Document:

ELY-EX-4.4

 Exhibit 4.4

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.
THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE, THE TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY OF THIS SECURITY, PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF CALLAWAY GOLF COMPANY AT 2180 RUTHERFORD ROAD, CARLSBAD, CALIFORNIA (FACSIMILE: (760) 804-4139).

    

Callaway Golf Company
3.75% Convertible Senior Note due August 15, 2019
No. R-1
CUSIP No. 131193 AC8 
ISIN No. US131193 AC89
Callaway Golf Company, a Delaware corporation (the “Company,” which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co. or its registered assigns, the principal sum set forth on Schedule I hereto on August 15, 2019.
Initial Interest Rate: 3.75% per annum.
Interest Payment Dates: February 15 and August 15, commencing February 15, 2013.
Regular Record Dates: February 1 and August 1.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which will for all purposes have the same effect as if set forth at this place.

    

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer.
CALLAWAY GOLF COMPANY
By:    /s/ Bradley J. Holiday                                  
Name:    Bradley J. Holiday
Title:  Senior Executive Vice President and 
        Chief Financial Officer

(Trustee’s Certificate of Authentication)
This is one of the 3.75% Convertible Senior Notes due August 15, 2019 described in the Indenture referred to in this Note.
		
	Date: August 29, 2013
	WILMINGTON TRUST, NATIONAL 
ASSOCIATION, as Trustee

By:    /s/ Timothy P. Mowdy                       
Authorized Signatory

    

REVERSE SIDE OF NOTE
Callaway Golf Company
3.75% Convertible Senior Note due August 15, 2019
Principal and Interest.
The Company promises to pay the principal of this Note on August 15, 2019.
The Company promises to pay interest (including Additional Interest, if any) on the principal amount of this Note on each Interest Payment Date, as set forth on the face of this Note, at the rate of 3.75% per annum.
Interest (including Additional Interest, if any) will be payable semiannually (to the holders of record of the Notes at the Close of Business on the February 1 or August 1 immediately preceding the interest payment date) on each interest payment date, commencing February 15, 2013.
Interest on this Note will accrue from the most recent date to which interest has been paid or provided for on this Note or the Note surrendered in exchange for this Note or, if no interest has been paid, from August 15, 2013, through the day before each Interest Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30‐day months.
The Company will pay interest on overdue principal, premium, if any, and, to the extent lawful, interest at a rate per annum that is 1% in excess of 3.75%.  Defaulted Interest shall be paid to the Persons that are Holders on a Special Record Date, which will established as set forth in the Indenture referred to below.
Method of Payment.
Subject to the terms and conditions of the Indenture, the Company shall pay interest on this Note to the person who is the Holder of this Note at the Close of Business on the Regular Record Date next preceding the related Interest Payment Date.  The Company will pay any Cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.
Paying Agent, Conversion Agent and Registrar.
Initially, the Trustee will act as Paying Agent, Conversion Agent and Registrar.  The Company may appoint and change any Paying Agent, Conversion Agent, Registrar or co‐registrar without notice, other than notice to the Trustee.  The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion Agent, Registrar or co‐registrar.  The Company may maintain deposit accounts and conduct other banking transactions with the Trustee in the normal course of business.

    

Indenture.
This is one of the Notes issued under an Indenture dated as of August 29, 2012 (as amended from time to time, the “Indenture”), between the Company and Wilmington Trust, National Association, as Trustee.  Capitalized terms used herein are used as defined in the Indenture unless otherwise indicated.  The terms of the Notes include those stated in the Indenture and those expressly made part of the Indenture by reference to the Trust Indenture Act.  The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms.  To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture will control.  The Notes are general unsecured obligations of the Company.
Repurchase at the Option of the Holders.
Upon the occurrence of a Change in Control or a Termination of Trading, a Holder has the right, at such Holder’s option, to require the Company to repurchase all of such Holder’s Notes or any portion thereof (in minimum principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.  
Redemption at the Option of the Company.
No sinking fund is provided for the Notes.  The Notes are redeemable as a whole, or from time to time in part, at any time commencing on August 15, 2015 at the option of the Company.  The redemption price (the “Redemption Price”) for any such redemption is equal to 100%, expressed as a percentage of the Principal Amount of Notes to be redeemed, together with accrued and unpaid interest (including Additional Interest, if any) to, but excluding, the Redemption Date.
Conversion.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the Business Day immediately preceding the Maturity Date, to convert this Note or portion thereof that is at least $1,000 or an integral multiple thereof, into shares of Common Stock at a Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.  The Company shall pay Cash in lieu of fractional shares of Common Stock as provided in the Indenture, and shall pay Cash in lieu of shares of Common Stock that cannot be issued pursuant to the terms of the Indenture.  Subject to the provisions of the Indenture, the Company will have the right to terminate the Conversion Right if the Volume Average Weighted Price of the Company’s Common Stock has been greater than or equal to 130% of the Conversion Price then in effect for at least 20 Trading Days during any 30 consecutive Trading Day period.

    

Defaults and Remedies.
Subject to certain exceptions, if an Event of Default, other than a Bankruptcy Default, occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate of the outstanding principal amount of the Notes, by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders may, declare the principal of and accrued interest (including Additional Interest, if any) on the Notes to be immediately due and payable.  Upon a declaration of acceleration, such principal and interest (including Additional Interest, if any) will become immediately due and payable.  If a Bankruptcy Default occurs, the principal of and accrued interest (including Additional Interest, if any) on the Notes then outstanding will become immediately due and payable automatically without any declaration or other act on the part of the Trustee or any Holder.
Amendment and Waiver.
Subject to certain exceptions set forth in the Indenture, the Indenture and the Notes may be amended, or default may be waived, with the consent of the Holders of a majority in principal amount of the outstanding Notes.  Without notice to or the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or this Note to, among other things, cure any ambiguity, omission, defect or inconsistency in the Indenture or this Note that does not adversely affect the rights of any Holder of the Notes.
Registered Form; Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in minimum denominations of $1,000 principal amount and integral multiples of $1,000.  A Holder may register the transfer or exchange of Notes in accordance with the Indenture.  The Trustee may require a Holder to furnish appropriate endorsements and transfer documents and to pay any taxes and fees as set forth in the Indenture.  Pursuant to the Indenture, there are certain periods during which the Trustee will not be required to issue, register the transfer of or exchange any Note or certain portions of a Note.
Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of this Note for all purposes.
Unclaimed Money or Notes.
Subject to applicable abandoned property law, the Trustee and each Paying Agent shall pay or deliver, as the case may be, to the Company upon request any money, Common Stock or other consideration held by them for the payment of the principal amount of (including the relevant Repurchase Price or Redemption Price) and interest (including Additional Interest, if any) on, or the amount due in connection with any conversion of, this Note that remains unclaimed for two years after a right to such money, Common Stock or other consideration has matured.

    

Trustee Dealings with the Company.
The Trustee, in its individual or any other capacity, may become the owner or pledgee of this Note and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee.  Any Agent may do the same with like rights.  However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311.
No Recourse Against Others.
No director, officer, employee, incorporator, member or stockholder of the Company, as such, will have any liability for any obligations of the Company under this Note or the Indenture or for any claim based on, in respect of, or by reason of, such obligations.  Each Holder of this Note by accepting this Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of this Note.
Authentication.
This Note shall not be valid until an authorized officer of the Trustee signs manually the Trustee’s Certificate of Authentication on the other side of this Note.
Governing Law.
THE INDENTURE AND THE NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF).
Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).
The Company will furnish a copy of the Indenture to any Holder upon written request and without charge.

    

FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto 
Insert Taxpayer Identification No. 
    
    
Please print or typewrite name and address including zip code of assignee
    
the within Note and all rights thereunder, hereby irrevocably constituting and appointing
    
attorney to transfer said Note on the books of the Company with full power of substitution in the premises.
Your Signature:
Date:
(Sign exactly as your name appears on the
other side of this Note)
*Signature guaranteed by:
By:
    
*    The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

    

Callaway Golf Company
2180 Rutherford Road
Carlsbad, CA 92008
Attention:  General Counsel
Fax:  (709) 930-5022

Wilmington Trust, National Association
650 Town Center Drive
Suite 600
Costa Mesa, CA 92626 
Attention: Callaway Golf Administrator

CONVERSION NOTICE
To convert this Note, check the box: 
To convert only part of this Note, state the principal amount to be converted (must be a minimum of $1,000 principal amount or an integral multiple of $1,000 principal amount): $__________.
This Conversion Notice is being delivered in connection with the following:
c   Make-Whole Change of Control    
If delivered in connection with either a Make-Whole Change of Control and, if applicable, such conversion will occur after the Conversion Termination Notice Date and on or before the Conversion Termination Date, the undersigned hereby elects to receive the following:
c   Make-Whole Shares   
c   Coupon Make-Whole Payment 
If you want the stock certificate made out in another person’s name or Cash in lieu of fractional shares of Common Stock paid to another person, fill in the form below: 
    
(Insert assignee’s soc. sec. or tax I.D. no.) 
    
    
    
(Print or type assignee’s name, address and zip code) 
and irrevocably appoint

    

    
agent to transfer this Note on the books of the Company.  The agent may substitute another to act for him or her.
Your Signature:
Date:
(Sign exactly as your name appears on the
other side of this Note)
*Signature guaranteed by:
By:
    
*    The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

    

Schedule I
No. R-1
The initial principal amount of this Global Note is $112,500,000.

	
				
	Date
	Principal Amount of this Global Note
	Notation Explaining Change in Principal Amount
	Authorized Signature of Trustee

	August 29, 2013
	$112,500,000
	N/AELY-EX-10.2

       Exhibit 10.2

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of September 5, 2013, is entered into by and among the Lenders (as defined below) signatory hereto, BANK OF AMERICA, N.A., as administrative agent and as security trustee for the Lenders (in such capacity, “Agent”), CALLAWAY GOLF COMPANY, a Delaware corporation (“Parent”), CALLAWAY GOLF SALES COMPANY, a California corporation (“Callaway Sales”), CALLAWAY GOLF BALL OPERATIONS, INC., a Delaware corporation (“Callaway Operations”, and together with Parent and Callaway Sales, collectively, “U.S. Borrowers”), CALLAWAY GOLF CANADA LTD., a Canada corporation (“Canadian Borrower”), CALLAWAY GOLF EUROPE LTD., a company organized under the laws of England (registered number 02756321) (“U.K. Borrower” and together with the U.S. Borrowers and the Canadian Borrower, collectively, “Borrowers”), and the other Obligors party hereto.
RECITALS
A.    Borrowers, the other Obligors party thereto, Agent, and the financial institutions signatory thereto from time to time (each a “Lender” and collectively the “Lenders”) have previously entered into that certain Second Amended and Restated Loan and Security Agreement dated as of December 22, 2011 (as amended, supplemented, restated and modified from time to time, the “Loan Agreement”), pursuant to which the Lenders have made certain loans and financial accommodations available to Borrowers.  Terms used herein without definition shall have the meanings ascribed to them in the Loan Agreement.
B.    Obligors have requested that Agent and the Lenders amend the Loan Agreement, which Agent and the Lenders are willing to do pursuant to the terms and conditions set forth herein.
C.    Obligors are entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of Agent’s or any Lender’s rights or remedies as set forth in the Loan Agreement or any of the other Loan Documents are being waived or modified by the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
1.Amendments to Loan Agreement.  
		
	(a)
	The following definitions are hereby added to Section 1.1 of the Loan Agreement in their proper alphabetical order:

“2012 Canadian Debt Reserve: a reserve established by Agent in an initial amount as of the Second Amendment Effective Date equal to $0.  The 2012 Canadian Debt Reserve: (a) shall be reduced on a dollar for dollar basis for any amounts expended 

in connection with any Preferred Stock Repurchases made after the Second Amendment Effective Date in accordance with Section 10.2.6(h)(ii)(A); (b) may be permanently reduced from time to time upon Parent’s written request to Agent; and (c) subject to Agent’s written consent (such consent not to be unreasonably withheld if (i) upon and after giving effect to such adjustment, no Default or Event of Default shall have occurred and be continuing and (ii) immediately after such adjustment (for clarification, including after giving effect to any recalculation of the U.K. Borrowing Base and U.S. Borrowing Base upon giving effect to such adjustment), U.K. Availability and U.S. Availability would be a positive number), may be reallocated on a dollar for dollar basis to the 2012 U.K. Debt Reserve and/or the 2012 U.S. Debt Reserve upon Parent’s written request to Agent; provided, however, that once reduced pursuant to clause (b) above, the 2012 Canadian Debt Reserve may not be increased.  The parties agree that the 2012 Canadian Debt Reserve shall never be less than zero (-0-), and shall be included in the calculation of the Canadian Availability Reserve.  For clarification, the aggregate amount of the 2012 Canadian Debt Reserve, the 2012 U.K. Debt Reserve, and the 2012 U.S. Debt Reserve may not exceed an amount equal to $18,379,618 less all amounts expended in connection with any Preferred Stock Repurchases made after the Second Amendment Effective Date in accordance with Section 10.2.6(h) and less all permanent reductions elected by Parent pursuant to clause (b) of each of the definitions of 2012 Canadian Debt Reserve, 2012 U.K. Debt Reserve, and 2012 U.S. Debt Reserve.” 
“2012 U.K. Debt Reserve: a reserve established by Agent in an initial amount as of the Second Amendment Effective Date equal to $0.  The 2012 U.K. Debt Reserve: (a) shall be reduced on a dollar for dollar basis for any amounts expended in connection with any Preferred Stock Repurchases made after the Second Amendment Effective Date in accordance with Section 10.2.6(h)(ii)(C); (b) may be permanently reduced from time to time upon Parent’s written request to Agent; and (c) subject to Agent’s written consent (such consent not to be unreasonably withheld if (i) upon and after giving effect to such adjustment, no Default or Event of Default shall have occurred and be continuing and (ii) immediately after such adjustment (for clarification, including after giving effect to any recalculation of the Canadian Borrowing Base and U.S. Borrowing Base upon giving effect to such adjustment), Canadian Availability and U.S. Availability would be a positive number), may be reallocated on a dollar for dollar basis to the 2012 Canadian Debt Reserve and/or the 2012 U.S. Debt Reserve upon Parent’s written request to Agent; provided, however, that once reduced pursuant to clause (b) above, the 2012 U.K. Debt Reserve may not be increased.  The parties agree that the 2012 U.K. Debt Reserve shall never be less than zero (-0-), and shall be included in the calculation of the U.K. Availability Reserve.  For clarification, the aggregate amount of the 2012 Canadian Debt Reserve, the 2012 U.K. Debt Reserve, and the 2012 U.S. Debt Reserve may not exceed an amount equal to $18,379,618 less all amounts expended in connection with any Preferred Stock Repurchases made after the Second Amendment Effective Date in accordance with Section 10.2.6(h) and less all permanent reductions elected by Parent pursuant to clause (b) of each of the definitions of 2012 Canadian Debt Reserve, 2012 U.K. Debt Reserve, and 2012 U.S. Debt Reserve.” 

2

“2012 U.S. Debt Reserve: a reserve established by Agent in an initial amount as of the Second Amendment Effective Date equal to $18,379,618.  The 2012 U.S. Debt Reserve: (a) shall be reduced on a dollar for dollar basis for any amounts expended in connection with any Preferred Stock Repurchases made after the Second Amendment Effective Date in accordance with Section 10.2.6(h)(ii)(B); (b) may be permanently reduced from time to time upon Parent’s written request to Agent; and (c) subject to Agent’s written consent (such consent not to be unreasonably withheld if (i) upon and after giving effect to such adjustment, no Default or Event of Default shall have occurred and be continuing and (ii) immediately after such adjustment (for clarification, including after giving effect to any recalculation of the Canadian Borrowing Base and U.K. Borrowing Base upon giving effect to such adjustment), Canadian Availability and U.K. Availability would be a positive number), may be reallocated on a dollar for dollar basis to the 2012 Canadian Debt Reserve and/or the 2012 U.K. Debt Reserve upon Parent’s written request to Agent; provided, however, that once reduced pursuant to clause (b) above, the 2012 U.S. Debt Reserve may not be increased.  The parties agree that the 2012 U.S. Debt Reserve shall never be less than zero (-0-), and shall be included in the calculation of the U.S. Availability Reserve.  For clarification, the aggregate amount of the 2012 Canadian Debt Reserve, the 2012 U.K. Debt Reserve, and the 2012 U.S. Debt Reserve may not exceed an amount equal to $18,379,618 less all amounts expended in connection with any Preferred Stock Repurchases made after the Second Amendment Effective Date in accordance with Section 10.2.6(h) and less all permanent reductions elected by Parent pursuant to clause (b) of each of the definitions of 2012 Canadian Debt Reserve, 2012 U.K. Debt Reserve, and 2012 U.S. Debt Reserve.” 
“Canadian Pledged Cash: the funds maintained in a blocked Deposit Account or securities account of the Canadian Borrower subject to a Deposit Account Control Agreement or securities account control agreement, as applicable, which give Agent at all times exclusive access and control for withdrawal purposes to the exclusion of the Canadian Borrower and precluding the Canadian Borrower from withdrawing or otherwise giving any instructions in connection therewith and which may not be withdrawn without the Agent’s prior written consent (such consent not to be unreasonably withheld if (i) upon and after giving effect to such withdrawal, no Default or Event of Default shall have occurred and be continuing and (ii) immediately after such withdrawal (for clarification, including after giving effect to any recalculation of the Canadian Borrowing Base upon giving effect to such withdrawal), Canadian Availability would be a positive number), and which are subject to effective security documents, in form and substance satisfactory to Agent, that provide Agent with an unencumbered perfected first priority/ranking security interest in and Lien on such funds.”
“Second Amendment Effective Date: September 5, 2013.”
“U.K. Pledged Cash: the funds maintained in a blocked Deposit Account or securities account of the U.K. Borrower subject to a Deposit Account Control Agreement or securities account control agreement, as applicable, which give Agent at all times exclusive access and control for withdrawal purposes to the exclusion of the U.K. Borrower and precluding the U.K. Borrower from withdrawing or 

3

otherwise giving any instructions in connection therewith and which may not be withdrawn without the Agent’s prior written consent (such consent not to be unreasonably withheld if (i) upon and after giving effect to such withdrawal, no Default or Event of Default shall have occurred and be continuing and (ii) immediately after such withdrawal (for clarification, including after giving effect to any recalculation of the U.K. Borrowing Base upon giving effect to such withdrawal), U.K. Availability would be a positive number), and which are subject to effective security documents, in form and substance satisfactory to Agent, that provide Agent with an unencumbered perfected first priority/ranking security interest in and Lien on such funds.”
“U.S. Pledged Cash: the funds maintained in a blocked Deposit Account or securities account of a U.S. Borrower subject to a Deposit Account Control Agreement or securities account control agreement, as applicable, which give Agent at all times exclusive access and control for withdrawal purposes to the exclusion of the U.S. Borrowers and precluding the U.S. Borrowers from withdrawing or otherwise giving any instructions in connection therewith and which may not be withdrawn without the Agent’s prior written consent (such consent not to be unreasonably withheld if (i) upon and after giving effect to such withdrawal, no Default or Event of Default shall have occurred and be continuing and (ii) immediately after such withdrawal (for clarification, including after giving effect to any recalculation of the U.S. Borrowing Base upon giving effect to such withdrawal), U.S. Availability would be a positive number), and which are subject to effective security documents, in form and substance satisfactory to Agent, that provide Agent with an unencumbered perfected first priority/ranking security interest in and Lien on such funds.”
		
	(b)
	The definition of “2012 Debt Reserve” in Section 1.1 of the Loan Agreement is hereby deleted in its entirety.

		
	(c)
	The definition of “Canadian Borrowing Base” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Canadian Borrowing Base:  on any date of determination, an amount equal to the lesser of (a) the result of: (i) the Maximum Canadian Facility Amount, minus (ii) the Canadian LC Reserve, or (b) the result of: (i) the Canadian Accounts Formula Amount, plus (ii) the Canadian Inventory Formula Amount, plus (iii) 100% of the amount of Canadian Pledged Cash, minus (iv) the Canadian Availability Reserve.”
		
	(d)
	The definition of “Trigger Event Excess Availability” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Trigger Event Excess Availability: as of any date of determination, an amount equal to the sum of: (a) U.S. Availability, plus (b) the lesser of (i) Canadian Availability, and (ii) 35% of U.S. Availability, plus (c) the lesser of (i) U.K. Availability, and (ii) 35% of U.S. Availability, minus (d) the aggregate amount, if any, of all trade payables of Obligors that are more than 60 days past due and all book overdrafts of Obligors in excess of historical practices with respect thereto, in each case as determined by Agent in its Credit Judgment.”

4

		
	(e)
	The definition of “U.K. Borrowing Base” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“U.K. Borrowing Base:  on any date of determination, an amount equal to the lesser of (a) the result of: (i) the Maximum U.K. Facility Amount, minus (ii) the U.K. LC Reserve, or (b) the result of: (i) the U.K. Accounts Formula Amount, plus (ii) the U.K. Inventory Formula Amount, plus (iii) 100% of the amount of U.K. Pledged Cash, minus (iv) the U.K. Availability Reserve.”
		
	(f)
	The definition of “U.S. Borrowing Base” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“U.S. Borrowing Base:  on any date of determination, an amount equal to the lesser of (a) the result of: (i) the Maximum U.S. Facility Amount, minus (ii) the U.S. LC Reserve, minus (iii) the Canadian Overadvance Loan Balance, if any, outstanding on such date, minus (iv) the U.K. Overadvance Loan Balance, if any, outstanding on such date; or (b) the result of: (i) the U.S. Accounts Formula Amount, plus (ii) the U.S. Inventory Formula Amount, plus (iii) 100% of the amount of U.S. Pledged Cash, minus (iv) the U.S. Availability Reserve.”
		
	(g)
	Clause (b)(i) of the definition of “U.S. Inventory Formula Amount” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“(i) $10,000,000,”
		
	(h)
	Section 10.2.6(h) of the Loan Agreement is hereby amended and restated in its entirety as follows:

“(h)    Parent may make Preferred Stock Repurchases so long as: (i) no Event of Default has occurred and is continuing or would result therefrom, and (ii) either:
(A)    the amount expended in connection with any such Preferred Stock Repurchase: (I) is made solely using cash proceeds of a substantially contemporaneous (x) dividend from the Canadian Borrower to Parent, or (y) repayment by the Canadian Borrower of an intercompany obligation owing to Parent, and (II) does not exceed the 2012 Canadian Debt Reserve in effect immediately prior to giving effect to any such expenditures;
(B)    the amount expended in connection with any such Preferred Stock Repurchase does not exceed the 2012 U.S. Debt Reserve in effect immediately prior to giving effect to any such expenditures; or
(C)    the amount expended in connection with any such Preferred Stock Repurchase: (I) is made solely using cash proceeds of a substantially contemporaneous (x) dividend from the U.K. Borrower to Parent, or (y) repayment by the U.K. Borrower of an intercompany obligation owing to Parent, and (II) does not exceed the 2012 U.K. Debt Reserve in effect immediately prior to giving effect to any such expenditures.”

5

		
	2.
	Effectiveness of this Amendment.  The following shall have occurred before this Amendment is effective:

		
	(a)
	Amendment.  Agent shall have received this Amendment, executed by Agent, each Obligor and the Lenders in a sufficient number of counterparts for distribution to all parties. 

		
	(b)
	Resolutions.  Agent shall have received a certificate of a duly authorized officer of the U.K. Borrower certifying that an attached copy of resolutions authorizing execution and delivery of this Amendment is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this Amendment.

		
	(c)
	Representations and Warranties.  The representations and warranties set forth herein must be true and correct.

		
	(d)
	No Default.  No event has occurred and is continuing that constitutes an Event of Default.

		
	(e)
	Other Required Documentation.  All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered or executed or recorded and shall be in form and substance satisfactory to Agent.

3.    Representations and Warranties.  Each Obligor represents and warrants as follows:
		
	(a)
	Authority.  Each Obligor has the requisite corporate power and authority to execute and deliver this Amendment, and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party.  The execution, delivery and performance by each Obligor of this Amendment have been duly approved by all necessary corporate action and no other corporate proceedings are necessary to consummate such transactions.

		
	(b)
	Enforceability.  This Amendment has been duly executed and delivered by each Obligor.  This Amendment and each Loan Document to which any Obligor is a party (as amended or modified hereby) is the legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability, and is in full force and effect.

		
	(c)
	Representations and Warranties.  The representations and warranties contained in each Loan Document to which any Obligor is a party (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct on and as of the date hereof as though made on and as of the date hereof.

		
	(d)
	Due Execution.  The execution, delivery and performance of this Amendment are within the power of each Obligor, have been duly authorized by all necessary 

6

corporate action, have received all necessary governmental approval, if any, and do not contravene any law or any contractual restrictions binding on any Obligor.
		
	(e)
	No Default.  No event has occurred and is continuing that constitutes an Event of Default.

		
	4.
	Choice of Law.  The validity of this Amendment, its construction, interpretation and enforcement, the rights of the parties hereunder, shall be determined under, governed by, and construed in accordance with the internal laws of the State of New York, without giving effect to any conflict of law principles (but giving effect to Section 5-1401 of the New York General Obligation Law and Federal laws relating to national banks).  The consent to forum and judicial reference provisions set forth in Section 14.15 of the Loan Agreement are hereby incorporated in this Amendment by reference.

		
	5.
	Counterparts.  This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile or a substantially similar electronic transmission shall have the same force and effect as the delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by telefacsimile or a substantially similar electronic transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

6.    Reference to and Effect on the Loan Documents.
		
	(a)
	Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to “the Loan Agreement”, “thereof” or words of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified and amended hereby.

		
	(b)
	Except as specifically amended above, the Loan Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations of Obligors to Agent and the Lenders.

		
	(c)
	The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

		
	(d)
	To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended hereby.

7

		
	7.
	Ratification.  Each Obligor hereby restates, ratifies and reaffirms each and every term and condition set forth in the Loan Agreement, as amended hereby, and the Loan Documents effective as of the date hereof.

		
	8.
	Estoppel.  To induce Lenders to enter into this Amendment and to continue to make advances to Borrowers under the Loan Agreement, each Obligor hereby acknowledges and agrees that, as of the date hereof, there exists no right of offset, defense, counterclaim or objection in favor of any Obligor as against Agent or any Lender with respect to the Obligations.

		
	9.
	Integration.  This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

		
	10.
	Severability.  In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Remainder of Page Left Intentionally Blank]

8

IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.

9

	
	
	OBLIGORS:

CALLAWAY GOLF COMPANY, 
a Delaware corporation
By: /s/  Bradley J. Holiday   
Name:  Bradley J. Holiday   
Title:  Executive SVP, Chief Financial Officer   

CALLAWAY GOLF SALES COMPANY, 
a California corporation
By:  /s/  Patrick S. Burke   
Name:   Patrick S. Burke   
Title:  Director   

CALLAWAY GOLF BALL OPERATIONS, INC., 
a Delaware corporation
By:  /s/ Patrick S. Burke    
Name:   Patrick S. Burke   
Title:  Director   

CALLAWAY GOLF CANADA LTD.,
a Canada corporation
By:   /s/  Patrick S. Burke   
Name:   Patrick S. Burke   
Title:   Director   

CALLAWAY GOLF EUROPE LTD.,
a company organized under the laws of England and Wales
By:   /s/  Bradley J. Holiday   
Name:   Bradley J. Holiday   
Title:   Executive SVP, Chief Financial Officer   

CALLAWAY GOLF INTERACTIVE, INC. 
a Texas corporation
By:  /s/  Patrick S. Burke    
Name:   Patrick S. Burke   
Title:   Director   

CALLAWAY GOLF INTERNATIONAL SALES COMPANY, 
a California corporation
By:   /s/  Patrick S. Burke   
Name: Patrick S. Burke   
Title:   Director   

CALLAWAY GOLF EUROPEAN HOLDING COMPANY LIMITED,
a company limited by shares incorporated under the laws of England and Wales
By:   /s/ Neil Howie   
Name:   Neil Howie   
Title:   Director    

10

	
		
	AGENT AND LENDERS
	 

	BANK OF AMERICA, N.A., as Agent and as a Lender 
	 

	By:  /s/ Monirah J. Masud   
Name:   Monirah J. Masud   
Title:   Senior Vice President
	 

	

BANK OF AMERICA, N.A.
(acting through its Canada branch), as a Canadian Lender

By:   /s/ Medina Sales De Andrade   
Name:   Medina Sales De Andrade   
Title:   Vice President
	 

	

BANK OF AMERICA, N.A.
(acting through its London branch), as a U.K. Lender

By:   /s/ Medina Sales De Andrade   
Name:   Medina Sales De Andrade   
Title:   Senior Vice President      

	 

	

UBS LOAN FINANCE LLC,
as a U.S. Lender and a U.K. Lender

By:  /s/ Joselin Fernandes         
Name: Joselin Fernandes         
Title:   Associate Director         

By:   /s/  Darlene Arias            
Name: Darlene Arias            
Title:   Director            

	 

	

UBS AG CANADA BRANCH,
as a Canadian Lender

By:  /s/ Joselin Fernandes         
Name: Joselin Fernandes         
Title:   Associate Director         

By:  /s/ James Morgan             
Name:     James Morgan            
Title: Executive Director, Regional Functional Head
	 

11

	
		
	

WELLS FARGO BANK, N.A.,
as a U.S. Lender

By:  /s/  David Klages            
Name: David Klages            
Title:   Portfolio Manager         

	 

	

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender

By:  /s/  Domenic Cosentino         
Name: Domenic Cosentino         
Title:   Vice President            

	 

	

WELLS FARGO BANK, N.A.
(London Branch), as a U.K. Lender

By: /s/  Tania Saldanha            
Name:   Tania Saldanha            
Title:   Associate Director         

	 

	

SUNTRUST BANK,
as a U.S. Lender and as a Canadian Lender

By: /s/  Stephen D. Metts         
Name:  Stephen D. Metts         
Title:   Director               
	 

12

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