REORGANIZATION AGREEMENT











                                 BY AND BETWEEN









                       NATIONAL PAINTBALL SUPPLY CO., INC.



                                       AND



                           AMERICAN INFLATABLES, INC.

































                          Dated as of October 12, 2000



                                       1









     This  REORGANIZATION  AGREEMENT  is  entered  into as of this  12th  day of

Cotober,  2000 by and between National  Paintball Supply Co., Inc.  ("NPSC"),  a

corporation organized and existing under the laws of the State of South Carolina

and  American  Inflatables,  Inc.  ("American"),  a  corporation  organized  and

existing under the laws of the State of Delaware.



                                    RECITALS



     A.  American  is  a  Delaware  corporation  headquartered  in  Costa  Mesa,

California.



     B. NPSC is a South Carolina corporation headquartered in Greenville,  South

Carolina.



     C. The parties hereto desire that NPSC acquire  American through the merger

of an  interim  subsidiary  of NPSC with and into  American,  upon the terms and

conditions set forth herein.





     NOW,   THEREFORE,   in   consideration  of  the  premises  and  the  mutual

representations,  warranties and agreements herein contained,  NPSC and American

hereby agree as follows:





                             SECTION 1. DEFINITIONS



     1.1. Articles of Merger. The Certificate/Articles  of Merger to be executed

by Interim and American in a form  appropriate  for filing with the  appropriate

state  agencies or offices and  relating to the  effective  consummation  of the

Merger as contemplated by the Plan of Merger.



     1.2.  Benefit  Plans.  All  employee  benefit  plans  within the meaning of

Section  3(3) of ERISA and any related or  separate  contracts,  plans,  trusts,

annuities,   programs,   policies,   arrangements,    practices,   customs   and

understandings  that provide benefits of economic value to any present or former

employee,  or current or former  beneficiary,  dependent or assignee of any such

employee or former employee.



     1.3. CERCLA. The Comprehensive  Environmental Response,  Compensation,  and

Liability Act, 42 U.S.C. 9601 et seq.



     1.4.  NPSC.  National  Paintball  Supply  Co.,  Inc.  ,  a  South  Carolina

corporation headquartered in Greenville, South Carolina.



     1.5. NPSC Benefit Plans.  All Benefit Plans,  and all other material fringe

benefit plans or programs, sponsored or maintained by NPSC or under which it may

be obligated.



     1.6. NPSC Common Stock. The common stock, no par value per share, of NPSC.



                                       2





     1.7.  American.  American  Inflatables,  Inc., a corporation  organized and

existing under the laws of the State of Delaware.



     1.8.  American  Benefit Plans.  All Benefit  Plans,  and all other material

fringe  benefit plans or programs,  sponsored or maintained by American or under

which American may be obligated.



     1.9.  American Common Stock.  The common stock, par value $__.00 per share,

of American.



     1.10.  Closing;  Closing Date. The terms "Closing" and "Closing Date" shall

have the meanings ascribed to them in Section 2.2 hereof.



     1.11.  Code. The Internal Revenue Code of 1986, as amended,  including,  if

the context permits, the applicable regulations promulgated pursuant thereto.



     1.12. Confidential Information.  The term "Confidential  Information" shall

mean all  information of any kind concerning a party hereto that is furnished by

such party or on its behalf  pursuant  to Section  6.1 hereof as a result of the

transactions  contemplated  herein,  except  information  (i)  ascertainable  or

obtained from public or published information,  (ii) received from a third party

not known to the recipient of Confidential Information to be under an obligation

to keep such  information  confidential,  (iii) which is or becomes known to the

public (other than through a breach of this Reorganization  Agreement),  (iv) of

which the recipient was in possession prior to disclosure  thereof in connection

with the  Merger,  or (v) which was  independently  developed  by the  recipient

without the benefit of Confidential Information.



     1.13.  Derivatives Contract.  Any exchange-traded or over-the-counter swap,

forward,  future,  option,  cap, floor or collar financial contract or any other

contract  not  included  on a  balance  sheet  which  is a  derivative  contract

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