SECOND AMENDMENT TO FIRST AMENDED

AND RESTATED CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is executed as of June 30, 2014 (the “Execution Date”) by JPMORGAN
CHASE BANK, N.A, as the Administrative Agent, Issuing Bank, Swingline Lender and
as a Lender, ESCALADE, INCORPORATED, as the Borrower, and the other Loan Parties
party hereto.

 

Recitals

 

A. This Amendment is executed in respect of the First Amended and Restated
Credit Agreement, dated as of August 27, 2013 (as amended by the First Amendment
to First Amended and Restated Credit Agreement, dated as of November 13, 2013,
the “Credit Agreement”), executed by and among Escalade, Incorporated, an
Indiana corporation, as the Borrower, the other Loan Parties party thereto and
JPMorgan Chase Bank, N.A., as the Administrative Agent, Issuing Bank, Swingline
Lender and as a Lender (“Chase”).

 

B. The Borrower is requesting that Chase, which as of the Execution Date is the
sole Lender, the Swingline Lender, the Issuing Bank and the Administrative
Agent, agree to amendments to the Credit Agreement, as provided in and subject
to the terms of this Amendment.

 

Agreement

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein, and each act performed and to be performed hereunder, the
Borrower, the other Loan Parties party hereto and Chase, as Lender, Swingline
Lender, the Issuing Bank and the Administrative Agent, agree as follows:

 

1. Definitions. All terms used in this Amendment, including its Recitals, that
are defined in the Credit Agreement and not otherwise defined herein, shall have
the same meanings in this Amendment as are ascribed to such terms in the Credit
Agreement.

 

2. Amendments to the Credit Agreement. Effective as of the Execution Date, the
Credit Agreement is amended as follows:

 

(a) New Defined Term. Section 1.01 of the Credit Agreement is amended to add the
following new defined term in the appropriate alphabetical position:

 

“Martin Yale Disposition” means the sale to Martin Yale Buyer of certain assets
of Martin Yale Seller, specifically excluding the real property located at 251
Wedcor Avenue, Wabash, Indiana 46992, any securities reflecting an equity
ownership interest in any Person or Affiliate of Martin Yale Seller, including
without limitation, in Neoteric Industries, Inc., a Taiwanese corporation, cash,
bank accounts, cash equivalents and other similar types of investments held or
owned by Martin Yale Seller, or the equipment listed on Exhibit B to the
Transition Services Agreement dated as of June 30, 2014 made by and between
intimus International GmbH, a German corporation, and Martin Yale Buyer, among
other Excluded Assets (as defined in the Asset Purchase Agreement dated as of
June 30, 2014 by and among Martin Yale Seller and Martin Yale Buyer and joined
in by the Borrower, as the Shareholder (as defined therein)).

 

“Martin Yale Seller” means Martin Yale Industries, Inc., an Indiana corporation.

 

 

 

 

“Martin Yale Buyer” means Martin Yale Industries, LLC, a Michigan limited
liability company.

 

(b) Amendment to Section 6.04. Section 6.04 of the Credit Agreement is amended
as follows:

 

(i) Subsection 6.04(c)(i) is hereby amended and, as so amended, restated in its
entirety to read as follows:

 

“(i) intimus International GmbH and its direct and indirect subsidiaries
(together with outstanding intercompany loans permitted under Section 6.04(d)(i)
and outstanding Guarantees permitted under the proviso to Section 6.04(e)(i))
shall not exceed $13,500,000 at any time outstanding (in each case determined
without regard to any write-downs or write-offs), and”

 

(ii) Subsection 6.04(d)(i) is hereby amended and, as so amended, restated in its
entirety to read as follows:

 

“(i) intimus International GmbH and its direct and indirect subsidiaries
(together with outstanding investments permitted under Section 6.04(c)(i) and
outstanding Guarantees permitted under the proviso to Section 6.04(e)(i)) shall
not exceed $13,500,000 at any time outstanding (in each case determined without
regard to any write-downs or write-offs), and”

 

(iii) Subsection 6.04(e)(i) is hereby amended and, as so amended, restated in
its entirety to read as follows:

 

“(i) intimus International GmbH and its direct and indirect subsidiaries
(together with outstanding investments permitted under Section 6.04(c)(i) and
outstanding intercompany loans permitted under Section 6.04(d)(i)) shall not
exceed $13,500,000 at any time outstanding (in each case determined without
regard to any write-downs or write-offs), and”

 

(c) Amendment to Section 6.05. Section 6.05 of the Credit Agreement is amended
as follows:

 

(i) By deleting the “and” following the semicolon in subsection (g);

 

(ii) By inserting “and” following the semicolon in subsection (h);

 

(iii) By inserting a new subsection (i), which shall read in its entirety “the
Martin Yale Disposition; provided that the Martin Yale Disposition shall not be
considered a Prepayment Event and any Net Proceeds of the Martin Yale
Disposition shall not be required to be applied to the Obligations as provided
in Section 2.11(c) of this Agreement;”; and

 

(iv) By deleting the parenthetical in the final proviso of Section 6.05 of the
Credit Agreement and replacing it with the following: “(other than those
permitted by paragraphs (b), (f), (h) and (i) above)”.

 

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3. Representations and Warranties of the Borrower. Each Loan Party represents
and warrants to Chase, as the Lender, Swingline Lender, Issuing Bank and the
Administrative Agent as follows:

 

(a) (i) The execution, delivery and performance of this Amendment and all
agreements, instruments and documents delivered pursuant hereto by each Loan
Party have been duly authorized by all necessary corporate action, and do not
and will not violate any provision of any law, rule, regulation, order,
judgment, injunction or writ presently in effect applying to any Loan Party, or
the articles of incorporation of any Loan Party, or result in a breach of or
constitute a default under any material agreement, lease or instrument to which
any Loan Party is a party or by which any Loan Party or any of their respective
properties may be bound or affected; (ii) no authorization, consent, approval,
license, exemption or filing of a registration with any court or governmental
department, agency or instrumentality is or will be necessary to the valid
execution, delivery or performance by any Loan Party of this Amendment and all
agreements, instruments and documents delivered pursuant hereto; and (iii) this
Amendment is the legal, valid and binding obligation of each Loan Party and is
enforceable against each Loan Party in accordance with its terms.

 

(b) The representations and warranties contained in Article III of the Credit
Agreement are true and correct on and as of the Execution Date with the same
force and effect as if made on and as of the Execution Date.

 

(c) No Default or Event of Default has occurred and is continuing or will exist
under the Credit Agreement as of the Execution Date.

 

(d) The Borrower’s constituent documents (articles of incorporation and by-laws)
have not been amended or otherwise changed since August 27, 2013. No Guarantor’s
constituent documents (articles of incorporation and by-laws) have been amended
or otherwise changed since August 27, 2013.

 

(e) Since August 27, 2013, no event, change or condition has occurred that has
had, or could reasonably be expected to have, a Material Adverse Effect.

 

(f) As of the date hereof, the entity name of Martin Yale Industries, Inc., an
Indiana corporation (“Martin Yale”), will be changed to Wedcor Holdings, Inc.
(the “Entity Name Change”). In addition, Martin Yale will adopt the assumed
business name of intimus North America.

 

4. Consent to Lease. Effective as of the Execution Date, subject to Section 5
hereof, Lender hereby consents, for purposes of each of Section 6.05 of the
Credit Agreement and Section 7 of that certain Mortgage, Security Agreement,
Fixture Filing and Assignment of Leases and Rents executed as of April 30, 2009
by Martin Yale in favor of Lender, to the entry by Wedcor Holdings, Inc., an
Indiana corporation (f/k/a Martin Yale Industries, Inc.), as lessor, into that
certain Lease, dated as of June 30, 2014 with Martin Yale Industries, LLC, a
Michigan limited liability company, as lessee.

 

5. Acknowledgment of Name Change. Effective as of the Execution Date, subject to
Section 5 hereof, Lender hereby acknowledges, for purposes of each of Section
6.03(d) of the Credit Agreement and Section 4.15 of that certain Pledge and
Security Agreement, dated as of April 30, 2009, executed by Martin Yale in favor
of Lender, that it received at least thirty days advance written notice of the
Entity Name Change and all actions of Lender requested in connection therewith
have been completed or taken.

 

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6. Conditions. The obligation of Chase, as Lender, Swingline Lender, Issuing
Bank and the Administrative Agent, to execute and to perform this Amendment
shall be subject to full satisfaction of the following conditions precedent on
or before the Execution Date:

 

(a) This Amendment shall have been executed by the Borrower and each Loan Party,
and delivered to Chase, and executed by Chase, as Lender, Swingline Lender,
Issuing Bank and Administrative Agent;

 

(b) The Second Amendment to Pledge and Security Agreement, dated as of the date
hereof, executed by the Borrower in favor of Chase, shall have been executed by
the Borrower delivered to Chase;

 

(c) The First Amendment to Pledge and Security Agreement, dated as of the date
hereof, executed by Martin Yale in favor of Chase, shall have been executed by
Martin Yale and delivered to Chase;

 

(d) The First Amendment to Pledge and Security Agreement, dated as of the date
hereof, executed by SOP Services, Inc. in favor of Chase, shall have been
executed by SOP Services, Inc. and delivered to Chase;

 

(e) The Trademark Security Agreement, dated as of the date hereof, executed by
Martin Yale in favor of Chase, shall have been executed by Martin Yale and
delivered to Chase;

 

(f) The Patent Security Agreement, dated as of the date hereof, executed by
Martin Yale in favor of Chase, shall have been executed by Martin Yale and
delivered to Chase;

 

(g) Chase shall have received a Certificate of Existence for the Borrower and
each Guarantor issued by the Secretary of State of its jurisdiction of
organization not more than thirty (30) days prior to the Execution Date;

 

(h) Chase shall have received copies, certified as of the Execution Date, of
such corporate documents or resolutions of the Borrower and each Guarantor as
Chase may request evidencing necessary corporate action by the Borrower and each
Guarantor with respect to this Amendment and all other agreements or documents
delivered pursuant hereto as Chase may request;

 

(i) Chase shall have obtained a UCC search certificate for the Borrower and each
Guarantor issued by the Secretary of State of the jurisdiction where such Person
is located (as such term is used in Article 9 of the UCC) not more than thirty
(30) days prior to the Execution Date which certificates shall show the
Administrative Agent having a first priority security interest in substantially
all of the assets of each of the Borrower and the Guarantors subject only to
Liens permitted by the Credit Agreement; and

 

(j) Chase shall have received a fully executed copy of the Asset Purchase
Agreement by and between Martin Yale Industries, Inc., Martin Yale Industries,
LLC and joined in by the Borrower, as the Shareholder (as defined therein),
dated as of the date hereof, including all exhibits and schedules thereto, in
form and substance acceptable to Lender.

 

7. Further Agreements and Acknowledgements. The Borrower and each Guarantor each
hereby further agree and acknowledge that the Borrower shall reimburse Chase for
or pay, within ten (10) days of the date of their receipt of billing from Chase,
the reasonable fees and out-of-pocket expenses of Faegre Baker Daniels LLP,
special counsel to the Lender, the Issuing Bank and the Administrative Agent,
for the preparation and closing of this Amendment.

 

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8. Consent and Representations of Guarantors. (a) Each Guarantor, by its
execution of this Amendment, expressly consents to the execution, delivery and
performance by the Borrower, Chase (as a Lender and Issuing Bank) and the
Administrative Agent of this Amendment and all agreements, instruments and
documents delivered pursuant hereto, and agrees that neither the provisions of
this Amendment nor any action taken or not taken in accordance with the terms of
this Amendment shall constitute a termination, extinguishment, release or
discharge of any of its obligations under its respective Unlimited Continuing
Guaranty, dated as of April 30, 2009, in favor of the Administrative Agent for
the benefit of each of the Lenders and the Administrative Agent (each a
“Guaranty”) or provide a defense, set-off or counterclaim to it with respect to
any of its obligations under its Guaranty or any other Loan Documents. Each
Guarantor affirms to Chase and the Administrative Agent that its Guaranty is in
full force and effect, is a valid and binding obligation, and continues to
guaranty payment of and secure and support the Secured Obligations, now existing
or hereafter arising.

 

(b) The request for and the grant of the confirmations, consents and waivers
given herein shall not establish a course of conduct or dealing between Chase
and the Guarantors and shall not impose any obligation on Chase to consult with,
notify or obtain the consent of the Guarantors in the future if the financial
accommodations provided by the Lenders to Borrower should be revised, amended or
increased.

 

9. Binding on Successors and Assigns. All of the terms and provisions of this
Amendment shall be binding upon and inure to the benefit of the parties hereto,
their respective successors, assigns and legal representatives.

 

10. Governing Law/Entire Agreement/Survival. This Amendment is a contract made
under, and shall be governed by and construed in accordance with, the laws of
the State of Indiana applicable to contracts made and to be performed entirely
within such state and without giving effect to the choice or conflicts of laws
principles of any jurisdiction. This Amendment constitutes and expresses the
entire understanding among the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings, commitments, inducements
or conditions, whether expressed or implied, oral or written. All covenants,
agreements, undertakings, representations and warranties made in this Amendment
shall survive the execution and delivery of this Amendment and shall not be
affected by any investigation made by any person. Except as expressly provided
otherwise in this Amendment, the Credit Agreement, as amended hereby, remains in
full force and effect in accordance with its terms and provisions.

 

11. Counterparts/Facsimile Signatures. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of a signature page of
this Amendment by facsimile shall be effective as delivery of a manually
executed counterpart of this Amendment.

 

[Signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective authorized signatories.

 

   JPMORGAN CHASE BANK, N.A., individually, as Administrative Agent, Issuing
Bank, Swingline Lender and a Lender            By:  /s/ Thomas W. Harrison     
Name: Thomas W. Harrison       Title: Senior Vice President / Authorized Officer

 

[Signature Page to Second Amendment to First Amended and Restated Credit
Agreement]

 

 

  BORROWER:            ESCALADE, INCORPORATED           By:  /s/ Deborah Meinert
     Name: Deborah Meinert       Title: Treasurer            OTHER LOAN PARTIES:
           BEAR ARCHERY, INC.            By:  /s/ Deborah Meinert       Name:
Deborah Meinert       Title: Treasurer            EIM COMPANY, INC.           
By:  /s/ Deborah Meinert       Name: Deborah Meinert       Title: Treasurer   
        ESCALADE INSURANCE, INC.            By:  /s/ Deborah Meinert       Name:
Deborah Meinert       Title: Treasurer            ESCALADE SPORTS PLAYGROUND,
INC.            By:  /s/ Deborah Meinert       Name: Deborah Meinert      
Title: Treasurer            HARVARD SPORTS, INC.            By:  /s/ Deborah
Meinert       Name: Deborah Meinert       Title: Treasurer            MARTIN
YALE INDUSTRIES, INC.            By:  /s/ Deborah Meinert       Name: Deborah
Meinert       Title: Treasurer

 

[Signature Page to Second Amendment to First Amended and Restated Credit
Agreement]

 

 

  OLYMPIA BUSINESS SYSTEMS, INC.            By:  /s/ Deborah Meinert     Name:
Deborah Meinert       Title: Treasurer            SOP SERVICES, INC.           
By:  /s/ Deborah Meinert       Name: Deborah Meinert       Title: Treasurer   
        U.S. WEIGHT, INC.            By:  /s/ Deborah Meinert       Name:
Deborah Meinert       Title: Treasurer            INDIAN INDUSTRIES, INC.      
     By:  /s/ Deborah Meinert       Name: Deborah Meinert       Title: Treasurer

 

[Signature Page to Second Amendment to First Amended and Restated Credit
Agreement]