<PAGE>   1
                                                                    EXHIBIT 10.1


                                CREDIT AGREEMENT


         THIS CREDIT AGREEMENT is executed as of the 15th day of May, 2000 (the
"CLOSING DATE"), between INDIAN-MARTIN AG, a corporation organized and existing
under the laws of Switzerland (the "COMPANY"), and BANK ONE, INDIANA, NATIONAL
ASSOCIATION, a national banking association with its principal office in
Indianapolis, Indiana, United States of America (the "BANK").

                                   ARTICLE I

                              DEFINITION OF TERMS

         Section 1.01. Accounting Terms/Financial Statements. All accounting and
financial terms used in this Agreement are used with the meanings such terms
would be given in accordance with GAAP, except as may be otherwise specifically
provided in this Agreement.

         Section 1.02. Definitions. The following terms have the meanings
indicated when used in this Agreement with the initial letter capitalized:

         "ACCOUNT" means Account No. 628553794 maintained by the Company with
         the Bank.

         "ADVANCE" means the disbursement of proceeds under the Loan.

         "AFFILIATE" means, with respect to any Person, any officer, shareholder
         or director of such Person and any Person or group acting in concert in
         respect of the Person in question that, directly or indirectly,
         controls or is controlled by or is under common control with such
         Person.

         "AGREEMENT" means this Credit Agreement, as amended, modified,
         supplemented and/or restated from time to time and at any time.

         "APPLICABLE SPREAD" means that number of percentage points or Basis
         Points to be taken into account in determining the rate per annum at
         which interest will accrue on the Loan, which shall be as follows:

              If determining a                   If determining a
              LIBOR-based Rate                   Prime-based Rate
              ----------------                   ----------------

                 137.5 B.P.                      (125) B.P.



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         "APPLICATION FOR ADVANCE" or "APPLICATION" means the written
         application of the Company for a disbursement of proceeds of the Loan,
         which application will be in form and substance substantially the same
         as EXHIBIT "A" attached to this Agreement.

         "AUTHORIZED OFFICER" means the Chairman, President or Chief Financial
         Officer of the Company.

         "BANK" has the meaning ascribed to such term in the preamble to this
         Agreement.

         "BANK DEBT" has the meaning ascribed to such term in Section 8.11 of
         this Agreement.

         "BANKING DAY" means a day on which the principal offices of the Bank in
         the City of Indianapolis, Indiana, are open for the purpose of
         conducting substantially all of the Bank's business activities.

         "BASIS POINT" and "B.P." each mean one hundredth of one percent
         (0.01%).

         "BOC" means BANK ONE CORPORATION and all of its Subsidiaries (including
         the Bank), Affiliates and divisions.

         "BOARD" means the Board of Governors of the Federal Reserve System.

         "BORROWING BASE" means, at any date a determination thereof is made, an
         amount equal to the sum of: ninety-two and one half of one percent
         (92.5%) of the book value of the Eligible Accounts plus one hundred
         percent (100%) of the Pledged Cash, less the amount of excess, if any,
         by which the aggregate Eligible Accounts outstanding at any time from
         any account debtor and its Affiliates exceeds seven and one half
         percent (7 1/2%) of aggregate Eligible Accounts on such date of
         determination; provided however, that: (i) such concentration
         limitation in the case of each of United Stationers Supply Co. and The
         Sports Authority shall be increased to twelve and one half percent (12
         1/2%) of aggregate Eligible Accounts on such date of determination, and
         (ii) such concentration limitation shall not apply to Eligible Accounts
         owed by Sears Roebuck, Inc. so long as such account debtor is rated at
         least BBB/Baa2, or better, on the senior unsecured debt ratings
         established from time to time by S&P and Moody's, respectively.
         Further, to the extent that an Eligible Account is subject to any
         claimed set-off, offset, credit or other reduction right held by the
         account receivable debtor, then for purposes of determining the
         Borrowing Base the amount of such Eligible Account shall be reduced by
         the sum of all such claimed offsets, credits and reductions to the
         extent not covered by the Escalade Domestic Subsidiary, or
         Subsidiaries, that sold the Eligible Accounts to the Company.

         "BORROWING BASE CERTIFICATE" means a certificate (in form and substance
         substantially the same as EXHIBIT "B" attached to this Agreement) which
         is required to be delivered to the Bank in accordance with Section
         5.01(c)(7) of this Agreement.

         "CAPITAL LEASE" means, at any time, any lease of property (whether
         real, personal or mixed) with respect to which the lessee is required
         concurrently to recognize the acquisition of an asset and the
         incurrence of a liability in accordance with GAAP.



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         "CHANGE IN CIRCUMSTANCES" has the meaning ascribed to such term in
         Section 5.01(l)(2) of this Agreement.

         "CHANGE OF CONTROL OF THE COMPANY" means Escalade shall cease to own
         one hundred percent (100%) of stock of the Company.

         "CLOSING DATE" has the meaning ascribed to such term in the Preamble to
         this Agreement.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COLLATERAL" has the meaning ascribed to such term in Section 4.01 of
         this Agreement.

         "COMPANY" has the meaning ascribed to such term in the Preamble to this
         Agreement.

         "COMPANY'S AUDITORS" means Olive LLP, or such other independent
         certified public accounting firm in the United States of America as is
         acceptable to the Bank.

         "COMPANY SECURITY AGREEMENT" means the Collateral Assignment and
         Security Agreement, dated as of the Closing Date, executed by the
         Company in favor of the Bank (in form and substance substantially the
         same as EXHIBIT "C" attached to this Agreement), as the same hereafter
         may be amended, modified, supplemented and/or restated from time to
         time and at any time.

         "DEBT" means, with reference to any Person, as of any date, without
         duplication: (a) all indebtedness, liabilities and obligations of such
         Person for borrowed money and its redemption obligations in respect of
         mandatorily redeemable preferred stock; (b) obligations of such Person
         to pay the deferred purchase or acquisition price of property (tangible
         or intangible, real or personal) or services; (c) all obligations of
         such Person appearing as a liability on its balance sheet in accordance
         with GAAP in respect of Capital Leases; (d) all obligations,
         indebtedness and liabilities which are secured by any Lien on any asset
         of such Person, whether or not the obligation, indebtedness or
         liability secured thereby shall have been assumed by such Person (e)
         all obligations for any swap or interest rate agreements of such
         Person; and (f) all obligations, indebtedness and liabilities of others
         similar in character to those described in clauses (a) through (e) of
         this definition for which such Person is liable, contingently or
         otherwise, as obligor, guarantor or in any other capacity, or in
         respect of which obligations, indebtedness or liabilities such Person
         assures a creditor against loss or agrees to take any action to prevent
         any such loss (other than endorsements of negotiable instruments for
         collection in the ordinary course of business), including without
         limitation all reimbursement obligations of such Person in respect of
         letters of credit, surety bonds or similar obligations and all
         obligations of such Person to advance funds to, or to purchase assets,
         property or services from, any other Person in order to maintain the
         financial condition of such other Person. Debt of any Person shall
         include all obligations of such Person of the character described in
         clauses (a) through (f) above to the extent such Person remains legally
         liable in respect




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         thereof notwithstanding that any such obligation is deemed to be
         extinguished under GAAP.

         "DEFAULT RATE" means the Prime Rate plus three percent (3%) per annum.

         "DISTRIBUTION" means any dividend, distribution, redemption or other
         acquisition for value of capital interests in the Company now or
         hereafter outstanding, return of capital or any distribution of assets
         to any shareholder of the Company.

         "DOLLARS" or "$" means dollars of the USA.

         "ELIGIBLE ACCOUNTS" means, at any date a determination thereof is to be
         made, those Purchased Accounts Receivable of the Company for which the
         Company shall have furnished to the Bank information adequate for
         purposes of identification at all times and in form and substance as
         may be requested by the Bank; provided however, that a Purchased
         Account Receivable shall not constitute an Eligible Account if it: (a)
         remains unpaid sixty-one (61) or more days after the original due date
         for its payment stated on the applicable invoice; (b) is an account
         receivable with respect to which the account receivable debtor is the
         subject of a bankruptcy or similar insolvency proceeding or has made an
         assignment for the benefit of creditors or whose assets have been
         conveyed to a receiver or trustee or who is no longer conducting its
         customary business, except and to the extent the Bank otherwise agrees
         in writing; (c) is an account receivable which is not invoiced (and
         dated as of the date of such invoice) and sent to the account
         receivable debtor in the ordinary course of the business of the Company
         and in accordance with customary billing practices after delivery of
         the underlying goods to, or performance of the underlying services for,
         the accounts receivable debtor; (d) is an account receivable arising
         with respect to goods which have not been shipped or arising with
         respect to services which have not been fully performed; (e) is an
         account receivable with respect to which the account receivable
         debtor's obligation to pay the account receivable is conditioned upon
         the account receivable debtor's approval or is otherwise subject to any
         repurchase obligation or return right, as with sales made on a
         bill-and-hold, guaranteed sale, sale-and-return, sale on approval or
         consignment basis; (f) is an account receivable in which the Bank does
         not have a security interest; (g) is an account receivable due from any
         Affiliate of the Company or which is due solely from an accounts
         receivable debtor which is a USA federal governmental entity or agency,
         except and to the extent the Bank otherwise agrees in writing; (h) is
         an account receivable evidenced by an instrument (as defined in Article
         9 of the UCC) not in the possession of the Bank; or (i) is an account
         receivable which has been charged-off by the Company, whether pursuant
         to Section 5.01(i) of this Agreement, or otherwise. At any time more
         than ten percent (10%) of the aggregate amount of accounts receivable
         due from an accounts receivable debtor remain unpaid sixty-one (61) or
         more days after the date(s) due, as stated on the original invoice(s)
         evidencing such accounts receivable, then no account receivable due the
         Company from that accounts receivable debtor shall constitute an
         Eligible Account.



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         "ESCALADE" means Escalade, Incorporated, a corporation organized and
         existing under the laws of the State of Indiana, USA.

         "ESCALADE DOMESTIC SUBSIDIARIES" means the following first and second
         tier subsidiaries of Escalade: Indian Industries Inc., a corporation
         organized under the laws of the State of Indiana, USA ("Indian
         Industries"), and its subsidiary, Harvard Sports, Inc., a corporation
         organized under the laws of the State of California, USA ("Harvard
         Sports"), and Martin Yale Industries, Inc., a corporation organized
         under the laws of the State of Indiana, USA ("Martin Yale"), and its
         subsidiary, Master Products Manufacturing Company, Inc., a corporation
         organized under the laws of the State of Delaware, USA ("Master
         Products").

         "ESCALADE NOTE" means that certain unsecured, demand promissory note
         made by Escalade and payable to the order of the Company, dated as of
         the Closing Date in an original principal amount which is the greater
         of (i) the initial Advance against the Loan, or (ii) $7,500,000.00.

         "ESCALADE NOTE PLEDGE AGREEMENT" means the Pledge Agreement, dated as
         of the Closing Date, executed by the Company in favor of the Bank (in
         form and substance substantially the same as EXHIBIT "D" attached to
         this Agreement), as the same hereafter may be amended, modified,
         supplemented and/or restated from time to time and at any time, whereby
         the Company pledges the Escalade Note to the Bank as a part of the
         Collateral securing the Obligations.

         "ESCALADE SUBORDINATION AGREEMENT" is used as defined in Section
         6.01(b)(4).

         "EURODOLLAR RATE" means, with respect to a LIBOR Advance for the
         relevant Interest Period, the sum of (i) the quotient of (a) LIBOR
         applicable to such Interest Period, divided by (b) one minus the
         Reserve Requirement (expressed as a decimal) applicable to such
         Interest Period, plus (ii) the Applicable Spread.

         "EVENT OF DEFAULT" means any of the events described in Section 7.01 of
         this Agreement.

         "FINANCIAL STATEMENTS" includes, but is not limited to, balance sheets,
         profit and loss statements, reconciliations of net worth and cash flow
         statements, prepared in accordance with GAAP.

         "GAAP" means generally accepted accounting principles in the United
         States of America as in effect from time to time, which shall include
         the official interpretations thereof by the Financial Accounting
         Standards Board, consistently applied (from and after the date hereof)
         and for the period as to which such accounting principles are to apply.
         Except as otherwise provided in this Agreement, to the extent
         applicable, all computations and determinations as to accounting or
         financial matters and all Financial Statements to be delivered pursuant
         to this Agreement shall be made and prepared in accordance with




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         GAAP (including principles of consolidation where appropriate), and, to
         the extent applicable, all accounting or financial terms shall have the
         meanings ascribed to such terms by GAAP.

         "HARVARD SPORTS" is used as defined in the definition of Escalade
         Domestic Subsidiaries.

         "HIGHEST LAWFUL RATE" means the maximum rate of interest which may be
         charged the Company by the Bank under applicable state or federal usury
         law or regulation or any other law or regulation, however
         characterized, limiting the rate of interest which may be charged to
         corporations.

         "INCREASED COST NOTICE" is used as defined in Section 2.01(g)(vii).

         "INCREASED COSTS" is used as defined in Section 2.01(g)(vii).

         "INDIAN INDUSTRIES" is used as defined in the definition of Escalade
         Domestic Subsidiaries.

         "INFORMAL REQUEST" is used as defined in Section 2.01(b) of this
         Agreement.

         "INTEREST PERIOD" means, with respect to any LIBOR Advance, the one (1)
         month, two (2) month, three (3) month or six (6) month period selected
         by the Company as provided in this Agreement and commencing on that day
         designated by the Company in its written notice to the Bank making such
         selection (so long as such day is not less than two (2) Banking Days
         after the date of such notice). Each Interest Period for a LIBOR
         Advance that begins on the last day of a calendar month (or on a day
         for which there is no numerically corresponding day in the appropriate
         subsequent calendar month) shall end on the last Banking Day of the
         appropriate subsequent calendar month. Each Interest Period for a LIBOR
         Advance which would otherwise end on a day which is not a Banking Day
         shall end on the next succeeding Banking Day (unless such next
         succeeding Banking Day is in another calendar month, in which case such
         Interest Period shall end on the immediately preceding Banking Day).

         "INTANGIBLE ASSETS" means amortizable loan costs, business acquisition
         costs, license agreements, trademarks, trade names, patents,
         capitalized research and development, proprietary products (the results
         of past research and development treated as long term assets and
         excluded from inventory), goodwill and all other assets which would be
         classified as intangible assets, all determined in accordance with
         GAAP.

         "INTEREST" means, for any fiscal period and for any Person, the amount
         equal to the sum of (a) the gross interest expense of such Person for
         that period plus, (b) capitalized interest on any Debt of such Person,
         in each case determined in accordance with GAAP.



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         "INVESTMENT" means any investment, in cash or by delivery of property,
         made directly or indirectly in any other Person, whether by acquisition
         of shares of capital stock, Debt or other obligations or securities or
         by loan, advance, capital contribution or otherwise.

         "LIBOR" means, with respect to any LIBOR Advance, for the relevant
         Interest Period, the applicable British Bankers' Association Interest
         Settlement Rate for deposits in Dollars appearing on Reuters Screen
         FRDB as of 11:00 a.m. (London time) two (2) Banking Days prior to the
         first day of such Interest Period, and having a maturity equal to such
         Interest Period; provided however, that (i) if Reuters Screen FRDB is
         not available to the Bank for any reason, the applicable LIBOR for the
         relevant Interest Period shall instead be applicable British Bankers'
         Association Interest Settlement Rate for deposits in Dollars as
         reported by any other generally recognized financial information
         service as of 11:00 a.m. (London time) two (2) Banking Days prior to
         the first day of such Interest Period, and having a maturity equal to
         such Interest Period, and (ii) if no such British Bankers' Association
         Interest Settlement Rate is available to the Bank, the applicable LIBOR
         for the relevant Interest Period shall instead be the rate determined
         by the Bank in its sole discretion to be the rate at which the Bank, or
         any of its Affiliate banks, offers to place deposits in Dollars with
         first-class banks in the London interbank market at approximately 11:00
         a.m. (London time) two (2) Banking Days prior to the first day of such
         Interest Period in the approximate amount of the Bank's relevant LIBOR
         Advance and having a maturity equal to such Interest Period, all as
         determined by the Bank. Each determination of a LIBOR made by the Bank
         in accordance with the foregoing shall be conclusive except in the case
         of demonstrative or manifest error.

         "LIBOR ADVANCE" means any Advance (or, if the case, the entire
         outstanding principal balance of the Loan) as to which a LIBOR-based
         Rate is elected by the Company pursuant to this Agreement.

         "LIBOR-BASED RATE" means a per annum rate at which interest may accrue
         on all or a portion of the Loan under the terms of this Agreement,
         which rate is determined by reference to LIBOR.

         "LIEN" means any mortgage, security interest, pledge, hypothecation,
         assignment, deposit arrangement, encumbrance, lien (statutory or
         otherwise) or other security interest or preferential arrangement of
         any kind or nature whatsoever (including, without limitation, any
         conditional sale or other title retention agreement, any financing or
         similar statement or notice filed under the UCC as in effect in any
         jurisdiction, or any other similar recording or notice statute, and any
         lease having substantially the same effect as the foregoing, but
         excluding any equipment operating leases and any precautionary filings
         related thereto).

         "LOAN" has the meaning ascribed to such term in Section 2.01 of this
         Agreement.



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         "LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the
         Company Security Agreement, the Lockbox Agreements, the Escalade Note
         Pledge Agreement, the Escalade Subordination Agreement, the Standby and
         Subordination Agreements and all other instruments, agreements,
         certificates, financing statements and documents executed and delivered
         or to be delivered by the Company and others pursuant to or by virtue
         of this Agreement including, but not limited to all the documents,
         instruments and agreements enumerated in Article VI of this Agreement,
         as each of the foregoing may be amended, modified, extended, renewed,
         supplemented and/or restated from time to time and at any time, and
         when used in the singular form, means any of the Loan Documents, as the
         context requires.

         "LOCKBOX AGREEMENTS" means the existing Lockbox Operating Agreements
         previously entered into by the Bank and each of Indian Industries (No.
         663637), Martin Yale (No. 663646) and Master Products (No. 664073),
         including all amendments, modifications, extensions and/or replacements
         thereof.

         "LOCKBOXES" has the meaning ascribed to such term in Section 2.01(f)(1)
         of this Agreement.

         "LOSS" has the meaning ascribed to such term in Section 8.12 of this
         Agreement.

         "MARTIN YALE" is used as defined in the definition of Escalade Domestic
         Subsidiaries.

         "MASTER PRODUCTS" is used as defined in the definition of Escalade
         Domestic Subsidiaries.

         "MATERIALLY ADVERSE EFFECT" means any event, circumstance or condition
         that could reasonably be expected to have a materially adverse effect
         on (a) the business, operations, financial condition, properties or
         prospects of the Company, Escalade or the Escalade Domestic
         Subsidiaries, (b) the ability of the Company to pay or perform the
         Obligations, (c) the validity or enforceability of any of the Loan
         Documents, or any material provision thereof, or any transaction
         contemplated thereby, or (d) the rights and remedies of the Bank under
         any of the Loan Documents.

         "MATURITY DATE" means the earlier of (i) the Scheduled Maturity Date,
         and (ii) that date upon which the Bank accelerates payment of the Loan
         in accordance with Section 7.02 of this Agreement.

         "MAXIMUM AVAILABILITY" means, as of the date any determination thereof
         is to be made, the lesser of: $30,000,000.00, and (ii) the Borrowing
         Base as of such date.

         "MOODY'S" means Moody's Investors Service, Inc.



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         "NET INCOME" means, for any period, the net income of the Company,
         determined for such period in accordance with GAAP.

         "NET WORTH" means, as of the date any determination thereof is to be
         made, the net worth of the Company as of such date, determined in
         accordance with GAAP.

         "NOTE" has the meaning ascribed to it in Section 2.01(b) of this
         Agreement.

         "NOTICE" has the meaning ascribed to such term in Section 5.01(l)(2) of
         this Agreement.

         "OBLIGATIONS" means all present and future indebtedness, obligations
         and liabilities, and all renewals, modifications and extensions
         thereof, now or hereafter owed to the Bank by the Company, whether
         arising under, by virtue of or pursuant to any of this Agreement, the
         Note, any other Loan Documents, or otherwise (including without
         limiting the generality of the foregoing, all indebtedness, obligations
         and liabilities hereafter arising by virtue of or in connection with
         any extensions of credit by the Bank to the Company unrelated to and
         not made under this Agreement), together with all costs, expenses and
         reasonable attorneys' fees incurred by the Bank in the enforcement or
         collection thereof, whether such indebtedness, obligations and
         liabilities are direct, indirect, fixed, contingent, liquidated,
         unliquidated, joint, several, joint and several, now exist or hereafter
         arise, or were prior to acquisition thereof by the Bank owed to some
         other Person.

         "OFFICER'S CERTIFICATE" means a certificate (in form and substance
         substantially the same as EXHIBIT "F" attached to this Agreement) which
         is in all regards satisfactory to the Bank and signed by an Authorized
         Officer confirming that all of the representations and warranties
         contained in Section 3.01 of this Agreement are true and correct as of
         the date of such certificate except as specified therein and with the
         further exceptions that: (i) the representation contained in Section
         3.01(d) of this Agreement shall be construed so as to refer to the
         latest Financial Statements which have been furnished to the Bank as of
         the date of any such certificate, and (ii) all other representations
         will be construed to have been amended to conform with any changes of
         which the Company shall have previously given the Bank notice in
         writing. The Officer's Certificate shall further confirm that no Event
         of Default or Unmatured Event of Default shall have occurred and be
         continuing as of the date of the Officer's Certificate or shall
         describe any such event which shall have occurred and be then
         continuing and the steps being taken by the Company to correct it. In
         addition, the Officer's Certificate shall demonstrate compliance with
         the financial covenants stated in Section 5.01(h), as applicable, and
         shall otherwise be in such form and provide such detail as may be
         reasonably satisfactory to the Bank.

         "PERSON" means an individual, a corporation, a limited or general
         partnership, a limited liability company, a joint venture, a trust or
         unincorporated organization, a joint stock company or other similar
         organization, a government or any political subdivision thereof, a



                                      -9-
<PAGE>   10

         court, or any other legal entity, whether acting in an individual,
         fiduciary or other capacity.

         "PLEDGED CASH" means the Company's cash and cash-equivalent
         Investments, which have been pledged to the Bank, and in which the Bank
         holds a perfected security interest, constituting part of the
         Collateral securing the Obligations.

         "PREPAYMENT PREMIUM" means the excess, if any, as determined by the
         Bank of: (i) the present value at the time of prepayment of the
         interest payments which would have been payable on account of an amount
         prepaid from the date of prepayment until the end of the period during
         which interest would have accrued at the LIBOR-based Rate applicable to
         the amount so prepaid but for such prepayment over (ii) the present
         value at the time of prepayment of interest payments calculated at the
         rate (the "REINVESTMENT RATE") which the Bank then estimates it would
         receive upon reinvesting the principal amount of the prepayment in an
         obligation which presents a credit risk substantially similar (as
         determined in accordance with the commercial credit rating system then
         used by the Bank) to that which is then presented by the Loan for the
         same period. The discount rate used by the Bank in determining such
         present values shall be the Reinvestment Rate.

         "PRIME ADVANCE" means any Advance (or, if the case, the entire
         outstanding principal balance of the Loan) as to which a Prime-based
         Rate is elected by the Company pursuant to this Agreement.

         "PRIME RATE" means a rate per annum equal to the prime rate of interest
         announced from time to time by the Bank or its parent as its prime rate
         (which is not necessarily the lowest or best rate charged to any
         customer), changing when and as said prime rate changes.

         "PRIME-BASED RATE" means the variable rate per annum at which interest
         may accrue on all or a portion of the Loan under the terms of this
         Agreement, which rate is determined by reference to the Prime Rate.

         "PURCHASED ACCOUNTS RECEIVABLE" means those accounts receivable less
         than sixty-one (61) days delinquent at the time of purchase, which are
         purchased on a non-recourse basis by the Company from the Escalade
         Domestic Subsidiaries pursuant to the Receivables Purchase Agreements
         for an amount which is not in excess of ninety-five percent (95%) of
         the original face amount of such purchased accounts receivable.

         "RECEIVABLES PURCHASE AGREEMENTS" means the four Receivable Purchase
         Agreements dated as of the Closing Date, by and between the Company and
         each of the Escalade Domestic Subsidiaries, respectively, pursuant to
         which the Company shall purchase from the Escalade Domestic
         Subsidiaries on a non-recourse basis certain of the accounts receivable
         of the Escalade Domestic Subsidiaries existing as of the Closing Date
         having in the aggregate an estimated face value of approximately
         $12,000,000.00, with




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<PAGE>   11

         additional accounts receivable being thereafter purchased by the
         Company from the Escalade Domestic Subsidiaries in an aggregate amount
         at any one time outstanding not in excess of the Maximum Availability
         (each of which Receivables Purchase Agreements shall be in form and
         substance substantially the same as EXHIBIT "G" attached to this
         Agreement).

         "REGULATION D" means Regulation D of the Board as in effect from time
         to time and any successor thereto or other regulation or official
         interpretation of the Board relating to reserve requirements applicable
         to member banks of the Federal Reserve System.

         "REGULATION U" means Regulation U of the Board as in effect from time
         to time and any successor or other regulation or official
         interpretation of the Board relating to the extension of credit by
         banks for the purpose of purchasing or carrying margin stocks
         applicable to member banks of the Federal Reserve System.

         "REINVESTMENT RATE" is used as defined in the definition of Prepayment
         Premium.

         "RESERVE REQUIREMENT" means, with respect to an Interest Period, the
         maximum aggregate reserve requirement (including all basic,
         supplemental, marginal and other reserves) which is imposed under
         Regulation D on Eurocurrency liabilities.

         "S&P" means Standard and Poor's Rating Services, a division of The
         McGraw Hill Companies, Inc.

         "SCHEDULED MATURITY DATE" means May 14, 2001, or such later date as may
         be established pursuant to Section 2.01(d) of this Agreement.

         "SERVICERS" means Indian Industries and Martin Yale, and in the
         singular means either one of them, as the context requires.

         "SERVICES AGREEMENTS" means the four Services Agreements dated as of
         the Closing Date, by and between the Company and a Servicer pursuant to
         which the Servicer with respect to those Purchased Accounts Receivable
         sold by it and its Subsidiary to the Company, will service and collect
         such Purchased Accounts Receivable (each of which Services Agreements
         shall be in form and substance substantially the same as EXHIBIT "H"
         attached to this Agreement).

         "SOLVENT" means, when used with respect to any Person, that: (i) the
         fair salable value of its assets is in excess of the total amount of
         its liabilities (including for purposes of this definition all
         liabilities, whether or not reflected on a balance sheet prepared in
         accordance with GAAP, and whether direct or indirect, fixed or
         contingent, disputed or undisputed; (ii) it is able to pay its debts or
         obligations in the ordinary course as they mature; and (iii) that
         Person has capital sufficient to carry on its business and all business
         in which it is about to engage.



                                      -11-
<PAGE>   12

         "STANDBY AND SUBORDINATION AGREEMENTS" is used as defined in Section
         6.01(b)(5).

         "SUBORDINATED DEBT" means with respect to the Company, as of any date
         of determination, all Debt of the Company owed to Persons other than
         the Bank which is made expressly subordinate in a manner acceptable to
         Bank to the payment of all or any of the Obligations.

         "SUBSIDIARY" means, with respect to any Person, any corporation,
         partnership, joint venture or other business entity (whether now
         existing or hereafter organized or acquired) over which the Person
         exercises control, provided that it shall be conclusively presumed that
         the Person exercises control over any such entity (a) if more than 50%
         of the equity interest in such entity is owned by the Person, directly
         or indirectly; or (b) if at least a majority of the securities of each
         class having ordinary voting power for the election of directors (other
         than securities which have such power only by reason of the happening
         of a contingency) at the time as of which the determination is being
         made, is owned, beneficially and of record, by such Person or by one or
         more of the other Subsidiaries of such Person or by any combination
         thereof.

         "SYSTEMS" has the meaning ascribed to such term in Section 3.01(k)(1)
         of this Agreement.

         "TANGIBLE CAPITAL BASE" means, as of the date any determination thereof
         is to be made, the Net Worth of the Company as of such date, less the
         amount of all Intangible Assets of the Company as of such date,
         determined in accordance with GAAP (except that, notwithstanding GAAP,
         such Intangible Assets shall include all notes and loans receivable
         from any of the Company's Affiliates as of such date), plus the sum of
         all Subordinated Debt.

         "TOTAL DEBT" means, with respect to the Company, as of the date any
         determination thereof is to be made, all Debt of the Company computed
         and determined in accordance with GAAP.

         "UCC" means the Indiana Uniform Commercial Code (i.e., IC 26-1-1-1, et
         seq.), as amended from time to time.

         "USA" means the United States of America.

         "UNAVAILABLE LIBOR-BASED RATE" is used as defined in Section
         2.01(g)(vi) of this Agreement.




                                      -12-
<PAGE>   13

         "UNAVAILABILITY DATE" is used as defined in Section 2.01 (g)(vi) of
this Agreement.

         "UNMATURED EVENT OF DEFAULT" means any event specified in Section 7.01
         of this Agreement, which is not initially an Event of Default, but
         which would, if uncured, become an Event of Default with the giving of
         notice or the passage of time or both.

         "YEAR 2000 COMPLIANT" has the meaning ascribed to such term in Section
3.01(k)(1) of this Agreement.


                                   ARTICLE II

                                 BORROWING TERMS

         Section 2.01. Loan. Provided that all of the conditions of lending
stated in Section 6.01(a) and (b) of this Agreement have been fulfilled on the
Closing Date, and subject to and in accordance with the terms of this Agreement,
and in reliance upon the representations, warranties, covenants, and agreements
of the Company made in this Agreement and the other Loan Documents, the Bank
will make a revolving loan available to the Company on the Closing Date, and
thereafter, on the following terms and subject to the following conditions:

         (a) The Loan Commitment / Use of Proceeds. From the Closing Date and
until the Maturity Date, the Bank agrees to make Advances (collectively, the
"LOAN") under a revolving line of credit from time to time to the Company up to
a principal amount which at any time shall not be in excess of the Maximum
Availability. All monies loaned and all Obligations repayable under this
Agreement shall be in Dollars. The Bank's agreement to make Advances is subject
to the requirement that all of the conditions of lending stated in Article VI of
this Agreement as being applicable to the Loan have been fulfilled at the time
of each Advance. The initial Advance of the Loan shall be used to fund a
one-time, unsecured loan by the Company to Escalade in an amount not less than
$7,500,000.00 in exchange for which Escalade shall issue to the Company the
Escalade Note. Thereafter, the proceeds of the Loan shall be used in their
entirety to fund the Company's acquisition of Purchased Accounts Receivable, in
accordance with the Receivables Purchase Agreements; provided however, that
certain operating expenses, service charges and legal and accounting fees of the
Company may be paid from the proceeds of the Loan if first disclosed to the
Bank.

         (b) Method of Borrowing. The Obligation of the Company to repay the
Loan shall be evidenced by a promissory note (the "NOTE") of the Company (in
form and substance substantially the same as EXHIBIT "I" attached to this
Agreement). So long as no Event of Default or Unmatured Event of Default shall
have occurred and be continuing and until the Maturity Date, Company may borrow,
repay and reborrow under the Note on any Banking Day, provided that no Advance
shall cause the total principal balance outstanding on the Loan to then exceed
the Maximum Availability or result in an Event of Default or an Unmatured Event
of Default. Each Advance under the Loan shall be conditioned upon receipt by the
Bank from the



                                      -13-
<PAGE>   14

Company of an Application for Advance and an Officer's Certificate, provided
that the Bank may, at its discretion, make a disbursement upon the oral request
of the Company made by an Authorized Officer, or upon a request transmitted to
the Bank by telephone facsimile machine, or by any other form of written
electronic communication (each such request for an Advance being hereafter
referred to as "INFORMAL REQUEST"). In so doing, the Bank may rely upon any
Informal Request which shall have been received by it in good faith from a
Person reasonably believed by it to be an Authorized Officer. Each Informal
Request shall be promptly confirmed by a duly executed Application and Officer's
Certificate, if the Bank so requires, which shall constitute the representation
of the Company that no Event of Default or Unmatured Event of Default has
occurred and is continuing or would result from the making of the requested
Advance and that the making of the requested Advance shall not cause the total
outstanding principal balance of the Revolving Loan to exceed the Maximum
Availability. All borrowings, repayments and reborrowings shall be in amounts of
not less than Ten Thousand Dollars ($10,000.00), except for repayment of the
entire principal balance of the Loan. Upon receipt of an Application, or at the
Bank's discretion upon receipt of an Informal Request for an Advance and upon
compliance with any other conditions of lending stated in Article VI of this
Agreement applicable to the Loan, the Bank shall disburse the amount of the
requested Advance to the Company. All Advances by the Bank and payments by the
Company shall be recorded by the Bank on its books and records, and the
principal amount outstanding on the Loan from time to time, plus interest
payable thereon, shall be determined by reference to the books and records of
the Bank, which books and records shall be presumed prima facie to be correct as
to such matters, absent demonstrative or manifest error.

         (c) Interest on the Loan. The principal amount of the Loan outstanding
from time to time shall bear interest until maturity of the Note at a rate per
annum equal to the Prime Rate, plus the Applicable Spread, except that at the
option of the Company, exercised from time to time as provided in Section
2.01(g) of this Agreement, interest may accrue prior to maturity on any Advance
or on the entire outstanding principal balance of the Loan as to which no
LIBOR-based Rate previously elected remains in effect, at the Eurodollar Rate,
for a period of one month, two months, three months or six months, provided that
an election of a LIBOR-based Rate for a period extending beyond the Scheduled
Maturity Date shall be permitted only at the discretion of the Bank. After
maturity, whether on the Scheduled Maturity Date or on account of acceleration
upon the occurrence of an Event of Default, and until paid in full, the Loan
shall bear interest at a per annum rate equal to the Default Rate. Accrued
interest on the outstanding principal balance of the Loan bearing a Prime-based
Rate shall be due and payable monthly on the first Banking Day of each month
prior to maturity. Accrued interest on the outstanding principal balance of the
Loan bearing one or more LIBOR-based Rates shall be due and payable on the last
day of the related Interest Period unless the related Interest Period covers a
period of six months in which event accrued interest thereon shall be due and
payable on the date which is three months after the first day of such Interest
Period and on the last day of such Interest Period. After maturity, all interest
shall be payable as accrued and without demand.

         (d) Extensions of Scheduled Maturity Date. The Bank may, upon the
request of Company, but at the Bank's sole discretion, extend the Scheduled
Maturity Date from time to




                                      -14-
<PAGE>   15

time to such date or dates as the Bank may elect by notice in writing to the
Company, and upon any such extension and upon execution and delivery by the
Company of a Note reflecting the extended maturity date, the date to which the
Note is then extended will become the "Scheduled Maturity Date" for purposes of
this Agreement.

         (e) Special Repayments of Principal. At any time the total outstanding
principal balance of the Loan exceeds the then existing Maximum Availability, as
determined by the Bank, the Company shall, immediately and without notice or
demand of any kind, repay that portion of the principal balance of the Loan
which is in excess of the Maximum Availability.

         (f) Manner of Payment. The Company shall pay the Obligations by and
through application of the proceeds of the Purchased Accounts Receivable as set
forth below:

                  (1) All checks, notes, drafts, items, money orders or other
         documents or instruments in satisfaction of or related to payments on
         the Purchased Accounts Receivable (collectively, the "ITEMS") shall be
         directed by the Company to be paid into one of three (3) lockboxes (the
         "Lockboxes") which shall be owned and controlled by the Bank, all as
         set forth more fully in the Company Security Agreement and Lockbox
         Agreements. The Bank shall process for collection all Items and
         remittances received into the Lockboxes at the close of every Banking
         Day and shall endorse and deposit all collected remittances into the
         "ACCOUNT", as such term is defined in the Lockbox Agreements. The
         Company shall cause any payments and remittances received by any of the
         Escalade Domestic Subsidiaries on account of the Purchased Accounts
         Receivable by means of an ACH credit, wire transfer or any other
         electronic means to be promptly transmitted by such Escalade Domestic
         Subsidiary to the Account.

                  (2) Provided that such funds are then "good and available" (as
         such term is understood in usual and customary banking parlance), the
         receipts deposited into the Account prior to an Event of Default or
         Unmatured Event of Default shall automatically be posted as payments
         and applied to the Obligations in accordance with the provisions of
         Section 2.02 (b) of this Agreement, or alternatively, upon written
         notice to the Bank from an Authorized Officer, funds in the Account may
         be used by the Company to acquire additional Purchased Accounts
         Receivable, pay interest on the Loan and other Obligations arising
         under this Agreement, pay normal and customary operating expenses of
         the Company previously approved by the Bank and/or pay accrued
         servicing fees due under the Services Agreements. After an Event of
         Default or Unmatured Event of Default all proceeds on deposit in the
         Account shall be applied solely to the Obligations. The Bank and the
         Company recognize as a matter of procedure that (i) payments on
         accounts receivable owing to one or more of the Escalade Domestic
         Subsidiaries may be deposited into the Account and applied by the Bank
         to the Obligations; and (ii) each of the Escalade Domestic Subsidiaries
         may owe the Company monies on account of returns, discounts, allowances
         or otherwise with



                                      -15-
<PAGE>   16

         respect to the Purchased Accounts Receivable. Accordingly, in
         accordance with the Services Agreements, the Escalade Domestic
         Subsidiaries and the Company shall make a determination within five (5)
         business days of the end of every four week accounting period of the
         Escalade Domestic Subsidiaries whether (i) the Bank has applied against
         the Obligations proceeds of accounts receivable, not Purchased Accounts
         Receivable, or (ii) any of the Escalade Domestic Subsidiaries owe the
         Company any monies for returns, discounts, allowances or otherwise.
         Such amounts shall be netted against each other as of the same date,
         and (i) any net monies to be reimbursed by the Bank to the Escalade
         Domestic Subsidiaries shall be paid out of receipts thereafter
         collected and deposited into the Account; provided however, that such
         payment does not cause any erosion of the Borrowing Base which would
         result in the outstanding principal balance of the Loan being in excess
         of the Maximum Availability, and (ii) any net monies owing by the
         Escalade Domestic Subsidiaries to the Company shall be paid immediately
         by their deposit of such amounts into the Account.

         (g) Procedures for Electing LIBOR-based Rates -- Certain Effects of
Election. LIBOR-based Rates may be elected only in accordance with the following
procedures, shall be subject to the following conditions, and the election of a
LIBOR-based Rate shall have the following consequences in addition to other
consequences stated in this Agreement:

                  (i)      A LIBOR-based Rate may be elected only for the Loan,
                           or portions thereof, in a minimum amount of
                           $500,000.00. No more than three (3) LIBOR-based Rate
                           elections may be in effect under the Loan, or
                           portions thereof, at any one time.

                  (ii)     No LIBOR-based Rate may be elected at any time that
                           an Event of Default or Unmatured Event of Default has
                           occurred and is continuing.

                  (iii)    Voluntary prepayment prior to scheduled expiration of
                           the relevant Interest Period pertaining to all or any
                           portion of the Loan on which interest is accruing at
                           a LIBOR-based Rate shall be subject to
                           contemporaneous payment of the Prepayment Premium if,
                           at the time of prepayment, the Reinvestment Rate is
                           less than the LIBOR-based Rate at which interest
                           accrues on such portion of the Loan. A Prepayment
                           Premium shall also be due and payable on prepayment
                           of all or any portion of any or all of such Loan
                           prior to scheduled expiration of the relevant
                           Interest Period because of acceleration of maturity
                           on account of an Event of Default if, at the time of
                           acceleration of maturity, the Reinvestment Rate is
                           less than the LIBOR-based Rate at which interest is
                           accruing on such portion of the Loan. If at the time
                           of any voluntary or mandatory prepayment of any
                           portion of the principal of the Loan, interest
                           accrues at both a LIBOR-based Rate or Rates and at a
                           Prime-based Rate on portions of such Loan, then any
                           prepayment of principal will be applied




                                      -16-
<PAGE>   17

                           first to the portion of such Loan on which interest
                           accrues at the Prime-based Rate and next to the
                           portion or portions at which interest accrues at a
                           LIBOR-based Rate or Rates, and if interest accrues on
                           such Loan at more than one LIBOR-based Rate, first to
                           that portion or those portions on which interest
                           accrues at a Rate or Rates which results in no
                           Prepayment Premium or the lowest Prepayment Premium
                           or Premiums.

                  (iv)     On any Banking Day, the Company may request a
                           quotation of the LIBOR-based Rates then in effect
                           from the Bank. As soon as possible, and in any event
                           before the close of business on the next following
                           Banking Day, the Bank shall quote such LIBOR-based
                           Rates. The Company shall then have until the end of
                           the Banking Day on which such quotation is given or
                           within such shorter time as the Bank may specify, to
                           exercise its option to elect any LIBOR-based Rate
                           quoted, subject to all other conditions and
                           limitations stated in this Agreement. The period for
                           which any LIBOR-based Rate is effective shall begin
                           on the second Banking Day following the day on which
                           the quotation is given.

                  (v)      An election of a LIBOR-based Rate may be communicated
                           to the Bank on behalf of the Company only by an
                           Authorized Officer. Such election may be communicated
                           by telephone or by telecopy or any other form of
                           written electronic communication, or by a writing
                           delivered to the Bank. At the request of the Bank,
                           the Company shall confirm any oral election in
                           writing, and such written confirmation shall be
                           signed by an Authorized Officer. The Bank shall be
                           entitled to rely on any oral or written electronic
                           communication of an election of a LIBOR-based Rate
                           which is received by an appropriate Bank employee
                           from anyone reasonably believed in good faith by such
                           employee to be an Authorized Officer.

                  (vi)     The Bank may elect not to quote a LIBOR-based Rate
                           (the "UNAVAILABLE LIBOR-BASED RATE") to any of its
                           customers otherwise eligible for the Unavailable
                           LIBOR-based Rate, including the Company, on any day
                           (the "UNAVAILABILITY DATE") on which the Bank has
                           determined that it is not practical to quote the
                           Unavailable LIBOR-based Rate because of the
                           unavailability of sufficient funds to the Bank for
                           appropriate terms at rates approximating the then
                           relevant LIBOR, or because of legal or regulatory
                           changes which make it impractical or burdensome for
                           the Bank to lend money at the Unavailable LIBOR-based
                           Rate.

                  (vii)    If, as a result of any regulatory change, the basis
                           of taxation of payments to the Bank of the principal
                           of or any interest on any portion or all of the Loan
                           bearing interest at a LIBOR-based Rate or any other
                           amounts payable hereunder in respect thereof, other
                           than taxes imposed on the overall net income of the
                           Bank, is changed, or any reserve, special deposit,



                                      -17-
<PAGE>   18

                           or similar requirement relating to any extensions of
                           credit or other assets of or any deposits with or
                           other liabilities of the Bank are imposed, modified,
                           or deemed applicable, and the Bank reasonably
                           determines that, by reason thereof, the cost to it of
                           making, issuing, or maintaining the Loan or any part
                           thereof at a LIBOR-based Rate is increased by an
                           amount deemed by it to be material, then the Company
                           shall pay promptly upon demand to the Bank such
                           additional amounts as the Bank reasonably determines
                           will compensate for such increased costs ("INCREASED
                           COSTS"); provided however, that (i) the Bank shall
                           give the Company ninety (90) days' prior written
                           notice of the Bank's intention to collect Increased
                           Costs from the Company ("INCREASED COST NOTICE"), and
                           the Bank shall not be entitled to pass-through to or
                           collect from the Company Increased Costs incurred by
                           the Bank prior to that date which is the ninetieth
                           (90th) day after the delivery of the Increased Cost
                           Notice to the Company by the Bank, and (ii) the
                           Company shall not be the only borrower of the Bank
                           that is singled out from a group of similarly
                           situated borrowers of the Bank subject to this type
                           of provision that is requested to remit Increased
                           Costs. Any determination by the Bank of Increased
                           Costs made pursuant to the provisions of this section
                           shall be final, absent manifest error.

         Section 2.02. Provisions Applicable to All Obligations. The following
provisions shall be applicable to all of the Obligations:

         (a) Calculation of Interest. Interest on all Obligations shall be
calculated on the basis of actual days elapsed and that an entire year's
interest is earned in three hundred sixty (360) days.

         (b) Other Manner of Payment -- Application. All payments of principal
and interest on the Loan made in addition to the payments provided for in
Section 2.02(f) shall be payable at the principal office of the Bank in
Indianapolis, Indiana, in funds available for the Bank's immediate use in that
city and for the Bank's account addressed as follows:

                          Bank One, Indiana, National Association
                          ABA #074000010
                          Attn: Commercial Loan Note Servicing
                          Re: Indian-Martin AG
                          Account No.  628553794

No payment will be considered to have been made until received in such funds.
Unless otherwise agreed to, in writing, or otherwise required by applicable law,
payments will be applied first to accrued, unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs, late charges and other
charges; provided however, upon delinquency or other default, the Bank reserves
the right to apply payments among principal, interest, late charges, collection
costs and other charges as may be determined in the sole discretion of the Bank.
All prepayments shall



                                      -18-
<PAGE>   19

be applied to the Obligations owing hereunder in such order and manner as the
Bank may from time to time determine in its sole discretion.

         (c) Automatic Debit . The Bank may without further authority debit when
due all payments of principal and interest, or any other Obligations due and
payable by the Company under the terms of this Agreement or any other Loan
Document, to any deposit account maintained with the Bank by the Company.

         (d) Unconditional Obligations and No Deductions. The Company's
Obligations to make all payments provided for in this Agreement and the Note
shall be absolute and unconditional. Each such payment shall be made without
relief from valuation and appraisement laws and without deduction for any claim,
defense or offset of any type, including without limitation any withholdings and
other deductions on account of income or other taxes and regardless of whether
any claims, defenses or offsets of any type exist.

         (e) Payment on Non-Banking Days. Whenever any payment to be made under
this Agreement and the Note shall be stated to be due on a day other than a
Banking Day, such payment may be made on the next succeeding Banking Day, and
such extension of time shall in such case be included in the computation of
payment of fees, if any, and interest under this Agreement and the Note.

         (f) Reduction of Maximum Availability. If an Event of Default or an
Unmatured Event of Default has occurred and is continuing, and the Event of
Default is one described in Section 7.01(d) of this Agreement or the Bank shall
have notified the Company of the election of the Bank to take any action
specified in Section 7.02 of this Agreement, the Maximum Availability shall be
automatically reduced to zero Dollars ($0) without any action on the part of or
the giving of any additional notice to the Company by the Bank.

         (g) Additional Amounts Payable. If any change or the enactment,
adoption or judicial or administrative interpretation of any law, regulation,
treaty, guideline or directive (including, without limitation, Regulation D of
the Board) either (a) subjects the Bank to any additional tax, duty, charge,
deduction or withholding with respect to the Loan (other than a tax measured by
the net or gross income of the Bank), or (b) imposes or increases any reserve,
special deposit or similar requirement on account of the Loan not otherwise
provided in this Agreement or (c) imposes increased minimum capital requirements
on the Bank on account of its issuing or maintaining the Loan; and if any of the
foregoing (i) results in any increase to the Bank in the cost of issuing or
maintaining the Loan, or making any payment on account of the Loan, (ii) reduces
the amount of any payment receivable by the Bank under this Agreement with
respect to the Loan, (iii) requires the Bank to make any payment calculated by
reference to the gross amount of any sum received or paid by the Bank pursuant
to the Loan, or (iv) reduces the rate of return on the Bank's capital to a level
below that which the Bank could otherwise have achieved (taking into
consideration the Bank's policies with respect to capital adequacy), then the
Company shall pay to the Bank, as additional compensation for the Loan, such
amounts as will compensate the Bank for such increased costs, payments or
reductions. Within twenty (20) days



                                      -19-
<PAGE>   20

after (A) the initial demand therefor and (B) presentation by the Bank of a
certificate to the Company containing a statement of the cause of such increased
costs, payments or reductions and a calculation of the amounts thereof (which
statement and calculation shall be presumed prima facie to be correct, absent
demonstrative or manifest error), the Company shall pay the additional amounts
payable, measured from the date such change, enactment, adoption or
interpretation first affects the Bank.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         Section 3.01. Representations and Warranties. To induce the Bank to
make the Loan, the Company represents and warrants to the Bank that:

         (a) Existence and Authority. The Company is a corporation duly
organized and validly existing under the laws of Switzerland. The Company is
qualified to do business in every jurisdiction in which: (i) the nature of the
business conducted by it or the character or location of properties owned or
leased by it, or the residences or activities of its shareholder, directors,
officers or employees, make such qualification necessary; and (ii) failure so to
qualify might have a Materially Adverse Effect. No jurisdiction in which the
Company is not qualified to do business has asserted that the Company is
required to be qualified therein. The principal office of the Company is located
at Aegeristrasse 66, 6300, Zug, Switzerland. The Company has no Subsidiaries.
The Company does not conduct any material operations or keep any material
amounts of property at any location other than the locations specified in the
Company Security Agreement. The Company has not done business under any name
other than its present corporate name at any time during the six years preceding
the date of this Agreement.

         (b) Authorization/No Conflict. The execution and delivery of this
Agreement, the borrowings hereunder, the execution and delivery of all of the
other Loan Documents and the performance by the Company of its obligations under
this Agreement and all of the other Loan Documents are within the powers of the
Company, have been duly authorized by all necessary action, have received any
required governmental or regulatory agency approvals and do not and will not
contravene or conflict with any provision of law or of the Articles of
Incorporation or By-Laws of the Company or of any agreement binding upon the
Company or its properties.

         (c) Validity and Binding Nature. This Agreement and all of the other
Loan Documents to which the Company is a party are the legal, valid and binding
obligations of the Company, enforceable against the Company under the laws of
the United States of America and Switzerland, in accordance with their
respective terms, except to the extent that enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium and other laws enacted for
the relief of debtors generally and other similar laws affecting the enforcement
of creditors' rights generally or by equitable principles which may affect the
availability of specific performance and other equitable remedies.



                                      -20-
<PAGE>   21

         (d) Financial Statements. The Company came into existence as of
December 20, 1999. The Company has delivered to the Bank its balance sheet
prepared by management of the Company as of December 25, 1999, which balance
sheet has been prepared in accordance with GAAP. Such balance sheet presents
fairly the financial position of the Company as of the date thereof. There has
been no materially adverse change in the financial position of the Company as of
the Closing Date, and the Company is Solvent as of the Closing Date.

         (e) Litigation and Contingent Liabilities. No litigation, arbitration
proceedings or governmental proceedings are pending or to the best of the
Company's knowledge threatened against the Company which would, if adversely
determined, have a Materially Adverse Effect. The Company does not have any
material, contingent liabilities not provided for or disclosed in the Financial
Statements referred to in Section 3.01(d), above.

         (f) Liens. None of the assets of the Company are subject to any Lien
(including without limitation any seller or vendor's lien or right of
reclamation), except for Liens described in Sections 5.02(b) of this Agreement.

         (g) Payment of Taxes. The Company has filed all tax returns (federal,
state, local or otherwise) and tax related reports as may be required under the
laws of the USA and Switzerland which it is required to file by any statute or
regulation and all taxes and any tax related interest payments and penalties
that are due and payable have been paid, except for such as are being diligently
contested in good faith and by appropriate proceedings and as to which
appropriate reserves have been established. Adequate provision has been made for
the payment when due of all tax liabilities which have been incurred, but are
not as yet due and payable.

         (h) Investment Company Act. The Company is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

         (i) Regulation U. The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock within the meaning of Regulation U of the
Board. Not more than twenty-five percent (25%) of the assets of the Company
consists of margin stock, within the contemplation of Regulation U, as amended.

         (j) Subsidiaries/Parent/Business Activities. The Company has no
Subsidiaries. Escalade is the sole owner of the issued and outstanding capital
stock of the Company. Except for such activities that the Bank may approve
pursuant to Section 5.02(m), the sole business of the Company is to buy and own
accounts receivable generated by and originally owed to the Escalade Domestic
Subsidiaries, respectively, and to engage in activities that are directly and
necessarily related thereto. The Company has only two employees, and all
servicing and collections of the Purchased Accounts Receivable are performed by
the Escalade Domestic Subsidiaries under the respective Services Agreements.



                                      -21-
<PAGE>   22

         (k) Year 2000 Compliant. The Company represents:

                  (1) All devices, systems, machinery, information technology,
         computer software and hardware, and other date sensitive technology
         (jointly and severally the "SYSTEMS") necessary for the Company to
         carry on its business as presently conducted and as contemplated to be
         conducted in the future are Year 2000 Compliant, or will be Year 2000
         Compliant, within a period of time calculated to result in no material
         disruption of any of its business operations. For purposes of these
         provisions, "YEAR 2000 COMPLIANT" means that such Systems are designed
         to be used prior to, during and after the Gregorian calendar year 2000
         A.D. and will operate during each time period without error relating to
         date data, specifically including any error relating to, or the product
         of, date data which represents or references different centuries or
         more than one century.

                  (2) The Company has: (i) undertaken a detailed inventory,
         review and assessment of all areas within the business and operations
         of the Company that could be adversely affected by the failure of the
         Company to be Year 2000 Compliant on a timely basis; (ii) developed a
         detailed plan and time line for becoming Year 2000 Compliant on a
         timely basis, and (iii) to date, implemented that plan in accordance
         with that timetable in all material respects.


                                   ARTICLE IV

                            SECURITY FOR OBLIGATIONS

         Section 4.01. Collateral for the Obligations. Until finally paid and
satisfied in full and this Agreement is no longer of any force or effect, the
Obligations are and shall remain secured by a valid and enforceable first
priority pledge, assignment of and/or grant of security interest and Lien in and
to all personal property of the Company, tangible and intangible, now owned and
existing or hereafter acquired or arising, including, without limitation, all
accounts receivable, all Purchased Accounts Receivable, cash, Pledged Cash,
Investment securities, all promissory notes (including, but not limited to, the
Escalade Note) made and issued by Escalade and/or any of the Escalade Domestic
Subsidiaries in favor of, and owned and held by, the Company, general
intangibles and all proceeds and products thereof (collectively, the
"COLLATERAL"), which assignments, security interests and pledges shall be
granted to the Bank by the Company Security Agreement and the Escalade Note
Pledge Agreement, respectively, subject only to Liens and security interests
described in the exceptions enumerated in Section 5.02(b) of this Agreement. In
the event the Company owns or acquires tangible or intangible personal property
that the Bank deems is or may not be covered as Collateral by the Company
Security Agreement and the Escalade Note Pledge Agreement, respectively, or in
which the Bank deems its security interest is or may not be perfected, the
Company covenants and agrees promptly, upon the request of the Bank, to execute
such other security instruments and documents and take such other actions as



                                      -22-
<PAGE>   23

the Bank may require to grant to the Bank a perfected security interest therein,
all of which security instruments and documents shall be in form and substance
satisfactory to the Bank and its counsel in all respects.


                                    ARTICLE V

                                 AFFIRMATIVE AND
                          NEGATIVE COVENANTS OF COMPANY

         Section 5.01. Affirmative Covenants of the Company. Unless otherwise
agreed or consented to by the Bank in a prior written document, until all
Obligations of the Company are paid and satisfied in full, and this Agreement
and the Bank's obligation to make Advances hereunder have been terminated, the
Company shall strictly observe each of the following covenants:

         (a) Existence. The Company shall preserve and maintain its corporate
existence and the right to do business in its place of incorporation and in such
other jurisdictions and states wherein non-qualification would have a Materially
Adverse Effect. Except for such activities that the Bank may approve pursuant to
Section 5.02(m), the sole business of the Company shall be to buy and own
accounts receivables generated by and originally owed to the Escalade Domestic
Subsidiaries, respectively, and to engage in activities that are directly and
necessarily related thereto. The Company shall not at any time have more than
two (2) employees, and all servicing and collections of the Purchased Accounts
Receivable shall be performed by the Escalade Domestic Subsidiaries under the
respective Services Agreements.

         (b) Use of the Proceeds of the Purchased Accounts Receivables. The
Company shall apply all proceeds of the Purchased Accounts Receivable against
its Obligations to the Bank to the extent necessary or required to all times to
prevent the outstanding principal balance owed on the Obligations from exceeding
the Maximum Availability and shall not invest or otherwise utilize the proceeds
for any purpose whatsoever; provided however, that the Company shall be
permitted from time to time to acquire additional Purchased Accounts Receivable
from the Escalade Domestic Subsidiaries so long as the Company as a result of
such transaction(s) does not at any time owe the Bank a principal balance on the
Loan in excess of the Maximum Availability and has not then otherwise committed
an Event of Default or Unmatured Event of Default.

         (c) Reports, Certificates and Other Information. The Company shall
furnish to the Bank the following Financial Statements, certificates and other
information, in form satisfactory in all regards to the Bank:

                  (1) Annual Audited Statements. As soon as available and in any
         event within ninety (90) days after the end of each fiscal year ending
         after the Closing Date, annual audited Financial Statements, audited by
         the Company's Auditors, showing the financial



                                      -23-
<PAGE>   24

         condition and results of operations of the Company as at the close of
         such fiscal year and for such fiscal year, all prepared in accordance
         with GAAP, accompanied by an opinion of the Company's Auditors, which
         opinion shall be without qualification and shall state that such
         audited Financial Statements present fairly the financial position of
         the Company as of the date of such Financial Statements and the results
         of its operations and changes in its financial position for the period
         covered thereby, and that their examination in connection with such
         Financial Statements has been made in accordance with GAAP. This
         reporting requirement may be satisfied by the Company providing to the
         Bank a copy of Escalade's annual audited Financial Statements which are
         inclusive of and show all consolidating data and information related to
         the Company.

                  (2) Interim Quarterly Statements. As soon as available and in
         any event within forty-five (45) days after the end of each fiscal
         quarter ending after the Closing Date, unaudited Financial Statements
         for the Company prepared in accordance with GAAP showing its financial
         condition and results of operations as at, and for such fiscal period
         and year-to-date, all in reasonable detail, and certified to the Bank
         by an Authorized Officer. This reporting requirement may be satisfied
         by the Company providing to the Bank a copy of Escalade's fiscal
         quarter Financial Statements which are inclusive of and show all
         consolidating data and information related to the Company.

                  (3) Annual and Quarterly Officer's Certificates.
         Contemporaneously with the furnishing of each set of Financial
         Statements provided for in Sections 5.01(c)(1) and (2), an Officer's
         Certificate.

                  (4) Orders. Prompt notice of any orders in any material
         proceedings to which the Company is a party, issued by any court or
         regulatory agency, federal or state, and if the Bank should so request,
         a copy of any such order.

                  (5) Notice of Default or Litigation. Immediately upon learning
         of the occurrence of an Event of Default or Unmatured Event of Default,
         or the institution of or any adverse determination in any litigation,
         arbitration proceeding or governmental proceeding which is material to
         the Company or the occurrence of any event which could have a
         Materially Adverse Effect, written notice thereof describing the same
         and the steps being taken with respect thereto.

                  (6) Borrowing Base Certificate. A Borrowing Base Certificate
         evidencing the Borrowing Base as of the close of the last prior Banking
         Day, on the date of the initial Advance and each subsequent Advance.
         For each month during which no Advance is made, the Company shall also
         provide a Borrowing Base Certificate as of the last Banking Day of such
         month by the fifth (5th) Banking Day of the next successive month.

                  (7) Other Information. From time to time all such other
         information, data and documents concerning the Company as the Bank may
         reasonably request.



                                      -24-
<PAGE>   25

         (d) Books, Records and Inspections. The Company shall maintain complete
and accurate books and records, and permit access thereto by the Bank for
purposes of inspection, copying and audit, and the Company shall permit the Bank
to inspect its properties and operations at all reasonable times and upon
reasonable notice. To the extent that the Company has rights pursuant to the
Receivables Purchase Agreements to access, inspect, copy and audit the books and
records and the properties and operations of the Escalade Domestic Subsidiaries,
the Company hereby irrevocably designates and authorizes the Bank to undertake
such access, inspection, copying and auditing functions for or on its behalf as
the Bank may determine, subject however, to the notice and other reasonable
limitations provided in the Receivables Purchase Agreements.

         (e) Insurance. In addition to any insurance required by any other Loan
Documents to which it is a party, the Company shall maintain in full force and
effect such insurance as may be required by law and such other insurance, to
such extent and against such hazards and liabilities, as is customarily
maintained by companies similarly situated.

         (f) Taxes and Liabilities. The Company shall pay when due all taxes,
license fees, assessments and other liabilities except such as are being
contested in good faith and by appropriate proceedings and for which appropriate
reserves have been established.

         (g) Compliance with Legal and Regulatory Requirements. The Company
shall maintain material compliance with the applicable provisions of all
federal, state and local statutes, ordinances and regulations of the USA and all
statutes, ordinances and regulations (or their equivalents) of Switzerland and
any court orders or orders of regulatory authorities issued thereunder.

         (h) Financial Covenants. The Company shall observe each of the
following financial covenants:

                  (1) Minimum Tangible Capital Base. The Company shall at all
         times maintain a Tangible Capital Base of not less than the lesser of
         Two Million Swiss francs (CHF 2,000,000) or One Million Two Hundred
         Fifty Thousand and 00/100 Dollars ($1,250,000.00) as of the Closing
         Date through and including the payment and satisfaction in full of all
         Obligations and termination of this Agreement.

                  (2) Total Debt. The Total Debt of the Company as of the
         Closing Date and at all times through and including the payment and
         satisfaction in full of all Obligations and termination of this
         Agreement shall be limited solely to the Obligations and the Debt
         specifically identified on the attached Schedule 5.01(h)(2) to this
         Agreement.

                  (3) Delinquency Ratio. The Company shall at all times maintain
         a delinquency ratio with respect to aggregate outstanding Eligible
         Accounts whereby the percentage of Eligible Accounts by Dollar amount
         which remains unpaid more than sixty-



                                      -25-
<PAGE>   26

         one (61) or more days after the original due dates for payment stated
         on the underlying invoices does not exceed ten percent (10%) of total
         Eligible Accounts then outstanding.

         (i) Charge-off Requirements. All Purchased Accounts Receivable owned by
the Company which become more than ninety (90) days delinquent shall be
charged-off immediately and automatically by the Company. If thirty percent
(30%) or more by Dollar amount of the Purchased Accounts Receivable owed to the
Company by a single account debtor become more than ninety (90) days delinquent,
all accounts owed to the Company by that account debtor shall be charged-off
immediately and automatically by the Company. All accounts charged-off pursuant
to this Section 5.01(i) shall not thereafter be deemed to be Eligible Accounts
for any purpose.

         (j) Primary Banking Relationship. The Company shall maintain the Cash
Collateral Account and its primary deposit accounts with the Bank.

         (k) Ownership/Solvency. The Company shall remain a wholly-owned
subsidiary of Escalade and be Solvent at all times.

         (l) Year 2000 Compliance. The Company shall:

                  (1) Furnish such additional information, statements and other
         reports with respect to its activities and progress towards the Company
         becoming Year 2000 Compliant as the Bank may reasonably request from
         time to time.

                  (2) In the event of any change in circumstances that causes or
         will likely cause any of its representations and warranties with
         respect to the Company being or becoming Year 2000 Compliant to no
         longer be true (hereinafter, referred to as a "CHANGE IN
         CIRCUMSTANCES") then it promptly, and in any event within ten (10) days
         of receipt of information regarding a Change in Circumstances, provide
         the Bank with written notice (the "NOTICE") that describes in
         reasonable detail the Change in Circumstances and how such Change in
         Circumstances caused or will likely cause the Company's representations
         and warranties with respect to the Company being or becoming Year 2000
         Compliant to no longer be true. The Company shall, within ten (10) days
         of a request, also provide the Bank with any additional information the
         Bank requests of the Company in connection with the Notice and/or a
         Change in Circumstances.

                  (3) Give any representative of the Bank access during all
         business hours to, and permit such representative to examine, copy or
         make excerpts from, any and all books, records and documents in the
         possession of the Company and relating to its affairs, and to inspect
         any of the properties and Systems of the Company and to project test
         such Systems to determine if they are Year 2000 Compliant in an
         integrated environment, all at the sole cost and expense of the Bank.



                                      -26-
<PAGE>   27

         Section 5.02. Negative Covenants of the Company. Unless otherwise
agreed or consented to by the Bank in a prior written document, until all
Obligations of the Company are paid and satisfied in full, and this Agreement
and the Bank's obligation to make Advances hereunder have been terminated, the
Company shall strictly observe each of the following covenants:

         (a) Restricted Payments. The Company shall not purchase or redeem any
shares of the capital stock of the Company, or declare or pay any Distributions
thereon. The Company shall not make any other Distributions to shareholders as
shareholders in any manner, or set aside any funds for any such purpose, or
prepay, purchase or redeem any Subordinated Debt of the Company; provided
however, that prior to the occurrence of an Event of Default or Unmatured Event
of Default, the Company shall be entitled to pay regularly scheduled payments of
interest owed by the Company on its Subordinated Debt which is payable to the
Escalade Domestic Subsidiaries and owned and held by Escalade.

         (b) Liens. The Company shall not create or permit to exist any Lien
with respect to any property or assets now owned or hereafter acquired by it,
including, without limitation any of its rights, title and interests in and to
any real estate, whether leased or owned, except:

                  (1) Liens in favor of the Bank created pursuant to the
         requirements of this Agreement, or otherwise;

                  (2) any Lien or deposit with any governmental agency required
         or permitted to qualify the Company to conduct business;

                  (3) Liens for taxes and governmental charges which are not yet
         due or which are being contested in good faith and by appropriate
         proceedings and for which appropriate reserves have been established;

                  (4) Liens created by or resulting from any litigation or legal
         proceeding which is being contested in good faith and by appropriate
         proceedings and for which appropriate reserves have been established;
         and

                  (5) those specific Liens now existing, if any, described on
         Schedule 5.02(b)(5) attached to this Agreement.

         (c) Guaranties. The Company shall not be a guarantor or surety of, or
otherwise be responsible in any manner with respect to any undertaking of any
other Person, whether by guaranty agreement or by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or advance any
funds, assets, goods or services, or otherwise, except for:

                  (1) guaranties in favor of the Bank;



                                      -27-
<PAGE>   28

                  (2) guaranties by endorsement of instruments for deposit made
         in the ordinary course of business; and

                  (3) those specific existing guaranties, if any, listed on
         Schedule 5.02(c)(3) attached to this Agreement.

         (d) Loans or Advances. The Company shall not make or permit to exist
any loans, advances or extensions of credit by it to any other Person, except
for the specific items, if any, listed in Schedule 5.02(d).

         (e) Mergers, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. The Company shall not (i) be a party to any consolidation or to
any merger or purchase the capital stock of or otherwise acquire any equity
interest in any other Person, (ii) acquire any assets of any other Person other
than Purchased Accounts Receivable acquired from the Escalade Domestic
Subsidiaries, or (iii) sell, transfer, convey or lease all or any of its assets.
The Company shall not cause to be created or otherwise acquire any Subsidiary
without the prior written consent of the Bank.

         (f) Other Agreements. The Company shall not enter into any agreement
containing any provision which would be violated or breached in any material
respect by the performance of its Obligations under this Agreement or under any
other Loan Document.

         (g) Judgments. The Company shall not permit any uninsured judgment or
monetary penalty rendered against it in any judicial or administrative
proceeding to remain unsatisfied for a period in excess of thirty (30) days
unless such judgment or penalty is being contested diligently and in good faith
by appropriate proceedings and execution upon such judgment has been stayed, and
unless an appropriate reserve has been established with respect thereto.

         (h) Change Name/Location of Principal Office. The Company shall not
change its legal name or the location of its principal office unless it gives
not less than sixty (60) days' prior written notice of such change to the Bank.

         (i) Negative Pledge Limitation. The Company shall not enter into any
agreement with any Person, other than the Bank, which prohibits or limits its
ability to create, incur, assume, or suffer to exist in favor of the Bank any
Lien upon any of its assets, rights, revenues, or property, real, personal, or
mixed, tangible or intangible, whether now owned or hereafter acquired.

         (j) Accounting Policies/Change of Business. The Company shall not: (1)
change its fiscal year or any of its significant accounting policies except to
the extent necessary to comply with GAAP; and (2) make any material change in or
expansion of the nature of its business as carried on as of the Closing Date.



                                      -28-
<PAGE>   29

         (k) Service Fees. With the sole exception of the Company's agreements
with respect to the Services Agreements and this Agreement, the Company shall
not pay, nor enter into any contract or other commitment which obligates it to
pay any management fees, consulting fees, administrative service fees or any
other similar fee or charge to any Person or any Affiliate of the Company.

         (l) Limitation on Compensation. The Company shall not pay or become
obligated to pay any compensation, including salaries, bonuses or fees of any
kind, to: (i) any Person as compensation for employment services or consulting
or administrative services except as provided in the Services Agreements, and
(ii) except as specified in Schedule 5.02(l).

         (m) Limitation on Business Activities. The Company shall not engage in
any business activity other than is directly and necessarily related to the
purchase and ownership by the Company of Purchased Accounts Receivable, unless
the details of such additional business activity have been previously and fully
disclosed to the Bank and the Bank shall have consented in writing to such
expanded business activity.

         (n) Prohibited Use of Loans. No portion of any Loan made hereunder
shall be used directly or indirectly to purchase any ineligible securities, as
defined by applicable regulations of the Board, which are underwritten by BOC
during the underwriting period and for the thirty (30) days thereafter.

         (o) Change in Receivables Purchase Agreements and Services Agreements.
The Company shall not permit, consent to or acquiesce in any material change to
any of the Receivables Purchase Agreements and Services Agreements.



                                      -29-
<PAGE>   30

                                   ARTICLE VI

                               LENDING CONDITIONS

         Section 6.01. Conditions of Lending. The obligation of the Bank to
advance the proceeds of the Loan shall be subject to fulfillment of each of the
following conditions precedent:

         (a) No Default. No Event of Default or Unmatured Event of Default shall
have occurred and be continuing, and the representations and warranties of the
Company contained in Section 3.01 of this Agreement shall be true and correct as
of the date of this Agreement and as of the date of any Advance, except that
after the date of this Agreement: (i) the representations contained in Section
3.01(d) of this Agreement will be construed so as to refer to the latest
Financial Statements furnished to the Bank by the Company pursuant to the
requirements of this Agreement, and (ii) all other representations will be
construed to have been amended to conform with any changes of which the Bank
shall previously have been given notice in writing by the Company.

         (b) Documents and other Items to be Furnished at Closing. The Bank
shall have received contemporaneously with the execution of this Agreement, the
following, each duly executed by the parties or intended signatories thereto,
currently dated (as applicable) and in form and substance in all regards
satisfactory to the Bank and its counsel:

                  (1) The Note, the Company Security Agreement, the Escalade
         Note Pledge Agreement and the Escalade Note.

                  (2) A copy of the Written Consent Resolutions of the Board of
         Directors of the Company authorizing the execution and delivery, on
         behalf of the Company, of this Agreement and the other Loan Documents
         provided for in this Agreement to which the Company is a party, which
         Written Consent Resolutions shall be printed in the English language.

                  (3) A certificate of the Secretary, or any Assistant
         Secretary, of the Company certifying the names and signatures of the
         officer or officers authorized to sign this Agreement and the other
         Loan Documents provided for in this Agreement to which the Company is a
         party, for and on behalf of the Company, together with a Certificate of
         Existence (or its equivalent) for the Company issued by the appropriate
         Switzerland government office, which certificates shall be printed in
         the English language.

                  (4) Escalade Subordination Agreement executed by Escalade in
         favor of the Bank, and consented to by each of the Escalade Domestic
         Subsidiaries, which Escalade Subordination Agreement shall be in form
         and substance substantially the same as EXHIBIT "J" attached to this
         Agreement (the "Escalade Subordination Agreement").



                                      -30-
<PAGE>   31

                  (5) Four (4) Standby and Subordination Agreements to be
         executed by and between the Company and each of the Escalade Domestic
         Subsidiaries, subordinating the Company's Debt to the Escalade Domestic
         Subsidiaries to the Obligations, which shall be in form and substance
         substantially the same as EXHIBIT "K" attached to this Agreement (the
         "Standby and Subordination Agreements").

                  (6) A copy of the Written Consent Resolutions of the Board of
         Directors of Escalade authorizing the execution and delivery, on behalf
         of Escalade, of the Escalade Note and all other documents provided for
         in this Agreement to which Escalade is to be a party.

                  (7) A certificate of the Secretary of Escalade certifying the
         names and signatures of the officer authorized to sign the documents
         referenced in (6) above to be executed by Escalade, for and on behalf
         of Escalade.

                  (8) Payment to the Bank of reimbursement for all costs and
         expenses incurred by the Bank in the preparation and closing of the
         Loan Documents and in the making of the Loan, including, but not
         limited to, all of its reasonable attorneys' fees.

                  (9) Opinions of counsel for the Company, Escalade and the
         Escalade Domestic Subsidiaries, addressed to the Bank in such form and
         substance as shall be acceptable in all regards to the Bank and its
         counsel on the matters identified on Schedule 6.01 (b)(9).

                  (10) UCC-1 Financing Statements in such form as the Bank may
         request from the Company and UCC-3 Statements of Assignment in such
         form as the Bank may request from the Company pertaining to any and all
         security interests which the Company may have or hereafter been granted
         by Escalade and/or the Escalade Domestic Subsidiaries, or otherwise.

                  (11) Copies of the Articles of Association of the Company
         certified by the appropriate Swiss governmental authority, and copies
         of the current Regulations for the Company, certified by its Secretary,
         which Articles of Association and Regulations shall be printed in the
         English language.

                  (12) Payment to the Bank of commitment fees for the Loan in an
         aggregate amount of $25,000, which fees shall be fully earned when paid
         and shall be non-refundable.

                  (13) An initial Borrowing Base Certificate and an initial
         Officer's Certificate.

                  (14) Four (4) Receivables Purchase Agreements to be executed
         by and between the Company and each of the Escalade Domestic
         Subsidiaries in form and substance



                                      -31-
<PAGE>   32

         substantially the same as EXHIBIT "G" attached to this Agreement,
         together with copies of all the documentation and information described
         in Section 4.1 thereof, respectively.

                  (15) Four (4) Services Agreements by and between the Company
         and each of the Escalade Domestic Subsidiaries in form and substance
         substantially the same as EXHIBIT "H" attached to this Agreement.

                  (16) Such other documents, certificates, agreements and/or
         information as the Bank may reasonably require.


                                   ARTICLE VII

                         EVENTS OF DEFAULT--ACCELERATION

         Section 7.01. Events of Default. Each of the following shall constitute
an Event of Default under this Agreement:

         (a) Nonpayment of the Loan. Default in the payment when due of any
amount payable under the terms of the Note, or otherwise payable to the Bank or
any other holder of any of the Note under the terms of this Agreement.

         (b) Nonpayment of Other Debt. (i) Default by the Company in the payment
when due, whether by acceleration or otherwise, of any other Debt owed to a
Person other than the Bank, or default in the performance or observance of any
obligation or condition with respect to any such other Debt if the effect of
such default is to accelerate the maturity of such other Debt or to permit the
holder or holders thereof, or any trustee or agent for such holders, to cause
such Debt to become due and payable prior to its scheduled maturity, unless the
Company is diligently contesting the existence of such default in good faith and
by appropriate proceedings; and (ii) Default by any other Credit Party to pay
any Debt owed to the Bank when due.

         (c) Other Material Obligations. Subject to the expiration of any
applicable grace period, default by the Company in the payment when due, or in
the performance or observance of any material obligation of, or condition agreed
to by the Company with respect to any agreement respecting any material
purchase, sale or lease of goods, securities or services except only to the
extent that the existence of any such default is diligently being contested in
good faith and by appropriate proceedings and that appropriate reserves have
been established with respect thereto.

         (d) Bankruptcy, Insolvency, etc. The Company or any Servicer admitting
in writing its inability to pay its debts as they mature or an administrative or
judicial order of dissolution or determination of insolvency being entered
against the Company or any Servicer; or the Company or any Servicer applying
for, consenting to, or acquiescing in the appointment of a trustee or receiver
for the Company or any Servicer or any property thereof, or the Company or any
Servicer making a general assignment for the benefit of creditors; or, in the
absence of such



                                      -32-
<PAGE>   33

application, consent or acquiescence, a trustee or receiver being appointed for
the Company or any Servicer or for a substantial part of the property of the
Company or any Servicer and not being discharged within sixty (60) days; or any
bankruptcy, reorganization, debt arrangement, or other proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding being
instituted by or against the Company or any Servicer, and, if involuntary, being
consented to or acquiesced in by the Company or any Servicer, as applicable, or
remaining for sixty (60) days undismissed.

         (e) Warranties and Representations. Any warranty or representation made
by the Company in this Agreement, or any of the other Loan Documents, proving to
have been false or misleading in any material respect when made, or any
schedule, certificate, financial statement, report, notice, or other writing
furnished by the Company to the Bank proving to have been false or misleading in
any material respect when made or delivered.

         (f) Violations of Negative and Financial Covenants. Failure by the
Company to comply with or perform any covenant stated in Section 5.01(h) or
Section 5.02 of this Agreement.

         (g) Change of Control. There shall be a Change of Control of the
Company without the prior written consent of the Bank.

         (h) Noncompliance With Other Provisions of this Agreement. Failure of
the Company to comply with or perform any covenant or other provision of this
Agreement or to perform any other Obligation (which failure does not constitute
an Event of Default under any of the preceding provisions of this Section 7.01)
and continuance of such failure for five (5) days after actual receipt of notice
thereof by the Company from the Bank.

         (i) Noncompliance With Other Loan Documents. The occurrence of any
"Event of Default" or "Default" (as such terms are defined in any of the Loan
Documents other than this Agreement).

         (j) Escalade Note/Policies. If at any time the principal balance of the
Escalade Note is paid or reduced to an amount of less than $7,500,000.00, or if
any change in the credit practices or policies of the Company, the Escalade
Domestic Subsidiaries or Escalade occurs with respect to the Purchased Accounts
Receivable which the Bank reasonably deems likely to have a Materially Adverse
Effect.

         (k) Termination/Modification of the Lockbox Agreements, Receivables
Purchase Agreements or Services Agreements. The termination or purported
termination of any one or more of the Lockbox Agreements, the Receivables
Purchase Agreements or Services Agreements, or in the case of the Services
Agreements, or any of them, if any Person other than the Servicers is named as
the servicing agent thereunder.



                                      -33-
<PAGE>   34

         Section 7.02. Effect of Event of Default. If any Event of Default
described in Section 7.01(d) of this Agreement shall occur: (i) the maturity of
the Loan shall immediately be accelerated, and the Note and the Loan evidenced
thereby and all other indebtedness and any other payment Obligations of the
Company to the Bank shall become immediately due and payable; (ii) the Escalade
Domestic Subsidiaries shall waive any sums that may be owing to them under
Section 2.01 (f)(2); and (iii) the Maximum Availability shall be immediately
reduced to zero Dollars ($0). When any other Event of Default has occurred and
is continuing, the Bank or any other holder of the Note may accelerate payment
of the Loan and declare the Note and all other payment Obligations due and
payable, whereupon maturity of the Loan shall be accelerated, the Note and the
Loan evidenced thereby, and all other payment Obligations shall become
immediately due and payable and the Maximum Availability shall be immediately
reduced to zero Dollars ($0), all without notice of any kind. The Bank or such
other holder shall promptly advise the Company of any such declaration, but
failure to do so shall not abrogate the occurrence or impair the effect of such
declaration. The remedies of the Bank specified in this Agreement or in any
other Loan Document shall not be exclusive, and the Bank may avail itself of any
other remedies provided by law, as well as any equitable remedies available to
the Bank.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section 8.01. Waiver -- Amendments. No delay on the part of the Bank,
or any holder of the Note in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by any of
them of any right, power or remedy preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to any of the provisions of
this Agreement or the other Loan Documents or otherwise of the Obligations shall
be effective unless such amendment, modification, waiver or consent is in
writing and signed by the Bank.

         Section 8.02. Notices. Any notice given under or with respect to this
Agreement to the Company or the Bank shall be in writing and, if delivered by
hand or sent by overnight courier service, shall be deemed to have been given
when delivered and, if mailed, shall be deemed to have been given five (5) days
after the date when sent by registered or certified mail, postage prepaid, and
addressed to the Company or the Bank (or other holder of the Note) at its
address shown below, or at such other address as any such party may, by written
notice to the other party to this Agreement, have designated as its address for
such purpose. The addresses referred to are as follows:

                  The Company:              Indian-Martin AG
                                            Aegeristrasse 66
                                            6300, Zug
                                            Switzerland
                                            Attn:  President
                                            Telecopy: +1 41 1 254 3180



                                      -34-
<PAGE>   35

                  (with a copy to:) Bar & Karrer
                                    Baarerstrasse 8
                                    CH - 6301, Zug
                                    Switzerland
                                    Attn: Michael Trippel
                                    Telecopy: +41 41 710 5604



                                      -35-
<PAGE>   36


                  The Bank:         Bank One, Indiana, National Association
                                    Bank One Tower, Mail Code IN 1-0046
                                    111 Monument Circle
                                    Indianapolis, IN 46277
                                    Attn:  Manager-- Corporate Banking
                                    Telecopy: (317) 321-6762

                  (with a copy to:) BAKER & DANIELS
                                    300 North Meridian Street
                                    Suite 2700
                                    Indianapolis, IN 46204
                                    Attn: David R. Hamer, Esq.
                                    Telecopy: (317) 237-1000

         Section 8.03. Costs, Expenses and Taxes. The Company agrees to pay
(without duplication), all of the following fees, costs and expenses incurred by
the Bank: (i) all reasonable costs and expenses in connection with the
negotiation, preparation, printing, typing, reproduction, execution and delivery
of the Loan Documents and any and all other documents furnished pursuant hereto
or in connection herewith, including without limitation the reasonable fees and
out-of-pocket expenses of Messrs. Baker & Daniels, special counsel to the Bank,
as well as the fees and out-of-pocket expenses of such counsel in connection
with the foregoing and the administration of this Agreement, (ii) all reasonable
costs and expenses in connection with the negotiation, preparation, printing,
typing, reproduction, execution and delivery of any amendments or modifications
of (or supplements to) any of the foregoing and any and all other documents
furnished pursuant thereto or in connection therewith, including without
limitation the reasonable fees and out-of-pocket expenses of counsel retained by
the Bank relative thereto (or, but not as well as, the reasonable allocated
costs of staff counsel), (iii) all UCC and Lien search fees and costs and all
fees and taxes payable in connection with the filing or recording of any Loan
Documents or financing statements; (iv) all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses of the Bank), if
any, incurred in connection with the administration and enforcement of this
Agreement and/or any other Loan Documents or other agreement furnished pursuant
hereto or thereto or in connection herewith or therewith; and (v) all costs and
expenses incurred by the Bank in conducting an independent audit or review by
the Bank's internal staff of the books and records of the Company and the
Collateral provided under the Loan Documents. In addition, the Company shall pay
any and all stamp, transfer and other similar taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement, or any
of the other Loan Documents, or the issuance of the Notes, or the making of the
Loans, and agrees to save and hold the Bank harmless from and against any and
all liabilities with respect to or resulting from any delay in paying, or
omission to pay, such taxes. Any portion of the foregoing fees, costs and
expenses which remains unpaid following the Bank's statement and request for
payment thereof shall bear interest from the date of such statement and request
to the date of payment at a per annum rate equal to the Default Rate, that the
Bank shall be entitled to rely thereon.



                                      -36-
<PAGE>   37

         Section 8.04. Severability/Counterparts. If any provision of this
Agreement or any other Loan Document is determined to be illegal or
unenforceable, such provision shall be deemed to be severable from the balance
of the provisions of this Agreement or such Loan Document and the remaining
provisions shall be enforceable in accordance with their terms. This Agreement,
and any other of the Loan Documents, may be executed in any number of
counterparts, which taken together (as to this Agreement or any other of the
Loan Documents, as applicable) shall be considered as one instrument, and each
of the parties agree that the facsimile signature of an Authorized Officer
hereon or thereon shall be deemed for all purposes to have the same force and
effect as an original, manual signature and any Loan Document bearing such a
facsimile signature may be enforced by the Bank accordingly.

         Section 8.05. Captions/Time of Essence/Miscellaneous. Section captions
used in this Agreement are for convenience only and shall not affect the
construction of this Agreement. Time is of the essence under the Loan Documents.
This Agreement may be executed by original or facsimile signatures (which shall
be binding and enforceable for all purposes the same as if original), in two or
more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one agreement.

         Section 8.06. Further Assurances. The Company shall, at its expense,
upon request of Bank, duly execute and deliver, or cause to be executed and
delivered, such further documents, agreements and instruments and perform or
cause to be performed such further acts as may be necessary or proper in the
reasonable opinion of Bank to from time to time carry out the intents,
provisions and purposes of this Agreement.

         Section 8.07. Governing Law. Except as may otherwise be expressly
provided in any other Loan Document, this Agreement and all other Loan Documents
are made under and will be governed in all cases by the substantive laws of the
State of Indiana, USA, without reference to the choice or conflicts of laws
rules or principles of any foreign or domestic jurisdiction. THE COMPANY AGREES
THAT ALL SERVICE OF PROCESS MAY BE MADE BY MESSENGER, BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, OR BY REGISTERED MAIL DIRECTED TO THE COMPANY AT THE ADDRESS
STATED IN SECTION 8.02 OF THIS AGREEMENT. NOTHING CONTAINED IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.

         Section 8.08. Prior Agreements, Etc. This Agreement supersedes all
previous agreements and commitments made by the Bank and the Company with
respect to the Loan and all other subjects of this Agreement, including, without
limitation, any oral or written proposals or commitments made or issued by the
Bank. The Company agrees to indemnify and hold harmless the Bank from and
against all liabilities, obligations, losses, damages, penalties, action,
judgments, suits, costs (including attorneys' fees), expenses or disbursements
of any kind whatever which may be imposed upon or asserted against the Bank in
any way relating to the business operations of the Company, execution of this
Agreement or any other of the Loan Documents or the performance of its
obligations thereunder. It is expressly agreed that the Bank




                                      -37-
<PAGE>   38

shall not be deemed to control the business activities of the Company as a
result of this Agreement, the other Loan Documents or the performance thereof.

         Section 8.09. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon and shall inure to the benefit of the Company
and the Bank and their respective legal representatives, successors and assigns,
provided that the Company's rights under this Agreement shall not be assignable
without the prior written consent of the Bank.

         Section 8.10. Waiver of Jury Trial/Jurisdiction. THE COMPANY AND THE
BANK EACH HEREBY VOLUNTARILY, KNOWINGLY, ABSOLUTELY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY TRIAL OR HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
BETWEEN THE BANK AND THE COMPANY ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY RELATIONSHIP BETWEEN THE COMPANY AND
THE BANK. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE
FINANCING DESCRIBED IN THIS AGREEMENT AND IN THE OTHER LOAN DOCUMENTS.

                  NEITHER THE COMPANY NOR THE BANK WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED.

                  THE COMPANY AGREES THAT THE COURTS OF THE STATE OF INDIANA,
USA, LOCATED IN INDIANAPOLIS, INDIANA, AND THE FEDERAL COURTS LOCATED IN THE
SOUTHERN DISTRICT OF INDIANA, INDIANAPOLIS DIVISION, HAVE EXCLUSIVE JURISDICTION
OVER ANY AND ALL ACTIONS AND PROCEEDINGS INVOLVING THIS AGREEMENT OR ANY OTHER
AGREEMENT MADE IN CONNECTION HEREWITH, AND THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR PURPOSES
OF ANY SUCH ACTION OR PROCEEDING. THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY OBJECTION THAT THE COMPANY MAY NOW HAVE OR HEREAFTER
CLAIM TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING, INCLUDING ANY CLAIM THAT
SUCH COURT IS AN INCONVENIENT FORUM, AND HEREBY CONSENTS TO SERVICE OF PROCESS,
PROVIDED THE SAME IS IN ACCORDANCE WITH THE TERMS HEREOF. FINAL JUDGMENT IN ANY
SUCH PROCEEDING AFTER ALL APPEALS HAVE BEEN EXHAUSTED OR WAIVED SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS, INCLUDING, BUT NOT
LIMITED TO, THE CONFEDERATION OF SWITZERLAND, BY SUIT ON THE JUDGMENT.

         Section 8.11. Highest Lawful Rate. Notwithstanding any provision to the
contrary contained in this Agreement or in any of the other Loan Documents, it
is expressly provided that



                                      -38-
<PAGE>   39

in no case or event shall the aggregate of (a) all interest on the unpaid
balance of the Note, accrued or paid from the date hereof, and (b) the aggregate
of any other amounts accrued or paid pursuant to the Note, or any of the other
Loan Documents, which under applicable laws are or may be deemed to constitute
interest upon such Debt from the date hereof, ever exceed the maximum rate of
interest which could lawfully be contracted for, charged or received on the
unpaid principal balance of such Debt. In this connection, it is expressly
stipulated and agreed that it is the intent of the Company and the Bank to
contract in strict compliance with Indiana usury laws and with any other
applicable state usury laws and with federal usury laws (whichever permit the
higher rate of interest) from time to time in effect. In furtherance thereof,
none of the terms of this Agreement, the Note or any of the other Loan Documents
shall ever be construed to create a contract to pay, as consideration for the
use, forbearance or detention of money, interest at a rate in excess of the
Highest Lawful Rate. Neither the Company nor any other Person now or hereafter
becoming liable for payment of indebtedness pursuant to the Loan Documents (the
"BANK DEBT") shall ever be liable for interest in excess of the Highest Lawful
Rate. If under any circumstances the aggregate amounts paid on the Bank Debt
include amounts which by law are deemed interest which would exceed the Highest
Lawful Rate, the Company stipulates that such amounts will be deemed to have
been paid as a result of an error on the part of the Company and the Bank, and
the Person receiving such excess payment shall promptly, upon discovery of such
error or upon notice thereof from the Person making such payment, in its
discretion credit the amount of such excess as a reduction of the principal
balance outstanding or refund the amount of such excess. The parties further
stipulate that such credit or refund shall be a sufficient and sole remedy for
such error and that no party shall be entitled to any damages or penalties,
whether statutory or otherwise, as a result of such error. In addition, all sums
paid or agreed to be paid to the holder or holders of the Bank Debt for the use,
forbearance or detention of the Bank Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of the Bank Debt. The provisions of this Section 8.11 shall control all
agreements, whether now or hereafter existing and whether written or oral,
between the Company and the Bank.

         Section 8.12. Indemnification. The Company agrees to indemnify the
Bank, and its successors and assigns (including any purchaser of a participation
in any of the Loan) and its directors, officers, employees, agents and attorneys
against all losses, claims, costs, damages, liabilities and expenses, including,
without limitation, all expenses of litigation or preparation therefor (a
"LOSS"), which they, or any of them, may pay or incur in connection with or
arising out of the direct or indirect application of the proceeds of the Loan,
except for any Loss incurred as the result of the willful misconduct of the
Bank, its successors or assigns, or its directors, officers, employees, agents
and attorneys. The indemnity set forth herein shall be in addition to the other
Obligations of the Company to the Bank under the Loan Documents or at common law
or otherwise, and shall survive termination of this Agreement and the payment of
all other Obligations.



                                      -39-
<PAGE>   40


         IN WITNESS WHEREOF, the Bank and the Company have by their respective
duly authorized officers executed and delivered this Agreement as of the Closing
Date.

                                  INDIAN-MARTIN AG, a corporation organized
                                  and existing under the laws of Switzerland

                                  By:      /s/ Lars Haussmann
                                       ---------------------------------------
                                           Lars Haussmann, Director
                                       ---------------------------------------
                                           (Printed Name and Title)

                                                                   ("Company")


                                  BANK ONE, INDIANA, NATIONAL
                                  ASSOCIATION

                                  By:       /s/ Steven J. Krakoski
                                       ---------------------------------------
                                           Steven J. Krakoski, Vice President
                                       ---------------------------------------
                                           (Printed Name and Title)

                                                                      ("Bank")




                                      -40-
<PAGE>   41


                         LIST OF EXHIBITS AND SCHEDULES


           EXHIBIT                           DESCRIPTION
           -------                           -----------

           "A"                      Application for Advance
           "B"                      Borrowing Base Certificate
           "C"                      Collateral Assignment and Security Agreement
           "D"                      Escalade Note Pledge Agreement
           "E"                      [Intentionally Omitted]
           "F"                      Officer's Certificate
           "G"                      Receivables Purchase Agreement (Specimen)
           "H"                      Services Agreement (Specimen)
           "I"                      Promissory Note
           "J"                      Subordination Agreement
           "K"                      Standby and Subordination (Specimen)


           SCHEDULE
           --------

           5.01 (h)(2)              Other Permitted Debt
           5.02 (b)(5)              Other Liens
           5.02 (c)(3)              Guaranties
           5.02 (d)                 Loans or Advances
           5.02 (l)                 Permitted Compensation
           6.01 (b)(9)              Opinions Required



                                      -41-