Document:

PROMISSORY
      NOTE

     

    
      	
              $140,709.00

            	
              July
                1, 2006

            
	 	
              Newark,
                Delaware

            

    

    

    FOR
      VALUE
      RECEIVED, Theater Xtreme Entertainment Group, Inc., a Florida corporation (the
      “Company”), promises to pay to the order of Theaters 4U, LLC, a Pennsylvania
      limited liability company (the “Holder”), the principal amount (the “Principal
      Amount”) of One Hundred Forty Thousand Seven Hundred Nine Dollars and 00/100
      ($140,709.00), together with interest accruing on the outstanding principal
      balance from the date hereof, as provided in this Note.

    

    This
      Note
      is being delivered by the Company pursuant to that certain Asset Purchase
      Agreement (the “Purchase Agreement”) dated as of July 1, 2006 among the Company,
      the Holder and Brian Wagner, Anthony Kilker and Kevin Hughes (the “Principals”).
      Any capitalized terms used herein but not otherwise defined shall have those
      meanings ascribed to them in the Purchase Agreement.

     

    This
      Note
      is subject to the following provisions, terms and conditions:

     

    ARTICLE
      I -   PAYMENT
      TERMS

     

    1.1  Interest
      Rate.
      All
      amounts outstanding under this Note shall bear interest at a rate equal to
      7.0%
      per annum.

     

    1.2  Maturity.
      The
      Principal Amount and all accrued interest thereon shall be payable in full
      on or
      before December 31, 2006 (the “Maturity Date”).

     

    1.3  Repayment.
      The
      Company shall pay consecutive monthly installments of the Principal Amount
      and
      accrued interest equal to $3,000.00 per installment, commencing on July 31,
      2006
      and payable thereafter on the first day of each month up to and including
      November 30, 2006. A final balloon payment in the amount of $130,441.64 shall
      be
      due and payable on December 31, 2006. All amounts due and payable under this
      Note shall be made in lawful money of the United States of America in
      immediately available funds to the Holder at the address set forth in Section
      4.1 hereof or at such other location as the Holder may designate in writing
      to
      the Company from time to time.

     

    1.4  Prepayment.

     

    This
      Note
      may be prepaid by the Company in whole or in part at any time without penalty
      provided that any such prepayment shall be applied first to any accrued and
      unpaid interest hereunder up to the date of such prepayment and then to the
      balance of the Principal Amount outstanding hereunder.

     

    1.5  Acceleration.
      If,
      prior to the Maturity Date, the Company receives funding from outside investors
      as a result of any issuance, or series of issuances, of shares of the Company’s
      capital stock totaling at least $3,000,000.00 in gross proceeds, the Holder
      or
      any subsequent holder of this Note may, at its option, by notice in writing
      sent
      by registered or certified mail to the Company, declare the entire unpaid
      balance of the Principal Amount, together with all interest accrued thereon
      and
      all other amounts due under this Note, to be due and payable within five
      business days following such notice; provided, however, that this right of
      acceleration shall only apply following the Company’s actual receipt of at least
      $3,000,000.00 in cash or other immediately available funds.

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    ARTICLE
      II -   EVENT
      OF DEFAULT

     

    2.1  Events
      of Default Defined.

     

    Any
      of
      the following that shall occur and be continuing for any reason whatsoever
      (and
      whether such occurrence shall be voluntary or involuntary or come about or
      be
      effected by operation of law or otherwise) shall constitute an event of default
      (each an “Event of Default”):

     

    (a)  the
      nonpayment of the Principal Amount, interest or any other amount due and payable
      under this Note within 30 days after the same shall have become due and payable,
      whether at the Maturity Date, by acceleration or otherwise; or

     

    (b)  if
      an
      order, judgment or decree is entered adjudicating the Company bankrupt or
      insolvent; or if the Company shall commence any case, proceeding or other action
      relating to it in bankruptcy or seeking reorganization, liquidation,
      dissolution, winding-up, arrangement, composition or readjustment of its debts,
      or for any other relief, under any bankruptcy, insolvency, reorganization,
      liquidation, dissolution, arrangement, composition, readjustment of debt or
      other similar act or law of any jurisdiction, domestic or foreign, now or
      hereafter existing; or if the Company shall apply for a receiver, custodian
      or
      trustee of it or for all or a substantial part of its property; or

     

    (c)  if
      any
      case, proceeding or other action against the Company shall be commenced in
      bankruptcy or seeking reorganization, liquidation, dissolution, winding-up,
      arrangement, composition or readjustment of its debts, or any other relief,
      under any bankruptcy, insolvency, reorganization, liquidation, dissolution,
      arrangement, composition, readjustment of debt or other similar act or law
      of
      any jurisdiction, domestic or foreign, now or hereafter existing; or if a
      receiver, custodian or trustee of the Company or for all or a substantial part
      of its properties shall be appointed; or if a warrant of attachment, execution
      or distraint, or similar process, shall be issued against any substantial part
      of the property of the Company; and if, in each such case, such condition shall
      continue for a period of 90 days undismissed, undischarged or
      unbonded.

     

    2.2  Holder’s
      Remedies Upon Default.

     

    Upon
      the
      occurrence of any Event of Default described in Section 2.1, the Holder or
      any
      subsequent holder of this Note may, at its option, by notice in writing sent
      by
      registered or certified mail to the Company, declare the entire unpaid balance
      of the Principal Amount together with all interest accrued thereon and all
      other
      amounts due under this Note to be immediately due and payable, without any
      presentment, demand, protest or other notice of any kind to the Company, all
      of
      which are hereby expressly waived. No course of dealing on the part of the
      Holder or any subsequent holder of this Note nor any delay or failure on the
      part of such holder of this Note to exercise any right shall operate as a waiver
      of such right or otherwise prejudice such holder’s rights, powers and
      remedies.

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    2.3  Company’s
      Remedies Upon Breach by Holder or the Principals.

     

    Notwithstanding
      anything to the contrary in this Note, upon any default or breach by the Holder
      or any Principal of any of its or their covenants, obligations or
      representations or warranties under the Purchase Agreement, the Company shall
      be
      entitled to offset any amounts representing damages, including reasonable
      attorneys’ fees, incurred by the Company arising out of such default or breach.
      Any such offset shall not impair the Company’s rights against the Holder or a
      Principal under any available remedy at law or in equity.

     

    ARTICLE
      III -   AMENDMENT;
      ASSIGNMENT

     

    3.1  Amendment.

     

    Any
      term,
      covenant, agreement or condition of this Note may be amended, or compliance
      therewith may be waived (either generally or in a particular instance and either
      retroactively or prospectively), only upon the written consent of the Company
      and the Holder or any subsequent holder of this Note.

     

    3.2  Effect
      of Amendment or Waiver.

     

    Any
      such
      amendment or waiver shall apply to and be binding upon the Holder and any
      subsequent holder of this Note and upon the Company and their respective
      successors and assigns, whether or not this Note shall have been marked to
      indicate such amendment or waiver. No such amendment or waiver shall extend
      to
      or affect any obligation not expressly amended or waived or impair any right
      consequent thereon.

     

    3.3  Assignment.
      This
      Note may be assigned or otherwise transferred by the Company upon notice to,
      but
      without requiring the consent from, the Holder; provided, that this Note shall
      be assumed by and become the obligation of, and be binding upon, each such
      assignee of the Company and the successors, assigns, heirs and representatives
      of such assignee. The Holder may assign this Note and its rights hereunder
      without consent of the Company; provided, that the Holder and each subsequent
      holder of this Note shall provide prior written notice to the
      Company.

     

    ARTICLE
      IV -   MISCELLANEOUS

     

    4.1  Notices.
      All
      notices required to be given to the parties hereunder shall be in writing and
      shall be (a) personally delivered (and deemed received when delivered and
      acknowledgment of receipt is given), or (b) mailed by certified or registered
      mail, return receipt requested (and deemed received three (3) days after
      delivery to the U.S. Postal Service, whether or not accepted by addressee),
      or
      (c) by telecopy (and deemed received when sent and confirmation of receipt
      is
      made), or (d) by any recognized overnight courier service guaranteeing delivery
      within twenty-four (24) hours (and deemed received on the scheduled date of
      delivery), and addressed to the respective parties hereto at the following
      addresses unless and until a different address has been designated by written
      notice to the other party:

     

    if
      to the
      Company, to:

     

    Theater
      Xtreme Entertainment Group, Inc.

    250
      Corporate Boulevard

    Suite
      E

    Newark,
      DE 19702

    Attention:
      Scott Oglum, Chairman and Chief Executive Officer

    Phone:
      (302) 455-1334

    Facsimile:
      (302) 455-1612

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    if
      to the
      Holder, to:

     

    Theaters
      4U, LLC

    8
      South
      5th
      Street

    Frackville,
      PA 17931

    Attention:
      Brian Wagner

    Phone:
      (570) 449-1623

    Facsimile:
      (570) 874-2130

     

    Any
      party
      may by notice given in accordance with this Section 4.1 to the other parties
      designate another address, fax number or person for receipt of notices
      hereunder.

     

    4.2  Binding
      Upon Successors.
      This
      Note shall be binding upon the Company and its successors, assigns and legal
      representatives, and it shall inure to the benefit of the Holder and any
      subsequent holder of this Note and their respective successors, assigns and
      legal representatives.

     

    4.3  Loss,
      Theft, Etc.

     

    Upon
      receipt of evidence satisfactory to the Company of the loss, theft, mutilation
      or destruction of this Note, and in the case of such loss, theft or destruction
      upon delivery of a bond of indemnity in such form and amount as shall be
      reasonably satisfactory to the Company, or in the event of such mutilation
      upon
      surrender and cancellation of this Note, the Company shall make and deliver
      without expense to the holder thereof, a new Note, of like tenor, in lieu of
      such lost, stolen, destroyed or mutilated Note. At the discretion of the
      Company, the Company may accept in lieu of a bond of indemnity, the affidavit
      of
      the holder that sets forth the fact of loss, theft or destruction and of its
      ownership of this Note at the time of such loss, theft or destruction as
      satisfactory evidence thereof and no further indemnity shall be required as
      a
      condition to the execution and delivery of a new Note other than the written
      agreement of such owner to indemnify the Company.

     

    4.4  Person
      Deemed Holder.

     

    Prior
      to
      any transfer or assignment of this Note by the Holder, the Company may deem
      and
      treat the Holder as the absolute owner of this Note (whether or not this Note
      shall be overdue and notwithstanding any notation of ownership or other writing
      hereon) for the purpose of receiving payment of or on account of the principal
      thereof and interest due thereon and for all other purposes, and the Company
      shall not be affected by any notice to the contrary.

     

    4.5  Governing
      Law.

     

    This
      Note
      shall be governed by, and construed and enforced in accordance with, the
      internal laws of the State of Delaware, excluding its conflicts of law
      principles.

     

    4.6  Section
      and Other Headings.

     

    The
      section and other headings contained in this Note are for reference purposes
      only and shall not affect the meaning or interpretation of this
      Note.

     

    [Remainder
      of page intentionally left blank]

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be signed by a duly
      authorized officer as of the day and year first above written.

     

    

     

    THEATER
      XTREME ENTERTAINMENT GROUP, INC.

    

    

    By:/s/
      Kenneth D. Warren  

    Kenneth
      D. Warren

    President
      and Chief Operating Officer

     

     

     

    5EXHIBIT 10.1

                        SEVENTH AMENDMENT TO AMENDED AND
                            RESTATED CREDIT AGREEMENT

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

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

         a.       The Company and the Bank (then Bank One, NA) 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, as further modified by
                  a Second Amendment to Amended and Restated Credit Agreement
                  dated April 17, 2003, as further modified by a Third Amendment
                  to Amended and Restated Credit Agreement dated June 1, 2003,
                  as further amended by a Fourth Amendment to Amended and
                  Restated Credit Agreement dated July 15, 2004, as further
                  amended by a Fifth Amendment to Amended and Restated Credit
                  Agreement dated June 27, 2005, and as further amended by a
                  Sixth Amendment to Amended and Restated Credit Agreement dated
                  May 19, 2006 (collectively, the "Agreement").

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

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

         2.       AMENDMENT.

         (a)      The following definition contained in the Agreement is hereby
                  amended and restated as follows:

                  "Euro Revolving Loan Maturity Date" means initially May 19,
                  2008, and hereafter any subsequent date to which the
                  Commitment may be extended by the Bank.

         (b)      Section 2.c(i) of the Agreement is hereby amended and restated
                  as follows:

                  c.       The Revolving Loan. The London Bank will make a
                           revolving loan to the Company on the following terms
                           and subject to the following conditions:

                           (i)      The Commitment - Use of Proceeds. From this
                           date and until the Euro Revolving Loan Maturity Date,
                           the London Bank agrees to make Advances
                           (collectively, the "Euro Revolving Loan") under a
                           revolving line of credit from time to time to the
                           Company of amounts not exceeding in the aggregate at
                           any time outstanding Three Million Euros
                           ((euro)3,000,000.00) (the "Euro Revolving Loan
                           Commitment"), as decreased from time to time as
                           hereinafter set forth, provided that all of the
                           conditions of lending stated in Section 7 of this
                           Agreement have been fulfilled at the time of each
                           Advance. Proceeds of the Euro Revolving Loan shall be
                           used to accommodate overseas operations, and
                           hereafter may be used by the Company only to fund
                           working capital requirements. The initial Commitment
                           shall be available to the Company until May 19, 2008.

                                       3
<PAGE>

         3.       CONDITIONS PRECEDENT. As conditions precedent to the
effectiveness of this Seventh Amendment, the Bank shall have received, each duly
executed and in form and substance satisfactory to the Bank, this Seventh
Amendment and the Promissory Note (Euro Revolving Loan).

         4.       REIMBURSEMENT OF EXPENSES. All out-of-pocket expenses of the
Bank incurred by the Bank associated with this Seventh 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 Seventh Amendment, the Company represents and warrants, as of the date
of this Seventh 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
Seventh 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 Seventh 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 Seventh Amendment to Credit Agreement effective as
of June 30, 2006.

                                       ESCALADE, INCORPORATED

                                       By:  /s/ TERRY D. FRANDSEN
                                            ------------------------------------
                                       Printed: Terry D. Frandsen
                                                --------------------------------
                                       Title:   VP Finance & CFO
                                                --------------------------------

                                       JPMORGAN CHASE BANK, N.A.

                                       By:  /s/ JOHN OTTESON
                                            ------------------------------------
                                       Printed: John Otteson
                                                --------------------------------
                                       Title:   Vice President
                                                --------------------------------

                                       4

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