Exhibit 10.3

Contract No. MA-14033

TITLE XI RESERVE FUND AND FINANCIAL AGREEMENT

THIS TITLE XI RESERVE FUND AND FINANCIAL AGREEMENT (the “Financial Agreement”),
dated as of April 25, 2006 by and between AQ BOAT, LLC, a Delaware limited
liability company (the “Assuming Shipowner”), and THE UNITED STATES OF AMERICA
(the “United States”), represented by the Secretary of Transportation, acting by
and through the Maritime Administrator (the “Secretary”).

RECITALS:

WHEREAS, Great AQ Steamboat, L.L.C., successor to Great AQ Steamboat Co. (the
“Original Shipowner”) entered into that certain Trust Indenture, dated
August 24, 1995, as amended and supplemented (the “Original Indenture”), with
The Bank of New York (the “Original Trustee”), pursuant to which it issued
certain obligations in the principal amounts and at the interest rates set forth
therein (the “Obligations”), to finance, in part, the construction of a
paddlewheel passenger vessel, AMERICAN QUEEN, O.N. 1030765 (the “Vessel”);

WHEREAS, payment of the principal of and interest on the Obligations is
guaranteed by the United States under the terms of Title XI of the Merchant
Marine Act, 1936 (the “Guarantee”);

WHEREAS, as security for the due and timely payment of debt service set forth in
the Obligations, the Original Shipowner executed and delivered to the Secretary,
inter alia, a promissory note in the amount of the Obligations (the “Secretary’s
Note”), and in order to secure the due and timely payment of the Secretary’s
Note, the Original Shipowner executed and delivered to the Secretary a First
Preferred Ship Mortgage relating to the Vessel, which named the Secretary as
mortgagee (the “Mortgage”), that certain Security Agreement (the “Original
Shipowner Security Agreement”), that certain Title XI Reserve Fund and Financial
Agreement (the “Original Shipowner Financial Agreement”) and that certain
Depository Agreement (the “Original Shipowner Depository Agreement”);

WHEREAS, the Original Shipowner filed for protection under Chapter 11 of the
Bankruptcy Code on October 22, 2001, and failed to make the debt service payment
due and owing on February 24, 2002;

WHEREAS, an auction of certain vessels owned by the Original Shipowner,
including the Vessel, was conducted with the consent of the Bankruptcy Court on
May 3, 2002, and DNPS Delta Queen Steamboat Company, Inc. (“DQSC”) was the
successful bidder;

WHEREAS, DQSC designated its subsidiary, American Queen Steamboat, LLC (the
“Second Shipowner”), to hold all the right, title and interest in the Vessel,
and the Second Shipowner agreed to assume the Original Indenture and the
Obligations;

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WHEREAS, in connection with the assumption of the Obligations, the Second
Shipowner on May 31, 2002 executed that certain Assumption Agreement and 2002
Supplement to Trust Indenture (the “Second Shipowner Trust Indenture
Assumption”), that certain 2002 Endorsement to the Secretary’s Note, that
certain Assumption and 2002 Supplement to the Mortgage, that certain Security
Agreement (the “Second Shipowner Security Agreement”), that certain Depository
Agreement (the “Second Shipowner Depository Agreement”) and that certain Title
XI Reserve Fund and Financial Agreement (the “Second Shipowner Financial
Agreement,” and collectively with the foregoing agreements and related documents
the “Second Shipowner Transaction Documents”);

WHEREAS, pursuant to that certain Asset Purchase Agreement dated as of April 6,
2006 (the “Asset Purchase Agreement”) by and among DQSC, the Second Shipowner,
Mississippi Queen Steamboat, LLC, Delta Queen Steamboat, LLC (collectively, the
“DQ Companies”) and Ambassadors Cruise Group, LLC (“ACG”) the DQ Companies
agreed to sell certain assets, including the Vessel, to ACG;

WHEREAS, in connection with the Asset Purchase Agreement, the Secretary and the
Second Shipowner executed that certain Termination Agreement dated as of the
date hereof pursuant to which the parties agreed to terminate the Second
Shipowner Transaction Documents;

WHEREAS, ACG has designated its subsidiary, AQ Boat LLC (the “Assuming
Shipowner”), to hold all the right, title and interest in the Vessel, and the
Assuming Shipowner agreed to assume the Original Indenture and the Obligations
under terms satisfactory, in form and substance, to the Secretary;

WHEREAS, on the date hereof the Assuming Shipowner has executed and delivered to
the Secretary that certain Assumption Agreement and 2006 Supplement to Trustee
Indenture (the “Assumption Agreement”), pursuant to which it has assumed the
Obligations and the Original Indenture, that certain 2006 Endorsement to the
Secretary’s Note, that certain 2006 Additional Endorsement to Promissory Note to
the United States, that certain Assumption and 2006 Supplement to the Mortgage,
Contract No. MA-14032, that certain Amended and Restated 2006 Security
Agreement, Contract No. MA-14031 (the “Security Agreement”), that certain
Depository Agreement, Contract No. MA-14034 (the “Depository Agreement”), and
this Financial Agreement;

WHEREAS, the Assuming Shipowner is not assuming, and shall have no obligations
with respect, to (i) the Original Shipowner Security Agreement or the Second
Shipowner Security Agreement, (ii) the Original Shipowner Depository Agreement
or the Second Shipowner Depository Agreement, and (iii) the Original Shipowner
Financial Agreement or the Second Shipowner Financial Agreement, and such
agreements are being replaced with the Security Agreement, the Depository
Agreement and this Financial Agreement; and

WHEREAS, the Assuming Shipowner wishes to comply with its undertakings set forth
in the Assumption Agreement by executing this Security Agreement.

 

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NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereby agree as follows:

SECTION 1. (a) Granting Clause. The Assuming Shipowner hereby sells, grants,
conveys, mortgages, assigns, transfers, pledges, confirms and sets over to the
Secretary a continuing security interest in all of its right, title and interest
in and to (1) the Title XI Reserve Fund, and (2) all sums, moneys, securities,
and proceeds thereof currently on deposit, or hereafter deposited in the Title
XI Reserve Fund.

(b) Definitions. For all purposes of this Financial Agreement, unless otherwise
expressly provided or unless the context otherwise requires, the capitalized
terms used herein shall have the meaning specified in Schedule X to the Security
Agreement dated as of the date hereof.

SECTION 2. Title XI Reserve Fund (a) The Secretary shall establish a Deposit
Fund with the Treasury of the United States pursuant to Section 1109 of Title XI
and in accordance with the terms and conditions of the Depository Agreement
(herein called the “Title XI Reserve Fund”).

(b)(1) Within 105 days after the end of each fiscal year of the Assuming
Shipowner, the Assuming Shipowner shall compute its net income attributable to
the operation of the Vessel (“Title XI Reserve Fund Net Income”). The net income
attributable to the operation of the Vessel, after taxes as provided for in
Section 8(a)(1)(A), computed in accordance with generally accepted accounting
principles, shall be adjusted as follows:

(A) The depreciation expense applicable to the accounting year shall be added
back.

(B) There shall be subtracted an amount equal to the principal amount of debt
required to be paid or redeemed, and actually paid or redeemed by the Assuming
Shipowner during the year; and the principal amount of Obligations Retired or
Paid, prepaid or redeemed, in excess of the required Redemptions or payments
that may be used by the Assuming Shipowner as a credit against future required
Redemptions or other required payments with respect to the Obligations, but
excluding payments from the Title XI Reserve Fund and the Title XI Escrow Fund.

(2) Unless (i) the Long-Term Debt of the Assuming Shipowner is equal to or less
than its Long-Term Debt as of the date of this Financial Agreement, which is set
forth in Attachment A hereto, and (ii) the Net Worth of the Assuming Shipowner
meets the requirements set forth in Attachment A hereto, then promptly after the
computation of the Title XI Reserve Fund Net Income by the Assuming Shipowner:

(A) If the Vessel is owned by the Assuming Shipowner, then from the Title XI
Reserve Fund Net Income for the Vessel there shall be deducted, annually, an
amount (pro rated

 

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for a period of less than a full fiscal year) which is 10% of the Assuming
Shipowner’s aggregate original equity investment in said Vessel, as specified in
Attachment A.

(B) The Assuming Shipowner shall, unless otherwise approved by the Secretary in
writing, transmit to the Secretary for the Secretary’s prompt deposit into the
Title XI Reserve Fund an amount equal to 50 percent of the balance of the Title
XI Reserve Fund Net income remaining after the above deductions.

(C) Irrespective of the Assuming Shipowner’s deposit requirements for the Title
XI Reserve Fund, the Assuming Shipowner shall not be required to make any
deposits for the Title XI Reserve Fund if (i) the Obligations and the related
Secretary’s Note with respect to the Vessel shall have been satisfied and
discharged and if the Assuming Shipowner shall have paid or caused to be paid
all other sums secured under the Security Agreement or the Mortgage, (ii) all of
the Guarantees on the Outstanding Obligations shall have been terminated
pursuant to the Security Agreement, or (iii) the amount (including any
securities at current market value) in the Title XI Reserve Fund is equal to, or
in excess of 50% of the principal amount of the Outstanding Obligations;

(D) The Assuming Shipowner shall deliver to the Secretary at the time of each
deposit for the Title XI Reserve Fund pursuant to Section 2(b)(2)(B), and any
deposits required under the Security Agreement, a statement of an independent
certified public accountant (who may be the regular auditors for the Assuming
Shipowner) stating that such deposit has been computed in accordance with
Section 2(b)(2)(B), (and the Security Agreement, if applicable) and showing the
pertinent calculations.

(E) In addition, the Assuming Shipowner shall deliver to the Secretary, within
105 days after the end of its fiscal year, a statement by such certified public
accountant stating (i) the total amount of all deposits which were required to
be so deposited into the Title XI Reserve Fund by the Assuming Shipowner for
such fiscal year (and showing the pertinent calculations), or (ii) that no such
deposit was required to be made for such fiscal year (and showing the pertinent
calculations) and that at the end of such fiscal year no adjustments pursuant to
Section 2(b)(2)(F) were required to be made (and, if such adjustments were
required to be made, stating the reasons therefor).

(F) The computation of all deposits required by this Section 2 shall be made on
the basis of information available to the Assuming Shipowner at the time of each
such deposit. Each such deposit shall be subject to adjustments from time to
time in the event and to the extent that the same would be required or permitted
by mistakes or omissions, additional information becoming available to the
Assuming Shipowner, or judicial or administrative determinations made subsequent
to the making of such deposits.

SECTION 3. Withdrawals from the Title XI Reserve Fund. (a) From time to time,
moneys in the Title XI Reserve Fund shall be subject to withdrawal by delivery
by the Assuming Shipowner to the Secretary of a Request for Payment (specifying
the Person or Persons to be paid and the amount of such payment) executed by the
Assuming Shipowner, together with an

 

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Officer’s Certificate of the Assuming Shipowner stating the reasons and purpose
for the withdrawal.

(b) If the Secretary approves the Request, the Secretary shall promptly withdraw
the moneys from the applicable Deposit Fund and make payment in accordance with
the terms of the Request.

SECTION 4. Termination of the Title XI Reserve Fund. (a) The Title XI Reserve
Fund shall terminate at such time as the Secretary’s Note shall have been
satisfied and discharged and the Assuming Shipowner shall have paid or caused to
be paid all sums secured under the Security Agreement and the Mortgage.

(b) Upon the termination of the Title XI Reserve Fund, pursuant to Section 4(a),
the moneys remaining in the Title XI Reserve Fund shall be subject to withdrawal
and payment into the general funds of the Assuming Shipowner.

(c) Upon payment by the Secretary to the Indenture Trustee of the Guarantees
pursuant to the Indenture, the Title XI Reserve Fund shall be terminated and the
balance remaining in the Title XI Reserve Fund shall be paid to the Secretary
and the Assuming Shipowner as determined by the Secretary.

(d) Any withdrawal from the Title XI Reserve Fund pursuant to this Section 4
shall not effect a discharge of or diminish any obligation of the Assuming
Shipowner under the Security Agreement, Mortgage or any other agreement as the
case may be except to the extent that the amount withdrawn is applied to
payments required to be made by the Assuming Shipowner under the Security
Agreement, Mortgage or any other agreement.

SECTION 5. Eligible Investments; Form of Deposits. (a) Moneys in the Title XI
Reserve Fund shall be invested by the Secretary in direct obligations of the
United States or any agency of the United States (“Eligible Investments”).

(b) In any case where the Assuming Shipowner is required to deposit or redeposit
sums into the Title XI Reserve Fund, the Assuming Shipowner shall make the
required deposit in cash.

(c) Cash held in the Title XI Reserve Fund will be held by the Treasury of the
United States pursuant to the terms and conditions of the Depository Agreement.

SECTION 6. Reserved.

SECTION 7. Reserved.

SECTION 8. Financial Requirements. (a) Primary Covenants. The Assuming Shipowner
shall not without the Secretary’s prior written consent:

(1) Except as hereinafter provided, make any distribution of earnings, except as
may

 

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be permitted below:

(A) Provided that the Assuming Shipowner is not then in Default under the
Security Agreement, the Assuming Shipowner may distribute to their respective
members, with respect to each fiscal year, funds sufficient to enable such
members to pay federal, state and local income taxes attributable to each
member’s allocable share of net income, such distributions to be made either
during the fiscal year in question to enable the member to pay estimated taxes
with respect to such fiscal year, or during a subsequent fiscal year. For
purposes of this Section 8(a)(1)(A), (i) federal income taxes attributable to a
member’s allocable share of net income shall be determined by preparing a pro
forma federal tax return for such member, including only the member’s allocable
share of the tax attributes of the Assuming Shipowner of which it is a member
and no other items of income or deduction, and (ii) state and local taxes
attributable to such member’s allocable share of net income shall be determined
by assuming a flat blended rate of state and local tax equal to 10 percent.

(B) From the retained earnings of the Assuming Shipowner in an amount specified
in subsection (D) below, provided that, in the fiscal year in which the
distribution of earnings is made there is no operating loss to the date of such
payment of such distribution of earnings;

(C) If distributions of earnings may not be made under (B) above, a distribution
can be made in an amount equal to the total operating net income for the
immediately preceding three fiscal year period, provided that the distribution
of earnings made would not exceed an amount specified in Section 8(a)(1)(D)
below;

(D) Distributions of earnings may be made from earnings of prior years in an
aggregate amount equal to (i) 50 percent of the Assuming Shipowner ‘s total net
income after tax for each of the prior years, less any distributions that were
made in such years; or (ii) the aggregate of the Assuming Shipowner’s total net
income after tax for such prior years, provided that after making such
distribution, the Long-Term Debt of the Assuming Shipowner is equal to or less
than its Long-Term Debt as of the date of this Financial Agreement. In computing
net income for purposes of this Section, extraordinary gains, such as gains from
the sale of assets, shall be excluded;

(2) Enter into any service, management or operating agreement for the operation
of the Vessel (excluding husbanding type agreements), or appoint or designate a
managing or operating agent for the operation of the Vessel (excluding
husbanding agents) unless approved by the Secretary, which approval shall not be
unreasonably withheld; provided, however, that the foregoing restriction shall
not apply to that certain Agreement for Operation of Vessels, dated the date
hereof, between DQSC Operations, LLC, an affiliate of the Assuming Shipowner,
and Delta Queen Steamboat Company, Inc.;

(3) (A) Sell, mortgage, transfer, or demise charter the Vessel or any assets to
any non-Related Party except as permitted in subsection 8(a)(6) below, or
(B) sell, mortgage, transfer, or demise charter the Vessel or any assets to a
Related Party, unless such transaction is (i) at a fair market value as
determined by an independent appraiser acceptable to the Secretary,

 

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and (ii) a total cash transaction or, in the case of demise charter, the charter
payments are cash payments;

(4) Enter into any agreement for both (A) sale and (B) leaseback of the same
assets sold unless the proceeds from such sale are at least equal to the fair
market value of the assets sold;

(5) Except with respect to any guarantees in place on the date hereof,
guarantee, or otherwise become liable for the obligations of any Person, except
in respect of any undertakings as to the fees and expenses of the Indenture
Trustee, except endorsement for deposit of checks and other negotiable
instruments acquired in the ordinary course of business and except as otherwise
permitted in Section 8(b);

(6) Enter into any merger or consolidation or convey, sell, demise charter, or
otherwise transfer, or dispose of any portion of its properties or assets (any
and all of which acts are encompassed within the words “sale” or “sold” as used
herein), provided that, the Assuming Shipowner shall not be deemed to have sold
such properties or assets if (A) the Net Book Value (defined as the original
book value of an asset less depreciation calculated on a straight line basis
over its useful life) of the aggregate of all the assets sold by the Assuming
Shipowner during any period of 12 consecutive calendar months does not exceed
10 % of the total Net Book Value of the Assuming Shipowner’s assets (the assets
which are the basis for the calculation of the 10% of the Net Book Value are
those indicated on the most recent annual audited consolidated financial
statement required to be submitted pursuant to Section 9 hereof prior to the
date of the sale); (B) the Assuming Shipowner retain the proceeds of the sale of
assets for use in accordance with the Assuming Shipowner’s regular business
activities; and (C) the sale is not otherwise prohibited by subsection 8(a)(3)
above. Notwithstanding any other provision of this subsection, the Assuming
Shipowner may not consummate such sale without the Secretary’s prior written
consent if the Assuming Shipowner has not, prior to the time of such sale,
submitted to the Secretary the financial statement in clause (A) of this
subsection, and any attempt to consummate a sale absent such approval shall be
null and void ab initio.

(b) Supplemental Covenants. Unless, after giving effect to such transaction or
transactions, (i) the Long-Term Debt of the Assuming Shipowner is equal to or
less than its Long-Term Debt as of the date of this Financial Agreement, which
is set forth in Attachment A hereto, and (ii) the Net Worth of the Assuming
Shipowner meets the requirements set forth in Attachment A hereto, the Assuming
Shipowner shall not, without the Secretary’s prior written consent:

(1) Withdraw any capital;

(2) Redeem any membership interest or convert any of the same into debt;

(3) Pay any dividend (except dividends payable for taxes under
Section 8(a)(1)(A) or in membership interests in the Assuming Shipowner);

 

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(4) Make any loan or advance, either directly or indirectly, to any member,
manager, director, officer, or employee of the Assuming Shipowner, or to any
Related Party;

(5) Make any investments in the securities of any Related Party;

(6) Prepay in whole or in part any indebtedness to any member, manager,
director, officer or employee of the Assuming Shipowner, or to any Related
Party;

(7) Increase any direct employee compensation (as hereinafter defined) paid to
any employee in excess of $175,000 per annum; nor increase any direct employee
compensation which is already in excess of $175,000 per annum; nor initially
employ or re-employ any person at a direct employee compensation rate in excess
of $175,000 per annum; provided, however, that beginning with January 1, 2003,
the $175,000 limit may be increased annually based on the previous year’s
closing CPI-U (Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics). For the purpose of this section the term “direct
employee compensation” is the total amount of any wage, salary, bonus,
commission, or other form of direct payment to any employee from all companies
with guarantees under Title XI of the Act as reported to the Internal Revenue
Service for any fiscal year;

(8) Acquire any fixed assets other than those required for the maintenance of
the Assuming Shipowner’s existing assets, including the normal maintenance and
operation of any vessel or vessels owned or chartered by the Assuming Shipowner;

(9) Pay any indebtedness subordinated to the Obligations or to any other Title
XI obligations;

(10) Make any investment, whether by acquisition of stock or indebtedness, or by
loan, advance, transfer of property, capital contribution, guarantee of
indebtedness or otherwise, in any Person, other than obligations of the United
States, bank deposits or investments in securities of the character permitted
for moneys in the Title XI Reserve Fund;

(11) Create, assume, permit or suffer to exist or continue any mortgage, lien,
charge or encumbrance upon, or pledge of, or subject to the prior payment of any
indebtedness, any of its property or assets, real or personal, tangible or
intangible, whether now owned or hereafter acquired, or own or acquire, or agree
to acquire, title to any property of any kind subject to or upon a chattel
mortgage or conditional sales agreement or other title retention agreement,
except (i) loans, mortgages and indebtedness guaranteed by the Secretary under
Title XI of the Act or related to the construction of a vessel approved for
Title XI by the Secretary, (ii) mortgages, liens or other encumbrances in
existence on the date that the supplemental covenants of Section 8(b) hereof
become applicable, and (iii) liens incurred in the ordinary course of business
as such business presently exists.

(c) Additional Test for the Supplemental Covenants. Effective July 1, 2008, the
threshold for determining the applicability of the covenants set forth in
Section 8(b) hereof shall also include a requirement that the Assuming Shipowner
have a positive cashflow; provided, however, that prior to July 1, 2008, the
Assuming Shipowner agrees not to make any

 

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distributions pursuant to Sections 8(b)(1), (b)(2) and (b)(3) hereof if the
Assuming Shipowner does not have a positive cashflow.

SECTION 9. (a) Annual Financial Statements. The Assuming Shipowner shall furnish
to the Secretary, in duplicate, (1) within 105 days after the end of the
Assuming Shipowner’s fiscal year commencing with the first fiscal year ending
after the date of the Security Agreement, the Assuming Shipowner’s Audited
Financial Statements including balance sheet and income statement for such
fiscal year along with a completed M.A. Form 172 or such other form approved by
the Secretary, and (2) within 90 days after the expiration of each quarterly
period of each fiscal year commencing with the first such quarterly period
ending after the date of the Security Agreement, a completed M.A. Form 172 or
such other form approved by the Secretary for such quarterly period along with
an Officer’s Certificate certifying its accuracy; provided that in the event the
Assuming Shipowner shall become insolvent or bankrupt, it shall submit the
financial information required by this Section 9(a)(2) for each monthly, rather
than quarterly, period of its fiscal year.

(b) Annual No Default Certificates. Within 105 days after the end of the
Assuming Shipowner’s fiscal year, the Assuming Shipowner shall furnish to the
Secretary, an Officer’s Certificate dated as of the close of such fiscal year
stating whether or not, the Assuming Shipowner is in default in the performance
of or in default in the compliance with any covenant, agreement or condition
contained herein or in the Mortgage, Security Agreement or charter relating to
any Vessel listed in Attachment A hereto, and if so, specifying each such
default and stating the nature thereof.

SECTION 10. Qualifying Financial Requirements. Immediately upon the execution
and delivery of this Financial Agreement, the Assuming Shipowner shall meet the
requirements with respect to the Net Worth and Long Term Debt requirements
specified in Section 8(b) hereof.

SECTION 11. Fund in Lieu of Title XI Reserve Fund. In the event the Vessel is
subject to a capital construction fund established by the Assuming Shipowner, as
provided in Section 607 of the Act, whether interim or permanent (herein called
the “Capital Construction Fund”), at any time when deposits would otherwise be
required to be made into the Title XI Reserve Fund, and the Assuming Shipowner
elects to deposit such funds into the Capital Construction Fund, then the
Assuming Shipowner shall enter into an agreement satisfactory in form and
substance to the Secretary to the effect that (a) the Capital Construction Fund
and all assets so deposited therein shall be and constitute security to the
United States in lieu of the Title XI Reserve Fund and the deposit requirements
of Section 2 of this Financial Agreement shall be deemed satisfied by deposits
of equal amounts in the Capital Construction Fund and (b) the Assuming Shipowner
and the Secretary may execute such further agreements or documents and take such
other actions as may be deemed necessary by the Secretary to perfect the pledge
of the security of the Capital Construction Fund.

SECTION 12. Notices. Except as otherwise provided in this Financial Agreement,
notices, requests, directions, instructions, waivers, approvals or other
communication may be made or delivered in person or by facsimile transmission,
or by electronic mail, or by overnight courier addressed to the party as
provided below, or to such other address as such party may

 

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hereafter specify in a written notice to the other parties named herein, and all
notices or other communications shall be in writing so addressed and shall be
effective upon receipt by the addressee thereof:

 

The Secretary as:   

SECRETARY OF TRANSPORTATION

c/o Maritime Administrator

Maritime Administration

400 Seventh Street, S.W.

Washington, D.C. 20590

Attention: Michael Bouril

Fax: 202-366-7901

E-mail: michael.bouril@dot.gov

The Assuming Shipowner as:   

AQ BOAT, LLC

c/o Ambassadors Cruise Group LLC

1071 Camelback Street

Newport Beach, California 92660

Attn: Brian R. Schaefgen

Fax: 949-759-5970

E-mail: brian.schaefgen@ambassadors.com

                          with copy to:   

Blank Rome LLP

600 New Hampshire Avenue, NW #1200

Washington, DC 20037

Attn: James B. Ellis II

Fax: 202-944-3068

E-mail: ellis-j@blankrome.com

SECTION 13. Amendments and Supplements. No agreement shall be effective to
amend, supplement, or discharge in whole or in part this Financial Agreement
unless such agreement is in writing signed by the parties hereto. Any
amendments, additions, deletions, substitutions or other changes not made in
accordance with this provision shall be invalid and of no effect.

SECTION 14. Counterparts. This Financial Agreement may be executed in any number
of counterparts. All such counterparts shall be deemed to be originals, and
shall together constitute but one and the same instrument.

SECTION 15. Governing Law. This Financial Agreement and the rights and
obligations of the parties hereto, shall be governed by and construed in
accordance with the federal laws of the United States of America, but if they
are inapplicable then in accordance with the laws of the District of Columbia.

SECTION 16. Prior Agreements. This Financial Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede all prior agreements. The Assuming Shipowner is not assuming, and
shall have no obligations with respect to, the Original Shipowner Financial
Agreement and the Second Shipowner Financial Agreement, both of which shall be
of no further force and effect.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, this Title XI Reserve Fund and Financial Agreement has been
executed by the parties hereto as of the day and year first above written.

 

AQ BOAT, LLC

By: 

 

/s/ Brian R. Schaefgen

 

Brian R. Schaefgen

 

Chief Financial Officer

 

Attest:

By:   

/s/ Laura Tuthill

 

Name: 

 

Laura Tuthill

 

UNITED STATES OF AMERICA

SECRETARY OF TRANSPORTATION

MARITIME ADMINISTRATOR

By: 

 

/s/ Joel C. Richard

 

Secretary

 

Maritime Administration

 

Attest:

/s/ Sarah J. Washington

Assistant Secretary

Maritime Administration

 

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ATTACHMENT A

TITLE XI RESERVE FUND AND FINANCIAL AGREEMENT

1. This Financial Agreement shall apply to the passenger vessel named AMERICAN
QUEEN, Official No. 1030765.

2. The Assuming Shipowner’s Net Worth for use in Section 2(b)(2) and
Section 8(b) shall be equal to or greater than $0; provided; however, the
Assuming Shipowner shall be permitted to have a Net Worth less than $0 during
the period between April 24, 2006 and December 30, 2008 to reflect the costs
incurred by the Shipowner directly related to (i) the lay-up of the Vessel and
(ii) the re-introduction of the Vessel into service following such lay-up.

3. The Assuming Shipowner’s Long Term Debt for use in Section 2(b)(2) and
Section 8(b) is $33,039,905.

4. The Assuming Shipowner’s aggregate original equity investment for the Vessel
for use in Section 2 is $0.