Sierra Dawn Arabian Horses, Arabian Horses to Ride, Stallion at Stud

IAHA/AHRA Merger Documents
PAT Merger Plan, page 2

Section 10.3 Market Development and Promotion Committee.

(a) Composition. Arabian Horse Association shall have a Market Development and Promotion Committee consisting of seven (7) members of which three (3) members shall be selected to represent the interest of the purebred Arabian horse

(the "Purebred Members"), three (3) members shall be selected to represent the interest of the Half-Arabian/Anglo-Arabian horse (the "Half-Arabian/Anglo-Arabian Members") and one (1) member (the "Other Member") selected by the above six (6) members. Initially, the Trustees of the Purebred Trust shall select one Purebred Member to serve for a term of one (1) year, one Purebred Member to serve for a term of two (2) years, and one Purebred Member to serve for a term of three (3) years. Thereafter, the Trustees of the Purebred Trust shall select Purebred Members each year to fill the vacancies created by the expiration of such terms, which successor members shall serve for a term of three (3) years. Initially, the Arabian Horse Association Board of Directors shall select one Half-Arabian/Anglo-Arabian Member to serve for a term of one (1) year, one Half-Arabian/Anglo-Arabian Member to serve for a term of two (2) years, and one Half-Arabian/Anglo-Arabian Member to serve for a term of three (3) years. Thereafter, the Arabian Horse Association Board of Directors shall select HalfArabian/Anglo-Arabian Members each year to fill the vacancies created by the expiration of such terms, which successor members shall serve for a term of three (3). Once the initial Purebred Members and Half-Arabian/Anglo-Arabian Members are selected, these six (6) persons shall elect by majority vote the initial Other Member to serve for a term of three (3) years and thereafter shall elect persons to fill vacancies create by the expiration of or resignation of the initial Other Member and succeeding Other Members. Each year, the Market Development and Promotion Committee shall elect its own chairperson.

(b) Duties. The Market Development and Promotion Committee shall be responsible for guiding Arabian Horse Association's marketing and promotional activities relating to the promotion of the Arabian horse. The committee shall formulate marketing and promotional plans for Arabian Horse Association and shall develop specific marketing and promotional activities.

(c) Funding. When a majority of the Market Development and Promotion Committee approves a marketing or promotional activity, the committee shall solicit funds from the following sources to fund the implementation of such approved activity:

(i) The Purebred Trust. The Trustees of the Purebred Trust shall determine whether, and to the extent, the specific activity serves the interest of the purebred Arabian horse and determine what portion, if any, of the solicited amount of funding it shall contribute to the activity, which determination shall be in the sole discretion of the Trustees.

(ii) The Designated Fund. Arabian Horse Association shall establish a designated fund (the "Designated Fund") comprised of the Designated Revenues for use by the Market Development and Promotion Committee. The Arabian Horse Association Board of Directors shall determine whether, and to the extent, an activity proposed by the Market Development and Promotion Committee should be supported by the Designated Fund.

(iii) The General Funds of Arabian Horse Association. The Arabian Horse Association Board of Directors shall determine whether, and to the extent, those activities should be supported by the general funds of Arabian Horse Association.

(d) Relationship with Arabian Horse Association Board of Directors, Committees and Commissions. The Market Development and Promotion Committee shall act independently from the Arabian Horse Association Board of Directors. The Arabian Horse Association Board of Directors cannot restrict the Market Development and Promotion Committee from seeking funding to implement its recommendations. However, the Arabian Horse Association Board of Directors may generate its own marketing and promotional activities and shall approach the Market Development and Promotion Committee to solicit funding from the Purebred Trust or the Designated Fund to implement these activities. If the Market Development and Promotion Committee does not endorse the activities proposed by the Arabian Horse Association Board of Directors and refuses to solicit funds from either the Purebred Trust or the Designated Fund, the Arabian Horse Association Board of Directors has the right (as it does with other corporate decisions) to direct funds from Arabian Horse Association's general funds to implement the activities. Arabian Horse Association and its committees and commissions shall make every effort to cooperate with and implement the approved programs of the Market Development and Promotion Committee.

(e) Staffing. Arabian Horse Association shall maintain a promotional staff for the purpose of developing, monitoring, and implementing promotional programs approved by the Market Development and Promotion Committee. The salaries and office related expenses of such promotional staff shall not be charged to the Market Development and Promotion Committee or the Purebred Trust and shall not be taken from the Purebred Revenues or the Designated Revenues but, instead, shall be paid by Arabian Horse Association's general funds within the .limits of Arabian Horse Association's annual budget. Any reduction in promotional staffing levels required as a result of Arabian Horse Association having serious financial problems must be part of a staff reduction applied uniformly throughout the entire staff of Arabian Horse Association.

Section 10.4 Racing Committee. The Racing Committee shall be composed of six (6) members, who shall be the members of the Arabian Jockey Club Executive Committee of the Purebred Trust, which members shall be actively involved in racing, and shall be responsible for the promotion, coordination, and general oversight of Arabian horse racing in the United States. The committee shall advise the Executive Committee of Arabian Horse Association, the Trustees of the Purebred Trust, and the Market Development and Promotion Committee on matters related to Arabian horse racing and shall suggest programs and prioritize and develop and obtain funding for action plans that will improve Arabian horse racing in the United States.

ARTICLE XI.

GOVERNANCE COMMITTEE AUTHORITY; DISPUTE RESOLUTION

Section 11.1 Continuance of Authority. The Governance Committee (known as the AHRA Mediation Team and the IAHA Mediation Team prior to the Effective Date) shall continue to oversee matters relating to the matters addressed in this Agreement including the Merger, the Governance Study (including the Strategic Plan), the Governance Study Recommendations approved by the Arabian Horse Association Board of Directors and delegates, and the Executive Search have been concluded and all matters required to be implemented in accordance with the foregoing (the "Merger Matters") have been implemented in their entirety (the "Concluded Date").

Section 11.2 Resolution of Disputes. Any dispute, claim, or controversy (a "Dispute") arising prior to the Concluded Date concerning a Merger Matter shall be presented to the Governance Committee for resolution without prior presentation to the Arabian Horse Association Board of Directors, the Executive Committee of Arabian Horse Association, or any other person or group. If, after reasonable attention to the Dispute, the Governance Committee believes that (a) the members of the Governance Committee will not agree upon a resolution of the Dispute, or (b) the Governance Committee believes that the Dispute can best be resolved without the initiation of dispute resolution through a third party source such as a third party mediator or arbitrator, the Governance Committee shall make a recommendation regarding the resolution of the Dispute to the Executive Committee, which recommendation shall state the basis therefore. In all other cases, the determination of the Governance Committee as to resolution of the Dispute shall be binding upon Arabian Horse Association. With respect to making determinations as provided in this Section, Governance Committee members representing IAHA shall have one vote collectively and Governance Committee members representing AHRA shall have one vote collectively.

ARTICLE XII. MISCELLANEOUS

Section 12.1 Headings. The Article and Section headings used herein shall not be considered in interpreting or construing the provisions of this Agreement or the intent of the parties relating thereto.

Section 12.2 Amendment. This Agreement may be amended, modified or supplemented by written agreement of the parties hereto at any time prior to the Effective Date.

Section 12.3 Execution in Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same document.

Section 12.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

Section 12.5 Entire Agreement; Survival. This Agreement (together with the Exhibits hereto, which are hereby incorporated by this reference) constitutes the entire agreement between the parties relating to the subject matter hereof. The terms and provisions of this Agreement shall survive the Merger.

Section 12.6 Construction. Unless the context of this Agreement clearly requires otherwise: (i) the singular shall include the plural and the plural shall include the singular wherever and as often as may be appropriate, (ii) the words "includes" or "including" shall mean "including without limitation," and (iii) the word "or" is not exclusive.