Document:

<PAGE>   1
                                                                   EXHIBIT 10.10

                        ESCALADE SUBORDINATION AGREEMENT

                  This Escalade Subordination Agreement (the "Agreement") is
made and entered into as of May 15, 2000, by and between ESCALADE, INCORPORATED,
an Indiana corporation ("Escalade") and BANK ONE, INDIANA, NATIONAL ASSOCIATION,
a national banking association with its principal office in Indianapolis,
Indiana, United States of America ("Bank").

                                    Recitals

                  A. Escalade is the sole shareholder of Martin Yale Industries,
Inc., an Indiana corporation ("Martin Yale"), Indian Industries, Inc., an
Indiana corporation ("Indian Industries"), and the owner of 99% of the
outstanding shares of Indian-Martin AG, a corporation organized and existing
under the laws of Switzerland ("Indian-Martin"). Martin Yale is the sole
shareholder of Master Products Manufacturing Company, Inc., a California
corporation ("Master Products"), and Indian Industries is the sole shareholder
of Harvard Sports, Inc., a Delaware corporation ("Harvard Sports").
(Hereinafter, Martin Yale, Indian Industries, Master Products, and Harvard
Sports shall be referred to herein collectively as the "Domestic Subsidiaries,"
and individually as a "Domestic Subsidiary.")

                  B. Indian-Martin and Bank have entered into a Credit Agreement
as of even date (the "Credit Agreement"), that, among other things, establishes
a credit facility for Indian-Martin with the Bank authorizing a loan to
Indian-Martin from the Bank of up to the aggregate principal sum of $30,000,000
(the "Loan"). The Loan is secured by the grant of a security interest and
assignment to Bank of all of Indian-Martin's rights, title and interests, now
owned or hereafter acquired by Indian-Martin, in and to that Collateral defined
and described in the Credit Agreement. (Hereinafter, all indebtedness,
Obligations and liabilities and any renewals or extensions thereof owed by
Indian-Martin to Bank under the Credit Agreement and Loan Documents shall be
referred to collectively as the "Indian-Martin/Bank One Obligations.") All
capitalized terms used, but not otherwise defined, herein shall have the
respective meanings ascribed to them in the Credit Agreement.

                  C. In accordance with those four (4) certain Receivables
Purchase Agreements executed by Indian-Martin and each of the Domestic
Subsidiaries, respectively, before or concurrent with execution of the Credit
Agreement, other Loan Documents and this Agreement, Indian-Martin shall purchase
certain accounts receivable from each of the Domestic Subsidiaries. Payment by
Indian-Martin for the purchase of such receivables shall be made pursuant to an
unsecured demand note issued by Indian-Martin payable to each of the Domestic
Subsidiaries in the amounts, respectively, of ninety-five percent (95%) of the
face value of the accounts receivables sold by each such Domestic Subsidiary to
Indian-Martin (collectively, the "Indian-Martin Receivables Notes", and
individually, an "Indian-Martin Receivables Note"). (Hereinafter, all
indebtedness, obligations and liabilities, and any renewals or extensions
thereof, owed by Indian-Martin to the Domestic Subsidiaries, respectively,
arising out of the Indian-
<PAGE>   2
Martin Receivables Notes shall be referred to collectively as the
"Indian-Martin/Domestic Subsidiaries Obligations".) Upon Indian-Martin's
delivery of the Indian-Martin Receivables Notes to each of the Domestic
Subsidiaries, respectively, the Bank understands that each Domestic Subsidiary
may distribute its Indian-Martin Receivables Note to Escalade as a dividend,
each of which Indian-Martin Receivables Notes upon issuance shall have been made
junior and subordinate to payment of the Indian-Martin/Bank One Obligations,
pursuant to the terms and provisions of those four (4) Standby and Subordination
Agreements, dated as of even date, executed by and between Indian-Martin and
each of the Domestic Subsidiaries.

                  D. Pursuant to the Receivables Purchase Agreements, among
other things, Indian-Martin shall have and be granted certain indemnities and
rights of limited recourse owing to it from Domestic Subsidiaries, respectively,
all of which indemnities and rights are required to and shall be assigned by
Indian-Martin to Bank, and Bank shall be granted a security interest therein,
under the Company Security Agreement (hereinafter, collectively the "Domestic
Subsidiaries/Indian-Martin/Bank One Obligations").

                  E. The permitted use of the proceeds of the Loan under the
Credit Agreement requires Indian-Martin, on a one time basis, to loan to
Escalade the proceeds of the Loan's initial funding in an amount not less than
the greater of the initial Advance (which amount shall be equal to the total
principal sum of the Indian-Martin Receivables Notes) or $7,500,000.00, for
which Escalade shall issue the Escalade Note payable to Indian-Martin evidencing
such loan (the "Escalade/Indian-Martin Loan"). (Hereinafter, all indebtedness,
obligations and liabilities, and all renewals and extensions thereof, owed by
Escalade to Indian-Martin arising out of the Escalade/Indian-Martin Loan shall
be referred to collectively as the "Escalade/Indian-Martin Obligations.")

                  F. Escalade intends to use the proceeds of the
Escalade/Indian-Martin Loan to repay existing indebtedness to Bank and/or fund
unsecured loans from Escalade to each of the Domestic Subsidiaries,
respectively, to finance their current ongoing operations (the "Domestic
Subsidiaries/Escalade Loans"). (Hereinafter, all indebtedness, obligations and
liabilities, and all renewals and extensions thereof, owed by the Domestic
Subsidiaries, individually and collectively, to Escalade arising out of the
Domestic Subsidiaries/Escalade Loans shall be referred to collectively as the
"Domestic Subsidiaries/Escalade Obligations".)

                  G. As a condition precedent to execution and delivery of the
Credit Agreement, Bank requires the execution and delivery of this Agreement
whereby Escalade will subordinate all payment by the Domestic Subsidiaries in
full or in part of the Domestic Subsidiaries/Escalade Obligations to payment in
full by the Domestic Subsidiaries of the Domestic
Subsidiaries/Indian-Martin/Bank One Obligations.

                  NOW THEREFORE, IN CONSIDERATION OF THE FOREGOING, AND FOR GOOD
AND VALUABLE CONSIDERATIONS, THE RECEIPT, SUFFICIENCY AND MUTUALITY OF WHICH ARE
HEREBY ACKNOWLEDGED, AND IN ORDER TO SATISFY THE CONDITIONS PRECEDENT OF THE
CREDIT AGREEMENT, ESCALADE AGREES WITH BANK AS FOLLOWS:

                                      -2-
<PAGE>   3
                  1. Escalade hereby agrees to subordinate and does hereby
subordinate, (a) payment by the Domestic Subsidiaries of all or any part of the
Domestic Subsidiaries/Escalade Obligations (all of the obligations, liabilities
and indebtedness described or to which reference is made in this clause (a)
being hereinafter called the "Subordinated Debt") to the payment in full by the
Domestic Subsidiaries of the Domestic Subsidiaries/Indian-Martin/Bank One
Obligations (all of the obligations, liabilities and indebtedness described or
included within the Domestic Subsidiaries/Indian-Martin/Bank One Obligations
being hereinafter called the "Senior Debt"); and (b) all security interests,
mortgages, liens, claims or rights now or hereafter securing the Subordinated
Debt to all security interests, mortgages, liens, claims or rights now or
hereafter securing the Senior Debt.

                  2. Upon maturity of the Senior Debt, or any portion thereof,
by lapse of time, acceleration or otherwise, all amounts due or to become due in
connection therewith shall first be paid in full in cash before any payment is
made by any of the Domestic Subsidiaries or any Person acting on behalf of the
Domestic Subsidiaries on account of any Subordinated Debt. Upon a distribution
of the assets or readjustment of the indebtedness of any of the Domestic
Subsidiaries by reason of liquidation, composition, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding involving the readjustments of all or any of the debts of the
Domestic Subsidiaries, or the application of the assets of the Domestic
Subsidiaries to the payment or liquidation thereof, Escalade acknowledges that
the payment and satisfaction of the Senior Debt shall have priority over the
payment and satisfaction of the Subordinated Debt. Bank is irrevocably
authorized and empowered to receive and collect any and all dividends, payments
and distributions made on account of any proof of claim relating to the
Subordinated Debt in whatever form the same may be paid or issued until the
Senior Debt is finally paid and satisfied in full. Escalade agrees to file a
proof of claim in respect of the Subordinated Debt and to execute and deliver to
Bank such assignments or other instruments as the Bank may require to enable the
Bank to collect all dividends, payments and distributions which may be made at
any time on account of the Subordinated Debt until the Senior Debt is finally
paid and satisfied in full.

                  3. Escalade shall not, without Bank's prior written consent,
(i) take any action to foreclose or otherwise enforce its Liens, if any, on any
of the Domestic Subsidiaries' assets, respectively, (ii) commence or join with
any other creditor or creditors of any of the Domestic Subsidiaries in
commencing any bankruptcy, reorganization, receivership or insolvency proceeding
against any of the Domestic Subsidiaries, (iii) exercise any other rights or
remedies it may have pursuant to the Domestic Subsidiaries/Escalade Obligations,
the Uniform Commercial Code or any other applicable law with respect to the
Domestic Subsidiaries' assets, respectively, or (iv) take or permit any action
prejudicial to, or inconsistent with, Bank's priority position over Escalade
that is created by this Agreement.

                  4. In the event that Indian-Martin defaults on the Senior
Debt, and as a result, Bank undertakes to enforce its security interests and
Liens with respect to any of the Domestic Subsidiaries' assets, respectively,
Escalade agrees that Escalade will not hinder, delay, or otherwise prevent Bank
from taking any and all action which the Bank deems necessary or

                                      -3-
<PAGE>   4
advisable to enforce its security interests and Liens in the Domestic
Subsidiaries' assets, respectively, and to realize thereon.

                  5. If any unauthorized payment on account of, or any
collateral for any part of, the Subordinated Debt is received by Escalade, such
payment or collateral shall be delivered forthwith by Escalade to the Bank for
application to the Senior Debt, in the form received except for the addition of
any endorsement or assignment necessary to effect a transfer of all rights
therein to the Bank. Bank is irrevocably authorized to supply any required
endorsement or assignment which may have been omitted. Until so delivered any
such unauthorized payment or collateral required to be delivered by Escalade to
Bank under this paragraph 5 shall be held by Escalade in trust for Bank and
shall not be commingled with other funds or property of Escalade.

                  6. Escalade represents, warrants and covenants to Bank that:
(a) it has not relied and will not rely on any representations or information of
any nature made by or received from Bank relating to the Domestic Subsidiaries
in deciding to execute this Agreement; (b) Escalade is the lawful owner of the
Subordinated Debt free and clear of all liens and encumbrances, and it has not
subordinated, encumbered, assigned or transferred, and agrees that it will not
subordinate, encumber, assign or transfer at any time while this Agreement
remains in effect, any right, claim or interest of any kind in or to the
Subordinated Debt, and any subordination, assignment or transfer in violation of
this sub-paragraph shall be null and void; and (c) Escalade has received all
consents and approvals required in order for it to execute and deliver this
Agreement.

                  7. Escalade hereby waives any rights it has or may have in the
future to require Bank to marshal its Collateral, and agrees that Bank may, in
addition to its other rights hereunder, proceed against its Collateral in any
order that Bank deems appropriate in the exercise of its absolute discretion.
Escalade also waives any right to be subrogated to the Senior Debt unless and
until the Senior Debt is indefeasibly paid and satisfied in full.

                  8. Escalade agrees that it will advise each future holder of
all or any part of the Subordinated Debt that the Subordinated Debt is
subordinated to the Senior Debt in the manner and to the extent set forth
herein. To that end, Escalade hereby agrees (and is hereby so authorized by
Domestic Subsidiaries) to endorse upon each instrument and document evidencing
all or any part of the Subordinated Debt the following legend:

                  The payment of the indebtedness evidenced by this instrument
                  is subordinated to the payment of the "Senior Debt" defined
                  and described in the Escalade Subordination Agreement dated
                  May 15, 2000, between Escalade, Incorporated and Bank One,
                  Indiana, National Association, and reference is made to such
                  Agreement for a full statement of the terms and conditions of
                  such subordination. Such indebtedness is also subject to that
                  certain Offset Waiver Agreement, dated May 15, 2000, wherein
                  offset and certain related rights are waived.

                                      -4-
<PAGE>   5
                  9. Escalade further agrees to indemnify Bank against any
losses, damages, costs and expenses incurred or suffered by Bank by reason of
Escalade's failure to so notify any future holder of the Subordinated Debt, or
any part thereof. Escalade hereby authorizes Bank to file such notices of record
as Bank may from time to time deem appropriate to evidence or give notice of
this Agreement.

                  10. Escalade agrees that it will not at any time directly or
indirectly contest the validity, perfection, priority or enforceability of any
Lien, security interest, encumbrance or claim granted to Bank in or on the
assets of the Domestic Subsidiaries, and hereby agrees not to hinder the Bank or
take a position adverse to Bank in the defense of any action contesting the
validity, perfection, priority or enforceability of any such Liens, security
interests, encumbrances or claims. Escalade further agrees that the provisions
of this Agreement shall remain in full force and effect notwithstanding a
successful challenge to the validity, perfection, priority or enforceability of
all or any of the Senior Debt or the Liens and security interests securing the
Senior Debt.

                  11. The occurrence of any of the following events shall
constitute an Event of Default by Escalade under this Agreement (referred to
herein as an "Event of Default"):

                  (a) Escalade 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
         Escalade; or Escalade applying for, consenting to, or acquiescing in
         the appointment of a trustee or receiver for Escalade or any property
         thereof, or Escalade making a general assignment for the benefit of
         creditors, or, in the absence of such application, consent or
         acquiescence, a trustee or receiver being appointed for Escalade or for
         a substantial part of the property of Escalade 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 Escalade, and, if involuntary, being consented to or
         acquiesced in by Escalade, as applicable, or remaining for sixty (60)
         days undismissed.

                  (b) Any breach by Escalade of any term, covenant or provision
         of this Agreement.

                  12. This Agreement shall be governed by the substantive laws
of the State of Indiana without reference to the choice or conflicts of laws
rules or principles of any foreign or domestic jurisdiction. This Agreement
contains the entire agreement between Escalade and Bank with respect to this
subject, and may only be modified by a writing signed by both Escalade and Bank.

                  (a) Bank's failure to exercise any right hereunder shall not
         be construed as a waiver of the right to exercise the same or any other
         right at any other time and from time to time thereafter, and such
         rights shall be cumulative and not exclusive.

                                      -5-
<PAGE>   6
                  (b) The knowledge by Bank of any breach or other
         non-observance by Escalade of the terms of this Agreement shall not
         constitute a waiver thereof or of any obligations to be performed by
         Escalade.

                  (c) Wherever possible, each provision of this Agreement shall
         be interpreted in such manner as to be effective and valid under
         applicable law, but if any provision of this Agreement shall be
         prohibited by or invalid under applicable law, such provision shall be
         ineffective only to the extent of such prohibition or invalidity,
         without invalidating the remainder of such provision or the remaining
         provisions of this Agreement.

                  (d) This Agreement shall continue in full force and effect
         until final payment and satisfaction in full of the Senior Debt and
         shall be binding upon Escalade and its successors and permitted
         assigns, including, without limitation, any future holder of all or any
         part of the Subordinated Debt, and shall inure to the benefit of Bank
         and its successors and assigns, including, without limitation, any
         future holder of all or any part of the Senior Debt, it being expressly
         acknowledged that Bank's rights under this Agreement may be assigned by
         Bank in connection with any assignment or transfer of all or any
         portion of the Senior Debt and that each holder of any portion of the
         Senior Debt shall be equally and ratably entitled to the benefits of
         this Agreement. References herein to the Domestic Subsidiaries shall
         include any successor to, or assign of, the Domestic Subsidiaries,
         including without limitation any debtor-in-possession or trustee for
         the Domestic Subsidiaries in any proceeding under the United States
         Bankruptcy Code.

                  (e) This Agreement may be executed in any number of
         counterparts, each of which shall be deemed to be an original hereof
         and submissible in evidence and all of which together shall be deemed
         to be a single instrument.

                  IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.

                                     ESCALADE, INCORPORATED, an Indiana
                                     corporation

                                     By: /s/ John R. Wilson
                                        -----------------------------------

                                         John R. Wilson, Secretary
                                     --------------------------------------
                                     (Printed Name and Title)

                                      -6-
<PAGE>   7

                                     BANK ONE, INDIANA, NATIONAL
                                     ASSOCIATION, a national banking association

                                     By: /s/ Steven J. Krakoski
                                     --------------------------------------

                                         Steven J. Krakoski, Vice President
                                     --------------------------------------
                                     (Printed Name and Title)

                                     CONSENT

                  Each of the undersigned Domestic Subsidiaries, respectively,
acknowledges receipt of a copy of the foregoing Subordination Agreement,
consents to all of the terms and conditions thereof, and agrees that it will not
pay any Subordinated Debt, except as provided therein. Each of the undersigned
Domestic Subsidiaries, respectively, agrees to mark its records to reflect the
subordination of the Subordinated Debt.

                                     MARTIN YALE INDUSTRIES, INC.,
                                     an Indiana corporation

                                     By: /s/ John R. Wilson
                                        -----------------------------------

                                         John R. Wilson, Secretary
                                     --------------------------------------
                                     (Printed Name and Title)

                                     INDIAN INDUSTRIES, INC.,
                                     an Indiana corporation

                                     By: /s/ John R. Wilson
                                        -----------------------------------
                                         John R. Wilson, Secretary
                                     --------------------------------------
                                     (Printed Name and Title)

                                      -7-
<PAGE>   8
                                     MASTER PRODUCTS MANUFACTURING
                                     COMPANY, INC., a California corporation

                                     By: /s/ John R. Wilson
                                        -----------------------------------

                                         John R. Wilson, Secretary
                                     --------------------------------------
                                     (Printed Name and Title)

                                     HARVARD SPORTS, INC.,
                                     a Delaware corporation

                                     By: /s/ John R. Wilson
                                        -----------------------------------

                                         John R. Wilson, Secretary
                                     --------------------------------------
                                     (Printed Name and Title)

                                      -8-<PAGE>   1
                                                                   EXHIBIT 10.11

                             OFFSET WAIVER AGREEMENT

                  This Offset Waiver Agreement (the "Agreement") is made and
entered into as of May 15, 2000, by and among ESCALADE, INCORPORATED, an Indiana
corporation ("Escalade"); MARTIN YALE INDUSTRIES, INC., an Indiana corporation
("Martin Yale"); INDIAN INDUSTRIES, INC., an Indiana corporation ("Indian
Industries"); MASTER PRODUCTS MANUFACTURING COMPANY, INC., a Delaware
corporation ("Master Products"); HARVARD SPORTS, INC., a California corporation
("Harvard Sports"); INDIAN-MARTIN AG, a corporation organized and existing under
the laws of Switzerland ("Indian-Martin"); and BANK ONE, INDIANA, NATIONAL
ASSOCIATION, a national banking association with its principal office in
Indianapolis, Indiana ("Bank").

                                    Recitals

                  A. Escalade is the sole shareholder of Martin Yale, Indian
Industries and the owner of 99% of the outstanding shares of Indian-Martin.
Martin Yale is the sole shareholder of Master Products, and Indian Industries is
the sole shareholder of Harvard Sports. (Hereinafter, Martin Yale, Indian
Industries, Master Products, and Harvard Sports shall be referred to
collectively as the "Domestic Subsidiaries," and individually as a "Domestic
Subsidiary.")

                  B. Indian-Martin and Bank have entered into a Credit Agreement
as of even date (the "Credit Agreement"), that, among other things, establishes
a credit facility for Indian-Martin with the Bank authorizing a loan to
Indian-Martin from Bank of up to the aggregate principal sum of $30,000,000 (the
"Loan"). The Loan is secured by the grant of a security interest and assignment
to Bank of all of Indian-Martin's rights, title and interests, now owned or
hereafter acquired by Indian-Martin, in and to that Collateral defined and
described in the Credit Agreement. (Hereinafter, all indebtedness, Obligations
and liabilities and any renewals or extensions thereof owed by Indian-Martin to
Bank under the Credit Agreement and Loan Documents shall be referred to
collectively as the "Indian-Martin/Bank One Obligations.") All capitalized terms
used, but not otherwise defined, herein shall have the respective meanings
ascribed to them in the Credit Agreement.

                  C. In accordance with those four (4) certain Receivables
Purchase Agreements executed by Indian-Martin and each of the Domestic
Subsidiaries, respectively, before or concurrent with execution of the Credit
Agreement, the other Loan Documents and this Agreement, Indian-Martin shall
purchase certain accounts receivable of the Domestic Subsidiaries. Payment by
Indian-Martin for the purchase of such receivables shall be made pursuant to an
unsecured note issued by Indian-Martin payable to each of the Domestic
Subsidiaries in the amounts, respectively, of ninety-five percent (95%) of the
face value of the accounts receivables sold by each such Domestic Subsidiary to
Indian-Martin (collectively, the "Indian-Martin Receivables Notes", and
individually, an "Indian-Martin Receivables Note"). (Hereinafter, all
indebtedness, obligations and liabilities, and any renewals or extensions
thereof, owed by Indian-Martin to the Domestic Subsidiaries, respectively,
arising out of the Indian-Martin Receivables Notes shall be referred to
collectively as the "Indian-Martin/Domestic Subsidiaries Obligations".) Upon
Indian-Martin's delivery of the Indian-Martin Receivables

<PAGE>   2
Notes to each of the Domestic Subsidiaries, respectively, Bank understands and
agrees that each Domestic Subsidiary may distribute as a dividend, assign or
otherwise sell, transfer or convey its Indian-Martin Receivables Note to
Escalade.

                  D. Pursuant to the Receivables Purchase Agreements, among
other things, Indian-Martin shall have and be granted certain indemnities and
rights of limited recourse owing to it from the Domestic Subsidiaries,
respectively, all of which indemnities and rights are required to and shall be
assigned by Indian-Martin to Bank, and Bank shall be granted a security interest
therein, under the Company Security Agreement (hereinafter, collectively the
"Domestic Subsidiaries/Indian-Martin/Bank One Obligations").

                  E. The permitted use of the proceeds of the Loan under the
Credit Agreement requires Indian-Martin, on a one time basis, to loan to
Escalade the proceeds of the Loan's initial funding in an amount not less than
the greater of the initial Advance (which amount shall be equal to the total
principal sum of the Indian-Martin Receivables Notes) or $7,500,000.00, for
which Escalade shall issue the Escalade Note payable to Indian-Martin evidencing
such loan (the "Escalade/Indian-Martin Loan"). The Escalade Note shall be
pledged by Indian-Martin to Bank and shall be a part of the Collateral given to
secure the Indian-Martin/Bank One Obligations. (Hereinafter, all indebtedness,
obligations and liabilities, and all renewals and extensions thereof, owed by
Escalade to Indian-Martin arising out of the Escalade/Indian-Martin Loan shall
be referred to collectively as the "Escalade/Indian-Martin Obligations.")

                  F. Escalade intends to use the proceeds of the
Escalade/Indian-Martin Loan to repay existing indebtedness to Bank and/or fund
unsecured loans from Escalade to each of the Domestic Subsidiaries,
respectively, to finance their current ongoing operations (the "Domestic
Subsidiaries/Escalade Loans"). (Hereinafter, all indebtedness, obligations and
liabilities, and all renewals and extensions thereof, owed by the Domestic
Subsidiaries, individually and collectively, to Escalade arising out of the
Domestic Subsidiaries/Escalade Loans shall be referred to collectively as the
"Domestic Subsidiaries/Escalade Obligations".)

                  G. As a condition precedent to execution and delivery of the
Credit Agreement, Bank requires the execution and delivery of this Agreement
whereby Escalade, the Domestic Subsidiaries and Indian-Martin each knowingly,
unconditionally and absolutely waive and terminate all rights of offset and
similar rights which may otherwise exist with respect to those obligations owing
by, to or among each other.

                  NOW THEREFORE, IN CONSIDERATION OF THE FOREGOING, AND FOR GOOD
AND VALUABLE CONSIDERATIONS, THE RECEIPT, SUFFICIENCY AND MUTUALITY OF WHICH ARE
HEREBY ACKNOWLEDGED, AND IN ORDER TO SATISFY THE CONDITIONS PRECEDENT OF THE
CREDIT AGREEMENT, ESCALADE, THE DOMESTIC SUBSIDIARIES AND INDIAN-MARTIN AGREE
WITH BANK AS FOLLOWS:

         1. Until such time as all Indian-Martin/Bank One Obligations are fully
and finally paid, performed and satisfied, and the credit commitment under the
Credit Agreement from Bank to Indian-Martin is no longer of any force or effect,
Indian-Martin hereby knowingly,

                                      -2-
<PAGE>   3
unconditionally and absolutely waives all rights, claims or privileges of
offset, set off, counterclaim, recoupment, abatement and any and all other
similar rights, claims or privileges which Indian-Martin may otherwise have, or
hereafter claim or assert, with respect to (i) any or all of the
Escalade/Indian-Martin Obligations, and (ii) any or all of the
Indian-Martin/Domestic Subsidiaries Obligations, whether or not such
Indian-Martin/Domestic Subsidiaries Obligations are assigned, sold or otherwise
transferred by the Domestic Subsidiaries to Escalade.

         2. Until such time as all Indian-Martin/Bank One Obligations are fully
and finally paid, performed and satisfied, and the credit commitment under the
Credit Agreement from Bank to Indian-Martin is no longer of any force or effect,
Escalade hereby knowingly, unconditionally and absolutely waives all rights,
claims or privileges of offset, set off, counterclaim, recoupment, abatement and
any and all other similar rights, claims or privileges which Escalade may
otherwise have, or hereafter claim or assert, with respect to (i) any or all of
the Escalade/Indian-Martin Obligations, and (ii) any or all of the
Indian-Martin/Domestic Subsidiaries Obligations, whether or not such
Indian-Martin/Domestic Subsidiaries Obligations are assigned, sold or otherwise
transferred by the Domestic Subsidiaries to Escalade.

         3. Until such time as all Indian-Martin/Bank One Obligations are fully
and finally paid, performed and satisfied, and the credit commitment under the
Loan Agreement from Bank to Indian-Martin is no longer of any force or effect,
each Domestic Subsidiary hereby knowingly, unconditionally and absolutely waives
all rights, claims or privileges of offset, set off, counterclaim, recoupment,
abatement and any and all other similar rights, claims or privileges which
Domestic Subsidiaries may otherwise have, or hereafter claim or assert, with
respect to (i) any or all of the Indian-Martin/Domestic Subsidiaries
Obligations, whether or not such Indian-Martin/Domestic Subsidiaries Obligations
are assigned, sold or otherwise transferred by the Domestic Subsidiaries to
Escalade, and (ii) any or all of the Domestic Subsidiaries/Indian-Martin/Bank
One Obligations.

         4. Indian-Martin, Escalade and the Domestic Subsidiaries, respectively,
each hereby acknowledge and consent to the waivers and agreements of each other
as set forth in this Agreement.

                  IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.

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

                           By: /s/ Lars Haussmann
                              ------------------------------------------

                               Lars Haussmann, Director
                           ---------------------------------------------
                               (Printed Name and Title)

                                      -3-
<PAGE>   4
                           ESCALADE, INCORPORATED, an Indiana corporation

                           By: /s/ John R. Wilson
                              ------------------------------------------

                               John R. Wilson, Secretary
                           ---------------------------------------------
                               (Printed Name and Title)

                           MARTIN YALE INDUSTRIES, INC., an Indiana
                           corporation

                           By: /s/ John R. Wilson
                              ------------------------------------------

                               John R. Wilson, Secretary
                           ---------------------------------------------
                               (Printed Name and Title)

                           INDIAN INDUSTRIES, INC., an Indiana corporation

                           By: /s/ John R. Wilson
                              ------------------------------------------

                               John R. Wilson, Secretary
                           ---------------------------------------------
                               (Printed Name and Title)

                           MASTER PRODUCTS MANUFACTURING
                           COMPANY, INC., a Delaware corporation

                           By: /s/ John R. Wilson
                              ------------------------------------------

                               John R. Wilson, Secretary
                           ---------------------------------------------
                               (Printed Name and Title)

                                      -4-
<PAGE>   5
                           HARVARD SPORTS, INC., a Delaware corporation

                           By: /s/ John R. Wilson
                              ------------------------------------------

                               John R. Wilson, Secretary
                           ---------------------------------------------
                               (Printed Name and Title)

                           BANK ONE, INDIANA, NATIONAL
                           ASSOCIATION, a national banking association

                           By: /s/ Steven J. Krakoski
                              ------------------------------------------

                               Steven J. Krakoski, Vice President
                           ---------------------------------------------
                               (Printed Name and Title)

                                      -5-

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