Exhibit 10.5

RESTRICTED STOCK AGREEMENT

This Restricted Stock Agreement (this “Agreement”), dated as of April 25, 2006,
is entered into by and among Ambassadors International, Inc. (the “Company”) and
Delta Queen Steamboat Company, Inc., a Delaware corporation (“DQSC”), American
Queen Steamboat, LLC, a Delaware limited liability company (“AQS”), Delta Queen
Steamboat, LLC, a Delaware limited liability company (“DQS”), and Mississippi
Queen Steamboat, LLC, a Delaware limited liability company (“MQS” and,
collectively with DQSC, AQS, and DQS, the “Sellers,” and each individually, a
“Seller”).

RECITALS

WHEREAS, the Company is the owner of 100% of the equity interests of Ambassadors
Cruise Group, LLC, a Delaware limited liability company (“ACG”);

WHEREAS, the Sellers and ACG are parties to that certain Asset Purchase
Agreement, dated as of April 6, 2006 (the “Purchase Agreement”); and

WHEREAS, as partial consideration for the purchase by ACG of the Acquired Assets
(as defined in the Purchase Agreement), the Company has agreed to issue to DQSC
an aggregate of 100,000 unregistered shares of the Company’s common stock, par
value $0.01 per share (the “Restricted Shares”), upon the satisfaction of
certain conditions provided for in this Agreement.

ARTICLE I

ISSUANCE OF RESTRICTED SHARES

1.1 Issuance of Restricted Stock. The Company hereby agrees to issue to DQSC the
Restricted Shares, upon the terms and conditions set forth in this Agreement, if
the Net Revenue generated by DQSC for any one of calendar years 2007, 2008 or
2009 exceeds $115,000,000. Such issuance shall occur within thirty (30) days
after the Company’s first receipt of audited financial statements demonstrating
satisfaction of such condition. For avoidance of doubt, if the foregoing
condition is not satisfied following the Company’s receipt of audited financial
statements for the calendar year 2009, then DQSC shall not be entitled to
receive any Restricted Shares and this Agreement shall automatically terminate.

“Net Revenue” means Gross Revenue, less all discounts reasonably determined and
applied by ACG, including, but not limited to early booking discounts and group
discounts, credit card fees, commissions and other allowances. The Company
agrees not to, and agrees to cause ACG not to, undertake any action with the
intent of reducing or avoiding Net Revenue solely for the purpose of avoiding
the satisfaction of the foregoing conditions.

“Gross Revenue” means all revenue including but not limited to fare revenue,
onboard revenue, passenger air revenue, cancellations, insurance and land based
revenue.

1.2 Conditions to Issuance of Stock Certificates. The Restricted Shares, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have been reacquired by the Company. Such Restricted Shares
shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any Restricted Shares prior

 

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to the obtaining of any approval or other clearance from any state or federal
governmental agency which the Company shall, in its absolute discretion,
determine to be necessary or advisable.

1.3 Rights as Stockholder. Except as otherwise provided herein, until the
issuance of the Restricted Shares, DQSC shall not have any of the rights of a
stockholder with respect to said Restricted Shares.

1.4 Shares Freely Tradable. On or prior to the ninetieth day after the issuance
of the Restricted Shares, the Company shall prepare and file with the Securities
and Exchange Commission (the “SEC”) a registration statement on Form S-3 (a
“Registration Statement”) registering the resale of the Restricted Stock,
provided that the Company is eligible to use a Registration Statement on Form
S-3 at such time. The Company shall use its reasonable best efforts to meet the
qualifications for use on Form S-3 and to have the Registration Statement
declared effective under the Securities Act of 1933, as amended (the “Securities
Act”) as promptly as practicable after such filing. The Company shall also take
any reasonable action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified or to file a general consent to service of
process) required to be taken under any applicable state securities laws in
connection with the resale of the Restricted Shares, and DQSC shall furnish all
information concerning DQSC as may be reasonably requested in connection with
any such action. The Company will advise DQSC, promptly after it receives notice
thereof, of the time when the Registration Statement has been declared effective
by the SEC or any supplement or amendment has been filed, the issuance of any
stop order, the suspension of the qualification of the Restricted Shares
registered thereon, or any request by the SEC for amendment of the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. The Company shall furnish DQSC with a copy of the
prospectus contained in the Registration Statement, as declared effective by the
SEC. All registration expenses incurred by the Company in connection with the
registration of the Restricted Shares shall be borne by the Company. Subject to
customary black-out periods applicable to DQSC, for which the Company shall
provide notice of black-out periods applicable to DQSC and during which time
DQSC shall not sell Restricted Shares registered pursuant to the Registration
Statement, the Company agrees to use commercially reasonable efforts to keep
current and effective the Registration Statement until such time as it may be
withdrawn pursuant to the last sentence of this Section 1.4. Upon the expiration
of a black-out period, the Company shall provide notice to DQSC, at which time
DQSC may dispose of Restricted Shares. Notwithstanding the forgoing, the Company
shall not be obligated to file a Registration Statement if, and shall be
entitled to withdraw a Registration Statement when, the Restricted Shares have
been sold by DQSC or may be sold by DQSC under Rule 144(k) under the Securities
Act.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Each Seller represents and warrants to the Company and ACG that the statements
contained in this Article II are correct and complete as of the date of this
Agreement.

 

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2.1 Organization. DQSC is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware. AQS, DQS and MQS are duly
organized, validly existing, and in good standing under the laws of the State of
Delaware.

2.2 Authorization of Transaction. The Sellers have full power and authority to
execute and deliver this Agreement and to perform their obligations hereunder.
The execution of this Agreement by the Sellers and the delivery and performance
by such parties of this Agreement has been duly authorized. Any and all acts and
other proceedings required for the due and valid authorization, execution,
delivery and performance by the Sellers of this Agreement have been validly and
appropriately taken. This Agreement constitutes the valid and legally binding
obligation of the Sellers, enforceable in accordance with its terms and
conditions. The Sellers need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
authority in order to consummate the transactions contemplated by this
Agreement.

2.3 Noncontravention. Neither the execution and the delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the performance by
the Sellers of their obligations under this Agreement, will violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge or other restriction of any government, governmental authority or
court to which any Seller is subject.

2.4 Investor Representations.

(a) The Sellers confirm that they have been given sufficient access to
information regarding the Company and in connection with DQSC’s receipt of the
Restricted Shares under this Agreement, including the opportunity to ask
questions of, and receive answers from, persons acting on behalf of the Company
and concerning the Company’s financial affairs, prospects and condition.

(b) The Sellers represent and warrant that (i) they are resident in or otherwise
subject to the securities legislation of the United States, and the issuance of
the Restricted Shares to DQSC under this Agreement shall occur only in the
United States; (ii) the Sellers, by reason of their business or financial
expertise, have the capacity to protect their own interests in connection with
the acquisition of the Restricted Shares; and (iii) each Seller is an
“accredited investor” as defined in Rule 501 of Regulation D of the Securities
Act.

(c) The Sellers represent, warrant and covenant that they shall acquire the
Restricted Shares issuable under this Agreement for their own account and not
for the account or on behalf of others, and they are doing so with the intent of
retaining such Restricted Shares as an investment and without the current intent
to redistribute the Restricted Shares.

(d) The Sellers acknowledge that: (i) no securities commission or similar
authority has reviewed or passed on the merits of the Restricted Shares issuable
under this Agreement; (ii) there is no government or other insurance covering
such Restricted Shares; and (iii) there are risks associated with the
acquisition of the Restricted Shares, including without limitation those
described in the Company’s filings with the Securities and Exchange Commission.

 

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(e) The Sellers acknowledge that (i) they must and shall bear the economic risk
of holding the Restricted Shares issuable under this Agreement, which may be for
an indefinite period of time, because at the time such Restricted Shares are
issued they will not have been registered under the Securities Act or any other
securities law and, therefore, cannot be sold unless they are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration is available; (ii) the Restricted Shares may not be
resold or transferred on the official stock transfer records of the Company
without furnishing to the Company an opinion of counsel reasonably acceptable to
the Company that such sale or transfer of the Restricted Shares will not violate
the registration provisions of applicable federal and state securities laws; and
(iii) certificates representing the Restricted Shares shall have endorsed on
them a restrictive legend to this effect.

(f) The Sellers acknowledge that the Company is relying on the representations,
warranties, covenants and acknowledgments in this Section 2.4 to ensure that any
Restricted Shares issued under the terms of this Agreement can be issued in
reliance on exemptions from registration requirements under United States
federal and state securities laws.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to DQSC that the statements contained in
this Article III are correct and complete as of the date of this Agreement.

3.1 Organization. The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware. The Company is
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities make such qualification necessary.

3.2 Authorization of Transaction. The Company has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution of this Agreement by the Company and the delivery and performance by
the Company of this Agreement has been duly authorized. Any and all acts and
other proceedings required for the due and valid authorization, execution,
delivery and performance by the Company of this Agreement have been validly and
appropriately taken. This Agreement constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms and
conditions. The Company need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
authority in order to consummate the transactions contemplated by this
Agreement.

3.3 Noncontravention. Neither the execution and the delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the performance by
the Company of its obligations under this Agreement, will violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental authority,
or court to which the Company is subject.

 

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3.4 Valid Issuance. The Restricted Shares will be, upon issuance, duly
authorized, validly issued, fully paid, nonassessable, and free of and not
issued in violation of preemptive rights.

3.5 Authorized and Issued Shares. The Company has                          total
authorized common shares of which                      common shares are issued
and outstanding on the date hereof.

ARTICLE IV

OTHER PROVISIONS

4.1 Adjustment for Stock Split; Change of Control. In the event of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company
occurring after the date of this Agreement the Company shall make adjustments to
the Restricted Shares and the number of Restricted Shares such that the
percentage of total outstanding shares of the Company that are Restricted Shares
subject to this Agreement after any or all such events shall be the same as the
percentage of total outstanding shares of the Company that are Restricted Shares
subject to this Agreement prior to any or all such events. The provisions of
this Agreement shall be similarly adjusted for any merger or consolidation of
the Company with or into another corporation in which the Company is not the
surviving corporation.

4.2 Listing. On or prior to the issuance of the Restricted Shares, the Company
shall use its commercially reasonable best efforts to cause the Restricted
Shares to be listed on the Nasdaq National Market and to obtain all governmental
approvals necessary for such listing.

4.3 Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary of the
Company, and any notice to be given to DQSC shall be addressed to DQSC at the
address given beneath its signature on the signature page hereof. By a notice
given pursuant to this Section 4.3, any party hereto may hereafter designate a
different address for notices to be given to that party. Any notice shall be
deemed duly given when sent via email or when sent by certified mail (return
receipt requested) and deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.

4.4 Titles. Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

4.5 Governing Law; Severability. This Agreement shall be administered,
interpreted and enforced under the laws of the State of Delaware without regard
to conflicts of laws thereof. Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.

4.6 Conformity to Securities Laws. DQSC acknowledges that the Purchase Agreement
and this Agreement are intended to conform to the extent necessary with all
provisions of the Securities Act and the Securities Exchange Act of 1934, as
amended, and any and all regulations and rules promulgated by the Securities and
Exchange Commission

 

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thereunder, and state securities laws and regulations. Notwithstanding anything
herein to the contrary, the Purchase Agreement and this Agreement shall be
administered, and the Restricted Shares are to be issued, only in such a manner
as to conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Purchase Agreement and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.

4.7 Amendments. This Agreement may not be modified, amended or terminated except
by an instrument in writing, signed by DQSC and by a duly authorized
representative of the Company.

4.8 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
DQSC and its successors and assigns.

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.

 

AMBASSADORS INTERNATIONAL, INC. By:   /s/ Joseph J. Ueberroth  

Name:  Joseph J. Ueberroth

 

Title:    President and Chief Executive Officer

 

Address:       1071 Camelback Street   Newport Beach, CA 92660

 

DELTA QUEEN STEAMBOAT COMPANY, INC. By:   /s/ Bruce Nierenberg  

Name:  Bruce Nierenberg

 

Title:    President

 

Address:       40 Fountain Plaza  

Buffalo, New York 14202

 

AMERICAN QUEEN STEAMBOAT, LLC By:   /s/ Bruce Nierenberg  

Name:  Bruce Nierenberg

 

Title:    President

 

Address:       40 Fountain Plaza  

Buffalo, New York 14202

 

DELTA QUEEN STEAMBOAT, LLC By:   /s/ Bruce Nierenberg  

Name:  Bruce Nierenberg

 

Title:    President

 

Address:       40 Fountain Plaza  

Buffalo, New York 14202

 

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MISSISSIPPI QUEEN STEAMBOAT, LLC By:   /s/ Bruce Nierenberg  

Name:  Bruce Nierenberg

 

Title:    President

 

Address:       40 Fountain Plaza  

Buffalo, New York 14202

 

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