Note 7 — Borrowings

On November 13, 2013, the Company entered into the First Amendment to its First Amended and Restated Credit Agreement dated August 27, 2013 (Restated Credit Agreement) with its issuing bank, JPMorgan Chase Bank, N.A. (Chase). Under the terms of the First Amendment to the Restated Credit Agreement, the Lender has increased by $9.0 million the amount available to the Company under its senior revolving credit facility in the maximum amount of now up to $31.0 million. The Company is required to repay the outstanding principal balance of the senior revolving credit facility, including all accrued and unpaid interest thereon, on the maturity date of August 27, 2016. The Company may prepay the senior revolving credit facility, in whole or in part, and reborrow prior to the maturity date.

The existing term loan in the principal amount of $5.0 million remains outstanding and the maturity date has been extended by two years to August 27, 2018. As amended, the Company is required to repay the outstanding principal balance of the term loan, including all accrued and unpaid interest thereon, on August 27, 2018. 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.

The First Amendment to the Restated Credit Agreement also revised the definitions of “Fixed Charges” and “Fixed Charge Coverage Ratio” and expressly permitted the Company to complete its acquisition of certain assets of DMI Sports, Inc.

The Restated Credit Agreement allows Escalade to request the issuance of letters of credit of up to $5,000,000, subject to the aggregate undrawn amount of a letter of credit issued by The Bank of New York Trust Company, N.A. for the account of Martin Yale Industries, Inc. Each loan, other than a Eurodollar Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Base Rate. Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the interest period in effect plus the Applicable Rate. Applicable Rate means the applicable rate per annum set forth below, based upon Escalade’s Funded Debt to Adjusted Ratio as of the most recent determination date:

Funded Debt to Adjusted EBITDA Ratio	Revolving Eurodollar Borrowing		Term Eurodollar Borrowing		ABR Revolving Borrowing		ABR Term Borrowing		Letter of Credit Fee		Commitment Fee
Category 1
Greater than or equal to 2.50 to 1.0	2.50	%	2.75	%	0.50	%	0.75	%	2.50	%	0.45	%
Category 2
Greater than or equal to 2.25 to 1.0 but less than 2.50 to 1.0	2.25	%	2.50	%	0.25	%	0.50	%	2.25	%	0.40	%
Category 3
Greater than or equal to 2.00 to 1.0 but less than 2.50 to 1.0	2.00	%	2.25	%	0.00	%	0.25	%	2.00	%	0.35	%
Category 4
Greater than or equal to 1.75 to 1.0 but less than 2.00 to 1.0	1.75	%	2.00	%	(0.25)	%	0.00	%	1.75	%	0.30	%
Category 5
Less than 1.75 to 1.0	1.50	%	1.75	%	(0.50)	%	(0.25)	%	1.50	%	0.30	%

The Applicable Rate shall be determined as of the end of each quarter based upon the Company’s annual or quarterly consolidated financial statements and shall be effective during the period commencing the date of delivery to the agent.

Indebtedness under the Restated Credit Agreement continues to be collateralized by liens on all of the present and future equity of each of the Company’s domestic subsidiaries and substantially all of the assets of the Company. In addition, each direct and indirect domestic subsidiary of Escalade has unconditionally guaranteed all of the indebtedness of Escalade arising under the Restated Credit Agreement and has secured its guaranty with a first priority security interest and lien on all of its assets. The Pledge and Security Agreement dated April 30, 2009 by and between Escalade and Chase, and each Pledge and Security Agreement dated April 30, 2009 by and between each such Escalade subsidiary and Chase continue in full force and effect, as amended by the Master Amendment to Pledge and Security Agreements dated May 31, 2010 entered into by Chase, Escalade and each such subsidiary. The Unlimited Continuing Guaranty dated April 30, 2009 applicable to each of Escalade’s domestic subsidiaries continues in full force and effect without change.

During the first quarter 2013, 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 with a maturity date of November 30, 2016. The outstanding principal balance as of December 28, 2013 was $1.8 million.

Short-Term Debt

Short-term debt at fiscal year-ends was as follows:

In Thousands	2013		2012

Senior secured revolving credit facility of $31.0 million with a maturity of August 27, 2016. The interest rates at December 29, 2013 ranged between 1.938% and 3.0%.	$	19,000	$	11,918

Euro overdraft facility of €1.0 million payable on demand. The facility bears an interest rate of LIBOR plus 2.5%.		—		2,452

Short-term debt reclassified from long-term debt		4,263		4,700
	$	23,263	$	19,070

The weighted average interest rate on short-term debt outstanding at December 28, 2013 and December 29, 2012 was 2.03% and 2.14%, respectively.

Long-Term Debt

Long-term debt at fiscal year-ends was as follows:

In Thousands	2013		2012

Term loan of $5.0 million with a maturity date of August 27, 2018. The interest rate at December 28, 2013, was 2.1875%.	$	4,750	$	5,500

Mortgage payable (Wabash, Indiana Adjustable Rate Economic Development Revenue Refunding Bonds), annual installments are optional, interest varies with short-term rates and is adjustable weekly based on market conditions, maximum rate is 10.00%, rate at December 28, 2013 is 2.25%, due September 2028, secured by plant facility, machinery and equipment, and a stand-by letter of credit		2,700		2,700

Seller-financed agreement for real estate in Mexico. The agreement requires sixteen quarterly installments of $156 thousand each with a maturity date of November 30, 2016. This agreement has an interest rate of zero percent and is secured by the financed real estate in Mexico.		1,759		-

		9,209		8,200
Portion classified as short-term debt		(4,263)		(4,700)
	$	4,946	$	3,500

Maturities of long-term debt outstanding at December 28, 2013 are as follows: $4.3 million in 2014, $1.6 million in 2015, $1.6 million in 2016, $1.0 million in 2017, and $0.7 million in 2018.