended March 31, 2020 and 2019. Charter Commitments From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions. Future minimum payments on its charter agreements as of March 31, 2020 are as follows: For the years ended December 31, Amount (In thousands) (unaudited) 2020 $ 6,538 2021 9,534 2022 1,850 Total $ 17,922 Natural Habitat Redeemable Non- Controlling Interest Mr. Bressler, founder of Natural Habitat, retains a 19.9% noncontrolling interest in Natural Habitat, which is subject to a put/call arrangement. The arrangement between the Company and Mr. Bressler was established in order to provide a formal exit opportunity for Mr. Bressler and a path to 100% ownership for the Company. Mr. Bressler has a put option, amended May 1, 2020, that under certain conditions and subject to providing notice by January 31, 2024, that enables him, but does not obligate him, to sell his remaining interest in Natural Habitat to the Company on December 31, 2023. The Company has a call option, but not an obligation, with an expiration of March 31, 2029, under which it can buy Mr. Bresslers remaining interest at a similar fair value measure as Mr. Bresslers put option, subject to a call purchase price minimum. Since the redemption of the noncontrolling interest is not solely in the Companys control, the Company is required to record the redeemable noncontrolling interest outside of stockholders equity but after its total liabilities. In addition, if it is probable that the instrument will become redeemable, as such solely due to the passage of time, the redeemable noncontrollable interest should be adjusted to the redemption value via one of two measurement methods. The Company elected the income classification-excess adjustment and accretion methods for recognizing changes in the redemption value of Mr. Bresslers put option. Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption values present value. Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the fair value of the noncontrolling interest, are classified to retained earnings. Adjustments in excess of the fair value of the noncontrolling interest, are treated as a decrease to net income available to common stockholders. The fair value of Mr. Bresslers put option was determined using a discounted cash flow model. The redemption value was adjusted to its present value using the Companys weighted average cost of capital. The following is a rollforward of redeemable non-controlling interest: Three Months Ended March 31, (In thousands) 2020 2019 (unaudited) (unaudited) Balance January 1, $ 16,112 $ 6,502 Net income attributable to noncontrolling interest (537 ) 406 Fair value adjustment of put option 901 - Balance March 31, $ 16,476 $ 6,908 Legal Proceedings  From time to time, the Company is party to litigation and regulatory matters and claims. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability will be incurred and the amount or range of the loss can be reasonably estimated. The results of complex proceedings and reviews are difficult to predict and the Companys view of these matters may change in the future as events related thereto unfold. An unfavorable outcome to any legal or regulatory matter, if material, could have an adverse effect on the Companys operations or its financial position, liquidity or results of operations.