EXHIBIT 10.3
ESCALADE NOTE
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is made and entered
into as of September 5, 2003, by and between INDIAN-MARTIN, INC., a company
organized and existing under the laws of the State of Nevada ("Pledgor"), and
BANK ONE, NATIONAL ASSOCIATION, a national banking association with its
principal office in Indianapolis, Indiana, USA (the "Bank").
RECITALS
A. Pledgor is a wholly owned subsidiary of Escalade,
Incorporated, a corporation organized and existing under the laws of the State
of Indiana ("Escalade").
B. Pledgor and the Bank have entered into a Credit Agreement
as of even date (the "Credit Agreement"), pursuant to which execution and
delivery of this Agreement is a condition precedent.
C. Under the Credit Agreement, the permitted use by Pledgor of
the proceeds of the initial Advance against funding of the Loan requires
Pledgor, on a one-time basis, to loan to Escalade as of the Closing Date of the
Loan an original principal amount of $14,000,000, pursuant to a promissory note
made by Escalade and payable to the order of Pledgor (the "Escalade Note").
D. The Credit Agreement further requires Pledgor, among other
things, to pledge the Escalade Note to the Bank, subject to a first priority
security interest in favor of the Bank, which pledged note shall constitute part
of the Collateral securing Pledgor's Obligations to the Bank.
AGREEMENT
NOW THEREFORE, in consideration of the premises, and in order
to induce the Bank to enter into the Credit Agreement and extend the Loan, the
Parties hereto agree as follows:
1. Definitions. All capitalized terms used, but not
otherwise defined, herein shall have the respective meanings stated or ascribed
thereto in the Credit Agreement.
2.01 Pledge and Grant. As security for the due and
punctual payment of the principal of and interest on the Obligations and the due
and punctual payment of all such Obligations and other amounts due and to become
due under the Loan and the performance and observance by Pledgor of all of the
covenants made by Pledgor in the Loan Documents, Pledgor hereby pledges and
grants to the Bank a security interest in each and all of the following (whether
now existing or hereafter coming into existence):
(i) All of Pledgor's right, title and interest
in and to the Escalade Note;
(ii) All of Pledgor's right, title and interest
in and to all contracts, documents and
agreements relating or pertaining in any way
to the Escalade Note; and
(iii) All proceeds of the foregoing.
All of the foregoing revenues, funds, property and assets, including the
Escalade Note, pledged and encumbered pursuant to this Agreement are referred to
herein, collectively, as the "Pledged Property."
2.02 Agreements of Pledgor. Pledgor represents, warrants
and agrees that:
(iv) Any and all monies received by Pledgor in
respect of the Pledged Property (including,
without limitation, all principal or
interest payments on the Escalade Note or in
respect thereof) shall be paid by Pledgor to
the Bank upon receipt by Pledgor;
(v) Upon the request of the Bank, Pledgor shall
execute and deliver such financing
statements, blanket endorsements and other
documents and instruments as may be
reasonably requested by the Bank to perfect,
preserve and protect the pledge and security
interest made and granted pursuant to this
Agreement;
(vi) Pledgor shall not create, assume or incur
any Lien on the Pledged Property or any part
thereof except those Liens created or
authorized by this Agreement and the
Agreement; and
(vii) Pledgor simultaneously with its execution
and delivery of this Agreement is also
delivering to the Bank possession of the
Escalade Note, to the end that Bank's
interests as pledgee thereof may be
perfected, and Pledgor agrees that the Bank
shall continue to possess and hold the
Escalade Note until all Obligations have
been finally paid and satisfied in full and
the Bank shall have no further obligation to
make Advances under the Credit Agreement.
3. Miscellaneous. This 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. This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same Agreement.
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IN WITNESS WHEREOF, the parties have duly executed and
delivered this Pledge Agreement to be effective as of the date first above
written.
INDIAN-MARTIN, INC., a Nevada corporation
By:_______________________________________
_________________________________________
(Printed Name and Title)
BANK ONE, NATIONAL ASSOCIATION
By:_______________________________________
_________________________________________
(Printed Name and Title)
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