Document:

Security and Pledge Agreement

 Exhibit 10.3 
  
 SECURITY AND PLEDGE AGREEMENT 
  
 dated as of December 8, 2004 
  
 between 
  
 TACTICA INTERNATIONAL, INC. as 
 Debtor and Debtor in Possession and Borrower 

 
 And 
  
 TACTICA FUNDING 1, LLC 
 as 
 Lender 

							
	ARTICLE 1	 	3
	 	 	DEFINITIONS	 	3
	 	 	    Section 1.1	 	Definitions.	 	3
	ARTICLE 2	 	6
	 	 	COLLATERAL	 	6
	 	 	    Section 2.1	 	Security Interest in the Collateral.	 	6
	ARTICLE 3	 	9
	 	 	REPRESENTATIONS AND WARRANTIES	 	9
	 	 	    Section 3.1	 	Representations and Warranties.	 	9
	ARTICLE 4	 	10
	 	 	FURTHER ASSURANCES; REMEDIES	 	10
	 	 	    Section 4.1	 	Further Assurances; Remedies.	 	10
	 	 	    Section 4.2	 	Delivery and Other Perfection.	 	10
	 	 	    Section 4.3	 	Preservation of Rights.	 	11
	 	 	    Section 4.4	 	Special Provisions Relating to Certain Collateral.	 	12
	 	 	    Section 4.5	 	Events of Default, Etc.	 	12
	 	 	    Section 4.6	 	Deficiency.	 	14
	 	 	    Section 4.7	 	Removals, Etc.	 	14
	 	 	    Section 4.8	 	Application of Proceeds.	 	14
	 	 	    Section 4.9	 	Attorney-in-Fact.	 	14
	 	 	    Section 4.10	 	Perfection.	 	15
	 	 	    Section 4.11	 	Termination.	 	15
	 	 	    Section 4.12	 	Expenses and Indemnities.	 	15
	 	 	    Section 4.13	 	Further Assurances.	 	16
	 	 	    Section 4.14	 	Releases.	 	16
	 	 	    Section 4.15	 	Other Financing Statements and Liens.	 	16
	ARTICLE 5	 	16
	 	 	MISCELLANEOUS	 	16
	 	 	    Section 5.1	 	No Waiver.	 	16
	 	 	    Section 5.2	 	Notices.	 	16
	 	 	    Section 5.3	 	Amendments, Etc.	 	17
	 	 	    Section 5.4	 	Successors and Assigns.	 	17
	 	 	    Section 5.5	 	Captions.	 	17
	 	 	    Section 5.6	 	Counterparts.	 	17
	 	 	    Section 5.7	 	Governing Law.	 	17
	 	 	    Section 5.8	 	Severability.	 	18

 SECURITY AND PLEDGE AGREEMENT 
  
 SECURITY AND PLEDGE AGREEMENT, dated as of December 3, 2004 by and among Tactica International, Inc., as debtor in
possession and borrower (the “Borrower”) and Tactica Funding 1, LLC, as lender (the “Lender”). 
  
 WITNESSETH : 
  
 WHEREAS, the Borrower and the Lender have entered into a Credit Agreement (as amended and in effect from time to time, the “Credit Agreement”), dated as of November 17, 2004 pursuant to which the Lender has agreed to provide the
Borrower with a $300,000 working capital loan facility, and upon the terms and subject to the conditions set forth therein, the Lender has agreed to provide such facility; 
  
 WHEREAS, it is a condition precedent to the effectiveness of the Credit Agreement that the Borrower shall have executed and
delivered to the Lender a Security and Pledge Agreement in substantially the form hereof; 
  
 NOW THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Lender to make the Loan, the Borrower hereby agrees as follows: 
  
 ARTICLE 1 
  
 DEFINITIONS 
  
 Section 1.1 Definitions. 
  
 All terms used in this Agreement that are not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement. As used in this
Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of the terms defined: 
  
 “Accounts” shall have the meaning assigned to that term in Section 2.1(d) hereof. 
  
 “Agreement” shall mean this Security and Pledge Agreement,
as the same may be modified, supplemented or amended from time to time in accordance with its terms. 
  
 “Avoidance Actions” means all claims, actions, causes of action and the proceeds and recoveries thereof arising under Sections 542, 544,
545, 547, 548, 549, 550, 551, 553(b), or 724(a) of the Bankruptcy Code. 

 “Carve-Out Expenses” shall have the meaning as set forth in the Credit Agreement.

  
 “Collateral” shall have the meaning assigned
to that term under Section 2.1 hereof. 
  
 “Collateral
Account” shall have the meaning assigned to that term in Section 4.1 hereof. 
  
 “Contracts” shall mean all contracts and leases (real or personal) between a Borrower and one or more additional parties.  
  
 “Contract Rights” shall mean all rights of an Obligor under each Contract (including, without limitation,
(i) all right to receive moneys due or to become due under or pursuant to all Contracts, (ii) all rights to terminate, and to perform under, all Contracts, compel performance and otherwise exercise all remedies under all Contracts, including, but
not limited to, rights to indemnification, and (iii) all rights to any payments, distributions or proceeds assigned from time to time in connection with, or with respect to, the assignor’s interest in any Person or any partnership or joint
venture agreement to which the Borrower is or may hereafter be a party). 
  
 “Copyrights” shall mean all copyrights, copyright registrations and applications for copyright registrations, including, without limitation, all renewals and extensions thereof, the right to recover
for all past, present and future infringements thereof, and all other rights of any kind whatsoever accruing thereunder or pertaining thereto. 
  
 “Documents” shall have the meaning assigned to that term in Section 2.1(j) hereof. 
  
 “Equipment” shall have the meaning assigned to that term
under Section 2.1(h) hereof. 
  
 “Governmental
Authority” shall mean (i) any government or political subdivision thereof, whether foreign or domestic, national, state, county, municipal or regional or any other government authority, (ii) any agency or other instrumentality of any such
government, political subdivision or other governmental entity (including any central bank or comparable agency), (iii) any court, arbitral tribunal or arbitrator and (iv) any non-governmental regulating body, to the extent that the rules,
regulations or orders of such body have the force of law. 
  
 “Innotrac Stipulation” shall mean that certain Stipulation and Consent Order Providing For Adequate Protection of Innotrac Corporation’s Interest In The Debtor’s Inventory approving the Stipulation on an interim
basis and entered by the United State Bankruptcy Court for the Southern District of New York on October 25, 2004. 

 “Intellectual Property” shall mean, collectively, all Copyrights, all Patents and all
Trademarks, together with (a) all inventions, processes, production methods, proprietary information, know-how and trade secrets; (b) all licenses or user or other agreements granted to the Borrower with respect to any of the foregoing, in each case
whether now or hereafter owned or used; (c) all information, customer lists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings, recorded knowledge, surveys, engineering reports, test reports, manuals, materials
standards, processing standards, performance standards, catalogs, computer and automatic machinery software and programs; (d) all accounting information and all media in which or on which any information or knowledge or data or records may be
recorded or stored and all computer programs used for the compilation or printout of such information, knowledge, records or data; (e) all licenses, consents, permits, variances, certifications and approvals of governmental agencies now or hereafter
held by the Borrower; and (f) all causes of action, claims and warranties now or hereafter owned or acquired by an Obligor in respect of any of the items listed above. 
  
 “Instruments” shall have the meaning assigned to that term in Section 2.1(e) hereof. 
  
 “Inventory” shall have the meaning assigned to such term in
Section 2.1(f) hereof. 
  
 “Legal Fees” shall
have the meaning assigned to such term in the Credit Agreement. 
  
 “Patents” shall mean all patents and patent applications, including, without limitation, the inventions and improvements described and claimed therein together with the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, all income, royalties, damages and payments now or hereafter due and/or payable under and with respect thereto, including, without limitation, damages and payments for past or future infringements
thereof, the right to sue for past, present and future infringements thereof, and all rights corresponding thereto throughout the world. 
  
 “Permitted Liens” shall have the meaning as set forth in the Credit Agreement. 
  
 “Principal Actions” means all claims, actions or causes of
action as may rise against Avi Sivan or Prem Ramchandani or involving any transaction in which Avi Sivan or Prem Ramchandani have participated. 
  
 “Trademarks” shall mean all trade names, trademarks and service marks, logos, 

 trademark and service mark registrations, and applications for trademark and service mark registrations, including,
without limitation, all renewals of trademark and service mark registrations, all rights corresponding thereto throughout the world, the right to recover for all past, present and future infringements thereof, all other rights of any kind whatsoever
accruing thereunder or pertaining thereto, together, in each case, with the product lines and goodwill of the business connected with the use of, and symbolized by, each such trade name, trademark and service mark. 
  
 ARTICLE 2 
  
 COLLATERAL 
  
 Section 2.1 Security Interest in the Collateral. 
  
 As collateral security for the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the Obligations, the Borrower
hereby pledges, grants and assigns to the Lender, subject to the Carve-Out Expenses, a Lien and security interest in all right, title and interest of the Borrower in the following property, whether now owned by the Borrower or hereafter acquired,
and whether now existing or hereafter coming into existence, other than Avoidance Actions and Principal Actions and the proceeds of Avoidance Actions and Principal Actions (all being collectively referred to herein as “Collateral”):

  
 (a) all accounts and general intangibles (each as defined in
the Uniform Commercial Code) of the Borrower constituting any right to the payment of money, including (but not limited to) all moneys due and to become due to it in respect of any loans or advances or for Inventory or Equipment or other goods sold
or leased or for services rendered, all moneys due and to become due to it under any guarantee (including a letter of credit) of the purchase price of Inventory or Equipment sold by the Borrower and all tax refunds (such accounts, general
intangibles and moneys due and to become due being herein called collectively “Accounts”); 
  
 (b) all instruments, chattel paper or letters of credit (each as defined in the Uniform Commercial Code) of the Borrower evidencing, representing, arising
from or existing in respect of, relating to, securing or otherwise supporting the payment of, any of the Accounts, including (but not limited to) promissory notes, drafts, bills of exchange and trade acceptances (herein collectively called
“Instruments”); 
  
 (c) all inventory (as defined in the
Uniform Commercial Code) of the Borrower, including all goods obtained by the Borrower in exchange for such inventory, and any products 

 made or processed from such inventory including all substances, if any, commingled therewith or added thereto (herein
collectively called “Inventory”); 
  
 (d) all other
accounts or general intangibles of the Borrower not constituting Accounts; 
  
 (e) all equipment (as defined in the Uniform Commercial Code) of the Borrower (herein collectively called “Equipment”); 
  
 (f) each contract and other agreement of the Borrower relating to the sale or other disposition of Inventory or Equipment;

  
 (g) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of the Borrower covering, evidencing or representing Inventory or Equipment (herein collectively called “Documents”); 
  
 (h) all rights, claims and benefits of the Borrower against any Person arising out of, relating to or in connection with
Inventory or Equipment purchased by the Borrower, including, without limitation, any such rights, claims or benefits against any Person storing or transporting such Inventory or Equipment; 
  
 (i) all cash of the Borrower; 
  
 (j) all Contracts, together with all Contract Rights; 
  
 (k) the balance from time to time in the Collateral Account; 
  
 (l) all Intellectual Property, other than non-assignable rights owned by the
Borrower under licenses whose ownership is solely incidental to the commercial activities of the Borrower; 
  
 (m) all other property of the Borrower’s estate (within the meaning of the Bankruptcy Code), real or personal, including all rights of payment
arising pursuant to the provisions of the Bankruptcy Code; and 
  
 (n) all other tangible and intangible personal 

 property and fixtures of the Borrower, including, without limitation, all proceeds, products, offspring, accessions,
rents, profits, income, benefits, substitutions and replacements of and to any of the property of the Borrower described in the preceding clauses of this Section 2.1 (including, without limitation, any proceeds of insurance thereon and all causes of
action, claims and warranties now or hereafter held by the Borrower in respect of any of the items listed above) and, to the extent related to any property described in said clauses or such proceeds, products and accessions, all books,
correspondence, credit files, records, invoices and other papers, including without limitation all tapes, cards, computer runs and other papers and documents in the possession or under the control of the Borrower or any computer bureau or service
company from time to time acting for the Borrower; but excluding any right, title and interest of the Borrower in, to or under the collateral securing Permitted Liens, as that term is defined in the Credit Agreement (the “Excluded
Property”), to the extent the security interest created hereby or an assignment as security of all or part of the Borrower’s right, title or interest in, to or under such Excluded Property would breach, violate or cause a default (which
would not be excused or permissible under the relevant provisions of the Bankruptcy Code or by entry of the Final Order or Interim Order, as the case may be) under any agreement or Contract, including the Innotrac Stipulation, to which the Borrower
is a party or by which it is bound relating to such Excluded Property (it being understood, however, that the proceeds of Excluded Property shall not be excluded from the Collateral except to the extent such a breach, violation or default would
arise from the inclusion of such proceeds in the Collateral (which would not be excused or permissible under the relevant provision of the Bankruptcy Code)). Without limiting the Borrower’s obligations under the Credit Agreement with respect to
such matters, the foregoing grant of a security interest in and of itself shall not be deemed (i) to constitute, require or prevent the assumption of any obligation in the Chapter 11 Case or (ii) to prohibit the rejection of any obligation in the
Chapter 11 Case. Anything herein contained to the contrary notwithstanding, the Borrower shall remain liable under any agreements or Contracts, referred to in this Section 2 and to perform all of its respective obligations thereunder, all in
accordance with the respective terms and provisions thereof, but subject to the relevant provisions of the Bankruptcy Code and without prejudice to the Borrower’s right to assume or reject such leases or executory contracts under § 365 of
the Bankruptcy Code, and the Lender shall have no obligation or liability under any of the aforementioned agreements or Contracts by reason of or arising out of the foregoing grant, nor shall Lender be required or obligated in any manner to perform
or fulfill any obligation of the Borrower pursuant thereto, or to make any payment, or to present or file any claim, or to take any action to collect or enforce the payment of any amounts which may have been assigned to Lender or to which it may be
entitled at any time. However, the Lender shall, at its option, have the right, but not the obligation, to cure any defaults under any such agreements or Contracts being assumed and/or assumed and assigned to the Lender or its designee in connection
with the 

 exercise of its remedies hereunder and under Section 10.3 of the Credit Agreement. Nothwithstanding any of the foregoing,
the Committee shall be permitted to investigate and commence any claim or action with regard to the Liens and security interests granted herein, which Liens and security interests shall be subject to avoidance if such claims and actions are
successful. 
  
 ARTICLE 3 
  
 REPRESENTATIONS AND WARRANTIES 
  
 Section 3.1 Representations and Warranties. 
  
 The Borrower represents and warrants to the Lender as of the date hereof as
follows: 
  
 (a) The Borrower is (or will be at the time the Lien
created hereby attaches) and will continue to be until all of the Obligations have been satisfied in full the sole legal, beneficial and record owner of the Collateral in which it purports to grant a security interest pursuant to Section 2 hereof
and no Lien exists or will exist upon such Collateral at any time (and no right or option to acquire the same exists in favor of any other Person), except for the Liens and security interests in favor of the Lender created or provided for herein,
and in the Credit Agreement and the Liens permitted under Section 9.2 of the Credit Agreement, which Liens and security interests constitute first priority perfected Liens and security interests in and to all of such Collateral, except for the
Permitted Liens to which the Lender’s security interest herein is junior and subordinate. There is no financing statement naming the Borrower as debtor (or similar documents or instrument of registration under the law of any jurisdiction) now
on file or registered in any public office covering any interest of the Borrower in any Collateral, except as permitted under Section 9.1 of the Credit Agreement. 
  
 (b) This Agreement creates a valid first priority security interest in favor of the Lender in the Collateral, as security
for the Obligations, except for Permitted Liens to which the Lender’s security interest herein is junior and subordinate, the Carve-Out Expenses and the Committee’s rights to investigate, commence any claim or cause of action and avoid any
Lien or security interest granted herein. Upon entry of the Interim Order or Final Order, as the case may be, such security interest is, or in the case of Collateral in which the Borrower 

 obtains rights after the date hereof, will be, a perfected first priority security interest, subject to Permitted Liens.
Upon entry of the Interim Order or Final Order, as the case may be, all action necessary or desirable to perfect and protect such security interest has been duly taken. 
  
 (c) Annexes 3, 4, and 5 hereto set forth a complete and correct list of all Copyrights, Patents and Trademarks (other than
immaterial rights arising under common law) owned by the Borrower on the date hereof; the Borrower owns and possesses the right to use, and has done nothing to authorize or enable any other Person to use, any Copyright, Patent or Trademark listed in
said Annexes 3,4, and 5, and all registrations listed in said Annexes 3, 4, and 5 are valid and in full force and effect; the Borrower owns and possesses the right to use all Copyrights, Patents and Trademarks. 
  
 (d) The chief executive office of the Borrower is 11 West 42nd Street, New York, NY 10036. 
  
 ARTICLE 4 
  
 FURTHER ASSURANCES; REMEDIES 
  
 Section 4.1 Further Assurances; Remedies. 
  
 In furtherance of the grant of the security and pledge interest pursuant to Section 2 hereof, each Borrower hereby agrees with the Lender as follows: 
  
 Section 4.2 Delivery and Other Perfection. 
  
 Each Borrower shall: 
  
 (a) if any of the shares, securities, interests, moneys or property required to be pledged by it under Section 2.1 hereof are received by the Borrower,
forthwith either (i) transfer and deliver to the Lender such shares or securities or interests so received by the Borrower (together with the certificates for any such shares and securities or interests duly endorsed in blank or accompanied by
undated stock powers duly executed in blank), all of which thereafter shall be held by the Lender, pursuant to the terms of this Agreement, as part of the Collateral or (ii) take such other action as the Lender 

 shall deem necessary or reasonably appropriate to duly record the Lien created hereunder in such shares, securities,
interests, moneys or property in said clauses (a) and (b) of Section 2.1 herein; 
  
 (b) deliver and pledge to the Lender any and all Instruments, endorsed and/or accompanied by such instruments of assignment and transfer in such form and substance as the Lender may request provided that so
long as no Default shall have occurred and be continuing, Borrower may retain for collection in the ordinary course any Instruments received by the Borrower in the ordinary course of business and the Lender shall, promptly upon request of the
Borrower make appropriate arrangements for making any other Instrument pledged by the Borrower available to the Borrower for purposes of presentation, collection or renewal (any such arrangement to be effected, to the extent deemed appropriate by
the Lender, against trust receipt or like document); 
  
 (c) give,
execute, deliver, file and/or record any financing statement, notice, instrument, document, agreement or other papers that may be necessary or desirable (in the reasonable judgment of the Lender) to create, preserve, perfect or validate the security
interest granted pursuant hereto or to enable the Lender to exercise and enforce its rights hereunder with respect to such security and pledge interest; 
  
 (d) keep full and accurate books and records relating to the Collateral, and stamp or otherwise mark such books and records in such manner as the Lender
may reasonably require in order to reflect the security interests granted by this Agreement; and 
  
 (e) permit representatives of the Lender, upon reasonable notice, at any time during normal business hours to inspect and make abstracts from its books
and records pertaining to the Collateral, and permit representatives of the Lender to be present at the Borrower’s place of business to receive copies of all communications and remittances relating to the Collateral, and forward copies of any
notices or communications received by the Borrower with respect to the Collateral, all in such manner as the Lender may reasonably require. 
  
 Section 4.3 Preservation of Rights. 
  
 The Lender shall not be required to take steps necessary to preserve any rights against prior parties to any of the Collateral. 

 Section 4.4 Special Provisions Relating to Certain Collateral. 
  
 (a) Intellectual Property. 
  
 (1) For the purpose of enabling the Lender to exercise rights and remedies
under Section 4.5 hereof at such time as the Lender shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Borrower hereby grants to the Lender, to the extent assignable without any consent not theretofore
obtained, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to the Borrower) to use, assign, license or sublicense any of the Intellectual Property now owned or hereafter acquired by the Borrower,
wherever the same may be located. 
  
 (2) Notwithstanding
anything contained herein to the contrary, so long as no Event of Default shall have occurred and be continuing, the Borrower will be permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with
respect to the Intellectual Property. The exercise of rights and remedies under Section 4. 4(b) hereof by the Lender shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by the Borrower in accordance with
the first sentence of this clause (2). 
  
 (b) Equipment.
The Borrower shall, upon the request of the Lender, deliver to the Lender originals of the certificates of title or ownership for all Equipment covered by a certificate of title owned by the Borrower with the Lender listed as lienholder, and take
such other action as the Lender shall deem appropriate to perfect the security interest created hereunder in all such Equipment. 
  
 Section 4.5 Events of Default, Etc. 
  
 During any period in which an Event of Default shall have occurred and be continuing after any applicable cure periods provided under Section 10.1 of the
Credit Agreement, but subject to the relevant provisions of Section 10.3 of the Credit Agreement: 
  
 (a) the Borrower shall, at the request of the Lender, assemble the Collateral owned by it at such place or places, reasonably convenient to both the
Lender and the Borrower, designated in the Lender’s request; 

 (b) the Lender may make any reasonable compromise or settlement deemed desirable with respect to any of
the Collateral and may extend the time of payment, arrange for payment in installments, or otherwise modify the terms of, any of the Collateral; 
  
 (c) the Lender shall have all of the rights and remedies with respect to the Collateral of a secured party under the Uniform Commercial Code (whether or
not said Code is in effect in the jurisdiction where the rights and remedies are asserted) and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation, the right, to the maximum extent permitted by law, to exercise all voting, consensual and other powers of ownership pertaining to the Collateral as if the Lender were the sole and absolute
owner thereof (and the Borrower agrees to take all such action as may be appropriate to give effect to such right); 
  
 (d) the Lender in its discretion may, in its name or in the name of the Borrower or otherwise, demand, sue for, collect or receive any money or property
at any time payable or receivable on account of or in exchange for any of the Collateral, but shall be under no obligation to do so; 
  
 (e) foreclose on this Agreement and the security interests created thereby, and sell, lease, assign or otherwise dispose of all or any part of the
Collateral or any part thereof which shall then be or shall thereafter come into the possession, custody or control of the Lender or any of its agents in a public or private sale; and 
  
 (f) with respect to all unexpired leases and executory contracts (within the meaning of the Bankruptcy Code), the Lender
shall, without application to or order of the Bankruptcy Court, have the exclusive right, upon the occurrence and during the continuance of an Event of Default on the Termination Date, to direct the disposition, subject to the rights and remedies
enforceable by or available to parties, other than the Borrower (including rights under §365 of the 

 Bankruptcy Code), with respect to such property, of the Borrower’s right, title and interest in and to any such
property, including directing the Borrower to seek any consent necessary to dispose of such property or assume and assign such property to the Lender or its designee. The proceeds from any such disposition shall be applied in accordance with the
terms of the Credit Agreement. 
  
 Section 4.6 Deficiency.

  
 If the proceeds of sale, collection or other realization of
or upon the Collateral pursuant to Section 4.5 hereof are insufficient to cover the costs and expenses of such realization and the payment in full of the Obligations, the Borrower shall remain liable for any deficiency. 
  
 Section 4.7 Removals, Etc. 
  
 Without at least 30 days’ prior written notice to the Lender and the
Committee, the Borrower shall not maintain any of its books and records with respect to the Collateral at any office or maintain its principal place of business at any place, or permit any Inventory or Equipment to be located anywhere, other than at
one of the locations identified in Annex 2 hereto under its name or in transit from one of such locations to another or (ii) change its name, or the name under which it does business, from the name shown on the signature pages hereto. 
  
 Section 4.8 Application of Proceeds. 
  
 Except as otherwise herein expressly provided, the proceeds of any
collection, sale or other realization of all or any part of the Collateral of the Borrower under Section 4.5 hereof, and any other cash of the Borrower at the time held by the Lender under and in accordance with Section 4 hereof or this Section 5,
shall be applied by the Lender to reduce the Obligation then outstanding in accordance with the terms of the Credit Agreement. 
  
 As used in this Section 4, “proceeds” of Collateral shall mean cash, securities and other property realized in respect of, and
distributions in kind of, Collateral, including any thereof received under any reorganization, liquidation or adjustment of debt of the Borrower. 
  
 Section 4.9 Attorney-in-Fact. 
  
 Without limiting any rights or powers granted by this Agreement to the Lender while no Event of Default has occurred and is continuing, upon the
occurrence and during the continuance of any Event of Default, the Lender is hereby appointed the attorney-in-fact of each Borrower for the purpose of carrying out the provisions of this Section 5 and taking any action and executing any instruments
which the Lender may deem necessary or reasonably advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest. 

 Section 4.10 Perfection. 
  
 Prior to or concurrently with the execution and delivery of this Agreement, each Borrower shall file such financing
statements and other documents in such offices as the Lender may request to perfect the security interests granted by Section 2.1 hereof. 
  
 Section 4.11 Termination. 
  
 When all the Obligations shall have been paid in full and the Commitments of the Lender under the Credit Agreement shall have expired or been terminated,
this Agreement shall terminate, and the Lender shall forthwith cause to be assigned, transferred and delivered, against receipt but without any recourse, warranty or representation whatsoever, any remaining Collateral and money received in respect
thereof, to or on the order of the Borrower and to be released and cancelled all licenses and rights referred to in Section 4.4(b) hereof. The Lender shall also execute and deliver to the Borrower upon such termination such Uniform Commercial Code
termination statements, certificates for terminating the Liens and such other documentation as shall be reasonably requested by the Borrower to effect the termination and release of the Lien of this Agreement on the Collateral. 
  
 Section 4.12 Expenses and Indemnities. 
  
 (a) The Borrower agrees to reimburse the Lender for Legal Fees incident to
(i) any Event of Default and (ii) any enforcement or collection proceeding resulting therefrom, including, without limitation, (A) performance by the Lender of any obligations of the Borrower in respect of the Collateral that the Borrower have
failed or refused to perform, (B) any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any of the Collateral, and for the care of the Collateral and defending or asserting rights and claims
of the Lender in respect thereof, by litigation or otherwise, including expenses of insurance, (C) judicial or regulatory proceedings and (D) the enforcement of this Section 4, and all such expenses shall be Obligations to the Lender secured under
Section 2 hereof. 
  
 (b) The Borrower agrees to indemnify the
Lender from and against any and all reasonable claims, losses and liabilities (including, without limitation, the reasonable fees, client charges and other expenses of the Lender’s outside and internal counsel) growing out of or resulting from
this Agreement or the enforcement of any of the terms hereof 

 (including, without limitation, the sale of Collateral pursuant to a public or private offering and each and every
document produced in furtherance thereof), except claims, losses or liabilities resulting solely and directly from the Lender’s gross negligence, bad faith or willful misconduct, subject to prior written notice to the Borrower and the Committee
with a period of ten Banking Days to raise objections to such claims, losses, and liabilities, and further, provided that all such objections shall be resolved by the Bankruptcy Court. 
  
 Section 4.13 Further Assurances. 
  
 The Borrower agrees that, from time to time upon the written request of the
Lender, the Borrower will execute and deliver such further documents and do such other acts and things as the Lender may reasonably request in order fully to effect the purposes of this Agreement. 
  
 Section 4.14 Releases. 
  
 Without limiting the obligations of the Borrower hereunder and under the
Credit Agreement, upon the sale, assignment, transfer or other disposition of any property effected in accordance with the Credit Agreement, the Lender shall, at the Borrower’s expense, execute and deliver to the Borrower such Uniform
Commercial Code termination statements and such other documentation as shall be reasonably requested by the Borrower to effect the termination and release of the Lien of this Agreement on such property. 
  
 Section 4.15 Other Financing Statements and Liens. 
  
 Except as otherwise permitted under Section 9.1 of the Credit Agreement and
except for precautionary financing statements filed with respect to operating leases (as defined in accordance with GAAP) entered into by the Borrower, the Borrower shall not file or suffer to be on file, or authorize or permit to be filed or to be
on file, in any jurisdiction, any financing statement or like instrument with respect to the Collateral in which the Lender is not named as the sole secured party. 
  
 ARTICLE 5 
  
 MISCELLANEOUS 
  
 Section 5.1 No Waiver. 
  
 No failure on the part of the Lender or any agent of the Lender to exercise, and no course of dealing with respect to, and no delay in exercising, any
right, power or remedy 

 hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Lender or any agent of the
Lender of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. 

 
 Section 5.2 Notices. 
  
 All notices, requests, consents and demands hereunder shall be made in the
manner and at the addresses set forth in Section 11.5 of the Credit Agreement. 
  
 Section 5.3 Amendments, Etc. 
  
 The terms of this Agreement may be waived, altered or amended only by an instrument in writing duly executed by the Borrower and the Lender. Any such amendment or waiver shall be binding upon the Lender and the Borrower. 
  
 Section 5.4 Successors and Assigns. 
  
 This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Borrower and the Lender (provided that the Borrower shall not assign or transfer its rights hereunder without the prior written consent of the Lender). 
  
 Section 5.5 Captions. 
  
 The captions and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 
  
 Section 5.6 Counterparts. 
  
 This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart. 
  
 Section 5.7 Governing Law. 
  
 This Agreement shall be governed by, and construed in accordance with, the internal law of the State of New York, without regard to choice of law principles thereof, except to the extent governed by the Bankruptcy Code. 

 Section 5.8 Severability. 
  
 If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i)
the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Lender in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Security and Pledge Agreement to be duly executed and delivered as of the day and
year first above written. 
  

			
	 TACTICA INTERNATIONAL, INC.

		
	 By
	 	 /s/ Avi Sivan

	 Title:
	 	 
	 Chief Executive Office:

	
	 TACTICA FUNDING 1, LLC

		
	 By
	 	 /s/ Prem Ramchandani

	 Title:
	 	 President

 MATERIAL CONTRACTS OF BORROWER 
  
 See attached list. 

 LIST OF LOCATIONS AND CHIEF EXECUTIVE OFFICE OF THE BORROWER  
  
 11 West 42nd Street, New York, N.T. 10036 

 LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND APPLICATIONS  
  
 FOR COPYRIGHT REGISTRATIONS 

 LIST OF PATENTS AND PATENT APPLICATIONS  
  
 United States Patent No. 6,191,930 Bi– Ionizing Hair Dryer 

 LIST OF TRADE NAMES, TRADEMARKS, SERVICE MARKS, 
  
 TRADEMARK AND SERVICE MARK REGISTRATIONS AND 
  
 APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONSForm of Director Compensation Agreement

 Exhibit 10.7 
  
 DIRECTOR COMPENSATION AGREEMENT 
  
 AGREEMENT, made          day of
                     200  , between LEE ENTERPRISES, INCORPORATED, a Delaware corporation (the “Company”),
and                     
(“                    ”). 
  
 RECITALS 
  
                      has performed services for
the Company, as a non-employee member of the Board of Directors of the Company and a member of the Company’s Executive Compensation Committee; and 
  
 The Company has agreed with
                     on compensation for
                    ’s services in the form of an annual director’s fee and per diem allowances for attendance at Board and
Committee meetings; and 
  
                      has asked to be given the opportunity to defer some or all of his compensation to a future date and the Company
is willing to do so upon the terms and conditions hereinafter set forth. 
  
 IT IS THEREFORE AGREED: 
  
 1. The Company agrees to pay to                      compensation for his services as may be established from time to time by
resolution of its Board of Directors. The current compensation schedule is set forth in Exhibit “A” to this Agreement. 
  
 2. At                     ’s written
direction on Exhibit “B”, the Company shall (a) pay to the charitable organization(s) designated on Exhibit “B” such portions of
                    ’s compensation as may be specified therein, and (b) contribute a matching amount on a dollar-for-dollar basis, not
to exceed $5,000 annually, to such organization(s). The Company contribution shall be allocated among charitable organizations, if more than one is designated by
                    , in the manner specified by
                     in Exhibit “B” or, absent such specification, on a prorata basis. Company contributions shall be paid
only to an organization to which a contribution is deductible for Federal corporate income tax purposes under §170 of the Internal Revenue Code of 1986, as amended. 
  
 3.
                     shall have the right to elect to defer all or any part of the compensation which he will earn as a director and committee
member to the Company during any calendar year by filing with the Company, prior to the commencement of each calendar year during which
                     will render services to the Company, a written election to defer receipt of compensation for such services in the form
attached as Exhibit “A.” Such election shall specify the services for which compensation is to be deferred. Such election shall apply to more than one calendar year unless revoked or modified, by written election filed with the
Company, with respect to any calendar year which has not commenced at the time of filing thereof. 
  
 4. The Company shall establish a general ledger account, hereinafter referred to as the
                     Deferred Compensation Account, and shall credit to such account, as the services are rendered, the amount of deferred
compensation applicable to such services. 
  
 5. Unless invested
in the Company’s Supplemental Executive Retirement Plan – Rabbi Trust (in which event the terms of that plan will govern the payment of earnings), at the end of each calendar year the Company will also credit to the
                     Deferred Compensation Account 

 
interest upon the average credit balance in such account during such year at the average rate of interest which the Company earned on its invested funds
during such year. Interest so calculated shall also be credited to such account from the beginning of the last calendar year to the date of payment under paragraph 6 hereof. 
  
 6. The Company shall pay to
                     or to his designated beneficiary in the event
                     shall not then survive, the amount standing to his credit in the
                     Deferred Compensation Account upon termination of
                    ’s status as a director of the Company, whether by reason of his resignation from the Board of Directors or death.

  
 7. The Board of Directors of the Company shall have the right
at any time to pay to                      or his designated beneficiary any portion of the amount then credited to the
                     Deferred Compensation Account upon a good faith determination by the Board of Directors that the payee is confronted by a
need for financial assistance in meeting a real emergency or avoiding a substantial hardship beyond the payee’s control. 
  
 8. The Company shall be entitled, upon thirty (30) days’ prior written notice to
                    , to terminate this Agreement as of the beginning of any calendar year, but such termination shall not affect
                    ’s rights hereunder with respect to compensation earned or interest credited thereon prior to such termination.

  
 9. The Company’s obligation to make payment to
                     hereunder shall be unsecured and unfunded, and
                    ’s right to payment shall be that of a general creditor of the Company. 
  
 10. Nothing herein contained shall constitute a grant to
                     of a right to be employed by the Company in any capacity whatsoever. 
  
 11. This Agreement supersedes all prior agreements or understandings between
the parties concerning the matters described herein. 
  
 12. The
deferred compensation payable under this Agreement shall not be subject to alienation, assignment, garnishment, execution or levy of any kind, and any attempt to cause any compensation to be so subjected shall not be recognized. 
  

							
	 	 	 	 	LEE ENTERPRISES, INCORPORATED
				
	 	 	 	 	By	 	 
	 	 	 	 	 	 	                                      
   , President

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