Document:

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                                                                    EXHIBIT 10.4

                            COLLATERAL ASSIGNMENT AND
                               SECURITY AGREEMENT

                  FOR VALUE RECEIVED, INDIAN-MARTIN AG, a corporation organized
and existing under the laws of Switzerland ("DEBTOR"), hereby GRANTS a security
interest in and ASSIGNS to BANK ONE, INDIANA, NATIONAL ASSOCIATION ("SECURED
PARTY") all of its rights, titles and interests, now owned by or hereafter
acquired by Debtor, in and to all of the following described personal property,
tangible and intangible, now owned and existing or hereafter acquired or
arising, and wheresoever located including, without limitation:

         (1)      Accounts;

         (2)      General Intangibles;

         (3)      Documents;

         (4)      Instruments;

         (5)      Commercial Tort Claims;

         (6)      Investment Property;

         (7)      Letter of Credit Rights;

         (8)      all cash, Pledged Cash and all demand, time, savings, passbook
                  and like accounts and deposits maintained by Debtor with any
                  bank, savings and loan association, credit union or like
                  organization, and any other monies, and all "investment
                  property" (as such term is defined in the UCC) of Debtor;

         (9)      all property and interests in property of Debtor now or
                  hereafter coming into the actual possession, custody or
                  control of Secured Party or any of its agents (whether for
                  safekeeping, deposit, custody, pledge, transmission,
                  collection or otherwise);

         (10)     all books and records (including, without limitation, customer
                  lists, credit files, computer programs, printouts and other
                  computer materials and records) of Debtor pertaining to any of
                  the property described in clauses (1) through (9), above;

         (11)     all additions, accessions, accessories, and replacements of
                  any of the property described in clauses (1) through (10),
                  above; and

         (12)     all products and Proceeds of all or any of the types or items
                  of property described in clauses (1) through (11), above.

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(All of the above-described property is referred to herein collectively as the
"COLLATERAL.")

                  As used herein, the term: (a) "ACCOUNTS" shall mean all rights
to payment of a monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered, or to be rendered, or (iii)
for a secondary obligation incurred, or to be incurred, including, without
limitation, all such Accounts as have been purchased or acquired from Escalade,
Incorporated, an Indiana corporation ("ESCALADE"), or from any of Escalade's
wholly-owned subsidiaries organized and existing in the United States of America
(the "ESCALADE DOMESTIC SUBSIDIARIES"), and shall also mean and include, without
limitation, all accounts receivable, contract rights, book debts, notes, drafts
and other obligations or indebtedness owing to Debtor and/or Escalade and/or the
Escalade Domestic Subsidiaries arising from the sale, lease or exchange of goods
or other property by it and/or Escalade and/or the Escalade Domestic
Subsidiaries and/or the performance of services by it and all of Debtor's rights
in, to and under all purchase orders for goods, services or other property, and
all of Debtor's rights to any goods, services or other property represented by
any of the foregoing (including without limitation returned or repossessed goods
and unpaid sellers' rights of rescission, replevin, reclamation and rights to
stoppage in transit), in each case whether now in existence or hereafter arising
or acquired including, without limitation, the right to receive the proceeds of
said purchase orders and contracts and all collateral security and guarantees of
any kind given by any person or entity with respect to any of the foregoing, and
the term "ACCOUNT" shall mean any of the Accounts; (b) "COMMERCIAL TORT CLAIMS"
shall mean any claim of Debtor arising in tort; (c) "CREDIT AGREEMENT" shall
mean the Credit Agreement, dated as of May 15, 2000, by and between Debtor and
Secured Party, as the same has been or hereafter may be amended, modified,
supplemented, and/or restated from time to time and at any time; (d) "DEFAULT
RATE" shall have the meaning ascribed to such term in the Credit Agreement or
any promissory note issued pursuant thereto; (e) "DOCUMENTS" shall mean all
"documents" (as defined in the UCC) or other receipts covering, evidencing or
representing goods, now owned or hereafter acquired by Debtor; (f) "GENERAL
INTANGIBLES" shall mean all "general intangibles" (as defined in the UCC) now
owned or hereafter acquired by Debtor, including, without limitation, (i) all
obligations or indebtedness owing to Debtor (other than Accounts) from whatever
source arising, including, but not limited to, indemnity and recourse claims,
(ii) all tax refunds and all rights or claims in respect of refunds for taxes
paid, and (iii) all rights in respect of any pension plan or similar arrangement
maintained for employees of Debtor; (g) "INSTRUMENTS" shall mean all
"instruments", "chattel paper" or "letters of credit" (each as defined in the
UCC), now owned or hereafter acquired by Debtor; (h) "INVESTMENT PROPERTY" shall
mean all "investment property" (as defined in the UCC) now owned or hereafter
acquired by Debtor; (i) "LETTER OF CREDIT RIGHTS" shall mean all rights to
payment or performance under a letter of credit, whether the beneficiary has
demanded or is at the time entitled to demand payment or performance, now owned
or hereafter acquired by Debtor; (j) "PROCEEDS" shall mean all "proceeds" (as
defined in the UCC) of all or any of the types or items of property described in
(1) through (11) above, including insurance proceeds and proceeds of all
warranty and tort claims, and all property of the types described in (1) through
(11) above arising from or received by Debtor in connection with the sale or
disposition thereof; and (k) "UCC" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of Indiana, Ind. Code Section 26-1-1-1 et
seq., as the same may

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hereafter be amended. All capitalized terms used, but not defined, herein shall
have the meanings ascribed thereto in the Credit Agreement.

                  The assignment and security interest hereby granted to Secured
Party is given to secure the performance and payment when due of the
Indebtedness. As used herein, the term "INDEBTEDNESS" means (1) all
indebtedness, obligations and liabilities, and all renewals and extensions
thereof, now or hereafter owed by Debtor to Secured Party, now existing or
hereafter arising, evidenced by or arising under or pursuant to the Loan
Agreement, together any and all other indebtedness, obligations and liabilities
incurred by Debtor pursuant to any promissory note or guaranty executed and
delivered to Secured Party in connection therewith; (2) all extensions,
renewals, amendments, restatements or replacements of the foregoing, together
with all costs, expenses and reasonable attorneys' fees incurred by Secured
Party in the enforcement or collection of any of the foregoing, whether such
indebtedness, obligations and liabilities are direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several, joint and several, now
exist or hereafter arise; and (3) all costs and expenses incurred by Secured
Party to enforce this Security Agreement, including reasonable attorneys' fees.

                  Debtor represents and warrants to and agrees with Secured
Party as follows:

                  1. The Collateral.

                  (a) Title. Debtor has or will acquire, and will maintain full
and absolute title in Debtor to the Collateral, free of all claims, assignments,
security interests, liens and encumbrances other than the assignment and
security interest herein granted to Secured Party and claims, assignments,
liens, security interests and other encumbrances, if any, that are permitted
under the Credit Agreement (collectively, the "PERMITTED LIENS"), and has good
right to subject the Collateral to the assignment and security interest granted
by this Security Agreement. Debtor has and will maintain full possession of all
tangible personal property included in the Collateral and will defend the
Collateral against all adverse claims. Except with respect to Permitted Liens
and the security interest granted by this Security Agreement, no notice,
financing statement, mortgage, security agreement or similar or equivalent
document or instrument covering all or any part of the Collateral is on file or
of record in any jurisdiction in which such filing or recording would be
effective to perfect a lien or security interest on such Collateral. If any
Collateral is at any time in the possession or control of any warehouseman,
bailee, consignee or any of Debtor's agents or processors, Debtor shall notify
such warehouseman, bailee, consignee, agent or processor of the security
interests granted or created hereby and to hold all such Collateral for Secured
Party's account subject to Secured Party's instructions.

                  (b) Condition-Location. Debtor shall maintain the Collateral
in good condition, repair and operating order and shall not permit it in any
respect to be wasted, destroyed, or used in violation of law. Secured Party, and
its agents and representatives, may come upon Debtor's property to examine and
inspect the Collateral at any reasonable time or times, and for the purpose of
conducting appraisals of the Collateral. Debtor shall keep full and accurate
books and records relating to the Collateral. Unless Secured Party otherwise
consents,

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all business records constituting, relating to or evidencing any of the
Collateral shall be located at Debtor's chief executive office and principal
place of business located at Aegeristrasse 66, 6300 Zug, Switzerland ("DEBTOR'S
CHIEF EXECUTIVE OFFICE"). All Collateral is also located at Debtor's Chief
Executive Office and at those additional addresses set forth on the attached
Schedule 1.

                  (c) Taxes and Assessments. Debtor shall promptly pay, as they
become due and payable, all taxes and assessments imposed upon the Collateral or
for its use or operation or upon this Security Agreement.

                  (d) Insurance. Debtor will maintain or will cause to be
maintained on its behalf policies of property and casualty insurance covering
the Collateral issued by fiscally sound and reputable insurers, which policies
of insurance shall be in such amounts, with such deductibles and against such
liabilities and hazards as customarily are maintained by other companies
operating similar businesses. All such policies of insurance shall be in form
and substance satisfactory to the Secured Party. Such policies of insurance
insuring all or any part of the Collateral shall (i) contain an endorsement
naming Secured Party as an additional insured and loss payee under a secured
lender's loss payable clause, and (ii) provide that the insurer will give
Secured Party thirty (30) days' prior written notice of the termination of such
policy. Debtor shall deliver to Secured Party the original (or a certified copy)
of each such policy of insurance, an appropriate certificate of insurance in
respect of each such policy, and evidence of the payment of all premiums
therefor when due. If Debtor at any time or times hereafter shall fail to obtain
or maintain or to cause to be maintained on its behalf any of the policies of
insurance required by this Security Agreement or to pay any premium in whole or
in part relating thereto, then Secured Party, without waiving or releasing any
Indebtedness or Event of Default, may at any time or times thereafter (but shall
be under no obligation to do so) obtain and maintain such policies of insurance
and pay such premiums and take any other action with respect thereto which
Secured Party deems advisable. After the occurrence of any Event of Default, and
so long as the Event of Default is continuing unremedied, Secured Party is
hereby authorized to act as attorney-in-fact for Debtor in making, adjusting and
settling claims under and canceling such insurance and endorsing Debtor's name
on any drafts drawn by insurers of the Collateral.

                  (e) Protection of Collateral. Debtor shall not, without the
prior written consent of Secured Party, sell, assign, transfer, or otherwise
dispose of any of the Collateral or any of Debtor's right, title or interest
therein, and shall not otherwise do or permit anything to be done or occur that
may impair the Collateral as security hereunder.

                  (f) Accounts. Each Account subject to the assignment to and
security interest of Secured Party: (i) is and will be free and clear from
setoffs or counterclaims, except to the extent that such setoffs or
counterclaims do not have a Materially Adverse Effect on Debtor's financial
condition; (ii) is not and will not be subject to any agreement wherein an
Account debtor on any Account may claim a deduction or discount except as
reflected on the document evidencing the Account; (iii) is and will be owned by
Debtor and Debtor shall have the right to subject such Account to the security
interest of Secured Party; and (iv) will not be sold, assigned or transferred to
any Person other than Secured Party, and Debtor will defend the same against

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any Person claiming an interest in such Account adverse to the interest of
Secured Party. Upon request of Secured Party, Debtor will promptly notify (and
Debtor hereby authorizes Secured Party so to notify) each Account debtor in
respect of any Account or Instrument that such Collateral has been assigned to
Secured Party, and that any payments due or to become due in respect of such
Collateral are to be made directly to Secured Party, or its designee, and/or to
one or more lockbox accounts in accordance with instructions provided to such
Account debtors by Secured Party. Debtor has taken all actions necessary under
the UCC to perfect its interest in any Accounts purchased or otherwise acquired
by it, as against its assignors and creditors of its assignors.

                  (g) Name/Location. Debtor has not, during the six (6) years
preceding the date of this Security Agreement, been known as or used any
corporate, fictitious, or assumed name other than the name by which it is
identified in this Security Agreement. Debtor will not change (i) the location
of Debtor's Chief Executive Office; (ii) the location of any Collateral if such
change would cause the Lien and security interest of Secured Party in such
Collateral to lapse or cease to be perfected either immediately upon the
movement thereof or after the passage of time; or (iii) its name, identity or
corporate structure in any manner unless it shall have given Secured Party not
fewer than thirty (30) days' prior written notice thereof.

                  (h) Licenses, Patents, etc.. Debtor possesses adequate assets,
permits (including those required under applicable federal, state, and local
environmental health and safety statutes and regulations) licenses, patents,
patent applications, copyrights, trademarks, trademark registrations and
applications, and tradenames to continue to conduct its business as presently
conducted by it.

                  2. Financing Statements, Certificates, Etc. Debtor will, from
time to time, at its expense, execute, deliver, file and record any statement,
assignment, instrument, document, agreement, notice or other paper and take any
other action, (including, without limitation, any filings of financing or
continuation statements under the UCC) that from time to time may be necessary,
or that Secured Party may reasonably request, in order to create, preserve,
perfect, confirm, validate, or protect the security interests granted or created
pursuant to this Security Agreement or to enable Secured Party to obtain the
full benefits of this Security Agreement, or to enable Secured Party to exercise
and enforce any of its rights, powers and remedies hereunder with respect to any
of the Collateral. To the extent necessary or desirable and permitted by law,
Debtor hereby authorizes Secured Party to execute and file financing statements,
amendments and continuation statements without Debtor's signature appearing
thereon. Debtor agrees that a carbon, photographic, photostatic or other
reproduction of this Security Agreement or of a financing statement is
sufficient as a financing statement. To the full extent permitted by law, Debtor
authorizes Secured Party and grants to Secured Party a power of attorney (which
is coupled with an interest and is irrevocable) to sign on Debtor's behalf and
file financing statements, continuation statements, applications for
certificates of title, notices, affidavits, and other documents and any
amendments thereto that Secured Party reasonably deems necessary or desirable
for the purpose of perfecting, protecting, and preserving the lien and security
interest of Secured Party in the Collateral. Debtor shall pay the reasonable
costs, fees, and expenses of, or

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incidental to, the perfection, protection and preservation of Secured Party's
Lien and security interest in the Collateral, including without limitation any
costs of mailing notices, recording or filing fees, recording taxes, stamp
taxes, and certificate of title application fees incurred in connection with the
filing or recording of all financing and continuation statements and other
documents concerning the Collateral.

                  At Debtor's cost and expense, Debtor shall:

                  (a) except as otherwise provided in (h) below, deliver to
Secured Party, immediately upon their receipt by or delivery to Debtor, all
notes or other instruments now or hereafter evidencing or securing any of the
Collateral and any guaranty or security therefor, together with appropriate
endorsements and assignments;

                  (b) upon request by Secured Party deliver to Secured Party
certified schedules, in such form as may be specified by Secured Party,
identifying the Collateral, or such part thereof as may be specified by Secured
Party, together with such supporting documents and information as Secured Party
reasonably may request;

                  (c) upon request by Secured Party, immediately deliver or
cause to be delivered to Secured Party, in due form for transfer (i.e., endorsed
in blank or accompanied by duly executed blank stock or bond powers), all
securities, instruments, and documents of title (subject to (e) below), if any,
at any time representing all or any of the Collateral;

                  (d) furnish or cause to be furnished to Secured Party such
appraisals, opinions of counsel regarding grants of valid and perfected liens
and security interests in favor of Secured Party in the Collateral, and other
documents with respect to the Collateral as Secured Party reasonably may request
from time to time;

                  (e) use all reasonable efforts to cause Secured Party's Lien
and security interest to be at all times duly noted on all certificates of title
issuable with respect to any of the Collateral and upon request by the Secured
Party after the occurrence of an Event of Default, forthwith deliver or cause to
be delivered to Secured Party each such certificate of title (except for
certificates of title issued with respect to Collateral that is subject to a
Permitted Lien that is prior to the lien and security interest of Secured Party
therein);

                  (f) acquire and maintain its property in a manner that will
enable such property to become subject to the Lien and security interest granted
under this Security Agreement;

                  (g) acquire and maintain the consent or approval of any Person
or entity whose consent or approval is required to the granting of a Lien or
security interest in any Collateral to the Secured Party; and

                  (h) upon request by Secured Party, cause all chattel paper (as
defined in the UCC) to be clearly stamped or marked to indicate that such
chattel paper is subject to a assignment

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and security interest in favor of Secured Party or deliver such chattel paper to
Secured Party, except for such chattel paper that is subject to a Permitted Lien
that is prior to the assignment and security interest granted hereunder.

                  3. General Covenants.

                  (a) Debtor agrees to pay promptly when due all taxes,
assessments and governmental charges upon or against the Collateral, or Debtor,
or for the property or operations of Debtor, in each case before the same become
delinquent and before penalties accrue thereon, unless and to the extent that
the same are diligently being contested in good faith by appropriate proceedings
and for which Debtor has established adequate reserves. Debtor shall give
written notice to Secured Party of all happenings and events adversely affecting
the Collateral or the value or amount thereof; including, without limitation,
the creation or assertion of any Lien or security interest against any of the
Collateral that is not a Permitted Lien.

                  (b) In the event Debtor fails to pay taxes, assessments, costs
and expenses which Debtor is required to pay or in the event Debtor fails to
keep the Collateral free from other assignments, security interests, Liens or
encumbrances not permitted under the terms of this Security Agreement, Secured
Party may make expenditures for any and all such purposes. All costs and
expenses of Secured Party in retaking, holding, preparing for sale and selling
or otherwise realizing upon any Collateral or enforcing any provisions hereof,
including reasonable attorneys' fees, shall constitute part of the Indebtedness,
and shall bear interest from the date incurred at the Default Rate.

                  (c) Debtor shall: (i) at all reasonable times allow Secured
Party and its agents or representatives to examine, inspect and/or make
abstracts from Debtor's books and records and to arrange for verification of
Collateral, under reasonable procedures, which in the case of Accounts may be
made directly with the Account debtors or by other methods; (ii) furnish to
Secured Party upon request additional statements of any Account, together with
all notes or other papers evidencing the same and any guaranty, security or
other information relating thereto; and (iii) Debtor will furnish or cause to be
furnished to Secured Party written reports of any changes that would be required
to be made to the Schedules to this Security Agreement in order for the
information contained in such Schedules to remain accurate, at or before the
time events requiring such changes occur.

                  (d) Debtor shall at all times and in all regards comply with
the terms and provisions of those certain Services Agreements dated as of May
15, 2000, by and between Debtor and the respective Escalade Domestic
Subsidiaries.

                  4. Processing, Sale and Collections. Until the occurrence of
an Event of Default and receipt from Secured Party of written notice of the
revocation of Debtor's authority, Debtor, directly or through the efforts of the
Escalade Domestic Subsidiaries, acting pursuant to the Services Agreements:

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                  (a) will, at its own expense, endeavor to collect, as and when
due, all amounts due with respect to any Account, including the taking of such
action with respect to such collection as Secured Party may reasonably request
or, in the absence of such request, as Debtor may deem advisable; and

                  (b) may grant, in the ordinary course of business, to any
Account debtor, any rebate, refund or adjustment to which such Account debtor
may be lawfully entitled, and may accept, in connection therewith, the return of
goods, the sale or lease of which shall have given rise to the obligation of the
Account debtor.

                  However, at any time before or after any revocation of such
authority or the maturity of any of the Indebtedness, Secured Party may notify
any Account debtor to make payment directly to Secured Party, or as Secured
Party may in its sole discretion direct, of any amounts due or to become due and
enforce the collection of any Account or contract right by suit or otherwise and
surrender, release or exchange all or any part thereof, or compromise or extend
or renew for any period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby.

                  If requested by Secured Party, Debtor will note the security
interest of Secured Party on all records relative to the Collateral, including
without limitation any invoice that evidences an Account.

                  5. Performance by Secured Party of Debtor's Agreements.
Secured Party may, but shall have no duty to, perform any agreement of Debtor
hereunder which Debtor shall have failed to perform, and Debtor will forthwith
reimburse Secured Party for any payment made or any expense incurred by Secured
Party in connection with such performance. Such payments and expenses shall
constitute a part of the Indebtedness and shall bear interest at the Default
Rate from the date incurred by Secured Party.

                  6. Events of Default. The occurrence of each of the following
events shall constitute an Event of Default by Debtor under this Security
Agreement (referred to herein as an "EVENT OF DEFAULT"):

                  (a) The occurrence of any "Event of Default," as such term is
defined in the Loan Agreement; or

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

                  7. General Authority. Debtor hereby irrevocably appoints the
Secured Party its true and lawful attorney, with full power of substitution, in
the name of Debtor, Secured Party, or otherwise, for the sole use and benefit of
Secured Party, but at Debtor's expense, to the extent permitted by law to
exercise, at any time and from time to time while an Event of Default has

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occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:

                  (a) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due thereon or by virtue thereof;

                  (b) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;

                  (c) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if Secured
Party were the absolute owner thereof;

                  (d) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto; and

                  (e) to make all necessary or appropriate transfers of all or
any part of the Collateral in connection with any sale, lease or other
disposition thereof pursuant to this Security Agreement, and execute and deliver
any documents necessary or appropriate to effect, evidence or facilitate such
sale, lease or other disposition.

                  8. Remedies Upon Default. Time is of the essence of this
Security Agreement. Upon the occurrence of any Event of Default by Debtor under
this Security Agreement and at any time thereafter (such Event of Default not
previously having been cured), Secured Party shall be entitled, by written or
telegraphic notice to Debtor, to declare all of the Indebtedness owed to it to
be immediately due and payable, whereupon the same shall become immediately due
and payable, without presentation, demand, protest, notice of protest, or other
notice of dishonor of any kind, all of which are hereby expressly waived. In
addition, upon the occurrence of any Event of Default and at any time thereafter
(such Event of Default having not previously been cured), Secured Party shall
have all the remedies of a secured party under the UCC and as otherwise provided
by applicable law, including but not limited to the following: Secured Party may
take possession of the Collateral and may use it after having done so. For
purposes of taking possession, Secured Party may enter upon any premises on
which the Collateral may be situated without legal process and remove the
Collateral. Debtor releases Secured Party from any claims arising from such
removal and shall hold Secured Party harmless from any liability resulting
therefrom. Secured Party may require Debtor to assemble the Collateral and make
it available at a place to be designated by Secured Party which is reasonably
convenient to all parties. Unless the Collateral threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Secured Party
shall give Debtor at least ten (10) days' prior written notice of the time and
place of any public sale thereof or of the time after which any private sale or
any other intended disposition thereof is to be made. Upon any such sale Secured
Party shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of Debtor which may
be waived, and Debtor, to the extent permitted by law, hereby

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specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted. The notice (if any) of
such sale shall (1) in case of a public sale, state the time and place fixed for
such sale, and (2) in the case of a private sale, state the day after which such
sale may be consummated. Debtor agrees that such notice constitutes "reasonable
notification" within the meaning of Section 9-504(3) of the UCC. Any such public
sale shall be held at such time or times within ordinary business hours and at
such place or places as Secured Party may fix in the notice of such sale. At any
such sale the Collateral may be sold in one lot as an entirety or in separate
parcels, as Secured Party may determine. Secured Party shall not be obligated to
make any such sale pursuant to any such notice. Secured Party may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
the sale, and such sale may be made at any time or place to which the same may
be so adjourned. In case of any sale of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be retained by Secured
Party until the selling price is paid by the purchaser thereof, but Secured
Party shall not incur any liability in case of the failure of such purchaser to
take up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may again be sold upon like notice. Secured Party, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose its security interests and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction. The expenses of retaking, holding, preparing
for sale, selling and the like, and reasonable attorneys' fees and expenses
incurred by Secured Party, may be paid from the proceeds of the disposition.
Secured Party may obtain the appointment of a receiver respecting the Collateral
upon such notice as may be required by applicable law and without notice if
permitted by such law, and may obtain immediate possession thereof in replevin.
Debtor hereby consents to the appointment of such receiver. Insofar as
Collateral shall consist of Accounts, insurance policies, instruments, chattel
paper, chooses in action or the like, Secured Party may demand, collect, receipt
for, settle, compromise, adjust, sue for, foreclose or realize upon Collateral
as Secured Party may determine, whether or not the Indebtedness or Collateral
are then due and for the purpose of realizing Secured Party's rights therein,
Secured Party may receive, open and dispose of mail addressed to Debtor and
endorse notes, checks, drafts, money orders, documents of title or other
evidences of payment, shipment or storage or any form of Collateral on behalf of
and in the name of Debtor, as its attorney-in-fact. All remedies of Secured
Party shall be cumulative to the full extent provided by law. Pursuit by Secured
Party of certain judicial or other remedies shall not abate nor bar resort to
other remedies with respect to the Collateral, and pursuit of certain remedies
with respect to all or some of the Collateral shall not bar other remedies with
respect to the Indebtedness or to other portions of the Collateral. Secured
Party may exercise its rights to the Collateral without resorting or regard to
other collateral or sources of security or reimbursement for the Indebtedness.

                  9. Nonwaiver-Expenses, Proceeds of Collateral. No waiver by
Secured Party of any of its rights shall be effective unless in writing, and in
no event shall it operate as a waiver of any other of its rights or of the same
rights on any future occasion.

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                  Debtor shall pay to Secured Party on demand any and all
expenses, including reasonable attorneys' fees, incurred or paid by Secured
Party in perfecting, protecting or enforcing its rights upon or under the
Indebtedness or the Collateral. After deducting all of said expenses the residue
of any proceeds of collection or sale of the Collateral shall be applied to the
payment of the Indebtedness as Secured Party may determine, and Debtor shall
remain fully liable for any deficiency.

                  10. Limitation on Duty of Secured Party in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof,
Secured Party shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. Secured Party shall be deemed to have exercised
reasonable care in the custody of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or damage
to any of the Collateral, or for any diminution in the value thereof, by reason
of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by Secured Party in good faith.
Secured Party shall not be responsible for the existence, genuineness or value
of any of the Collateral or for the validity, perfection, priority or
enforceability of the security interests granted or created hereunder in any of
the Collateral, whether impaired by operation of law or by reason of any action
or omission to act on its part hereunder. Secured Party shall have no duty to
ascertain or inquire as to the performance or observance of any of the terms of
this Security Agreement by Debtor.

                  11. Applicable Law-Definitions. Should applicable law confer
any rights or impose any duties inconsistent with or in addition to any of the
provisions of this Security Agreement, the affected provisions of this Security
Agreement shall be considered amended to conform to such law, but all other
provisions hereof shall remain in full force and effect without modification.
This Security Agreement shall be construed for all purposes under the laws of
the State of Indiana without reference to the choice or conflicts of laws rules
or principles of any foreign or domestic jurisdiction.

                  12. Successors in Interest. This Security Agreement shall be
binding upon and inure to the benefit of Debtor and Secured Party and their
respective successors, assigns and legal representatives. If at any time or
times by assignment or otherwise Secured Party transfers any of the Collateral,
such transfer shall carry with it Secured Party's power and rights under this
Security Agreement with respect to the Collateral transferred, and the
transferee shall become vested with said powers and rights whether or not they
are specifically referred to in the transfer. If and to the extent Secured Party
retains any other Collateral, Secured Party will continue to have the rights and
powers herein set forth with respect thereto.

                  13. This Security Agreement may be executed in any number of
counterparts, which taken together shall be considered as but one instrument,
and each of the parties agree that the facsimile signature of Debtor hereon
shall be deemed to have the same force and effect as an original, manual
signature and may be enforced by Secured Party accordingly.

                                      -11-
<PAGE>   12

                  14. Miscellaneous. DEBTOR HEREBY VOLUNTARILY, ABSOLUTELY,
IRREVOCABLY, KNOWINGLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY
ON ANY CLAIM, COUNTERCLAIM, THIRD-PARTY CLAIM OR OTHERWISE, IN ANY LEGAL ACTION
OR PROCEEDING ARISING IN ANY WAY OUT OF OR WHICH IN ANY WAY INVOLVES ANY OF THE
RIGHTS, OBLIGATIONS OR REMEDIES OF ANY PARTY TO THIS SECURITY AGREEMENT OR ANY
DOCUMENT EXECUTED OR DELIVERED PURSUANT TO OR OTHERWISE IN CONNECTION WITH THIS
SECURITY AGREEMENT (WHETHER BASED UPON CONTRACT TORT OR OTHERWISE). THIS
PROVISION IS A MATERIAL INDUCEMENT TO SECURED PARTY TO PROVIDE THE FINANCING
DESCRIBED IN THE LOAN AGREEMENT. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS SECURITY AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
INDIANA WITHOUT REGARD TO THE CHOICE OR CONFLICTS OF LAWS RULES OR PRINCIPLES OF
ANY JURISDICTION. DEBTOR AGREES THAT THE COURTS OF THE STATE OF INDIANA LOCATED
IN INDIANAPOLIS, INDIANA, USA, AND THE FEDERAL COURTS LOCATED IN THE SOUTHERN
DISTRICT OF INDIANA, MARION COUNTY, HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL
ACTIONS AND PROCEEDINGS INVOLVING THIS SECURITY AGREEMENT OR ANY OTHER AGREEMENT
MADE IN CONNECTION HEREWITH, AND DEBTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES TO SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR PURPOSES OF ANY SUCH
ACTION OR PROCEEDING. DEBTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION THAT DEBTOR MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION
OR PROCEEDING, INCLUDING ANY CLAIM THAT SUCH COURT IS AN INCONVENIENT FORUM, AND
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 ANY OTHER
JURISDICTION, INCLUDING WITHOUT LIMITATION SWITZERLAND, BY SUIT ON THE JUDGMENT.

                  Executed and delivered by the duly authorized signatory of
Debtor as of this 15th day of May, 2000.

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

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

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

                                      -12-
<PAGE>   13

STATE OF _____________ )
                       )  SS:
COUNTY OF ___________  )

                  Before me, a Notary Public for said County and State,
personally appeared _________________, the _______________ of INDIAN-MARTIN AG,
a corporation organized and existing under the laws of Switzerland, who being
duly sworn, acknowledged execution of the foregoing COLLATERAL ASSIGNMENT AND
SECURITY AGREEMENT for and on its behalf and stated that the representations
contained therein are true and correct.

Date:
     ----------------------------------

                                          (Printed Name), Notary Public

My Commission Expires:
My County of Residence:

Official Certification

Seen for authentication of the above signature, affixed in our presence by

Mr. Lars Alexander Haussmann, Swiss citizen of Herrliberg ZH, according to his
Information residing in Zurich, Switzerland,
(who has identified himself by passport),

who, according to the extract shown to us from the Commercial Register dated
April 26, 2000, is entered in the Commercial Register of the canton of Zug as
member of the board of directors with the right to sign individually for the

Indian-Martin AG (Indian-Martin Ltd.), having its registered domicile in Zug,
Switzerland.

The Swiss law does not provide for the act of swearing.

Zurich 8, May 16, 2000/ih

                                                NOTARIAT RIESBACH-ZURICH

                                                /s/ Max Bodmer
                                                --------------------------------
                                                Max Bodmer, certifying officer

                                      -13-
<PAGE>   14

                                   SCHEDULE I

                             Locations of Collateral

                None, other than Debtor's Chief Executive Office

                                      -14-<PAGE>   1
                                                                    EXHIBIT 10.5

                         RECEIVABLES PURCHASE AGREEMENT

                                     BETWEEN

                             INDIAN INDUSTRIES, INC.
                                 AS THE SELLER,

                                       AND

                               INDIAN - MARTIN AG,
                                  AS THE BUYER

                            DATED AS OF MAY 15, 2000

<PAGE>   2

<TABLE>
<CAPTION>
TABLE OF CONTENTS

                                                                                                              Page

<S>              <C>                                                                                        <C>
ARTICLE 1         AMOUNTS AND TERMS OF THE PURCHASES............................................................3

   SECTION 1.1    AGREEMENT TO PURCHASE AND SELL................................................................3
   SECTION 1.2    NO RECOURSE...................................................................................4
   SECTION 1.3    TRUE SALES....................................................................................4
   SECTION 1.4    CONSIDERATION FOR PURCHASES...................................................................5

ARTICLE 2         CALCULATION OF PURCHASE PRICE.................................................................5

   SECTION 2.1    CALCULATION OF PURCHASE PRICE.................................................................5

ARTICLE 3         PAYMENT OF PURCHASE PRICE.....................................................................6

   SECTION 3.1    THE PURCHASE PRICE PAYMENT....................................................................6
   SECTION 3.2    INELIGIBLE RECEIVABLES, REPURCHASE, ETC.......................................................6
   SECTION 3.3    PAYMENTS AND COMPUTATIONS, ETC................................................................6

ARTICLE 4         CONDITIONS TO PURCHASE........................................................................7

   SECTION 4.1    CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT.......................................7
   SECTION 4.2    CONDITIONS PRECEDENT TO ALL PURCHASES.........................................................8
   SECTION 4.3    CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES............................................8
   SECTION 4.4    EFFECT OF PAYMENT OF PURCHASE PRICE...........................................................8

ARTICLE 5         REPRESENTATIONS AND WARRANTIES................................................................8

   SECTION 5.1    REPRESENTATIONS AND WARRANTIES................................................................8

ARTICLE 6         COVENANTS....................................................................................11

   SECTION 6.1    AFFIRMATIVE COVENANTS........................................................................11
   SECTION 6.2    NEGATIVE COVENANTS...........................................................................12

ARTICLE 7         INDEMNIFICATION..............................................................................12

   SECTION 7.1    INDEMNITIES BY                  .............................................................12

ARTICLE 8         ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF
                  THE ASSIGNED RECEIVABLES.....................................................................15

   SECTION 8.1    SERVICING OF ASSIGNED RECEIVABLES AND RELATED RIGHTS.........................................15
   SECTION 8.2    RIGHTS OF THE BUYER; ENFORCEMENT RIGHTS......................................................15
   SECTION 8.3    RESPONSIBILITIES OF                   .......................................................16
   SECTION 8.4    FURTHER ACTION EVIDENCING PURCHASES..........................................................16
   SECTION 8.5    PURCHASE TERMINATION EVENT...................................................................17

ARTICLE 9         MISCELLANEOUS................................................................................17

   SECTION 9.1    AMENDMENTS, ETC..............................................................................17
   SECTION 9.2    NOTICES, ETC.................................................................................17
   SECTION 9.3    BINDING EFFECT; ASSIGNABILITY................................................................18
   SECTION 9.4    GOVERNING LAW AND JURISDICTION...............................................................18
   SECTION 9.5    EXECUTION IN COUNTERPARTS....................................................................19
   SECTION 9.6    SURVIVAL OF TERMINATION......................................................................19
   SECTION 9.7    WAIVER OF JURY TRIAL.........................................................................19
   SECTION 9.8    ENTIRE AGREEMENT.............................................................................19
   SECTION 9.9    HEADINGS.....................................................................................19
</TABLE>

<PAGE>   3

                         RECEIVABLES PURCHASE AGREEMENT

         This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement") is entered into as of
May 15, 2000 between Indian Industries, Inc., a corporation incorporated under
the laws of Indiana, as seller (sometimes referred to as "Indian Industries" or
the "Seller," as the case may be) and INDIAN-MARTIN AG, a corporation
incorporated under the laws of Switzerland, as buyer (sometimes referred to as
"AG" or the "Buyer").

                             PRELIMINARY STATEMENTS

         1. Certain terms that are capitalized and used throughout this
Agreement are defined in Exhibit 1 to this Agreement. References in the Exhibits
hereto to the Agreement refer to this Agreement, as amended, modified or
supplemented from time to time and at any time.

         2. AG is a corporation all of whose issued and outstanding shares of
capital stock is wholly owned by Escalade, Incorporated, a corporation
incorporated and existing under the laws of Indiana.

         3. Indian Industries wishes to sell Receivables that it now owns and
from time to time hereafter will own to AG, and AG is willing, on the terms and
subject to the conditions contained in this Agreement, to purchase such
Receivables from Indian Industries at such times.

         4. AG, in the Services Agreement, will appoint Indian Industries as the
Servicer to collect Assigned Receivables as AG may from time to time purchase
from Indian Industries.

         NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as follows:

ARTICLE 1 AMOUNTS AND TERMS OF THE PURCHASES

         Section 1.1 Agreement to Purchase and Sell.

                  (a) On the terms and conditions hereinafter set forth, and in
consideration of the Purchase Price, Indian Industries hereby sells to the
Buyer, and the Buyer hereby purchases from Indian Industries, all of Indian
Industries' right, title and interest in and to:

                           (i) all Assigned Receivables, except that in
                  connection with the Initial Sale Indian Industries will retain
                  any Receivable that is sixty-one (61) or more days past due
                  and which is identified on the attached Exhibit 2 and any such
                  Receivable shall not be sold to Buyer at any time following
                  the Initial Sale;

                           (ii) all rights to, but not the obligations under,
                  all related Contracts and all Related Property with respect
                  thereto;

                           (iii) all monies due or to become due with respect to
                  the foregoing; and

                                      -1-
<PAGE>   4

                           (iv) all Collections in respect of, and other
                  proceeds of, such Assigned Receivables or any other of the
                  foregoing including, without limitation, all funds which
                  either are received by Indian Industries or the Buyer from or
                  on behalf of or for credit to the Obligors in payment of any
                  amounts owed (including, without limitation, finance charges,
                  interest and all other charges) in respect of such Assigned
                  Receivables, or are applied to such amounts owed by the
                  Obligors (including, without limitation, insurance payments,
                  if any, that Indian Industries applies in the ordinary course
                  of its business to amounts owed in respect of any such
                  Assigned Receivable and the net proceeds of sale or other
                  disposition of goods or other collateral or property of the
                  Obligors or any other Person directly or indirectly liable for
                  payment of such Assigned Receivable and available to be
                  applied thereon, excluding, however, proceeds of returned
                  inventory).

         All purchases hereunder shall be made without recourse, but shall be
made pursuant to and in reliance upon the representations, warranties and
covenants of Indian Industries, in its capacity as seller, set forth herein. The
proceeds and rights described in subsections (ii), (iii) and (iv) of this
Section 1.1(a) are herein collectively called the "Related Rights". Sales by the
Seller to the Buyer of Receivables under this Agreement may be made at the close
of each business week of Indian Industries but shall be made no less frequently
than by the end of each four week accounting period of Indian Industries.

         Section 1.2 No Recourse. Except as specifically provided in this
Agreement, the purchase and sale of Receivables and Related Rights under this
Agreement shall be without recourse to Indian Industries; provided that Indian
Industries shall be liable to the Buyer for all representations, warranties,
covenants and indemnities made by Indian Industries pursuant to the terms of
this Agreement, it being understood that such obligation of Indian Industries
will not arise on account of the failure of any Obligor for credit reasons to
make any payment in respect of an Assigned Receivable.

         Section 1.3 True Sales.

                  (a) Each of Indian Industries and the Buyer intend the
transactions hereunder to constitute absolute and irrevocable purchases and
sales of Receivables and the Related Rights by Indian Industries to the Buyer
providing the Buyer with the full benefits of ownership of the Assigned
Receivables, and no party hereto intends the transactions contemplated hereunder
to be, or for any purpose to be characterized as, a loan or similar advance from
the Buyer to Indian Industries giving rise to indebtedness secured by such
Assigned Receivables and Related Rights.

                  (b) In the event (but only to the extent) that the transfer,
assignment and conveyance of Assigned Receivables and Related Rights hereunder
is characterized by a court or other Governmental Authority as a loan rather
than a sale, Indian Industries shall be deemed hereunder to have granted to the
Buyer, and Indian Industries hereby grants to the Buyer, a security interest in
all of Indian Industries' right, title and interest in, to and under all of the
Assigned Receivables and Related Rights, whether now or hereafter owned,
existing or arising. Such security interest shall secure all of Indian
Industries' obligations (monetary or otherwise)

                                      -2-
<PAGE>   5

arising under, pursuant to or by virtue of this Agreement (including any loan
deemed to have been made to Indian Industries pursuant hereto), whether now or
hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent. The Buyer shall have, with respect to the property
described in this Section 1.3, and in addition to all the other rights and
remedies available to the Buyer under this Agreement and applicable law, all the
rights and remedies of a secured party under the UCC, and this Agreement shall
constitute a security agreement under applicable law. To the extent permitted by
applicable law, Indian Industries hereby authorizes Buyer to file any financing
statements, amendments, continuation statements, or the like, as Buyer may deem
necessary or appropriate with any filing jurisdiction, signed by Buyer alone.

         Section 1.4 Consideration for Purchases. On the terms and subject to
the conditions set forth in this Agreement, the Buyer agrees to make all
Purchase Price payments to Indian Industries in accordance with Article 3.

ARTICLE 2 CALCULATION OF PURCHASE PRICE

         Section 2.1 Calculation of Purchase Price. The "Purchase Price" (to be
paid to Indian Industries in accordance with the terms of Article 3) for the
Assigned Receivables and the Related Rights shall be determined in accordance
with the following formula:

                  PP       =        AR x FMVD

                           where:

                  PP       =        Purchase Price (to be paid to Indian
                                    Industries in accordance with the terms
                                    of Article 3) as calculated on the relevant
                                    Determination Date;

                  AR       =        For purposes of calculating the Purchase
                                    Price for Assigned Receivables on each
                                    Determination Date, the aggregate Unpaid
                                    Balance of the Receivables that will be sold
                                    to the Buyer; and

                  FMVD     =        "Fair Market Value Discount Factor" on the
                                    Determination Date, which shall equal the
                                    discount factor as determined pursuant to an
                                    economic transfer pricing study as
                                    calculated by an independent third party
                                    acceptable to both Buyer and Indian
                                    Industries. Buyer and Indian Industries
                                    agree that until otherwise agreed the
                                    initial FMVD shall equal 95% based upon the
                                    economic transfer pricing study that has
                                    been previously agreed to by Buyer and
                                    Indian Industries.

ARTICLE 3  PAYMENT OF PURCHASE PRICE

         Section 3.1 The Purchase Price Payment. Buyer shall pay the purchase
price for the Initial Sale of Assigned Receivables sold under this Agreement by
making a demand note in

                                      -3-
<PAGE>   6

favor of Indian Industries in the form of Exhibit 3, attached hereto and made a
part hereof. For all sales of Assigned Receivables sold under this Agreement
other than the Initial Sale, Buyer shall pay the Purchase Price of Assigned
Receivables by depositing into such account as Indian Industries shall specify
in immediately available funds, as specified in Section 3.3.

         Section 3.2 Ineligible Receivables, Repurchase, Etc.

                  (a) If any of the representations or warranties in Section 5.1
(i) or (t) hereto is not true with respect to any Receivable (each such
Receivable, an "Ineligible Receivable"), Indian Industries shall deliver and pay
to the Servicer in same day funds an amount equal to the full Unpaid Balance of
such Assigned Receivable for application by the Servicer to the same extent as
if Collections of such Unpaid Balance had actually been received on such date.

                  (b) In the event that Indian Industries has paid to the Buyer
the full Unpaid Balance of any Assigned Receivable pursuant to this Section 3.2,
the Buyer shall reconvey such Assigned Receivable and all Related Rights with
respect thereto to Indian Industries, without recourse, representation or
warranty, free and clear of all Liens created by the Buyer; such reconveyed
Assigned Receivables and all Related Rights shall no longer be subject to the
terms of this Agreement (including any obligation to turn over Collections with
respect thereto).

         Section 3.3 Payments and Computations, Etc.

                  (a) All amounts to be paid or deposited by Indian Industries
hereunder shall be paid or deposited no later than 2:00 p.m. (Central time) on
the day when due in same day funds. All amounts received after 2:00 p.m.
(Central time) will be deemed to have been received on the immediately
succeeding Business Day.

                  (b) All amounts to be paid or deposited by the Buyer hereunder
shall be paid or deposited no later than 2:00 p.m. (Zurich time) on the day when
due in same day funds. All amounts received after 2:00 p.m. (Zurich time) will
be deemed to have been received on the immediately succeeding Business Day.

                  (c) Whenever any payment or deposit to be made hereunder shall
be due on a day other than a Business Day, such payment or deposit shall be made
on the next succeeding Business Day.

ARTICLE 4 CONDITIONS TO PURCHASE

         Section 4.1 Conditions Precedent to Effectiveness of this Agreement.
The effectiveness of this Agreement is subject to the conditions precedent that
the Buyer shall have received each of the following, on or before the date of
the first purchase hereunder, each in form and substance (including the date
thereof) satisfactory to the Buyer.

                  (a) A certificate of the Secretary of Indian Industries
certifying (i) a copy of the resolutions of its Board of Directors approving
this Agreement and the other Transaction Documents to be delivered by it
hereunder and the transactions contemplated hereby; (ii) the names and true
signatures of the officers authorized on its behalf to sign this Agreement and
the

                                      -4-
<PAGE>   7

other Transaction Documents to be delivered by it hereunder (on which
certificate the Buyer may conclusively rely until such time as the Buyer shall
receive from Indian Industries, as the case may be, a revised certificate
meeting the requirements of this subsection (a)); (iii) a copy of its by-laws as
then in effect; and (iv) all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement and
the other Transaction Documents;

                  (b) The Articles of Incorporation of Indian Industries, duly
certified by the Secretary of State of Indiana, as of a recent date;

                  (c) Signed original copies or time stamped receipt copies, of
the proper financing statements (Form UCC-1) that have been duly executed and
name Indian Industries as the debtor and seller and the Buyer as the secured
party and purchaser of the Assigned Receivables and the Related Rights or other,
similar instruments or documents, as may be necessary or, in Buyer's opinion,
desirable under the UCC or any comparable law of all appropriate jurisdictions
to perfect the Buyer's ownership interest in all Assigned Receivables and
Related Rights in which an ownership interest is assigned to it hereunder;

                  (d) A certificate from an officer of Indian Industries to the
effect that Indian Industries has placed on the most recent, and have taken all
steps reasonably necessary to ensure that there shall be placed on subsequent,
summary master control data processing reports of Indian Industries the
following legend (or the substantive equivalent thereof):

                  THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO INDIAN -
                  MARTIN AG PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED
                  AS OF MAY 15, 2000, AS AMENDED FROM TIME TO TIME, BETWEEN
                  INDIAN INDUSTRIES, INC. AND INDIAN- MARTIN AG.

                  (e) Such other agreements, instruments, UCC financing
statements, certificates, opinions and other documents as the Buyer may
reasonably request.

         Section 4.2 Conditions Precedent to All Purchases. Each purchase under
this Agreement is subject to the condition precedent that the agreement of
Indian Industries to sell Assigned Receivables and Related Rights, and the
agreement of the Buyer to purchase Assigned Receivables and Related Rights,
shall not have terminated pursuant to Sections 8.5 and 9.3 of this Agreement,
and shall be subject further to the conditions precedent that the
representations and warranties contained in Article 5 are correct on and as of
such day as though made on and as of such day and shall be deemed to have been
made on such day (except that any such representation or warranty that is
expressly stated as being made only as of a specified earlier date shall be true
and correct in all material respects as of such earlier date).

         Section 4.3 Certification as to Representations and Warranties. Indian
Industries, by accepting the Purchase Price paid for each purchase of Assigned
Receivables and Related Rights on any day, shall be deemed to have certified
that its representations and warranties contained in Article 5 are true and
correct on and as of such day, with the same effect as though made on and as of
such day.

                                      -5-
<PAGE>   8

         Section 4.4 Effect of Payment of Purchase Price. Upon the payment of
the Purchase Price for any purchase of Assigned Receivables and Related Rights,
absolute title to such Assigned Receivables and Related Rights shall vest in the
Buyer, whether or not the conditions precedent to such purchase were in fact
satisfied; provided that the Buyer shall not be deemed to have waived any claim
it may have under this Agreement for the failure by Indian Industries in fact to
satisfy any such condition precedent unless the underlying Assigned Receivable
has been repurchased from the Buyer by the Seller.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

         Section 5.1 Representations and Warranties. In order to induce the
Buyer to enter into this Agreement and to make purchases thereunder, Indian
Industries hereby represents and warrants as follows:

                  (a) Organization and Good Standing. Indian Industries has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State ofIndiana, with power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted.

                  (b) Due Qualification. Indian Industries is duly qualified to
do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such qualification,
licenses or approvals except where the failure to so qualify or have such
licenses or approvals could not reasonably be expected to have a Seller Material
Adverse Effect.

                  (c) Power and Authority; Due Authorization. Indian Industries
(i) has all necessary power, authority and legal right to (A) execute and
deliver this Agreement and the other Transaction Documents to which it is a
party, (B) carry out the terms of the Transaction Documents to which it is a
party, and (C) sell and assign the Assigned Receivables and Related Rights on
the terms and conditions herein provided and (ii) has duly authorized by all
necessary corporate action the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party.

                  (d) Binding Obligations. This Agreement constitutes, and each
other Transaction Document to be signed by Indian Industries when duly executed
and delivered will constitute, a legal, valid and binding obligation of Indian
Industries enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.

                  (e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which
Indian Industries is a party and the

                                      -6-
<PAGE>   9

fulfillment of the terms hereof and thereof will not (i) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under Indian Industries'
articles of incorporation or by-laws or any loan or credit agreement, other
agreement, indenture, lease or instrument of Indian Industries, or by which it
or its properties may be bound, but only to the extent that such conflict,
breach or default is reasonably likely to have a Seller Material Adverse Effect,
(ii) result in the creation or imposition of any Lien upon any of Indian
Industries' properties pursuant to the terms of any such loan or credit
agreement, other agreement, indenture, lease or instrument, other than the
Transaction Documents, or (iii) violate any requirements of law enacted by any
Governmental Authority.

                  (f) No Proceedings. There is no litigation, proceeding or
investigation pending or, to the best of Indian Industries' knowledge,
threatened, before any Governmental Authority or arbitrator (i) asserting the
invalidity of this Agreement or any other Transaction Document to which Indian
Industries is a party, (ii) seeking to prevent the sale and assignment of the
Receivables and Related Rights, the collectibility of any of the Receivables or
the consummation of any of the other transactions contemplated by this Agreement
or any other Transaction Document, or (iii) seeking any determination or ruling
that could reasonably be expected to have a Seller Material Adverse Effect.

                  (g) Government Approvals. No action by a Governmental
Authority is required for the due execution, delivery and performance by Indian
Industries of this Agreement or any other Transaction Document to which it is a
party.

                  (h) Securities Exchange Act. No proceeds of any purchase will
be used to acquire any equity security of a class which is registered pursuant
to Section 12 of the Securities Exchange Act of 1934.

                  (i) Quality of Title; Valid Sale; Etc. Immediately prior to
any sale or contribution to the Buyer under this Agreement, Indian Industries is
the legal and beneficial owner of each of the Assigned Receivables and the
Related Rights free and clear of any Lien; and upon each purchase or
contribution the Buyer shall acquire a valid and enforceable ownership interest
in each Assigned Receivable and in the Related Rights then existing or
thereafter arising with respect thereto, free and clear of any Lien. Each
Assigned Receivable constitutes an "account" as such term is defined in the UCC.
No effective financing statement or other instrument similar in effect covering
any Assigned Receivable or Related Rights with respect thereto is on file in any
recording office, except those filed in favor of the Buyer pursuant to this
Agreement.

                  (j) Accuracy of Information. Each report, information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of it to the Buyer in connection with
this Agreement is or will be correct in all material respects as of its date or
as of the date so furnished, and no such item contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not materially misleading.

                                      -7-
<PAGE>   10

                  (k) Offices. The principal place of business and chief
executive office of Indian Industries are located at the address of Indian
Industries referred to in Section 9.2, and the offices where Indian Industries
keeps all its books, records and documents evidencing or relating to Assigned
Receivables are located at the address of Indian Industries referred to in
Section 9.2 (or in jurisdictions where all action required by Section 8.4 has
been taken and completed).

                  (l) Bulk Sales Act. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.

                  (m) Margin Regulations. The use of all funds obtained by
Indian Industries under this Agreement will not conflict with or contravene any
of Regulation T, U or X promulgated by the Federal Reserve Board from time to
time.

                  (n) Maintenance of Books and Records. Indian Industries has
accounted for and will account for each sale of Assigned Receivables and Related
Rights in its books and financial statements as sales, consistent with generally
accepted accounting principles.

                  (o) Credit and Collection Policy. Indian Industries has
complied in all material respects with, and as Servicer will continue to comply
with, the Credit and Collection Policy and practices with regard to each
Assigned Receivable.

                  (p) Solvency. Indian Industries is solvent; and at the time of
(and immediately after) each sale pursuant to this Agreement it shall be
solvent.

                  (q) Compliance with Transaction Documents. Indian Industries,
as Servicer and/or Seller, has complied with all of the terms, covenants and
agreements contained in this Agreement and the other Transaction Documents
applicable to it.

                  (r) Corporate Name. Indian Industries' complete corporate name
is set forth in the preamble to this Agreement, and Indian Industries does not
use and has not during the last six years used any other corporate name, trade
name, doing business name or fictitious name other than the trade name "Indian
Industries".

                  (s) Investment Company Act. It is not, and is not controlled
by, an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended.

                  (t) Eligible Receivables. Each Assigned Receivable sold by
Indian Industries to the Buyer hereunder as of the date of its sale hereunder is
in fact an Eligible Receivable.

ARTICLE 6 COVENANTS

         Section 6.1 Affirmative Covenants. From the date hereof until the
earlier of (a) collection by the Buyer of all Assigned Receivables, and (b) six
(6) months after a Purchase Termination Event:

                                      -8-
<PAGE>   11

                  (a) Compliance with Laws, Etc. Indian Industries will comply
in all material respects with all requirements of law enacted by any
Governmental Authority, including those with respect to the Assigned Receivables
and the related Contracts and Related Rights, except where noncompliance could
not reasonably be expected to have a Seller Material Adverse Effect.

                  (b) Preservation of Corporate Existence. Indian Industries
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction where
the failure to preserve and maintain such existence, rights, franchises,
privileges and qualification could reasonably be expected to have a Seller
Material Adverse Effect.

                  (c) Audits. (i) Indian Industries will at any time and from
time to time during regular business hours, but only upon the delivery of three
(3) Business Day's prior notice thereof to Indian Industries, permit the Buyer
or any of its respective agents, representatives or lenders, (A) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in its possession or under its
control relating to Assigned Receivables, (B) to visit its offices and
properties for the purpose of examining such materials described in clause
(i)(A) above, and to discuss matters relating to Assigned Receivables or its
performance hereunder with any of its officers or employees having knowledge of
such matters, and (C) to verify the existence and amount of the Assigned
Receivables; and (ii) without limiting the provisions of clause (i) above, from
time to time on request of the Buyer, permit certified public accountants or
other auditors acceptable to the Buyer to conduct, at Indian Industries'
expense, a review of Indian Industries' books and records with respect to the
Assigned Receivables.

                  (e) Location of Records. Indian Industries will keep its
principal place of business and chief executive office, and the offices where it
keeps its records concerning the Assigned Receivables, all related Contracts and
other Related Rights and all other agreements related to such Assigned
Receivables (and all original documents relating thereto), at its address(es)
referred to in Section 9.2 or, upon 30 days' prior written notice to the Buyer,
at such other locations in the State of Indiana where all action required by
Section 8.4 shall have been taken and completed.

                  (f) Collections. Indian Industries in its capacity as the
Servicer, if instructed by AG, will instruct all Obligors to cause all
Collections to be sent to a Lock Box Account. In the event that Indian
Industries receives Collections directly from any Obligor, Indian Industries
shall deposit such Collections into a Lock Box Account by the end of the then
current four week accounting period of Indian Industries.

         Section 6.2 Negative Covenants. From the date hereof until the earlier
of (a) collection by the Buyer of all Assigned Receivables, and (b) six (6)
months after a Purchase Termination Event:

                  (a) Sales, Liens, Etc. Indian Industries will not sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Lien (other than the

                                      -9-
<PAGE>   12

Lien and security interest created by Section 1.3, above) upon or with respect
to, any Assigned Receivable or Related Rights or any interest therein.

                  (b) Extension or Amendment of Receivables. Indian Industries
will not, except as Servicer and as expressly permitted in any other Transaction
Document, extend, amend or otherwise modify the terms of any Assigned
Receivable; or amend, modify or waive any term or condition of any Contract
related to an Assigned Receivable.

                  (c) Change in Business or Credit and Collection Policy. Indian
Industries will not make any change in the character of its business or in the
credit and collection policy, which change could impair the collectibility of
any Assigned Receivable or otherwise adversely affect the interests or remedies
of the Buyer under this Agreement or any other Transaction Document unless such
change does not result in a Seller Material Adverse Effect.

                  (d) Change in Payment Instructions to Obligors. Indian
Industries will not make any change, or as the Servicer make any change, in its
instructions to Obligors regarding payments to be made to a post office box or a
wire transfer receipt account.

                  (e) Deposits to Special Accounts. Indian Industries will not
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Lock-Box Account any payments other than Collections of Assigned
Receivables.

ARTICLE 7  INDEMNIFICATION

         Section 7.1 Indemnities by Indian Industries. Without limiting any
other rights which the Buyer and each of its permitted assigns, officers,
directors, employees, agents, lenders or secured creditors (each of the
foregoing Persons being individually called a "Sale Indemnified Party") may have
hereunder or under applicable law, Indian Industries hereby agrees to indemnify
and hold harmless the Buyer and each Sale Indemnified Party from and against any
and all damages, losses, claims, judgments, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing collectively being called "Sale Indemnified Amounts") arising out of
or resulting from this Agreement (whether directly or indirectly) or the use of
proceeds of purchases or the purchase ownership of any Assigned Receivable or
Related Rights, excluding, however, (a) Sale Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of the Buyer
or such Sale Indemnified Party, (b) Sale Indemnified Amounts to the extent the
same include losses in respect of Assigned Receivables and reimbursement
therefor that would constitute credit recourse to Indian Industries for the
amount of any Assigned Receivable or Related Rights not paid by the Obligor for
credit reasons, or (c) any net income taxes or franchise taxes imposed on the
Buyer or such Sale Indemnified Party. Without limiting or being limited by the
foregoing, but subject to the exclusions set forth in the immediately preceding
sentence, Indian Industries shall pay on demand to the Buyer and each Sale
Indemnified Party any and all amounts necessary to indemnify and hold harmless
the Buyer and such Sale Indemnified Party from and against any and all Sale
Indemnified Amounts relating to or resulting from any of the following, with the
express understanding that no such claim shall arise solely due to the inability
of a particular Obligor to satisfy its obligations under a particular Assigned
Receivable because it lacks the financial resources to do so:

                                      -10-
<PAGE>   13

                           (i) the transfer or assignment (by operation of law
                  or otherwise) by Indian Industries of an interest in any
                  Assigned Receivable or Related Rights to any Person other than
                  the Buyer or the transfer and sale to the Buyer of any
                  Receivable other than an Eligible Receivable;

                           (ii) the failure of any information provided by
                  Indian Industries to the Buyer with respect to Assigned
                  Receivables or this Agreement to be true, correct and
                  complete;

                           (iii) the failure of any representation or warranty
                  or statement made or deemed made by Indian Industries (or any
                  of its officers), under or in connection with this Agreement
                  to have been true and correct when made or deemed made;

                           (iv) the failure by Indian Industries to comply with
                  any requirements of law enacted by any Governmental Authority
                  with respect to any Receivable or Related Rights or otherwise;
                  or the failure of any Assigned Receivable or Related Rights to
                  conform to any such requirement of law;

                           (v) the failure to vest and maintain vested in the
                  Buyer a valid and enforceable absolute ownership interest in
                  each Assigned Receivable at any time existing and the Related
                  Rights with respect thereto, free and clear of any Lien, other
                  than a Lien arising solely as a result of an act of the Buyer,
                  whether existing at the time of purchase of such Assigned
                  Receivable or at any time thereafter;

                           (vi) the failure of Indian Industries to have filed,
                  or any delay in filing, financing statements or other similar
                  instruments or documents under the UCC of any applicable
                  jurisdiction or other applicable laws with respect to any
                  Assigned Receivables and the Related Rights in respect
                  thereof, whether at the time of any purchase or at any
                  subsequent time;

                           (vii) any dispute, claim, counterclaim, offset or
                  defense (other than discharge in bankruptcy) of the Obligor to
                  the payment of any Assigned Receivable (including, without
                  limitation, a defense based on such Assigned Receivable or the
                  related Contract not being a legal, valid and binding
                  obligation of such Obligor enforceable against it in
                  accordance with its terms), or any other claim resulting from
                  the sale of the goods or services related to such Assigned
                  Receivable or the furnishing or failure to furnish such goods
                  or services;

                           (viii) any failure of Indian Industries to perform
                  its duties or obligations in accordance with the provisions
                  hereof or to perform its duties or obligations under any of
                  the Contracts;

                           (ix) any products liability claim or personal injury
                  or property damage suit or other claim, investigation,
                  litigation or proceeding of whatever sort arising

                                      -11-
<PAGE>   14

                  out of or in connection with merchandise, insurance or
                  services which are the subject of any Receivable or Contract;

                           (x) the commingling of Collections of Assigned
                  Receivables at any time with other funds;

                           (xi) any investigation, litigation or proceeding
                  related to this Agreement or the use of proceeds of purchases
                  or the ownership of any Assigned Receivable or Related Rights;

                           (xii) any tax or governmental fee or charge (but not
                  including taxes upon or measured by net income or representing
                  a franchise or doing business tax on such Sale Indemnified
                  Party), all interest and penalties thereon or with respect
                  thereto, and all out-of-pocket costs and expenses, including
                  the reasonable fees and expenses of counsel in defending
                  against the same, which may arise by reason of the purchase or
                  ownership of the Assigned Receivables generated by Indian
                  Industries or any Related Rights connected with any such
                  Assigned Receivables; or

                           (xiii) any failure by Indian Industries to pay any
                  taxes when due, including, without limitation, sales taxes or
                  excise taxes, payable in connection with the Assigned
                  Receivables.

ARTICLE 8  ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE ASSIGNED RECEIVABLES

         Section 8.1 Servicing of Assigned Receivables and Related Rights.
Consistent with the Buyer's ownership of the Assigned Receivables and the
Related Rights, the Buyer shall have the sole right to service, administer and
collect the Assigned Receivables, to assign such right and to delegate such
right to others. In consideration of the Buyer's purchase of the Assigned
Receivables and the Related Rights, Indian Industries agrees to cooperate fully
with the Buyer to facilitate the full and proper performance of such duties and
obligations for the benefit of the Buyer.

         Section 8.2 Rights of the Buyer; Enforcement Rights.

                  (a) Unless the underlying Assigned Receivables have been
repurchased by Indian Industries from the Buyer pursuant to Section 3.2, the
Buyer shall have no obligation to account for, to replace, to substitute or to
return any Assigned Receivables and Related Rights to Indian Industries. Unless
the underlying Assigned Receivables have been repurchased by the Buyer from
Indian Industries, the Buyer shall have no obligation to account for, or to
return to Indian Industries, Collections, or any interest, late fees and charges
or other finance charges collected pursuant thereto, without regard to whether
such Collections and charges are in excess of the Purchase Price for such
Assigned Receivables and Related Rights.

                  (b) The Buyer shall have the unrestricted right to further
assign, transfer,

                                      -12-
<PAGE>   15

deliver, hypothecate, grant Liens in, subdivide or otherwise deal with the
Receivables and Related Rights, and all of the Buyer's right, title and interest
in, to and under this Agreement, on whatever terms the Buyer shall determine.

                  (c) The Buyer shall have the sole right to retain any gains or
profits created by buying, selling or holding the Assigned Receivables and
Related Rights and, except as expressly set forth in the Transaction Documents,
shall have the sole risk of and responsibility for losses or damages created by
such buying, selling or holding.

                  (d) Indian Industries hereby authorizes the Buyer, and
irrevocably appoints the Buyer as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of Indian
Industries, which appointment is coupled with an interest, to take any and all
steps in the name of Indian Industries and on behalf of Indian Industries
necessary or desirable, in the determination of the Buyer, to collect any and
all amounts or portions thereof due under any and all Assigned Receivables or
Related Rights, including, without limitation, endorsing the name of Indian
Industries on checks and other instruments representing Collections and
enforcing such Assigned Receivables and Related Rights.

         Section 8.3 Responsibilities of Indian Industries .

         Anything herein to the contrary notwithstanding:

                  (a) Indian Industries agrees to deliver directly to the
Servicer (for the Buyer's account), by the end of the then current four week
accounting period of Indian Industries, any Collections that it receives, in the
form so received, and agrees that all Collections shall be deemed to be received
in trust for the Buyer and shall be maintained and segregated separate and apart
from all other funds and moneys of Indian Industries until delivery of the
Collections to the Servicer;

                  (b) Indian Industries in its capacity as the Servicer, if
instructed by AG, agrees to instruct all Obligors to cause all Collections to be
sent to a post office box that is the subject of a Lock-Box Agreement; and

                  (c) Indian Industries shall (i) perform all of its obligations
hereunder and under the Contracts related to the Assigned Receivables and
Related Rights to the same extent as if the Assigned Receivables and Related
Rights had not been sold hereunder, and the exercise by the Buyer or its
designee or assignee of the Buyer's rights hereunder or in connection herewith
shall not relieve Indian Industries from such obligations and (ii) pay when due
any taxes, including, without limitation, any sales taxes payable in connection
with the Assigned Receivables and their creation and satisfaction.
Notwithstanding anything to the contrary in this Agreement, the Buyer shall not
have any obligation or liability with respect to any Assigned Receivable or
Related Rights nor shall the Buyer be obligated to perform any of the
obligations of Indian Industries under any of the foregoing, other than a duty
to cooperate with Indian Industries in connection with the performance of its
obligations under this Agreement.

                                      -13-
<PAGE>   16

         Section 8.4 Further Action Evidencing Purchases. Indian Industries
agrees that from time to time, at its expense, it will execute and deliver all
further instruments and documents, and take all further reasonable action, in
order to perfect, protect or more fully evidence the purchase of the Assigned
Receivables and the Related Rights by the Buyer hereunder, or to enable the
Buyer to exercise or enforce any of its rights hereunder or under any other
Transaction Document as soon as reasonably possible. Indian Industries further
agrees from time to time, at its expense, promptly to take all action that the
Buyer may reasonably request in order to perfect, protect or more fully evidence
such purchase of the Assigned Receivables and the Related Rights or to enable
the Buyer to exercise or enforce any of its or their respective rights hereunder
or under any other Transaction Document in respect of the Assigned Receivables
and the Related Rights. Without limiting the generality of the foregoing Indian
Industries will:

                  (a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as the Buyer or its lender(s) may reasonably determine
to be necessary or appropriate; and

                  (b) mark the master data processing records evidencing the
Assigned Receivables and, if requested by the Buyer, to the extent reasonably
practicable, legend the related Contracts, to reflect the sale of the Assigned
Receivables and Related Rights pursuant to this Agreement.

         Indian Industries hereby authorizes the Buyer or its designee or
assignee to file, signed only by the Buyer, one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Assigned Receivables and Related Rights of Indian
Industries, in each case whether now existing or hereafter generated. If Indian
Industries fails to perform any of its agreements or obligations under this
Agreement, the Buyer or its designee or assignee may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the reasonable expenses of the Buyer or its designee or assignee incurred in
connection therewith shall be payable by Indian Industries under Section 7.1.

         Section 8.5 Purchase Termination Event. Either (i) an election by the
Seller to no longer sell Receivables and Related Rights to the Buyer hereunder
by delivery to the Buyer of a notice to that effect or (ii) an election by the
Buyer to no longer purchase Receivables and Related Rights from the Seller
hereunder by delivery to the Seller of a notice to that effect; such notice to
take effect on the Business Day after the day of receipt by the recipient of
such notice (in either case, a "Purchase Termination Event").

ARTICLE 9  MISCELLANEOUS

         Section 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or consent to any departure by Indian Industries therefrom shall
be effective unless in a writing signed by the Buyer and any lender of the Buyer
to which the Buyer shall have granted a Lien in, or assigned to, any of the
Assigned Receivables, and any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of the Buyer to exercise, and no delay in exercising, any right
hereunder shall operate

                                      -14-
<PAGE>   17

as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right.

         Section 9.2 Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise expressly stated herein, be in writing
(which shall include facsimile communication) and shall be personally delivered
or sent by certified mail, postage prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth under its name
below or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered, when received,
(b) if sent by certified mail, three (3) Business Days after having been
deposited in the mail, postage prepaid, (c) if sent by overnight courier, one
(1) Business Day after having been given to such courier, and (d) if transmitted
by facsimile, when sent, receipt confirmed by telephone or electronic means.

                  The Seller:         Indian Industries, Inc.
                                      817 Maxwell Avenue
                                      Evansville, Indiana 47717
                                      Attention:
                                                 ----------------------------
                                      Telephone:
                                                 ----------------------------
                                      Facsimile:
                                                 ----------------------------

                  AG:                 Indian-Martin AG
                                      Aegeristrasse 66
                                      6300, Zug, Switzerland
                                      Attention: President
                                      Telephone: 0041 41 720 34 45
                                      Facsimile:  0041 41 720 34 46

         Section 9.3 Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Buyer and Indian Industries and
their respective successors and permitted assigns. Indian Industries may not
assign its rights hereunder or any interest herein without the prior written
consent of the Buyer. The Buyer may not assign its rights hereunder or any
interest herein without the prior written consent of Indian Industries;
provided, that Indian Industries hereby approves of the Buyer's assignment of
its rights hereunder, either absolutely or as collateral, to Bank One, Indiana,
National Association, and its successors and assigns. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
date after the occurrence of any Purchase Termination Event on which Indian
Industries has received payment in full for all Assigned Receivables and Related
Rights conveyed pursuant to Section 1.1 hereof and has paid and performed all of
its obligations hereunder in full. The rights and remedies with respect to any
breach of any representation and warranty made by Indian Industries pursuant to
Article 5 shall be continuing and shall survive any termination of this
Agreement.

         Section 9.4 Governing Law and Jurisdiction.

                  (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED

                                      -15-
<PAGE>   18

IN ACCORDANCE WITH, 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, EXCEPT TO THE EXTENT THAT THE PERFECTION (OR THE
EFFECT OF PERFECTION OR NON-PERFECTION) OF THE INTERESTS OF THE BUYER IN THE
RECEIVABLES AND THE RELATED RIGHTS IS GOVERNED BY THE LAWS OF A STATE OR
JURISDICTION OTHER THAN THE STATE OF INDIANA.

                  (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF INDIANA OR ANY UNITED
STATES FEDERAL COURT, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
TRANSACTION DOCUMENT.

         Section 9.5 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.

         Section 9.6 Survival of Termination. The provisions of Section 1.4,
Article 7, Section 9.4, Section 9.7 and this Section 9.6 shall survive any
termination of this Agreement.

         Section 9.7 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH
OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

                                      -16-
<PAGE>   19

         Section 9.8 Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding of the parties hereto,
and supersede all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof.
The Exhibits to this Agreement shall be deemed incorporated by reference into
this Agreement as if set forth herein.

         Section 9.9 Headings. The captions and headings of this Agreement and
in any Exhibit hereto are for convenience of reference only and shall not affect
the interpretation hereof or thereof.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective duly authorized officers, as of the
date first above written.

                                           INDIAN INDUSTRIES, INC., AS SELLER

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

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

                                           INDIAN - MARTIN AG, AS BUYER

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

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

STATE OF INDIANA  )
                  )     ss:
COUNTY OF MARION  )

         The foregoing instrument was acknowledged before me this 16th day of
May, 2000, by John R. Wilson, the Secretary of Indian Industries, Inc., an
Indiana corporation, on behalf of the corporation.

                                           /s/ David R. Hamer
                                           -----------------------------------
                                           Notary Public - Signature

                                           David R. Hamer
                                           -----------------------------------
                                           (Printed Name)

My Commission Expires:    11/25/00
                       ---------------
My County of Residence:   Hamilton
                        --------------

                                      -17-
<PAGE>   20

STATE OF _____________     )
                           )       ss:
COUNTY OF ___________      )

         The foregoing instrument was acknowledged before me this _______ day of
May, 2000, by ___________________________, the ________________ of Indian-Martin
AG, a Swiss corporation, on behalf of the corporation.

                                               --------------------------------
                                               Notary Public - Signature

                                               --------------------------------
                                               (Printed Name)

My Commission Expires: ____________________
My County of Residence: ____________________

Official Certification

Seen for authentication of the above signature, affixed in our presence by

Mr. Lars Alexander Haussmann, Swiss citizen of Herrliberg ZH, according to his
Information residing in Zurich, Switzerland,
(who has identified himself by passport),

who, according to the extract shown to us from the Commercial Register dated
April 26, 2000, is entered in the Commercial Register of the canton of Zug as
member of the board of directors with the right to sign individually for the
Indian-Martin AG (Indian-Martin Ltd.), having its registered domicile in Zug,
Switzerland.

The Swiss law does not provide for the act of swearing.

Zurich 8, May 16, 2000/ih

                                                NOTARIAT RIESBACH-ZURICH

                                                /s/ Max Bodmer
                                                -------------------------------
                                                Max Bodmer, certifying officer

                                      -18-
<PAGE>   21

EXHIBIT 1

                                   DEFINITIONS

         As used in the Receivables Purchase Agreement, dated as of May 15,
2000, between Indian Industries, Inc. and Indian-Martin AG (the "Agreement"),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section and Exhibit references in the Agreement
are to Sections of and Exhibits to the Agreement. All accounting terms not
specifically defined herein shall be constructed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC in the
State of Indiana and not specifically defined herein, are used herein as defined
in Article 9. Unless the context otherwise requires, "or" means "and/or," and
"including" (and with correlative meaning "include" and "includes") means
including without limiting the generality of any description preceding such
term.

         "Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person.

         "Assigned Receivable" means any Receivable which as of any
Determination Date, Indian Industries sells to the Buyer.

         "Adverse Claim" means a lien, security interest, pledge or charge or
encumbrance of any kind other than a lien, pledge, security interest or other
charge or encumbrance, in favor of the Buyer.

         "Business Day" means any day on which (i) banks are not authorized or
required to remain closed in Indianapolis, Indiana and (ii) if this definition
of "Business Day" is used in connection with the Buyer, reference shall be to
any day on which banks are not authorized or required to remain closed in
Zurich, Switzerland.

         "Buyer" has the meaning assigned in the preamble to this Agreement.

         "Collections" means, with respect to any Assigned Receivables, (i) all
funds or other payment media or property that are received by any Person in
payment of any amounts owed in respect of such Assigned Receivable (including,
without limitation, finance charges, interest and all other charges), or applied
to amounts owed in respect of such Assigned Receivable (including, without
limitation, insurance payments and net proceeds of the sale or other disposition
of repossessed goods or other collateral or property of the Obligor or any
Person directly or indirectly liable for the payment of such Assigned Receivable
and available to be applied thereon) and (ii) all other proceeds of such
Assigned Receivable.

         "Contract" means, with respect to any Receivable, any all contracts,
understandings, instruments, agreements, invoices, notes or other writings
pursuant to which such Receivable arises or which evidences such Receivable or
under which any Obligor becomes or is obligated to make payment in respect of
such Receivable.

                                      -19-
<PAGE>   22

         "Credit and Collection Policy" means those receivables credit and
collection policies and practices of Seller in effect on the date of this
Agreement, as modified from time to time.

         "Determination Date" shall mean any date on which Assigned Receivables
are sold to the Buyer.

         "Eligible Receivables" means, at any date a determination thereof is to
be made, those Receivables of Indian Industries for which Indian Industries
shall have furnished to the Buyer information adequate for purposes of
identification at all times and in form and substance as may be requested by the
Buyer; provided however, that a Receivable shall not constitute an Eligible
Receivable 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
Indian Industries 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 Buyer does not have
an interest; (g) is an account receivable due from any Affiliate of Indian
Industries 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 Buyer
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
Buyer; or (i) is an account receivable which has been charged-off by Indian
Industries. 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
Indian Industries from that accounts receivable debtor shall constitute an
Eligible Receivable.

         "Fair Market Value Discount Factor" shall have the meaning assigned to
such term in Section 2.1 hereof.

         "Governmental Authority" means any court or any federal, state,
municipal, local or other department, commission, board, bureau, agency, public
authority, instrumentality or any arbitrator.

         "Ineligible Receivable" shall have the meaning assigned to such term in
Section 3.2(a) hereof.

                                      -20-
<PAGE>   23

         "Initial Sale" means the first and earliest sale of Assigned
Receivables made by Indian Industries to Buyer pursuant to this Agreement. There
can be only one Initial Sale under this Agreement.

         "Lien" means any security interest, mortgage, pledge, assignment, or
voluntary or involuntary lien, charge or other encumbrance of any kind,
including interests of vendors or lessors under conditional sale contracts or
capital leases.

         "Lock-Box Account" means an account maintained at a bank or other
financial institution for the purpose of receiving collections with respect to
the Assigned Receivables.

         "Lock-Box Agreement" means an agreement between the Buyer and each
Lock-Box Bank.

         "Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.

         "Obligor" means, with respect to any Receivable, the Person obligated
to make payments pursuant to the Contract relating to such Receivable.

         "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereor.

         "Purchase Price" shall have the meaning assigned to such term in
Section 2.1 hereof.

         "Purchase Termination Event" shall have the meaning assigned to such
term in Section 8.5 hereof.

         "Receivable" means any indebtedness and any other obligations owed to
the Seller by, or any rights of the Seller to payments from or on behalf of, an
Obligor, which constitutes an account arising in connection with the sale of
goods or services by the Seller, and includes, without limitation, the
obligation to pay any finance charges, fees and other charges with respect
thereto. Indebtedness and other obligations arising from any one transaction,
including, without limitation, indebtedness and other obligation represented by
an individual invoice or Contract, shall constitute a Receivable separate from a
Receivable arising from any other transaction.

         "Related Property" means, with respect to any Receivable:

                  (i) all of the Seller's interest in any goods (including
returned goods), and documentation or title evidencing the shipment or storage
of any goods (including returned goods) relating to any sale giving rise to such
Receivable;

                  (ii) all other security interests or liens and property
subject thereto from time

                                      -21-
<PAGE>   24

to time purporting to secure payment of such Receivable, whether pursuant to the
Contract relating to such Receivable or otherwise, together with all UCC
financing statements or similar filings signed by an Obligor relating thereto;
and

                  (iii) all guaranties, indemnities, insurance and other
agreements (including the related Contract) or arrangements of whatever
character from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise.

         "Related Rights" shall have the meaning assigned to such term in
Section 1.1(a) hereof.

         "Sale Indemnified Amounts" shall have the meaning assigned to such term
in Section 7.1 hereof.

         "Sale Indemnified Party" shall have the meaning assigned to such term
in Section 7.1 hereof.

         "Seller" has the meaning set forth in the preamble to the Agreement.

         "Seller Material Adverse Effect" means, with respect to any event or
circumstance

                  (i) a material adverse effect on the assets, business,
financial condition, prospects or operation of Indian Industries;

                  (ii) a material adverse effect on the ability of Indian
Industries to perform its obligations under this Agreement or any other
Transaction Document to which Indian Industries as the Seller or the Servicer,
in its capacity as such, is a party;

                  (iii) a material adverse effect on the validity or
enforceability as against Indian Industries of this Agreement or any other
Transaction Document to which Indian Industries, as the Seller or the Servicer
as such, is a party;

                  (iv) a material adverse effect on the status, existence,
vesting, validity, perfection, priority or enforceability of the Buyer's
interests in the Assigned Receivables and the Related Rights; or

                  (v) a material adverse effect on the validity, enforceability
or collectibility of more than _______ percent (___%) of the then outstanding
Assigned Receivables.

         "Servicer" means the Person who will collect the Assigned Receivables
on behalf of the Buyer. Indian Industries will be appointed by AG as the
Servicer pursuant to the Services Agreement.

         "Services Agreement" means the Services Agreement, dated as of even
date herewith, between AG and Indian Industries, wherein AG appoints Indian
Industries as the Servicer.

                                      -22-
<PAGE>   25

         "Transaction Documents" means this Agreement, the Services Agreement,
the Lock-Box Agreements (if any), and all other certificates, instruments, UCC
financing statements, reports, notices, agreements and documents executed or
delivered under or in connection with this Agreement, in each case as the same
may be amended, supplemented or otherwise modified or restated from time to time
in accordance with this Agreement.

         "UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.

         "Unpaid Balance" means the then outstanding principal balance thereof,
excluding therefrom any available reductions or adjustments, the amount of which
the Buyer and Seller have agreed upon, due to defective, rejected, returned,
repossessed or foreclosed goods, defective goods or rejected services or any
cash discount, adjustment or set off.

                                      -23-
<PAGE>   26

                                    EXHIBIT 2

                               PURCHASE STATEMENT

         This instrument is delivered to you pursuant to the Receivables
Purchase Agreement dated as of May 15, 2000, by and between Indian Industries,
Inc. and INDIAN-MARTIN AG (the "Agreement").

         1. The undersigned hereby sells, assigns and transfers, absolutely but
without recourse and with the covenants, warranties and indemnifications set
forth in the Agreement, to INDIAN - MARTIN AG pursuant to Article 1 of the
Agreement, all rights, title and interests of the Seller in, to and under the
Receivables sold herewith and all Related Rights (as such term is defined in the
Agreement) with respect thereto, for an aggregate purchase price of $__________,
payable in accordance with the provisions of Article 3 of the Agreement.

         [Include the following Paragraph 2 in the Purchase Statement prepared
with respect to the Initial Sale only:]

         2. The undersigned will retain the Receivables that have remained
unpaid for sixty-one (61) or more days after the original due date for payment
and which are identified on Schedule 1, attached hereto.

         3. This instrument shall become effective as of the date hereof upon
your acceptance.

                                                INDIAN INDUSTRIES, INC.

                                                By:
                                                   -----------------------------

                                                --------------------------------
                                                (Printed Name and Title)

Accepted as of ___________ ____, 2000.

INDIAN - MARTIN AG

By:
    --------------------------------

------------------------------------
(Printed Name and Title)

                                      -24-
<PAGE>   27

[Attach the following Schedule to the Purchase Statement prepared with respect
to the Initial Sale only:]

                                   SCHEDULE 1
                                       TO
                               PURCHASE STATEMENT
                            DATED AS OF MAY 15, 2000

Indian Industries, Inc. is hereby transferring as of May 15, 2000 to INDIAN
MARTIN AG certain Assigned Receivables. ________________________ is retaining
the Receivables that have remained unpaid for sixty-one (61) or more days after
the original due date for payment and which are set forth below bearing the
following customer name, invoice number and date:

                                      -25-
<PAGE>   28

                                    EXHIBIT 3

                                  SUBORDINATED
                                 PROMISSORY NOTE

$_____________    May 15, 2000
                                                           Indianapolis, Indiana

         1. FOR VALUE RECEIVED, the undersigned, INDIAN MARTIN AG, a corporation
incorporated under the laws of Switzerland ("Maker"), promises to pay to the
order of Indian Industries, Inc., a corporation incorporated under the laws of
Indiana ("Holder"), upon demand the principal sum of
_________________________________ Dollars ($_____________), for payment of
accounts receivable purchased pursuant to the terms of the Receivables Purchase
Agreement dated as of May 15, 2000 by and between Maker and Holder, as same may
be amended from time to time (the "Purchase Agreement"), together with interest
accrued on the unpaid principal balance from the date hereof at the Note Rate as
defined below, subject to adjustment.

         Accrued interest shall be payable annually on the first day of each
calendar year commencing January 1, 2001, and continuing on the first day of
each year thereafter, together with a final payment of all unpaid principal and
interest, together with any other sums due under this Note, upon demand of the
Holder.

         2. The Note Rate shall be at the Applicable Federal Rate in effect as
of the date hereof. The Applicable Federal Rate means the rate of interest per
annum determined periodically by the United States federal government pursuant
to Internal Revenue Code Section 1274.

         3. Interest shall be calculated on the basis of a 360 day year and
charged for twelve (12) thirty (30) day months.

         4. This Note may be prepaid in part or in full at any time without
premium or penalty. To do so, the Maker must give written notice to the Holder
of its intention to prepay this Note in full or in part pursuant to this
paragraph and shall specify therein the principal amount to be prepaid and the
date on which such prepayment shall occur. The amount which shall be paid to the
Holder in the event of such prepayment shall be the principal so prepaid plus
accrued interest thereon to the date of prepayment. Prepayments will be applied
first to accrued interest and then to principal.

         5. Maker shall pay all principal, interest, costs and expenses hereon,
including but not limited to attorneys' fees and costs, all without relief from
valuation and appraisement laws.

         6. All payments on account of the indebtedness evidenced by this Note
shall be first applied to the interest on the unpaid principal balance and the
remainder to principal.

                                      -26-
<PAGE>   29

         Payments are to be made at the office of Holder, Indian Industries,
Inc., 817 Maxwell Avenue, Evansville, Indiana 47717, or to such other address as
the Holder may in writing designate to the Maker from time to time. All payments
are to be made in immediately available funds.

         7. In addition to the breach ("Event of Default") of any of the terms
and conditions herein, the failure to pay any installment of principal or
interest hereunder when due or demanded and the continuance of such failure for
five days thereafter, time being of the essence, shall also be considered an
Event of Default. Upon the occurrence of an Event of Default (i) the outstanding
principal balance hereunder at the sole option of the Holder and without further
demand or notice of any kind (which are hereby expressly waived), may become
immediately due and payable, and such amounts, together with all arrearages of
interest, shall then bear interest at a rate per annum three percent (3%) in
excess of the then applicable Prime Rate, (ii) the Maker will pay to the Holder
all attorneys' fees, court costs and expenses incurred by the Holder in
connection with the Holder's efforts to collect such indebtedness, and (iii) the
Holder may exercise from time to time any of the rights and remedies available
to the Holder under applicable law and/or the Purchase Agreement.

         8. In no event shall the interest rate hereunder exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in
a final determination, deem applicable hereto. In the event that a court
determines that the Holder has received interest hereunder in excess of the
highest rate applicable hereto, such excess interest shall be applied as a
principal payment and/or refunded to the Maker.

         9. No delay or omission of the holder of this Note to exercise any
right or power arising from any Event of Default herein shall impair any such
right or power or be considered to be a waiver of any other right or power or of
any such default or any acquiescence therein nor shall the action or nonaction
of the Holder in case of default on the part of the Maker impair any right or
power resulting therefrom. A waiver of a right or remedy or of an Event of
Default on one occasion shall not be construed as a bar or waiver on any other
occasion. No waiver shall be effective unless made in a signed writing. If any
provision of this Note is held invalid, that provision will be ineffective to
the extent of such invalidity, without invalidating the remainder of that
provision or the other provisions of this Note.

         10. The Maker and all endorsers, sureties, guarantors and all others
who are or may become liable for all or any part of this obligation hereby waive
presentment, demand for payment, notice of default or dishonor, notice of
protest, and protest, and all other notices or demands in connection with the
delivery, acceptance, performance, default, endorsement or guaranty of this
Note. All such persons hereby consent to any number of renewals or extensions of
the time of payment hereof and to any changes in the interest rate and to any
releases of collateral which the Holder at any time may grant or agree to,
without notice to such persons. Any such renewals or extensions may be made
without notice to any of said parties and without affecting their liability.

                                      -27-
<PAGE>   30

                                       -1-

         11. This Note will be governed and construed in accordance with the
laws of the State of Indiana. MAKER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY
WITH RESPECT TO ALL MATTERS ARISING OUT OF THIS NOTE.

         12. This Note is subject to the terms of a Standby and Subordination
Agreement and an Offset Waiver Agreement, each dated as of May 15, 2000 in favor
of BANK ONE, INDIANA, NATIONAL ASSOCIATION (the "Bank"), to which reference is
hereby made, restricting the rights of the maker, drawer or any guarantor, and
of any holder, with respect to payments on account of the principal and interest
hereof and subordinating the indebtedness evidenced hereby to the interests of
the Bank and waiving offset and certain related rights.

                                           MAKER:

                                           INDIAN-MARTIN AG

                                           By:
                                              ----------------------------------

                                           Title:
                                                 -------------------------------

STATE OF _____________  )
                        )       ss:
COUNTY OF ___________   )

         The foregoing Subordinated Promissory Note was acknowledged before me
this _______ day of _________, 20___, by ___________________________, the
________________ of Indian-Martin AG, a Swiss corporation, on behalf of the
corporation.

                                           ------------------------------------
                                           Notary Public

                                      -28-

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