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Exhibit 10.6
 
PATENT COLLATERAL ASSIGNMENT

This Agreement is made on this 8th day of November, 2007, by and among Nature
Vision, Inc., a Minnesota corporation, and Nature Vision Operating, Inc., a
Minnesota corporation, each having a mailing address at 1480 Northern Pacific
Road, Brainerd, MN  56401 (individually and collectively the “Assignor”) and M&I
Business Credit, LLC, a Minnesota limited liability company, having a mailing
address at Suite 450, 651 Nicollet Mall, Minneapolis, Minnesota 55402
(“Lender”).

Background.  Assignor has executed and delivered to Lender a Credit and Security
Agreement dated as of the date hereof whereby Lender may make loans to Assignor
(said Credit and Security Agreement as amended from time to time is referred to
herein as the “Credit Agreement”).  In order to induce the Lender to execute and
deliver the Credit Agreement, Assignor has agreed to assign to Lender certain
Patent rights.

NOW, THEREFORE, in consideration of the premises, each Assignor hereby agrees
with Lender as follows:

1.
To secure the complete and timely satisfaction of all Obligations (as defined in
the Credit Agreement), Assignor hereby grants, assigns, and conveys to Lender
all of its right, title and interest, if any, in and to the Patent applications
and Patents listed in Schedule A hereto, including without limitation all
proceeds thereof (such as, by way of example, license royalties and proceeds of
infringement suits), the right to sue for past, present and future
infringements, all rights corresponding thereto throughout the world and all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof (collectively called the “Patents”).

2.           Assignor covenants and warrants that:

 
a.
The Patents are subsisting and have not been adjudged invalid or unenforceable,
in whole or in part;

 
b.
To the best of Assignor’s knowledge, each of the Patents is valid and
enforceable and Assignor has notified Lender in writing of all prior art
(including public uses and sales) of which it is aware;

 
c.
Assignor is the sole and exclusive owner of the entire and unencumbered right,
title and interest in and to each of the Patents, free and clear of any liens,
charges and encumbrances, including without limitation pledges, assignments,
licenses, shop rights and covenants by Assignor not to sue third persons; and

 
 
d.
Assignor has the unqualified right to enter into this Agreement and perform its
terms and has entered and will enter into written agreements with each of its
present and future employees, agents and consultants which will enable it to
comply with the covenants herein contained.

 
 
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3.
Assignor agrees that, until all of the Obligations (as defined in the Credit
Agreement) shall have been satisfied in full, it will not enter into any
agreement (for example, a license agreement) which is inconsistent with
Assignor’s obligations under this Agreement, without Lender’s prior written
consent.

4.
If, before the Obligations shall have been satisfied in full, Assignor shall
obtain rights to any new Patentable inventions, or become entitled to the
benefit of any Patent application or Patent  for any reissue, division,
continuation, renewal, extension, or continuation-in-part of any Patent or any
improvement on any Patent, the provisions of paragraph 1 shall automatically
apply thereto and Assignor shall give to Lender prompt notice thereof in writing
hereof.

5.
Assignor authorizes Lender to modify this Agreement by amending Schedule A to
include any future Patents and Patent applications which are Patents under
paragraph 1 or paragraph 4 hereof.

6.
Unless and until there shall have occurred and be continuing an Event of Default
(as defined in the Credit Agreement), Lender hereby grants to Assignor the
exclusive, nontransferable right and license under the Patents to make, have
made for it, use and sell the inventions disclosed and claimed in the Patents
for Assignor’s own benefit and account and for none other.  Assignor agrees not
to sell or assign its interest in, or grant any sublicense under, the license
granted to Assignor in this paragraph 6, without the prior written consent of
Lender.

7.
If any Event of Default shall have occurred and be continuing, Assignor’s
license under the Patents as set forth in paragraph 6, shall terminate
forthwith, and the Lender shall have, in addition to all other rights and
remedies given it by this Agreement, those allowed by law and the rights and
remedies of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which the Patents may be located and, without limiting the
generality of the foregoing, the Lender may immediately, without demand of
performance and without other notice (except as set forth next below) or demand
whatsoever to Assignor, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize upon, in
Minneapolis, Minnesota, or elsewhere, the whole or from time to time any part of
the Patents, or any interest which the Assignor may have therein, and after
deducting from the proceeds of sale or other disposition of the Patents all
reasonable expenses (including all reasonable expenses for brokers’ fees and
legal services), shall apply the residue of such proceeds toward the payment of
the Obligations.  Any remainder of the proceeds after payment in full of the
Obligations shall be paid over to the Assignor.  Notice of any sale or other
disposition of the Patents shall be given to Assignor at least ten (10) days
before the time of any intended public or private sale or other disposition of
the Patents is to be made, which Assignor hereby agrees shall be reasonable
notice of such sale or other disposition.  At any such sale or other
disposition, any holder of any Note (as defined in the Credit Agreement) or
Lender may, to the extent permissible under applicable law, purchase the whole
or any part of the Patents sold, free from any right or redemption on the part
of Assignor, which right is hereby waived and released.

 
 
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8.
At such time as Assignor shall completely satisfy all of the Obligations, this
Agreement shall terminate and Lender shall execute and deliver to Assignor all
deeds, assignments and other instruments s may be necessary or proper to re-vest
in Assignor full title to the Patents, subject to any disposition thereof which
may have been made by Lender pursuant hereto.

9.
Any and all reasonable fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys’ fees and legal expenses incurred by Lender
in connection with preparation of this Agreement and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees, maintenance
fees, encumbrances, or in otherwise protecting, maintaining or preserving the
Patents, or in defending or prosecuting any actions or proceedings arising out
of or related to the Patents, shall be borne and paid by Assignor on demand by
Lender and until so paid shall be added to the principal amount of the
Obligations and shall bear interest at the highest rate prescribed in the Credit
Agreement.

10.
Assignor shall have the duty, through counsel reasonably acceptable to Lender,
to prosecute diligently any Patent applications of the Patents pending as of the
date of this Agreement or thereafter until the Obligations shall have been paid
in full and to preserve and maintain all rights in Patent applications and
Patents of the Patents, including without limitation the payment of all
maintenance fees.  Any expenses incurred in connection with such an application
shall be borne by Assignor.  The Assignor shall not abandon any right to file
any pending Patent application or Patent without the consent of the Lender,
which consent shall not be unreasonably withheld.

11.
Assignor shall have the right, with the consent of Lender, which shall not be
unreasonably withheld, to bring suit in its own name, and to join Lender, if
necessary, as a party to such suit so long as Lender is satisfied that such
joinder will not subject it to any risk of liability, to enforce the Patents and
any licenses thereunder.  Assignor shall promptly, upon demand, reimburse and
indemnify Lender for all damages, costs and expenses, including legal fees,
incurred by Lender pursuant to this paragraph 11.

12.
No course of dealing between Assignor and Lender, nor any failure to exercise,
nor any delay in exercising, on the part of Lender, any right, power or
privilege hereunder or under the Credit 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.

13.
All of Lender’s rights and remedies with respect to the Patents, whether
established hereby or by the Credit Agreement, or by any other agreements or by
law shall be cumulative and may be exercised singularly or concurrently.

 
 
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14.
The provisions of this 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 of this Agreement in any jurisdiction.

15.
This Agreement is subject to modification only by a writing signed by the
parties, except as provided in paragraph 5.

16.
The benefits and burdens of this Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties.

17.
The validity and interpretation of this Agreement and the rights and obligations
of the parties shall be governed by the laws of the State of Minnesota.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on the
day and year first above written.

 
NATURE VISION, INC. 
                   
By:  
/S/ Jeffrey P. Zernov
     
Jeffrey P. Zernov, President and CEO
           
NATURE VISION OPERATING, INC. 
                           
By:
/S/ Jeffrey P. Zernov
     
Jeffrey P. Zernov, President and CEO
           
M&I BUSINESS CREDIT, LLC 
                           
By:
/S/ Thomas J. Kopacek
   
Its:
Vice President
 

                                       
 
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STATE OF MINNESOTA                  )
) ss.
COUNTY OF HENNEPIN                   )

The foregoing instrument was executed and acknowledged before me on this 8th day
of November, 2007, by Jeffrey P. Zernov, the President and CEO of Nature Vision,
Inc., a Minnesota corporation, on behalf of said corporation.

 
/S/ Joseph R. Koester                        
   
Notary Public
 

 

 
STATE OF MINNESOTA                  )
) ss.
COUNTY OF HENNEPIN                   )

The foregoing instrument was executed and acknowledged before me on this 8th day
of November, 2007, by Jeffrey P. Zernov, the President and CEO of Nature Vision
Operating, Inc., a Minnesota corporation, on behalf of said corporation.

 
/S/ Joseph R. Koester                        
   
Notary Public
 

 
STATE OF MINNESOTA                  )
) ss.
COUNTY OF HENNEPIN                   )

The foregoing instrument was executed and acknowledged before me on this 8th day
of November, 2007, by Thomas J. Kopacek, the Vice President of M&I Business
Credit, LLC, a Minnesota limited liability company, on behalf of said company.

 
/S/ Joseph R. Koester                        
 
Notary Public
 

                                            
 
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SCHEDULE A

Patent
Patent Number
   
Video display/cord dispenser
D529,884
Clip-on-light
D524,974
Video fish camera
D513,029
Vibrating fishing rod
6,836,995
Underwater viewing camera
D489,387
Viewing monitor
D488,826
Lighted fishing lure
D480,445
Submersible video viewing system
6,476,853
Submersible video viewing system
6,262,761
Underwater viewing monitor housing
D439,589
Underwater viewing monitor
D438,881
Underwater viewing monitor housing
D429,744
Submersible video viewing system
6,097,424
Bird feeder
D426,352

 
 
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