{"id":43489,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/partnership-interest-purchase-agreement-navarre-corp-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"partnership-interest-purchase-agreement-navarre-corp-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/partnership-interest-purchase-agreement-navarre-corp-and.html","title":{"rendered":"Partnership Interest Purchase Agreement – Navarre Corp. and FUNimation"},"content":{"rendered":"

PARTNERSHIP INTEREST PURCHASE AGREEMENT<\/strong><\/p>\n

\n

This Agreement is made as of March 31, 2011, by and among FUNimation GP, LLC,
\na Texas limited liability company (“Buyer GP<\/u>“), Anime LP Holdings, LLC, a
\nTexas limited liability company (“Buyer ALP<\/u>“), FUNimation LP, LLC, a
\nTexas limited liability company (“Buyer FLP<\/u>” and together with Buyer GP
\nand Buyer ALP, the “Buyers<\/u>“), Navarre CP, LLC, a Minnesota limited
\nliability company (“Navarre CP<\/u>“), Navarre CS, LLC, a Minnesota limited
\nliability company (“Navarre CS<\/u>“), Navarre CLP, LLC, a Minnesota limited
\nliability company (“Navarre CLP<\/u>” and together with Navarre CP and Navarre
\nCS, the “Sellers<\/u>“), and Navarre Corporation, a Minnesota corporation
\n(“Navarre<\/u>“).<\/p>\n<\/p>\n

RECITALS<\/strong><\/p>\n

\n

A. Navarre CP owns all of the general partnership interests in FUNimation
\nProductions, Ltd., a Texas limited partnership (“Productions Company<\/u>“);\n<\/p>\n<\/p>\n

B. Navarre CLP owns all of the limited partnership interests in Productions
\nCompany;<\/p>\n<\/p>\n

C. Navarre CS owns all of the general partnership interests in animeOnline,
\nLtd., a Texas limited partnership (“Anime Online<\/u> and together with
\nProductions Company, the “Companies<\/u>“);<\/p>\n<\/p>\n

D. Navarre CLP owns all of the limited partnership interests in Anime Online;\n<\/p>\n<\/p>\n

E. Buyers desire to purchase all of the outstanding limited partnership
\ninterests and general partnership interests of Productions Company and Anime
\nOnline (collectively, the “Partnership Interests<\/u>“), and Sellers desire to
\ncause the sale of the Partnership Interests to Buyers on the terms and
\nconditions hereinafter set forth; and<\/p>\n<\/p>\n

F. Navarre wishes to undertake certain obligations hereunder.<\/p>\n<\/p>\n

NOW, THEREFORE, in consideration of the foregoing and the mutual promises set
\nforth below, the parties agree as follows:<\/p>\n<\/p>\n

ARTICLE 1<\/strong>
\nDEFINITIONS<\/u><\/strong><\/p>\n

\n

The capitalized terms referred to below have the meanings indicated (and
\nother capitalized terms are defined elsewhere in this Agreement):<\/p>\n<\/p>\n

“Accounts Payable<\/u>” means the accrued or outstanding accounts payable
\nof each of Productions Company and Anime Online, consistent with past practices,
\nrelating to the time period prior to the Closing Date (whether or not invoiced
\nas of the Closing Date) but in all events exclusive of the payments due to
\nGeneon Entertainment USA referenced in Section 5.4 hereof.<\/p>\n<\/p>\n

\n

“Accounts Receivable<\/u>” means each of Productions Company153s and Anime
\nOnline153s accounts and notes receivable, deferred charges, chattel paper and
\nother rights to receive payments prior to the Closing Date, consistent with past
\npractices.<\/p>\n<\/p>\n

“Agreement<\/u>” means this Partnership Interest Purchase Agreement and the
\nschedules and exhibits hereto and the other agreements attached hereto or made a
\npart of this Agreement.<\/p>\n<\/p>\n

“Anime Online<\/u>” has the meaning set forth in the introductory
\nparagraph.<\/p>\n<\/p>\n

“Applicable Law<\/u>” means all laws, statutes, treaties, rules, codes,
\nordinances or regulations, of any Governmental Authority.<\/p>\n<\/p>\n

“Basket<\/u>” has the meaning set forth in Section 7.1(b).<\/p>\n<\/p>\n

“Buyer ALP<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Buyer FLP<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Buyer GP<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Buyers<\/u>” has the meaning set forth in the introductory paragraph.<\/p>\n<\/p>\n

“Cap<\/u>” has the meaning set forth in Section 7.1(b).<\/p>\n<\/p>\n

“Closing<\/u>” means the actual delivery of the instruments for conveyance
\nof the Partnership Interests, and the exchange and delivery by the parties of
\nthe other documents and instruments contemplated by this Agreement, which will
\ntake place at the offices of Winthrop & Weinstine, P.A., 225 South Sixth
\nStreet, Suite 3500, Minneapolis, Minnesota, or such other location as the
\nparties may agree.<\/p>\n<\/p>\n

“Closing Date<\/u>” means March 31, 2011.<\/p>\n<\/p>\n

“Closing Date Debt<\/u>” means all Indebtedness, if any, existing on the
\nFunding Date.<\/p>\n<\/p>\n

“Closing Date Debt Payoff Amount<\/u>” means the aggregate amount necessary
\nto fully repay and retire all Closing Date Debt.<\/p>\n<\/p>\n

“Closing Payments<\/u>” has the meaning set forth in Section 2.3.<\/p>\n<\/p>\n

“Code<\/u>” means the Internal Revenue Code of 1986, as amended.<\/p>\n<\/p>\n

“Conflict of Interest<\/u>” has the meaning set forth in Section 7.3(b).\n<\/p>\n<\/p>\n

“Companies<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Distribution Agreement<\/u>” has the meaning set forth in Section 6.1.\n<\/p>\n<\/p>\n

“Effective Time<\/u>” shall be as of 11:59 p.m. on the Closing Date.<\/p>\n<\/p>\n

2<\/p>\n

\n

\n

“Employment Agreement<\/u>” has the meaning set forth in Section 5.8.<\/p>\n<\/p>\n

“Employee Policies and Procedures<\/u>” has the meaning set forth in
\nSection 3.8.<\/p>\n<\/p>\n

“Employment and Labor Agreements<\/u>” has the meaning set forth in Section
\n3.8.<\/p>\n<\/p>\n

“Encumbrances<\/u>” means any mortgage, pledge, option, easement, deed of
\ntrust, right-of-way, encroachment, restriction, lien, charge, claim, security
\ninterest, easement or other encumbrances of any kind or nature.<\/p>\n<\/p>\n

“ERISA<\/u>” means the Employee Retirement Income Security Act of 1974, as
\namended.<\/p>\n<\/p>\n

“ERISA Affiliate<\/u>” has the meaning set forth in Section 3.9.<\/p>\n<\/p>\n

“Fundamental Representations<\/u>” has the meaning set forth in Section
\n7.1.<\/p>\n<\/p>\n

“Funding Date<\/u>” means April 1, 2011.<\/p>\n<\/p>\n

“Governmental Authority<\/u>” means any national, federal, state,
\ndepartmental, county, municipal, regional or other governmental authority,
\nagency, board, body, instrumentality or court in whatever country having
\njurisdiction in whole or in part over the Companies.<\/p>\n<\/p>\n

“Guaranty Agreement<\/u>” means that certain Guaranty Agreement, dated May
\n29, 2007, by Navarre in favor of Landlord relating to the Lease.<\/p>\n<\/p>\n

“Indebtedness<\/u>” means, with respect to the Companies, any indebtedness
\nfor borrowed money, whether short term or long term and whether interest bearing
\nor non-interest bearing, including, without limitation, capital or operating
\nleases, and all interest, fees and other expenses owed with respect to such
\nindebtedness. Notwithstanding the foregoing and for the avoidance of doubt,
\naccounts payable incurred in the ordinary course and accrued expenses and
\nliabilities shall be specifically excluded from the term “Indebtedness” for the
\npurposes of this Agreement.<\/p>\n<\/p>\n

“Indemnification Period<\/u>” has the meaning set forth in Section 7.1(c).\n<\/p>\n<\/p>\n

“Indemnified Party<\/u>” has the meaning set forth in Section 7.3(a).<\/p>\n<\/p>\n

“Indemnifying Party<\/u>” has the meaning set forth in Section 7.3(a).<\/p>\n<\/p>\n

“knowledge of the Companies, the Sellers or Navarre<\/u>“, or words of
\nsimilar import, shall mean the actual knowledge of each of Cary L. Deacon, J.
\nReid Porter, Ryan F. Urness, Diane D. Lapp, Linda A. Ruehle, Margo McManus,
\nMitchell Miller, Michael Janousek, Kimberly Woebler, Lina Shurslep and Jeffrey
\nMehr.<\/p>\n<\/p>\n

“Landlord<\/u>” shall mean FMBP Industrial I, LP or its successors and
\nassigns or any Persons making any claim against Sellers, Navarre or their
\nlenders relating to the Lease.<\/p>\n<\/p>\n

“Lease<\/u>” shall mean the Lease, dated May 29, 2007, between Productions
\nCompany and Landlord, relating to premises leased in Flower Mound, Texas.<\/p>\n<\/p>\n

3<\/p>\n

\n

\n

“Letter of Credit<\/u>” means one or more Letter of Credit from Capital One
\nLeverage Finance Corp. and\/or Wells Fargo Foothill, LLC in favor of Landlord,
\nissued to secure a release or modification of Navarre153s obligations under the
\nGuaranty Agreement.<\/p>\n<\/p>\n

“Letter of Undertaking<\/u>” has the meaning set forth in Section 5.9.<\/p>\n<\/p>\n

“Logistics Agreement<\/u>” has the meaning set forth in Section 6.1.<\/p>\n<\/p>\n

“Loss<\/u>” or “Losses<\/u>” means each and all of the following items to
\nthe extent actually paid or incurred: losses, liabilities, damages, judgments,
\nfines, costs, penalties, amounts paid in settlement and reasonable out-of-pocket
\ncosts and expenses incurred in connection therewith (including, without
\nlimitation, costs and expenses of suits and proceedings, and reasonable fees and
\ndisbursements of counsel), but net of any insurance proceeds actually received
\nby the Indemnified Party with respect to such Losses.<\/p>\n<\/p>\n

“material<\/u>” and “materially<\/u>“, as used in Article 3, shall refer
\nto the condition (financial or otherwise), operations as currently conducted,
\nand properties or liabilities of the Companies, in each case, taken as a whole.\n<\/p>\n<\/p>\n

“Navarre<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Navarre CLP<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Navarre CLP Anime Online Limited Partnership Interests<\/u>” has the
\nmeaning set forth in Section 2.1.<\/p>\n<\/p>\n

“Navarre CLP Productions Company Limited Partnership Interests<\/u>” has
\nthe meaning set forth in Section 2.1.<\/p>\n<\/p>\n

“Navarre CS<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Navarre CS General Partnership Interests<\/u>” has the meaning set forth
\nin Section 2.1.<\/p>\n<\/p>\n

“Navarre CP<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Navarre CP General Partnership Interests<\/u>” has the meaning set forth
\nin Section 2.1.<\/p>\n<\/p>\n

“NLRB<\/u>” has the meaning set forth in Section 3.8.<\/p>\n<\/p>\n

“Notice of Claim<\/u>” has the meaning set forth in Section 7.1(c).<\/p>\n<\/p>\n

“Partnership Interests<\/u>” has the meaning set forth in the introductory
\nparagraph.<\/p>\n<\/p>\n

“Party<\/u>” means Sellers or Buyers, and “Parties<\/u>” means all of
\nthem.<\/p>\n<\/p>\n

“Person<\/u>” means an individual, a partnership, a corporation, a limited
\nliability company, an association, a joint stock company, a trust, a joint
\nventure, an unincorporated organization, any other business entity or a
\nGovernmental Authority.<\/p>\n<\/p>\n

4<\/p>\n

\n

\n

“Plans<\/u>” has the meaning set forth in Section 3.9.<\/p>\n<\/p>\n

“Pre-Closing Periods<\/u>” has the meaning set forth in Section 3.12.<\/p>\n<\/p>\n

“Productions Company<\/u>” has the meaning set forth in the introductory
\nparagraph.<\/p>\n<\/p>\n

“Purchase Price<\/u>” has the meaning set forth in Section 2.2.<\/p>\n<\/p>\n

“Records<\/u>” has the meaning set forth in Section 5.1.<\/p>\n<\/p>\n

“Returns<\/u>” has the meaning set forth in Section 3.12.<\/p>\n<\/p>\n

“Securities Act<\/u>” has the meaning set forth in Section 4.4.<\/p>\n<\/p>\n

“Seller Apportioned Taxes<\/u>” has the meaning set forth in section
\n2.6(a).<\/p>\n<\/p>\n

“Seller Taxes<\/u>” has the meaning set forth in Section 2.6(a).<\/p>\n<\/p>\n

“Sellers<\/u>” has the meaning set forth in the introductory paragraph.\n<\/p>\n<\/p>\n

“Taxes<\/u>” means all state, local or foreign taxes, social security
\ncontributions, fees, imposts, levies or other assessments imposed by any taxing
\nGovernmental Authority, including, without limitation, all net income, gross
\nreceipts, sales, use, ad valorem, value added, transfer, recording, franchise,
\nprofits, inventory, capital stock, license, withholding, payroll, stamp,
\noccupation taxes, real and personal property taxes, customs duties or other
\nsimilar fees, assessments and charges, however denominated, together with all
\ninterest, penalties, surcharges, additions to tax or additional amounts imposed
\nby any taxing Governmental Authority, and any transfer liability in respect of
\nany of the foregoing taxes.<\/p>\n<\/p>\n

“Tax Return<\/u>” means any report, return, statement or other written
\ninformation supplied, or required to be supplied, to any taxing Governmental
\nAuthority in connection with or relating to any Taxes.<\/p>\n<\/p>\n

“Termination<\/u>” has the meaning set forth in Section 5.8.<\/p>\n<\/p>\n

“Third Party Claim<\/u>” has the meaning set forth in Section 7.3(a).<\/p>\n<\/p>\n

“Transition Services Agreement<\/u>” has the meaning set forth in Section
\n6.1.<\/p>\n<\/p>\n

ARTICLE 2<\/strong>
\nPURCHASE AND SALE OF PARTNERSHIP INTERESTS<\/u><\/strong><\/p>\n

\n

2.1 Transfer of Partnership Interests<\/strong>. Upon the terms and
\nsubject to the conditions of this Agreement, at the Closing and as of the
\nEffective Time, (i) Navarre CP shall sell to Buyer GP, and Buyer GP shall
\npurchase from Navarre CP, all of the general partnership interests of
\nProductions Company held by Navarre CP (the “Navarre CP General Partnership
\nInterests<\/u>“), (ii) Navarre CLP shall sell to Buyer FLP, and Buyer FLP shall
\npurchase from Navarre CLP, all of the limited partnership interests of
\nProductions Company held by Navarre CLP (the “Navarre<\/u> CLP Productions
\nCompany Limited Partnership Interests<\/u>“), (iii) Navarre CS shall sell to
\nBuyer<\/p>\n<\/p>\n

5<\/p>\n

\n

\n

GP, and Buyer GP shall purchase from Navarre CS, all of the general
\npartnership interests of Anime Online held by Navarre CS (the “Navarre CS
\nGeneral Partnership Interests<\/u>“), and (iv) Navarre CLP shall sell to Buyer
\nALP, and Buyer ALP shall purchase from Navarre CLP, all of the limited
\npartnership interests of Anime Online held by Navarre CLP (the “Navarre CLP
\nAnime Online Limited Partnership Interests<\/u>“), free and clear of all
\nEncumbrances. In each case, such sales and purchases shall be made pursuant to
\nan Assignment of Partnership Interest substantially in the form attached hereto
\nas Exhibit D<\/u>.<\/p>\n<\/p>\n

2.2 Purchase Price<\/strong>. Buyers shall pay Sellers the aggregate
\namount of $24,000,000.00 as full consideration for the Partnership Interests
\n(the “Purchase Price<\/u>“) on the Funding Date.<\/p>\n<\/p>\n

2.3 Payment Terms<\/strong>. The Purchase Price shall be paid by
\nBuyers to Sellers as set forth on Schedule 2.3<\/u> attached hereto by wire
\ntransfers of immediately available funds on the Funding Date to an account
\ndesignated by each Seller in writing not less than five (5) business days prior
\nto the Funding Date (the “Closing Payments<\/u>“).<\/p>\n<\/p>\n

2.4 Closing<\/strong>. The Closing will take place at the offices of
\nWinthrop & Weinstine, P.A., 225 South Sixth Street, Suite 3500, Minneapolis,
\nMinnesota, on March 31, 2011, or on such other date and at such other place as
\nthe Parties may agree in writing. At Closing, Sellers will deliver or cause to
\nbe delivered to Buyers the documents identified in Section 6.1 and Buyers will
\ndeliver to Sellers the documents identified in Section 6.2.<\/p>\n<\/p>\n

2.5 Satisfaction of Indebtedness<\/strong>. On or prior to the Funding
\nDate, in addition to such other actions as may be provided for herein, each of
\nthe Companies shall have either:<\/p>\n<\/p>\n

(a) fully and irrevocably paid, satisfied and retired in all respects all
\nIndebtedness that if not satisfied prior to Funding Date would constitute
\nClosing Date Debt and obtained all final payoff letters, releases, lien
\ndischarges and other evidences thereof all in form and substance reasonably
\nsatisfactory to Buyers and caused all liens on any of its assets arising
\npursuant to such Indebtedness or other collateral with respect thereto, to have
\nbeen fully and irrevocably satisfied, removed, released and discharged in all
\nrespects and duly filed and recorded, or caused to have been duly filed and
\nrecorded, such UCC-3 termination statements and other evidences of the
\nsatisfaction, removal and discharge thereof all in form and substance reasonably
\nsatisfactory to Buyers; or<\/p>\n<\/p>\n

(b) obtained irrevocable payoff letters, releases and lien discharges in
\nadvance executed by the lenders with respect to the Closing Date Debt and all
\nthird parties entitled to enforce the payment of such Closing Date Debt or
\nsecured by any collateral pledged therefor, each in form and substance
\nreasonably satisfactory to Buyer, that (i) establish the Closing Date Debt
\nPayoff Amount to be paid on the Funding Date and (ii) provide that upon the
\npayment of such amount on the Funding Date, all I<\/u>ndebtedness relating
\nthereto and all liens on any of assets arising pursuant to such Indebtedness or
\nother collateral with respect thereto, will be automatically, fully and
\nirrevocably satisfied, removed, released and discharged in all respects and all
\nUCC-3 termination statements and other evidences of the satisfaction, removal
\nand discharge thereof, all in form and<\/p>\n<\/p>\n

6<\/p>\n

\n

\n

substance reasonably satisfactory to Buyer, will be duly filed and recorded
\npromptly thereafter.<\/p>\n<\/p>\n

2.6 Taxes<\/strong>.<\/p>\n<\/p>\n

(a) Sellers shall be responsible for preparing and making proper and timely
\nfilings of all Tax Returns for the Companies for all periods beginning prior to
\nand ending on or prior to the Closing Date and for paying all Taxes shown on
\nsuch Tax Returns (“Seller Taxes<\/u>“). Buyers shall be responsible for
\npreparing and making proper and timely filings of all Tax Returns of the
\nCompanies for all periods ending after the Closing Date and for paying all Taxes
\nshown on such Tax Returns other than the Seller Apportioned Taxes (as determined
\nin Section 2.6(c)). All Tax Returns prepared by Sellers and Buyers shall be
\nprepared and filed in a manner consistent with the past practices of the
\nCompanies, except as required by change in Aplicable Law.<\/p>\n<\/p>\n

(b) Buyers, Sellers and Navarre agree that the transaction contemplated by
\nthis Agreement shall be treated as an asset sale for tax purposes. Each party
\nhereto agrees (a) that the Purchase Price for the assets of the Companies will
\nbe allocated for all federal and state tax purposes (including but not limited
\nto, income, excise, sales, use, personal property and transfer taxes, and
\notherwise) among the assets of the Companies in accordance with Schedule
\n2.6(b)<\/u> hereof which is in accordance with the Code (b) to file separately a
\nFederal Form 8594 with its Federal Income Tax Return consistent with such
\nallocation for the tax year in which the Closing Date occurs; provided<\/u>,
\nhowever<\/u>, that, thirty (30) days of the Closing Date, the Buyers and
\nSellers shall, acting reasonably, collectively prepare Schedule 2.6(b)<\/u>
\nand Federal Form 8594 to be filed with the IRS and (c) that no party will take a
\nposition on any tax returns or filings with any governmental or regulatory
\nauthority charged with the collection of taxes or having jurisdiction over the
\ntransaction contemplated hereunder or in any judicial proceeding, that is in any
\nmanner inconsistent with the terms of the allocation set forth on Schedule
\n2.6(b)<\/u> hereof.<\/p>\n<\/p>\n

(c) For purposes of this Agreement, in the case of any Taxes that are imposed
\non a periodic basis and are payable for a Tax period that begins prior to but
\ndoes not end on the Closing Date, the term “Seller Apportioned Taxes<\/u>”
\nshall (i) in the case of any Taxes other than Taxes based upon or related to
\nincome or receipts, be the amount of such Tax for the entire Tax period
\nmultiplied by a fraction, the numerator of which is the number of days in the
\nTax period through and including the Closing Date and the denominator of which
\nis the number of days in the entire Tax period, and (ii) in the case of any Tax
\nbased upon or related to income or receipts, be the amount that would be payable
\nif the relevant Tax period ended on the Closing Date, calculated in accordance
\nwith the closing-of-the-books method.<\/p>\n<\/p>\n

(d) Buyers and Sellers shall cooperate, as and to the extent reasonably
\nrequested, in connection with the preparation and filing of Tax Returns pursuant
\nto this Section and any audit, investigation, litigation or other action with
\nrespect to Taxes which may be instituted after the Closing.<\/p>\n<\/p>\n

7<\/p>\n

\n

\n

(e) All transfer, real estate transfer, excise, documentary, sales, use,
\nstamp, registration and other such Taxes and fees (including any penalties and
\ninterest) incurred in connection with the purchase and sale of the Partnership
\nInterests shall be paid by Sellers or Navarre when due, and Sellers or Navarre
\nshall, at their own expense, file all necessary Tax Returns and other
\ndocumentation with respect to all such transfer, real estate transfer, excise,
\ndocumentary, sales, use, stamp, registration and other such Taxes and fees, and,
\nif required by applicable law, Buyers shall join in the execution of any such
\nTax Returns and other documentation.<\/p>\n<\/p>\n

ARTICLE 3<\/strong>
\nREPRESENTATIONS AND WARRANTIES OF SELLERS<\/u><\/strong><\/p>\n

\n

To induce Buyers to enter into this Agreement, Sellers and Navarre, jointly
\nand severally, represent and warrant that, notwithstanding any investigation
\nBuyers may undertake, the following are true and correct on the date hereof and
\nwill be true and correct as of the Closing Date:<\/p>\n<\/p>\n

3.1 Organization and Qualification<\/strong>.<\/p>\n<\/p>\n

(a) Productions Company is a limited partnership lawfully existing and in
\ngood standing under the laws of the State of Texas with full power and authority
\nto own or lease its properties and to conduct business in the manner and in the
\nplaces where such properties are owned or leased or such business is conducted.
\nProductions Company is duly qualified to transact business as a foreign limited
\npartnership and is in good standing under the laws of each state in which it
\nowns or leases any real estate or maintains any offices, any bank accounts, or
\nhas any employees who reside and\/or normally perform their employment services
\nin such state, and where the character and location of such assets or the nature
\nof the business transacted by Productions Company makes such qualification
\nnecessary.<\/p>\n<\/p>\n

(b) Anime Online is a limited partnership lawfully existing and in good
\nstanding under the laws of the State of Texas with full power and authority to
\nown or lease its properties and to conduct business in the manner and in the
\nplaces where such properties are owned or leased or such business is conducted.
\nAnime Online is duly qualified to transact business as a foreign limited
\npartnership and is in good standing under the laws of each state in which it
\nowns or leases any real estate or maintains any offices, any bank accounts, or
\nhas any employees who reside and\/or normally perform their employment services
\nin such state, and where the character and location of such assets or the nature
\nof the business transacted by Anime Online makes such qualification necessary.\n<\/p>\n<\/p>\n

3.2 Authority; Binding Nature of Agreement<\/strong>.<\/p>\n<\/p>\n

(a) The execution, delivery and performance of this Agreement and all
\nobligations hereunder by Sellers and Navarre and the consummation of the
\ntransactions contemplated by this Agreement have been duly authorized by all
\nnecessary action on the part of Sellers and Navarre.<\/p>\n<\/p>\n

8<\/p>\n

\n

\n

(b) Sellers and Navarre have full power and authority to enter into this
\nAgreement and to carry out the transactions contemplated hereby.<\/p>\n<\/p>\n

(c) This Agreement has been duly and validly executed and delivered by
\nSellers and Navarre and is the legal, valid and binding obligation of Sellers
\nand Navarre, enforceable in accordance with its respective terms, except as such
\nmay be limited by bankruptcy, insolvency, reorganization or similar laws
\naffecting creditors153 rights generally, and by general equitable principles.<\/p>\n<\/p>\n

3.3 No Conflict<\/strong>. Except as set forth on Schedule 3.3<\/u>
\nattached hereto, the execution, delivery and performance of this Agreement by
\nSellers and Navarre does not and will not conflict with, constitute a default
\nunder (whether after the giving of notice, lapse of time, or both), (i) any
\nprovision of the Certificate of Formation, Articles of Organization, Articles of
\nIncorporation or other governing documents of either of the Companies or (ii)
\nany Applicable Law to which either of the Companies may be subject.<\/p>\n<\/p>\n

3.4 Ownership of Partnership Interests<\/strong>.<\/p>\n<\/p>\n

(a) Navarre CP is the sole record and beneficial owner of the Navarre CP
\nGeneral Partnership Interests, free and clear of all Encumbrances.<\/p>\n<\/p>\n

(b) Navarre CLP is the sole record and beneficial owner of the Navarre CLP
\nProductions Company Limited Partnership Interests, free and clear of all
\nEncumbrances.<\/p>\n<\/p>\n

(c) Navarre CS is the sole record and beneficial owner of the Navarre CS
\nGeneral Partnership Interests, free and clear of all Encumbrances.<\/p>\n<\/p>\n

(d) Navarre CLP is the sole record and beneficial owner of the Navarre CLP
\nAnime Online Limited Partnership Interests, free and clear of all Encumbrances.\n<\/p>\n<\/p>\n

(e) Except as set forth on Schedule 3.10<\/u>, there are no options,
\nwarrants, convertible securities or other rights, agreements, arrangements or
\ncommitments of any character relating to the Partnership Interests of the
\nCompanies, as applicable, or obligating the Companies to issue or sell any
\npartnership interests, as applicable, of, or any other interest in, the
\nCompanies.<\/strong><\/p>\n<\/p>\n

3.5 Subsidiaries<\/strong>. Neither of the Companies has any
\nsubsidiaries.<\/p>\n<\/p>\n

3.6 Brokers or Agents<\/strong>. Except for Houlihan Lokey (whose fees
\nshall be borne exclusively by Navarre and the Sellers) neither Navarre nor
\nSellers have employed or dealt with any brokers, consultants or investment
\nbankers in connection with the transactions contemplated hereby.<\/p>\n<\/p>\n

3.7 Compliance with Law<\/strong>. The Sellers and Navarre, (i) the
\noperations of the Companies153 respective businesses have been conducted in all
\nmaterial respects in accordance with all applicable laws, regulations, orders
\nand other requirements of all courts and other governmental or regulatory
\nauthorities, domestic or foreign, having jurisdiction over the Companies and
\ntheir respective assets, properties and operations. Except as set forth on
\nSchedule<\/u><\/p>\n<\/p>\n

9<\/p>\n

\n

\n

3.7<\/u>, neither the Sellers or Navarre or the Companies, have received
\nnotice of any violation of any such law, regulation, order or other legal
\nrequirement, or is in default with respect to any order, writ, judgment, award,
\ninjunction or decree of any national, state or local court or governmental or
\nregulatory authority or arbitrator, domestic or foreign, applicable to the
\nCompanies153 respective businesses.<\/p>\n<\/p>\n

3.8 Labor Matters<\/strong>. With respect to employees of the
\nCompanies, except as set forth in Schedule 3.8<\/u> hereof: (i) the Companies
\nare not party to any employment agreements with employees that are not
\nterminable at will, or that provide for the payment of any bonus or commission
\nupon termination thereof, (ii) the Companies are not party to any agreement,
\npolicy or practice that requires them to pay termination or severance pay to
\nsalaried, non exempt or hourly employees (other than as required by law), (iii)
\nthe Companies are not party to any collective bargaining agreement or other
\nlabor union contract nor do the Companies, the Sellers or Navarre know of any
\nactivities or proceedings of any labor union to organize any such employees, and
\n(iv) the Companies are not party to or subject to any conciliation agreements,
\nconsent decrees or settlements with respect to their respective businesses or
\nemployees. Sellers have furnished to Buyers complete and correct copies of all
\nsuch agreements, if any (the “Employment and Labor Agreements<\/u>“). The
\nCompanies are not, and were not over the last three (3) years, in material
\ndefault or breach under the provisions of the Employment and Labor Agreements
\n(except for such breaches or defaults that have been cured waived).<\/p>\n<\/p>\n

Except as set forth in Schedule 3.8<\/u> hereof or Section 7.1(f): (i) the
\nSellers and Navarre, the Companies are in material compliance with all
\napplicable laws relating to employment and employment practices, wages, hours,
\nand terms and conditions of employment, (ii) there is no unfair labor practice
\ncharge or complaint pending before the National Labor Relations Board (the
\n“NLRB<\/u>“) relating to either of the Companies, or, to the knowledge of the
\nCompanies, the Sellers or Navarre, threatened against the Companies, (iii) there
\nis no labor strike, material slowdown or material work stoppage or lockout
\npending or, to the knowledge of the Companies, the Sellers or Navarre,
\nthreatened against or affecting the Companies, and the Companies have not
\nexperienced any strike, material slowdown or material work stoppage, lockout or
\nother collective labor action by or with respect to employees of the Companies,
\n(iv) there is no representation, claim or petition pending before the NLRB or
\nany similar foreign agency and no question concerning representation exists
\nrelating to the employees of the Companies, (v) there are no charges with
\nrespect to or relating to the Companies pending before the Equal Employment
\nOpportunity Commission or any state, local or foreign agency responsible for the
\nprevention of unlawful employment practices, and (vi) neither the Companies, the
\nSellers nor Navarre have received written notice from any national, state, local
\nor foreign agency responsible for the enforcement of labor or employment laws of
\nan intention to conduct an investigation of it and, to the knowledge of the
\nCompanies, the Sellers or Navarre, no such investigation is pending.<\/p>\n<\/p>\n

Sellers have furnished Buyers with a complete and accurate list of all of the
\nCompanies153 respective employee manuals, policies, procedures and work-related
\nrules affecting employees of the Companies (“Employee Policies and
\nProcedures<\/u>“). Sellers have provided Buyers with a copy of all of the
\nCompanies153 respective written Employee Policies and Procedures and a written
\ndescription of all unwritten Employee Policies and Procedures. Each of the
\nEmployee Policies and Procedures can be amended or terminated at will by the
\nCompanies.<\/p>\n<\/p>\n

10<\/p>\n

\n

\n

3.9 Employee Plans<\/strong>. With respect to the respective employees
\nof the Companies, except as set forth in Schedule 3.9<\/u> hereof, the
\nCompanies do not maintain and do not have any obligation to contribute to any
\npension, savings, retirement, health, life, disability, other insurance,
\nseverance, bonus, incentive compensation, stock option or other equity-based or
\nother employee benefit or fringe benefit plans, whether or not “employee benefit
\nplans” as defined in Section 3(3) of ERISA (collectively referred to herein as
\nthe “Plans<\/u>“). Each Company or any trade or business (whether or not
\nincorporated) which is or has ever been treated as a single employer with such
\nCompany under Section 414(b), (c), (m) or (o) of the Code (“ERISA
\nAffiliate<\/u>“) has incurred no liability under Title IV of ERISA or Section 412
\nof the Code, except for any such liability which has been satisfied in full, and
\nno events have occurred and no circumstances exist that could reasonably be
\nexpected to result in any such liability to either of the Companies or any ERISA
\nAffiliate.<\/p>\n<\/p>\n

3.10 Effect of Agreement<\/strong>. The execution and delivery of this
\nAgreement by each of the Sellers and Navarre does not, and the consummation of
\nthe transactions contemplated hereby by each of the Sellers and Navarre will not
\n(i) except as set forth on Schedule 3.10<\/u> hereof, require the consent,
\napproval or authorization of, or declaration, filing or registration with, any
\ngovernmental or regulatory authority or any third party; or (ii) result in the
\nbreach of any term or provision of, or constitute a default under, or result in
\nthe acceleration of or entitle any party to accelerate (whether after the giving
\nof notice or the lapse of time or both) any obligation under any Indebtedness,
\nor result in the creation or imposition of any Encumbrance upon any part of the
\nproperty of the Companies, the Sellers or Navarre pursuant to any provision of,
\nany material Indebtedness, order, judgment, arbitration award, injunction,
\ndecree, indenture, mortgage, lease, license, lien, or other agreement or
\ninstrument to which any of the Companies, the Sellers or Navarre is a party or
\nby which any of them is bound.<\/p>\n<\/p>\n

3.11 Litigation<\/strong>. Except as set forth in Schedule 3.11<\/u>
\nhereof or Section 7.1(f) there are no claims, actions, suits, proceedings or
\ninvestigations pending or, to the knowledge of the Companies, the Sellers or
\nNavarre, threatened before any federal, state or local court or governmental or
\nregulatory authority, domestic or foreign, or before any arbitrator of any
\nnature, brought by or against the Companies or any of its officers, directors,
\nemployees, or agents involving, affecting or relating to any of the Companies153
\nrespective assets or the transactions contemplated by this Agreement. Except as
\nset forth in Schedule 3.11<\/u> hereof, neither the Companies nor any of their
\nrespective assets is subject to any order, writ, judgment, award, injunction or
\ndecree of any federal, state or local court or governmental or regulatory
\nauthority, domestic or foreign, or any arbitrator of any nature, that affects or
\nmight affect such assets, or that would or might interfere with the transactions
\ncontemplated by this Agreement.<\/p>\n<\/p>\n

3.12 Taxes<\/strong>.<\/p>\n<\/p>\n

11<\/p>\n

\n

\n

(a) Except as provided in Schedule 3.12<\/u> hereof, the Companies and the
\nSellers have timely filed all returns and reports required to be filed for Taxes
\nfor all taxable years or periods that end on or before the Closing Date and,
\nwith respect to any taxable year or period beginning before and ending after the
\nClosing Date, the portion of such taxable year or period ending on and including
\nthe Closing Date (“Pre-Closing Periods<\/u>“) (collectively, the
\n“Returns<\/u>“) and such Returns as filed are accurate and complete in all
\nmaterial respects.<\/p>\n<\/p>\n

(b) Except as provided in Schedule 3.12<\/u> hereof, the Companies and the
\nSellers have timely paid all Taxes (whether or not shown on a Return) and
\nprovided evidence of such, for all Pre-Closing Periods or adequately disclosed
\nand fully provided for such Taxes on their respective balance sheets.<\/p>\n<\/p>\n

(c) Except as provided in Schedule 3.12<\/u> hereof, there is no action,
\nsuit, proceeding, audit, claim or, to the knowledge of the Companies, the
\nSellers or Navarre, investigation, now pending or, to the knowledge of the
\nCompanies, the Sellers or Navarre, threatened by any authority regarding any
\nTaxes relating to the Companies or the Sellers or their respective assets for
\nany Pre-Closing Period.<\/p>\n<\/p>\n

(d) No claim has been made since May 30, 2005, by any taxing authority in a
\njurisdiction where the Companies and the Sellers do not file Returns that the
\nCompanies, the Sellers or any of their respective assets are or may be subject
\nto taxation by that jurisdiction.<\/p>\n<\/p>\n

(e) There are no liens or security interests on any of the Companies153 or the
\nSellers153 respective assets that arose in connection with any failure (or alleged
\nfailure) to pay any Taxes (other than liens relating to Taxes that are not yet
\ndue and payable).<\/p>\n<\/p>\n

(f) Except as provided in Schedule 3.12<\/u> attached hereto, there are no
\nagreements for the extension or waiver of the time for assessment of any Taxes
\nrelating to the Companies, the Sellers or their respective assets for any
\nPre-Closing Period and none of the Companies or the Sellers have been requested
\nto enter into any such agreement or waiver.<\/p>\n<\/p>\n

(g) Except as provided in Schedule 3.12<\/u> attached hereto, all Taxes
\nthat the Companies or the Sellers are required by law to withhold or collect
\nhave been duly withheld or collected in all material respects, and have been
\ntimely paid over to the proper authorities to the extent due and payable.<\/p>\n<\/p>\n

(h) Except pursuant to this Agreement, none of the Companies or the Sellers
\nis now or has been a party to any tax indemnification, tax allocation or tax
\nsharing agreement that could result in any liability to the Buyers.<\/p>\n<\/p>\n

3.13 Accounts Receivable. <\/strong>Schedule 3.13<\/u> hereof (which
\nshall be provided as of February 28, 2011 by the Sellers, and subsequently
\nupdated by the Sellers as of the Closing Date and delivered to Buyers after the
\nClosing Date within 10 business days of Seller153s receipt of such<\/p>\n<\/p>\n

12<\/p>\n

\n

\n

updated schedule from the Companies) sets forth the Accounts Receivable and
\nthe identity and address of the party from whom such receivable is owing as of
\neach of February 28, 2011 and the Closing Date, as applicable. To the knowledge
\nof the Sellers and Navarre, after due inquiry, Schedule 3.13<\/u> is a true,
\ncomplete and correct list of the Accounts Receivable as of each of February 28,
\n2011 and the Closing Date, as applicable. The Accounts Receivable arose in the
\nordinary course of business, consistent with past practices, represent bona fide
\nclaims against obligors for sales and other charges, and, except for returns and
\nto the extent included in any applicable reserves (e.g. discounts, doubtful or
\nuncollectible accounts, marketing development funds and other discount programs
\nor advertising offered to customers) are collectible in the ordinary course of
\nbusiness. Except to the extent expressly included in the applicable reserves
\n(examples of which are described above) none of the Accounts Receivable are
\nsubject to any claim of offset, recoupment, setoff or counter-claim, other than
\nagreements relating to a right of return. Except as set forth in Schedule
\n3.13<\/u> hereof, no Person has any encumbrance on any of Accounts Receivable and
\nnone of the Accounts Receivable are subject to prior assignment and no agreement
\nfor deduction or discount has been made with respect to any of such Accounts
\nReceivable, other than agreements relating to a right of return. Notwithstanding
\nanything contained in this Section 3.13 to the contrary, in recognition of the
\nfact that neither Navarre nor Sellers directly supervise the salespersons and
\nother employees of the Sellers, neither Navarre nor Sellers make any
\nrepresentation or warranty with respect to any covenants, agreements,
\ncommitments or communications, whether written or oral, from any salespersons or
\nother employees of the Companies to any customer, client or obligor under any
\nAccounts Receivable concerning such customer153s, client153s or obligor153s
\nobligations to make any payments to the Companies with respect to such Accounts
\nReceivable (including, without limitation, any amounts, timing, discounts,
\nwritedowns or the like).<\/p>\n<\/p>\n

3.14 Disclosure<\/strong>. To the knowledge of Sellers and Navarre, no
\nrepresentation or warranty by Sellers and Navarre in this Agreement and no
\nstatement contained in this Agreement or in any document delivered or to be
\ndelivered pursuant hereto contains or will contain an untrue statement of
\nmaterial fact or omits or will omit to state any material fact necessary to make
\nthe statements herein or therein contained, in light of the circumstances under
\nwhich made, not misleading; it being understood that as used in this
\nsubparagraph “material” means material to any individual statement or omission
\nand in the aggregate as to all statements and omissions.<\/p>\n<\/p>\n

Except as provided in this Agreement Sellers have not made, do not make and
\nspecifically negate and disclaim any representations, warranties, promises,
\ncovenants, agreements or guaranties of any kind or character whatsoever, whether
\nexpress or implied, oral or written, past, present or future of, as to,
\nconcerning or with respect to the Companies or their assets, liabilities,
\nforecasts or projections. Buyers acknowledges and agree that they have or will
\nbe given the opportunity to inspect the businesses and assets of the Companies
\nand, except for their reliance on the representations and warranties set forth
\nin this Agreement, Buyers will rely on their own due diligence investigation of
\nthe Companies and their respective businesses. Sellers and Navarre are not
\nliable or bound in any manner by any oral or written statement, representations
\nor information pertaining to Companies or their respective businesses furnished
\nby any other Person.<\/p>\n<\/p>\n

13<\/p>\n

\n

\n

3.15 Payment of Accounts Payable<\/strong>. Schedule 3.15<\/u>
\nhereof (which shall be provided as of February 28, 2011 by the Sellers, and
\nsubsequently updated by the Sellers as of the Closing Date and delivered to
\nBuyers after the Closing Date within 10 business days of Seller153s receipt of
\nsuch updated schedule from the Companies) sets forth the Accounts Payable and
\nthe identity and address of the party to whom such payable is owed as each of
\nFebruary 28, 2011 and the Closing Date, as applicable. To the knowledge of the
\nSellers and Navarre, after due inquiry, Schedule 3.15<\/u> is a true, complete
\nand correct list of the Accounts Payable as of each of February 28, 2011 and the
\nClosing Date, as applicable. Since January 1, 2011, neither Sellers nor Navarre
\nhave delayed or postponed the payment of such Accounts Payable, other than in
\nthe ordinary course of business consistent with past practices;
\nprovided<\/u>, however<\/u>, that except as set forth in Section 5.4 hereof,
\nneither the Sellers nor Navarre make any representation or warranty with respect
\nto Geneon Entertainment USA.<\/p>\n<\/p>\n

3.16 Title Advances<\/strong>. Between March 1, 2011 and March 31,
\n2011, Sellers and Navarre have paid the title advances described in Schedule
\n3.16<\/u> attached hereto, in the amounts set forth thereon.<\/p>\n<\/p>\n

ARTICLE 4<\/strong>
\nREPRESENTATIONS AND WARRANTIES OF BUYER<\/u><\/strong><\/p>\n

\n

To induce Sellers to enter into this Agreement, Buyers, jointly and
\nseverally, represent and warrant to Sellers that the following are true and
\ncorrect on the date hereof and will be true and correct as of the Closing Date:\n<\/p>\n<\/p>\n

4.1 Organization<\/strong>. Each of Buyer GP, Buyer ALP and Buyer FLP
\nis a limited liability company validly existing and in good standing under the
\nlaws of Texas.<\/p>\n<\/p>\n

4.2 Authority; Binding Nature of Agreement<\/strong>.<\/p>\n<\/p>\n

(a) The execution, delivery and performance of this Agreement by Buyers and
\nthe consummation of the transactions contemplated by this Agreement have been
\nduly authorized by all necessary action on the part of Buyers.<\/p>\n<\/p>\n

(b) Buyers have full power and authority to enter into this Agreement and to
\ncarry out the transactions contemplated hereby.<\/p>\n<\/p>\n

(c) This Agreement has been duly and validly executed and delivered by Buyers
\nand is the legal, valid and binding obligation of Buyers, enforceable in
\naccordance with its respective terms, except as such may be limited by
\nbankruptcy, insolvency, reorganization or similar laws affecting creditors153
\nrights generally, and by general equitable principles.<\/p>\n<\/p>\n

4.3 No Conflict<\/strong>. The execution, delivery and performance of
\nthis Agreement by Buyers does not and will not conflict with, constitute a
\ndefault under, or create in any party the right to accelerate, terminate,
\nmodify, or cancel, or require any notice under, (i) any provision of the
\nCertificate of Formation or other governing documents of either of any the
\nBuyers or (ii) any Applicable Law to which any of the Buyers may be subject.\n<\/p>\n<\/p>\n

14<\/p>\n

\n

\n

4.4 Compliance with Securities Laws<\/strong>. Each Buyer is an
\n“accredited investor” as that term is defined in Regulation D under the
\nSecurities Act of 1933, as amended (the “Securities Act<\/u>“), and is
\nacquiring the Partnership Interests only for such Buyer153s own account, for
\ninvestment purposes only and not with a view to the distribution thereof. Buyers
\nwill not sell, offer for sale, pledge, transfer or otherwise dispose of the
\nPartnership Interests or any interest therein except in compliance with the
\nSecurities Act and any other applicable Laws. Buyers acknowledge that the
\nPartnership Interests have not been registered under the Securities Act or the
\nblue sky laws of any state. Buyers have been given access to information
\nregarding the Companies (including the opportunity to meet with management and
\nother representatives of the Companies) and have utilized such access to the
\nBuyers153 satisfaction. Buyers are experienced and knowledgeable in financial and
\nbusiness matters, capable of evaluating the merits and risks of purchasing the
\nPartnership Interests and do not need or desire the assistance of a
\nknowledgeable representative to aid in the evaluation of such risks (or, in the
\nalternative, the Buyers have used a knowledgeable representative in connection
\nwith the Buyers153 decision to purchase the Partnership Interests).<\/p>\n<\/p>\n

4.5 Brokers or Agents<\/strong>. Buyers have not employed or dealt
\nwith any brokers, consultants or investment bankers in connection with the
\ntransactions contemplated hereby for which Sellers or Navarre will have any
\nliability.<\/p>\n<\/p>\n

4.6 Disclosure<\/strong>. To the knowledge of Buyers, no
\nrepresentation or warranty by Buyers in this Agreement and no statement
\ncontained in this Agreement or in any document delivered or to be delivered
\npursuant hereto contains or will contain an untrue statement of material fact or
\nomits or will omit to state any material fact necessary to make the statements
\nherein or therein contained, in light of the circumstances under which made, not
\nmisleading; it being understood that as used in this subparagraph “material”
\nmeans material to any individual statement or omission and in the aggregate as
\nto all statements and omissions.<\/p>\n<\/p>\n

ARTICLE 5<\/strong>
\nCOVENANTS<\/u><\/strong><\/p>\n

\n

5.1 Books and Records<\/strong>. From and after the Closing, Buyers
\nwill, and will cause the Companies to, provide Sellers and their representatives
\nwith reasonable access and assistance, upon prior notice and at reasonably
\nacceptable times, for any reasonable purpose, including but not limited to (a)
\nthe preparation or filing of any Tax Returns or filings required by or advisable
\nwith the U.S. Securities and Exchange Commission, or (b) defending any claim in
\nrespect of which a Notice of Claim has been served, during normal business
\nhours, to all books and records of the Companies, including, but not limited to,
\naccounting and Tax records, sales and purchase documents, notes, memoranda, and
\nany other electronic or written data (“Records<\/u>“) pertaining or relating
\nto the period prior to or after the Effective Time, provided that Buyers shall
\nhave the right to cause a representative of Buyers to be present during the time
\nin which Sellers and their representatives have access to such Records. To the
\nextent deemed necessary by Sellers with respect to their affairs, Sellers may
\nretain copies of such Records prior to returning the originals to Buyers, or, as
\nsoon as practicable after Closing, Buyers will provide to Sellers, at Sellers153
\nexpense, copies of all or any portion of such Records as reasonably requested by
\nNavarre. Unless otherwise consented to in writing by the other party, no party
\nwill, for a period of seven (7) years following the date hereof or such longer
\nperiod as retention thereof is required by<\/p>\n<\/p>\n

15<\/p>\n

\n

\n

applicable Law, destroy, alter or otherwise dispose of (or allow the
\ndestruction, alteration or disposal of) any of the Records without first
\noffering to surrender to the other party such Records.<\/p>\n<\/p>\n

5.2 Announcements<\/strong>. The Parties agree that no press release
\nor other public statement concerning the negotiation, execution and delivery of
\nthis Agreement or the transactions contemplated hereby will be issued or made
\nwithout the prior written approval of the Navarre and Buyers (which approval
\nwill not be unreasonably withheld), except as required by any applicable law or
\nregulation.<\/p>\n<\/p>\n

5.3 Filings; Cooperation<\/strong>.<\/p>\n<\/p>\n

(a) Buyers and Sellers will use their commercially reasonable efforts to
\nobtain any authorizations, consents, approvals of governments and governmental
\nagencies in order to consummate and make effective the transactions contemplated
\nby this Agreement. Prior to the Closing, the Parties will proceed in good faith
\nto make such filings and take such other actions as may be commercially
\nreasonable to satisfy the conditions to Closing set forth in Sections 6.1 and
\n6.2.<\/p>\n<\/p>\n

(b) The Parties will, on request, cooperate with one another by furnishing
\nany additional information, executing and delivering any additional documents
\nand instruments, including contract assignments, and doing any and all such
\nother things as may be reasonably required by the Parties or their counsel (i)
\nto consummate or otherwise implement the transactions contemplated by this
\nAgreement or (ii) make any filings required by or advisable with the U.S.
\nSecurities and Exchange Commission.<\/p>\n<\/p>\n

5.4 Payments to Geneon Entertainment USA<\/strong>. Navarre shall be
\nsolely responsible for any payments due to Geneon Entertainment USA for final
\nreconciliation of amounts due under the Distribution Agreement, dated April 18,
\n2008, by and between Productions Company and Geneon Entertainment USA (as
\namended), including the excess of returns holdback against actual returns and
\nthe net adjustment of actual versus reported sales, the aggregate of which is
\ncurrently $1,083,059 and such amounts shall not be included in the Accounts
\nPayable.<\/p>\n<\/p>\n

5.5 Third Party Consents<\/strong>. Any transfer or assignment of a
\ncontract to Buyers as a result of the transactions contemplated under this
\nAgreement that requires the consent or approval of a third party shall be made
\nsubject to such consent or approval being obtained. In the event any such
\nconsent or approval is not obtained on or prior to the Closing Date, each of
\nSellers and Navarre shall continue to use all reasonable efforts to obtain any
\nsuch consent or approval after the Closing Date until such time as such consent
\nor approval has been obtained, and each of Sellers and Navarre will cooperate
\nwith Buyers in any lawful and economically feasible arrangement to provide that
\nBuyers shall receive the interest of Sellers in all benefits under any such
\ncontract, including without limitation performance by Sellers or Navarre, as
\napplicable, as agent if economically feasible; provided<\/u>, however<\/u>,
\nthat Buyers shall undertake to pay or satisfy the corresponding liabilities for
\nthe enjoyment of such benefit to the extent Buyers would have been responsible
\ntherefor hereunder if such consent or approval had been obtained as of the
\nClosing Date.<\/p>\n<\/p>\n

16<\/p>\n

\n

\n

5.6 Employee Bonuses<\/strong>. In the event that Navarre pays its
\nemployees a bonus for fiscal 2011 pursuant to its published company-wide bonus
\nplan, Navarre shall pay the employees of the Companies that were (i) employees
\nof the Companies as of the Closing Date and (ii) still employed by the Companies
\nas of the date Navarre pays such bonus to its employees, a bonus that such
\nemployees would have received under its published company-wide bonus plan as if
\nthe Companies were still owned by the Sellers and Navarre; provided<\/u>,
\nhowever<\/u>, such bonus shall be pro rated based upon the number of months
\nthat the Sellers and Navarre owned the Companies during fiscal 2011. For the
\navoidance of doubt, the foregoing clause shall not be deemed to include any spot
\nbonuses, special individual achievement bonuses or any other like individual
\nbonuses that could have been awarded outside of Navarre153s published company-wide
\nbonus plan.<\/p>\n<\/p>\n

5.7 Fukunaga Bonus; Employment Agreement<\/strong>. On the Funding
\nDate, Navarre and the Sellers shall pay to Gen Fukunaga a cash bonus of $250,000
\n(subject to all applicable withholding taxes) pursuant to the terms of Section 5
\nof that certain Amended and Restated Employment Agreement, among Mr. Fukunaga,
\nthe Companies and Navarre, dated May 27, 2010 (the “Employment
\nAgreement<\/u>“). In addition to the foregoing, Buyers shall deliver a
\ntermination of the Employment Agreement (a “Termination<\/u>“), pursuant to
\nwhich Mr. Fukunaga releases the Companies and Navarre and Navarre and the
\nSellers release Mr. Fukunaga from any obligations thereunder as of the Closing
\nDate.<\/p>\n<\/p>\n

5.8 Release of Guaranty; Lease<\/strong>. Following the Closing Date,
\nBuyers and the Companies shall use their commercially reasonable efforts to
\nsecure a release of the Letter of Credit and\/or any remaining obligations of
\nNavarre under the Guaranty Agreement. For the avoidance of doubt, commercially
\nreasonable efforts by the Buyers and the Companies in the foregoing sentence
\nshall under no circumstance mean that the Buyers or the Companies shall be
\nrequired to make any kind of payment to the Landlord or any of its affiliates
\nother than as set forth in the Lease. In addition, for as long as the Letter of
\nCredit and\/or Guaranty Agreement, or any modification, amendment or replacement
\nthereof, remain outstanding, or Navarre has any obligations thereunder, (a)
\nneither Buyers nor the Companies shall effect any material modification of the
\nLease without the prior written consent of Navarre; and (b) Buyers and the
\nCompanies shall provide to Navarre copies of (i) year-end audited balance
\nsheets, statements of income and cash flow, and statements of member153s equity
\nwithin 120 days of the last business day of each fiscal year, and (ii) quarterly
\nunaudited balance sheets, statements of income and cash flow, and statements of
\nmember153s equity, for such quarter and year-to-date, within 45 days of the last
\nbusiness day of each quarter.<\/p>\n<\/p>\n

5.9 Potential Independent Contractor Liability<\/strong>. Following
\nthe Closing Date, Buyers and the Company shall fulfill their obligations set
\nforth in the Letter of Undertaking, attached hereto as Exhibit E<\/u> (the
\n“Letter of Undertaking<\/u>“) and use commercially reasonable efforts to
\ncooperate with Sellers and Navarre to mitigate any such liability. In connection
\nwith any claims, settlements, statements, communications, or negotiations with
\nthe Internal Revenue Service or any state revenue agency relating to the
\nincorrect classification of any Person designated as an independent contractor
\nrather than an employee prior to the Closing Date, at the option of Navarre, the
\nprovisions of Section 7.3 shall apply as if the Buyers and Companies were the
\n“Indemnified Party” and Navarre and the Sellers were the “Indemnifying Party” in
\nso far as Navarre and the Sellers shall control of the defense and investigation
\nand employ and engage<\/p>\n<\/p>\n

17<\/p>\n

\n

\n

attorneys of its own choice to handle, defend and settle such matters,
\nsubject to the rights of the Indemnified Party thereunder.<\/p>\n<\/p>\n

ARTICLE 6<\/strong>
\nCLOSING DOCUMENTS<\/u><\/strong><\/p>\n

\n

6.1 Deliveries of Sellers<\/strong>. Sellers shall deliver, or cause
\nto be delivered, to Buyer on the Closing Date all of the following, executed as
\nappropriate:<\/p>\n<\/p>\n

(a) An assignment separate from certificate, in form and substance reasonable
\nacceptable to Buyers, duly executed by each Seller, so as to transfer to Buyers
\nall right, title and interest in and to the Partnership Interests of such Seller
\nfree and clear of all Encumbrances.<\/p>\n<\/p>\n

(b) Certificates of Existence and Account Status for each of the Companies
\nfrom the State of Texas, dated no more than ten (10) days prior to the Closing
\nDate;<\/p>\n<\/p>\n

(c) Documentation confirming the release of liens, including such termination
\nstatements or satisfactions, as appropriate;<\/p>\n<\/p>\n

(d) The Exclusive Logistics Services Agreement by and among Navarre
\nLogistical Services, Inc. and the Companies in the form attached hereto as
\nExhibit<\/u> A<\/u> (the “Logistics Agreement<\/u>“);<\/p>\n<\/p>\n

(e) The Distribution Agreement by and among Navarre Distribution Services,
\nInc. and the Companies in the form attached hereto as Exhibit B<\/u> (the
\n“Distribution Agreement<\/u>“);<\/p>\n<\/p>\n

(f) The Transition Services Agreement by and between Navarre Corporation and
\nProductions Company in the form attached hereto as Exhibit C<\/u> (the
\n“Transition<\/u> Services Agreement<\/u>“);<\/p>\n<\/p>\n

(g) A termination of the Collateral Access Agreement dated November
\n20th<\/sup>, 2009, by and among Landlord, Productions Company and Wells
\nFargo Foothill, LLC; and<\/p>\n<\/p>\n

(h) The Letter of Undertaking.<\/p>\n<\/p>\n

6.2 Deliveries of Buyers<\/strong>. Buyers shall deliver, or cause to
\nbe delivered, to Sellers on the Closing Date all of the following, executed as
\nappropriate:<\/p>\n<\/p>\n

(a) Certificates of Existence and Account Status for each of the Buyers from
\nthe Texas Secretary of State, dated no more than ten (10) days prior to the
\nClosing Date;<\/p>\n<\/p>\n

(b) The Logistics Agreement;<\/p>\n<\/p>\n

18<\/p>\n

\n

\n

(c) The Distribution Agreement;<\/p>\n<\/p>\n

(d) The Transition Services Agreement;<\/p>\n<\/p>\n

(e) The Termination from Mr. Fukunaga;<\/p>\n<\/p>\n

(f) An extension to the Lease, in a form mutually acceptable to the Landlord
\nand Productions Company; and<\/p>\n<\/p>\n

(g) The Letter of Undertaking.<\/p>\n<\/p>\n

ARTICLE 7<\/strong>
\nINDEMNIFICATION<\/u><\/strong><\/p>\n

\n

7.1 Indemnification by Sellers and Navarre<\/strong>.<\/p>\n<\/p>\n

(a) Subject to the limitations set forth in this Section 7.1, Sellers and
\nNavarre will, jointly and severally, indemnify, defend and hold Buyers harmless
\nagainst and in respect of any and all Losses arising from:<\/p>\n<\/p>\n

(i) any breach or violation of the covenants made in this Agreement by any
\nSeller and Navarre (which will not include the representations and warranties
\nset forth in Article 3, which are covered by Section 7.1(a)(ii) below);<\/p>\n<\/p>\n

(ii) any breach of any of the representations and warranties made in this
\nAgreement by either Seller or Navarre;<\/p>\n<\/p>\n

(iii) Gaimz Candies, L.L.C. v. FUNimation Productions, Ltd., FUNimation
\nProductions Management, L.L.C., and Navarre CP, L.L.C;<\/p>\n<\/p>\n

(iv) FUNimation Productions, Ltd. v. Gaimz Candies, L.L.C., Gaimz Inc., Gaimz
\nFoods, Inc., New Tech Foods, Ltd., Larry A. Cress, David D. Cudd, and Robert
\nFrank Schmidt;<\/p>\n<\/p>\n

(v) Any amounts paid by or on behalf of the Companies to the Internal Revenue
\nService or any state revenue agency relating to the incorrect classification of
\nany Person designated as an independent contractor rather than an employee prior
\nto the Closing Date; and<\/p>\n<\/p>\n

(vi) Telea Stafford v. Navarre Corporation and FUNimation Productions, Ltd.
\n(Charge filed with the U.S. Equal Employment Opportunity Commission).<\/p>\n<\/p>\n

(b) (i) Buyer will not be entitled to indemnification and Sellers and Navarre
\nshall have no liability pursuant to Section 7.1(a)(ii) until such time as the
\ntotal amount of all Losses under Section 7.1(a)(ii) exceeds $500,000 (the
\n“Basket<\/u>“), and then for all Losses, including those that comprise the
\nBasket. (ii) The aggregate maximum liability of Sellers and Navarre with respect
\nto indemnification provided under Section 7.1(a)(ii)<\/p>\n<\/p>\n

19<\/p>\n

\n

\n

shall not exceed an amount equal to $5,000,000 (the “Cap<\/u>“). (iii)
\nNotwithstanding the foregoing, Sections 7.1(b)(i) and 7.1(b)(ii) shall not apply
\nto any claim for indemnification with respect to:<\/strong><\/p>\n<\/p>\n

(A) any of the matters described in Sections 7.1(a)(i) through 7.1(a)(vi);
\nprovided that the aggregate liability of the Sellers and Navarre under Section
\n7.1(a)(v) shall not exceed $250,000. Notwithstanding the foregoing, such
\n$250,000 limitation with respect to the aggregate liability of the Sellers and
\nNavarre under Section 7.1(a)(v) shall be exclusive of any fees or costs incurred
\nby Navarre or the Sellers in defending any investigation or audit relating to
\nthe Companies in connection therewith;<\/p>\n<\/p>\n

(B) any breach of any of the representations and warranties made in Sections
\n3.1, 3.2, 3.4, 3.5, 3.9 and 3.12 of this Agreement by any Seller or Navarre (the
\n“Fundamental Representations<\/u>“); or<\/p>\n<\/p>\n

(C) any intentional misrepresentation or omission by any Seller or Navarre;
\nor<\/p>\n<\/p>\n

(D) any fraud on the part of any Seller or Navarre.<\/p>\n<\/p>\n

(c) All representations and warranties made by Sellers, Navarre, or Buyers in
\nthis Agreement or any other document, certificate, schedule or instrument
\ndelivered or executed in connection herewith will survive the Closing and will
\nexpire at 11:59 p.m. (Central Standard Time) eighteen (18) months after the
\nEffective Time (“Indemnification Period<\/u>“); provided<\/u>,
\nhowever<\/u>, that the Fundamental Representations shall remain in effect
\nindefinitely notwithstanding the expiration of the Indemnification Period and
\nthe representations in Section 3.12 shall survive for a period beginning as of
\nthe date hereof and continuing until 90 days after the expiration of the
\napplicable statute of limitations; provided<\/u>, further<\/u>, that
\nSellers153 and Navarre153s obligations under Section 7.1(a)(v) will expire at 11:59
\np.m. (Central Standard Time) twenty four (24) months after the Effective Time.
\nNeither Sellers nor Buyers will have any liability to the other (for
\nindemnification or otherwise) with respect to any representation or warranty,
\nunless, on or before the expiration of the Indemnification Period (solely in the
\ncase of representations or warranties other than Fundamental Representations) or
\nthe time periods set forth in the provisos in the foregoing sentences with
\nrespect to such matters, Buyers deliver to Navarre, or Navarre delivers to
\nBuyers, as applicable, a written notice of claim specifying the factual basis
\nand amount of such claim of Loss in reasonable detail to the extent then known
\n(“Notice of Claim<\/u>“). The expiration of the Indemnification Period shall
\nnot affect any Notice of Claim which was given in a timely manner if the
\nunderlying claim of Loss asserted in such notice has not been fully and finally
\nresolved as of the end of the Indemnification Period. For the avoidance of
\ndoubt, the failure of Buyers to deliver a Notice of Claim with respect to any of
\nthe Fundamental Representations on or before the expiration of the
\nIndemnification Period shall not render such Notice of Claim ineffective
\nprovided that Buyers otherwise deliver such Notice of Claim to Navarre pursuant
\nto this Section 7.1(c).<\/p>\n<\/p>\n

20<\/p>\n

\n

\n

(d) In the absence of fraud, the indemnification provisions set forth in this
\nSection 7.1 will provide the exclusive remedy for Buyers for breach of any
\ncovenant, agreement, representation or warranty of Sellers set forth in this
\nAgreement or any other agreement ancillary hereto executed pursuant to this
\nAgreement.<\/p>\n<\/p>\n

(e) Notwithstanding anything in this Agreement to the contrary, no liability,
\nobligation, contract or other fact or circumstance will constitute a breach of
\nany representation or warranty of Sellers or entitle Buyers to indemnification
\nhereunder if the liability, obligation, contract or fact or circumstance was
\nactually known to any of the Buyers as of the date of this Agreement.<\/p>\n<\/p>\n

(f) Notwithstanding any provision of Article 3 to the contrary (including,
\nwithout limitation, Sections 3.7, 3.8, 3.12 and 3.13), except for the
\nindemnification obligations in Section 7.1(a)(v), neither the Sellers nor
\nNavarre make any representation or warranty concerning whether any of the
\nindependent contractors or consultants to or any employee of either Company has
\nbeen correctly classified as an independent contractor rather than an employee
\nprior to the closing of the transactions contemplated hereby or afterward and,
\nexcept for the indemnification obligations in Section 7.1(a)(v), neither the
\nSellers nor Navarre shall have any liability to the Buyers or either Company for
\nany claimed, alleged or demonstrated failure to correctly classify such Persons
\nor withhold any amounts from such Person153s compensation. To be eligible for
\nindemnification under Section 7.1(a)(v), Buyers and the Companies must fulfill
\nthe obligations set forth in the Letter of Undertaking and must have used
\ncommercially reasonable efforts to cooperate with Sellers and Navarre to
\nmitigate any such liability.<\/p>\n<\/p>\n

7.2 Indemnification by Buyers<\/strong>.<\/p>\n<\/p>\n

(a) Buyers will, jointly and severally, indemnify, defend and hold Sellers
\nand Navarre harmless against and in respect of any and all Losses during the
\nIndemnification Period arising from:<\/p>\n<\/p>\n

(i) any breach or violation of the covenants made in this Agreement by any
\nBuyer;<\/p>\n<\/p>\n

(ii) any breach of any of the representations or warranties made in this
\nAgreement by any Buyer; or<\/p>\n<\/p>\n

(iii) any Losses incurred by Sellers or Navarre related, whether directly or
\nindirectly, to the Lease, any guaranty(ies) or surety provided by Navarre
\nrelating to the Lease, and\/or the aggregate amount drawn against the Letter of
\nCredit to be provided by Navarre to Landlord to secure a release or modification
\nof the Guaranty Agreement.<\/p>\n<\/p>\n

(b) Seller will not be entitled to indemnification and Buyers shall have no
\nliability pursuant to Section 7.2(a)(ii) until such time as the total amount of
\nall Losses exceeds the Basket, and then for all Losses, including those that
\ncomprise the Basket. Further, the aggregate maximum liability of Buyers with
\nrespect to indemnification provided under Section 7.2(a)(ii) shall not exceed an
\namount equal to the Cap.<\/p>\n<\/p>\n

21<\/p>\n

\n

\n

Notwithstanding the foregoing, this Section 7.2(b) shall not apply to any
\nclaim for indemnification with respect to any fraud on the part of the Buyers.\n<\/p>\n<\/p>\n

(c) In the absence of fraud, the indemnification provisions set forth in this
\nSection 7.2 will provide the exclusive remedy for Sellers and Navarre for breach
\nof any covenant, agreement, representation or warranty of Buyers set forth in
\nthis Agreement or any other agreement ancillary hereto executed pursuant to this
\nAgreement.<\/p>\n<\/p>\n

(d) Upon written notice to Buyers and the Companies specifying in reasonable
\ndetail the basis therefor, and upon providing a fifteen (15) day period to cure
\nany liability, Sellers and\/or Navarre may set off any amount which it is
\nactually entitled to under this Section 7.2<\/u> against amounts otherwise
\npayable to Buyers and\/or the Companies. The exercise of such right of setoff by
\nSellers and\/or Navarre in good faith, whether or not ultimately determined to be
\njustified, will not constitute default or breach of any of this Agreement, the
\nLogistics Agreement, the Distribution Agreement, the Transition Services
\nAgreement or any other agreement between or among Navarre and one or both of the
\nCompanies.<\/p>\n<\/p>\n

7.3 Procedure for Indemnification of Third Party Claims<\/strong>.\n<\/p>\n<\/p>\n

(a) Notice of Third Party Claims<\/u>. If any action, claim, suit,
\nproceeding, arbitration, order, or governmental investigation or audit is filed
\nor initiated by any third party (a “Third Party Claim<\/u>“) against any party
\nentitled to the benefit of indemnity under this Agreement (an “Indemnified
\nParty<\/u>“), written notice of such Third Party Claim will be given to the party
\nowing indemnity (an “Indemnifying Party<\/u>“) as promptly as reasonably
\npracticable (and in any event within ten (10) days after the service of the
\ncitation or summons); provided<\/u>, however<\/u>, that the failure of any
\nIndemnified Party to give timely notice will not affect any rights to
\nindemnification hereunder except to the extent that the Indemnifying Party is
\nprejudiced or damaged by such failure to receive notice.<\/p>\n<\/p>\n

(b) Defense and Settlement by Indemnifying Party<\/u>.<\/p>\n<\/p>\n

(i) After notice of a Third Party Claim is given under Section 7.3(a) and in
\nthe absence of a Conflict of Interest (as defined below), the Indemnifying Party
\nmay (A) take control of the defense and investigation of the Third Party Claim,
\n(B) employ and engage attorneys of its own choice to handle and defend the Third
\nParty Claim at the Indemnifying Party153s cost, risk and expense, which attorneys
\nmust be reasonably satisfactory to the Indemnified Party, and (C) subject to
\nSection 7.3(b)(ii) below, compromise or settle the Third Party Claim.<\/p>\n<\/p>\n

(ii) Notwithstanding Section 7.3(b)(i)(C) above, no such compromise or
\nsettlement of the Third Party Claim may be made without the written consent of
\nthe Indemnified Party, which consent will not be unreasonably withheld,
\nconditioned, or delayed. The Indemnified Party may withhold such consent if such
\ncompromise or settlement would materially and adversely affect the conduct<\/p>\n<\/p>\n

22<\/p>\n

\n

\n

of Business or requires less than an unconditional release with respect to
\nthe Third Party Claim.<\/p>\n<\/p>\n

(iii) The Indemnifying Party will provide the Indemnified Party access to all
\nrecords, documents and personnel of the Indemnifying Party and keep the
\nIndemnified Party informed relating to any Third Party Claim under this Section
\n7.3.<\/p>\n<\/p>\n

(iv) The term “Conflict of Interest<\/u>” means that the named parties to a
\nThird Party Claim include both of the Indemnifying Party and the Indemnified
\nParty and the Indemnified Party has been advised in writing by counsel that
\nthere exist one or more legal defenses available to the Indemnified Party that
\nare different from or additional to those available to the Indemnifying Party,
\nand which, if asserted, would create a conflict of interest with the
\nIndemnifying Party.<\/p>\n<\/p>\n

(c) Defense and Settlement by Indemnified Party<\/u>.<\/p>\n<\/p>\n

(i) If the Indemnifying Party fails to assume the defense of such Third Party
\nClaim within fifteen (15) days after receipt of notice thereof pursuant to this
\nSection 7.3 or there is a Conflict of Interest, the Indemnified Party may (A)
\ntake control of the defense and investigation of the Third Party Claim, (B)
\nemploy and engage attorneys of its own choice to handle and defend the Third
\nParty Claim at the Indemnifying Party153s cost, risk and expense, which attorneys
\nmust be reasonably satisfactory to the Indemnifying Party, and (C) subject to
\nSection 7.3(c)(ii) below, compromise or settle the Third Party Claim.<\/p>\n<\/p>\n

(ii) Notwithstanding Section 7.3(c)(i)(C) above but also subject to Section
\n7.3(e), no such compromise or settlement of the Third Party Claim may be made
\nwithout the written consent of the Indemnifying Party, which consent will not be
\nunreasonably withheld, conditioned, or delayed.<\/p>\n<\/p>\n

(iii) The Indemnified Party will provide the Indemnifying Party access to all
\nrecords, documents and personnel of the Indemnified Party that are reasonably
\nnecessary with respect to the investigation, trial, or defense of the Third
\nParty Claim and keep the Indemnifying Party informed relating to any Third Party
\nClaim under this Section 7.3.<\/p>\n<\/p>\n

(d) Liability, Costs and Expenses<\/u>. The Indemnifying Party will be
\nliable for any settlement of any action effected pursuant to and in accordance
\nwith this Section 7.3 and for any final judgment (subject to any right of
\nappeal), and the Indemnifying Party agrees to indemnify and hold harmless the
\nIndemnified Party from and against any damages by reason of such settlement or
\njudgment. Regardless of whether the Indemnifying Party or the Indemnified Party
\ntakes up the defense, the Indemnifying Party will pay the costs and expenses in
\nconnection with the defense, compromise or settlement for any Third Party Claim
\nunder this Section 7.3.<\/p>\n<\/p>\n

(e) Insurance; Subrogation<\/u>.<\/p>\n<\/p>\n

23<\/p>\n

\n

\n

(i) With respect to any claim, all parties agree to use commercially
\nreasonable efforts to maximize insurance recoveries.<\/p>\n<\/p>\n

(ii) With respect to any claim for which the Indemnifying Party is obligated
\nto indemnify the Indemnified Party, the Indemnifying Party shall be subrogated
\nto all rights and claims of the Indemnified Party with respect to such Loss.\n<\/p>\n<\/p>\n

(f) Participation and Payment Obligations<\/u>. The Indemnified Party may,
\nat its own cost, participate in the investigation, trial and defense of any
\nThird Party Claim and any appeal arising therefrom, the investigation, trial and
\ndefense of which is being handled by the Indemnifying Party pursuant to Section
\n7.3(b).<\/p>\n<\/p>\n

(g) Limitation of Special Damages<\/u>. Notwithstanding anything in this
\nAgreement to the contrary, neither the Sellers or Navarre nor Buyers shall be
\nentitled to indemnification for consequential, indirect or punitive damages
\nregardless of the form of the claim or action, except to the extent such damages
\nare payable by an Indemnifying Party in respect of third party claims.<\/p>\n<\/p>\n

ARTICLE 8<\/strong>
\nMISCELLANEOUS<\/u><\/strong><\/p>\n

\n

8.1 Expenses<\/strong>. Each party to this Agreement will pay all
\nexpenses incurred by it relating to the transactions contemplated by this
\nAgreement, including without limitation, the fees and expenses of its legal,
\naccounting and financial advisors. For the avoidance of doubt, all fees due to
\nHoulihan Lokey as a result of the transactions contemplated hereunder shall be
\nborne exclusively by Navarre and the Sellers.<\/p>\n<\/p>\n

8.2 Governing Law and Venue<\/strong>. This Agreement shall be deemed
\nto be a contract made under the laws of the State of Texas and for all purposes
\nit, and any related or supplemental documents and notices, shall be construed in
\naccordance with and governed by the laws of such state. In respect of any action
\nor claim arising out of or relating to this Agreement (x) the parties hereby
\nirrevocably submit to the jurisdiction of the United States District Court,
\nNorthern District of Texas (Fort Worth Division) and\/or in the Texas state
\ncourts located within Tarrant County, Texas, over any action or proceeding
\narising out of or related to this Agreement and the documents related hereto or
\nexecuted in connection herewith, (y) the parties hereby irrevocably agree that
\nall claims in respect of such actions or proceedings may be heard and determined
\nin the courts referenced in the foregoing clause (x), and (z) the parties hereto
\nhereby irrevocably waive, to the fullest extent they may effectively do so, the
\ndefense of an inconvenient forum to the maintenance of such action or proceeding
\nin Texas.<\/p>\n<\/p>\n

8.3 Notices<\/strong>. All notices required or permitted to be given
\nunder this Agreement will be in writing and will be deemed given (i) when
\ndelivered in person, (ii) three (3) business days after being deposited in the
\nUnited States mail, postage prepaid, registered or certified mail addressed as
\nset forth below, (iii) on the next business day after being deposited with a
\nnationally recognized overnight courier service addressed as set forth below or
\n(iv) upon dispatch if sent by<\/p>\n<\/p>\n

24<\/p>\n

\n

\n

facsimile with telephonic confirmation of receipt from the intended recipient
\nto the facsimile number set forth below:<\/p>\n<\/p>\n

(a) If to Sellers and Navarre:<\/p>\n<\/p>\n

Navarre Corporation<\/p>\n<\/p>\n

7400 49th Avenue North<\/p>\n<\/p>\n

New Hope, MN 55428<\/p>\n<\/p>\n

Attn: Ryan F. Urness, General Counsel<\/p>\n<\/p>\n

Tel. No.: (763) 971-2770<\/p>\n<\/p>\n

Fax No.: (763) 504-1107<\/p>\n<\/p>\n

with copies (which will not constitute notice) to:<\/p>\n<\/p>\n

Winthrop & Weinstine, P.A.<\/p>\n<\/p>\n

225 South Sixth Street, Suite 3500<\/p>\n<\/p>\n

Minneapolis, MN 55402<\/p>\n<\/p>\n

Attn: Scott J. Dongoske<\/p>\n<\/p>\n

Tel. No.: (612) 604-6565<\/p>\n<\/p>\n

Fax No.: (612) 604-6800<\/p>\n<\/p>\n

(b) If to Buyers:<\/p>\n<\/p>\n

FUNimation Entertainment<\/p>\n<\/p>\n

1200 Lakeside Parkway, Building 1<\/p>\n<\/p>\n

Flower Mound, Texas 75028<\/p>\n<\/p>\n

Attention: Gen Fukunaga<\/p>\n<\/p>\n

Tel. No.: (972) 355-7300 x4832<\/p>\n<\/p>\n

Fax No.: (972) 335-1382<\/p>\n<\/p>\n

with copies (which will not constitute notice) to:<\/p>\n<\/p>\n

Kelly Hart & Hallman LLP<\/p>\n<\/p>\n

201 Main St., Suite 2500<\/p>\n<\/p>\n

Fort Worth, TX 76102<\/p>\n<\/p>\n

Attention: S. Benton Cantey V, Esq.<\/p>\n<\/p>\n

Tel. No.: (817) 878-3559<\/p>\n<\/p>\n

Fax No.: (817) 878-9759<\/p>\n<\/p>\n

or to such other respective addresses as may be designated by notice given in
\naccordance with the provisions of this Section, except that any notice of change
\nof address will not be deemed given until actually received by the party to whom
\ndirected.<\/p>\n<\/p>\n

8.4 Entire Agreement; Amendment<\/strong>. This Agreement, including
\nthe schedules and exhibits, constitutes the entire agreement between the parties
\nand supersedes all prior discussions, negotiations and understandings relating
\nto the subject matter hereof, whether written or oral. This Agreement may not be
\namended, altered, enlarged, supplemented, abridged,<\/p>\n<\/p>\n

25<\/p>\n

\n

\n

modified, or any provisions waived, except by a writing duly signed by all of
\nthe parties to this Agreement.<\/p>\n<\/p>\n

8.5 Benefit; Assignability<\/strong>. Subject to the last sentence of
\nthis Section, this Agreement is enforceable by, and inures to the benefit of,
\nthe parties to this Agreement and their respective heirs, personal
\nrepresentatives, successors and assigns. Neither this Agreement nor any right,
\ninterest or obligation under this Agreement may be assigned by the Buyers
\nwithout the prior written consent of Navarre and any attempt to do so will be
\nvoid; provided<\/u>, however<\/u>, that Buyers may assign this Agreement,
\nand any of their rights, interests or obligations hereunder, to any affiliate of
\nthe Buyers without obtaining such consent of Sellers or Navarre.<\/p>\n<\/p>\n

8.6 Counterparts<\/strong>. This Agreement may be executed in any
\nnumber of counterparts, each of which will be deemed an original and all of
\nwhich, taken together, will constitute one and the same agreement.<\/p>\n<\/p>\n

8.7 No Third-Party Rights<\/strong>. Nothing expressed or implied in
\nthis Agreement is intended, nor may be construed, to confer upon or give any
\nPerson, other than the parties hereto, any rights or remedies under or by reason
\nof this Agreement.<\/p>\n<\/p>\n

8.8 Headings<\/strong>. The descriptive headings of the Articles and
\nSections of this Agreement are inserted for convenience only and do not
\nconstitute a part of this Agreement.<\/p>\n<\/p>\n

8.9 Remedies<\/strong>. The rights, remedies, powers and privileges
\nprovided in this Agreement are cumulative and not exclusive and are in addition
\nto any and all rights, remedies, powers and privileges granted by law, rule,
\nregulation or instrument. The parties agree that, in addition to any other
\nrelief afforded under the terms of this Agreement or by Applicable Law, the
\nparties may enforce this Agreement by injunctive or mandatory relief to be
\nissued by or against the other parties, it being understood that both damages
\nand specific performance will be proper modes of relief and are not to be
\nunderstood as alternative remedies.<\/p>\n<\/p>\n

[Signature page to follow]<\/em><\/p>\n

\n

26<\/p>\n

\n

\n

[Signature page to Partnership Interest Purchase
\nAgreement]<\/em><\/p>\n

\n

IN WITNESS WHEREOF, this Partnership Interest Purchase Agreement is executed
\nas of the date set forth above.<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

BUYERS:<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

SELLERS:<\/strong><\/p>\n<\/td>\n

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

FUNIMATION GP, LLC<\/p>\n<\/td>\n

<\/td>\n\n

NAVARRE CS, LLC<\/p>\n<\/td>\n

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

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

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

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

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

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

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

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

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

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

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

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

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

ANIME LP HOLDINGS, LLC<\/p>\n<\/td>\n

<\/td>\n\n

NAVARRE CP, LLC<\/p>\n<\/td>\n

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

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

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

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

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

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

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

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

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

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

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

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

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

FUNIMATION LP, LLC<\/p>\n<\/td>\n

<\/td>\n\n

NAVARRE CLP, LLC<\/p>\n<\/td>\n

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

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

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

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

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

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

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

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

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

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

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

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

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

NAVARRE:<\/strong><\/p>\n<\/td>\n

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

NAVARRE CORPORATION<\/p>\n<\/td>\n

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

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

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

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

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

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

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