{"id":40949,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/credit-agreement-amendment-navarre-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"credit-agreement-amendment-navarre-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/credit-agreement-amendment-navarre-corp.html","title":{"rendered":"Credit Agreement – Amendment – Navarre Corp."},"content":{"rendered":"

AMENDMENT NO. 5 TO CREDIT AGREEMENT <\/strong><\/p>\n

THIS AMENDMENT NO. 5 TO CREDIT AGREEMENT (this “Amendment<\/u>“) is entered
\ninto as of December 29, 2011, by and among the Lenders identified on the
\nsignature pages hereof (such Lenders, together with their respective successors
\nand permitted assigns, are referred to hereinafter each individually as a
\n“Lender<\/u>” and collectively as the “Lenders<\/u>“), WELLS FARGO CAPITAL
\nFINANCE, LLC, formerly known as Wells Fargo Foothill, LLC, a Delaware limited
\nliability company, as the arranger and administrative agent for the Lenders (in
\nsuch capacity, “Agent<\/u>“) and NAVARRE CORPORATION, a Minnesota corporation
\n(“Borrower<\/u>“).<\/p>\n

WHEREAS, Borrower, Agent, and Lenders are parties to that certain Credit
\nAgreement dated as of November 12, 2009 (as amended, modified or supplemented
\nfrom time to time, the “Credit Agreement<\/u>“);<\/p>\n

WHEREAS, in connection with the foregoing, Borrower, Agent and Lenders have
\nagreed to amend the Credit Agreement in certain respects (including, without
\nlimitation, to extend the maturity date thereof from November 12, 2012 to the
\ndate that is 5 years from the date of this Amendment);<\/p>\n

NOW THEREFORE, in consideration of the premises and mutual agreements herein
\ncontained, the parties hereto agree as follows:<\/p>\n

1. Defined Terms<\/u>. Unless otherwise defined herein, capitalized terms
\nused herein shall have the meanings ascribed to such terms in the Credit
\nAgreement.<\/p>\n

2. Amendments to Credit Agreement<\/u>: Subject to the satisfaction of the
\nconditions set forth in Section 5<\/u> below, in reliance upon the
\nrepresentations and warranties of Borrower set forth in Section 6<\/u> below,
\nthe Credit Agreement is hereby amended in the following respects:<\/p>\n

(a) The following new Section 2.14 is added to the Credit Agreement:<\/p>\n

2.14. Increase in Revolver Commitments<\/u><\/strong>.<\/p>\n

(a) Provided there exists no Default or Event of Default and subject to the
\nprior written consent of Agent (which may be provided or withheld in Agent153s
\nsole discretion and without the consent of any other Lender, and absent which
\nany notice from Borrower described below shall be void and of no force and
\neffect), the Borrower may, from time to time prior to the Maturity Date, upon
\nwritten notice to the Agent (whereupon Agent shall promptly deliver a copy to
\neach of the Lenders), request up to four (4) increases (in minimum increments of
\n$5,000,000), not to exceed $20,000,000 in the aggregate to the Maximum Revolver
\nAmount (any such increase, each a “Revolver Increase<\/u>“). At the time of
\nsending such notice, the Borrower (in consultation with the Agent) shall specify
\nthe time period within which each Lender is requested to respond (which shall in
\nno event be less than ten Business Days from the date of delivery of such notice
\nto the Lenders).<\/p>\n

\n

(b) Each Lender shall notify the Agent within such time period whether or not
\nit agrees to increase its Revolver Commitment in connection with such Revolver
\nIncrease and, if so, whether by a percentage of the requested Revolver Increase
\nequal to, greater than, or less than its Pro Rata Share in respect of the
\naggregate amount of the Revolver Commitments of all Lenders. Any Lender not
\nresponding within such time period shall be deemed to have declined to increase
\nits Revolver Commitment.<\/p>\n

(c) The Agent shall notify the Borrower and each Lender of the Lenders153
\nresponses to each request for a Revolver Increase made hereunder. To achieve the
\nfull amount of a requested Revolver Increase if existing Lenders do not elect to
\nprovide the full amount of a requested Revolver Increase, and subject to the
\nconsent and of the Agent in its sole discretion and to the approval of the
\nAgent, the Issuing Lender and the Swing Lender with respect to the identity of
\nsuch Person, the Borrower may also invite additional Persons to become Lenders
\npursuant to a joinder to this Agreement in form and substance satisfactory to
\nthe Agent and its counsel.<\/p>\n

(d) If the Revolver Commitments and Maximum Revolver Amount are increased in
\naccordance with this Section 2.14<\/u>, the Agent (in consultation with the
\nBorrower) shall determine the effective date (the “Revolving Credit Increase
\nEffective Date<\/u>“) and the final allocation of such increase. The Agent shall
\npromptly notify the Borrower and the Lenders of the final allocation of such
\nincrease and the Revolving Credit Increase Effectiveness Date.<\/p>\n

(e) As additional conditions precedent to any Revolver Increase (and without
\nlimiting Agent153s discretion as to whether to consent to any Revolver Increase),
\n(i) the Borrower shall deliver to the Agent a certificate of each Loan Party
\ndated as of the Revolving Credit Increase Effective Date (in sufficient copies
\nfor each Lender) signed by an officer of such Loan Party, certifying and
\nattaching the resolutions adopted by such Loan Party approving or consenting to
\nsuch increase, and certifying that the conditions precedent set out in the
\nfollowing subclauses (ii) through (iv) have been satisfied, (ii) no Default or
\nEvent of Default shall have occurred and be continuing or would result from such
\nRevolver Increase, (iii) before and after giving effect to such Revolver
\nIncrease, the representations and warranties contained in this Agreement and the
\nother Loan Documents shall be true and correct in all material respects (except
\nthat such materiality qualifier shall not be applicable to any representations
\nthat already are qualified or modified by materiality in the text thereof) on
\nand as of the Revolving Credit Increase Effective Date, except to the extent
\nthat such representations and warranties specifically refer to an earlier date,
\nin which case they shall be true and correct in all material respects (and in
\nall respects if any such representation or warranty is already qualified by
\nmateriality) as of such earlier date, (iv) after giving effect to such Revolver
\nIncrease, the Borrower would be in pro forma compliance with Section 7(a) of the
\nAgreement for the twelve-month period to which the most recent Compliance
\nCertificate received by the Agent pursuant to Schedule 5.1 relates, assuming
\nthat the Revolver Commitments (after giving<\/p>\n

2<\/p>\n

\n

effect to such increase) are fully drawn. The Borrower shall prepay any
\nAdvances, Letter of Credit Disbursements or Swing Loans (to the extent
\nparticipated to Lenders) outstanding on the Revolving Credit Increase Effective
\nDate to the extent necessary to keep the outstanding Advances, Letter of Credit
\nDisbursements or Swing Loans (to the extent participated to Lenders), as the
\ncase may be, ratable with any revised Pro Rata Share of a Lender in respect of
\nthe Revolver Commitments arising from any nonratable increase in the Revolver
\nCommitments under this Section 2.14<\/u>.<\/p>\n

(f) In connection with each Revolver Increase and as a further condition to
\nproviding each Revolver Increase, Lenders, Borrower, and each Guarantor shall
\nexecute such amendments, agreements, instruments and documents, if any, as Agent
\nshall reasonably request to evidence such Revolver Increase<\/p>\n

(b) Section 3.3 of the Credit Agreement is amended and restated in its
\nentirety as follows:<\/p>\n

3.3. Maturity<\/u><\/strong>.<\/p>\n

This Agreement shall continue in full force and effect for a term ending on
\nDecember 29, 2016 (the “Maturity Date<\/u>“). The foregoing notwithstanding,
\nthe Lender Group, upon the election of the Required Lenders, shall have the
\nright to terminate its obligations under this Agreement immediately and without
\nnotice upon the occurrence and during the continuation of an Event of Default.\n<\/p>\n

(c) Sections 4.1(b), 4.6(d), 4.7(b), 4.13, and 4.19 of the Credit Agreement
\nare amended by replacing each reference to “the Closing Date” set forth therein
\nwith a reference to “the Fifth Amendment Closing Date”.<\/p>\n

(d) Section 4.26 of the Credit Agreement is amended and restated in its
\nentirety as follows:<\/p>\n

4.26. Dissolution of BCI and Funimation Entities<\/u><\/strong>.\n<\/p>\n

BCI was dissolved with the Secretary of State of Minnesota effective January
\n13, 2010. Each of Funimation Channel, Inc., Navarre CP, LLC, Navarre CS, LLC and
\nNavarre CLP, LLC was dissolved with the Secretary of State of Minnesota
\neffective December 19, 2011.<\/p>\n

(e) Section 5.16 of the Credit Agreement is amended and restated in its
\nentirety as follows:<\/p>\n

5.16. [RESERVED]<\/u><\/strong>.<\/p>\n

(f) Section 6.3(a) of the Credit Agreement is amended by inserting “Other
\nthan in order to consummate a Permitted Acquisition,” to the beginning thereof.\n<\/p>\n

3<\/p>\n

\n

(g) Section 6.12 of the Credit Agreement is amended by (i) inserting “and” at
\nthe end of clause (c) thereof, (ii) replacing the “, and” at the end of clause
\n(d) thereof with a “.”, and (iii) deleting clause (e) thereof in its entirety.\n<\/p>\n

(h) Section 7 of the Credit Agreement is hereby amended by amending and
\nrestating clause (b) thereof in its entirety as follows:<\/p>\n

(b) [reserved] <\/strong><\/p>\n

(i) Section 7 of the Credit Agreement is hereby amended by amending and
\nrestating clause (d) thereof in its entirety as follows:<\/p>\n

(d) Excess Availability.<\/strong> Maintain Excess Availability at all
\ntimes after the Fifth Amendment Closing Date of at least $5,000,000.<\/p>\n

(j) Schedule 1.1 of the Credit Agreement is amended by amending and restating
\nthe definition of the terms “Applicable Unused Line Fee”, “Base LIBOR Rate”,
\n“Base Rate Margin”, “Capital Expenditures”, “Fee Letter”, “LIBOR Rate Margin”,
\n“Maximum Revolver Amount”, “Permitted Purchase Money Indebtedness”, “Publishing
\nBusiness”, and “WFF” set forth therein in their entirety as follows:<\/p>\n

“Applicable Unused Line Fee<\/u>” means 0.375%.<\/p>\n

“Base LIBOR Rate<\/u>” means the rate per annum, determined by Agent in
\naccordance with its customary procedures, and utilizing such electronic or other
\nquotation sources as it considers appropriate, to be the rate at which Dollar
\ndeposits (for delivery on the first day of the requested Interest Period) are
\noffered to major banks in the London interbank market 2 Business Days prior to
\nthe commencement of the requested Interest Period, for a term and in an amount
\ncomparable to the Interest Period and the amount of the LIBOR Rate Loan
\nrequested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR
\nRate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by
\nBorrower in accordance with the Agreement, which determination shall be
\nconclusive in the absence of manifest error.<\/p>\n

“Base Rate<\/u>” means the greatest of (a) the Federal Funds Rate plus
\n1<\/sup>\/2%, (b) the Base LIBOR Rate (which rate shall be calculated based
\nupon an Interest Period of 3 months and shall be determined on a daily basis),
\nplus 1%, and (c) the rate of interest announced, from time to time, within Wells
\nFargo at its principal office in San Francisco as its “prime rate”, with the
\nunderstanding that the “prime rate” is one of Wells Fargo153s base rates (not
\nnecessarily the lowest of such rates) and serves as the basis upon which
\neffective rates of interest are calculated for those loans making reference
\nthereto and is evidenced by the recording thereof after its announcement in such
\ninternal publications as Wells Fargo may designate.<\/p>\n

“Base Rate Margin<\/u>” means, as of any date of determination (with
\nrespect to any portion of the outstanding Advances on such date that is a Base
\nRate<\/p>\n

4<\/p>\n

\n

Loan), the applicable margin set forth in the following table that
\ncorresponds to average daily Excess Availability for the most recently ended
\ncalendar month (the “Monthly Average Excess Availability Amount<\/u>“);
\nprovided<\/u>, however<\/u>, that for the period from the Closing Date
\nthrough January 31, 2012, the Base Rate Margin shall be at the margin in the row
\nstyled “Level I”:<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Level<\/p>\n<\/td>\n

<\/td>\n\n

Monthly Average Excess Availability<\/p>\n

Amount<\/p>\n<\/td>\n

<\/td>\n\n

Base Rate Margin<\/p>\n<\/td>\n<\/tr>\n

\n

I<\/p>\n<\/td>\n

<\/td>\n\n

Greater than or equal to the greater of (i) $15,000,000 and (ii) 25% of the
\nMaximum Revolver Amount<\/p>\n<\/td>\n

<\/td>\n\n

1.00 percentage points<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

II<\/p>\n<\/td>\n

<\/td>\n\n

Less than the greater of (i) $15,000,000 and (ii) 25% of the Maximum Revolver
\nAmount<\/p>\n<\/td>\n

<\/td>\n\n

1.25 percentage points<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Base Rate Margin shall be based upon the most recent Monthly Average
\nExcess Availability Amount, which will be calculated as of the end of each
\ncalendar month. If Borrower fails to provide the information necessary to
\ncalculate the Monthly Average Excess Availability Amount, the Base Rate Margin
\nshall be set at the margin in the row styled “Level II” until the date on which
\nsuch information is delivered (on which date (but not retroactively), without
\nconstituting a waiver of any Default or Event of Default occasioned by the
\nfailure to timely deliver such information, the Base Rate Margin shall be set at
\nthe margin based upon the calculations disclosed by such information.<\/p>\n

“Capital Expenditures<\/u>” means, with respect to any Person for any
\nperiod, the aggregate of all expenditures by such Person and its Subsidiaries
\nduring such period that are capital expenditures as determined in accordance
\nwith GAAP, whether such expenditures are paid in cash or financed, excluding (i)
\nany Production Costs, (ii) any Vendor Advances, and (iii) Permitted
\nAcquisitions.<\/p>\n

“Fee Letter<\/u>” means that certain amended and restated fee letter
\nbetween Borrower and Agent dated as of the Fifth Amendment Closing Date.<\/p>\n

“LIBOR Rate Margin<\/u>” means, as of any date of determination (with
\nrespect to any portion of the outstanding Advances on such date that is a LIBOR
\nRate Loan), the applicable margin set forth in the following table that
\ncorresponds to average daily Excess Availability for the most recently ended
\ncalendar month (the “Monthly Average Excess Availability Amount<\/u>“);
\nprovided<\/u>, however<\/u>, that for the period from the Closing Date
\nthrough January 31, 2012, the LIBOR Rate Margin shall be at the margin in the
\nrow styled “Level I”:<\/p>\n

5<\/p>\n

\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Level<\/p>\n<\/td>\n

<\/td>\n\n

Monthly Average Excess Availability<\/p>\n

Amount<\/p>\n<\/td>\n

<\/td>\n\n

LIBOR Rate Margin<\/p>\n<\/td>\n<\/tr>\n

\n

I<\/p>\n<\/td>\n

<\/td>\n\n

Greater than or equal to the greater of (i) $15,000,000 and (ii) 25% of the
\nMaximum Revolver Amount<\/p>\n<\/td>\n

<\/td>\n\n

2.00 percentage points<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

II<\/p>\n<\/td>\n

<\/td>\n\n

Less than the greater of (i) $15,000,000 and (ii) 25% of the Maximum Revolver
\nAmount<\/p>\n<\/td>\n

<\/td>\n\n

2.25 percentage points<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The LIBOR Rate Margin shall be based upon the most recent Monthly Average
\nExcess Availability Amount, which will be calculated as of the end of each
\ncalendar month. If Borrower fails to provide the information necessary to
\ncalculate the Monthly Average Excess Availability Amount, the LIBOR Rate Margin
\nshall be set at the margin in the row styled “Level II” until the date on which
\nsuch information is delivered (on which date (but not retroactively), without
\nconstituting a waiver of any Default or Event of Default occasioned by the
\nfailure to timely deliver such information, the LIBOR Rate Margin shall be set
\nat the margin based upon the calculations disclosed by such information.<\/p>\n

“Maximum Revolver Amount<\/u>” means $50,000,000, decreased by the amount
\nof reductions in the Revolver Commitments made in accordance with Section
\n2.4(c)<\/u> of the Agreement, and increased by the amount of any Revolver
\nIncreases made pursuant to Section 2.14<\/u> of the Agreement.<\/p>\n

“Permitted Purchase Money Indebtedness<\/u>” means collectively, as of any
\ndate of determination, (i) Purchase Money Indebtedness incurred after the
\nClosing Date in an aggregate principal amount outstanding at any one time not in
\nexcess of $500,000, and (ii) Purchase Money Inventory Indebtedness incurred
\nafter the Fifth Amendment Closing Date in an aggregate principal amount
\noutstanding at any one time not in excess of $10,000,000.<\/p>\n

“Publishing Business<\/u>” means the publishing business of Encore
\nSoftware, Inc., a Minnesota corporation as presently conducted and any similar
\nbusiness of any Loan Party that may be conducted in the future.<\/p>\n

“WFF<\/u>” means Wells Fargo Capital Finance, LLC (formerly known as Wells
\nFargo Foothill, LLC), a Delaware limited liability company.<\/p>\n

(k) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Borrowing Base” set forth therein by (i) replacing the
\nreference to “$15,000,000” in clause (b)(i) thereof with a reference to
\n“$20,000,000”, and (ii) replacing the reference to “50%” in clause (b)(iv)
\nthereof with a reference to “60%”.<\/p>\n

(l) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “EBITDA” set forth therein by (i) deleting the “and”
\nfollowing subclause<\/p>\n

6<\/p>\n

\n

(v) of clause (c) thereof, (ii) inserting a comma and the word “and”
\nfollowing the reference to “of such Person of any Stock” at the end of subclause
\n(vi) of clause (c) thereof, and (iii) inserting a new subclause (vii) in clause
\n(c) thereof following such newly inserted “and” and prior to the phrase “in each
\ncase to the extent included in the calculation of consolidated net income of
\nsuch Person for such period in accordance with GAAP”:<\/p>\n

(vii) Fifth Amendment EBITDA Restructuring Expenses to the extent incurred
\nduring the fiscal year of Borrower ending March 31, 2012,<\/p>\n

(m) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Eligible Accounts” set forth therein by amending and
\nrestating clause (a) thereof in its entirety as follows:<\/p>\n

(a) Accounts that the Account Debtor (other than the Specified Account
\nDebtor) has failed to pay within 90 days of original invoice date or Accounts of
\nan Account Debtor (other than the Specified Account Debtor) with selling terms
\nof more than 61 days (or, in the case of Best Buy and its Affiliates, accounts
\nwith selling terms of more than 90 days); or Accounts that the Specified Account
\nDebtor has failed to pay within 30 days of due date or Accounts of the Specified
\nAccount Debtor with selling terms of more than 60 days after the month end in
\nwhich such Account arose (provided<\/u>, that the aggregate portion of the
\nAccounts of the Specified Account Debtor in excess of $2,000,000 shall not be
\nEligible Accounts),<\/p>\n

(n) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Eligible Accounts set forth therein by amending and
\nrestating clause (i) thereof in its entirety as follows:<\/p>\n

(i) Accounts owing by an Account Debtor and its Affiliates (other than Best
\nBuy and its Affiliates, Walmart\/Sam153s Club and its Affiliates, Costco and its
\nAffiliates, Fry153s Electronics and its Affiliates, Staples and its Affiliates,
\nAnderson Merchandisers and its Affiliates or Target and its Affiliates) whose
\ntotal obligations owing to Borrower exceed 10% (such percentage, as applied to a
\nparticular Account Debtor and its Affiliates, being subject to reduction by
\nAgent in its Permitted Discretion if the creditworthiness of such Account Debtor
\nand its Affiliates deteriorates) of all Eligible Accounts, to the extent of the
\nobligations owing by such Account Debtor and its Affiliates in excess of such
\npercentage; Accounts owing by Best Buy and its Affiliates if the total
\nobligations owing to Borrower by Best Buy and its Affiliates exceed 35% (such
\npercentage, as applied to Best Buy and its Affiliates, being subject to
\nreduction by Agent in its Permitted Discretion if the creditworthiness of Best
\nBuy and its Affiliates deteriorates) of all Eligible Accounts, to the extent of
\nthe obligations owing by Best Buy and its Affiliates in excess of such
\npercentage; Accounts owing by Wal-Mart\/Sam153s Club and its Affiliates if the
\ntotal obligations owing to Borrower by Wal-Mart\/Sam153s Club and its Affiliates
\nexceed 20% (such percentage, as applied to Wal-Mart\/Sam153s Club and its
\nAffiliates, being subject to reduction by Agent in its Permitted Discretion if
\nthe creditworthiness of Wal-Mart\/Sam153s Club and its Affiliates deteriorates) of
\nall Eligible Accounts, to the extent of the obligations<\/p>\n

7<\/p>\n

\n

owing by Wal-Mart\/Sam153s Club and its Affiliates in excess of such percentage;
\nAccounts owing by Costco and its Affiliates if the total obligations owing to
\nBorrower by Costco and its Affiliates exceed 15% (such percentage, as applied to
\nCostco and its Affiliates, being subject to reduction by Agent in its Permitted
\nDiscretion if the creditworthiness of Costco and its Affiliates deteriorates) of
\nall Eligible Accounts, to the extent of the obligations owing by Costco and its
\nAffiliates in excess of such percentage; Accounts owing by Fry153s Electronics and
\nits Affiliates if the total obligations owing to Borrower by Fry153s Electronics
\nand its Affiliates exceed 15% (such percentage, as applied to Fry153s Electronics
\nand its Affiliates, being subject to reduction by Agent in its Permitted
\nDiscretion if the creditworthiness of Fry153s Electronics and its Affiliates
\ndeteriorates) of all Eligible Accounts, to the extent of the obligations owing
\nby Fry153s Electronics and its Affiliates in excess of such percentage; Accounts
\nowing by Staples and its Affiliates if the total obligations owing to Borrower
\nby Staples and its Affiliates exceed 15% (such percentage, as applied to Staples
\nand its Affiliates, being subject to reduction by Agent in its Permitted
\nDiscretion if the creditworthiness of Staples and its Affiliates deteriorates)
\nof all Eligible Accounts, to the extent of the obligations owing by Staples and
\nits Affiliates in excess of such percentage; Accounts owing by Anderson
\nMerchandisers and its Affiliates if the total obligations owing to Borrower by
\nAnderson Merchandisers and its Affiliates exceed 15% (such percentage, as
\napplied to Anderson Merchandisers and its Affiliates, being subject to reduction
\nby Agent in its Permitted Discretion if the creditworthiness of Anderson
\nMerchandisers and its Affiliates deteriorates) of all Eligible Accounts, to the
\nextent of the obligations owing by Anderson Merchandisers and its Affiliates in
\nexcess of such percentage; and Accounts owing by Target and its Affiliates if
\nthe total obligations owing to Borrower by Target and its Affiliates exceed 15%
\n(such percentage, as applied to Target and its Affiliates, being subject to
\nreduction by Agent in its Permitted Discretion if the creditworthiness of Target
\nand its Affiliates deteriorates) of all Eligible Accounts, to the extent of the
\nobligations owing by Target and its Affiliates in excess of such percentage;
\nprovided<\/u>, however<\/u>, that, in each case, the amount of Eligible
\nAccounts that are excluded because they exceed the foregoing percentages shall
\nbe determined by Agent based on all of the otherwise Eligible Accounts prior to
\ngiving effect to any eliminations based upon the foregoing concentration limits,\n<\/p>\n

(o) In order to correct numbering and punctuation errors in the definition of
\n“Eligible Accounts” resulting from the Consent and Amendment No. 2 to Credit
\nAgreement dated May 17, 2010 and the Amendment No. 3 to Credit Agreement dated
\nSeptember 30, 2010, Schedule 1.1 of the Credit Agreement is amended by amending
\nthe definition of the term “Eligible Accounts” set forth therein by (i) deleting
\nthe “or” at the end of clause (p) thereof, (ii) replacing the period at the end
\nof clause (q) thereof with a comma, (iii) renumbering clause (s) thereof
\n(reading “Accounts originally created by Punch and acquired by Encore from Punch
\nin under the Punch Acquisition Agreement (provided that the foregoing shall not
\ninclude Accounts created by Encore after the Punch Acquisition Closing Date).”
\nas clause (r) thereof, and (iv) replacing the period at the end of such clause
\n(r) thereof with “, or”.<\/p>\n

8<\/p>\n

\n

(p) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Eligible Accounts” set forth therein by inserting the
\nfollowing new clause (s) at the end thereof:<\/p>\n

(s) such Accounts that were acquired in a Permitted Acquisition or arise from
\nthe business acquired in a Permitted Acquisition, unless Agent shall have
\ncompleted a field examination with respect to the business and assets acquired
\nin connection with such Permitted Acquisition in accordance with Agent153s
\ncustomary procedures and practices and as otherwise required by the nature and
\ncircumstances of the business acquired in connection with such Permitted
\nAcquisition, the scope and results of which shall be satisfactory to Agent, and
\nthe criteria for Eligible Accounts set forth herein are satisfied with respect
\nto such Accounts in accordance with this Agreement (or such other or additional
\ncriteria as Agent may, at its option, establish with respect thereto in
\naccordance with the definition of Eligible Accounts).<\/p>\n

(q) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Eligible Inventory” set forth therein by (i) deleting
\nthe “or” following clause (m) thereof, (ii) replacing the period following
\nclause (n) thereof with a comma, and (iii) adding the following new clauses (o)
\nand (p) at the end thereof:<\/p>\n

(o) it is subject to Purchase Money Inventory Indebtedness, or<\/p>\n

(p) it was acquired in a Permitted Acquisition or arises from the business
\nacquired in a Permitted Acquisition, unless Agent shall have completed an
\nappraisal and field examination with respect to such Inventory in accordance
\nwith Agent153s customary procedures and practices and as otherwise required by the
\nnature and circumstances of such Inventory, the scope and results of which shall
\nbe satisfactory to Agent, and the criteria for Eligible Inventory set forth
\nherein are satisfied with respect to such Inventory in accordance with this
\nAgreement (or such other or additional criteria as Agent may, at its option,
\nestablish with respect thereto in accordance with the definition of Eligible
\nInventory).<\/p>\n

(r) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Permitted Indebtedness” set forth therein by (i)
\ndeleting the “and” at the end of clause (k) thereof, (ii) replacing the period
\nat the end of clause (l) thereof with a comma, and (iii) inserting new clauses
\n(m) and (n) at the end thereof as follows:<\/p>\n

(m) Acquired Indebtedness in an amount not to exceed $1,000,000 outstanding
\nat any one time, and<\/p>\n

(n) contingent liabilities in respect of any indemnification obligation,
\nadjustment of purchase price, non-compete or similar obligation of Borrower or
\nthe applicable Loan Party incurred in connection with the consummation of one or
\nmore Permitted Acquisitions.<\/p>\n

9<\/p>\n

\n

(s) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Permitted Investments” by amended and restating clause
\n(k) thereof in its entirety as follows:<\/p>\n

(k) so long as no Event of Default has occurred and is continuing or would
\nresult therefrom, Vendor Advances in an amount not to exceed $4,000,000 per
\nfiscal year,<\/p>\n

(t) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Permitted Investments” by (i) renumbering existing
\nclause (l) thereof such that it appears as clause (m) thereof, and (ii) adding
\nthe following new clause (l) thereto:<\/p>\n

(l) Permitted Acquisitions, and<\/p>\n

(u) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Permitted Liens” set forth therein by amending and
\nrestating clause (f) thereof in its entirety as follows:<\/p>\n

(f) (i) purchase money Liens on Equipment or the interests of lessors under
\nCapital Leases of Equipment to the extent that such Liens or interests secure
\nPermitted Purchase Money Indebtedness that does not constitute Purchase Money
\nInventory Indebtedness and so long as (A) such Lien attaches only to the asset
\npurchased or acquired and the proceeds thereof, and (B) such Lien only secures
\nthe Indebtedness that was incurred to acquire the asset purchased or acquired or
\nany Refinancing Indebtedness in respect thereof, and (ii) purchase money Liens
\non Inventory to the extent that such Liens or interests secure Permitted
\nPurchase Money Indebtedness constituting Purchase Money Inventory Indebtedness
\nand so long as (A) such Lien attaches only to the Inventory purchased or
\nacquired and the identifiable cash proceeds thereof, (B) such Lien only secures
\nthe Indebtedness that was incurred to acquire the Inventory purchased or
\nacquired or any Refinancing Indebtedness in respect thereof, and (C) the holder
\nof such Lien has executed and delivered a waiver agreement to Agent in the form
\nattached as<\/p>\n

Exhibit P<\/u> hereto.<\/p>\n

(v) Schedule 1.1 of the Credit Agreement is amended by amending the
\ndefinition of the term “Permitted Liens” set forth therein by (i) deleting “and”
\nfrom the end of clause (o) thereof, (ii) replacing the period at the end of
\nclause (p) thereof with a comma, and (iii) adding the following new clauses (q)
\nand (r) thereto:<\/p>\n

(q) Liens solely on any cash earnest money deposits made by Borrower or its
\nSubsidiaries in connection with any letter of intent or purchase agreement with
\nrespect to a Permitted Acquisition, and<\/p>\n

(r) Liens assumed by Borrower or any of its Subsidiaries in connection with a
\nPermitted Acquisition that secure Acquired Indebtedness.<\/p>\n

(w) Schedule 1.1 of the Credit Agreement is amended by adding the following
\nnew defined terms thereto in their appropriate alphabetical order as follows:\n<\/p>\n

10<\/p>\n

\n

“Acquired Indebtedness<\/u>” means Indebtedness of a Person whose assets or
\nStock is acquired by Borrower or any of its Subsidiaries in a Permitted
\nAcquisition; provided<\/u>, however<\/u>, that such Indebtedness (a) is
\neither Purchase Money Indebtedness or a Capital Lease with respect to Equipment
\nor mortgage financing with respect to Real Property, (b) was in existence prior
\nto the date of such Permitted Acquisition, and (c) was not incurred in
\nconnection with, or in contemplation of, such Permitted Acquisition.<\/p>\n

“Dominion Period<\/u>” means each period beginning on any date that Excess
\nAvailability is less than $15,000,000 and ending upon such date thereafter upon
\nwhich Excess Availability has been greater than $15,000,000 for sixty (60)
\nconsecutive days.<\/p>\n

“Fifth Amendment Closing Date<\/u>” means December 29, 2011.<\/p>\n

“Fifth Amendment EBITDA Restructuring Expenses<\/u>” means, collectively,
\nand in each case to the extent incurred during the fiscal year of Borrower
\nending March 31, 2012, (a) cash expenses in connection with severance payments
\nmade to Borrower153s prior CEO, Cary Deacon, in connection with his resignation on
\nMarch 31, 2011 plus search fees in connection with identifying a successor CEO,
\nin an aggregate amount not to exceed $1,700,000, (b) cash expenses in an
\naggregate amount not to exceed $6,900,000 for (i) severance payments and
\noutplacement expenses in connection with staff reductions at the Borrower153s
\nMinnesota headquarters and in connection with the closing of Encore Software,
\nInc153s California office along with other miscellaneous personnel related
\nrestructuring costs, in an aggregate amount for such severance payments and
\noutplacement expenses and other personnel related restructuring costs not to
\nexceed the maximum corresponding amount set forth on Schedule F-1<\/u>, and
\n(ii) cash expenses incurred in connection with Borrower153s negotiation with its
\nlandlord for its Minnesota headquarters to reduce the size of its facility by
\nvacating one of the three headquarters buildings currently leased by Navarre and
\nin connection with Borrower153s negotiation with the landlord for Encore Software,
\nInc.153s California office to terminate the lease for such office prior to its
\nscheduled expiration, in an aggregate amount for such expenses in connection
\nwith such leases not to exceed the maximum corresponding amount set forth on
\nSchedule F-1<\/u>, and (c) non-cash charges in an aggregate amount not to
\nexceed $2,600,000 resulting from (i) the writedown of Inventory for certain
\nsoftware titles of Encore Software, Inc. to be discontinued, (ii) the writedown
\nof software development costs pertaining to such discontinued Encore Software,
\nInc. software titles, and (iii) other miscellaneous non-cash restructuring
\ncharges.<\/p>\n

“Permitted Acquisition<\/u>” means any Acquisition so long as:<\/p>\n

(a) no Default or Event of Default shall have occurred and be continuing or
\nwould result from the consummation of the proposed Acquisition and the proposed
\nAcquisition is consensual,<\/p>\n

11<\/p>\n

\n

(b) no Indebtedness will be incurred, assumed, or would exist with respect to
\nBorrower or its Subsidiaries as a result of such Acquisition, other than
\nIndebtedness permitted under clause (m) of the definition of Permitted
\nIndebtedness and no Liens will be incurred, assumed, or would exist with respect
\nto the assets of Borrower or its Subsidiaries as a result of such Acquisition
\nother than Permitted Liens,<\/p>\n

(c) Borrower has provided Agent with written confirmation, supported by
\nreasonably detailed calculations, that on a pro forma basis (including pro forma
\nadjustments arising out of events which are directly attributable to such
\nproposed Acquisition, are factually supportable, and are expected to have a
\ncontinuing impact, in each case, determined as if the combination had been
\naccomplished at the beginning of the relevant period; such eliminations and
\ninclusions to be mutually and reasonably agreed upon by Borrower and Agent)
\ncreated by adding the historical combined financial statements of Borrower
\n(including the combined financial statements of any other Person or assets that
\nwere the subject of a prior Permitted Acquisition during the relevant period) to
\nthe historical consolidated financial statements of the Person to be acquired
\n(or the historical financial statements related to the assets to be acquired)
\npursuant to the proposed Acquisition, Borrower and its Subsidiaries (i) would
\nhave been in compliance with the financial covenants in Section 7<\/u> of the
\nAgreement for the 4 fiscal quarter period ended immediately prior to the
\nproposed date of consummation of such proposed Acquisition, and (ii) are
\nprojected to be in compliance with the financial covenants in Section 7<\/u>
\nfor the 4 fiscal quarter period ended one year after the proposed date of
\nconsummation of such proposed Acquisition,<\/p>\n

(d) Borrower has provided Agent with its due diligence package relative to
\nthe proposed Acquisition, including forecasted balance sheets, profit and loss
\nstatements, and cash flow statements of the Person or assets to be acquired, all
\nprepared on a basis consistent with such Person153s (or assets153) historical
\nfinancial statements, together with appropriate supporting details and a
\nstatement of underlying assumptions for the 1 year period following the date of
\nthe proposed Acquisition, on a quarter by quarter basis), in form and substance
\n(including as to scope and underlying assumptions) reasonably satisfactory to
\nAgent,<\/p>\n

(e) Borrower shall have Excess Availability (calculated after giving effect
\nto the payment of any transaction costs and expenses to be paid in connection
\ntherewith) in an amount equal to or greater than $15,000,000 immediately after
\ngiving effect to the consummation of the proposed Acquisition and Borrower shall
\nhave had average daily Excess Availability for the 30 day period ending on the
\ndate of the consummation of the proposed Acquisition (and calculated after
\ngiving effect to such Acquisition) in an amount equal to or greater than
\n$15,000,000,<\/p>\n

12<\/p>\n

\n

(f) the assets being acquired or the Person whose Stock is being acquired did
\nnot have negative EBITDA during the 12 consecutive month period most recently
\nconcluded prior to the date of the proposed Acquisition,<\/p>\n

(g) Borrower shall have provided Agent with written notice of the proposed
\nAcquisition at least 15 Business Days prior to the anticipated closing date of
\nthe proposed Acquisition not later than 5 Business Days prior to the anticipated
\nclosing date of the proposed Acquisition, copies of the acquisition agreement
\nand other material documents relative to the proposed Acquisition, which
\nagreement and documents must be reasonably acceptable to Agent,<\/p>\n

(h) the assets being acquired (other than a de minimis amount of assets in
\nrelation to Borrower153s and its Subsidiaries153 total assets), or the Person whose
\nStock is being acquired, are useful in or engaged in, as applicable, the
\nbusiness of Parent and its Subsidiaries or a business reasonably related
\nthereto,<\/p>\n

(i) the assets being acquired (other than a de minimis amount of assets in
\nrelation to the assets being acquired) are located within the United States or
\nthe Person whose Stock is being acquired is organized in a jurisdiction located
\nwithin the United States,<\/p>\n

(j) the subject assets or Stock, as applicable, are being acquired directly
\nby Borrower or one of its Subsidiaries that is a Loan Party, and, in connection
\ntherewith, Borrower or the applicable Loan Party shall have complied with
\nSection 5.11<\/u> or 5.12<\/u>, as applicable, of the Agreement and, in the
\ncase of an acquisition of Stock, Borrower or the applicable Loan Party shall
\nhave demonstrated to Agent that the new Loan Parties have received consideration
\nsufficient to make the joinder documents binding and enforceable against such
\nnew Loan Parties, and<\/p>\n

(k) the purchase consideration payable in respect of all Permitted
\nAcquisitions (including the proposed Acquisition and including any deferred
\npayment obligations and the amount of Indebtedness assumed) shall not exceed
\n$5,000,000 in the aggregate.<\/p>\n

“Purchase Money Inventory Indebtedness<\/u>” means Indebtedness (other than
\nthe Obligations), incurred at the time of, or within 20 days after, the
\nacquisition of any Inventory for the purpose of financing all or any part of the
\nacquisition cost thereof, so long as the holder of such Indebtedness has
\nexecuted and delivered a waiver agreement to Agent in the form attached as
\nExhibit P<\/u> hereto.<\/p>\n

(x) The following Schedules to the Credit Agreement are amended and restated
\nin their entirety as set forth on Exhibit A<\/u> to this Amendment: Schedule
\nA-2 (Authorized Persons), Schedule C-1 (Commitments), Schedule E-1 (Eligible
\nInventory Locations), Schedule P-1 (Permitted Investments), Schedule P-2
\n(Permitted Liens), Schedule P-3 (Specific Permitted Indebtedness), Schedule
\n4.1(b) (Capitalization of Borrower), Schedule 4.1(c) (Capitalization of
\nBorrower153s Subsidiaries), Schedule 4.6(a) (States of Organization), Schedule
\n4.6(b) (Chief<\/p>\n

13<\/p>\n

\n

Executive Offices), Schedule 4.6(c) (Organizational Identification Numbers),
\nSchedule 4.6(d) (Commercial Tort Claims), Schedule 4.7(b) (Litigation), Schedule
\n4.12 (Environmental Matters), Schedule 4.13 (Intellectual Property), Schedule
\n4.15 (Deposit Accounts and Securities Accounts), Schedule 4.17 (Material
\nContracts), Schedule 4.19 (Closing Date Indebtedness), Schedule 4.30 (Location
\nof Inventory and Equipment), and Schedule 6.6 (Nature of Business), and Schedule
\n6.12 (Transactions with Affiliates).<\/p>\n

(y) Schedule 5.2 of the Credit Agreement is hereby amended by replacing the
\nreference to “Weekly” on the left side of the first row thereof with a reference
\nto “Weekly (not later than Tuesday of each week) at such times that a Dominion
\nPeriod is in effect, and monthly (not later than the 10th day of each month) at
\nsuch times that a Dominion Period is not in effect”.<\/p>\n

(z) Schedule 6.12 (Transactions with Affiliates) to the Credit Agreement is
\nhereby deleted.<\/p>\n

(aa) A new Schedule F-1 (Fifth Amendment EBITDA Restructuring Expenses) is
\nadded to the Credit Agreement in the form attached as Exhibit F-1<\/u> to this
\nAmendment.<\/p>\n

(bb) Exhibit C-1 to the Credit Agreement is amended and restated in its
\nentirety in the form attached as Exhibit C-1<\/u> to this Amendment.<\/p>\n

(cc) A new Exhibit P is added to the Credit Agreement in the form attached as
\nExhibit P<\/u> to this Amendment.<\/p>\n

3. Continuing Effect<\/u>. Except as expressly set forth in Section
\n2<\/u> of this Amendment, nothing in this Amendment shall constitute a
\nmodification or alteration of the terms, conditions or covenants of the Credit
\nAgreement or any other Loan Document, or a waiver of any other terms or
\nprovisions thereof, and the Credit Agreement and the other Loan Documents shall
\nremain unchanged and shall continue in full force and effect, in each case as
\namended hereby.<\/p>\n

4. Reaffirmation and Confirmation<\/u>. Borrower hereby ratifies, affirms,
\nacknowledges and agrees that the Credit Agreement and the other Loan Documents
\nrepresent the valid, enforceable and collectible obligations of Borrower, and
\nfurther acknowledges that there are no existing claims, defenses, personal or
\notherwise, or rights of setoff whatsoever with respect to the Credit Agreement
\nor any other Loan Document. Borrower hereby agrees that this Amendment in no way
\nacts as a release or relinquishment of the Liens and rights securing payments of
\nthe Obligations. The Liens and rights securing payment of the Obligations are
\nhereby ratified and confirmed by Borrower in all respects.<\/p>\n

5. Conditions to Effectiveness<\/u>. This Amendment shall become effective
\nupon the satisfaction of each of the following conditions precedent, each in
\nform and substance acceptable to Agent:<\/p>\n

(a) Agent shall have received a fully executed copy of this Amendment (along
\nwith the Consent and Reaffirmation attached hereto) and each of the additional
\ndocuments, instruments and agreements listed on the Closing Checklist attached
\nhereto as Annex 1<\/u> to this<\/p>\n

14<\/p>\n

\n

Amendment, each in form and substance acceptable to Agent, together with such
\nother documents, agreements and instruments as Agent may require or reasonably
\nrequest;<\/p>\n

(b) Capital One Leverage Finance Corp. shall have assigned all of its
\nRevolver Commitment to Wells Fargo Capital Finance, LLC effective immediately
\nprior to the effectiveness of this Amendment such that Wells Fargo Capital
\nFinance, LLC is the sole Lender under the Credit Agreement as of the
\neffectiveness of this Amendment; and<\/p>\n

(c) No Default or Event of Default shall have occurred and be continuing on
\nthe date hereof (other than the Existing Defaults) or as of the date of the
\neffectiveness of this Amendment.<\/p>\n

6. Representations and Warranties<\/u>. In order to induce Agent and
\nLenders to enter into this Amendment, Borrower hereby represents and warrants to
\nAgent and Lenders that, after giving effect to this Amendment:<\/p>\n

(a) All representations and warranties contained in the Credit Agreement and
\nthe other Loan Documents are true and correct on and as of the date of this
\nAmendment, in each case as if then made, other than representations and
\nwarranties that expressly relate solely to an earlier date (in which case such
\nrepresentations and warranties were true and correct on and as of such earlier
\ndate);<\/p>\n

(b) No Default or Event of Default has occurred and is continuing;<\/p>\n

(c) This Amendment and the Credit Agreement, as modified hereby, constitute
\nlegal, valid and binding obligations of Borrower and are enforceable against
\nBorrower in accordance with their respective terms.<\/p>\n

7. Miscellaneous<\/u>.<\/p>\n

(a) Expenses<\/u>. Borrower agrees to pay on demand all Lender Group
\nExpenses of Agent (including, without limitation, the fees and expenses of
\noutside counsel for Agent) in connection with the preparation, negotiation,
\nexecution, delivery and administration of this Amendment and all other
\ninstruments or documents provided for herein or delivered or to be delivered
\nhereunder or in connection herewith. All obligations provided herein shall
\nsurvive any termination of this Amendment and the Credit Agreement as modified
\nhereby.<\/p>\n

(b) Governing Law<\/u>. This Amendment shall be a contract made under and
\ngoverned by the internal laws of the State of Illinois.<\/p>\n

(c) Counterparts<\/u>. This Amendment may be executed in any number of
\ncounterparts, and by the parties hereto on the same or separate counterparts,
\nand each such counterpart, when executed and delivered, shall be deemed to be an
\noriginal, but all such counterparts shall together constitute but one and the
\nsame Amendment. Delivery of an executed counterpart of this Amendment by
\nfacsimile or electronic mail shall be equally effective as delivery of an
\noriginal executed counterpart of this Amendment.<\/p>\n

15<\/p>\n

\n

8. Release<\/u>.<\/p>\n

(a) In consideration of the agreements of Agent and Lenders contained herein
\nand for other good and valuable consideration, the receipt and sufficiency of
\nwhich is hereby acknowledged, Borrower and each Guarantor (by its execution and
\ndelivery of the attached Consent and Reaffirmation), on behalf of itself and its
\nsuccessors, assigns, and other legal representatives, hereby absolutely,
\nunconditionally and irrevocably releases, remises and forever discharges Agent
\nand Lenders, and their successors and assigns, and their present and former
\nshareholders, affiliates, subsidiaries, divisions, predecessors, directors,
\nofficers, attorneys, employees, agents and other representatives (Agent, each
\nLender and all such other Persons being hereinafter referred to collectively as
\nthe “Releasees<\/u>” and individually as a “Releasee<\/u>“), of and from all
\ndemands, actions, causes of action, suits, covenants, contracts, controversies,
\nagreements, promises, sums of money, accounts, bills, reckonings, damages and
\nany and all other claims, counterclaims, defenses, rights of set-off, demands
\nand liabilities whatsoever (individually, a “Claim<\/u>” and collectively,
\n“Claims<\/u>“) of every name and nature, known or unknown, suspected or
\nunsuspected, both at law and in equity, which Borrower, any Guarantor or any of
\ntheir respective successors, assigns, or other legal representatives may now or
\nhereafter own, hold, have or claim to have against the Releasees or any of them
\nfor, upon, or by reason of any circumstance, action, cause or thing whatsoever
\nin relation to, or in any way in connection with any of the Credit Agreement, or
\nany of the other Loan Documents or transactions thereunder or related thereto
\nwhich arises at any time on or prior to the day and date of this Amendment.<\/p>\n

(b) Each of Borrower and each Guarantor understands, acknowledges and agrees
\nthat the release set forth above may be pleaded as a full and complete defense
\nand may be used as a basis for an injunction against any action, suit or other
\nproceeding which may be instituted, prosecuted or attempted in breach of the
\nprovisions of such release.<\/p>\n

(c) Each of Borrower and each Guarantor agrees that no fact, event,
\ncircumstance, evidence or transaction which could now be asserted or which may
\nhereafter be discovered shall affect in any manner the final, absolute and
\nunconditional nature of the release set forth above.<\/p>\n

[signature pages follow]<\/p>\n

16<\/p>\n

\n

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
\nexecuted by their respective officers thereunto duly authorized and delivered as
\nof the date first above written.<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

NAVARRE CORPORATION,<\/strong><\/p>\n

a Minnesota corporation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Signature Page to Amendment No. 5 to Credit Agreement<\/p>\n

\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

WELLS FARGO CAPITAL FINANCE, LLC,<\/strong><\/p>\n

formerly known as Wells Fargo Foothill, LLC,<\/p>\n

a Delaware limited liability company, as Agent and as a Lender<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Signature Page to Amendment No. 5 to Credit Agreement<\/p>\n

\n

CONSENT AND REAFFIRMATION <\/strong><\/p>\n

Each of the undersigned hereby (i) acknowledges receipt of a copy of the
\nforegoing Amendment No. 5 to Credit Agreement (terms defined therein and used,
\nbut not otherwise defined, herein shall have the meanings assigned to them
\ntherein); (ii) consents to Borrower153s execution and delivery thereof; (iii)
\nagrees to be bound by the terms of the Amendment, including Section 8 thereof;
\nand (iv) affirms that nothing contained therein shall modify in any respect
\nwhatsoever any Loan Document to which any of the undersigned is a party and
\nreaffirm that each such Loan Document is and shall continue to remain in full
\nforce and effect. Although each of the undersigned has been informed of the
\nmatters set forth herein and has acknowledged and agreed to same, each of the
\nundersigned understands that Agent and Lenders have no obligation to inform any
\nof the undersigned of such matters in the future or to seek any of the
\nundersigned153s acknowledgment or agreement to future consents, amendments or
\nwaivers, and nothing herein shall create such a duty.<\/p>\n

IN WITNESS WHEREOF, each of the undersigned has executed this Consent and
\nReaffirmation on and as of the date of such Amendment.<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

NAVARRE DISTRIBUTION SERVICES, INC.,<\/p>\n

a Minnesota corporation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

NAVARRE ONLINE FULFILLMENT SERVICES,<\/p>\n

INC., a Minnesota corporation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

ENCORE SOFTWARE, INC.,<\/p>\n

a Minnesota Corporation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

NAVARRE DIGITAL SERVICES, INC.,<\/p>\n

a Minnesota Corporation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Consent and Reaffirmation to Amendment No. 5 to Credit Agreement<\/p>\n

\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

NAVARRE LOGISTICAL SERVICES, INC.,<\/p>\n

a Minnesota corporation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

NAVARRE DISTRIBUTION SERVICES ULC,<\/p>\n

a British Columbia unlimited liability company<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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