Trade Association of Paddlesports (TAPS) and Paddlesports Industry Association (PIA) Memorandum of Understanding (MOU)

This Memorandum of Understanding shall serve as a nonbinding statement of the mutual desires and intentions of the Trade Association of Paddlesports (“TAPS”) and the Professional Paddlesports Association, Inc. d/b/a the Paddlesports Industry Association (“PIA”) to combine operations and memberships into one paddlesports industry association to build and strengthen the industry and serve the needs of their memberships. As contemplated, this transaction will have the following significant terms and conditions which will be incorporated into a mutually acceptable Asset Purchase Agreement (“Agreement”):

1. Prior to, and during the period from the date of this Memorandum of Understanding through the closing of the transaction, it is anticipated that any party may disclose or reveal to any other, either orally or in writing, or by inspection, confidential information as to the respective operations of TAPS and PIA that would be helpful in evaluating the proposed transaction. Such “Confidential Information” to be disclosed or inspected, as the case may be, would include information as may be supplied by the respective parties that is not generally ascertainable from public or published information or trade sources. The parties agree to retain in confidence, all such “Confidential Information” transmitted by them to any other party, and not to disclose to others, or permit the use or disclosure of, any such Confidential Information obtained from or revealed by the other party.

2. Recognizing that cooperation and coordinated communications will be essential to achieving unification of the two organizations, the parties agree that from the date of this Memorandum of Understanding through the earlier of December 31, 2008 or the preparation, execution and closing of the Agreement, the parties will collaborate and cooperate to facilitate the completion of the transaction, using their best efforts to blend the cultures of the organizations, their Boards, and their memberships, in order for the unified organization to immediately commence operations in a cooperative manner.

3. Recognizing that industry perceptions are critical to the success of this effort, the transaction is to be characterized as an industry unification. The transaction is not to be characterized as a takeover, acquisition, purchase, or similar terms indicating that either party is stronger than, or superior to, the other. Neither party, nor their Board members, shall disparage the other party or its Board members or personnel. Any statements about the transaction to the public or the memberships of either organization will require the prior approval of the other organization. The primary contacts to negotiate, coordinate, and publicly speak about or comment on the transaction will be one individual from each existing association, likely to be Landis Arnold and Michael Prom. The parties will jointly create and follow a written communications plan for the transaction, to include immediate joint announcement of this Memorandum of Understanding, membership notifications and meetings, and public announcements. It is the mutually understood goal of this process to complete the MOU and announce its intentions and meanings to the industry no later than the Outdoor Retailer Show in August 2008.

4. If unification discussions are terminated for any reason, the parties will issue a joint public statement and neither party shall make any other comment or independent statements to its membership, third parties, press or the public regarding the transaction or its failure to close. Such termination shall leave the parties in status quo, with the “Let’s Go Paddle” Joint Marketing Plan to remain in place.

5. The existing TAPS entity, including its federal tax exemption, will serve as the vehicle for the combined organizations and will sometimes be referred to herein as the “Unified Organization.” This will avoid starting over with a new entity and obtaining a new tax exemption, thereby saving the combined organizations’ capital, simplifying the transaction, and providing control over the timing of the combination. It is also intended to allow for select assets and liabilities to be included in the combination, as representatives of the parties discussed in meetings in Madison, Wisconsin, on March 7, 2008. The organizational documents of the Unified Organization, including Articles of Incorporation, Bylaws and Board Policies shall be amended and readied for approval and implementation prior to, and as a condition of, the closing. The intent is for these documents to be industry best practices, rather than those of either constituent party.

6. PIA will convey all of its assets, other than its insurance subsidiary known as RIA, and its interest in Paddlesports Publishing, Inc., to the Unified Organization. Both of these residual assets will be wound up or sold, and liquidated by PIA. Proceeds from these dispositions will be applied, first, to the liquidation of any residual PIA liabilities. PIA shall then be dissolved as soon as practical and any net residual assets will be contributed to the Unified Organization. Such net residual contributions, after being used to reimburse accrued Unification expenses, shall be earmarked by the Unified Organization’s Board, to the extent the Board deems it fiscally responsible in light of other budget priorities, to support the business needs of the paddlesports rental and outfitter sector, to the extent approved by a vote of three-quarters of the Board members.

7. The Unified Organization will assume the following PIA liabilities: credit card debt, not to exceed the amount currently outstanding, and term debt, not to exceed the amount currently outstanding, and PIA’s employment contract with Matt Menashes.

8. PIA member benefits contracts or agreements will be assumed (or renegotiated) by the Unified Organization, and in its discretion, to the extent they do not conflict with existing TAPS/OIA member benefit programs, and will not conflict with or hinder the Unified Organization’s ability to secure support from third parties such as Outdoor Retailer or Outdoor Industry Association. These include affinity/benefit partners including US Bank/Elavon merchant credit card processing; GE Money consumer financing; GTS transportation services, CBIZ and MMIC health insurance marketing. The Unified Organization will also negotiate a new shared membership agreement with the American Canoe Association.

9. The Joint Marketing Agreement between TAPS and PIA will be terminated as a self standing program at the closing, with the understanding that the Unified Organization will continue to operate the “Let’s Go Paddle” cooperative marketing campaign, and pursue the underlying mission of that agreement after the closing for the benefit of the combined memberships.

10. The parties will jointly agree on which member programs to retain, it being the general intent of the parties to retain PIA’s National School for Paddleports Business, the Paddlesports Pro conference series, the Certified Paddlesports Professional program, and Disaster Assistance programs, and TAPS’ current program offerings. Ultimately, it is understood that the ongoing program slate will require the Unified board’s support and approval.

11. In order to ensure that the best interests and productivity of the Unified Organization are met in a cost effective manner, an evaluation of support staff and their salaries must be conducted. It is the goal of the parties to honor PIA’s remaining contract term with Matt Menashes, and to retain Michael Pardy as a full-time or part-time contractor at a compensation level that is proportionate to full-time equivalent pay parity with Mr. Menashes. These individuals would hold the roles of operational directors with separate responsibility areas, reporting to the Chairman of the Unified board, however they will together be responsible for cooperating, designing and implementing an industry unification plan. The parties recognize the financial pressure this will put on the Unified Organization, and will work to modify employment relationships (on a parity basis) and consolidate all staff and what have heretofore been outsourced projects in the two directors. No other PIA employees or contractors would join the Unified Organization. It is contemplated that the Unified board would advertise for and seek applications for one Executive Director to commence employment in Spring 2010.

12. All members of both existing organizations will be issued memberships in the Unified Organization, valid through the expiration of their existing memberships in PIA and TAPS. Thereafter, memberships will be offered on terms offered by the Unified Organization, which terms shall be agreed upon and announced prior to the closing.

13. At the time of closing the transaction, PIA will terminate the memberships of its members, discontinue operations, enter into a non-competition agreement, liquidate its assets, dissolve and distribute residual funds as soon as reasonably possible yet while maximizing the value of its residual assets.

14. At the time of closing the transaction, the name of the Unified Organization will be changed to a mutually acceptable name, with the tagline “The Paddlesport Industry’s Association” (to be spelled out, and not printed or stated as PIA initials). Its Articles of Incorporation and Bylaws will be amended to include terms agreed upon by the parties, and its Board of directors shall be reconstituted to include members from both organizations mutually agreed upon by the parties through 2009 (the “Reorganization”). The parties acknowledge that PIA’s Articles of Incorporation and Bylaws have undergone extensive review and should be given due consideration as the model for the Unified Organization.

15. The closing of the transaction would occur by November 30, 2008. Public announcement of the MOU and its timeline and process will occur by or at the Outdoor Retailer Trade Show in August 2008.

16. TAPS will pay for the preparation of the Agreement and services in connection with the closing by Faegre & Benson LLP, which shall act as counsel to TAPS and the Unified Organization. Faegre & Benson LLP shall be available, if requested by PIA, and to be paid for out of the Unified Organization (or by PIA if the closing fails to occur) to assist PIA with legal compliance in obtaining membership approval and winding up PIA’s operations. If the combination fails to close for any reason other than the wrongful refusal of TAPS to close, PIA shall reimburse TAPS for one-half of the legal expenses incurred by TAPS in connection with the preparation of this Memorandum of Understanding and with the transaction. In the event of any dispute between the parties that cannot be resolved by the parties, Faegre & Benson LLP shall withdraw from the representation and shall not represent either party in connection with such dispute.

17. Promptly upon the execution of this Memorandum of Understanding by all parties, the unification working group shall jointly prepare a comprehensive transition plan, membership integration plan and program, including networking and membership education benefits, detailed pro forma budget and assumptions, and such other documents as are necessary, and Landis Arnold and Mike Prom shall prepare a proposed combined Board slate. Faegre & Benson LLP shall prepare the Agreement and required ancillary documents.

18. It is understood that the Agreement and the Reorganization will need to be approved by the Boards of Directors of TAPS and PIA, and by the members of PIA, and that the Reorganization will need to be approved by the members of TAPS. Information about the combination including such disclosures as are reasonably necessary to allow for informed votes by the parties shall be mutually agreed upon prior to distribution.

It is understood that this Memorandum of Understanding is intended to be, and shall be construed only as, a summary of intentions evidencing the discussions between TAPS and PIA to the date hereof; and the respective rights and obligations of TAPS and PIA remain to be defined in the Agreement, into which this Memorandum of Understanding and all prior discussions shall be merged; provided, however, that the respective obligations of the parties under Paragraphs 1 and 16 of this Memorandum of Understanding shall be binding when this Memorandum of Understanding shall be executed and delivered. Absent an Agreement, neither party shall be obligated to proceed with this unification effort.

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