Note E – Notes Payable

On August 27, 2013, the Company and each of its domestic subsidiaries entered into a First Amended and Restated Credit Agreement (“Restated Credit Agreement”) with its issuing bank, JPMorgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the Restated Credit Agreement (collectively, the “Lender”). The Restated Credit Agreement amends and restates the existing Credit Agreement dated as of April 30, 2009, as amended by the Amendments First through Tenth, between the Company and the Lender.

Under the terms of the Restated Credit Agreement, the Lender has made available to the Company a senior revolving credit facility in the maximum amount of up to $22.0 million (“Revolving USD Facility”) and a term loan in the principal amount of $5.0 million (“Term Loan”). Escalade is required to repay the outstanding principal balance of the Revolving USD Facility, including all accrued and unpaid interest thereon, on August 27, 2016. Escalade may prepay the Revolving USD Facility, in whole or in part, and reborrow prior to the maturity date. The Company is required to repay the outstanding principal balance of the Term Loan, including all accrued and unpaid interest thereon, on August 27, 2016. Beginning with the calendar quarter ending September 30, 2013, the Company is required to make repayments of the principal balance of the Term Loan in equal installments of $250 thousand per calendar quarter, with interest accrued thereon. Principal amounts repaid in respect of the Term Loan may not be re-borrowed. In addition, the Euro overdraft facility has been reduced from €2.0 million to €1.0 million. The credit facility and term debt are secured by substantially all assets of the Company.

During the first quarter, the Company entered into a seller-financed agreement for the purchase of its formerly leased real estate in Mexico. The agreement requires sixteen quarterly installments of $156 thousand each with a maturity date of November 30, 2016. The outstanding principal balance as of October 5, 2013 was $1.8 million.