ex10_6.htm


    
      
        

      

    

    Exhibit
10.6

     

    INTELLECTUAL PROPERTY SECURITY
AGREEMENT

     

    This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “Agreement”), dated as
of March 5, 2008, is made by Blue Holdings, Inc., a Nevada corporation (the
“Company”), and all of the
Subsidiaries of the Company (such Subsidiaries,
the “Guarantors”, and together
with the Company, the “Grantors”), in favor
of the holders of the Company’s 8% Senior Secured Convertible Notes issued or to
be issued in the original aggregate principal amount of up to $3,000,000 (the
“Notes”)
pursuant to the Purchase Agreement (as defined below) (collectively, together
with their endorsees, transferees and assigns, the “Lenders”).

     

    W I T N E
S S E T H:

     

    WHEREAS,
the Company and the Lenders are party to that certain Securities Purchase
Agreement, dated on or about on or about March 5, 2008 (“Purchase Agreement”),
pursuant to which the Company issued or is issuing the Notes, among other
things;

     

    WHEREAS,
pursuant to that certain Subsidiary Guarantee, dated as of the date hereof
(“Guarantee”),
the Guarantors have jointly and severally agreed to
guarantee and act as surety for payment of such Notes;

    


    WHEREAS,
contemporaneously herewith the Grantors are entering into a Security Agreement
(“Security
Agreement”), pursuant to which each Grantor has granted a security
interest in its assets and properties to secure the satisfaction of the
Company’s obligations under the Notes and the Guarantor’s obligations under the
Guarantee, among other things; and

     

    WHEREAS,
the Grantors are obligated under the Security Agreement to take such further
actions as the collateral Agent (as defined therein) requests to further perfect
the Lenders’ security interest granted under the Security Agreement, including
without limitation with respect to intellectual property;

     

    NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as
follows:

     

    DEFINED
TERMS.

     

    (a)          Certain Defined
Terms.  As used in this Agreement, the following terms shall
have the meanings set forth below:

     

    “Copyright”
means copyrights and copyright registrations, including without limitation the
copyright registrations and recordings listed on Schedule I attached
hereto, if any, in which the Grantors have any right, title and interest, and
(i) all reissues, continuations, extensions or renewals thereof, (ii) all
income, royalties, damages and payments now and hereafter due and/or payable
under and with respect thereto, subject to payment to any co-owner of its, his
or her share thereof, including without limitation payments under all licenses
entered into in connection therewith and damages and payments for past or future
infringements thereof, (iii) the right to sue for past, present and future
infringements thereof, and (iv) all of the Grantors’ rights corresponding
thereto throughout the world.

     

    
      
        
           


        

        
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    “Intellectual
Property Licenses” means rights under or interest in any patent,
trademark, copyright or other intellectual property, including software license
agreements with any other party, whether the Grantors are a licensee or licensor
under any such license agreement, and the right to use the foregoing in
connection with the enforcement of the Lenders’ rights pursuant to the Security
Agreement.

     

    “Patent”
means patents and patent applications, including without limitation the patents
and patent applications listed on Schedule I hereto and
all continuations, divisionals, provisionals, continuations in part, or reissues
of applications related to patents thereon, and (i) all renewals thereof, (ii)
all income, royalties, damages and payments now and hereafter due and/or payable
under and with respect thereto, subject to payment to any co-owner or inventor
of its, his or her share thereof, including without limitation payments under
all licenses entered into in connection therewith and damages and payments for
past or future infringements or dilutions thereof, (iii) the right to sue for
past, present and future infringements thereof, and (iv) all of the Grantors’
rights corresponding thereto throughout the world.

     

    “Trademark”
means trademarks, trade names, registered trademarks, trademark applications,
service marks, registered service marks and service mark applications, including
without limitation the registered trademarks listed on Schedule I hereto,
and (i) all renewals thereof, (ii) all income, royalties, damages and payments
now and hereafter due and/or payable under and with respect thereto, subject to
payment to any co-owner of its, his or her share thereof, including without
limitation payments under all licenses entered into in connection therewith and
damages and payments for past or future infringements or dilutions thereof,
(iii) the right to sue for past, present and future infringements and dilutions
thereof, (iv) the goodwill of the Grantors’ business symbolized by the foregoing
and connected therewith, and (v) all of the Grantors’ rights corresponding
thereto throughout the world.

     

    (b)           Terms Defined in the
Purchase Agreement.  Capitalized terms used in this Agreement
and not otherwise defined herein have the meanings ascribed to them in the
Purchase Agreement.

     

    2.           
 GRANT OF
SECURITY INTEREST IN INTELLECTUAL PROPERTY
COLLATERAL.  Grantors hereby grant to Lenders a continuing
second priority security interest (as set forth in the Security Agreement) in
all of Grantors’ right, title and interest in, to and under all of Grantors’
Intellectual Property (as defined in the Security Agreement), including without
limitation the following, whether presently existing or hereafter created or
acquired (collectively, the “Intellectual Property
Collateral”):

     

    (a)           all
of Grantors’ Patents and Grantors’ rights under all Patent Intellectual Property
Licenses to which it is a party, including those patents referred to on Schedule I hereto,
including:

     

    
      	
               
      

            	
              (i)

            	
              all
      registrations and applications in respect of the foregoing, including
      continuations, divisionals, provisionals, continuations in part, or
      reissues of applications and patents issuing thereon;
  and

            


    

     

    
      
        
           


        

        
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              (ii)

            	
              all
      products and proceeds of the foregoing, including without limitation any
      claim by Grantors against third parties for past, present or future
      infringement of any Patent or any Patent licensed under any Intellectual
      Property License;

            


    

     

    (b)           all
of Grantors’ Trademarks and Grantors’ rights under all Trademark Intellectual
Property Licenses to which it is a party, including those trademarks referred to
on Schedule I
hereto, including:

     

    
      	
               
      

            	
              (i)

            	
              all
      registrations, applications, and renewals in respect of the
      foregoing;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              all
      goodwill of the business connected with the use of, and symbolized by,
      each Trademark and each Trademark licensed under an Intellectual Property
      License; and

            


    

     

    
      	
               
      

            	
              (iii)

            	
              all
      products and proceeds of the foregoing, including without limitation any
      claim by Grantor against third parties for past, present or future (i)
      infringement or dilution of any Trademark or any Trademark licensed under
      any Intellectual Property License or (ii) injury to the goodwill
      associated with any Trademark or any Trademark licensed under any
      Intellectual Property License; and

            


    

     

    (c)           all
of Grantors’ Copyrights and Grantors’ rights under all Copyright Intellectual
Property Licenses to which it is a party, including those referred to on Schedule I hereto,
including:

     

    
      	
               
      

            	
              (i)

            	
              all
      registrations, applications, and renewals in respect of the foregoing;
      and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              all
      products and proceeds of the foregoing, including without limitation any
      claim by Grantors against third parties for past, present or future
      infringement of any Copyright or any Copyright licensed under any
      Intellectual Property License.

            


    

     

    3.           
 SECURITY
AGREEMENT.  The security interests granted pursuant to this
Agreement are granted in conjunction with the security interests granted to
Lenders pursuant to the Security Agreement.  Grantors hereby
acknowledge and affirm that the rights and remedies of Lenders with respect to
the security interest in the Intellectual Property Collateral made and granted
hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.  Each Lender acknowledges that the priorities set forth herein
are subject to the terms of the Intercreditor Agreement.

     

    4.        
    AUTHORIZATION TO
SUPPLEMENT.  If Grantors shall obtain rights to any new
Intellectual Property (as defined in the Security Agreement), the provisions of
this Agreement shall automatically apply thereto.  Grantors shall give
Lenders prompt written notice with respect to any such material new Intellectual
Property.  Grantors represent that Schedule I is
substantially accurate and complete but reserve the right from time to time to
correct inaccuracies and/or omissions by giving Lenders written notice
thereof.  Without limiting Grantors’ obligations under this Section 4, Grantors
hereby authorize Lenders unilaterally to modify
this Agreement by amending Schedule I to include
any such corrections and other modifications and any such new Intellectual
Property of Grantors.  Notwithstanding the foregoing, no failure to so
modify this Agreement or amend Schedule I shall in
any way affect, invalidate or detract from Lenders’ continuing security interest
in all Intellectual Property Collateral, whether or not listed on Schedule
I.

    
       

      
        
          
             


          

          
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    5.      
      COUNTERPARTS.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such separate counterparts shall together
constitute but one and the same instrument.  In proving this Agreement
in any judicial proceedings, it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom enforcement is
sought.  Any signatures delivered by a party by facsimile transmission
or by e-mail transmission shall be deemed an original signature
hereto.

     

    6.         
   GOVERNING LAW;
JURISDICTION.  This Agreement shall be governed by and
construed under the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.  Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City and County of New York for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

     

    7.        
    SUCCESSORS AND
ASSIGNS.  The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties.  Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.  A Lender may assign its rights
hereunder in connection with any private sale or transfer of its Notes, in which
case the term “Lender” shall be deemed to refer to such transferee as though
such transferee were an original signatory hereto.  No Grantor may
assign its rights or obligations under this Agreement.

     

    8.          
  MULTIPLE
CLOSINGS.  For clarification, the Grantors acknowledge and
agree that there may be more than one Closing under the Purchase Agreement and
that this Agreement creates a security interest in the Collateral in favor of
all the Lenders regardless of when (1) any Lender executes the Purchase
Agreement or whether such Lender executes this Agreement, it being understood
that the Agent is acting as collateral agent for all Lenders, (2) any Closing
occurs or (3) any Notes are issued, without any need for the Grantors to execute
any further documentation or be notified of any Closing or for any other action
to occur.

     

     

    [Signature Pages
Follow]

     

    
      
        
           


        

        
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    IN
WITNESS WHEREOF, each of the Grantors have caused this Intellectual Property
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.

     

    
      	 
      	
              BLUE
      HOLDINGS, INC.

            	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
              By: 
      

            	
               /s/ Glenn S. Palmer

            	 
	 
      	 
      	
              Name:
      Glenn S. Palmer

            	 
	 
      	 
      	
              Title:
      Chief Executive Officer

            	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
              ANTIK
      DENIM, LLC

            	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
              By: 
      

            	
               /s/ Glenn S. Palmer

            	 
	 
      	 
      	
              Name:
      Glenn S. Palmer

            	 
	 
      	 
      	
              Title:
      Chief Executive Officer

            	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
              TAVERNITI
      SO JEANS, LLC

            	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
              By:  
      

            	
               /s/ Glenn S. Palmer

            	 
	 
      	 
      	
              Name:
      Glenn S. Palmer

            	 
	 
      	 
      	
              Title:
      Chief Executive Officer

            	 


    

     

    
      
        
           


        

        
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              ACCEPTED
      AND ACKNOWLEDGED BY:

            	 
	 
      	 
      	 
	 
      	
              GEMINI
      MASTER FUND, LTD.

            	 
	 
      	
              By:

            	
              GEMINI
      STRATEGIES, LLC, as investment manager

            	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
              By: 
      

            	
              /s/Steven Winters

            	 
	 
      	 
      	
              Steven
      Winters

            	 
	 
      	 
      	
              Managing
      Member

            	 
	 
      	 
      	 
      	 
	 
      	
              GEMINI STRATEGIES, LLC,
      as collateral Agent for the Lenders

            	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
              By: 
      

            	
              /s/Steven Winters

            	 
	 
      	 
      	
              Steven
      Winters

            	 
	 
      	 
      	
              Managing
      Member

            	 


    

     

     

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