BETWEEN

EXHIBIT 2.5

TAX SHARING AGREEMENT

BETWEEN

AMBASSADORS INTERNATIONAL, INC.

AND

AMBASSADORS GROUP, INC.

EFFECTIVE AS OF

_________________, 2001

TABLE OF CONTENTS

Page

1. DEFINITIONS..................................................................... 1

2. FILING OF TAX RETURNS; PAYMENT OF TAXES; REFUNDS................................ 4
2.1 Preparation of Tax Returns.......................................... 5
2.2 Payment of Taxes.................................................... 5
2.3 Tax Refunds and Carrybacks.......................................... 6
2.4 Allocation of Straddle Period Taxes................................. 7

3. TAX INDEMNIFICATION; TAX CONTESTS............................................... 7
3.1 Indemnification..................................................... 8
3.2 Notice of Indemnity................................................. 8
3.3 Payments............................................................ 9
3.4 Tax Contests........................................................ 10

4. COMPENSATION PAYMENTS; OPTIONS;................................................. 10
4.1 Compensation Payments............................................... 10
4.2 Stock Options....................................................... 11
4.3 Change in Law....................................................... 13

5. COOPERATION AND EXCHANGE OF INFORMATION......................................... 12
5.1 Inconsistent Actions................................................ 12
5.2 Cooperation and Exchange of Information............................. 12
5.3 Tax Records......................................................... 12

6. MISCELLANEOUS................................................................... 13
6.1 Authority........................................................... 13
6.2 Amendment and Execution............................................. 13
6.3 Counterparts........................................................ 13
6.4 Effectiveness....................................................... 14
6.5 Effect If Separation And/or Distribution Does Not Occur............. 14
6.6 Termination......................................................... 14
6.7 Binding Effect; Assignment.......................................... 14
6.8 Performance......................................................... 14
6.9 Additional Assurances............................................... 14
6.10 Entire Agreement.................................................... 14
6.11 Attachments......................................................... 14
6.12 Descriptive Headings................................................ 14
6.13 Gender and Number................................................... 15
6.14 Severability........................................................ 15
6.15 Survival of Agreements.............................................. 15
6.16 Governing Law....................................................... 15
6.17 Notices............................................................. 15
6.18 Waivers; Remedies................................................... 16
6.19 Dispute Resolution.................................................. 16
6.20 Force Majeure....................................................... 16

TAX SHARING AGREEMENT

This Tax Sharing Agreement (this "Agreement") is entered into as of
__________, 2001, between Ambassadors International, Inc., a Delaware
corporation ("Ambassadors"), and Ambassadors Group, Inc., a Delaware corporation
("Education"). Capitalized terms used herein have defined meanings as specified
in Article 1 or as other wise defined herein or in that certain Master
Separation and Distribution Agreement between the parties hereto, dated as of
___________________, 2001 (the "Separation Agreement").

RECITALS

WHEREAS, Ambassadors currently owns all of the issued and outstanding
capital stock of Education; and,

WHEREAS, the Board of Directors of Ambassadors has determined that it is
appropriate and desirable to separate the business of the parties (the
"Separation") and to distribute all of the shares of Education common stock pro
rata to the holders of Ambassadors common stock (the "Distribution"), all on the
terms and conditions contemplated by the Separation Agreement;

WHEREAS, in connection with the Separation and Distribution, the parties
wish to make certain agreements concerning the allocation between the
Ambassadors Group and the Education Group of all responsibilities, liabilities
and benefits relating to or affecting Taxes paid or payable by either of them
for all taxable periods, whether beginning before, on or after the Distribution
Date.

To accomplish the purposes described above, Ambassadors and Education
agree as follows:

1. DEFINITIONS. For the purposes of this Agreement, the following terms shall
have the following meanings. Any capitalized terms which are not defined in this
Agreement shall have the meaning assigned to them in the Separation Agreement.

1.1. "ACTUALLY REALIZED" shall mean, for purposes of determining the
timing of any Taxes (or related Tax cost or benefit) relating to any
payment, transaction, occurrence or event, the time at which the amount
of Taxes payable by any person is increased above or reduced below, as
the case may be, the amount of Taxes that such person would be required
to pay but for the payment, transaction, occurrence or event.

1.2. "AMBASSADORS" shall have the meaning defined in the preamble.

1.3. "AMBASSADORS BOARD" shall mean the Board of Directors of Ambassadors
or a duly authorized committee thereof.

1.4. "AMBASSADORS COMMON STOCK"shall mean the common stock, par value
$0.01 per share, of Ambassadors.

1.5. "AMBASSADORS COMMON STOCK OPTIONS" shall mean options to acquire
Ambassadors Common Stock.

1.6. "AMBASSADORS GROUP" has the meaning defined in Section 6.1 of the
Separation Agreement.

1.7. "CODE" shall mean the Internal Revenue Code of 1986, as amended, or
any successor legislation.

1.8. "COMPENSATION PAYMENTS" shall mean all non-qualified employee
benefit plan and welfare benefit plan payments made by any member of the
Education Group under the Employee Matters Agreement.

1.9. "DISPUTES" has the meaning defined in Section 6.7 of the Separation
Agreement.

1.10. "DISTRIBUTION" has the meaning defined in Section 6.8 of the
Separation Agreement.

1.11. "DISTRIBUTION DATE" has the meaning defined in Section 6.10 of the
Separation Agreement.

1.12. "EDUCATION COMMON STOCK" shall mean the common stock, par value
$0.01 per share, of Education.

1.13. "EDUCATION COMMON STOCK OPTIONS" shall mean options to acquire
Education Common Stock.

1.14. "EDUCATION GROUP EMPLOYEES AND FORMER EMPLOYEES" shall mean
individuals (i) who are employees of any member of the Education Group on
the date of the event giving rise to a deduction in respect of any
Compensation Payments made to such individuals or Stock Options held by
such individuals, or (ii) who were employees of any member of the
Education Group and were not thereafter employees of any member of the
Ambassadors Group.

1.15. "EDUCATION GROUP" has the meaning defined in Section 6.13 of the
Separation Agreement.

1.16. "EMPLOYEE MATTERS AGREEMENT" shall mean the Employee Matters
Agreement dated as of __________, 2001 by and between Ambassadors and
Education.

1.17. "GROUP" shall mean the Ambassadors Group or the Education Group, as
the case may be.

1.18. "INCOME TAX" shall mean (a) any Tax based upon, measured by, or
calculated with respect to (i) net income or profits (including, but not
limited to, any capital gains, minimum Tax and any Tax on items of Tax
preference, but not including sales, use, real or personal property,
gross or net receipts, transfer or similar Taxes) or (ii) multiple bases
(including, but not limited to, corporate franchise, doing business or
occupation Taxes) if one or more of the bases upon which such Tax may be
based, measured by, or calculated with respect to, is described in clause
(i) above, or (b) any U.S. state or local franchise Tax.

1.19. "INCOME TAX BENEFIT" shall mean for any taxable period the excess
of (i) the hypothetical Income Tax liability of the taxpayer for the
taxable period calculated as if the Timing Difference or Reverse Timing
Difference, as the case may be, had not occurred but with all other facts
unchanged, over (ii) the actual Income Tax liability of the taxpayer for
the taxable period, calculated taking into account the Timing Difference
or Reverse Timing Difference, as the case may be (treating an Income Tax
refund or credit as a negative Income Tax liability for purposes of such
calculation).

1.20. "INCOME TAX DETRIMENT" shall mean for any taxable period the excess
of (i) the actual Income Tax liability of the taxpayer for the taxable
period, calculated taking into account the Timing Difference or Reverse
Timing Difference, as the case may be, over (ii) the hypothetical Income
Tax liability of the taxpayer for the taxable period, calculated as if
the Timing Difference or Reverse Timing Difference, as the case may be,
had not occurred but with all other facts unchanged (treating an Income
Tax refund or credit as a negative Income Tax liability for purposes of
such calculation).

1.21. "INCOME TAX RETURN" shall mean any Tax Return that relates to
Income Taxes.

1.22. "INDEMNITEE" shall have the meaning defined in Section 3.3.

1.23. "INDEMNITOR" shall have the meaning defined in Section 3.3.

1.24. "INDEMNITY ISSUE" shall have the meaning defined in Section 3.3.

1.25. "IRS" shall mean the Internal Revenue Service.

1.26. "PRE-DISTRIBUTION TAXABLE PERIOD" shall mean a taxable period
ending on or before the Distribution Date.

1.27. "POST-DISTRIBUTION TAX ACT" shall have the meaning defined in
Section 3.1.1.

1.28. "POST-DISTRIBUTION TAXABLE PERIOD" shall mean a taxable period
beginning after the Distribution Date.

1.29. "POST-TAX INDEMNIFICATION PERIOD" shall mean any Post-Distribution
Taxable Period and that portion of any Straddle Period that begins on the
day after the Distribution Date.

1.30. "REVERSE TIMING DIFFERENCE" shall mean an increase in income, gain
or recapture, or a decrease in deduction, loss or credit, as calculated
for Income Tax purposes, of the taxpayer for the Tax Indemnification
Period coupled with an increase in deduction, loss or credit, or a
decrease in income, gain or recapture, of the taxpayer for any Post-Tax
Indemnification Period.

1.31. "SEPARATION AGREEMENT" shall mean the Master Separation and
Distribution Agreement dated as of __________________, 2001 between
Ambassadors and Education.

1.32. "STOCK OPTIONS" shall mean Ambassadors Common Stock Options and/or
Education Common Stock Options.

1.33. "STRADDLE PERIOD" shall mean a taxable period that includes but
does not end on the Distribution Date.

1.34. "TAX" and "TAXES" shall mean all forms of taxation, whenever
created or imposed, and whether of the United States or elsewhere, and
whether imposed by a federal, state, municipal, governmental,
territorial, local, foreign or other body, and without limiting the
generality of the foregoing, shall include net income, gross income,
gross receipts, sales, use, value added, ad valorem, transfer, recording,
franchise, profits, license, lease, service, service use, payroll, wage,
withholding, employment, unemployment insurance, workers compensation,
social security, excise, severance, stamp, business license, business
organization, occupation, premium, property, environmental, windfall
profits, customs, duties, alternative minimum, estimated or other taxes,
fees, premiums, assessments or charges of any kind whatever imposed or
collected by any governmental entity or political subdivision thereof,
together with any related interest and any penalties, additions to such
tax or additional amounts imposed with respect thereto by any Tax
Authority.

1.35. "TAX AUTHORITY" shall mean, with respect to any Tax, any
governmental entity, quasi-governmental body or political subdivision
thereof that imposes such Tax and the agency (if any) charged with the
determination or collection of such Tax for such entity, body or
subdivision.

1.36. "TAX INDEMNIFICATION PERIOD" shall mean any Pre-Distribution
Taxable Period and that portion of any Straddle Period that ends on the
Distribution Date.

1.37. "TAX RETURN" shall mean any return, filing, questionnaire,
information return, election or other document required or permitted to
be filed, including requests for extensions of time, filings made with
respect to estimated tax payments, claims for refund and amended returns
that may be filed, for any period with any Tax Authority (whether
domestic or foreign) in connection with any Tax (whether or not a payment
is required to be made with respect to such filing).

1.38. "TIMING DIFFERENCE" means an increase in income, gain or recapture,
or a decrease in deduction, loss or credit, as calculated for Income Tax
purposes, of the taxpayer for any Post-Tax Indemnification Period coupled
with an increase in deduction, loss or credit, or a decrease in income,
gain or recapture, of the taxpayer for the Tax Indemnification Period.

1.39. "TRANSACTION AGREEMENTS" has the meaning defined in Section 6.27 of
the Separation Agreement.

Any capitalized term not otherwise defined in this Agreement shall have
the meaning ascribed to it in the Separation Agreement.

2. FILING OF TAX RETURNS; PAYMENT OF TAXES; REFUNDS.

2.1. PREPARATION OF TAX RETURNS.

2.1.1. UNITED STATES FEDERAL INCOME TAX RETURNS. Ambassadors shall
prepare and file or cause to be prepared and filed all U.S.
Federal Income Tax Returns (including amendments thereto) which
include a member of the Ambassadors Group or a member of the
Education Group which are required to be filed for any
Pre-Distribution Taxable Period. Education hereby irrevocably
designates, and agrees to cause each of its affiliates to so
designate, Ambassadors as its agent to take any and all actions
necessary or incidental to the preparation and filing of such U.S.
federal Income Tax returns. Notwithstanding the foregoing,
Ambassadors shall consult with Education before it takes any
action that may reasonably be expected to have an adverse tax
effect on Education. To the extent there is a disagreement between
Ambassadors and Education as to the consequences of an election or
filing, the parties agree to resolve such a dispute in the manner
prescribed by the Separation Agreement.

2.1.2. UNITED STATES STATE AND LOCAL INCOME TAX RETURNS.

2.1.2.1. Ambassadors shall prepare and file or cause to be
prepared and filed all U.S. state and local Income Tax
Returns (including amendments thereto) (i) which are
required to be filed for any Pre-Distribution Taxable
Period which include a member of the Ambassadors Group or a
member of the Education Group and (ii) which are required
to be filed for any Straddle Period which (a) relate to a
member or members of the Ambassadors Group or their
respective businesses, assets or activities, or (b) relate
to members of each of the Ambassadors Group and the
Education Group or their respective businesses, assets or
activities. Education hereby irrevocably designates, and
agrees to cause each of its affiliates to so designate,
Ambassadors as its agent to take any and all actions
necessary or incidental to the preparation and filing of
such U.S. state and local Income Tax Returns.

2.1.2.2. All U.S. state and local Income Tax Returns
(including amendments thereto) which relate to a member of
the Education Group or their respective businesses, assets
or activities for all Straddle Periods which are not the
responsibility of the Ambassadors Group shall be the
responsibility of the Education Group.

2.1.3. NON-INCOME TAX RETURNS.

2.1.3.1. All Tax Returns (including amendments thereto)
which are not Income Tax Returns for all Pre-Distribution
Taxable Periods and all Straddle Periods shall be the
responsibility of the Ambassadors Group if such Tax Returns
(i) relate to a member or members of the Ambassadors Group
or their respective businesses, assets or activities, or
(ii) relate to members of each of the Ambassadors Group and
the Education Group or their respective businesses, assets
or activities. Education hereby irrevocably designates, and
agrees to cause each of its affiliates to so designate,
Ambassadors as its agent to take any and all actions
necessary or incidental to the preparation and filing of
such Tax Returns.

2.1.3.2. All Tax Returns (including amendments thereto)
which are not Income Tax Returns which relate to a member
of the Education Group or their respective businesses,
assets or activities for all Pre-Distribution Taxable
Periods and Straddle Periods which are not the
responsibility of the Ambassadors Group shall be the
responsibility of the Education Group.

2.1.4. POST-DISTRIBUTION DATE TAX RETURNS. All Tax Returns
(including amendments thereto) for all Post-Distribution Taxable
Periods shall be the responsibility of the Ambassadors Group if
such Tax Returns relate to a member or members of the Ambassadors
Group or their respective businesses, assets or activities, and
shall be the responsibility of the Education Group if such Tax
Returns relate to a member or members of

the Education Group or their respective businesses, assets or
activities.

2.1.5. CONSISTENT WITH PAST PRACTICE; REVIEW BY NON-RESPONSIBLE
PARTY. Unless Ambassadors and Education otherwise agree in
writing, all Tax Returns (including amendments thereto) described
in this Section 2.1 filed after the date of this Agreement, in the
absence of a controlling change in law or circumstances, shall be
prepared on a basis consistent with the elections, accounting
methods, conventions and principles of taxation used for the most
recent taxable periods for which Tax Returns involving similar
matters have been filed. Upon the request of the non-responsible
party, the party responsible under this Section 2.1 for
preparation of a particular Tax Return shall make available a
draft of such Tax Return (or relevant portions thereof) for review
and comment by such non-responsible party. Subject to the
provisions of this Agreement, all decisions relating to the
preparation of Tax Returns shall be made in the sole discretion of
the party responsible under this Agreement for such preparation.

2.2. PAYMENT OF TAXES.

2.2.1. UNITED STATES FEDERAL INCOME TAXES. Except as otherwise
provided in this Agreement, Ambassadors shall pay or cause to be
paid, on a timely basis, all Taxes due with respect to the
consolidated U.S. federal Income Tax liability for all
Pre-Distribution Taxable Periods of all members of the Ambassadors
Group and the Education Group.

2.2.2. UNITED STATES STATE AND LOCAL INCOME TAXES. Except as
otherwise provided in this Agreement:

2.2.2.1. Ambassadors shall pay or cause to be paid, on a
timely basis, all Taxes due with respect to the U.S. state
and local Income Tax liability (i) for all Pre-Distribution
Taxable Periods of all members of the Ambassadors Group and
the Education Group and (ii) for all Straddle Periods which
relate to (a) a member or members of the Ambassadors Group
or their respective businesses, assets or activities, or
(b) members of each of the Ambassadors Group and the
Education Group or their respective businesses, assets or
activities, provided, however, that Education, on behalf of
the Education Group, hereby assumes and agrees to pay
directly to or at the direction of Ambassadors, at least
two days prior to the date payment (including estimated
payment) thereof is due, the portion of such U.S. state and
local Income Taxes for that portion of any Straddle Period
which begins on the day after the Distribution Date which
relates to a member of the Education Group or its business,
assets or activities.

2.2.2.2. Education shall pay or cause to be paid, on a
timely basis, all U.S. state and local Income Taxes for all
Straddle Periods which relate to a member of the Education
Group, its business, assets or activities which are not the
responsibility of the Ambassadors Group other than any U.S.
state and local Income Taxes imposed in connection with the
transactions contemplated by the Transaction Agreements or
any other agreement entered into for the purpose of
implementing the Distribution.

2.2.3. NON-INCOME TAXES. Except as otherwise provided in this
Agreement:

2.2.3.1. Ambassadors shall pay or cause to be paid, on a
timely basis, all Taxes due with respect to the non-Income
Tax liability for all Pre-Distribution Taxable Periods and
Straddle Periods which relate to (i) a member or members of
the Ambassadors Group or their respective businesses,
assets or activities, or (ii) members of each of the
Ambassadors Group and the Education Group or their
respective businesses, assets or activities; and

2.2.3.2. Education shall pay or cause to be paid, on a
timely basis, all non-Income Taxes for all Straddle Periods
which relate to the Education Group business, assets or
activities which are not the responsibility of the
Ambassadors Group other than any non-Income Taxes imposed
in connection with the transactions contemplated by the
Transaction Agreements or any other agreement entered into
for the purpose of implementing the Distribution.

2.2.4. POST-DISTRIBUTION DATE TAXES. Except as otherwise provided
in this Agreement, all Taxes for all Post-Distribution Taxable
Periods shall be paid or caused to be paid by the party
responsible under this Agreement for filing the Tax Return
pursuant to which such Taxes are due or, if no such Tax Returns
are due, by the party liable for such Taxes.

2.2.5. CREDIT FOR PRIOR TAX PAYMENTS. To the extent any member of
a Group has made a payment of Taxes (including estimated Taxes) on
or before the Distribution Date, the party liable for paying such
Taxes under this Agreement shall be entitled to treat the payment
as having been paid or caused to have been paid by such party, and
such party shall not be required to reimburse the party which
actually paid such Taxes.

2.2.6. RESPONSIBILITY FOR PAYMENT; NOTICE OF PAYMENT DUE. Although
Ambassadors or Education may be responsible for paying a
particular Tax liability, Ambassadors and Education may agree that
the actual payment to a Taxing Authority of certain Tax
liabilities will be made by the non-responsible party. Ambassadors
and Education may agree to prepare a schedule setting forth such
Tax liabilities and may agree from time to time to additions or
deletions from such schedule. In each case where Ambassadors or
Education, as the case may be, is required to make payment of
Taxes to the other party, Ambassadors or Education, as the case
may be shall notify the other party as to the amount of Taxes due
from the other party at least five days prior to the date payment
(including estimated payment) is due.

2.3. TAX REFUNDS AND CARRYBACKS.

2.3.1. RETENTION AND PAYMENT OF TAX REFUNDS. Except as otherwise
provided in this Agreement, Ambassadors shall be entitled to
retain, and to receive within ten days after Actually Realized by
the Education Group, the portion of all refunds or credits of
Taxes for which the Ambassadors Group is liable pursuant to
Section 2.2 or Section 3.1.1 or is treated as having paid or
caused to have been paid pursuant to Section 2.2.6, and Education
shall be entitled to retain, and to receive within ten days after
Actually Realized by the Ambassadors Group, the portion of all
refunds or credits of Taxes for which the Education Group is
liable pursuant to Section 2.2 or Section 3.1.2 (including all
non-Income Taxes for which Education would have been liable
pursuant to Section 2.2.4 had such non-Income Taxes been due and
not paid) or is treated as having paid or caused to have been paid
pursuant to Section 2.2.6. The amount of any refund or credit of
Taxes to which Ambassadors or Education is entitled to retain or
receive pursuant to the foregoing sentence shall be reduced to
take account of any Taxes incurred by the Education Group, in the
case of a refund or credit to which Ambassadors is entitled, or
the Ambassadors Group, in the case of a refund or credit to which
Education is entitled, upon the receipt of such refund or credit.

2.3.2. CARRYBACKS. Unless the parties otherwise agree in writing,
Education shall elect and shall cause each member of the Education
Group to elect, where permitted by law, to carry forward any net
operating loss, net capital loss, charitable contribution or other
item arising after the Distribution Date that could, in the
absence of such election, be carried back to a Pre-Distribution
Taxable Period. Except as otherwise provided in this Agreement,
notwithstanding the provisions of Section 2.3.1, (i) any refund or
credit of Taxes resulting from the carryback of any item of Taxes
attributable to the Education Group arising in a Post-Tax
Indemnification Period to a Tax Indemnification Period shall be
for the account and benefit of the Education Group, and (ii) any
refund or credit of Taxes resulting from the carryback of any item
of Taxes attributable to the Ambassadors Group arising in a
Post-Tax Indemnification Period to a Tax Indemnification Period
shall be for the account and benefit of the Ambassadors Group.
Notwithstanding the foregoing, if the carrybacks from the same
year are filed by both parties and the carrybacks exceed the
amount refundable for such period, the benefits of such carrybacks
shall be allocated under the principles of Section 1.1502-21(b)(1)
of the consolidated return regulations.

2.3.3. REFUND CLAIMS. Ambassadors shall be permitted to file at
Ambassadors's sole expense, and Education

shall reasonably cooperate with Ambassadors in connection with,
any claims for refund of Taxes to which Ambassadors is entitled
pursuant to this Section 2.3 or any other provision of this
Agreement. Ambassadors shall reimburse Education for any
reasonable out-of-pocket costs and expenses incurred by any member
of the Education Group in connection with such cooperation.
Education shall be permitted to file at Education's sole expense,
and Ambassadors shall reasonably cooperate with Education in
connection with, any claims for refunds of Taxes to which
Education is entitled pursuant to this Section 2.3 or any other
provision of this Agreement. Education shall reimburse Ambassadors
for any reasonable out-of-pocket costs and expenses incurred by
any member of the Ambassadors Group in connection with such
cooperation.

2.4. ALLOCATION OF STRADDLE PERIOD TAXES. In the case of any Straddle
Period:

2.4.1. the Taxes of a member of the Ambassadors Group or the
Education Group or its business, assets or activities for that
portion of any Straddle Period beginning after the Distribution
Date shall be computed on a "closing-of-the-books" basis as if
such taxable period began on the day after the Distribution Date,
and, in the case of any Taxes of a member of the Ambassadors Group
or the Education Group or its business with respect to any equity
interest in any partnership or other "flowthrough" entity, as if a
taxable period of such partnership or other "flowthrough" entity
began as of the day after the Distribution Date; and

2.4.2. the Taxes of the Ambassadors Group and the Education Group
with respect to any Tax Return for a Straddle Period which
includes a member of each of the Ambassadors Group and the
Education Group or their respective businesses, assets or
activities shall be allocated between the Ambassadors Group, on
the one hand, and the Education Group, on the other hand,
determined in a manner analogous to that set forth in Treasury
Regulation Section 1.1552-1(a)(2).

3. TAX INDEMNIFICATION; TAX CONTESTS.

3.1. INDEMNIFICATION.

3.1.1. AMBASSADORS INDEMNIFICATION. Subject to Section 3.1.2,
Ambassadors shall indemnify, defend and hold harmless each member
of the Education Group and each of their respective shareholders,
directors, officers, employees and agents and each of the heirs,
executors, successors and assigns of any of the foregoing from and
against:

3.1.1.1. all Taxes of the Ambassadors Group;

3.1.1.2. all Taxes of the Education Group for all
Pre-Distribution Taxable Periods and all Straddle Periods
for which Ambassadors is liable pursuant to Section 2.2;

3.1.1.3. all liability as a result of Treasury Regulation
Section 1.1502-6(a) (which imposes several liability on
members of an affiliated group that file a U.S. federal
consolidated Income Tax return) or comparable U.S. state or
local provision for Income Taxes of any person which is or
has ever been affiliated with any member of the Ambassadors
Group or with which any member of the Ambassadors Group
joins or has ever joined (or is or has ever been required
to join) in filing any consolidated, combined or unitary
Income Tax Return for any Tax period ending on or before or
including the Distribution Date;

3.1.1.4. all Taxes for any Tax period (whether beginning
before, on or after the Distribution Date) that would not
have been payable but for the breach by any member of the
Ambassadors Group of any representation, warranty, covenant
or obligation under this Agreement;

3.1.1.5. all liability for a breach by any member of the
Ambassadors Group of any representation, warranty, covenant
or obligation under this Agreement;

3.1.1.6. all Income Taxes and non-Income Taxes imposed in
connection with the transactions contemplated by the
Transaction Agreements or any other agreement entered into
for the purpose of implementing the Distribution; and

3.1.1.7. all liability for any reasonable legal,
accounting, appraisal, consulting or similar fees and
expenses relating to the foregoing.

3.1.1.8. all Taxes imposed in connection with any action or
failure to act by Ambassadors as agent for Education
relating to Sections 2.1 and 2.2 herein.

Notwithstanding the foregoing, Ambassadors shall not indemnify, defend or
hold harmless any member of the Education Group from any liability for
Taxes (other than Taxes resulting from (i) the failure of the
Distribution to qualify as a reorganization described in Section
368(a)(1)(D) of the Code, or (ii) the failure of the Distribution to
qualify as tax-free to Ambassadors under Section 361(c) or Section 355(c)
of the Code) attributable to any action (including the making of an
election under Section 338 of the Code) taken by or with respect to any
member of the Education Group after the Distribution (other than any such
action expressly required or otherwise expressly contemplated by the
Transaction Agreements or any other agreement entered into for the
purpose of implementing the Distribution or taken in the ordinary course
of business) (a "Post-distribution Tax Act").

3.1.2. EDUCATION INDEMNIFICATION. Education shall be liable for,
and shall indemnify, defend and hold harmless each member of the
Ambassadors Group and each of the respective shareholders,
directors, officers, employees and agents and each of the heirs,
executors, successors and assigns of any of the foregoing from and
against:

3.1.2.1. all Taxes of any member of the Education Group
(other than Taxes for which Ambassadors provides
indemnification pursuant to Section 3.1.1);

3.1.2.2. all Taxes for any Tax period (whether beginning
before, on or after the Distribution Date) that would not
have been payable but for the breach by any member of the
Education Group of any representation, warranty, covenant
or obligation under this Agreement;

3.1.2.3. all liability for a breach by any member of the
Education Group of any representation, warranty, covenant
or obligation under this Agreement;

3.1.2.4. all Taxes attributable to a Post-Distribution Tax
Act;

3.1.2.5. all liability for any reasonable legal,
accounting, appraisal, consulting or similar fees and
expenses relating to the foregoing; and

3.1.2.6. all Taxes for any Tax period (whether beginning
before, on or after the Distribution Date) that would not
have been payable but for the breach by any member of the
Education Group of any representation, warranty, or
covenant made to the IRS in connection with Ambassadors'
request for a private letter ruling from the IRS.

3.2. NOTICE OF INDEMNITY. Whenever a party hereto (hereinafter an
"Indemnitee") becomes aware of the existence of an issue raised by
any Tax Authority which could reasonably be expected to result in
a determination that would increase the liability for any Tax of
the other party hereto or any member of its Group for any Tax
period or require a payment hereunder by the other party
(hereinafter an "Indemnity Issue"), the Indemnitee shall in good
faith promptly give notice to such other party (hereinafter the
"Indemnitor") of such Indemnity Issue. The failure of the
Indemnitee to give such notice shall not relieve the Indemnitor of
its obligations under this Agreement, except to the extent such
Indemnitor or a member of its Group is actually prejudiced by such
failure to give notice.

3.3. PAYMENTS.

3.3.1. TIMING ADJUSTMENTS.

3.3.1.1. Timing Differences. If a Tax audit proceeding or
an amendment of a Tax Return results in a Timing
Difference, and such Timing Difference results in a
decrease in an indemnity obligation Ambassadors has or
would otherwise have under Section 3.1.1 and/or an increase
in the amount of a Tax refund or credit to which
Ambassadors is entitled under Section 2.3, then in each
Post-Tax Indemnification Period in which the Education
Group Actually Realizes an Income Tax Detriment,
Ambassadors shall pay to Education an amount equal to such
Income Tax Detriment; provided, however, that the aggregate
payments which Ambassadors shall be required to make under
this Section 3.3.1.1 with respect to any Timing Difference
shall not exceed the aggregate amount of the Income Tax
Benefits realized by the Ambassadors Group for all taxable
periods and the Education Group for all Tax Indemnification
Periods as a result of such Timing Difference. Ambassadors
shall make all such payments within ten days after
Education notifies Ambassadors that the relevant Income Tax
Detriment has been Actually Realized.

3.3.1.2. Reverse Timing Differences. If a Tax audit
proceeding or an amendment to a Tax Return results in a
Reverse Timing Difference, and such Reverse Timing
Difference results in an increase in an indemnity payment
obligation of Ambassadors under Section 3.1 and/or a
decrease in the amount of a Tax refund or credit to which
Ambassadors is or would otherwise be entitled under Section
2.3, then in each Post-Tax Indemnification Period in which
the Education Group Actually Realizes an Income Tax
Benefit, Education shall pay to Ambassadors within ten days
after Education has Actually Realized such Income Tax
Benefit an amount equal to such Income Tax Benefit,
provided, however, that the aggregate payments which
Education shall be required to make under this Section
3.3.1.2 with respect to Reverse Timing Differences shall
not exceed the aggregate amount of the Income Tax
Detriments realized by the Education Group and the
Ambassadors Group for all Tax Indemnification Periods as a
result of such Reverse Timing Difference.

3.3.2. TIME FOR PAYMENT. Except as otherwise provided in this
Section 3.3.2, any indemnity payment required to be made pursuant
to this Agreement shall be paid within thirty days after the
indemnified party makes written demand upon the indemnifying
party, provided that in no event shall such payment be required to
be made earlier than five business days prior to the date on which
the relevant Taxes (including estimated Taxes) are required to be
paid (or would be required to be paid if no such Taxes are due) to
the relevant Tax Authority. Notwithstanding any other provision in
this Agreement, to simplify the administration of this Agreement,
the payment of any amount less than $100,000 required to be made
pursuant to this Agreement by one party hereto to another party
hereto need not be made to such other party prior to thirty days
following the later of (i) the close of the calendar quarter
during which such payment obligation arose and (ii) the day during
such calendar quarter when the aggregate amount of all such less
than $100,000 payment obligations arising during such calendar
quarter exceeds $500,000. Unless otherwise specified by the
recipient for items exceeding $250,000, any such payment may be
made on a net Tax basis (i.e., reduced to take account of any net
Tax benefit to be realized by the recipient (computed at the
effective Tax rate set forth in Section 3.3.3) to the extent such
recipient is entitled to a corresponding deduction.

3.3.3. PAYMENTS NET OF TAXES AND TAX BENEFITS. The amount of any
payment under this Agreement shall be (i) reduced to take into
account any net Tax benefit realized by the recipient's Group
arising from the incurrence or payment by such recipient's Group
of any amount in respect of which such payment is made and (ii)
increased to take into account any net Tax cost incurred by the
recipient's Group as a result of the receipt or accrual of
payments hereunder (grossed-up for such increase), in each case
determined by treating the recipient as recognizing all other
items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of accrual of any
payment hereunder. In determining the amount of any such Tax
benefit or Tax cost, the recipient's Group shall be deemed to be
subject to (i) U.S. federal Income Taxes and foreign Income Taxes
at the maximum statutory rate then in effect and (ii) U.S. state
and local Income Taxes

at an assumed rate of Five percent net of U.S. federal Income Tax
benefits. Except as otherwise provided in this Agreement or unless
the parties otherwise agree to an alternative method for
determining the present value of any such anticipated Tax benefit
or Tax cost, any payment hereunder shall initially be made without
regard to this section and shall be increased or reduced to
reflect any such net Tax cost (including gross-up) or net Tax
benefit only after the recipient's Group has Actually Realized
such Tax cost or Tax benefit.

3.3.4. RIGHT TO OFFSET. Any party making a payment under this
Agreement shall have the right to reduce any such payment by any
undisputed amounts owed to it by the other party to this
Agreement.

3.3.5. CHARACTERIZATION OF PAYMENTS. It is the intention of the
parties to this Agreement that payments made pursuant to this
Agreement are to be treated as relating back to the Distribution
as an adjustment to the assets and liabilities transferred
thereunder, and the parties shall not take any position
inconsistent with such intention before any Tax Authority, except
to the extent that a final determination (as defined in Section
1313 of the Code) with respect to the recipient party causes any
such payment not to be so treated.

3.4. TAX CONTESTS. The Indemnitor and its representatives, at the
Indemnitor's expense, shall be entitled to participate (i) in all
conferences, meetings and proceedings with any Tax Authority, the subject
matter of which is or includes an Indemnity Issue and (ii) in all
appearances before any court, the subject matter of which is or includes
an Indemnity Issue. The party who has responsibility for filing the Tax
Return under this Agreement (the "Responsible Party") with respect to
which there could be an increase in liability for any Tax or with respect
to which a payment could be required hereunder shall have the right to
decide as between the parties hereto how such matter is to be dealt with
and finally resolved with the appropriate Tax Authority and shall control
all audits and similar proceedings. If no Tax Return is or was required
to be filed in respect of an Indemnity Issue, the Indemnitor shall be
treated as the Responsible Party with respect thereto. The Responsible
Party agrees to cooperate in the settlement of any Indemnity Issue with
the other party and to take such other party's interests into account.
Notwithstanding any other provision of this Agreement, if Ambassadors has
materially satisfied its obligations under this Agreement and if
Education fails to permit Ambassadors to control any audit or proceeding
regarding any Indemnity Issue relating to (i) the qualification of the
Distribution as a "reorganization" within the meaning of Section
368(a)(1)(D) of the Code or as tax-free to Ambassadors under Section
361(c) or Section 355(c) of the Code, or (ii) the qualification of any
transactions undertaken pursuant to the Transaction Agreements as
transactions described in Section 355 of the Code, "reorganizations"
within the meaning of Section 368(a)(1)(D) of the Code or as otherwise
tax-free transactions, then Ambassadors shall not be liable for and shall
not indemnify the Education Group for any Tax deficiency resulting from
an adverse determination of such Indemnity Issue.

4. COMPENSATION PAYMENTS; OPTIONS.

4.1. COMPENSATION PAYMENTS.

4.1.1. TAX DEDUCTIONS. Notwithstanding anything to the contrary in
this Agreement, unless Ambassadors and Education otherwise agree
in writing, the Education Group (and not the Ambassadors Group)
shall claim the post-Distribution Date Tax deductions in respect
of Compensation Payments paid by the Education Group to Education
Group Employees and Former Employees, and the Ambassadors Group
(and not the Education Group) shall claim the post-Distribution
Date Tax deductions in respect of Compensation Payments paid by
the Ambassadors Group to Education Group Employees and Former
Employees.

4.1.2. NOTICES, WITHHOLDING, REPORTING. The party responsible for
making the Compensation Payments pursuant to the Employee Matters
Agreement shall withhold applicable Taxes and satisfy applicable
Tax reporting obligations in connection with the Compensation
Payments made to all Education Group Employees and Former
Employees.

4.1.3. TAX AUDIT ADJUSTMENTS. Notwithstanding the provisions of
Section 4.1.1, in the event a Tax audit proceeding shall determine
(by settlement or otherwise), or the parties otherwise determine
pursuant to Section

4.6, that all or a portion of the Tax deductions in respect of
Compensation Payments paid to Education Group Employees or Former
Employees was not available to the party claiming the Tax
deduction, then the appropriate party shall claim such Tax
deductions (by an amended Tax Return or otherwise) and shall pay
to the party which had previously claimed such Tax deduction,
within ten days after such Tax deduction has been Actually
Realized by the such appropriate party, the amount of the
resulting Tax benefit to such appropriate party. Any such
reimbursement payment shall be made based on the actual rate paid
by the taxpayer.

4.2. STOCK OPTIONS.

4.2.1. STOCK OPTION ADJUSTMENTS AND GRANTS. Pursuant to the terms
of the Employee Matters Agreement, Ambassadors Common Stock
Options outstanding at the time of the Distribution will be
adjusted as follows:

4.2.1.1. Ambassadors Common Stock Options held by employees
of the Ambassadors Group at the time of the Distribution
will be adjusted as to the number of shares of common stock
underlying such options and exercise price so as to
preserve the intrinsic value of such options prior to the
Distribution;

4.2.1.2. Ambassadors Common Stock Options held by employees
of Education Group at the time of the Distribution will be
exchanged for Education Common Stock Options. The number of
shares underlying the Education Common Stock Options and
the exercise price of the Education Common Stock Options
will be adjusted so as to preserve the intrinsic value of
the Ambassadors Common Stock Options prior to the
Distribution.

4.2.2. TAX DEDUCTIONS. Notwithstanding anything to the contrary in
this Agreement, unless the IRS issues a contrary private letter
ruling to Ambassadors or Education, or Ambassadors and Education
otherwise agree in writing, (i) the Ambassadors Group (and not the
Education Group) shall claim the post-Distribution Date Tax
deductions in respect of Ambassadors Common Stock Options and (ii)
the Education Group (and not the Ambassadors Group or the Boeing
Group) shall claim any post-Distribution Date Tax deductions in
respect of Education Common Stock Options.

4.2.3. NOTICES, WITHHOLDING, REPORTING.

4.2.3.1. Ambassadors shall promptly notify Education of any
post-Distribution Date event giving rise to income to any
Education Group Employees and Former Employees in
connection with the Ambassadors Common Stock Options and,
if required by law, Education shall withhold applicable
Taxes and satisfy applicable Tax reporting obligations in
connection therewith. Ambassadors shall within ten days of
demand thereof reimburse Education for all reasonable
out-of-pocket expenses incurred in connection with the
Ambassadors Common Stock Options, including with respect to
incremental Tax reporting obligations and any incremental
employment Tax obligations; provided that Education shall
use reasonable efforts to collect any such amounts required
to be paid by Education Group Employees and Former
Employees from such Education Group Employees and Former
Employees.

4.2.3.2. Education shall promptly notify Ambassadors of any
post-Distribution Date event giving rise to income to any
non-Education Group Employees and Former Employees in
connection with the Education Common Stock Options and, if
required by law, Ambassadors shall withhold applicable
Taxes and satisfy applicable Tax reporting obligations in
connection therewith. Education shall within ten days of
demand thereof reimburse Ambassadors for all reasonable
out-of-pocket expenses incurred in connection with the
Education Common Stock Options, including with respect to
incremental Tax reporting obligations and any incremental
employment Tax obligations; provided that Ambassadors shall
use reasonable efforts to collect any such amounts required
to be paid by non-Education Group Employees and Former
Employees from such non-Education Group Employees and
Former Employees.

4.2.4. TAX AUDIT ADJUSTMENTS. Notwithstanding the provisions of
Section 4.2.2, in the event a Tax audit

proceeding shall determine (by settlement or otherwise) that all
or a portion of the Tax deductions in respect of Ambassadors
Common Stock Options or Education Common Stock Options should have
been claimed by the Education Group or the Ambassadors Group,
respectively, the Education Group or the Ambassadors Group,
respectively, shall claim such Tax deductions (by an amended Tax
Return or otherwise) and shall pay to Ambassadors or Education, as
the case may be, the amount of any Tax refund or credit arising in
respect of such Tax deduction within ten days after such Tax
refund or credit is Actually Realized by the Education Group or
the Ambassadors Group, as the case may be.

4.3. CHANGE IN LAW. Notwithstanding the agreement with respect to
reporting of Tax items and the claiming of the deductions set forth in
Article 4 of this Agreement, neither the Ambassadors Group nor the
Education Group shall have any obligation to report any such Tax items or
claim such deductions as set forth in such Article in the event that
either such party determines, based on an opinion of tax counsel, which
opinion shall be satisfactory to the other party, that there is no
substantial authority to support reporting such Tax items or claiming
such deductions on a Tax Return filed by such party as a result of a
change in or amendment to any law or regulation, or any change in the
official interpretation thereof, effective or occurring after the date of
this Agreement, and such Group provides prompt notice to the other Group
of any such determination.

5. COOPERATION AND EXCHANGE OF INFORMATION.

5.1. INCONSISTENT ACTIONS. Each party to this Agreement agrees (i) to,
and to cause each of the relevant members of its Group to, report the
Distribution as a transaction described in Section 368(a)(1)(D) or
Section 355(c) of the Code on all Tax Returns and other filings, (ii) to
use its best efforts to ensure that the Distribution receives such
treatment for U.S. federal Tax purposes and (iii) that, unless it has
obtained the prior written consent of the other party, it (and the
members of its Group) shall not take any action inconsistent with, or
fail to take any action required by, the Transaction Agreements.

5.2. COOPERATION AND EXCHANGE OF INFORMATION. Each party hereto agrees to
provide, and to cause each member of its Group to provide, such
cooperation and information as such other party shall request, on a
timely basis, in connection with the preparation or filing of any Tax
Return or claim for Tax refund not inconsistent with this Agreement or in
conducting any Tax audit, Tax dispute, or otherwise in respect of Taxes
or to carry out the provisions of this Agreement. To the extent necessary
to carry out the purposes of this Agreement and subject to the other
provisions of this Agreement, such cooperation and information shall
include without limitation the non-exclusive designation of an officer of
Ambassadors as an officer of Education and each of its affiliates for the
purpose of signing Tax Returns, cashing refund checks, pursuing refund
claims, dealing with Tax Authorities and defending audits as well as
promptly forwarding copies of appropriate notices and forms or other
communications received from or sent to any Tax Authority which relate to
the Education Group for the Tax Indemnification Period and providing
copies of all relevant Tax Returns for the Tax Indemnification Period,
together with accompanying schedules and related workpapers, documents
relating to rulings or other determinations by Tax Authorities, including
without limitation, foreign Tax Authorities, and records concerning the
ownership and Tax basis of property, which either party may possess.
Subject to the rights of the Education Group under the other provisions
of this Agreement, such officer shall have the authority to execute
powers of attorney (including Form 2848) on behalf of each member of the
Education Group with respect to Tax Returns for the Tax Indemnification
Period. Each party to this Agreement shall make, or shall cause its
affiliates to make, its employees and facilities available on a mutually
convenient basis to provide an explanation of any documents or
information provided hereunder.

5.3. TAX RECORDS.

5.3.1. Ambassadors and Education agree to (and to cause each
member of their respective Group to) (i) retain all Tax Returns,
related schedules and workpapers, and all material records and
other documents as required under Section 6001 of the Code and the
regulations promulgated thereunder relating thereto existing on
the date hereof or created through the Distribution Date, for a
period of at least ten years following the Distribution Date and
(ii) allow the party to this Agreement, at times and dates
reasonably acceptable to the retaining party,

to inspect, review and make copies of such records, as Ambassadors
and Education may reasonably deem necessary or appropriate from
time to time. In addition, after the expiration of such ten-year
period, such Tax Returns, related schedules and workpapers, and
material records shall not be destroyed or otherwise disposed of
at any time, unless, prior to such destruction or disposal, (A)
the party proposing to destroy or otherwise dispose of such
records shall provide no less than 30 days' prior written notice
to the other party, specifying in reasonable detail the records
proposed to be destroyed or disposed of and (B) if a recipient of
such notice shall request in writing prior to the scheduled date
for such destruction or disposal that any of the records proposed
to be destroyed or disposed of be delivered to such requesting
party, the party proposing the destruction or disposal shall
promptly arrange for the delivery of such requested records at the
expense of the party requesting such records.

5.3.2. Notwithstanding anything in this Agreement to the contrary,
if any party fails to comply with the requirements of Section
5.3.1 hereof, the party failing so to comply shall be liable for,
and shall hold the other party, harmless from, any Taxes
(including without limitation, penalties for failure to comply
with the record retention requirements of the Code) and other
costs resulting from such party's failure to comply.

6. MISCELLANEOUS.

6.1. AUTHORITY. Each of the parties hereto represents to the other that
(a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery
and performance of this Agreement by it have been duly authorized by all
necessary corporate or other actions, (c) it has duly and validly
executed and delivered this Agreement, and (d) this Agreement is a legal,
valid and binding obligation, enforceable against it in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
and general equity principles.

6.2. AMENDMENTS AND EXECUTION. The Boards of Directors of Education and
Ambassadors may mutually agree to amend the provisions of this Agreement
at any time or times, for any reason, either prospectively or
retroactively, to such extent and in such manner as the Boards mutually
deem advisable. Each Board may delegate its amendment power, in whole or
in part, to one or more Persons or committees as it deems advisable. No
change or amendment will be made to this Agreement, except by an
instrument in writing signed by authorized individuals. This Agreement
and amendments hereto shall be in writing and executed on behalf of
Ambassadors and Education by their respective duly authorized officers
and representatives.

6.3. COUNTERPARTS. This Agreement, including any attachments hereto and
the other documents referred to herein, may be executed via facsimile or
otherwise in counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement.

6.4. EFFECTIVENESS. All covenants and agreements of the parties contained
in this Agreement shall be subject to and conditioned upon the
Distribution becoming effective.

6.5. EFFECT IF SEPARATION AND/OR DISTRIBUTION DOES NOT OCCUR. If the
Separation and/or Distribution does not occur, then all actions and
events that are, under this Agreement, to be taken or occur effective as
of the Separation Date and/or Distribution Date, or otherwise in
connection with the Separation and/or Distribution, shall not be taken or
occur except to the extent specifically agreed by Education and
Ambassadors.

6.6. TERMINATION. This Agreement may be terminated and the Distribution
abandoned at any time prior to the time of Distribution by and in the
sole discretion of the Ambassadors Board of Directors without the
approval of Education or of Ambassadors's shareholders. In the event of
such termination, no party will have any liability of any kind to any
other party on account of such termination.

6.7. BINDING EFFECT; ASSIGNMENT. Except for the provisions of Article 3
relating to Tax Indemnification, this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
legal

representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Except as herein specifically provided to the contrary, neither party may
assign this Agreement or any rights or obligations hereunder, without the
prior written consent of the other party, and any such assignment shall
be void; provided, however, either party (or its permitted successive
assignees or transferees hereunder) may assign or transfer this Agreement
as a whole without consent to an entity that succeeds to all or
substantially all of the business or assets of such party to which this
Agreement relates.

6.8. PERFORMANCE. Each party hereto will cause to be performed, and
hereby guarantees the performance of all actions, agreements and
obligations set forth herein to be performed by any subsidiary or any
member of such party's Group.

6.9. ADDITIONAL ASSURANCES. Except as may be specifically provided herein
to the contrary, the provisions of this Agreement shall be self-operative
and shall not require further agreement by the parties; provided,
however, at the request of either party, the other party shall execute
such additional instruments and take such additional acts as are
reasonable, and as the requesting party may reasonably deem necessary, to
effectuate this Agreement.

6.10. ENTIRE AGREEMENT. This Agreement, the Separation Agreement, all
other Transaction Agreements, including any annexes, schedules and
exhibits hereto or thereto, and other agreements and documents referred
to herein and therein, will together constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof
and shall supersede all prior negotiations, agreements and understandings
of the parties of any nature, whether oral or written, with respect to
such subject matter. Notwithstanding any other provisions in this
Agreement to the contrary, in the event and to the extent that there
shall be a conflict relating to Taxes between the provisions of this
Agreement and the provisions of the Separation Agreement or any other
Transaction Agreement, the provisions of this Agreement shall control.

6.11. ATTACHMENTS. All attachments hereto are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Capitalized
terms used in the attachments hereto but not otherwise defined therein
will have the respective meanings assigned to such terms in this
Agreement.

6.12. DESCRIPTIVE HEADINGS. The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. When a reference is made
in this Agreement to an Article or a Section, Exhibit or Schedule, such
reference shall be to an Article or Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated.

6.13. GENDER AND NUMBER. Whenever the context of this Agreement requires,
the gender of all words herein shall include the masculine, feminine and
neuter, and the number of all words herein shall include the singular and
plural.

6.14. SEVERABILITY. The parties hereto have negotiated and prepared the
terms of this Agreement in good faith with the intent that each and every
one of the terms, covenants and conditions herein be binding upon and
inure to the benefit of the respective parties. Accordingly, if any one
or more of the terms, provisions, promises, covenants or conditions of
this Agreement or the application thereof to any person or circumstance
shall be adjudged to any extent invalid, unenforceable, void or voidable
for any reason whatsoever by a court of competent jurisdiction, such
provision shall be as narrowly construed as possible, and each and all of
the remaining terms, provisions, promises, covenants and conditions of
this Agreement or their application to other persons or circumstances
shall not be affected thereby and shall be valid and enforceable to the
fullest extent permitted by law. To the extent this Agreement is in
violation of applicable law, then the parties agree to negotiate in good
faith to amend the Agreement, to the extent possible consistent with its
purposes, to conform to law and effect the original intent of the
parties.

6.15. SURVIVAL OF AGREEMENTS. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the parties contained in this
Agreement shall remain in full force and effect and shall survive the
time of Distribution.

6.16. GOVERNING LAW. This Agreement shall be construed in accordance with
and all Disputes hereunder shall be governed by the laws of the State of
California, excluding its conflict of law rules. The Superior Court of
Los Angeles County and/or the United States District Court for the
Southern District of California shall have jurisdiction and venue over
all Disputes between the parties that are permitted to be brought in a
court of law pursuant to Section 4.6 of the Separation Agreement.

6.17. NOTICES. Any notice, demand, offer, request or other communication
required or permitted to be given by either party pursuant to the terms
of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally,
(iii) one Business Day after being delivered by facsimile (with receipt
of appropriate confirmation), (iv) one Business Day after being deposited
with a nationally recognized overnight courier service or (v) four days
after being deposited in the U.S. mail, First Class with postage prepaid,
and addressed to:

If to Ambassadors: With a copy to:

Ambassadors International, Inc. Xxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxxxx Xxxxxx Richman, Mann, Chizever, Philips & Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 0000 Xxxxxxxx Xxxx., Xxxxxxxxx Xxxxx
Xxxxxxxxx: Xxxxxxx Xxxxx, XX 00000
Facsimile: 000 000-0000

If to Education: With a copy to:

Ambassadors Group, Inc. Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxxxx Building Richman, Mann, Chizever, Philips & Xxxxxx
000 Xxxxx Xxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxx., Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000 Xxxxxxx Xxxxx, XX 00000
Facsimile: Facsimile: 000 000-0000

Ambassadors and Education may substitute a different address or facsimile
number, from time to time, if such substitute is provided to the intended
notice recipient in writing by notice given in the manner provided in
this section.

6.18. WAIVERS; REMEDIES. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder will operate as a
waiver thereof, nor will any waiver on the part of any party hereto of
any right, power or privilege hereunder operate as a waiver of any other
right, power or privilege hereunder, nor will any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege hereunder. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies which the
parties may otherwise have at law or equity.

6.19. DISPUTE RESOLUTION. Any and all controversies, disputes or claims
arising out of, relating to, in connection with or resulting from this
Agreement (or any amendment thereto or any transaction contemplated
hereby or thereby), including as to its existence, interpretation,
performance, non-performance, validity, breach or termination, including
any claim based on contract, tort, statute or constitution and any claim
raising questions of law, whether arising before or after termination of
this Agreement, shall be deemed a Dispute as defined in the Separation
Agreement and shall be resolved exclusively by, in accordance with, and
subject to the limitations set forth in the Separation Agreement.

6.20. FORCE MAJEURE. Neither party shall be liable or deemed to be in
default for any delay or failure in performance under this Agreement or
other interruption of service deemed to result, directly or indirectly,
from acts of God, civil or military authority, acts of public enemy, war,
accidents, explosions, earthquakes, floods, failure of transportation,
strikes or other work interruptions by either party's employees, or any
other similar cause beyond the reasonable control of either party unless
such delay or failure in performance is expressly addressed elsewhere in
this Agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties as of the date first written
above.

Ambassadors International, Inc. Ambassadors Group, Inc.,
a Delaware corporation a Delaware corporation

By: By:
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Title: Title:
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