Common use of Subrogation; Contribution Clause in Contracts

Subrogation; Contribution. Each of Guarantor, Borrower and FM Precision Golf Corp., a Delaware corporation ("Parent Company"), is guaranteeing the full and prompt payment and performance of the Guaranteed Obligations under a separate guaranty. It is the intent of Guarantor, Borrower and Parent Company (each of Guarantor, Borrower and Parent Company being sometimes called an "Obligor") that this Guaranty and the guaranty of each other Obligor (this Guaranty and the guaranty of each other Obligor being called, collectively, the "Guaranties") not be subject to challenge on any basis. Accordingly, as of the date of this Guaranty, the probable liability of Guarantor under this Guaranty, together with all of its other liabilities to all Persons as of the date of this Guaranty and as of any other date on which a transfer is deemed to occur by virtue of the Loan Documents, calculated in amount sufficient to pay its probable net liabilities on its existing debts as the same become absolute and matured ("GUARANTOR'S DATED LIABILITIES") is, and is to be, less than the amount of the aggregate of the present fair salable value of its property, and, if different, at a fair valuation thereof, as of such corresponding date ("GUARANTOR'S DATED ASSETS"). To this end, Guarantor (i) grants to and recognizes in each Obligor ratably rights of subrogation and contribution in the amount, if any, by which Guarantor's Dated Assets, but for the aggregate of subrogation and contribution rights in its favor recognized in all the Guaranties, would exceed Guarantor's Dated Liabilities or, as the case may be, (ii) acknowledges receipt of and recognizes rights of subrogation and contribution ratably from each Obligor in the amount, if any, by which Guarantor's Dated

Subrogation; Contribution. Each of Guarantor, Borrower Guarantor and FM Precision Golf Corp., a Delaware corporation ("Parent Company"), Borrowers is guaranteeing the full and prompt payment and performance of the Guaranteed Obligations under a separate guaranty. It is the intent of Guarantor, Borrower Guarantor and Parent Company Borrowers (each of Guarantor, Borrower Guarantor and Parent Company Borrowers being sometimes called an "Obligor") that this Guaranty and the guaranty of each other Obligor (this Guaranty and the guaranty of each other Obligor being called, collectively, the "Guaranties") not be subject to challenge on any basis. Accordingly, as of the date of this Guaranty, the probable liability of Guarantor under this Guaranty, together with all of its other liabilities to all Persons as of the date of this Guaranty and as of any other date on which a transfer is deemed to occur by virtue of this Guaranty or any of the Loan Security Documents, calculated in amount sufficient to pay its probable net liabilities on its existing debts as the same become absolute and matured ("GUARANTOR'S DATED LIABILITIES") is, and is to be, less than the amount of the aggregate of the present fair salable value of its property, and, if different, at a fair valuation thereof, as of such corresponding date ("GUARANTOR'S DATED ASSETS"). To this end, Guarantor (i) grants to and recognizes in each Obligor ratably rights of subrogation and contribution in the amount, if any, by which Guarantor's Dated Assets, but for the aggregate of subrogation and contribution rights in its favor recognized in all the Guaranties, would exceed Guarantor's Dated Liabilities or, as the case may be, (ii) acknowledges receipt of and recognizes in Guarantor rights of subrogation and contribution ratably from each Obligor in the amount, if any, by which Guarantor's DatedDated Liabilities, but for the aggregate of subrogation and contribution rights in its favor granted and recognized in all the Guaranties, would exceed Guarantor's Dated Assets. In recognizing the value of Guarantor's Dated Assets and Guarantor's Dated Liabilities, it is understood that each Obligor will recognize, to at least the same extent of its aggregate recognition of liabilities under its respective Guaranty, its rights to subrogation and contribution under the Guaranties. It is expressly recognized and agreed to by Guarantor that Guarantor's rights of contribution and subrogation against Borrower is expressly junior and subordinate to the prior payment and performance in full of the Obligations. It is a material objective of this SECTION 5.2 that each Obligor recognize rights of subrogation and contribution rather than be deemed to be insolvent (or in contemplation thereof) by reason of an arbitrary interpretation of any of the Guaranties or any of the Loan Documents.

Subrogation; Contribution. Each REIMBURSEMENT OR INDEMNITY; SUBORDINATION. Until one year and one day after all Obligations have been indefeasibly paid in full in cash, each Subsidiary Guarantor agrees not to take any action pursuant to any rights which may have arisen in connection with this Guarantee to be subrogated to any of the rights (whether contractual, under the Bankruptcy Code, as amended, including Section 509 thereof, under common law or otherwise) of any of the Holders against the Issuer or against any collateral security or guaranty or right of offset held by the Holders for the payment of the Obligations. Until one year and one day after all Obligations have been indefeasibly paid in full in cash, each Subsidiary Guarantor agrees not to take any action pursuant to any contractual, common law, statutory or other rights of reimbursement, contribution, exoneration or indemnity (or any similar right) from or against the Issuer which may have arisen in connection with this Guarantee. If any Subsidiary Guarantor becomes the holder of any indebtedness payable by the Issuer, such Subsidiary Guarantor hereby subordinates all indebtedness owing to it from the Issuer to all indebtedness of the Issuer to the Holders, and agrees that, during the continuance of any Event of Default, it shall not accept any payment on the same until payment in full of the Obligations and shall in no circumstance whatsoever attempt to set-off or reduce any obligations hereunder because of such indebtedness. So long as the Obligations remain outstanding, if any amount shall be paid by or on behalf of the Issuer to any Subsidiary Guarantor on account of any of the rights waived in this paragraph, such amount shall be held by such Subsidiary Guarantor in trust, segregated from other funds of such Subsidiary Guarantor, Borrower and FM Precision Golf Corp.shall, a Delaware corporation forthwith upon receipt by such Subsidiary Guarantor, be turned over to the Holders ("Parent Company"duly endorsed by such Subsidiary Guarantor to the Holders, if required), is guaranteeing to be applied against the Obligations, whether matured or unmatured, in such order as the Holders may determine. The provisions of this paragraph shall survive the term of this Guarantee and the payment in full and prompt payment and performance of the Guaranteed Obligations under a separate guarantyObligations. It is the intent of Guarantor, Borrower and Parent Company (each of Guarantor, Borrower and Parent Company being sometimes called an "Obligor") that this Guaranty and the guaranty of each other Obligor (this Guaranty and the guaranty of each other Obligor being called, collectively, the "Guaranties") not be subject to challenge on any basis. Accordingly, as of the date of this Guaranty, the probable liability of Guarantor under this Guaranty, together with all of its other liabilities to all Persons as of the date of this Guaranty and as of any other date on which a transfer is deemed to occur by virtue of the Loan Documents, calculated in amount sufficient to pay its probable net liabilities on its existing debts as the same become absolute and matured ("GUARANTOR'S DATED LIABILITIES") is, and is to be, less than the amount of the aggregate of the present fair salable value of its property, and, if different, at a fair valuation thereof, as of such corresponding date ("GUARANTOR'S DATED ASSETS"). To this end, Guarantor (i) grants to and recognizes in each Obligor ratably rights of subrogation and contribution in the amount, if any, by which Guarantor's Dated Assets, but for the aggregate of subrogation and contribution rights in its favor recognized in all the Guaranties, would exceed Guarantor's Dated Liabilities or, as the case may be, (ii) acknowledges receipt of and recognizes rights of subrogation and contribution ratably from each Obligor in the amount, if any, by which Guarantor's DatedSECTION 7.

Subrogation; Contribution. Each of Guarantor, Borrower and FM Precision Golf Corp., a Delaware corporation ("Parent Company"), is guaranteeing the full and prompt payment and performance of the Guaranteed Obligations under a separate guaranty. It is the intent of Guarantor, Borrower and Parent Company (each of Guarantor, Borrower and Parent Company being sometimes called an "Obligor") that this Guaranty and the guaranty of each other Obligor (this Guaranty and the guaranty of each other Obligor being called, collectively, the "Guaranties") not be subject to challenge on any basis. Accordingly, as of the date of this Guaranty, the probable liability of Guarantor under this Guaranty, together with all of its other liabilities to all Persons as of the date of this Guaranty and as of any other date on which a transfer is deemed to occur by virtue of the Loan Documents, calculated in amount sufficient to pay its probable net liabilities on its existing debts as the same become absolute and matured ("GUARANTOR'S DATED LIABILITIES") is, and is to be, less than the amount of the aggregate of the present fair salable value of its property, and, if different, at a fair valuation thereof, as of such corresponding date ("GUARANTOR'S DATED ASSETS"). To this end, Guarantor (i) grants to and recognizes in each Obligor ratably rights of subrogation and contribution in the amount, if any, by which Guarantor's Dated Assets, but for the aggregate of subrogation and contribution rights in its favor recognized in all the Guaranties, would exceed Guarantor's Dated Liabilities or, as the case may be, (ii) acknowledges receipt of and recognizes rights of subrogation and contribution ratably from each Obligor in the amount, if any, by which Guarantor's Datedrights