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December 28, 2005

Ambassadors to buy American West Steamboat

Travel and event management specialist Ambassadors International, Inc. (Nasdaq: AMIE) has signed a definitive agreement to acquire 100 percent of the membership interests of Seattle-based American West Steamboat Company LLC and related entities ("American West Cruises") from Oregon Rail Holdings, LLC.

American West Cruises, founded in 1995, currently operates two vessels, the 231-passenger Empress of the North, built in 2003 and the 150-passenger Queen of the West, built in 1995. Both are authentic replicas of historic sternwheelers, though they are not steam driven.

The Queen of the West offers sternwheeler cruising on the the Columbia, Willamette and Snake Rivers. The Empress of the North is the first sternwheeler to sail Alaska's Inside Passage in over 100 years.

Ambassadors has hired cruise industry veteran David Giersdorf to be President and COO of Ambassadors Cruise Group, LLC, a wholly-owned subsidiary set up to own and operate American West Cruises.

Giersdorf was most recently Executive Vice President, Marketing and Sales for Holland America Line Inc., part of Carnival Corporation's family of cruise lines.

From 1999 to 2004, Mr. Giersdorf was responsible for global brand management, product planning, revenue management, sales, distribution and public relations for Holland America and its subsidiary companies Windstar Cruises and Holland America Tours.

Giersdorf served as Chairman of Cruise Lines International Association in 2004. cruise companies.

The transaction is subject to the approval of certain debt covenant amendments by the U.S. Department of Transportation, as well as customary closing conditions, and is expected to close during the first quarter of 2006.

Under the terms of the agreement, Ambassadors Cruise Group will acquire the membership interests of American West Cruises for one dollar, repay certain outstanding indebtedness of approximately $4.3 million currently held by American West Cruises and assume approximately $41.5 million in fixed-rate, 4.63 percent debt payable through 2028 and guaranteed by the U.S. Maritime Administration. In addition, the transaction consideration consists of 250,000 shares of the company's restricted common stock, which is subject to forfeiture to the Company if certain future financial targets are not met during the four years following the close of the transaction.

Announcing the pending acquisition, Joe Ueberroth, President and CEO of Ambassadors, noted that the company "should be well positioned to acquire complementary companies in the niche cruise segment."

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