<PAGE>   1

                                                                   EXHIBIT 10(A)

                                  May 15, 2001

Martin Industries, Inc.
Attention: Mr. James W. Truitt
Vice President & Chief Financial Officer
P.O. Box 128
Florence, Alabama 35631

Re:      Line of Credit (Account #120435-524769); Term Loan (Account
         #120435-087445 and #120435-087452); Loan Agreement dated January 7,
         1993, as amended April 5, 1994, February 17, 1995, March 15, 1995,
         March 28, 1996, August 28, 1997, January 1, 2000, December 29, 2000,
         January 31, 2001 and March 15, 2001 (collectively "Loan Agreement") by
         and among Martin Industries, Inc. ("Martin Industries") and AmSouth
         Bank ("the Bank"). In this letter capitalized terms shall be given the
         meanings indicated in the Loan Agreement and/or in this letter.

Dear Mr. Truitt:

I am writing this letter to you concerning the indebtednesses ("Indebtednesses")
referenced above of Martin Industries to the Bank and our recent discussions
concerning the Bank extending and amending the Loan Agreement. In accordance
with our recent discussions, the Bank proposes a financing arrangement as
outlined in the Financing Proposal attached as Exhibit A to this letter. The
attached Financing Proposal does not summarize all of the terms, conditions,
covenants and other provisions which will be contained in the definitive
documentation for the amended Loan Agreement and is not to be construed as a
commitment or an agreement on the part of the Bank to provide financing on the
terms therein.

We have discussed with you the further extension of the Loan Agreement to enable
the parties adequate time to complete the required definitive documentation for
the proposed amended Loan Agreement. In this regard, the Bank hereby (i) amends
the definition of "Line of Credit Termination Date" in Section 1.02 of the Loan
Agreement, as heretofore amended, to substitute "June 15, 2001" in lieu of "May
15, 2001," (ii) extends the date on which payment of the semi-annual installment
of principal in the amount of $596,700 is due under the Term Note, as previously
extended, from May 15, 2001, to June 15, 2001, and (iii) increase the interest
rate on the Indebtednesses to Prime plus 1%, effective May 15, 2001.

To evidence the acceptance of these extensions on the terms and conditions
stated herein, please sign and return to me the enclosed copy of this letter. By
so signing the enclosed copy of this letter, Martin Industries acknowledges and
agrees to the following terms and conditions of such extension:

1.       This letter agreement shall not be deemed to be an accord and
         satisfaction of the Indebtednesses or any other obligation owed to the
         Bank.

2.       All collateral that now secures all or any of the Indebtednesses shall
         continue to secure same. Nothing in this letter agreement diminishes
         any security interest or lien that the Bank has in any assets securing
         the Indebtednesses. All of the collateral, rights, security, and
         guarantees that the Bank now has to secure any of the Indebtednesses
         due from Martin Industries shall remain in full force and effect and
         are hereby ratified and confirmed.

3.       The Bank waives until June 15, 2001, any default or Event of Default
         arising out of (i) the Borrower's failure to comply with the provisions
         of the Loan Agreement as set forth on Exhibit B, and (ii) the
         Borrower's failure to pay on May 15, 2001, the semi-annual installment
         of principal due under the Term Loan. Except as provided in the
         preceding sentence, the Bank reserves all of its rights and remedies
         under the Loan Agreement, the Security Documents, any other Loan
         Documents, and/or applicable law, in respect of any Event(s) of


                                        1
<PAGE>   2

         Default. The current non-exercise by the Bank of any rights and
         remedies which it may have shall not constitute a release or waiver of
         any of its rights and/or remedies or a release or waiver of any
         Event(s) of Default under the Loan Agreement, the Security Documents,
         or any other Loan Documents, except for the waiver provided in the
         first sentence of this paragraph. Except as provided in the first
         sentence of this paragraph, the Bank specifically reserves the right to
         invoke any and all rights and remedies at any time in its sole
         discretion.

4.       Martin Industries hereby releases, satisfies, cancels, waives, acquits,
         and forever discharges the Bank, its directors, officers, employees,
         agents, attorneys, successors and assigns, of and from any and all
         claims, demands, actions, or causes of action of any kind or character,
         arising at any time in the past, up to and including the date of this
         letter, which relate or pertain in any way to the Indebtednesses and/or
         collection of them.

5.       The Indebtednesses are owed by Martin Industries to the Bank for the
         amounts (exclusive of outstanding letters of credit, ACH exposures and
         the Bank's attorneys fees) herein stated and there are no defenses,
         setoffs, or counterclaims with respect to any of them:

<TABLE>
<CAPTION>
                                                        Payoff as of
         General Description      Obligation No.           05/14/01
         -------------------      --------------       --------------

         <S>                      <C>                  <C>
         Term Loan #1                 #087445          $ 1,192,029.35
         Term Loan #2                 #087452          $ 1,192,497.09
         Term Loan #3                 #524769          $ 9,876,726.79
</TABLE>

6.       Martin Industries agrees to pay the Indebtednesses strictly and
         promptly in accordance with the terms of the applicable promissory
         notes or other debt instruments, as specifically modified by the Loan
         Agreement and this letter agreement.

7.       Martin Industries agrees to pay to the Bank's counsel, Wilmer, Lee &
         Rowe, P.A., on or before June 15, 2001, all of its attorney's fees
         incurred in connection with this extension and/or the collection of the
         Indebtednesses.

                                                     Very truly yours,


                                                     /s/ DARLENE CHANDLER

                                                     Darlene Chandler
                                                     Vice President

cc:      Mr. John L. Duncan
         Denson N. Franklin III, Esq.
         S. Dagnal Rowe, Esq.

ACCEPTED AND AGREED TO BY:

                MARTIN INDUSTRIES, INC.


By:               /s/ JAMES W. TRUITT
    -------------------------------------------------
                    James W. Truitt
         Its Vice President of Administration
        and Finance and Chief Financial Officer


                                        2
<PAGE>   3

                                                                       EXHIBIT A

                               FINANCING PROPOSAL

         AmSouth Bank (the "Bank") proposes the following terms as amendments to
the Loan Agreement and other Loan Documents with Martin Industries, Inc.
("Martin Industries" or the "Company"):

1.       Extension:        The definition of "Line of Credit Termination Date"
                           in Section 1.02 of the Loan Agreement, as heretofore
                           amended, will be further amended to read "January 1,
                           2002."

2.       Line of Credit:   The Line of Credit will be increased by $1 million
                           for a total line of up to $11 million. The actual
                           amount available under the Line of Credit will be
                           determined periodically as the sum of: (a) 80% of the
                           eligible accounts receivable of the Company, net of
                           customary reserves, (to be determined) plus (b) 38%
                           of finished goods inventory, plus (c) 30% of raw
                           material inventory (less reserves for warranty and
                           obsolete inventory, subject to adjustment of the
                           final advance rates - additional reserves to be
                           determined).

3.       Term Loans:       The Term Loans will be reamortized from biannually to
                           monthly and defaults arising through the execution of
                           the amendment to the Loan Agreement will be deferred.

4.       Interest Rates and Fees:

                           The rate of interest charged on the first $10 million
                           under the Line of Credit will be increased from the
                           current rate to the Bank's Prime Rate plus 1%. The
                           rate of interest charged on any borrowings under the
                           additional $1 million made available under the Line
                           of Credit will be the Bank's Prime Rate plus 3%.

                           The rate of interest charged on the Term Loan will be
                           increased from the current rate to the Bank's Prime
                           Rate plus 1%; provided, however, that in the event
                           such an increase will adversely affect the tax
                           exemption received by the Bank with respect to the
                           Term Loan, this increase will not be implemented.

                           Fees will include a closing fee of one-half of one
                           percent (0.50%) of the total credit facility
                           (approximately $66,900), an annual loan service fee,
                           to be paid monthly, equal to one-half of one percent
                           (0.50%) of the total credit facility, and a fee equal
                           to one-half of one percent (0.50%) per annum, charged
                           per diem and payable monthly, of the average daily
                           unused portion of the Line of Credit.

5.       Additional Terms:

                           (a)      All proceeds of accounts receivable will be
                           required to be paid into a lockbox account of the
                           Bank. No payments will be made to the Company and all
                           invoices shall be marked with the Bank's lockbox as
                           the mailing address. Provision shall be made for the
                           lockbox account to be monitored daily to insure its
                           compliance with the borrowing base.


                                        3
<PAGE>   4

                           (b)      The borrowing base under the Line of Credit
                           will be determined and certificated weekly. Daily
                           reports on new invoices will be required.

                           (c)      The current financial covenants included in
                           the Loan Agreement will be amended to reflect 90% of
                           the Company's current projections and will include
                           minimum EBITDA, debt coverage ratio, current ratio
                           and minimum net worth. Other covenants will include a
                           requirement that the Company prepare an appropriate
                           offering memorandum to raise an agreed upon
                           additional amount of equity or to sell the Company or
                           certain operations or assets thereof by July 15,
                           2001, and the Company receive letters of intent for
                           purchase of whole or part of the company or equity
                           issuance or commitment letters for replacement
                           financing by August 15, 2001.

                           (d)      The amended Loan Agreement shall also
                           include a provision whereby the Line of Credit will
                           be permanently reduced to $6 million on October 31,
                           2001.


                                        4
<PAGE>   5

                                                                       EXHIBIT B

                          PROVISIONS OF LOAN AGREEMENT

<TABLE>
<CAPTION>
Section           Covenant
-------           --------

<S>               <C>
ss. 8.09          Debt Service Coverage Ratio

ss. 8.11          Working Capital

ss. 8.13          Net Worth

ss. 7.04(b)       Furnish monthly financial statementS

ss. 7.08          Notice of Default (i.e., Borrower's failure to give notice of
                  any of the foregoing defaults).
</TABLE>


                                        5