Exhibit 10.7

CONSENT AND TERMINATION AGREEMENT

This Consent and Termination Agreement is made as of December 29, 2007 by and
among Manufacturers and Traders Trust Company (“Agent”), as Administrative Agent
for the Lenders (“Lenders”) described in the Credit Agreement referenced below
and Phoenix Footwear Group, Inc. (“Borrower”), and as sole Lender under the
Credit Agreement.

WHEREAS, Borrower, the Agent, and the Lenders entered into an Amended and
Restated Credit Facility Agreement as of November 13, 2006, as amended (the
“Credit Agreement”, with defined terms therein being applicable hereto),
pursuant to which the Lenders made certain credit accommodations to the Borrower
and its wholly owned subsidiaries, including Revolving Credit Loans, the First
Term Loan A, the First Term Loan B, and issuance of Letters of Credit, and

WHEREAS, Altama Delta Corporation, a Georgia corporation (“Altama”) and Altama
Delta (Puerto Rico) Corporation, a Delaware corporation (“Altama PR”) each are
wholly owned direct and indirect subsidiaries of Borrower, and

WHEREAS, the Borrower secured its obligations under the Credit Agreement with a
pledge of its interests in the stock of its subsidiaries, including Altama and
Altama PR, pursuant to a certain Pledge Agreement (the “Pledge Agreement”) dated
as of November 13, 2006 made by the Borrower in favor of the Agent for the
benefit of the Lenders, and

WHEREAS, in connection with receiving certain benefits related to the Credit
Agreement, Altama and Altama PR guaranteed the obligations of the Borrower to
the Lenders under the Credit Agreement pursuant to a certain Unlimited Guaranty
and Indemnity Agreement (the “Guaranty”) dated as of November 13, 2006 and made
in favor of the Agent for the benefit of the Lenders by the signatories thereto,
including among others Altama and Altama, and

WHEREAS, Altama and Altama PR secured their respective obligations under the
Guaranty with grants of security interests and liens in all of their respective
assets pursuant to the following agreements (together with the Credit Agreement,
the Pledge Agreement, and the Guaranty, collectively, the “Loan Documents”):

 

  (a) Amended and Restated General Security Agreement dated as of November 13,
2006 and made in favor of the Agent for the benefit of the Lenders by the
signatories thereto, including among others Altama and Altama PR (the “2006
Security Agreement”),

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  (b) Trademark Security Agreement dated June 29, 2005 made between Altama and
Manufacturers and Traders Trust Company, recorded with the United States Patent
and Trademark Office on December 23, 2005, reaffirmed by

Confirmation of Certain Security Documents made as of August 3, 2005 by Altama
and others in favor of the Agent for the benefit of the Lenders, and further
reaffirmed by Reaffirmation of Security Agreements in Trademarks dated
November 13, 2006 made by Altama in favor of the Agent for the benefit of the
Lenders, and Trademark Security Agreement dated June 29, 2005 made between
Altama PR and Manufacturers and Traders Trust Company, reaffirmed by
Confirmation of Certain Security Documents made as of August 3, 2005 by Altama
PR and others in favor of the Agent for the benefit of the Lenders, and further
reaffirmed by Reaffirmation of Security Agreements in Trademarks dated
November 13, 2006 made by Altama PR in favor of the Agent for the benefit of the
Lenders (collectively, the “Altama Trademark Agreement”);

 

  (c) Deed of Trust, Absolute Assignment of Leases, Security Agreement and
Fixture Filing dated November 13, 2006 granted to M&T for certain lenders by
Altama (the “Deed of Trust”); and

 

  (d) Assignment of Claims Under United States Government Contact dated July 10,
2006 (“Assignment of Contracts”).

WHEREAS, the Borrower and Tactical Holdings, Inc. (“Buyer”) have entered into a
Stock Purchase Agreement dated as of December 29, 2007 (“Stock Purchase
Agreement”) pursuant to which Buyer will purchase all of the stock of Altama
from Borrower (the “Transaction”) in exchange for a $13,5000,000 Promissory Note
and Pledge Security Agreement dated December 29, 2007 (“Note”) issued by Buyer,
and

WHEREAS, as part of the Transaction, Altama will enter into a Guaranty (“Altama
Guaranty”) dated December 29, 2007 in favor of Borrower pursuant to which Altama
will guaranty payment of the Note, and

WHEREAS, as part of the Transaction, Altama and Altama PR will enter into a
Security Agreement (“Altama Security Agreement”) dated December 29, 2007 in
favor of Borrower to secure payment of the Guaranty and the Note, and

WHEREAS, GGC Administration, LLC and Golden Gate Private Equity, Inc.
(collectively, “Golden Gate”) have made a Guaranty (“Golden Gate Guaranty”) in
favor of Buyer dated December 29, 2007 pursuant to which Golden Gate has
guaranteed payment of the Note and the initial payment due under the Transition
Services Agreement (“Transition Services Agreement”) executed as part of the
Transaction, and

WHEREAS, the Note, the Altama Guaranty, the Altama Security Agreement, and the
Golden Gate Guaranty will be pledged and collaterally assigned by the Borrower
to the Agent for the benefit of the Lenders,

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WHEREAS, pursuant to and as required by the Credit Agreement, Borrower has
requested that the Agent, for itself and on behalf of the Lenders consent to the
Transaction, and

WHEREAS, in consideration of the application of net proceeds Note and payments
under the Transition Services Agreement to the payment of certain obligations
under the Credit Agreement as provided below, the Agent on behalf of the Lenders
has agreed to (i) release the guarantee of Altama and Altama PR and the security
interests and liens in the assets of Altama and Altama PR and (ii) terminate the
obligations of Altama and Altama PR under and in connection with the Credit
Agreement and other Loan Documents, subject to the terms of this agreement, upon
delivery to Buyer and Agent of the executed Confirmation of Security Agreement
made by Buyer in favor of Agent (the “Confirmation”),

NOW THEREFORE, the Agent, for itself and on behalf of the Lenders, and the
Borrower hereby agree as follows:

1. Attached hereto as Exhibits A, B, C, D, E and F are the forms of Stock
Purchase Agreement, Note, Golden Gate Guaranty, Altama Guaranty, Altama Security
Agreement, and Transition Services Agreement (collectively, the “Transaction
Documents”). The Agent for itself and the Lenders hereby irrevocably consents to
the Transaction as contemplated by the Transaction Documents. This consent is
expressly conditioned upon the executed Transaction Documents being in all
material respects in the form attached hereto as exhibits and the Transaction
being closed on or before December 31, 2007. Except as expressly provided
herein, the Credit Agreement and the Loan Documents remain in full force and
effect with respect to the parties party thereto other than Altama and Altama PR
and their assets, no amendments or waivers are implied hereby, and all rights
and remedies of the Agent and Lenders related thereto shall remain in full force
and effect.

2. The Borrower hereby irrevocably authorizes and directs (i) the Buyer to wire
transfer all principal and interest paid with respect to the Note to the
Borrower’s operating account held by the Agent, and (ii) the Agent to debit the
Borrower’s account with the Agent for the net proceeds of the Note upon receipt
thereof. No prepayment penalty or premium shall be due in connection therewith.
The Borrower will provide telephonic notice of the payment of the Note to the
Agent on the date of payment.

3. Upon delivery of the executed Confirmation, the executed Transaction
Documents, and the certificates for the capital stock of Altama Delta
Corporation pledged pursuant to the terms of the Note with stock powers
attached, and without any further action on the part of any party: (a) the 2006
Security Agreement shall be terminated as it relates to Altama and Altama PR and
their respective assets, and otherwise shall remain in full force and effect as
to all parties; (b) the Altama Trademark Agreement shall be terminated;(c) the
Pledge Agreement shall be terminated as it relates to the capital stock of
Altama and Altama PR, and otherwise shall remain in full force and effect as to
all other capital stock pledged thereunder; (d) the Guaranty shall be terminated
as it relates to Altama and

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Altama PR and otherwise remain in full force and effect as to all parties
thereto except for Royal, (e) the Deed of Trust shall be terminated and Agent
shall execute and deliver to Buyer for recording a discharge of the Deed of
Trust, and (f) the Assignment of Contracts shall be terminated.

4. The Agent, at the expense of Borrower, shall take such further actions, and
execute and deliver such further documents and agreements, as may be reasonably
necessary and requested by the Borrower and Buyer in order to carry out the
expressed intentions of this Termination Agreement, including but not limited
(i) to filing applicable UCC termination statements (provided that Buyer,
Borrower and/or any other person designated thereby are hereby authorized by
Agent to file any such UCC termination statements) and (ii) immediatley
releasing all possessory collateral.

5 This Termination Agreement shall be governed by the laws of the State of New
York, including Section 5-1401 of the General Obligations Law of such State.

6. The Agent makes no representation or warranty of any kind or nature regarding
the guaranties, security interests, pledges, or assets referenced herein. The
Agent represents and warrants that it is the sole Lender under the Credit
Agreement.

7. This Termination Agreement shall be binding upon, and shall inure to the
benefit of, the successors and assigns of the Agent, Lenders, and Borrower. This
Termination Agreement may not be amended or modified without the written consent
of the Agent and Borrower.

8. This Termination Agreement may be executed in counterparts, each of which
shall be deemed to be an original.

IN WITNESS WHEREOF, the Agent has caused this Termination Agreement to be
executed by its duly authorized officer as of the date first above written.

[Remainder of page left blank – signature pages follow]

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MANUFACTURERS AND TRADERS TRUST

COMPANY, AS ADMINISTRATIVE AGENT

FOR ITSELF AND ON BEHALF OF THE LENDERS

By:   /s/ Philip M. Smith   Philip M. Smith   Senior Vice President

MANUFACTURERS AND TRADERS TRUST

COMPANY, AS SOLE LENDERS

By:   /s/ Philip M. Smith   Philip M. Smith   Senior Vice President

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PHOENIX FOOTWEAR GROUP, INC. By:   /s/ James R. Riedman   James R. Riedman  
Chairman

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EXHIBIT A

STOCK PURCHASE AGREEMENT

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EXHIBIT B

PROMISSORY NOTE

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EXHIBIT C

GOLDEN GATE GUARANTY

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EXHIBIT D

ALTAMA GUARANTY

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EXHIBIT E

ALTAMA SECURITY AGREEMENT

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EXHIBIT F

TRANSITION SERVICES AGREEMENT