Note 7 —

Borrowings

On January 21, 2016, the Company entered into a Second Amended and Restated Credit Agreement (“Restated Credit Agreement”) with its issuing bank, JP Morgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the Restated Credit Agreement (collectively, the “Lender”). Under the terms of the Restated Credit Agreement, the Lender has made available to the Company a senior revolving credit facility in an increased maximum amount of up to $35.0 million and a term loan in an increased principal amount of $7.5 million. The maturity date of the revolving credit facility was extended to January 21, 2019 and the maturity of the term loan facility was extended to January 21, 2021.

The existing term loan principal amount was increased to $7.5 million and remains outstanding. The maturity date has been extended to January 21, 2021. As amended, the Company is required to repay the outstanding principal balance of the term loan, including all accrued and unpaid interest thereon, on January 21, 2021. The Company is required to make repayments of the principal balance of the term loan in equal installments of $313 thousand per calendar quarter, with interest accrued thereon. Principal amounts repaid in respect of the term loan may not be re-borrowed. The credit facility and term debt are secured by substantially all assets of the Company.

The Restated Credit Agreement allows Escalade to request the issuance of letters of credit of up to $5,000,000. 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		2.50	%		2.75	%		0.50	%		0.75	%		2.50	%		0.45	%
Greater than or equal to 2.50 to 1.0
Category 2		2.25	%		2.50	%		0.25	%		0.50	%		2.25	%		0.40	%
Greater than or equal to 2.25 to 1.0 but less than 2.50 to 1.0
Category 3		2.00	%		2.25	%		0.00	%		0.25	%		2.00	%		0.35	%
Greater than or equal to 2.00 to 1.0 but less than 2.50 to 1.0
Category 4		1.75	%		2.00	%		(0.25)	%		0.00	%		1.75	%		0.30	%
Greater than or equal to 1.75 to 1.0 but less than 2.00 to 1.0
Category 5		1.50	%		1.75	%		(0.50)	%		(0.25)	%		1.50	%		0.30	%
Less than 1.75 to 1.0

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 required sixteen quarterly installments of $156 thousand with a maturity date of November 30, 2016. The outstanding principal balance as of December 31, 2016 was zero.

Short-Term Debt

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

In Thousands	2017		2016

Short-term debt reclassified from long-term debt	$	1,250	$	1,250
	$	1,250	$	1,250

The weighted average interest rate on short-term debt outstanding at December 30, 2017 and December 31, 2016 was 3.19% and 2.56%, respectively.

Long-Term Debt

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

In Thousands	2017		2016

Senior secured revolving credit facility of $35.0 million with a maturity of January 21, 2019. The interest rate at December 30, 2017 was 3.227%.	$	18,121	$	19,189

Term loan of $7.5 million with a maturity date of January 21, 2021. The interest rate at December 30, 2017, was 3.188%.		5,000		6,250

		23,121		25,439
Portion classified as short-term debt		(1,250)		(1,250)
	$	21,871	$	24,189

Maturities of long-term debt outstanding at December 30, 2017 are as follows: $1.3 million in 2018, $19.4 million in 2019, $1.2 million in 2020 and $1.2 million in 2021.

While the revolving credit facility has a due date within one year of the issuance of these financial statements, the Company utilizes the financing for long-term operating purposes and does not have liquid funds available to repay the balance at its maturity date. Management intends to renew the revolving credit facility on comparable terms at or near the maturity date and believes it is probable such renewal will be successful.