SECURITY AGREEMENT

THIS SECURITY AGREEMENT is made December 28, 2007 in favor of PHOENIX FOOTWEAR GROUP, INC. (?Secured Party?), a Delaware corporation, by ALTAMA DELTA CORPORATION, a Georgia corporation (?Altama Delta?), and ALTAMA DELTA (PUERTO RICO) CORPORATION, a Delaware corporation (?Altama Puerto Rico? and, together with Altama Delta, jointly and severally, ?Grantor?).

1. Definitions. Unless otherwise defined in this Agreement, all terms used herein shall have the meanings as given to them in the Uniform Commercial Code of the State of Delaware (the ?UCC?) as amended from time to time. The following terms shall have the following meanings when used in this Agreement:

?Collateral? means all Collateral as defined in the UCC and includes all assets and property of any kind or nature not including real estate but including all accounts, cash, chattel paper (including electronic chattel paper and tangible chattel paper), securities (whether certificated or uncertificated), deposit accounts, documents, books and records, equipment, financial assets, fixtures, general intangibles, goods, instruments, inventory, investment property, letter-of-credit rights, letters of credit, promissory notes, securities accounts, security entitlements, software, supporting obligations, vehicles, leasehold improvements, goodwill, insurance policies and proceeds thereof, and intellectual property (including among others patents, copyrights, trademarks, tradenames, licenses, and trade secrets), of any kind or nature in which Grantor has an interest now or in the future, and which are now existing or hereafter created or acquired, together with all additions, replacements, accessions, products, and proceeds in any form thereof.

?Guaranty? means the Guaranty dated December 29, 2007 made by Grantor in favor of Secured Party, as the same may be amended, restated, supplemented or modified from time to time in accordance with its terms, pursuant to which Grantor guaranteed the obligations of Tactical under the Note.

?Liabilities? means, collectively, the Guaranteed Obligations (as defined in the Guaranty) and all liabilities, and obligations of Tactical and Altama Delta, of every kind or nature, under the Transition Services Agreement, in each case whether absolute or contingent, primary or secondary, direct or indirect, joint or several, and whether heretofore or hereafter created, arising, or existing or at any time due and owing (including without limitation all sums expended by the Secured Party for protection of its interests such as payments made for taxes, insurance, and expenses of collection).

?Note? means the Promissory Note and Pledge Security Agreement dated December 29, 2007 in the original principal amount of $13,500,000 made by Tactical Holdings, Inc. in favor of Secured Party, as the same may be amended, restated, supplemented or modified from time to time in accordance with its terms.

?Transition Services Agreement? means the Transition Services Agreement dated December 29, 2007 made between Secured Party, Tactical Holdings, Inc. (?Tactical?) and Altama Delta Corporation, as the same may be amended, restated, supplemented or modified from time to time in accordance with its terms.

2. Security Interest.

(a) Grantor hereby grants to the Secured Party a security interest in its Collateral to secure the payment and performance of the Liabilities. This security interest is specifically intended to be a continuing interest and shall cover Collateral in which Grantor acquires an interest after the date of this Agreement as well as Collateral in which Grantor now has an interest. This security interest is granted in consideration, among others, of Grantor?s arrangement of the release of mortgages, collateral assignments, and general security interests held by Manufacturers and Traders Trust Company covering all of Guarantor?s assets.

(b) Notwithstanding the foregoing, the ?Collateral? shall not include (i) any Equipment that is subject to a purchase money lien or capital lease permitted herein to the extent the documents relating to such purchase money lien or capital lease would not permit such Equipment to be subject to the security interests created hereby, (ii) any property to the extent that such grant of a security interest is prohibited by any requirements of law of any governmental authority, (iii) any contract, license, agreement, or permit to the extent that such grant of a security interest therein constitutes a breach or default under or results in termination of any such contract, license, agreement, or permit or any rights of the applicable Grantor therein, in each case of clauses (ii) and (iii) above, to the extent that such requirement of law or the provision of such contract, license, agreement, permit giving rise to such prohibition, breach, default or termination is ineffective under applicable law, (iv) any United States intent-to-use trademark application to the extent and for so long as creation by a Grantor of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application, and (v) any leasehold interest.

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