Document:

<PAGE>

                                  EXHIBIT 10.7

                               SERVICES AGREEMENT

                  This SERVICES AGREEMENT (as amended, supplemented or otherwise
modified from time to time and at any time, this "Services Agreement"), is
entered into as of September 5, 2003, between INDIAN-MARTIN, INC., a Nevada
corporation ("IM, Inc."), and MARTIN YALE INDUSTRIES INC. ("Seller" or in its
capacity as servicer, the "Servicer"), a corporation incorporated under the laws
of Indiana.

                                   DEFINITIONS

                  Unless otherwise defined herein or the context otherwise
requires, certain terms that are used throughout this Services Agreement are
defined in Exhibit 1 to the Receivables Purchase Agreement, dated as of even
date herewith, between IM, Inc. and Seller, which definitions set forth on said
Exhibit 1 are incorporated herein by this reference.

                             PRELIMINARY STATEMENTS

                  As of the Effective Date, IM, Inc. is purchasing Receivables
and Related Rights from Seller, pursuant to one or more of the Receivables
Purchase Agreements between IM, Inc. and Seller and others, together with
Receivables and Related Rights currently owned by Indian-Martin AG, a Swiss
corporation (the "Swiss Subsidiary"), which were previously sold to the Swiss
Subsidiary by Seller and others.

                  IM, Inc. desires to appoint Seller as the Servicer to collect
Assigned Receivables and Related Rights as IM, Inc. is and will be purchasing
from Seller and the Swiss Subsidiary (the "Swiss Receivables") arising from
prior transactions with Seller commencing as of the Effective Date and may from
time to time thereafter purchase from Seller.

                  Seller is willing to undertake to act as the Servicer for IM,
Inc.

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

ARTICLE 1         COLLECTION SERVICES

                  Section 1.01. Appointment of Servicer. IM, Inc. hereby
appoints Seller to perform the duties and obligations of the Servicer.

                  Section 1.02. Duties of Servicer.

                  (a)      The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Assigned Receivable and
each Swiss Receivables from time to time, all in accordance with this Services
Agreement and all applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy.

<PAGE>

                  (b)      The Servicer shall set aside for the account of IM,
Inc. the amount of the Collections to which IM, Inc. is entitled in accordance
with the Receivables Purchase Agreement and shall deposit for the account and
benefit of IM, Inc. the amount of such Collections as IM, Inc. shall direct the
Servicer. The Servicer, if instructed by IM, Inc. or its lender, will instruct
all Obligors to cause all Collections to be sent to a Lock-Box Account. In the
event that Seller receives Collections directly from any Obligor, Seller shall
deposit such Collections into a Lock-Box Account by the end of the then current
four week accounting period of Seller.

                  (c)      The Servicer, at the direction of IM, Inc. or its
lender, shall commence or settle any legal action to enforce collection of any
Assigned Receivable or to foreclose upon or repossess any Related Property.

                  (d)      The Servicer shall perform such other acts and
provide such other services as IM, Inc. or its lender may from time to time
reasonably request and the Servicer may agree to perform or provide.

                  (e)      The Servicer will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Assigned Receivables in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Assigned Receivables (including, without limitation, records
adequate to permit the daily identification of each new Assigned Receivable and
all Collections of and adjustments to each existing Assigned Receivable), but
only for a period of at least forty-eight (48) months from the date of the
origination thereof.

                  (f)      The Servicer shall permit IM, Inc. or its lender on
reasonable notice at any time during normal business hours to inspect, audit,
check and make abstracts from accounts, records, correspondence and other papers
pertaining to the Assigned Receivables. IM, Inc. shall deliver to the Servicer
and the Servicer shall hold for the benefit of IM, Inc., all records and
documents (including without limitation computer tapes or disks) with respect to
each Assigned Receivable.

ARTICLE 2         CONSIDERATION FOR PERFORMANCE OF SERVICER'S ACTIVITIES

                  Section 2.01. Compensation for Performance of Servicer's
Activities. In consideration for the performance of the Servicer's collection
and servicing activities set forth in Article 1 of this Services Agreement (the
"Servicing Activities"), commencing as of the Effective Date, IM, Inc. shall
compensate the Servicer in an amount equal to the Operating Costs incurred by
the Servicer plus the Percentage Fee. The term "Operating Costs" shall mean the
costs of those Services as set out in Annex 1 to this Services Agreement. The
term "Percentage Fee" shall equal the percentage of Operating Costs as
determined pursuant to an economic transfer pricing study as calculated by an
independent third party acceptable to both IM, Inc. and the Servicer. IM, Inc.
and the Servicer agree that until otherwise agreed the initial Percentage Fee
shall equal 2.23% of Operating Costs based upon the economic transfer pricing
study that has been previously agreed to by IM, Inc. and Servicer.

                                        2
<PAGE>

                  Section 2.02. Reports. The Servicer shall provide reports to
IM, Inc. listing the Servicing Activities that the Servicer has provided for IM,
Inc. during each fiscal quarter of the Servicer. Each Report shall be submitted
no later than fifteen (15) days following the end of each quarter of the
calendar year, and shall be in the form of Annex 2 to this Services Agreement.

                  Section 2.03. Payment by IM, Inc. IM, Inc. shall pay the
amount stated in a Report to the Servicer within thirty (30) days following
receipt of such Report.

                  Section 2.04. Currency. All financial obligations originating
from the terms and conditions of this Article 2 shall be denominated in U.S.
dollars.

ARTICLE 3         INDEPENDENT CONTRACTOR

                  Section 3.01. Independent Contractor. The Servicer is, and
shall remain, an independent contractor, and not an employee or partner of IM,
Inc. The Servicer shall be solely liable for any loss or damage caused by it or
its employees or agents.

                  Section 3.02. Servicer Not an Agent. IM, Inc. does not appoint
the Servicer as its agent or authorize the Servicer to hold itself out as agent
of IM, Inc., nor does IM, Inc. authorize the Servicer to pledge the credit of,
or enter into any contract on behalf of, IM, Inc.

                  Section 3.03. Contracts. The Servicer shall not have the right
to assume or create any obligation of any kind, either express or implied, on
behalf of IM, Inc., except as expressly provided for in this Services Agreement.
No agreement or commitment made on behalf of IM, Inc. is binding on IM, Inc.
without a confirmation by cable, facsimile, or other writing by a person duly
authorized to act on IM, Inc.'s behalf.

ARTICLE 4         INDEMNIFICATION

                  The Servicer agrees to indemnify IM, Inc. and each of its
permitted assigns, officers, directors, employees, agents, lenders or secured
creditors (each of the foregoing Persons being individually called an
"Indemnified Party") against, and hold IM, Inc. and each Indemnified Party
harmless from, any and all claims asserted against IM, Inc. or any Indemnified
Party by any third party arising out of any wrongful or negligent act or
omission of the Servicer in performing any of the activities that the Servicer
shall perform or furnish for IM, Inc. pursuant to the provisions of this
Services Agreement; provided however, that IM, Inc. shall promptly notify the
Servicer in writing of each such claim made or suit thereon instituted against
IM, Inc. or any Indemnified Party and the details thereof, and shall not pay or
compromise any such claim or suit without the written approval of the Servicer,
and the Servicer shall be permitted to assume and direct the defense of any such
suit by counsel of its own choosing.

ARTICLE 5         COMPLIANCE WITH LAW

                  The Servicer agrees that it shall not violate any applicable
law or regulation of any country or political subdivision in performing or
purporting to perform its obligations arising out of, or in connection with,
this Services Agreement. The Servicer agrees to maintain any

                                        3
<PAGE>

records required by applicable laws and regulations and to provide all written
assurances required by IM, Inc. or its lender in connection with compliance with
this Article 5.

ARTICLE 6         PAYMENTS AND COMPUTATIONS

                  Section 6.01. Amounts Paid by Servicer and IM, Inc. All
amounts to be paid or deposited by the Servicer and IM, Inc. 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.

                  Section 6.02. Business Day. 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 7         TERM AND TERMINATION

                  Section 7.01. Term. This Services Agreement may be terminated
by either party at any time by giving the other party thirty (30) days' prior
written notice of the effective date of termination.

                  Section 7.02. Rights on Termination. On termination of this
Services Agreement:

                  (a)      All rights and obligations of the parties shall cease
and terminate except that the obligations of both parties under this Services
Agreement otherwise shall continue in effect after the date of termination with
respect to all Assigned Obligations owned by IM, Inc. on the date of termination
or previously acquired by IM, Inc. (including obligations of accounting and
rights of indemnification provided for herein).

                  (b)      The Servicer shall turn over to IM, Inc. records and
documents in the Servicer's files relating to Assigned Receivables (including
without limitation computer tapes or disks with respect to each Assigned
Receivable). All such records and information shall be treated as confidential
and shall not be disclosed by the Servicer to any other Person either during or
after the term of this Services Agreement without the prior written consent of
IM, Inc.

ARTICLE 8         MISCELLANEOUS

                  Section 8.01. Notices. 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 party 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,

                                        4
<PAGE>

and (d) if transmitted by facsimile, when sent, receipt confirmed by telephone
or electronic means.

                           The Servicer:     Martin Yale Industries Inc.
                                             251 Wedcor Drive
                                             Wabash, IN  46992
                                             Attn:  Mr. Terry Frandsen
                                             Telephone: (260) 569-7208
                                             Facsimile: (260) 563-4575

                           IM, Inc.:         Indian-Martin, Inc.
                                             2325-B Renaissance Drive, Suite 10
                                             Las Vegas, NV  89119
                                             Attention: President
                                             Telephone: (702) 740-4244
                                             Facsimile: (702) 966-4247

                  Section 8.02. Force Majeure. If the performance of any part of
this Services Agreement by either party, or of any obligation under this
Services Agreement, is prevented, restricted, interfered with, or delayed by
reason of any cause beyond the reasonable control of the party liable to
perform, unless conclusive evidence to the contrary is provided, the party so
affected shall, on giving written notice to the other party, be excused from
such performance to the extent of such prevention, restriction, interference or
delay, provided that the affected party shall use its reasonable best efforts to
avoid or remove such causes of nonperformance and shall continue performance
with the utmost dispatch whenever such causes are removed. When such
circumstances arise, the parties shall discuss in good faith what, if any,
modification of the terms of this Services Agreement may be required in order to
arrive at an equitable solution.

                  Section 8.03. Successors and Assigns. This Services Agreement
shall be binding on and shall inure to the benefit of the parties, Affiliates,
their respective successors, successors in title, and assigns, and each party
agrees, on behalf of it, its Affiliates, successors, successors in title, and
assigns, to execute any instruments that may be necessary or appropriate to
carry out and execute the purposes and intentions of this Services Agreement and
hereby authorizes and directs its Affiliates, successors, successors in title,
and assigns to execute any and all such instruments. Each and every successor in
interest to any party or Affiliate, whether such successor acquires such
interest by way of gift, devise, assignment, purchase, conveyance, pledge,
hypothecation, foreclosure, or by any other method, shall hold such interest
subject to all of the terms and provisions of this Services Agreement. The
rights of the parties, Affiliates, and their successors in interest, as among
themselves and shall be governed by the terms of this Services Agreement, and
the right of any party, Affiliate or successor in interest to assign, sell or
otherwise transfer or deal with its interests under this Services Agreement
shall be subject to the limitations and restrictions of this Services Agreement.

                  Section 8.04. Amendment. No change, modification, or amendment
of this Services Agreement shall be valid or binding on the parties unless such
change or modification shall be in writing signed by the party or parties
against whom the same is sought to be enforced

                                        5
<PAGE>

and any lender of IM, Inc. to which IM, Inc. shall have granted a Lien in, or
assigned to, any of the Assigned Receivables.

                  Section 8.05. Remedies Cumulative. The remedies of the parties
under this Services Agreement are cumulative and shall not exclude any other
remedies to which either party may be lawfully entitled.

                  Section 8.06. Further Assurances. Each party hereby covenants
and agrees that it shall execute and deliver such further documents and take
such further actions as may be required to implement any of the provisions of
this Services Agreement.

                  Section 8.07. No Waiver. The failure of either party to insist
on strict performance of a covenant hereunder or of any obligation hereunder
shall not be a waiver of such party's right to demand strict compliance
therewith in the future, nor shall the same be construed as a novation of this
Services Agreement.

                  Section 8.08. Entire Agreement. This Services Agreement
embodies the entire agreement and understandings of the parties hereto, and
supersedes all prior or contemporaneous agreements and understandings of such
Person, verbal or written, relating to the subject matter hereof and thereof.
The Annexes to this Services Agreement shall be deemed incorporated by reference
into this Services Agreement as if set forth herein.

                  Section 8.09. Headings. The captions and heading of this
Services Agreement and in any Annex hereto are for convenience of reference and
shall not affect the interpretation hereof or thereof.

                  Section 8.10. Counterparts. This Services 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 8.11. Applicable Law. This Services Agreement shall be
governed by, and construed in accordance with, the substantive laws of the State
of Indiana without reference to the conflicts of laws rules or principles of any
jurisdiction.

                  Section 8.12. Severability. In the event any provision,
clause, sentence, phrase, or word hereof, or the application thereof in any
circumstances, is held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder hereof, or of the application of any such provision, sentence, clause,
phrase, or word in any other circumstances.

                                        6
<PAGE>

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

                                     MARTIN YALE INDUSTRIES INC.

                                     By: _______________________________________
                                     ___________________________________________
                                              (Printed Name and Title)

                                     INDIAN - MARTIN, INC., a Nevada corporation

                                     By: _______________________________________
                                     ___________________________________________
                                              (Printed Name and Title)

                                        7
<PAGE>

                                                                         ANNEX 1

                          DEFINITION OF OPERATING COSTS

Operating Costs shall include the following categories:

A.       Direct costs ("Direct Costs") of the Servicing Activities:

         -        Costs or deductions for compensation, bonuses, and travel
         expenses attributable to employees directly engaged in performing the
         servicing

         -        Materials and supplies directly consumed in rendering the
         servicing

         -        Other costs in connection with the servicing

B.       Indirect costs that relate to the Direct Costs ("Indirect Costs")
         attributable to the Servicing Activities:

         -        Including utilities, occupancy, supervisory and clerical
         compensation, and other overhead burden of the department incurring the
         Direct Costs. Indirect Costs also include an appropriate share of the
         costs relating to supporting department and other applicable general
         and administrative expense to the extent reasonably allocable to the
         Servicing Activities.

         -        Excluded costs include interest expense and expenses of
         compliance with regulations or policies imposed upon the Servicer that
         are not directly related to the Servicing Activities.

<PAGE>

                                                                         Annex 2

                   REPORT OF SERVICING ACTIVITIES PROVIDED BY
               SERVICER TO IM, INC. PURSUANT TO SERVICES AGREEMENT

To:   [Name and Address]
From: [Name and Address]
Date: [Date]

                  You are receiving this Report pursuant to Section 2 of the
Services Agreement (the "Services Agreement"), dated as of September 5, 2003,
between Indian-Martin, Inc. and ________________ (the "Servicer"). Unless
defined herein, capitalized terms that are used throughout this Report are
defined in the Services Agreement.

                  During the period from [Date] to [Date] (the "Period"), the
Servicer performed to following described Servicing Activities: ________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
During the Period, the Servicer incurred Operating Costs in the following
categories:

                         [List of Operating Categories]

                           [Total of Operating Costs]

                  Pursuant to the Services Agreement, the compensation due the
Servicer for the Period is the total of Operating Costs and the Percentage Fee.
Accordingly, the compensation due for this Period is $_______________ [Total of
Operating Costs + Percentage Fee].

                  All supporting information with respect to the Operating Costs
is in the Servicer's files. Please advise if you have any questions or comments
about these matters.<PAGE>

                                  EXHIBIT 10.8

                        ESCALADE SUBORDINATION AGREEMENT

                  This Escalade Subordination Agreement (the "Agreement") is
made and entered into as of September 5, 2003, by and between ESCALADE,
INCORPORATED, an Indiana corporation ("Escalade") and BANK ONE, NATIONAL
ASSOCIATION, a national banking association with its principal office in
Indianapolis, Indiana ("Bank").

                                    Recitals

                  A.       Escalade is the sole shareholder of Martin Yale
Industries, Inc., an Indiana corporation ("Martin Yale"), Indian Industries,
Inc., an Indiana corporation ("Indian Industries"), and the owner of 100% of the
outstanding shares of Indian-Martin, Inc., a corporation organized and existing
under the laws of the State of Nevada ("Indian-Martin"). Martin Yale is the sole
shareholder of Master Products Manufacturing Company, Inc., a Delaware
corporation ("Master Products"), and Indian Industries is the sole shareholder
of Harvard Sports, Inc., a California corporation ("Harvard Sports"), U.S.
Weight, Inc., a corporation organized under the laws of the State of Illinois
("U.S. Weight") and Bear Archery, Inc., a corporation organized under the laws
of the State of Florida ("Bear Archery"). (Hereinafter, Martin Yale, Indian
Industries, Master Products, Harvard Sports, U.S. Weight and Bear Archery shall
be referred to herein collectively as the "Domestic Subsidiaries," and
individually as a "Domestic Subsidiary.")

                  B.       Indian-Martin and Bank have entered into a Credit
Agreement as of even date (the "Credit Agreement"), that , among other things,
establishes a credit facility for Indian-Martin with the Bank authorizing a loan
to Indian-Martin from the Bank of up to the aggregate principal sum of
$45,000,000.00 (the "Loan"). The Loan is secured by the grant of a security
interest and assignment to Bank of all of Indian-Martin's rights, title and
interests, now owned or hereafter acquired by Indian-Martin, in and to that
Collateral defined and described in the Credit Agreement. (Hereinafter, all
indebtedness, Obligations and liabilities and any renewals or extensions thereof
owed by Indian-Martin to Bank under the Credit Agreement and Loan Documents
shall be referred to collectively as the "Indian-Martin/Bank One Obligations.")
All capitalized terms used, but not otherwise defined, herein shall have the
respective meanings ascribed to them in the Credit Agreement.

                  C.       In accordance with those six (6) certain Receivables
Purchase Agreements executed by Indian-Martin and each of the Domestic
Subsidiaries, respectively, before or concurrent with execution of the Credit
Agreement, other Loan Documents and this Agreement, Indian-Martin shall purchase
certain accounts receivable from each of the Domestic Subsidiaries. Payment by
Indian-Martin for the purchase of such receivables shall be made with proceeds
of Indian-Martin's borrowings under the Loan.

                  D.       Pursuant to the Receivables Purchase Agreements,
among other things, Indian-Martin shall have and be granted certain indemnities
and rights of limited recourse owing to it from Domestic Subsidiaries,
respectively, all of which indemnities and rights are required to and shall be
assigned by Indian-Martin to Bank, and Bank shall be granted a security interest

<PAGE>

therein, under the Company Security Agreement (hereinafter, collectively the
"Domestic Subsidiaries/Indian-Martin/Bank One Obligations").

                  E.       The permitted use of the proceeds of the Loan under
the Credit Agreement requires Indian-Martin, on a one time basis, to loan to
Escalade $14,000,000.00, for which Escalade shall issue the Escalade Note
payable to Indian-Martin evidencing such loan (the "Escalade/Indian-Martin
Loan"). (Hereinafter, all indebtedness, obligations and liabilities, and all
renewals and extensions thereof, owed by Escalade to Indian-Martin arising out
of the Escalade/Indian-Martin Loan shall be referred to collectively as the
"Escalade/Indian-Martin Obligations.")

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

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

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

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

                  2.       Upon maturity of the Senior Debt, or any portion
thereof, by lapse of time, acceleration or otherwise, all amounts due or to
become due in connection therewith shall first be paid in full in cash before
any payment is made by any of the Domestic Subsidiaries or any Person acting on
behalf of the Domestic Subsidiaries on account of any Subordinated Debt. Upon a
distribution of the assets or readjustment of the indebtedness of any of the
Domestic Subsidiaries

                                        2
<PAGE>

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

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

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

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

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

                                        3
<PAGE>

subordination, assignment or transfer in violation of this sub-paragraph shall
be null and void; and (c) Escalade has received all consents and approvals
required in order for it to execute and deliver this Agreement.

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

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

                  The payment of the indebtedness evidenced by this instrument
                  is subordinated to the payment of the "Senior Debt" defined
                  and described in the Escalade Subordination Agreement dated
                  September 5, 2003, between Escalade, Incorporated and Bank
                  One, National Association, and reference is made to such
                  Agreement for a full statement of the terms and conditions of
                  such subordination. Such indebtedness is also subject to that
                  certain Offset Waiver Agreement, dated September 5, 2003,
                  wherein offset and certain related rights are waived.

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

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

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

                           (a)      Escalade admitting in writing its inability
                  to pay its debts as they mature or an administrative or
                  judicial order of dissolution or determination of insolvency
                  being entered against Escalade; or Escalade applying for,
                  consenting to,

                                        4
<PAGE>

                  or acquiescing in the appointment of a trustee or receiver for
                  Escalade or any property thereof, or Escalade making a general
                  assignment for the benefit of creditors, or, in the absence of
                  such application, consent or acquiescence, a trustee or
                  receiver being appointed for Escalade or for a substantial
                  part of the property of Escalade and not being discharged
                  within sixty (60) days; or any bankruptcy, reorganization,
                  debt arrangement, or other proceeding under any bankruptcy or
                  insolvency law, or any dissolution or liquidation proceeding
                  being instituted by or against Escalade, and, if involuntary,
                  being consented to or acquiesced in by Escalade, as
                  applicable, or remaining for sixty (60) days undismissed.

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

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

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

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

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

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

                                        5
<PAGE>

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

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

                                           ESCALADE, INCORPORATED,
                                           an Indiana corporation

                                           By: _________________________________
                                           _____________________________________
                                                 (Printed Name and Title)

                                           BANK  ONE, NATIONAL ASSOCIATION,
                                           a national banking association

                                           By: _________________________________
                                           _____________________________________
                                                 (Printed Name and Title)

                                        6
<PAGE>

                                     CONSENT

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

INDIAN INDUSTRIES, INC.,                   MARTIN YALE INDUSTRIES, INC.,
an Indiana corporation                     an Indiana corporation

By:_________________________________       By: _________________________________
____________________________________       _____________________________________
      (Printed Name and Title)                   (Printed Name and Title)

HARVARD SPORTS, INC.,                      MASTER PRODUCTS MANUFACTURING
a California corporation                   COMPANY, INC., a Delaware corporation

By:_________________________________       By: _________________________________
____________________________________       _____________________________________
      (Printed Name and Title)                   (Printed Name and Title)

U.S. WEIGHT, INC., an Illinois             BEAR ARCHERY, INC., a Florida
corporation                                corporation

By:_________________________________       By: _________________________________
____________________________________       _____________________________________
      (Printed Name and Title)                   (Printed Name and Title)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]