Preview | Leasehold Mortgage |

AFTER RECORDING, MAIL TO:
CHICAGO TITLE INS. CO.
ATTN: MARIANN KAMINSKI
171 N. CLARK ST.
CHICAGO, IL 60601

LEASEHOLD MORTGAGE (Mortgage), dated as of December 23, 2004, by GOLFSMITH NU, L.L.C., a Delaware limited liability company (being hereinafter called the Mortgagor or Grantor) to U.S. BANK TRUST NATIONAL ASSOCIATION, as Collateral Agent (the Collateral Agent) under the Indenture, dated as of October 15, 2002, by and among Golfsmith International, Inc., U.S. Bank Trust National Association, as Trustee and the Guarantors, as defined therein (as amended, restated or otherwise modified from time to time, the Indenture), as collateral agent for the Holders, as defined in the Indenture;

That for and in consideration of the sum of Ten Dollars ($10.00) and other valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, and in order to secure the indebtedness and other obligations of Mortgagor, hereinafter set forth, Mortgagor does hereby MORTGAGE AND WARRANT, GRANT A SECURITY INTEREST IN, GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER, HYPOTHECATE, DEPOSIT, PLEDGE, SET OVER and CONFIRM unto Collateral Agent and its successors and assigns the following:

(A) Mortgagors leasehold interest and estate created by and arising pursuant to that certain Memorandum of Lease, dated December 1, 2004 and recorded in the Office of the Clerk of Somerset County, New Jersey in Mortgage Book 5684 at Page 3098 (Instrument # 2004102838) on December 15, 2004 between KIR Bridgewater 573, LLC, a Delaware limited liability company, as landlord (the Landlord), and Mortgagor, as tenant (together with that certain lease dated December 1, 2004 between the Mortgagor and Landlord the Mortgaged Lease) and which demises to Mortgagor certain premises more particularly described therein (the Premises) and located on a portion of that certain tract or parcel of land more particularly described in Exhibit A attached hereto and incorporated herein by reference (the Land); TOGETHER WITH all of Mortgagors right, title and interest in and to the Mortgaged Lease, and all modifications, extensions and renewals and assignments of the Mortgaged Lease and in and to all rights to renew or extend the term of the Mortgaged Lease, or to purchase the Premises leased pursuant to the Mortgaged Lease, and all credits, deposits, options, privileges and rights of Mortgagor, as tenant, under the Mortgaged Lease;

(B) TOGETHER WITH all of Mortgagors right, title and interest, to the extent granted to Mortgagor under the Mortgaged Lease, in and to (1) the buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Land and constituting a part of the Premises, and (2) the fixtures, machinery, appliances, equipment, furniture and personal property of every nature whatsoever now or hereafter owned by Mortgagor and located in or on, attached to, and used or intended to be used in connection with or with the operation of, the Premises, or in connection with any construction being conducted or which may be

conducted thereon, and all extensions, additions, improvements, betterments, renewals, substitutions and replacements to all of the foregoing, and all of the right, title and interest of Mortgagor to the extent provided under the Mortgaged Lease in and to any such personal property and fixtures (hereinafter called the Improvements);

(C) TOGETHER WITH all of Mortgagors right, title and interest, to the extent granted to Mortgagor under the Mortgaged Lease, in and to all easements, rights-of-way, gores of land, streets, ways, alleys, passages, sewer rights, water courses, water rights and powers, other real property and interests therein, and all appurtenances whatsoever, in any way belonging, relating or appertaining to any of the property described in paragraphs (A) and (B) hereof, or which hereafter shall in any way belong, relate or be appurtenant thereto;

(D) TOGETHER WITH all of Mortgagors right, title and interest, to the extent granted to Mortgagor under the Mortgaged Lease, in and to (i) all of the estate, right, title and interest of Mortgagor of, in and to all judgments, insurance proceeds, awards of damages and settlements hereafter made or resulting from condemnation proceedings or the taking of the Premises or any part thereof under the power of eminent domain, or for any damage (whether caused by such taking or otherwise) to the Premises or any part thereof, or to any rights appurtenant thereto, and all proceeds of any sale or other disposition of the Premises or any part thereof; and Collateral Agent is, subject to the provisions of this Mortgage and the Mortgaged Lease, hereby authorized to collect and receive said awards and proceeds and to give proper receipts and acquittances therefor, and (if it so elects) to apply the same toward the payment of indebtedness and other sums secured hereby, notwithstanding the fact that the amount owing thereon may not then be due and payable; and (ii) all contract rights, general intangibles, actions and rights in action, including without limitation all rights to insurance proceeds and unearned premiums arising from or relating to the Premises; and (iii) all proceeds, products, replacements, additions, substitutions, renewals and accessions of and to the Premises;

(E) TOGETHER WITH all rents, income and other benefits to which Mortgagor may now or hereafter be entitled to receive from the Premises to be applied against the indebtedness and other sums secured hereby; provided, however, that permission is hereby given to Mortgagor, so long as no Event of Default (as defined in Section 2.01) has occurred hereunder and is continuing, to collect and use such rents, income and other benefits as they become due and payable, but not more than one (1) month in advance thereof. Upon the occurrence of any such Event of Default, the permission hereby given to Mortgagor to collect such rents, income and other benefits from the Premises shall terminate and such permission shall be reinstated upon a cure of such Event of Default;

The foregoing provisions hereof shall constitute an absolute and present assignment of the rents, income and other benefits from the Premises, subject, however, to the conditional permission given to Mortgagor to collect and use such rents, income and other benefits as hereinabove provided; and the existence or exercise of such right of Mortgagor shall not operate to subordinate this assignment to any subsequent assignment, in whole or in part, by Mortgagor, and any such subsequent assignment by Mortgagor shall be subject to the rights of Collateral Agent and Holders hereunder;

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(F) TOGETHER WITH all right, title and interest of Mortgagor in and to any and all subleases now or hereafter on or affecting the Premises, and all books and records which contain payments made under the subleases and all security therefor; and

(G) TOGETHER WITH (i) Mortgagors rights further to encumber the Premises; and (ii) all of Mortgagors rights to enter into any sublease or sublease agreement.

All of the property described in paragraphs (A), (B), (C), (D), (E), (F) and (G) above, and each item of property therein described, is hereinafter referred to collectively as the Property.

TO HAVE AND TO HOLD the Property and all parts thereof unto Collateral Agent, its successors and assigns, forever upon the trust, terms and conditions contained herein.

Grantor is a wholly owned subsidiary of Golfsmith International, Inc., a Delaware corporation (the Borrower) and hereby acknowledges that it will derive substantial economic benefit from the proceeds of Borrowers issuance of its Notes (as defined below) in the aggregate principal amount of $93,750,000.00 and, as a result, Grantor has agreed to guarantee Borrowers payment and performance of its indebtedness, obligations and liabilities under the Notes, the Indenture and the Indenture Documents.

The Guarantees (as defined in the Indenture) have been executed and delivered by Guarantors with respect to Borrowers liability with respect to the Notes, the Indenture and the Indenture Documents, and Grantor hereby acknowledges that it will derive a substantial economic benefit from the execution and delivery of the Guarantees by Guarantors due to the fact that each Guarantor is also a subsidiary of Borrower and Borrower and Grantor will benefit from the Guarantees. As a result, Grantor has agreed to grant this Mortgage to secure the payment and performance by Grantor under its guaranty (and constituting one of the Guarantees) dated October 15, 2002 (the Golfsmith NU, L.L.C. Guaranty) and the Obligations (as defined below) of the other Guarantors under the Guarantees.

This Mortgage is executed and delivered by Mortgagor to secure the following described obligations, liabilities and indebtedness to Collateral Agent and Holders (hereinafter collectively referred as the Obligations):

(a) All loans, advances, indebtedness, obligations and liabilities now or from time to time hereafter owing by the Borrower, including the Obligations as defined in the Indenture, to Collateral Agent, Holders, and any other Person under the Indenture, or under any agreement, instrument or document executed or delivered to Collateral Agent or Holders in respect of the Indenture (all such agreements, instruments or documents, collectively, the Indenture Documents) or the transactions contemplated thereby, pursuant to which Holders have duly authorized the creation of an issue of 8.375% Senior Notes due 2009 (the Initial Notes), and Series B 8.375% Exchange Notes due 2009 (the Exchange Notes, and together with the Initial Notes and any Additional Notes, as defined in the Indenture, collectively, the Notes) as described in the Indenture;

(b) All indebtedness, obligations and liabilities of Grantor and the other Guarantors arising under the Guarantees, including the indebtedness, obligations and liabilities of Grantor under the Golfsmith NU, L.L.C. Guaranty;

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(d) All advances made by Collateral Agent and the other Holders to protect or preserve the Property or the lien hereof on the Property, or for taxes, assessments, insurance premiums, or other advances authorized under the terms of this Mortgage (whether or not Mortgagor remains the owner of the Property at the time of such advance);

(e) Any and all renewals, extensions, modifications, substitutions, replacements or consolidations of the indebtedness, liabilities and obligations described in paragraphs (a), (b), (c) or (d) above; and

(f) All other obligations, liabilities and indebtedness of every kind and character now or hereafter owing by Borrower, Mortgagor or any Guarantor to Collateral Agent and/or Holders, however created, incurred or evidenced, direct or indirect, absolute or contingent, and whether owing under the Indenture, Indenture Documents, this Mortgage or the Notes, including without limitation, all Obligations (as defined in the Indenture) of Borrower, Mortgagor and Guarantors to Collateral Agent and Holders.

ARTICLE ONE

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