Ambassadors International to Acquire American West Cruises

Ambassadors International, Inc. announced has signed a definitive agreement to acquire 100% of the membership interests of American West Steamboat Company LLC and related entities from Oregon Rail Holdings, LLC. Founded in 1995, American West Cruises currently operates two vessels, the 231-passenger Empress of the North and the 150-passenger Queen of the West. American West Cruises' voyages are exemplified by their Cruise Into History experience in which guests and crew recreate the grandeur of the past on the company's modern-day sternwheelers with onboard historians and naturalists, visiting historical points of interest and cruising through natural scenic wonders. The company announced that David Giersdorf will join the Company as President and Chief Operating Officer of Ambassadors Cruise Group, LLC, a wholly-owned subsidiary of the Company established to own and operate American West Cruises. Mr. Giersdorf is a well-known and respected cruise industry executive. He 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. Mr. Giersdorf served as Chairman of Cruise Lines International Association in 2004. From 1989 to 1991, he held the position of Vice President, Windstar Cruises. Mr. Giersdorf has over 30 years of operational and marketing experience in the cruise and tour industries. During his career, Mr. Giersdorf has also successfully operated a number of entrepreneurial marketing, advertising and tour and 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% 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.