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Earlier this year, January 16, 2008, Callaway Golf issued a notice of default to Ashworth Inc. under the parties’ May 14, 2001 License Agreement. Ashworth has denied that any breach has occurred, and has not taken the steps requested by its business partner to rectify the matter. Callaway, therefore, believes it is within its rights to terminate the Agreement and has communicated such to Ashworth. The two parties then conducted a mediation of the issue back on April 23, 2008, pursuant to dispute resolution procedures specified in the Agreement. However, it was still not resolved and Callaway is now demanding binding arbitration to resolve the dispute. According to a quarterly filing with the Securities and Exchange Commission, Ashworth stated that it believes it would have claims against Callaway in the event that it wrongfully terminates or interferes with the Agreement. Callaway contends it is not aware of what such claims might be, but it currently is unaware of any basis for a meritorious claim against it based upon the handling of the alleged breach by Ashworth.