Document:

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                                                                   Exhibit 10.38
                                PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT (the "Pledge Agreement") is made and dated as of
the 10th day of November, 2003 by and between CALLAWAY GOLF COMPANY, a Delaware
corporation (the "Borrower" and, collectively, with any other Person that joins
in this Pledge Agreement by execution and delivery of a Joinder Agreement
substantially in the form of Exhibit A to this Pledge Agreement, the
"Pledgors"), and BANK OF AMERICA, N.A., a national banking association, as
Administrative Agent (the "Administrative Agent").

                                    RECITALS

         A.       Pursuant to that certain Credit Agreement dated as of November
10, 2003 by and among the Borrower, the Administrative Agent, the L/C Issuer,
the Swing Line Lenders, and the other Lenders party thereto (as amended,
extended and replaced from time to time, the "Credit Agreement"), the Lenders
have agreed to extend credit to the Borrower from time to time. All capitalized
terms not otherwise defined herein are used with the meanings given such terms
in the Credit Agreement. All other terms not otherwise defined herein shall have
the meanings attributed to such terms in the California Uniform Commercial Code
as in effect from time to time.

         B.       As a condition precedent to the Lenders' obligations to extend
and to continue extending credit under the Credit Agreement and as security for
the payment and performance of the Secured Obligations (as defined in Paragraph
3 below), the Pledgors are required to execute and deliver and/or from time to
time join in this Pledge Agreement, all for the purpose of granting a security
interest in Collateral, all as hereinafter provided.

         NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                                    AGREEMENT

         1.       Grant of Security Interest. Each Pledgor hereby pledges,
assigns and grants to the Administrative Agent, for the ratable benefit of the
Lenders, a security interest in the property described in Paragraph 2 below
(collectively and severally, the "Pledged Collateral") to secure payment and
performance of such Pledgor's Secured Obligations.

         2.       Collateral. The Pledged Collateral shall consist of all right,
title and interest of each Pledgor, whether now existing or hereafter acquired:

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                  (a ) all Pledged Equity Interests, including, without
limitation, those Pledged Equity Interests listed on Schedule 1 to this Pledge
Agreement;

                  (b) all Pledged Debt Securities, including, without
limitation, those Pledged Debt Securities listed on Schedule 1 to this Pledge
Agreement;

                  (c) all other property that may be delivered to and held by
the Administrative Agent pursuant to the terms of this Pledge Agreement;

                  (d) all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed, in respect of, in exchange for or upon the conversion of
the securities referred to in subparagraphs (a) and (b) above;

                  (e) all rights, powers and privileges with respect to the
Pledged Collateral referred to in subparagraphs (a) through (d) above; and

                  (f) all proceeds of the foregoing Pledged Collateral.

                  Upon delivery to the Administrative Agent, (a) any stock
certificates, promissory notes or other securities now or hereafter included in
the Pledged Collateral (the "Pledged Securities") shall be accompanied by stock
powers duly executed in blank or other instruments of transfer satisfactory to
the Administrative Agent and by such other endorsement, instruments and
documents as the Administrative Agent may reasonably request and (b) all other
property comprising part of the Pledged Collateral shall be accompanied by
proper instruments of assignment duly executed by the appropriate Pledgor and
such other endorsements, instruments or documents as the Administrative Agent
may reasonably request. Each Pledgor promises promptly to deliver to the
Administrative Agent any and all Pledged Securities and any and all certificates
or other instruments or documents representing the Pledged Collateral. Each
delivery of or other change in Pledged Securities shall be accompanied by a
schedule describing the securities theretofor and then being pledged hereunder,
which schedule shall be attached hereto as Schedule 1 and made a part hereof.
Each schedule so delivered shall supersede any prior schedules so delivered. If
any Pledged Securities or other assets of any Pledgor shall, at any time, cease
to be Pledged Collateral hereunder (including, without limitation, as the result
of (i) any Disposition thereof permitted by the Credit Agreement or (ii) the
issuer thereof ceasing to be a Direct Material Foreign Subsidiary), the
Administrative Agent, on behalf of the Lenders, agrees, at the cost of the
Borrower, (i) that its security interest therein concurrently will be terminated
without further action of the Administrative Agent, (ii) promptly on receipt of
written notice thereof, to re-deliver to such Pledgor all stock certificates,
promissory notes, stock powers, endorsements, instruments and documents
delivered to the Administrative Agent hereunder in connection with such Pledged
Collateral, and (iii) to terminate or appropriately amend financing statements
filed to perfect the security interest in such Pledged Collateral.

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         3.       Secured Obligations. The "Secured Obligations" secured by this
Pledge Agreement shall consist of (i) in the case of the Borrower, all
Obligations of the Borrower under, and as defined in, the Credit Agreement and
each other Loan Document to which it is a party, in each case whether now
existing or hereafter arising, voluntary or involuntary, whether or not jointly
owed with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, whether now existing or hereafter arising
and (ii) in the case of any other Pledgor, all Guaranteed Obligations under, and
as defined in, the Guaranty of such Pledgor and each other Loan Document to
which it is a party, in each case whether now existing or hereafter arising,
voluntary or involuntary, whether or not jointly owed with others, direct or
indirect, absolute or contingent, liquidated or unliquidated, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, in each case whether now existing or hereafter arising.

         4.       Representations and Warranties. In addition to all
representations and warranties of the Pledgors set forth in the other Loan
Documents, which are incorporated herein by this reference, each Pledgor hereby
represents and warrants that: (a) the Pledged Equity Interests represent that
percentage set forth on Schedule I of the issued and outstanding Equity
Interests of the issuer with respect thereto; (b) except for the security
interest granted hereunder, such Pledgor (i) is and, except as otherwise
permitted by the Credit Agreement, will at all times continue to be the direct
owner, beneficially and of record, of the Pledged Securities indicated on
Schedule I, (ii) holds the same free and clear of all Liens except those
permitted by the Credit Agreement or any other Loan Document; (iii) will not
Dispose of or make any assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, the Pledged
Collateral, other than pursuant hereto, or as permitted by the Credit Agreement
or the other Loan Documents and (iv) will cause any and all Pledged Securities
received after the date of this Pledge Agreement, whether for value paid or
otherwise, to be forthwith deposited with the Administrative Agent and pledged
or assigned hereunder; (c) such Pledgor (i) has the power and authority to
pledge the Pledged Collateral in the manner hereby done or contemplated and (ii)
will defend its title or interest thereto or therein against any and all Liens
(other than the Liens created by this Pledge Agreement or permitted by the
Credit Agreement or the other Loan Documents), however arising, of all Persons
whomsoever; (d) no consent of any other Person (including stockholders or
creditors of the such Pledgor) and no consent or approval of any Governmental
Authority or any securities exchange was or is necessary to the validity or
enforceability of the pledge effected hereby, except such consents as have been
obtained and are in full force and effect, (e) by virtue of the execution and
delivery by such Pledgor of this Pledge Agreement, when the Pledged Securities,
certificates or other documents representing or evidencing the Pledged
Collateral are delivered to the Administrative Agent in accordance with this
Pledge Agreement or, if a security interest in the Pledged Collateral may not,
under applicable law be perfected by possession, then upon the filing of
appropriate financing statements, the Administrative Agent will obtain, on
behalf of itself and the Lenders, a valid and perfected first Lien upon and
security interest in such Pledged Securities as security for the payment and
performance of the Secured Obligations of such Pledgor; (f) all of the Pledged
Equity Interests have been duly

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authorized and validly issued and are fully paid and nonassessable and are in
certificated form; and (g) the Pledged Collateral will not be represented by any
certificates, notes, securities, documents, or other instruments other than
those delivered hereunder.

         5.       Registration in Nominee Name; Denominations. The
Administrative Agent shall have the right following an Event of Default which is
continuing (in its sole and absolute discretion) to hold the Pledged Securities
in its own name as pledgee, the name of its nominee (as pledge or as sub-agent)
or the name of the Pledgor granting a security interest therein, endorsed or
assigned in blank or in favor of the Administrative Agent. Each Pledgor will
promptly give to the Administrative Agent copies of any notices or other
communication received by it from any Governmental Authority with respect to the
Pledged Securities registered in the name of such Pledgor. The Administrative
Agent shall at all times following an Event of Default which is continuing have
the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with
this Pledge Agreement. Each Pledgor hereby grants to the Administrative Agent an
exclusive, irrevocable power of attorney, with full power and authority in the
place and stead of such Pledgor to take all such action permitted under this
Paragraph 5. Each Pledgor agrees to reimburse the Administrative Agent upon
demand for any costs and expenses, including, without limitation, attorneys'
fees, the Administrative Agent may incur while acting as such Pledgor's
attorney-in-fact hereunder, all of which costs and expenses are included in the
Secured Obligations of such Pledgor secured hereby. It is further agreed and
understood between the parties hereto that such care as the Administrative Agent
gives to the safekeeping of its own property of like kind shall constitute
reasonable care of the Pledged Collateral when in the Administrative Agent's
possession; provided, however, that the Administrative Agent shall not be
required to make any presentment, demand or protest, or give any notice and need
not take any action to preserve any rights against any prior party or any other
Person in connection with the Secured Obligations or with respect to the Pledged
Collateral.

         6.       Administration of the Pledged Securities.

                  (a)      Until there shall have occurred and be continuing an
Event of Default, each Pledgor shall be entitled to vote or consent with respect
to the Pledged Securities in any manner not inconsistent with this Pledge
Agreement or any document or instrument delivered or to be delivered pursuant to
or in connection with any thereof; provided, however, that no Pledgor will be
entitled to exercise any such right if the result thereof could materially and
adversely affect the rights inuring to a holder of the Pledged Securities or the
rights and remedies of the Administrative Agent under this Pledge Agreement, the
Credit Agreement or the Loan Documents or the ability of the Administrative
Agent to exercise the same. If there shall have occurred and be continuing an
Event of Default and the Administrative Agent shall have notified a Pledgor that
the Administrative Agent desires to exercise its proxy rights with respect to
all or a portion of the Pledged Securities, such Pledgor hereby grants to the
Administrative Agent an irrevocable proxy for the Pledged Securities of such
Pledgor pursuant to which proxy the Administrative Agent shall be entitled to
vote or consent, in its discretion, and in such event, each such Pledgor agrees
to deliver to the Administrative

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Agent such further evidence of the grant of such proxy as the Administrative
Agent may request. Upon the occurrence and during the continuance of an Event of
Default, all rights of each Pledgor to exercise the voting and consensual rights
and powers it is entitled to exercise pursuant to this Pledge Agreement shall
cease, and all such rights shall thereupon become vested in the Administrative
Agent, which shall have the sole and exclusive right and authority to exercise
such voting and consensual rights and powers.

                  (b)      In the event that, at any time or from time to time
after the date hereof, any Pledgor, as record and beneficial owner of Pledged
Securities, shall receive or shall become entitled to receive, any dividend or
any other distribution whether in securities or property by way of stock split,
spin-off, split-up or reclassification, combination of shares or the like, or in
case of any reorganization, consolidation or merger, or any Pledgor, as record
and beneficial owner of Pledged Securities, shall thereby be entitled to receive
securities or property in respect of such Pledged Securities, then and in each
such case, each such Pledgor shall deliver to the Administrative Agent, and the
Administrative Agent shall be entitled to receive and retain, all such
securities or property as part of the Pledged Securities as security for the
payment and performance of such Pledgor's Secured Obligations; provided,
however, that until an Event of Default shall have occurred and be continuing,
each Pledgor shall be entitled to receive, retain, and use any cash dividends,
interest, principal payments and other distributions paid to it on account of
the Pledged Securities to the extent that such payments or other distributions
are permitted by, and otherwise paid in accordance with, the terms and
conditions of the Credit Agreement and the other Loan Documents.

                  (c)      Upon the occurrence of an Event of Default, all
rights of the Pledgors to dividends, distributions, interest or principal that
any Pledgor is authorized to receive pursuant to this Pledge Agreement shall
cease, and all such rights shall thereupon become vested in the Administrative
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, distributions, interest or principal. All dividends,
distributions, interest or principal received by any Pledgor contrary to the
provisions of this Pledge Agreement shall be held in trust for the benefit of
the Administrative Agent and the Lenders, shall be segregated from other
property or funds of such Pledgor and shall forthwith be delivered to the
Administrative Agent upon demand in the same form as so received (with any
necessary endorsement). Any and all money and other property paid over to or
received by the Administrative Agent pursuant to the provisions of this
subparagraph (c) shall be retained by the Administrative Agent in an account to
be established by the Administrative Agent upon receipt of such money or other
property and shall constitute Pledged Collateral under this Pledge Agreement to
be applied in accordance herewith.

                  (d)      Upon the occurrence of an Event of Default, the
Administrative Agent is authorized to sell the Pledged Securities and, at any
such sale of any of the Pledged Securities, if it deems it advisable to do so,
to restrict the prospective bidders or purchasers to persons or entities who (1)
will represent and agree that they are purchasing for their own account, for
investment, and not with a view to the distribution or sale of any of the
Pledged Securities; and (2) satisfy the offeree and purchaser requirements for a
valid private placement transaction under Section 4(2) of the Securities Act of
1933, as

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amended (the "Act"), and under Securities and Exchange Commission Release Nos.
33-6383; 34-18524; 35-22407; 39-700; IC-12264; AS-306, or under any similar
statute, rule or regulation. Each Pledgor agrees that disposition of the Pledged
Securities pursuant to any private sale made as provided above may be at prices
and on other terms less favorable than if the Pledged Securities were sold at
public sale, and that the Administrative Agent has no obligation to delay the
sale of any Pledged Securities for public sale under the Act. Each Pledgor
agrees that a private sale or sales made under the foregoing circumstances shall
be deemed to have been made in a commercially reasonable manner. In the event
that the Administrative Agent elects to sell all or any part of the Pledged
Securities of any Pledgor, and there is a public market for such Pledged
Securities, in a public sale ,such Pledgor shall use its best efforts to
register and qualify its Pledged Securities, or applicable part thereof, under
the Act and all state blue sky or securities laws required by the proposed terms
of sale and all expenses thereof shall be payable by such Pledgor, including,
but not limited to, all costs of (i) registration or qualification of, under the
Act or any state blue sky or securities laws or pursuant to any applicable rule
or regulation issued pursuant thereto, any Pledged Securities, and (ii) sale of
such Pledged Securities, including, but not limited to, brokers' or
underwriters' commissions, fees or discounts, accounting and legal fees, costs
of printing and other expenses of transfer and sale.

                  (e)      If any consent, approval or authorization of any
state, municipal or other governmental department, agency or authority should be
necessary to effectuate any sale or other disposition of the Pledged Securities
of a Pledgor, or any part thereof, such Pledgor will execute such applications
and other instruments as may be reasonably required in connection with securing
any such consent, approval or authorization, and will otherwise use its
commercially reasonable efforts to secure the same.

                  (f)      Nothing contained in this Paragraph 6 shall be deemed
to limit the other obligations of any Pledgor contained in the Credit Agreement,
the Guaranties, this Pledge Agreement, or the other Loan Documents or the rights
of the Administrative Agent hereunder or thereunder.

         7.       Remedies.

                  (a)      Upon the occurrence of an Event of Default, the
Administrative Agent may, without notice to or demand on any Pledgor and in
addition to all rights and remedies available to the Administrative Agent or any
Lender with respect to the Secured Obligations, at law, in equity or otherwise,
do any one or more of the following:

                           (1)      Foreclose or otherwise enforce the
Administrative Agent's security interest in Pledged Collateral of such Pledgor
in any manner permitted by law or provided for in this Pledge Agreement.

                           (2)      Sell, lease, license or otherwise dispose of
any Pledged Collateral of such Pledgor at one or more public or private sales at
the Administrative Agent's place of business or any other place or places,
including, without limitation, any broker's board or securities exchange,
whether or not such Pledged Collateral is present

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at the place of sale, for cash or credit or future delivery, on such terms and
in such manner as the Administrative Agent may determine.

                           (3)      Recover from such Pledgor all costs and
expenses, including, without limitation, reasonable attorneys' fees (including
the allocated cost of internal counsel), incurred or paid by the Administrative
Agent in exercising any right, power or remedy provided by this Pledge
Agreement.

                           (4)      In connection with the disposition of any
Pledged Collateral of such Pledgor, disclaim any warranty relating to title,
possession or quiet enjoyment.

                  (b)      Unless the Pledged Collateral of a Pledgor threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, such Pledgor shall be given ten (10) Business Days' prior notice of the
time and place of any public sale or of the time after which any private sale or
other intended disposition of such Pledged Collateral is to be made pursuant to
this Pledge Agreement, which notice each Pledgor hereby agrees shall be deemed
reasonable notice thereof.

                  (c)      Upon any sale or other Disposition pursuant to this
Pledge Agreement, the Administrative Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Pledged Collateral or portion
thereof so sold or Disposed of. Each purchaser at any such sale or other
disposition (including the Administrative Agent) shall hold the Pledged
Collateral free from any claim or right of whatever kind, including any equity
or right of redemption of any Pledgor, and each Pledgor specifically waives (to
the extent permitted by law) all rights of redemption, stay or appraisal which
it has or may have under any rule of law or statute now existing or hereafter
adopted.

                  (d)      Any deficiency with respect to the Secured
Obligations of a Pledgor which exists after the Disposition or liquidation of
the Pledged Collateral of such Pledgor shall be a continuing liability of such
Pledgor to the Administrative Agent and the Lenders and shall be immediately
paid by such Pledgor to such Person.

                           8.       Application of Non-Cash Proceeds.
Notwithstanding anything else contained in this Pledge Agreement, if any
non-cash proceeds are received in connection with any sale or Disposition of any
Pledged Collateral, the Administrative Agent shall not apply such non-cash
proceeds to the Secured Obligations unless and until such proceeds are converted
to cash; provided, however, that if such non-cash proceeds are not expected on
the date of receipt thereof to be converted to cash within one year after such
date, the Administrative Agent shall use commercially reasonable efforts to
convert such non-cash proceeds to cash within such one year period.

                           9.       Waiver of Hearing. Each Pledgor expressly
waives to the extent permitted under applicable law any constitutional or other
right to a judicial hearing prior to the time the Administrative Agent takes
possession or Disposes of the Pledged Collateral upon the occurrence of an Event
of Default.

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                           10.      Cumulative Rights. The rights, powers and
remedies of the Administrative Agent under this Pledge Agreement shall be in
addition to all rights, powers and remedies given to the Administrative Agent or
any Lender by virtue of any statute or rule of law, the Credit Agreement, the
Guaranties, any Loan Document or any other agreement, all of which rights,
powers and remedies shall be cumulative and may be exercised successively or
concurrently without impairing the Administrative Agent's security interest in
the Pledged Collateral.

                           11.      Waiver. Any forbearance or failure or delay
by the Administrative Agent in exercising any right, power or remedy shall not
preclude the further exercise thereof, and every right, power or remedy of the
Administrative Agent shall continue in full force and effect until such right,
power or remedy is specifically waived in a writing executed by the
Administrative Agent. Each Pledgor waives any right to require the
Administrative Agent to proceed against any Person or to exhaust any Pledged
Collateral or to pursue any remedy in the Administrative Agent's or any Lender's
power.

                           12.      Setoff. Each Pledgor agrees that the
Administrative Agent and the Lenders may exercise their rights of setoff with
respect to the Secured Obligations in the same manner as if the Secured
Obligations of such Pledgor were unsecured.

                           13.      Financing Statements. Each Pledgor hereby
consents to, authorizes and instructs the Administrative Agent to file financing
statements with respect to the Pledged Collateral in all locations deemed
appropriate by the Administrative Agent from time to time.

                           14.      Entire Agreement. This Pledge Agreement and
the other Loan Documents embody the entire agreement and understanding between
the parties hereto and supersede all prior agreements and understandings
relating to the subject matter hereof and thereof.

                           15.      Survival. All representations, warranties,
covenants and agreements contained herein and in the other Loan Documents of
each Pledgor shall survive the termination of this Pledge Agreement and shall be
effective until the Secured Obligations of all Pledgors are paid and performed
in full or longer as expressly provided herein.

                           16.      Notices. All notices shall be given in
accordance with the Credit Agreement, which, in the case of Pledgors other than
the Borrower, shall be addressed to such Pledgor care of the Borrower at the
address indicated in the Credit Agreement.

                           17.      Governing Law. This Pledge Agreement shall
be governed by and construed in accordance with the laws of the State of
California without giving effect to its choice of law rules.

                           18.      Counterparts. This Pledge Agreement may be
executed in any number of counterparts, all of which together shall constitute
one agreement.

                           19.      Severability. The illegality or
unenforceability of any provision of this Pledge Agreement or any instrument or
agreement required hereunder or thereunder shall

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not in any way affect or impair the legality or enforceability of the remaining
provisions hereof or thereof.

                           [Signature Pages Following}

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         EXECUTED as of the day and year first above written.

                                            CALLAWAY GOLF COMPANY, as Pledgor

                                            By: /s/ RONALD A. DRAPEAU
                                            Name: Ronald A. Drapeau
                                            Title: CEO

                                            BANK OF AMERICA, N.A., as
                                            Administrative Agent

                                            By: /s/ DORA A. BROWN
                                            Name: Dora A. Brown
                                            Title: Vice President

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                                                                       EXHIBIT A

                                                           (TO PLEDGE AGREEMENT)

                                JOINDER AGREEMENT

         THIS JOINDER AGREEMENT (this "Agreement") is made and dated as of the
____ day of ___, 200_ by and between _______________________, a
_________________ (the "Joining Pledgor") and Bank of America, N.A. (the
"Administrative Agent"). --------------------

         WHEREAS, Callaway Golf Company (the "Borrower"), the Administrative
Agent, the L/C Issuer, the Swing Line Lender and the Lenders party thereto have
entered into a Credit Agreement dated as of November [10], 2003 (as amended,
modified, or waived, the "Credit Agreement") pursuant to which the Lenders have
agreed to extend credit to the Borrower on the terms and conditions contained
thereon;

         WHEREAS, the Borrower and the Administrative Agent, for itself and the
Lenders, have executed a Pledge Agreement (as such term and all other
capitalized terms used, but not otherwise defined, are defined in the Credit
Agreement) pursuant to which the Borrower has, and certain other Pledgors may
have, granted to the Administrative Agent a security interest in the Pledged
Collateral, as defined in the Pledge Agreement;

         WHEREAS, the Joining Pledgor is or concurrently herewith is becoming a
Guarantor under the Credit Agreement and will acquire an interest in Pledged
Collateral or property required to become Pledged Collateral under the Pledge
Agreement and, pursuant to the Credit Agreement, is required to join in the
Pledge Agreement;

         NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

         1.       Agreements of Joining Pledgor. The Joining Pledgor hereby (a)
joins in the Pledge Agreement as though a party thereto ab initio, (b) grants to
the Administrative Agent a security interest in all right, title and interest of
the Joining Pledgor in the Pledged Collateral of the Joining Pledgor, whether
now owned or hereafter acquired, (c) delivers to the Administrative Agent a new
Schedule 1 to the Pledge Agreement to the extent required by the Pledge
Agreement on account of Pledged Securities of the Joining Pledgor, (d) from and
after the date of this Agreement, agrees to be a Pledgor under the Pledge
Agreement and to be bound by all of the terms and conditions of the Pledge
Agreement, each of which is incorporate herein by reference as though set forth
at length and (e) agrees to deliver to the Administrative Agent such other
agreements and documents as the Administrative Agent may reasonably required to
effectuate this joinder and to realize for the Administrative Agent and the
Lenders the benefits of the Pledged Collateral intended to be granted pursuant
to the Pledge Agreement.

         2.       Acceptance by Administrative Agent. The Administrative Agent
hereby agrees that, as of the date of this Agreement, the Joining Pledgor is and
shall be a party to the Pledge Agreement.

<PAGE>

         3.       Miscellaneous. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of California without giving
effect to its choice of law rules. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement.

                 BANK OF AMERICA, N.A., as Administrative Agent

                                      By: ___________________________________
                                      Name: _________________________________
                                      Title: ________________________________

                                      _______________, a ______________, as
                                      Joining Pledgor

                                      By: ___________________________________
                                      Name: _________________________________
                                      Title: ________________________________<PAGE>
                                                                   EXHIBIT 10.39

                              BANK OF AMERICA, N.A.

                                November 12, 2003

Callaway Golf Company
2180 Rutherford Road
Carlsbad, CA 92008-7328

      Re:   Credit Agreement dated as of June 16, 2003 (the "Bi-Lateral Credit
            Agreement") between Callaway Golf Company (the "Borrower") and Bank
            of America, N.A. (the "Lender")

Ladies and Gentlemen:

           At the request of the Borrower indicated by its signature below, the
Lender acknowledges that its Commitment under the Bi-Lateral Agreement was
terminated on November 10, 2003 (prior notice of such request being waived by
the Lender) concurrently with the effectiveness of the Credit Agreement dated as
of November 10, 2003 among the Borrower, Bank of America, N.A., as Agent, L/C
Issuer and Swing Line Lender and the Lenders party thereto.

           Please execute and return a copy of this letter to the undersigned by
telefacsimile transmission to (619) 515-7524.

                                                Sincerely yours,

                                                BANK OF AMERICA, N.A.

                                                By   /s/ Susan J. Pepping
                                                   -----------------------------
                                                     Susan J. Pepping
                                                     Senior Vice President

Confirmed and agreed:
CALLAWAY GOLF COMPANY

By:      /s/ Bradley J. Holiday
   -----------------------------------
Name: Bradley J. Holiday
Title:  Sr. Exec. VP, CFO

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