Document:

Intellectual Property Security Agreement

  
 EXHIBIT 10.7

 INTELLECTUAL PROPERTY SECURITY AGREEMENT 

THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “Security Agreement”) dated as of November 3, 2010, is made by
PHOENIX FOOTWEAR GROUP, INC., a Delaware corporation (the “Borrower”), in favor of GIBRALTAR BUSINESS CAPITAL, LLC, a Delaware limited liability company (together with its successors and assigns,
“Agent”) for the benefit of the Lenders. 
 RECITALS 

WHEREAS, Borrower, the Agent and the lenders parties thereto (the “Lenders”) are parties to that certain Loan and
Security Agreement dated as of even date herewith (as the same may be amended, supplemented or modified from time to time, the “Loan Agreement”), which provides (i) for Lenders to make certain loans to Borrower, and
(ii) for the grant by Borrower to Agent for the benefit of the Lenders of a security interest in the Borrower’s assets, including, without limitation, patents, its trademarks, trademark applications and registrations, trade names,
copyrights and copyright registrations, service marks, service mark applications, all goodwill relating thereto and licenses, and all proceeds thereof. 
 NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Borrower
(intending to be legally bound) hereby agrees as follows: 
 1. Incorporation of Loan Agreement. The Loan
Agreement and the terms and provisions thereof are hereby incorporated herein in their entirety by this reference thereto. All terms capitalized but not otherwise defined herein shall have the same meanings herein as in the Loan Agreement.

 2. Security Interest in Intellectual Property. To secure the complete satisfaction and payment and
performance when due (or declared due in accordance with the terms of the Loan Agreement) of the “Liabilities”, as defined in the Loan Agreement (collectively, the “Obligations”), the Borrower hereby grants to Agent for
the benefit of the Lenders a continuing security interest in and to any and all of the Borrower’s right, title and interest in and to all of the following now owned and existing and hereafter arising, created or acquired property (collectively,
the “Intellectual Property”): 
 (i) trademarks, trademark registrations, trademark
applications, trade names and tradestyles, brand names, service marks, service mark registrations and service mark applications, including, without limitation, the trademarks, trade names, brand names, service marks and applications and
registrations thereof listed on Exhibit A attached hereto and hereby made a part hereof, and (a) all renewals or extensions thereof, (b) all income, royalties, proceeds, damages and payments now and hereafter due or payable with
respect thereto, including, without limitation, damages and payments for past or future infringements thereof, (c) the right to sue for past, present and future infringements thereof, and (d) all rights corresponding thereto throughout the
world, if any (all of the foregoing trademarks, trade names and tradestyles, brand names, service marks and applications and registrations thereof, together with the items described in clauses (a)-(d) of this subsection 2(i), are sometimes
hereinafter referred to individually as a “Trademark” and, collectively, as the “Trademarks”); 

  
 (ii)
license agreements (to the extent such license agreements may be assigned without violating the terms of any such license agreement) with respect to any of the Intellectual Property or any other patent, trademark, service mark or any application or
registration thereof or any other trade name or tradestyle between Borrower and any other party, whether Borrower is a licensor or licensee under any such license agreement (all of the foregoing license agreements and Borrower’s rights
thereunder are referred to collectively as the “Licenses”); 
 (iii) the goodwill of
Borrower’s business connected with and symbolized by the Trademarks; 
 (iv) copyrights, copyright
registrations and copyright applications, used in the United States, including, without limitation, namely the copyright registrations and copyright applications listed on Exhibit B attached hereto and made a part hereof, and
(a) renewals or extensions thereof, (b) all income, royalties, proceeds, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, damages and payments for past or future infringements
thereof, (c) the right to sue for past, present and future infringements thereof, and (d) all rights corresponding thereto throughout the world (all of the foregoing copyrights, copyright registrations and copyright applications, together
with the items described in clauses (a)-(d), are sometimes hereinafter individually and/or collectively referred to as the “Copyrights”); 
 (v) all trade secrets, formulas, processes, devices, know-how, or compilations of information (including technical information and non-technical information such as customer lists and marketing plans),
collectively referred to as trade secrets, which are not available to others and which are maintained as confidential by Borrower, and the right to prevent misappropriation and unauthorized disclosures thereof and all rights corresponding thereto
throughout the world (all of the foregoing trade secrets and associated rights are sometimes hereinafter individually and/or collectively referred to as the “Trade Secrets”); and 

(vi) patents and patent applications, including, without limitation, the inventions and improvements described and claimed
therein, and those patents listed on Exhibit C attached hereto and hereby made a part hereof, and (a) all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof, (b) all income, royalties,
damages, proceeds and payments now and hereafter due or payable under or with respect thereto, including, without limitation, damages and payments for past or future infringements thereof, (c) the right to sue for past, present and future
infringements thereof, and (d) all rights corresponding thereto throughout the world (all of the foregoing patents and applications, together with the items described in clauses (a)-(d) of this subsection 2(i), are sometimes hereinafter
referred to individually as a “Patent” and, collectively, as the “Patents”). 

  
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 3.
Representations and Warranties. The Borrower hereby represents and warrants to Agent, which representations and warranties shall survive the execution and delivery of this Security Agreement, that as of the date hereof: 

(i) None of the Intellectual Property owned by Borrower that is United States Intellectual Property and material to
Borrower’s business has been adjudged invalid or unenforceable nor has any such Intellectual Property been cancelled, in whole or in part, and each such material Intellectual Property is presently subsisting; 

(ii) To Borrower’s knowledge, each of the Intellectual Property owned by Borrower and material to Borrower’s
business is valid and enforceable; 
 (iii) Borrower is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to the Intellectual Property that is scheduled in Exhibits A and B hereto, free and clear of any liens, security interests, mortgages, charges and encumbrances, (including, without
limitation, licenses other than non-exclusive licenses which may be granted in the ordinary course of business, consent-to-use agreements, shop rights and covenants by Borrower not to sue third persons) other than a security interest granted in
favor of Agent; 
 (iv) Borrower has adopted, used and is currently using all of the Trademarks and Patents owned
by Borrower that are material to Borrower’s business; 
 (v) Borrower has no knowledge of any suits or
actions commenced or threatened within the last three years with reference to or in connection with any of the Intellectual Property; 
 (vi) No trademark opposition or cancellation proceedings have been filed with the United States Patent and Trademark Office against any of the Trademarks owned by Borrower; 

(vii) The Licenses are valid and binding agreements, enforceable in accordance with their terms. Each of the Licenses is
in full force and effect and to Borrower’s knowelde there is no material default under any of the Licenses; 

(viii) To Borrower’s knowledge, none of the Intellectual Property owned by Borrower infringes upon the rights or
property of any other person or entity or is currently being challenged in any way, and there are no pending or threatened claims, litigation, proceedings or other investigations regarding any such Intellectual Property; and 

(ix) This Security Agreement has been executed and delivered on behalf of the Borrower by a duly authorized officer of
such Borrower. 
 4. Restrictions on Future Agreements. The Borrower agrees that until all Obligations
shall have been satisfied and indefeasibly paid in full and the Loan Agreement shall have been terminated in accordance with its terms, Borrower shall not, without the prior written consent of Agent, sell, transfer, mortgage, convey, dispose,
encumber or assign any or all of, or grant an irrevocable license or sublicense in perpetuity under, the Intellectual Property, or enter into any other agreement with respect to the Intellectual Property (other than licenses in the ordinary course
of business) that materially adversely affects the rights of Agent in and to the Intellectual Property, or take any action or permit any action to be taken by others subject to its control, including, without limitation, licensees or sublicensees,
or fail to take any action, in each of the foregoing cases which would materially adversely affect the validity or enforcement of the rights provided or transferred to Agent under this Security Agreement. 

  
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 5.
New Intellectual Property. The Borrower hereby represents and warrants to Agent that the Intellectual Property listed on Exhibits A, B and C respectively, constitute all of the registered United States Trademarks and
Copyrights, as applicable, now owned by Borrower and material to Borrower’s business. If, before all Obligations shall have been satisfied in full or before the Loan Agreement has been terminated in accordance with its terms, Borrower shall
obtain rights to any new Intellectual Property, the provisions of this Security Agreement above shall automatically apply thereto and, with respect to any US Trademark and Copyright registrations and applications Borrower shall give to Agent prompt
written notice thereof. Borrower hereby authorizes Agent to modify this Security Agreement by amending Exhibits A, B and C, as applicable, to include any such Intellectual Property, and to file or refile this Security Agreement
with the U.S. Patent and Trademark Office and U.S. Copyright Office or Library of Congress (at Borrower’s sole cost and expense). 
 6. Royalties; Terms; Rights Upon Default. The term of this Security Agreement shall extend until the earlier of (i) the expiration of all of the respective Intellectual Property subject to the
grant of security interest hereunder, and (ii) the indefeasible payment in full of all Obligations and the termination of the Loan Agreement. The Borrower agrees that upon the occurrence and during the continuance of an Event of Default, the
use by Agent shall have a non-exclusive license and right to use all Intellectual Property to the same extent as the Borrower uses such Intellectual Property, and without any liability for royalties or other related charges from Agent to any
Borrower. Upon the occurrence and during the continuance of any Event of Default, Borrower hereby authorizes: (a) the Register of Copyrights, United States Copyright Office, to issue any and all certificates of registration or renewal for all
of the Copyrights to Agent as assignee of Borrower’s entire interest therein; and (b) the Commissioner of Patents and Trademarks, United States Patent and Trademark Office to issue any and all certificates of registration or renewal for
all of the Trademarks to Agent as assignee of Borrower’s entire interest therein and in the goodwill of Borrower’s business connected therewith and symbolized thereby. 

7. Effect on Loan Agreement. The Borrower acknowledges and agrees that this Security Agreement is not intended to
limit or restrict in any way the rights and remedies of Agent under the Loan Agreement but rather is intended to facilitate the exercise of such rights and remedies. 

8. Release of Security Agreement. Upon the payment and performance in full of the Obligations, and the full and
final termination of any commitment to extend any loan or financial accommodations under the Loan Agreement, this Security Agreement shall terminate, and Agent shall execute and deliver any document reasonably requested by Borrower, at
Borrower’s sole cost and expense, as shall be necessary to evidence termination of the security interest granted by Borrower to Agent hereunder. 
 9. Duties of Borrower. Except as otherwise permitted by the Loan Agreement, the Borrower shall have the duty to the extent commercially reasonable and in Borrower’s good faith business
judgment: (i) to file and prosecute diligently any trademark or service mark applications pending as of the date hereof or hereafter until all Obligations shall have been paid in full and the Loan Agreement has been terminated, (ii) to
make application on trademarks and service marks, (iii) to preserve and maintain all rights in the Intellectual Property 

  
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owned by Borrower (including, but not limited to, with respect to Trademarks, the filing of affidavits of use and, incontestability, where applicable, under §§8 and 15 of the Lanham Act
(15 U.S.C. § 1058, 1065) and renewals and, to the extent commercially reasonable, initiating opposition or cancellation proceedings or litigation against users of the same or confusingly similar marks who seriously threaten the validity or
rights of Borrower in its Trademarks), and (iv) to ensure that the Intellectual Property owned by Borrower is and remains enforceable. Any and all costs and expenses incurred in connection with Borrower’s obligations under this
Section 9 shall be borne by Borrower. 
 10. Agent’s Right to Sue. Upon the occurrence
and during the continuance of an Event of Default, Agent shall have the right, but shall in no way be obligated, to bring suit in its own name to enforce the Intellectual Property, and, if Agent shall commence any such suit, Borrower shall, at the
request of Agent, do any and all lawful acts and execute any and all proper documents and instruments reasonably required by Agent in aid of such enforcement. 
 11. Waivers. No course of dealing between or among Borrower and Agent, nor any failure to exercise, nor any delay in exercising, on the part of Agent, any right, power or privilege hereunder or
under the Loan Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. 
 12. Severability. The provisions of this Security Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and shall not in any manner
affect such clause or provision in any other jurisdiction, or any other clause or provision of this Security Agreement in any jurisdiction. 
 13. Modification. This Security Agreement cannot be altered, amended or modified in any way, except as specifically provided in Section 5 hereof or by a writing signed by Borrower and
Agent. 
 14. Cumulative Remedies; Power of Attorney. All of Agent’s rights and remedies with respect
to the Intellectual Property, whether established hereby or by the Loan Agreement, or by any other agreements or by law shall be cumulative and may be exercised singularly or concurrently. The Borrower hereby authorizes Agent upon the occurrence and
during the continuance of an Event of Default, to make, constitute and appoint any officer or agent of Agent as Agent may select, in its sole discretion, as Borrower’s true and lawful attorney-in-fact, with power to, upon written notice to
Borrower, (i) endorse Borrower’s name on all applications, documents, papers and instruments necessary or desirable for Agent in the use of the Intellectual Property, or (ii) take any other actions with respect to the Intellectual
Property as Agent deems to be in the best interest of Agent, or (iii) grant or issue any exclusive or non-exclusive license under the Intellectual Property to any person or entity, or (iv) assign, pledge, sell, convey or otherwise transfer
title in or dispose of any of the Intellectual Property to any person or entity. Borrower hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney being coupled with an interest shall be
irrevocable until all Obligations shall have been paid in full and the Loan Agreement has been terminated. 

  
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 15.
Binding Effect; Benefits. This Security Agreement shall be binding upon Borrower and its respective successors and permitted assigns, and shall inure to the benefit of Agent and its successors, nominees and assigns; provided,
however, Borrower shall not assign this Security Agreement or any of Borrower’s obligations hereunder without the prior written consent of Agent. 
 16. Headings; Counterparts. Paragraph headings used herein are for convenience only and shall not modify the provisions which they precede. This Security Agreement may be signed in one or more
counterparts, but all of such counterparts shall constitute and be deemed to be one and the same instrument. A signature hereto sent or delivered by facsimile or other electronic transmission shall be as legally binding and enforceable as a signed
original for all purposes. 
 17. Further Assurances. The Borrower agrees to execute and deliver such
further agreements, instruments and documents, and to perform such further acts, as Agent shall reasonably request from time to time in order to carry out the purpose of this Security Agreement and agreements set forth herein. Borrower acknowledges
that a copy of this Security Agreement will be filed by Agent with the United States Patent and Trademark Office and, if applicable, the United States Copyright Office or Library of Congress, at the sole cost and expense of Borrower. 

18. Survival of Representations. All representations and warranties of Borrower contained in this Security
Agreement shall survive the execution and delivery of this Security Agreement. 
 19. GOVERNING LAW. THIS
SECURITY AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF ILLINOIS AND THE VALIDITY OF THIS SECURITY AGREEMENT, ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT, AND THE RIGHTS AND OBLIGATIONS OF PARTIES HEREUNDER, SHALL BE DETERMINED
UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW OR CHOICE OF LAW PRINCIPLES. 
 20. SUBMISSION TO JURISDICTION. EACH OF THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: 
 (i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND APPELLATE COURTS FROM ANY THEREOF; AND 

(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING ANY OBJECTION THAT SUCH PARTY MAY NOW OR HEREAFTER 

  
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HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME.

 21. JURY TRIAL WAIVER. EACH OF THE BORROWER AND AGENT HEREBY IRREVOCABLY AND KNOWINGLY WAIVES
(TO THE FULLEST EXTENT PERMITTED BY LAW), AS SEPARATELY BARGAINED FOR CONSIDERATION TO AGENT, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTIONS RELATED HERETO, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY. EACH OF THE BORROWER AND AGENT ACKNOWLEDGES THAT SUCH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT LEGAL COUNSEL
REGARDING THE MEANING AND EFFECT OF THIS PARAGRAPH. 
 [SIGNATURE PAGE FOLLOWS] 

  
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 IN WITNESS
WHEREOF, the Borrower has duly executed this Intellectual Property Security Agreement as of the date first written above. 
  

			
	PHOENIX FOOTWEAR GROUP, INC.
		
	By:	 	/s/ James Riedman
		 	 Name: James Riedman
 Its:
Chief Executive Officer

  

			
	Agreed and Accepted:
	
	GIBRALTAR BUSINESS CAPITAL, LLC
		
	By:	 	/s/ Darren M. Latimer
		 	 Darren M. Latimer
 Chief
Executive Officer

  
 EXHIBIT A

 TRADEMARKS 
 Trademark Registrations 
  

					
	 Mark
	  	 Registration No.
	  	 Registration Date

	TROTTERS	  	2089400	  	August 19, 1997
	SOFT WALK and Design	  	2899145	  	November 2, 2004
	H.S. TRASK BOZEMAN MONTANA and Design	  	2496187	  	November 9, 2001
	H.S. TRASK and bison Design	  	3573739	  	February 10, 2009
	H.S. TRASK & star Design	  	3573740	  	February 10, 2009
	H.S. TRASK & Design	  	3573738	  	February 10, 2009
	Black Bison Design	  	3573747	  	February 10, 2009
	H.S. TRASK (metal letters logo)	  	3643412	  	June 23, 2009
	FORT BRIDGER	  	3643405	  	June 23, 2009
	BRIDGER TRAIL	  	3643404	  	June 23, 2009
	H.S. TRASK (embossed design)	  	3829075	  	August 3, 2010
	H.S. TRASK (stacked buffalo)	  	3829076	  	August 3, 2010

 Trademark Applications

  

					
	 Mark
	  	 Serial No.
	  	 File Date

	 HEALTH GLIDE
	  	77/956286	  	March 11, 2010
	 SOFT-WALK SUSPENSION
	  	85/058362	  	June 9, 2010

  
 EXHIBIT B

 COPYRIGHTS 
 None. 

  
 EXHIBIT C

 PATENTS 

Patent Registrations 
  

					
	 Title
	  	 Patent No.
	  	 Issue Date

	 Insole Construction for Footwear
	  	6,675,501	  	1/13/04
	 Footwear Construction
	  	6,857,202	  	2/22/05
	 Insole Construction for Footwear
	  	6,922,914	  	8/2/05
	 Footwear Construction
	  	6,976,319	  	12/20/05
	 Insole Construction for Footwear
	  	7,171,764	  	2/6/07
	 Insole Construction for Footwear
	  	7,434,338	  	10/14/08Deposit Account Control Agreement

  
 EXHIBIT 10.8

 DEPOSIT ACCOUNT CONTROL AGREEMENT 
 This DEPOSIT ACCOUNT CONTROL AGREEMENT (this “Agreement”) is made as of November 1, 2010, by PACIFIC WESTERN BANK, a California state-chartered bank, whose address is 21600
Oxnard Street, Suite 100, Woodland Hills, CA 91367, Attn: SHARON SKIBISKI, (the “Bank”), PHOENIX FOOTWEAR GROUP, INC., a Delaware Corporation, whose address is 5840 El Camino Real, Suite 106, Carlsbad, CA 92008 (with
respect to its respective Blocked Deposit Account(s) (“Borrower”) and, GIBRALTAR BUSINESS CAPITAL, LLC, a Delaware Limited Liability Company, whose address is 60 Revere Drive Northbrook, IL 60062 Attn: Darren Latimer
(“Lender”). 
 W I T N E S S E T H: 

WHEREAS, Borrower has requested and Lender is providing the Borrower with certain revolving loans and a term loan up to the
maximum the aggregate stated amount of $5,750,000 (the “Loan”) which Loan is being secured by, among other collateral, certain [real property and certain personal property] related thereto (collectively, the “Property”); and

 WHEREAS, pursuant to that certain LOAN AND SECURITY AGREEMENT, dated as of November 2, 2010 between the
Borrower and Lender (the “Security Agreement”), funds are to be delivered by Borrower to Lender to be held and applied as additional collateral and as reserves for [taxes, replacement reserves, lease rollover, and any other reserves]
provided for in the Loan Agreement, and Lender directs Borrower and Borrower agrees, to deliver such payments to Bank for deposit into the following account at the Bank, and any further accounts which may be added to this Agreement by amendment (as
such accounts may be renumbered or retitled, the “Blocked Deposit Accounts”): 
  

									
	 Account Name
	  	Account #(s)	 	  	Tax Id #	 
	 Phoenix Footwear Lockbox
	  				  	 	15-0327010	  

 [which funds, if held for more than
one purpose, Borrower agrees may be commingled in the Blocked Deposit Accounts; and] 
 WHEREAS, pursuant to the Security
Agreement and/or the other documents evidencing, securing, or otherwise relating to the Loan (the Security Agreement and said other documents, collectively, the “Loan Documents”), Lender requires the execution and delivery of this
Agreement as a control agreement (a “Control Agreement”) of the type described in Section 9-104(a)(2) of the Uniform Commercial Code as enacted in the state which is the Bank’s jurisdiction as hereinbelow provided (the
“UCC”) to perfect Lender’s security interests in the Blocked Deposit Accounts; 
 NOW, THEREFORE, in
consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Bank, Borrower, and Lender agree as follows: 

1. Security Interest. Borrower acknowledges to all, and warrants and represents to the Bank, that, pursuant to the Security
Agreement, Lender has, with respect to the Loan, a first priority security interest in the Blocked Deposit Accounts, in all funds now or hereafter held therein (including, without limitation, all federal wire transfers of funds and all cash, checks,
drafts, and other instruments now or hereafter deposited in the Blocked Deposit Accounts), in all proceeds thereof, and in all rights related thereto (all such security being referred to herein as the “Deposit Account Security”). Borrower
hereby further pledges, assigns and grants to Lender pursuant to this Agreement a first priority lien and security interest as security for the Loan in the Deposit Account Security, which 

 
lien and security interest are granted in accordance with the terms and conditions of the security interests granted pursuant to the Security Agreement. The Bank acknowledges the aforesaid
security interests in the Blocked Deposit Accounts; provided, however, the Bank does not warrant the existence, priority or perfection of such security interests. The Bank, however, shall not be bound in any way by the terms or provisions of any
loan document or other agreements between Borrower and Lender, regardless of whether the Bank has knowledge thereof. 
 2.
Control. 
 (a) Borrower hereby authorizes and directs the Bank to comply with all instructions of
Lender pertaining to the Blocked Deposit Accounts, including, without limitation, instructions originated by Lender relating to the operation of, deposit of funds to, payment of items from, withdrawal of funds from, disposition of funds on deposit
in or other transactions and matters related to or associated with, the Blocked Deposit Accounts, without further consent by Borrower and notwithstanding any conflicting instructions, demands or claims by Borrower. Neither Borrower nor any officer,
director, partner, manager, agent, or other representative of Borrower, has or shall have, during the term hereof, signature authority with respect to the Blocked Deposit Accounts or any right to direct any disposition of funds from the Blocked
Deposit Accounts or to give any instructions of any kind to the Bank with respect to the Blocked Deposit Accounts. The Bank will not comply with any instructions of the Borrower related to the Blocked Deposit Accounts, unless confirmed in writing by
Lender. Accordingly, Borrower, Lender and the Bank hereby agree that Lender has and shall have control of the Blocked Deposit Accounts and that the Bank will comply with instructions originated by Lender with respect to the Blocked Deposit Accounts,
including the disposition of the funds therein, without further consent by Borrower. 
 (b) All notifications and
instructions to the Bank shall be reasonable and shall be reasonably acceptable to the Bank, and the Bank shall have a reasonable time to comply with such instructions which shall be not less than two (2) business days exclusive of the day that
actual notice is received by the Bank in the manner specified herein. The Bank may rely upon any instructions from any person that the Bank reasonably believes to be an authorized representative of Lender, or Borrower, as the case may be; provided,
however, the Bank shall not be obligated to comply with any instructions received from an “Assignee” (as defined in Section 4 below) unless and until the Bank shall have received written notice from Lender of such assignment, such
notice to be pursuant to and in accordance with Section 4 below. All payments or transfers of funds from the Blocked Deposit Accounts shall be subject to the Bank’s availability schedule of funds (i.e., the schedule maintained by the Bank
concerning the typical timing of collection by the Bank of funds deposited by check drawn on the clearing banks listed therein). 
 (c) Borrower hereby authorizes and directs the Bank to provide to Lender, on request by Lender from time to time, copies of all agreements, balances, written notices, and other account information related
to the Blocked Deposit Accounts; provided, however, that the Bank shall have no liability for its failure or delay in providing any such agreements, balances, written notices, and account information other than as may arise under the “Standard
Account Agreements” (as defined in Section 6 hereinbelow) or unless such failure is the result of the intentional misconduct or gross negligence of the Bank. The Bank shall have no responsibility to provide Borrower or Lender any internal
communications (whether written, oral, or computer generated) by, between, or among the Bank’s employees and agents related to the Blocked Deposit Accounts, and such internal communications shall not be considered account information or notice
regarding the Blocked Deposit Accounts. 
 (d) The Bank represents that it is not now a party to any Control
Agreement (other than this Agreement) related to the Blocked Deposit Accounts, and agrees that it will not enter into any other Control Agreement with respect to the Blocked Deposit Accounts while this Agreement remains in effect, without the
written consent of Lender. 
 (e) In the event of any conflict between the instructions from Lender and
instructions from Borrower, the instructions of Lender shall control in their entirety without any reference to the instructions of Borrower (for purposes of clarity, the foregoing is intended to permit the Bank to rely on one set of instructions
without having to rely on portions of several sets of instructions). Upon receipt by the Bank of any notice from Lender revoking such authority of Borrower, Borrower shall have no further signature authority or right to direct dispositions or give
instructions with respect to the Blocked Deposit Accounts, unless and until Bank receives subsequent written instructions from Lender directing otherwise. 

  

					
	PWB—Form of Control Agmt with Lockbox	 	2	  	

  
 3. Lockbox
Procedures 
 (a) Bank shall establish a unique U.S. Postal Service address (“Lockbox”)
to be used for remittances which are to be deposited into a Blocked Deposit Account pursuant to this Agreement (as designated by Lender or Borrower, as the case may be) and shall promptly notify Borrower and Lender in writing of such address. Bank
shall have exclusive and unrestricted access to, and use of, the Lockbox for the purpose of handling such remittances in accordance with this Agreement. Bank will collect, open and process for deposit all mail received in the Lockbox in accordance
with the procedures set forth on Exhibit A attached hereto. Borrower shall be responsible for all fees associated with the Lockbox and Deposit Account, as may be charged by the Bank pursuant to the Lockbox terms and conditions and its
schedule of fees and charges, applicable to customers generally, as may be amended from time to time. 
 (b) The
parties agree that items deposited in the Deposit Account shall be deemed to bear the valid and legally binding endorsement of the payee and to comply with all of Bank’s requirements for the supplying of missing endorsements, now or hereafter
in effect. As between Borrower and Lender, any deposit made by or on behalf of Borrower into a Blocked Deposit Account shall be deemed deposited into such account when the funds in respect of such deposit shall become collected funds. 

(c) Bank shall redeposit without advice any item returned for any reason. If any item is returned a second time, Bank will
charge the amount of such item and its current standard charge for returned items against the Blocked Deposit Accounts if any such account contains sufficient funds to pay the amount of the returned item and the returned item charges. If the balance
in the Blocked Deposit Accounts is not sufficient to pay the amount of the returned item and the returned item charges, Bank shall notify Lender and Borrower. Within five (5) business days of such notification, Borrower agrees to reimburse Bank
for same. In the event Borrower does not reimburse Bank, the Bank may charge the amount of such items and charges to any Blocked Deposit Account, provided however, that Lender shall be liable to Bank only for amounts actually paid to Lender which
are not recovered by Bank in accordance with the preceding sentence. Bank shall return the item along with the debit advice to Borrower. 
 (d) Bank is granted the further right to debit from the Blocked Deposit Account any amounts deposited therein in error or as necessary to correct processing errors. 

4. Reporting of Interest Income. Interest income on funds in the Blocked Deposit Accounts should be reported
by the Bank for federal and, if applicable, state income tax purposes as income of, and taxable to, the respective Borrower, the federal taxpayer identification numbers for which are set forth above in the Recitals hereto. 

5. Transfer of Blocked Deposit Accounts. Lender may assign its rights under this Agreement to a financial
institution or to a trust (in either case, an “Assignee”) in connection with an assignment of the Loan Documents and/or the issuance of mortgage pass-through certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement related to the Loan. Lender will notify the Bank in writing of such assignment (an “Assignment Notice”) within ten (10) business days of such assignment, which notice shall at a minimum
notify the Bank of the existence and effective date of such assignment and the identity of the Assignee, and shall give instructions to the Bank regarding any necessary changes to the deposit account titles. Lender acknowledges and agrees that
neither such assignment nor the receipt by the Bank of such written notice of such assignment shall in any manner modify or abrogate the termination rights of the Bank set forth in Section 9 below, which rights shall remain in full force and
effect following such assignment. Upon any such assignment this Agreement shall continue in full force and effect as a control agreement for the benefit of such Assignee, as the successor secured party with respect to the Blocked Deposit Accounts,
to permit such Assignee to hold a continuously perfected security interest in the Blocked Deposit Accounts. The acceptance by an Assignee of any such assignment by Lender of the Loan and Lender’s interest hereunder with respect thereto shall be
deemed to, and shall, constitute an assumption by such Assignee of the rights and obligations of Lender hereunder, effective as of the time of acceptance of such assignment by such Assignee. By acceptance of assignment hereof, any such Assignee
hereby agrees to such assumption. Upon such assignment and assumption becoming effective, but not prior thereto, Lender shall be deemed to be, and shall be, released from any obligations or liability thereafter arising under this Agreement. Without
implying any limitation of the foregoing, if requested by Lender, the parties hereto will execute an agreement with such Assignee confirming the foregoing. Prior to the receipt by the Bank of an

  

					
	PWB—Form of Control Agmt with Lockbox	 	3	  	

 
Assignment Notice, and except in connection with the exercise by the Bank of any right expressly reserved in this Agreement, the Bank shall act with respect to the Blocked Deposit Accounts only
at, and in compliance with, the instructions of Lender. After receipt by the Bank of an Assignment Notice, and except in connection with the exercise by the Bank of any right expressly reserved in this Agreement, the Bank shall act with respect to
the Blocked Deposit Accounts only at, and in compliance with, the instructions of Assignee. It is acknowledged that there may be further assignments of the Loan Documents and the rights of Lender (whether original Lender or an assignee) under this
Agreement, including, without limitation, possible reassignment to the original Lender or to a prior assignee, and each assignor and assignee shall have the benefits afforded the original Lender and Assignee under this Section 5 upon compliance
with all requirements of this Section 5, all in accordance with the foregoing provisions of this Section 5. 

6. Waiver and Retention of Rights. The Bank hereby waives and relinquishes all security interests,
banker’s liens, and rights of set-off, chargeback, deduction and recoupment which the Bank may now or hereafter have with respect to the Blocked Deposit Accounts; provided, however, that nothing herein constitutes a waiver or relinquishment of,
and the Bank expressly reserves all of, its present and future rights (whether described as security interests, banker’s liens, rights of set-off, chargeback, deduction or recoupment or otherwise) with respect to: (a) items (electronic,
paper or other) deposited in or credited to the Blocked Deposit Accounts which are returned unpaid, whether for insufficient funds, erroneous crediting of funds or for any other reason, whether deposited or credited before or after the date of this
Agreement; (b) the Bank’s usual and customary charges for services rendered, including basic periodic deposit account fees, in connection with the Blocked Deposit Accounts and (c) any security interest to which the Bank is entitled
pursuant to Section 4-210 of the UCC as in effect in the State of California. Except where inconsistent with the provisions of this Agreement, the deposit agreement(s) governing the Blocked Deposit Accounts and the Bank’s Terms and
Conditions applicable to the Blocked Deposit Accounts, copies of which have been provided to Borrower and Lender (collectively, the “Standard Account Agreements”), as such Standard Account Agreements may be modified from time to time in
accordance with their terms, shall continue in full force and effect. 
 7. Third Party Rights. If a
bankruptcy or insolvency proceeding shall be instituted by or against Borrower, or if any third party should assert an adverse claim against the Blocked Deposit Accounts or any sums on deposit therein, whether such a claim arises by tax lien,
execution, attachment, garnishment, levy, the claim of a trustee in bankruptcy or debtor-in-possession, or a competing lien creditor or otherwise, then the Bank shall be entitled to refuse to permit any deposits, withdrawals and/or transfers from
the Blocked Deposit Accounts without any liability until reasonably satisfactory documentation is provided to the Bank that continued deposits, withdrawals, and/or transfers from the Blocked Deposit Accounts are authorized and do not violate any
laws, regulations, or orders of any court. 
 8. Endorsements/Returned Items. Borrower hereby grants
the Bank for the term of this Agreement an irrevocable power of attorney, coupled with an interest, to endorse all checks, drafts, remittances and receipts of every kind and nature (collectively “Items”) deposited in the Blocked Deposit
Accounts. The Bank may supply whatever endorsement it may deem necessary for such Items, provided such remittances are payable to Borrower in its name or a trade name of Borrower or any reasonable variation thereof, in order to deposit such Items to
the Blocked Deposit Accounts. Borrower agrees that such endorsement shall constitute the proper endorsement of Borrower. The Bank does not warrant any endorsements. Items under $1,000.00 deposited with the Clearing Bank which are returned for
insufficient or uncollected funds will be re-deposited the first time. Items over $1,000.00 returned or unpaid the second time for whatever reason shall be debited to the Property Account under advice and returned to Borrower. Items returned unpaid
the second time for whatever reason shall be debited to the Property Account under advice and returned to Borrower. 
 9.
Hold Harmless. 
 (a) Borrower shall pay all fees, charges, costs, and expenses, including,
without limitation, reasonable attorneys’ fees and expenses of every kind (collectively, “Charges”), which the Bank may charge, suffer or incur in connection with this Agreement or the Blocked Deposit Accounts. Borrower further
covenants and agrees that it shall indemnify, defend, and hold harmless the Bank and its successors, assigns, officers, directors, and agents, from any and all liabilities, obligations, losses, damages, claims, actions, suits, costs, or expenses
(including, without limitation, reasonable attorneys’ fees and expenses) of every kind (collectively, “Losses”) suffered or 

  

					
	PWB—Form of Control Agmt with Lockbox	 	4	  	

 
incurred by the Bank in connection with the Bank’s acceptance of the Blocked Deposit Accounts and the duties provided for under this Agreement, provided, however, that Borrower shall have no
obligation to so indemnify, defend, and hold the Bank harmless for any Charges or Losses suffered by the Bank as a result of its intentional misconduct or gross negligence. 

(b) Borrower shall reimburse the Bank for all Charges and Losses of the types described in subsections (a) and
(b) of Section 6 above, when there are insufficient funds in the Blocked Deposit Account from which the Bank can recoup such Charges or Losses. If Borrower fails to reimburse the Bank for any Charges or Losses suffered or incurred by the
Bank which are (i) of the types described in subsections (a) and (b) of Section 6 above, and the Bank has complied with instructions of Lender with respect to the disbursement of funds from the Blocked Deposit Account which left
the Blocked Deposit Account with insufficient funds for the Bank to recoup such Charges and Losses or (ii) of the type described in such subsections (a) and (b) of Section 6 above, then Lender shall reimburse the Bank for such
Charges and Losses. 
 (c) In performing its functions and duties under this Agreement, the Bank shall not be
deemed to have assumed any fiduciary obligation towards or relationship of trust with or for any other party hereto. The Bank’s duties shall continue to be that of a debtor/creditor as in any other depository account, and the duties specified
hereunder shall be deemed to be ministerial and administrative in nature. The Bank shall have no duty to monitor the Items deposited into the Blocked Deposit Accounts, except as may be set forth in the Standard Account Agreements. 

(d) The Bank will use due care in performing its duties and responsibilities and shall only be responsible for any loss
which any other party hereto sustains to the extent that such loss is proximately caused by the Bank’s intentional misconduct or gross negligence; however, in such case such liability will extend only to direct loss resulting therefrom, as
opposed to any consequential or special loss or damages. The Bank shall not be responsible for liability, loss, or damage resulting from any delay in the performance of or failure to perform its responsibilities hereunder which is caused by any
force majeure, including, without limitation, fire, other natural catastrophe or act of God, electrical or computer failure, or act, failure to act, delay or fraud by any third party, or any other cause beyond the Bank’s control.

 (e) Borrower shall reimburse and indemnify, defend and hold harmless Lender in full upon demand by Lender with
respect to any and all payments by, or liability or claim of liability on the part of, Lender to Bank hereunder or under the Standard Account Agreements by way of indemnity, reimbursement or otherwise. 

10. Termination. This Agreement will terminate on the first to occur of (a) Lender’s
delivery to the Bank of Lender’s notice of termination hereof, (b) thirty (30) days after the Bank’s delivery to Lender of the Bank’s notice of termination hereof, or (c) the filing of an interpleader by the Bank
pursuant to the following sentence; provided, however, that no such termination will affect the duties or responsibilities of any party hereto arising out of transactions occurring prior to such termination or the obligations of Borrower or Lender
under Section 9 above arising out of or related to transactions or activity occurring prior to such termination. In connection with any such termination by the Bank pursuant to clause 10(b) hereinabove, the Bank shall reasonably cooperate with
Lender in connection with the closing of the Blocked Deposit Accounts and the transfer of funds to another depository institution identified by Lender at such time. If a bankruptcy or insolvency proceeding shall be instituted by or against Borrower,
or if any third party should assert an adverse claim against the Blocked Deposit Accounts or any sums on deposit therein, whether such a claim arises by tax lien, execution, attachment, garnishment, levy, the claim of a trustee in bankruptcy or
debtor-in-possession, or a competing lien creditor or otherwise, and the Bank determines that its interests may be prejudiced or harmed in any respect even if it takes the actions contemplated by Section 7 hereinabove with respect to the
Blocked Deposit Accounts, then the Bank, in addition to any other remedies it may possess under this Agreement or at law or in equity, may (and if the Bank has taken or intends to take any such actions pursuant to Section 7 hereinabove and
Lender has requested the Bank to terminate this Agreement, then the Bank shall) immediately terminate all obligations of the Bank under this Agreement by interpleading all funds then held in the Blocked Deposit Accounts into the registry of the
appropriate court for the state which is the Bank’s jurisdiction as hereinbelow provided, and Borrower (or, if such interpleader shall be brought at Lender’s request, Lender, with reimbursement from Borrower) shall pay the reasonable
costs, expenses and attorney’s fees actually incurred by the Bank related to such interpleader. In the event of a termination of all obligations of the Bank under this Agreement in connection with an interpleader in accordance with the
foregoing 

  

					
	PWB—Form of Control Agmt with Lockbox	 	5	  	

 
sentence, this Agreement shall be deemed to continue to constitute a Control Agreement for purposes of perfecting Lender’s security interest in such funds. Upon such interpleader, the Bank
shall be fully acquitted and discharged from all liability hereunder to Lender and Borrower for any obligation performable by the Bank for the first time after the filing of such interpleader. 

11. Bankruptcy Notice/Effect of Filing. If Bank at any time receives notice of the commencement of a
bankruptcy case or other insolvency or liquidation proceeding by or against Borrower (a “Bankruptcy Notice”), Bank shall continue to comply with its obligations under this Agreement, except to the extent that any action required of Bank
under this Agreement is prohibited under applicable bankruptcy laws or regulations or is stayed pursuant to the automatic stay imposed under the United States Bankruptcy Code or by order of any court or agency. With respect to any obligations of
Bank hereunder or under the terms and conditions governing the Blocked Accounts which requires prior demand upon Borrower by Bank, the commencement of a bankruptcy case or other insolvency or liquidation proceeding by or against Borrower shall
automatically eliminate the necessity of such demand upon Borrower and shall immediately entitle Bank to make demand on Lender with the same effect as if demand had been made upon Borrower and the time for Borrower’s performance had expired.

 12. Bank’s Jurisdiction/Governing Law. Notwithstanding any provision to the contrary in any
other agreement by or among any of the parties hereto related to the Blocked Deposit Accounts, the “bank’s jurisdiction”, as said term is used in Section 9-304 of the UCC, is and shall be the State of California. This Agreement
shall be interpreted, construed, and enforced according to the substantive laws of such jurisdiction without giving effect to its principles of choice of law or conflicts of law. 

13. Borrower Liability. The liability of Borrower hereunder is not, and shall not hereafter be, subject to
any limitation of liability provisions contained in any of the Loan Documents. 
 14. Notices. All
notices, demands, elections, requests, consents, approvals, waivers, or other communications (collectively, “Notices”) required or permitted to be sent by one party to another hereunder or required by law shall be in writing (including
telex, facsimile transmission or similar writing), and given by delivery of such Notice in person to the intended addressee, or by depositing the same with Federal Express or another reputable national private courier service for next business day
delivery, or by depositing the same in the United States mail, postage prepaid, registered or certified mail, return receipt requested, in any event addressed to the intended addressee at its address set forth in the preamble on the first page of
this Agreement, to the facsimile number specified below opposite its signature, or at such other address or telex or facsimile number as may be designated by such party as herein provided. All Notices shall become effective upon such personal
delivery, or on date of delivery if sent by private courier service or by United States mail, or, if given by telex or facsimile transmission, when such telex or facsimile is transmitted to the telex or facsimile number specified herein and the
sender receives from his transmitting device a written confirmation of transmittal. Rejection or other refusal to accept delivery or the inability to deliver because of changed address or telex or facsimile number of which no notice was received by
the sender in accordance with this provision prior to the sending of the Notice given hereunder shall be deemed to be receipt of the Notice sent. Any party may change its address or telex or facsimile number for Notices by Notice to each other party
hereunder, provided, however, that no notice of change of address or telex or facsimile number shall be effective with respect to Notices sent prior to the time of receipt thereof. 

15. Miscellaneous. The parties hereto agree to the content of the recitals on the first page of this
Agreement, which recitals are incorporated herein as a part of this Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns, except that Borrower may not
assign any of its rights or obligations hereunder without the prior written consent of Lender which may be granted or withheld by Lender in its sole and absolute discretion, and the Bank may assign its rights and duties hereunder only to a successor
bank. This Agreement may not be modified, waived, discharged, or terminated orally or by any act or failure to act on the part of party hereto, but only by an agreement in writing signed by the party against whom enforcement of any modification,
waiver, discharge, or termination is sought. Each of the Blocked Deposit Accounts is a “deposit account” within the meaning of Article 9 of the UCC. This Agreement is an “authenticated record” (as said terms are defined in
Section 9-102 of the UCC). This Agreement may be executed in several counterparts, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. The exchange by facsimile of
executed copies of this Agreement shall be legally sufficient to constitute the legal execution and delivery by the parties of this Agreement. 

  

					
	PWB—Form of Control Agmt with Lockbox	 	6	  	

  
 IN WITNESS
WHEREOF, the Bank, Borrower and Lender have executed this Agreement, under seal, as of the day and year first above written. Facsimile signatures shall be effective as though original signatures have been provided. 

 

									
	Bank’s Telephone No.: (818) 610-2772	 		 	BANK:
	Bank’s Facsimile No.: (818) 703-8457	 		 	
		 		 	PACIFIC WESTERN BANK,
		 		 	a California state-chartered bank
					
		 		 		 	By:	 	/s/ Susan Thomas
		 		 		 	Name:     Susan Thomas
		 		 		 	Title:       Vice President
			
	Borrower’ Telephone No.: (760) 579-5020	 		 	BORROWER:
	Borrower’s Facsimile No.: (760) 804-9042	 		 	
		 		 	PHOENIX FOOTWEAR GROUP, INC.,
		 		 	a Delaware Corporation
					
		 		 		 	By:	 	/s/ Dennis Nelson
		 		 		 	Name:     Dennis Nelson
		 		 		 	Title:       Chief Financial Officer
			
	Lender’s Telephone No.: (847) 272-9618	 		 	LENDER:
	Lender’s Facsimile No.: (847) 272-9765	 		 	
		 		 	Gibraltar Business Capital, LLC
		 		 	a Delaware Limited Liability Company
					
		 		 		 	By: 	 	/s/ Darren M. Latimer
		 		 		 	Name: Darren M. Latimer, CEO
		 		 		 	Its: Authorized Signatory

  

					
	PWB—Form of Control Agmt with Lockbox	 	7	  	

  
 DEPOSIT ACCOUNT CONTROL
AGREEMENT 
 SCHEDULE A – DESCRIPTION OF LOCKBOX SERVICES 
 Description of Services. The following Services shall be provided by Bank. 
  

	1.	Collect mail from the post office on behalf of Customer daily. To be processed the following day. 

 

	2.	Open Customer’s mail and extract all contents. 

  

	3.	Inspect all payments received for acceptability based on Customer’s specifications. 

 

	4.	Prepare all acceptable checks and their associated paperwork for further processing. 

 

	5.	Encode the face of each check with the appropriate dollar amount. 

  

	6.	Endorse each check for deposit. 

  

	7.	Capture an electronic image of each check before it is deposited. 

  

	8.	Prepare a deposit for Customer and post it each processing day. 

  

	9.	Prepare a package of information for Customer containing any unacceptable items, batch total reports and any other information Customer has requested and Bank has
agreed to provide. 

  

					
	PWB—Form of Control Agmt with Lockbox	 	8

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