Document:

<PAGE>
                                                                    EXHIBIT 10.1

                             RE Investments III, LLC
                              BANK ESCROW AGREEMENT

Vestin Mortgage, Inc., a Nevada corporation, is the manager of RE Investments
III, LLC, a Nevada limited liability company (the "Company"). The Company is an
issuer and registrant for an offering of shares of limited liability company
interest (the "Shares") under a Registration Statement on Form S-11, filed with
the Securities and Exchange Commission on __, 2003. The Shares will be offered
and sold by Vestin Capital, Inc., a Nevada corporation (the "Dealer/Manager")
and other securities broker-dealers who participate with the Dealer/Manager in
the offering of the Shares.

The terms of the offering require that the payments of the purchase price of the
first 1,000,000 shares sold in the offering ($10,000,000) be placed in a bank
escrow account. This Escrow Agreement ("Agreement") sets forth the terms and
conditions under which, U.S.Bank National Association (referred to herein as "US
Bank" or "you" or "Your" will hold such funds (the "Required Proceeds") as the
Escrow Agent who is hereby appointed by the Company and the Dealer/ Manager for
the offering to hold and distribute the Required Proceeds.

1.    Persons subscribing to purchase the Shares will be instructed by the
      Dealer/Manager or any participating broker-dealers to remit the purchase
      price in the form of checks, drafts or money orders (herein called
      "Instruments of payment") payable to the order of or funds wired in favor
      of "US Bank as Escrow Agent" until such time as the 1,000,000 shares have
      been sold and the $10,000,000 received. By noon of the next business day
      after receipt of instruments of payment from the offering, the Manager
      will send to US Bank: (a) each accepted subscriber's name, address, number
      of shares purchased and purchase price remitted ("Evidence of
      Subscriptions"), and (b) the instruments of payment from such subscribers
      for deposit into the deposit account entitled "US Bank as Escrow Agent for
      RE Investments III, LLC", which deposit will occur within one business day
      after you receive such materials. The credit to the account will be
      handled according to US Bank's normal deposit procedures and policies.

2.    The aforesaid instruments of payment are to be promptly processed for
      collection by US Bank following deposit by the Manager for the Company
      into the Escrow Account. The proceeds thereof are to be held in the Escrow
      Account until such funds are either returned to the subscribers in
      accordance with paragraph 3 hereof or otherwise disbursed in accordance
      with paragraph 6 hereof. In the event any of the instruments of payment
      are returned to US Bank for non-payment prior to receipt of the Required
      Proceeds, US Bank shall promptly notify the Manager in writing of such
      non-payment, and is authorized to debit the Escrow Account in the amount
      of such return payment as well as interest earned on the investment
      represented by such payment, less applicable fees assessed by US Bank for
      a returned deposited item.

                                     Page 1
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3.    In the event that at the close of US Bank's business on __________, 2003
      (the "Expiration Date") you are not in receipt of Evidence of
      Subscriptions, and instruments of payment dated not later than that date
      (or actual wired funds), for the purchase of Shares providing for total
      purchase proceeds that equal or exceed the required Proceeds (exclusive of
      any funds received from subscriptions for shares from entities, which we
      have notified you are affiliated with the Company or Manager and their
      affiliates) or in the event that instruments of payment are returned to
      the Escrow Agent for non-payment and the subtraction, to the account
      pursuant to paragraph 2 above reduces the amount in the account to less
      than the capital required, you shall promptly notify the Manager that such
      instruments of payment have not been received by you.

      Promptly following the Expiration Date, and in any event no later than ten
      business days after the Expiration Date, US Bank shall promptly return by
      check the funds deposited in the Escrow Account, or shall return the
      instruments of payment delivered to you if such instruments have not been
      processed for collection prior to such time, directly to each subscriber
      at the address given by the Company.

      Included in the remittance shall be a proportionate share of the income
      earned in the account allocable to each subscriber's investment in
      accordance with the terms and conditions specified in paragraph 7 hereof,
      except that in the case of subscribers who have not provided to US Bank an
      executed form W-9, you shall withhold thirty-one percent (31%) of the
      earnings attributable to those subscribers in accordance with IRS
      Regulations. In the event US Bank receives an executed Form W-9 from a
      subscriber after you have returned such subscriber's proceeds, net of the
      thirty-one percent (31%) withholding, you shall promptly refund by your
      check the amount withheld to such subscriber. Notwithstanding the
      foregoing, you shall not be required to remit any payments until funds
      represented by such payments have been collected by you.

      In the event that the Company rejects any subscription for which US Bank
      has already collected funds, you will be so informed in writing by the
      Manager to promptly issue a refund check to the rejected subscriber. If
      the Manager rejects any subscription for which you have not yet collected
      funds but have submitted the subscriber's check for collection, you shall
      promptly issue a check in the amount of the subscriber's check to the
      rejected subscriber after such funds clear. If you have not yet submitted
      a rejected subscriber's check for collection, you shall promptly remit the
      subscriber's check directly to the subscriber.

4.    Following receipt by US Bank of cash and instruments of payment (or wired
      funds) of the Required Proceeds prior to the Expiration Date, you shall
      notify the Company in writing within five business day when such funds
      have been collected through normal banking channels and deposited in the
      Escrow Account.

                                     Page 2
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5.    Prior to the disbursement of funds deposited in the Escrow Account in
      accordance with the provisions of paragraph 3 or 6 hereof, US Bank shall
      invest all of the funds deposited in the Escrow Account only in
      investments permissible under SEC Rule 15c2-4(as defined below), and you
      are further authorized and you agree to reinvest all earnings and interest
      derived therefrom in any of the investments specified below. In the event
      that instruments of payment are returned to you for nonpayment, you are
      authorized to debit the Escrow Account in accordance with paragraph 2
      hereof. Escrow Agent will have no liability for any loss of interest or
      penalties assessed if an investment is liquidated before maturity.

      "Authorized Investments" represents any bank account, including savings
      accounts, money market accounts or certificates of deposit of national or
      state banks that have deposits insured by the Federal Deposit Insurance
      Corporation including money market accounts and certificates of deposits
      of any bank acting as a depository or custodian for any such funds,
      including, without limitation, such money market accounts or certificates
      or instruments of US Bank, which mature on or before the Expiration Date,
      unless such instruments cannot be readily sold or otherwise disposed of
      for cash by the Expiration Date without any dissipation of the offering
      proceeds invested.

      The following securities are not permissible investments: money-market
      mutual funds; corporate equity or debt securities; repurchase agreements;
      banker's acceptances; commercial paper; and municipal securities.

6.    All disbursements from the Escrow Account, except for disbursements under
      the provisions of paragraph 3 hereof, shall be made by US Bank only
      pursuant to the provisions of this paragraph 6. Except for disbursements
      authorized upon court order, you shall hold all funds in the Escrow
      Account until (i) the date checks for Required Proceeds have cleared
      normal banking channels after receipt by you of the Required Proceeds, and
      (ii) receipt of letter instructions from the Company directing
      disbursements of such funds to the Company.

      In disbursing such funds, you are authorized to rely solely upon such
      letter instructions which you receive from the Company whether or not such
      instructions are correct, true or authentic; provided that, if in your
      opinion such letter instructions from the Company are unclear, you are
      authorized to rely upon the legal counsel to the Company in distributing
      such funds to the effect that distribution of the funds is authorized by
      the letter instructions of the Company and that distribution of the funds
      in that manner is authorized by and in compliance with such letter.

      However, you shall not be required to disburse any funds attributable to
      instruments of payment which have not been collected by you, provided that
      you shall use your best efforts to promptly collect such funds after your
      receipt of disbursement instructions from the Company in accordance with
      this paragraph, and shall disburse such funds in compliance with the
      disbursement instructions from the Company.

                                     Page 3
<PAGE>
7.    In the event the offering of Shares terminates prior to receipt of the
      Required Proceeds, income earned on subscription proceeds deposited in the
      Escrow Account ("Gross Escrow Income") minus the total escrow expenses
      ("Net Escrow Income") shall be remitted to subscribers in compliance with
      paragraph 3. Each subscriber's pro rata portion of Net Escrow Income shall
      be determined as follows: The total amount of Net Escrow Income shall be
      multiplied by a fraction, the numerator of which is determined by
      multiplying the number of Shares purchased by said subscriber times the
      number of days said subscriber's proceeds are invested prior to
      termination of the offering, and the denominator of which is the total of
      the numerators for all such subscribers. Notwithstanding the foregoing,
      escrow expenses may be deducted from the Escrow Account only to the extent
      of Gross Escrow Income, and the Manager shall reimburse the Escrow Agent
      for any escrow expenses in excess of such amount. US Bank shall promptly
      remit all such Net Escrow Income in accordance with paragraph 3.

8.    As compensation for serving as Escrow Agent hereunder, US Bank shall
      receive a fee, as set forth on Schedule A attached hereto.

9.    US Bank, in performing any of its duties hereunder, shall not incur any
      liability to anyone for any damages, losses or expenses, except for
      willful default, breach of trust, or gross negligence, and accordingly you
      shall not incur any such liability with respect to any action taken or
      omitted (1) in good faith upon advice of your counsel given with respect
      to any question relating to your duties and responsibilities under this
      Agreement, or (2) in reliance upon any instrument, including any written
      instrument or instruction provided for in this Agreement, not only as to
      its due execution and validity and effectiveness of its provisions but
      also as to the truth and accuracy of information contained therein, which
      you shall in good faith believe to be genuine, and (3) to have been signed
      or presented by a proper person or persons and to conform to the
      provisions of this Agreement. You have no duty under this Agreement to
      ascertain or assure that the Company shall be in compliance with the terms
      and conditions of the offering of the Shares.

10.   Company covenants to defend and indemnify US Bank as Escrow Agent, its
      directors, officers, employees and agents harmless from any and all
      losses, liabilities, claims, damages, costs or expenses (including without
      limitation reasonable attorney's fees and disbursements) suffered or
      incurred by it arising out of or in connection with Escrow Agent's status
      as a party to and in the administration of this Agreement (including but
      not limited to the costs and expenses of defending against any claim of
      liability in connection therewith), or in connection with Escrow Agent's
      performance (excluding breach of trust, gross negligence or willful
      misconduct) of any of the obligations hereunder, or Escrow Agent's action
      pursuant to any instruction received by Escrow Agent from any party hereto
      reasonably believed by Escrow Agent to have been properly given hereunder,
      without the necessity of making any investigation with respect thereto.

                                     Page 4
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      Escrow Agent shall not be required to defend legal proceedings, which may
      be instituted against it with respect to the subject matter of this
      Agreement or any written instructions, unless requested to do so by the
      Company and indemnified to Escrow Agent's satisfaction against the cost
      and expense of such defense. Escrow Agent shall not be requested to
      institute legal proceedings of any kind.

11.   In the event of a dispute between the parties hereto or between any person
      or persons who have subscribed for Shares and delivered an instrument of
      payment therefor and the Company, the Manager, the Dealer/ Manager, or any
      participating broker-dealer sufficient in US Bank's discretion to justify
      doing so, you shall be entitled to tender into the registry or custody of
      any court of competent jurisdiction of the State of Nevada all money or
      property in your hands under this Agreement, together with such legal
      pleadings as you deem appropriate, and thereupon be discharged from all
      further duties and liabilities under this agreement.

      In the event of any uncertainty as to US Banks duties hereunder, you may
      refuse to act under the provisions of this Agreement pending order of such
      court of competent jurisdiction and you shall have no liability to the
      Company or to any other person as a result of such action. Any such legal
      action may be brought in such court as you shall determine to have
      jurisdiction thereof. The filing of any such legal proceedings shall not
      deprive you of your compensation earned prior to such filing.

12.   All written notices and letters required hereunder to you shall only be
      effective if delivered personally or by certified mail, return receipt
      requested to US Bank, 2300 West Sahara Avenue Las Vegas, Nevada 89102,
      Attn: Karal Presley. All written notices and letters required hereunder to
      the Company or the Dealer Manager shall only be effective if delivered
      personally or by certified mail, return receipt requested to Vestin
      Mortgage, Inc., Peggy May, President, 2901 El Camino Ave., Las Vegas,
      Nevada 89120.

13.   This Agreement shall be governed by the laws of the State of Nevada as to
      both interpretation and performance.

14.   The provisions of this Agreement shall be binding upon the legal
      representatives, heirs, successors and assigns of the parties hereto.

15.   The Company hereby acknowledges that US Bank is serving as Escrow Agent
      only for the limited purposes herein set forth, and hereby agrees that it
      will not represent or imply that you, by serving as Escrow Agent hereunder
      or otherwise, have investigated the desirability or advisability of
      investment in the Company, or have approved, endorsed or passed upon the
      merits of the Shares or the Company.

                                     Page 5
<PAGE>
      The Company further agrees to instruct the Dealer/Manager, and each of its
      representatives, and any other representatives who may offer Shares to
      persons from time to time, that they shall not represent or imply that you
      have investigated the desirability or advisability of investment in the
      Company, or have approved, endorsed or passed upon the merits of the
      Shares or the Company, nor shall they use your name in any manner
      whatsoever in connection with the offer or sale of the Shares other than
      by acknowledgment that you have agreed to serve as Escrow Agent for the
      limited purposes herein set forth.

16.   This Agreement and any amendment hereto may be executed by the parties
      hereto in one or more counterparts, each of which shall be deemed to be an
      original.

17.   In the event that US Bank receives instruments of payment (or wired funds)
      after the Required Proceeds have been received and the proceeds of the
      Escrow Account have been distributed to the Company, you are hereby
      authorized to deposit such instruments of payment to any deposit account
      as directed by the Company. The application of said funds into a deposit
      account directed by the Company shall be a full acquittance to you and you
      shall not be responsible for the application of said funds.

18.   US Bank as the Escrow Agent shall be bound only by the terms of this
      Escrow Agreement and shall not be bound or incur any liability with
      respect to any other agreements or understanding between any other
      parties, whether or not the Escrow Agent has knowledge of any such
      agreements or understandings.

19.   Indemnification provisions set forth herein shall survive the termination
      of this Agreement.

20.   Upon acceptance and distribution of the Required Proceeds, this Escrow
      Agreement shall terminate and the Escrow Agent shall have no further
      responsibility or liability with regard to the terms of this Agreement.

21.   The Escrow Agent has no responsibility for accepting, rejecting or
      approving subscriptions.

22.   This Agreement shall not be modified, revoked, released or terminated
      unless reduced to writing and signed by all parties hereto, subject to the
      following paragraph.

      Should at any time, any attempt be made to modify this Agreement in a
      manner that would increase the duties and responsibilities of the Escrow
      Agent or to modify this Agreement in any manner which the Escrow Agent
      shall deem undesirable, or at any other time, the Escrow Agent may resign
      by notifying the Company in writing, by certified mail, and until (i) the
      acceptance by a successor escrow agent as shall be appointed by the
      Company; or (ii) thirty (30) days following the date upon which notice was
      mailed, whichever occurs sooner, the Escrow Agent's only remaining
      obligation shall be to perform its duties hereunder in accordance with the
      terms of the Agreement.

                                     Page 6
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23.   The Escrow Agent may resign at any time from its obligations under this
      Escrow Agreement by providing written notice to the Company. Such
      resignation shall be effective on the date specified in such notice, which
      shall be not less than thirty (30) days after such written notice has been
      given. The Escrow Agent shall have no responsibility for the appointment
      of a successor escrow agent. The Company shall within 20 days designate a
      successor agent, the Escrow Agent shall promptly deliver all funds to the
      successor agent. Unless otherwise provided in this Agreement, final
      termination of this Escrow Agreement shall occur on the date all funds
      held in the Escrow Account are distributed either (a) to the Company
      pursuant to paragraph 6 hereof, (b) to subscribers pursuant to paragraphs
      3 and 7 hereof, or (c) upon delivery of all funds to a successor agent as
      described herein. The Company shall give notice of the name and address of
      the successor agent to each subscriber.

24.   The Escrow Agent may be removed for cause by the Company by written notice
      to the Escrow Agent effective on the date specified in such notice. The
      removal of the Escrow Agent shall not derive the Escrow Agent of its
      compensation earned prior to such removal.

                                     Page 7
<PAGE>
Agreed to as of the 30th day of July, 2003

                                            RE Investments III, LLC,
                                            A Nevada limited liability company

                                            By: Vestin Mortgage, Inc., a Nevada
                                                corporation and sole manager of
                                                RE Investments III, LLC

ATTEST:

By:                                         By:
  --------------------------------             ---------------------------------
Name: Michael Whiteaker                     Name: Michael V. Shustek
                                            Title: Chief Executive Officer

Agreed to as of the 30th day of July, 2003

                                            VESTIN Capital, INC.,
                                            a Nevada corporation
                                            (Dealer/Manager)

ATTEST:

By:                                         By:
  --------------------------------             ---------------------------------
Name: Michael Whiteaker                     Name: Michael V. Shustek
                                            Title: President

The terms and conditions contained above are hereby accepted and agreed to as of
the ____ day of ______________, 2003 by:

                                            US Bank,

By:                                         By:
  --------------------------------             ---------------------------------
Name:                                       Name:

                                            Title:

                                     Page 8
<PAGE>
                                   Schedule A
                              Bank Escrow Agreement

Fees subject to US Bank's Master Disclosure Statement dated the ____ day of
______________, 2003. Fees may be waived if earnings credits exceed monthly
expenses on the account. This is determined by Account Analysis.

In addition, in the event that US Bank is directed to refund a subscribers
funds, a fee of $25 per subscriber will be charged.

                                     Page 9<PAGE>

                                  EXHIBIT 10.1

                         THIRD AMENDMENT TO AMENDED AND
                            RESTATED CREDIT AGREEMENT

         ESCALADE, INCORPORATED, an Indiana corporation (the "Company"), and
BANK ONE, N.A., a national banking association which is the successor by merger
to Bank One, Indiana, N.A. (the "Bank"), agree as follows:

         1.       CONTEXT. This agreement is made in the context of the
                  following agreed state of facts:

         a.       The Company and the Bank (then Bank One, Indiana, N.A.) are
                  parties to an Amended and Restated Credit Agreement effective
                  October 24, 2001 as modified by a First Amendment to Amended
                  and Restated Credit Agreement dated August 29, 2002, and as
                  further modified by a Second Amendment to Amended and Restated
                  Credit Agreement dated April 17, 2003 (the "Agreement").

         b.       The Company and the Bank desire to amend the Agreement.

         c.       The Company and Bank have executed this document (this "Third
                  Amendment") to give effect to their agreement.

         2.       AMENDMENT.

         (a)      The pricing matrix appearing in the definition of Applicable
                  Spread in Section 1 of the Agreement is hereby amended and
                  replaced with the following:

<TABLE>
<CAPTION>
                                                                                     APPLICABLE      APPLICABLE
                                                                      UNUSED         COMMISSION       ISSUANCE
   LEVEL          LEVERAGE RATIO         LIBOR          PRIME          FEE              RATE          FEE RATE
<S>             <C>                     <C>            <C>            <C>              <C>             <C>
     V          > 2.50:1.00             +200bps        +0bps          +37.5bps       +137.5 bps      +62.5 bps

    IV          2.00 to 2.49:1.00       +175bps        -37.5bps       +25bps         +125 bps        +50 bps

    III         1.50 to 1.99:1.00       +150bps        -75bps         +25bps         +112.5 bps      +37.5 bps

    II          1.00 to 1.49:1.00       +125bps        -75bps         +25bps         +100 bps        +25 bps

     I          <1.00:1.00              +100bps        -75bps         +25bps         +87.5 bps       +12.5 bps
</TABLE>

         (b)      Subsection 2(a)(i) of the Agreement is modified in the
                  following respect:

                  The maximum amount of the Commitment, which increased on April
                  17, 2003 to $20,000,000, will be increased, effective as of
                  May 1, 2003, to the amount of $35,000,000, where it will
                  remain until March 31, 2004, on which date and on each March
                  31 thereafter the maximum amount of the Commitment will reduce
                  by $7,000,000.

         (c)      Subsection 2(a)(ii) of the Agreement is modified in the
                  following respect:

                  The requirement that all borrowings and reborrowings and all
                  payments be in amounts of not less than Twenty-Five Thousand
                  and No/100 Dollars ($25,000.00) is hereby deleted.

         (d)      Subsection 5(g)(ii) is hereby modified as follows:

                  Net Worth. The Company shall maintain its Net Worth,
                  determined on a consolidated basis, of not less than Forty-One
                  Million and No/100 Dollars ($41,000,000.00). At June 30, 2003
                  and at the last day of each fiscal quarter thereafter, the Net
                  Worth to be maintained by the Company on that date and at all
                  times

<PAGE>

                  thereafter until the last day of the next quarter shall be
                  increased by an amount equal to seventy-five percent (75%) of
                  the Company's consolidated net profit for the fiscal quarter
                  then ended.

         (e)      Schleicher & Co. International AG shall be required to
                  guaranty Company's obligations to Bank, to be obtained upon
                  refinancing of debt of Schleicher & Co. International AG.

         3.       CONDITIONS PRECEDENT. As conditions precedent to the
effectiveness of this Third Amendment, the Bank shall have received, each duly
executed and in form and substance satisfactory to the Bank, this Third
Amendment and the Promissory Note (Revolving Loan), as well as the Commitment
Fee (as defined below).

         4.       COMMITMENT FEE; REIMBURSEMENT OF EXPENSES. Company shall pay
to Bank a commitment fee in respect of this Third Amendment in the amount of
Fifty Thousand and No/100 Dollars ($50,000.00) ("Commitment Fee"), which
Commitment Fee was deemed earned upon Company's execution of this Third
Amendment. All out-of-pocket expenses of the Bank incurred by the Bank
associated with this Third Amendment, including without limitation, filing fees,
recording fees and legal fees and disbursements, are to be reimbursed by the
Company to the Bank promptly upon demand therefor.

         5.       REPRESENTATIONS AND WARRANTIES. To induce the Bank to enter
into this Third Amendment, the Company represents and warrants, as of the date
of this Third Amendment, that no Event of Default or Unmatured Event of Default
has occurred and is continuing and that the representations and warranties
contained in Section 3 of the Agreement are true and correct, except that the
representations contained in Section 3.d refer to the latest financial
statements furnished to the Bank by the Company pursuant to the requirements of
the Agreement.

         6.       REAFFIRMATION OF THE AGREEMENT. Except as amended by this
Third Amendment, all terms and conditions of the Agreement shall continue
unchanged and in full force and effect and the Obligations of the Company shall
continue to be secured and guaranteed as therein provided until payment and
performance in full of all Obligations.

         7.       COUNTERPARTS. This Third Amendment may be signed in
counterparts, each of which shall constitute an original and all of which taken
together will constitute one and the same agreement.

         IN WITNESS WHEREOF, the Company, and the Bank, by their duly authorized
officers, have executed this Third Amendment to Credit Agreement effective as of
May 1, 2003.

                                     ESCALADE, INCORPORATED

                                     By:_____________________________
                                        John R. Wilson, Vice President and
                                             Chief Financial Officer

                                     BANK ONE, NA

                                     By:______________________________
                                     Printed: __________________________
                                     Title: ____________________________

<PAGE>

                                 PROMISSORY NOTE
                                (Revolving Loan)

                                                           Indianapolis, Indiana
                                                            Dated: May ___, 2003
$35,000,000.00                                    Final Maturity: March 31, 2008

         On or before March 31, 2008 ("Final Maturity"), ESCALADE, INCORPORATED,
an Indiana corporation (the "Maker"), promises to pay to the order of BANK ONE,
NA (the "Bank") at the principal office of the Bank at Indianapolis, Indiana,
the principal sum of Thirty Five Million and No/100 Dollars ($35,000,000.00) or
so much of the principal amount of the Loan represented by this Note as may be
disbursed by the Bank under the terms of the Credit Agreement described below,
and to pay interest on the unpaid principal balance outstanding from time to
time as provided in this Note.

         This Note evidences indebtedness (the "Loan") incurred or to be
incurred by the Maker under a revolving line of credit extended to the Maker by
the Bank under an Amended and Restated Credit Agreement (the "Credit Agreement")
dated as of October 24, 2001, as amended from time to time. All references in
this Note to the Credit Agreement shall be construed as references to that
Agreement as it may be amended from time to time. The Loan is referred to in the
Credit Agreement as the "Revolving Loan". Subject to the terms and conditions of
the Credit Agreement, the proceeds of the Loan may be advanced and repaid and
re-advanced until Final Maturity. The principal amount of the Loan outstanding
from time to time shall be determined by reference to the books and records of
the Bank on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be recorded. Such books and records shall be deemed
prima facie to be correct as to such matters.

         The terms "Advance" and "Banking Day" are used in this Note as defined
in the Credit Agreement.

         Interest on the unpaid principal balance of the Loan outstanding from
time to time prior to and after maturity will accrue at the rate or rates
provided in the Credit Agreement. Prior to maturity, accrued interest shall be
due and payable on the last Banking Day of each month commencing on the last
Banking Day of the month in which this Note is executed. After maturity,
interest shall be due and payable as accrued and without demand. Interest will
be calculated on the basis that an entire year's interest is earned in 360 days.

         The entire outstanding principal balance of this Note shall be due and
payable, together with accrued interest, at Final Maturity.

         If any installment of interest due under the terms of this Note is not
paid when due, then the Bank or any subsequent holder of this Note may, subject
to the terms of the Credit Agreement, at its option and without notice, declare
the entire principal amount of the Note and all accrued interest immediately due
and payable. Reference is made to the Credit Agreement which provides for
acceleration of the maturity of this Note upon the happening of other "Events of
Default" as defined therein.

         If any installment of interest due under the terms of this Note prior
to maturity is not paid in full when due, then the Bank at its option and
without prior notice to the Maker, may assess a late payment fee in an amount
equal to the greater of $50.00 or five percent (5%) of the amount past due. Each
late payment fee assessed shall be due and payable on the earlier of the next
regularly scheduled interest payment date or the maturity of this Note. Waiver
by the Bank of any late payment fee assessed, or the failure of the Bank in any
instance to assess a late payment fee shall not be construed as a waiver by the
Bank of its right to assess late payment fees thereafter.

         All payments on account of this Note shall be applied first to expenses
of collection, next to any late payment fees which are due and payable, next to
interest which is due and payable, and only after satisfaction of all such
expenses, fees and interest, to principal.

         The Maker and any endorsers severally waive demand, presentment for
payment and notice of nonpayment of this Note, and each of them consents to any
renewals or extensions of the time of payment of this Note without notice.

         All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.

         This Note is given in replacement, renewal and/or extension of, but not
extinguishing the indebtedness evidenced

<PAGE>

by, that Promissory Note dated as of October 24, 2001, executed by Maker in the
original principal amount of $25,000,000, and is not a novation thereof. All
interest evidenced by the Note being replaced, renewed, and/or extended by this
instrument shall continue to be due and payable until paid.

         This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that Indiana
conflicts of law rules might otherwise require the substantive rules of law of
another jurisdiction to apply.

                                     ESCALADE, INCORPORATED

                                     By: __________________________________
                                         John R. Wilson, Vice President and
                                              Chief Financial Officer

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