Exhibit 10.1
LIMITED WAIVER AND FIFTH AMENDMENT TO FOURTH AMENDED AND
RESTATED CREDIT AGREEMENT
     This LIMITED WAIVER AND FIFTH AMENDMENT TO FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT (this “Amendment”), is dated as of 5th day of February, 2009,
by NAVARRE CORPORATION, a Minnesota corporation (“Borrower”), the Credit Parties
signatory hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation,
as agent (the “Agent”) for itself and the Lenders under and as defined in the
Credit Agreement (as hereinafter defined), and the Lenders. Unless otherwise
specified herein, capitalized terms used in this Amendment shall have the
meanings ascribed to them by the Credit Agreement.
RECITALS
     WHEREAS, the Borrower, the Credit Parties, the Agent and the Lenders have
entered into that certain Fourth Amended and Restated Credit Agreement, dated as
of March 22, 2007 (as amended, supplemented, restated or otherwise modified from
time to time, the “Credit Agreement”); and
     WHEREAS, the Borrower, the Credit Parties, the Agent and the Lenders have
agreed to waive and amend certain provisions of the Credit Agreement as herein
set forth.
     NOW THEREFORE, in consideration of the foregoing recital, mutual agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Credit Parties,
the Agent, and the Lenders hereby agree as follows:
SECTION 1. Amendments. Subject to the satisfaction of each of the conditions to
effectiveness set forth in Section 3 hereof, the Credit Agreement is hereby
amended as follows:
     (a) The last sentence of Section 1.1(a) of the Credit Agreement is hereby
deleted.
     (b) Section 1.5(a) of the Credit Agreement is hereby amended and restated
to read in its entirety as follows:
     “(a) Borrower shall pay interest to Agent, for the ratable benefit of
Lenders in accordance with the Loans being made by each Lender, in arrears on
each applicable Interest Payment Date, at the Index Rate plus 5.75% per annum
or, at the election of Borrower, at the applicable LIBOR Rate plus 4.75% per
annum.”
     (c) Section 1.9(b) of the Credit Agreement is hereby amended and restated
to read in its entirety as follows:
     “(b) As additional compensation for the Revolving Lenders, Borrower shall
pay to Agent, for the ratable benefit of such Lenders, in arrears, on the first
Business Day of each month prior to the Commitment Termination Date and on the
Commitment Termination Date, a Fee for Borrower’s non-use of available funds in
an amount equal to the Applicable Unused Line Fee Margin per annum (calculated
on the basis of a 360 day

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year for actual days elapsed) multiplied by the difference between (x) the
Maximum Amount (as it may be reduced from time to time) and (y) the average for
the period of the daily closing balances of the Revolving Loan and the Swing
Line Loan outstanding during the period for which the such Fee is due (the
“Average Outstanding Amount”).”
     (d) Section 1.9 (c) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
     “(c) [Intentionally Omitted]”
     (e) The following definitions are hereby added to Annex A to the Credit
Agreement in alphabetical order:
     “Average Outstanding Amount” has the meaning ascribed to it in Section
1.9(b).
     “Fifth Amendment Date” shall mean February 5, 2009.
     (f) The following definitions set forth in Annex A to the Credit Agreement
are hereby amended and restated in their entirety to read as follows:
     “Applicable Unused Line Fee Margin” means (i) 0.75% if the Average
Outstanding Amount during the applicable period is less than $40,000,000 or
(ii) 1.00% if the Average Outstanding Amount during the applicable period is
greater than or equal to $40,000,000.
     “Borrowing Base” means, as of any date of determination by Agent, from time
to time, an amount equal to the sum at such time of:
     (a) the product of (x) the lesser of 65% and the Eligible Accounts Dilution
Percentage at such time multiplied by (y) the book value of Eligible Accounts;
     (b) the lesser of (i) 50% of the Eligible Inventory of the Eligible Credit
Parties valued at the lower of cost (FIFO) or market or (ii) 85% of the Orderly
Liquidation Value of the Eligible Inventory of the Eligible Credit Parties;
     (c) in each case less the Minimum Excess Availability Reserve less any
additional Reserves established by Agent from time to time; provided however
that at no time shall the amount of the Borrowing Base attributable to the
Eligible Accounts arising from the Publishing Business shall exceed 25% of the
aggregate Borrowing Base attributable to Eligible Accounts; provided further
that at no time shall the amount of the Borrowing Base attributable to the
Eligible Inventory of Eligible Credit Parties exceed (1) $12,000,000 during the
Fiscal Months of November and December of each Fiscal Year, and (2) $10,000,000
during all other Fiscal Months of each Fiscal Year (each such amount is an
“Applicable Sublimit Amount”); provided that Agent may at any time, in its sole
discretion, increase the Applicable Sublimit Amounts to $15,000,000 pursuant to
a written notice to Borrower specifically referring to this definition. The
value of any Eligible Accounts denominated in Canadian Dollars shall be included
in the Borrowing Base using such Accounts’ Dollar Amount.

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     “Commitment Termination Date” means the earliest of (a) June 30, 2010,
(b) the date of termination of Lenders’ obligations to make Advances and to
incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrower of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of the Commitments to zero dollars ($0).
     “EBITDA” means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period, determined in accordance with GAAP, minus (b) the sum of (i) income
tax credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), (v) any other non-cash gains that have been added in determining
consolidated net income and (vi) amounts paid on behalf of or for the benefit of
Goldhil Media, Tower Records or any trust, trustee or fund relating thereto or
successor to any of the foregoing, in each case to the extent included in the
calculation of net income of such Person for such period in accordance with
GAAP, but without duplication, plus (c) the sum of (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from extraordinary items for such
period, (iv) depreciation and amortization for such period (other than
amortization with respect to Vendor Advances), (v) amortized debt discount for
such period, (vi) the amount of any deduction to consolidated net income as the
result of any grant to any members of the management of such Person of any
Stock, (vii) losses arising from the operations of Navarre Entertainment in an
aggregate amount not to exceed (w) $3,233,000 with respect to the 12 month
period ending on March 31, 2008, (x) $1,368,000 with respect to the 12 month
period ending on June 30, 2008, (y) $394,000 with respect to the 12 month period
ending on September 30, 2008, (z) $27,000 with respect to the 12 month period
ending on December 31, 2008, (viii) non cash expenses incurred on or prior to
March 31, 2009 solely as a result of the closure of the business of BCI Eclipse
in an aggregate amount not to exceed $18,600,000, (ix) cash severance payments
made to employees whose employment with BCI Eclipse was terminated on or after
October 31, 2008 but on or prior to March 31, 2009 in connection with the
closure of the business of BCI Eclipse in an aggregate amount not to exceed
$500,000, (x) cash severance payments made to employees of the Borrower whose
employment with the Borrower was terminated on or after October 31, 2008 but on
or prior to March 31, 2009 in an aggregate amount not to exceed $750,000, (xi)
non-cash impairment charges incurred by the FUNimation Companies on or prior to
December 31, 2008 in an aggregate amount not to exceed $9,400,000,
(xii) additional non-cash impairment charges incurred by the FUNimation
Companies on or prior to March 31, 2010 in an aggregate amount not to exceed
$4,400,000, (xiii) non-cash impairment charges incurred by Encore Software on or
prior to March 31, 2010 in an aggregate amount not to exceed $44,000 and
(xiv) all expenses or losses for impairment of goodwill, in each case to the
extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without

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duplication. For purposes of this definition, the following items shall be
excluded in determining consolidated net income of a Person: (1) the income (or
deficit) of any other Person accrued prior to the date it became a Subsidiary
of, or was merged or consolidated into, such Person or any of such Person’s
Subsidiaries; (2) the income (or deficit) of any other Person (other than a
Subsidiary) in which such Person has an ownership interest, except to the extent
any such income has actually been received by such Person in the form of cash
dividends or distributions; (3) the undistributed earnings of any Subsidiary of
such Person to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation or requirement of law applicable to such
Subsidiary; (4) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of income accrued during
such period; (5) any write-up of any asset; (6) any net gain from the collection
of the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person, (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets, and (9) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.
     “Minimum Excess Availability Reserve” shall mean a special Reserve
maintained by Agent in an amount at all times equal to $11,700,000; provided
that (x) such amount shall be increased by $100,000 on March 1, 2009;
(y) commencing on April 1, 2009 and ending on March 31, 2010, such amount shall
be increased on the first day of each calendar month during such period by (i)
$300,000 or (ii) $100,000 as long as (A) no Default or Event of Default has
occurred and is continuing and (B) Borrower and the Subsidiaries have met each
of the Reserve Tests as of each Fiscal Quarter ending on or after March 31,
2009; and (z) commencing on April 1, 2010, such amount shall be increased by
$500,000 on April 1, 2010 and on the first day of each calendar month thereafter
(provided, however, that if Borrower and its Subsidiaries have met each of the
Reserve Tests as of the most recently completed Fiscal Quarter, the Minimum
Excess Availability Reserve shall not be increased to an amount greater than
$14,500,00 pursuant to the above proviso). As used herein, “Reserve Tests” shall
mean the following financial tests:
     (i) Borrower and its Subsidiaries shall have on a consolidated basis, as of
the last day of the Fiscal Quarter ending on March 31, 2009 and as of the last
day of each Fiscal Quarter thereafter, a Fixed Charge Coverage Ratio for the
3 month period then ended of at least the ratio set forth below opposite such
Fiscal Quarter:

      Fiscal Quarter Ending   Ratio
March 31, 2009
  1.50:1
June 30, 2009
  2.10:1
September 30, 2009
  2.40:1
December 31, 2009
  2.40:1
March 31, 2010 and each Fiscal Quarter ending thereafter; and
  2.70:1

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     (ii) Borrower and its Subsidiaries shall have on a consolidated basis, as
of the last day of the Fiscal Quarter ending on March 31, 2009 and as of the
last day of each Fiscal Quarter thereafter, Excess Cash Flow for the 12 month
period then ended (or with respect to each Fiscal Quarter ending on or prior to
September 30, 2009, the period commencing on January 1, 2009 and ending on the
last day of such Fiscal Quarter) of at least the amount set forth below opposite
such Fiscal Quarter:

          Fiscal Quarter Ending   Amount
March 31, 2009
  $ 400,000  
 
       
June 30, 2009
  $ 1,600,000  
September 30, 2009
  $ 3,000,000  
December 31, 2009
  $ 4,700,000  
March 31, 2010 and each Fiscal Quarter ending thereafter
  $ 6,000,000  

     “Revolving Loan Commitment” means (a) as to any Revolving Lender, the
aggregate commitment of such Revolving Lender to make Revolving Credit Advances
or incur Letter of Credit Obligations as set forth on Annex J to the Agreement
or in the most recent Assignment Agreement executed by such Revolving Lender and
(b) as to all Revolving Lenders, the aggregate commitment of all Revolving
Lenders to make Revolving Credit Advances or incur Letter of Credit Obligations,
which aggregate commitment shall be Sixty Five Million Dollars ($65,000,000) on
the Fifth Amendment Date, as such amount may be adjusted, if at all, from time
to time in accordance with the Agreement.
     “Vendor Advance Expense” shall mean any expense, including write-offs,
recoupments, amortization or similar recognition of expenses relating to a
reduction in any Vendor Advance; provided, however, that “Vendor Advance
Expense” shall exclude any amount to the extent such amount was added to the
consolidated net income of the Borrower in the calculation of EBITDA of the
Borrower.
     (g) Clause (a) of Annex F to the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
     “(a) (1) To Agent, upon its request, and in any event no less frequently
than weekly, by 12:00 p.m. (Chicago time) on Wednesday of each week (together
with a copy of all or any part of the following report requested by any Lender
in writing after the Closing Date), a Borrowing Base Certificate with respect to
Borrower, which shall be prepared by the Borrower as of the last Friday of the
immediately preceding week or the date two (2) days prior to the date of any
such request, accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;

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          (2) To Agent, upon its request, and in any event no less frequently
than five (5) Business Days after the end of each Fiscal Month (together with a
copy of all or any part of the following reports requested by any Lender in
writing after the Closing Date), each of the following reports, each of which
shall be prepared by the Borrower as of the last day of the immediately
preceding Fiscal Month or the date two (2) days prior to the date of any such
request:
     (i) with respect to Borrower, a summary of Inventory and a perpetual
Inventory report, in each case by location and type in each case accompanied by
such supporting detail and documentation as shall be requested by Agent in its
reasonable discretion;
     (ii) with respect to Borrower, a monthly trial balance showing Accounts
outstanding aged from invoice date as follows: 1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion; and
     (iii) an aging of accounts payable;”
     (h) Clause (a) of Annex G to the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
     “(a) Maximum Capital Expenditures. Borrower and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods:

          Period   Maximum Capital Expenditures per Period
Fiscal Quarter ending on March 31, 2009
  $500,000  
 
       
Fiscal Year ending on or about March 31, 2009
  $3,500,000 plus an amount equal to an amount of Capital Expenditures not to
exceed $1,000,000 incurred in connection with the installation of the ERP
computer system during such Fiscal Year
 
       
Fiscal Year ending on or about March 31, 2010 and each Fiscal Year ending
thereafter.”
  $2,000,000  

     (i) Clause (b) of Annex G to the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
     “(b) Minimum Fixed Charge Coverage Ratio.

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     (i) Borrower and its Subsidiaries shall have on a consolidated basis, as of
the last day of the Fiscal Quarter ending on March 31, 2009 and as of the last
day of each Fiscal Quarter thereafter, for the 12 month period then ended (or
with respect to each Fiscal Quarter ending on or prior to September 30, 2009,
the period commencing on January 1, 2009 and ending on the last day of such
Fiscal Quarter), a ratio (the “Fixed Charge Coverage Ratio”) of (A) the sum of
(i) EBITDA plus (ii) the aggregate of all Vendor Advance Expenses for such
period, plus (iii) interest income received during such period minus (iii)
Capital Expenditures during such period (other than Capital Expenditures
financed other than with the proceeds of Loans), minus (iv) income taxes paid in
cash during such period, minus (v) the aggregate of all Vendor Advances made
during such period to (B) the sum of, without duplication, (i) the aggregate of
all Interest Expense paid or accrued during such period, plus (ii) scheduled
payments of principal with respect to Indebtedness during such period, plus,
(iii) all Restricted Payments made by a Credit Party during such period (other
than Restricted Payments (a) made to another Credit Party or (b) which have
caused EBITDA to be reduced for such period) of at least the ratio set forth
below opposite such Fiscal Quarter:

          Fiscal Quarter Ending   Ratio
March 31, 2009
    1.30:1  
June 30, 2009
    1.80:1  
September 30, 2009
    2.00:1  
December 31, 2009
    2.30:1  
March 31, 2010 and each Fiscal Quarter ending thereafter
    2.70:1  

     (ii) Borrower and its Subsidiaries shall have on a consolidated basis, as
of the last day of the Fiscal Quarter ending on March 31, 2009 and as of the
last day of each Fiscal Quarter thereafter, a Fixed Charge Coverage Ratio for
the 3 month period then ended of at least the ratio set forth below opposite
such Fiscal Quarter:

          Fiscal Quarter Ending   Ratio
March 31, 2009
    1.20:1  
June 30, 2009
    1.40:1  
September 30, 2009
    1.60:1  
December 31, 2009
    1.70:1  
March 31, 2010 and each Fiscal Quarter ending thereafter.”
    2.00:1  

     (j) Clause (c) of Annex G to the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

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     “(c) Maximum Vendor Advances. Borrower and its Subsidiaries on a
consolidated basis shall not make, measured as of the last day of the Fiscal
Quarter ending on December 31, 2008 and as of the last day of each Fiscal
Quarter thereafter, during the 12 month period then ended (or with respect to
the Fiscal Quarter ending on December 31, 2008 during the period commencing on
December 1, 2008 and ending on the last day of such Fiscal Quarter, or with
respect to each Fiscal Quarter ending on March 31, 2009, June 30, 2009 and
September 30, 2009, during the period commencing on January 1, 2009 and ending
on the last day of such Fiscal Quarter), Vendor Advances in an amount greater
than the amount set forth below opposite such Fiscal Quarter:

          Fiscal Quarter Ending   Amount
December 31, 2008
  $ 3,800,000  
March 31, 2009
  $ 5,000,000  
June 30, 2009
  $ 10,250,000  
September 30, 2009
  $ 16,750,000  
December 31, 2009
  $ 17,750,000  
March 31, 2010 and each Fiscal Quarter ending thereafter.”
  $ 17,500,000  

     (k) Clause (d) of Annex G to the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
     “(d) Minimum EBITDA. Borrower and its Subsidiaries shall have on a
consolidated basis, as of the last day of the Fiscal Quarter ending on
December 31, 2008 and as of the last day of each Fiscal Quarter thereafter, for
the 12 month period then ended (or with respect to the Fiscal Quarter ending on
December 31, 2008 during the period commencing on December 1, 2008 and ending on
the last day of such Fiscal Quarter, or with respect to each Fiscal Quarter
ending on March 31, 2009, June 30, 2009 and September 30, 2009, during the
period commencing on January 1, 2009 and ending on the last day of such Fiscal
Quarter), EBITDA of at least the amount set forth below opposite such Fiscal
Quarter:

          Fiscal Quarter Ending   Amount
December 31, 2008
  $ 1,500,000  
March 31, 2009
  $ 2,800,000  
June 30, 2009
  $ 6,400,000  
September 30, 2009
  $ 11,300,000  
December 31, 2009
  $ 16,900,000  
 
       
March 31, 2010 and each Fiscal Quarter ending thereafter.”
  $ 18,200,000  

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     (l) Annex J to the Credit Agreement is hereby amended and restated to read
in its entirety as set forth on Annex J hereto:
SECTION 2. Limited Waivers. Effective as of December 31, 2008, Agent and Lenders
hereby waive any Event of Default under subsection 8.1 (b) of the Credit
Agreement arising solely as a result of the failure to comply with (i) clause
(b) of Annex G for the Fiscal Quarter ending December 31, 2008 and (ii) clause
(d) of Annex G for the Fiscal Quarter ending December 31, 2008. The waivers set
forth above shall be limited precisely as written and shall not be deemed or
otherwise construed to constitute a waiver of any other Default or Event of
Default or any other provision or to prejudice any right, power or remedy which
Agent or Lenders may now have or may have in the future under or in connection
with the Credit Agreement or any other Loan Document, all of which rights, power
and remedies are hereby expressly reserved by Agent and Lenders.
SECTION 3. Conditions to Effectiveness. The effectiveness of this Amendment is
subject to the satisfaction of each the following conditions precedent:
     (a) this Amendment shall have been duly executed and delivered by the
Borrower, the Credit Parties, the Agent and each Lender;
     (b) Borrower shall have executed and delivered to Agent that certain fee
letter supplement, dated as of the date hereof, between GE Capital and the
Borrower (the “Second Fee Letter Supplement”); and
     (c) Agent shall have received such other documents, instruments, agreements
and legal opinions as Agent shall reasonably request in connection with the
transactions contemplated by this Amendment, including those listed in the
Closing Checklist attached hereto as Annex A, each in form and substance
reasonably satisfactory to Agent.
SECTION 4. Representations and Warranties. In order to induce the Agent and each
Lender to enter into this Amendment, each Credit Party hereby represents and
warrants to the Agent and each Lender, which representations and warranties
shall survive the execution and delivery of this Amendment, that:
     (a) all of the representations and warranties contained in the Credit
Agreement and in each Loan Document are true and correct as of the date hereof
after giving effect to this Amendment, except to the extent that any such
representations and warranties expressly relate to an earlier date;
     (b) the execution, delivery and performance by such Credit Party of this
Amendment has been duly authorized by all necessary corporate, limited liability
company or partnership action required on its part and this Amendment, and the
Credit Agreement is the legal, valid and binding obligation of such Credit Party
enforceable against such Credit Party in accordance with its terms, except as
its enforceability may be affected by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors generally;

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     (c) neither the execution, delivery and performance of this Amendment by
such Credit Party, the performance by such Credit Party of the Credit Agreement
nor the consummation of the transactions contemplated hereby does or shall
contravene, result in a breach of, or violate (i) any provision of any Credit
Party’s certificate or articles of incorporation or bylaws or other similar
documents, or agreements, (ii) any law or regulation, or any order or decree of
any court or government instrumentality, or (iii) any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which any Credit Party or any
of its Subsidiaries is a party or by which any Credit Party or any of its
Subsidiaries or any of their property is bound, except in any such case to the
extent such conflict or breach has been waived herein or by a written waiver
document, a copy of which has been delivered to Agent on or before the date
hereof; and
     (d) no Default or Event of Default has occurred and is continuing (other
than those waived pursuant hereto).
SECTION 5. Reference to and Effect Upon the Credit Agreement.
     (a) Except as specifically set forth above, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed; and
     (b) The amendments set forth herein are effective solely for the purposes
set forth herein and shall be limited precisely as written, and shall not be
deemed to (i) be a consent to any amendment, waiver or modification of any other
term or condition of the Credit Agreement or any other Loan Document,
(ii) operate as a waiver or otherwise prejudice any right, power or remedy that
the Agent or the Lenders may now have or may have in the future under or in
connection with the Credit Agreement or any other Loan Document or
(iii) constitute an amendment or waiver of any provision of the Credit Agreement
or any Loan Document, except as specifically set forth herein. Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to “this
Agreement”, “herein”, “hereof” and words of like import and each reference in
the Credit Agreement and the Loan Documents to the Credit Agreement shall mean
the Credit Agreement as amended hereby. This Amendment shall be construed in
connection with and as part of the Credit Agreement.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
SECTION 7. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute part of this Amendment
for any other purposes.
SECTION 8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts shall constitute one and the same instrument.
(signature pages follow)

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     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written above.

                  BORROWER:    
 
                NAVARRE CORPORATION    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

[Signature Page to Limited Waiver and Fifth Amendment To Fourth Amended and
Restated
Credit Agreement]
S-1

 

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                  GENERAL ELECTRIC CAPITAL         CORPORATION, as Agent and
Lender    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

[Signature Page to Limited Waiver and Fifth Amendment To Fourth Amended and
Restated
Credit Agreement]
S-2

 

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     IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first written above by below Persons in their capacity as Credit Parties not as
Borrower.

                  ENCORE SOFTWARE, INC., as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                BCI ECLIPSE COMPANY, LLC, as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                FUNIMATION PRODUCTIONS LTD., as Credit Party    
 
           
 
  By:   Navarre CP, LLC, its General Partner      
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                ANIMEONLINE, LTD (F/K/A THE FUNIMATION         STORE LTD.), as
Credit Party    
 
           
 
  By:   Navarre CS, LLC, its General Partner    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                NAVARRE CP, LLC, as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

[Signature Page to Limited Waiver and Fifth Amendment To Fourth Amended and
Restated
Credit Agreement]
S-3

 

--------------------------------------------------------------------------------

 

                  NAVARRE CLP, LLC, as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                NAVARRE CS, LLC, as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                NAVARRE LOGISTICAL SERVICES, INC., as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                NAVARRE DIGITAL SERVICES, INC., as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                NAVARRE ONLINE FULFILLMENT SERVICES, INC., as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                NAVARRE DISTRIBUTION SERVICES, INC., as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

[Signature Page to Limited Waiver and Fifth Amendment To Fourth Amended and
Restated
Credit Agreement]
S-4

 

--------------------------------------------------------------------------------

 

                  FUNIMATION CHANNEL, INC., as Credit Party    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

[Signature Page to Limited Waiver and Fifth Amendment To Fourth Amended and
Restated
Credit Agreement]
S-5

 

--------------------------------------------------------------------------------

 

Annex A
Closing Checklist
[to be attached]

 

--------------------------------------------------------------------------------

 

ANNEX J (from Annex A — Commitments definition)
to
CREDIT AGREEMENT
Lenders:
General Electric Capital Corporation:
Revolving Loan Commitment
(including a Swing Line Commitment
of $5,000,000)
$65,000,000
Annex J-1