AFTER RECORDING RETURN TO: EXHIBIT 99.5
Xxxxxx X. Xxxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
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SUBORDINATION AGREEMENT
This Subordination Agreement is made and entered into this
25TH day of AUGUST, 1999, by and among Xxxxxx Snowboards, Inc. ("Xxxxxx"),
Xxxxxx X. Xxxxxx, Inc. ("RKMI"), as Collateral Agent for the ratable benefit of
the Participating Creditors of Xxxxxx listed in Exhibit A attached hereto, and
Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx (collectively, "Pekkola").
WITNESSETH:
On or about July 6, 1999, Xxxxxx, being the owner of the
following described property in Xxxxxx County, Oregon to-wit:
0000 Xxxxxxx Xxxx, X.X., Xxxxx, XX 00000, a legal description
of which is attached hereto in Exhibit B (the "Property")
executed and delivered a certain trust deed (the "RKMI Trust Deed") to secure
(i) Xxxxxx'x indebtedness to the Participating Creditors under that certain
Payment Agreement effective June 17, 1999 by and among Xxxxxx, RKMI and certain
of Xxxxxx'x creditors (the "Payment Agreement"), and (ii) Xxxxxx'x obligations
to RKMI under the Payment Agreement and the RKMI Trust Deed. The RKMI Trust Deed
was recorded on July 7, 1999 in the records of Xxxxxx County, Oregon as Control
No. 1614279.
Pekkola is about to loan the sum of $675,000 to Xxxxxx, with
interest thereon at the rate of twelve percent (12%) per annum. This loan is to
be secured by Xxxxxx'x trust deed upon the Property (the "Pekkola Trust Deed")
and is to be repaid on or before June 28, 2000.
RKMI has heretofore agreed and consented to subordinate the
RKMI Trust Deed on the terms and conditions and subject to the limitations
described below.
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NOW, THEREFORE, for value received, and for the purpose of
inducing Pekkola to make the loan described above, RKMI hereby covenants,
consents and agrees that the RKMI Trust Deed shall be subject and subordinate to
the Pekkola Trust Deed, and that the Pekkola Trust Deed shall be prior and
superior to the RKMI Trust Deed, but only to the extent that the obligations
secured by the Pekkola Trust Deed do not exceed, at any one time in the
aggregate, (i) $500,000 or, (ii) in the event that Xxxxxx makes the $250,000
initial payment required by Paragraph 2(a)(i) of the Payment Agreement on or
before August 27, 1999, $750,000; PROVIDED, HOWEVER, that in the event the
Pekkola Trust Deed is not duly recorded within thirty (30) days after the date
hereof, this Subordination Agreement shall be null and void and of no further
force or effect.
It is expressly understood and agreed that nothing herein
contained shall be construed to change, alter or impair the liens arising from
the RKMI Trust Deed, except as hereinabove expressly set forth.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement, and Xxxxxx and RKMI have caused their names to be signed by an
officer or other person duly authorized to do so by order by their boards of
directors.
XXXXXX SNOWBOARDS, INC.
By: /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx, President
STATE OF OREGON )
) ss.
County of Xxxxxx )
This instrument was acknowledged before me on AUGUST 24, 1999, by
Xxxxx Xxxxxx as President of Xxxxxx Snowboards, Inc.
/s/ XXXXX XXX XXXXX
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Notary Public for Oregon
My Commission Expires: JULY 10, 2002
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XXXXXX X. XXXXXX, INC.
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, President
STATE OF OREGON )
) ss.
County of Multnomah )
This instrument was acknowledged before me on AUGUST 19, 1999,
by Xxxxxx X. Xxxxxx as President of Xxxxxx X. Xxxxxx, Inc.
/s/ XXXXX XXXX
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Notary Public for Oregon
My Commission Expires: 9/13/99
/s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
STATE OF OREGON )
) ss.
County of DESCHUTES )
This instrument was acknowledged before me on AUGUST 23, 1999,
by Xxxxxx X. Xxxxxxx.
/s/ XXXX XXXX
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Notary Public for Oregon
My Commission Expires: 3/15/02
/s/ XXXXX X. XXXXXXX
---------------------------------
Xxxxx X. Xxxxxxx
STATE OF OREGON )
) ss.
County of DESCHUTES )
This instrument was acknowledged before me on AUGUST 23, 1999,
by Xxxxx X. Xxxxxxx.
/s/ XXXX XXXX
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Notary Public for Oregon
My Commission Expires: 3/15/02
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