NATIONAL DISTRIBUTION AND
                              WAREHOUSING AGREEMENT



THIS NATIONAL DISTRIBUTION AND WAREHOUSING AGREEMENT (this "Agreement") is made
and entered into effective as of the 18th day of January, 2001 (the "Effective
Date"), by and between NAVARRE CORPORATION, a Minnesota corporation ("Navarre")
and BODYGUARD RECORDS.COM, INC., a Delaware corporation ("Label") (collectively,
Navarre and Label shall be referred to as the "Parties").

                                    RECITALS:

WHEREAS, Navarre is a wholesale distributor of musical, literary, and artistic
sound recordings on various forms of recording media;

WHEREAS, Label has released, and will release during the term of this Agreement,
certain recordings for sale and distribution in the "Territory" (as defined
below); and

WHEREAS, Label's proper legal title and registered business address are as
follows:

                           BODYGUARD RECORDS.COM, INC.
--------------------------------------------------------------------------------
                                  Label Name

                               138 FULTON STREET
--------------------------------------------------------------------------------
                                 Street Address

                            New York                NY              10038
--------------------------------------------------------------------------------
                            City                    State            Zip

                            Telephone: (732) 888-4646
                            Facsimile: (732) 888-2973
                            Email:     _________________________


WHEREAS, Label desires to grant to Navarre certain rights relating to Label's
sound and video recordings, including but not limited to exclusive distribution
rights within the Territory, and Navarre desires to accept the same, in
accordance with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants
and mutual promises set forth in this Agreement, the Parties agree as follows:


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<PAGE>

DEFINITIONS:

"Artists" shall mean those performing artists who recorded the Masters.

"Base Price" shall mean the price of the Recordings to Navarre, as set forth on
Schedule A, unadjusted for any discounts, credits or rebates described in this
Agreement.

"Catalog" shall mean Label's collection of Recording titles provided to Navarre
pursuant to this Agreement.

"Compositions" shall mean the musical and other sound or video compositions
embodied in the Masters.

"Consigned Product" shall mean Recordings that Navarre is holding in its
warehouse as inventory that has not been sold by Navarre to any Resellers, or
Returned Goods that have been processed by Navarre and placed in inventory for
resale.

"Contract Year" shall mean each January 18 through January 17 during the Term of
this Agreement.

"Deleted Recordings" shall mean Recordings deleted from Label's Catalog in
accordance with Section 8.

"DELIVERY MINIMUM" shall mean the minimum number of Releases Label is to provide
to Navarre during each Contract Year as set forth in Section 3.1.

"Documents" shall mean this Agreement and any and all other documents by and
between Navarre and Label, including, without limitation, any promissory notes
and security and financing agreements and/or financing statements.

"Growth Incentive Rebate" shall mean the rebate paid to Label by Navarre, if
any, after the end of each Contract Year based on Navarre's Net Sales to Label
during that Contract Year. The amount of any Growth Incentive Rebate for a given
Contract Year shall be determined in accordance with Schedule A.

"Manufacturing Services Agreement" if applicable, the Manufacturing Services
Agreement by and between Label and Navarre relating to the Recordings.

"Masters" shall mean the master sound or video recordings owned or controlled by
Label from which the Recordings are derived.

"Net Sales" shall mean the dollar value of all sales, net of Returned Goods,
during a given Contract Year. The Net Sales figure shall not be net of
applicable manufacturing, printing, promotional, advertising or administrative
costs for that year.

"Printing Services Agreement" if applicable, the Printing Services Agreement by
and between Label and Navarre relating to the Recordings.


<PAGE>


"Publisher" shall mean any Artist, producer, label or music publishing company
with which Label is affiliated, either by contract, common ownership or
otherwise, that has an ownership or control interest in the Compositions,
Recordings or Masters.

"Recordings" shall mean all music and other sound or video recordings, and any
and all copies thereof, which are (i) owned or controlled, in whole or in part,
directly or indirectly, by Label as of the effective date of this Agreement and
at any other time during the Term of this Agreement, and (ii) recorded on any
recording media, including but not limited to compact discs ("CD's"), cassettes,
digital video discs ("DVD's") and other forms of recording media now known or
later developed in which music and other sounds or video are fixed or recorded
by any method now known or later developed. A partial listing of the Label's
Catalog of Recordings and the respective UPC codes are set forth on Schedule B.

"Releases" shall mean any and all titles of Recordings which Label is providing
to Navarre for the first time.

"Resellers" shall mean all wholesale and retail outlets, one stops, rack
jobbers, military and wholesale clubs, sub-distributors or any other third
parties who would customarily purchase through a distributor.

"Returned Goods" shall mean Recordings previously sold by Navarre that have been
returned to Navarre by its customers.

"RETURN RESERVES" shall mean a certain designated percentage of the Base Price
of all Sold Goods which shall be retained by Navarre in the Return Reserves
Account, as such account shall be adjusted from time to time. Initially, the
Return Reserves rate shall be twenty-five percent (25%) of the Base Price.

"Return Reserves Account" shall mean the account held by Navarre as a reserve to
cover its projected costs associated with Returned Goods.

"Sold Goods" shall mean all Recordings that have been sold by Navarre and
shipped from its warehouse to Resellers.

"Term" shall have the definition set forth in Section 1.1.

"TERRITORY" shall mean the United States and Canada.

"Titles" shall mean the individual tracks on Recordings.

"Weekly Summary Report" shall mean the weekly report provided to Label by
Navarre stating by SKU the aggregate volume of Sold Goods from Monday through
the last business day of the previous week. The Weekly Summary Report shall also
describe the remaining aggregate Consigned Product as of the last business day
of the previous week as well as identify quantities and titles of Returned Goods
received by Navarre during that week.


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<PAGE>

1. APPOINTMENT AND SCOPE.

     1.1. TERM. The initial term of this Agreement shall be for approximately
          three years from the Effective Date of this Agreement, ending on the
          17`" day of January , 2004. Thereafter. this Agreement will
          automatically renew for successive one year periods unless and until
          (i) either Party provides the other with written notice of non-renewal
          at least 90 days prior to the expiration of the initial or renewal
          term, as the case may be, or (ii) this Agreement is otherwise
          terminated as provided in Section 14. The initial term and all
          subsequent renewal terms, if any, shall hereinafter be collectively
          referred to as the "Term."

     1.2. EXCLUSIVE DISTRIBUTION. Label appoints Navarre as its exclusive
          distributor in the Territory for the sale and distribution of all of
          Label's Recordings, including but not limited to sales made to
          Resellers, sales made through the Internet, and sales made through
          electronic transfers to retail outlets or directly to consumers. Such
          appointment also includes, on a non-exclusive basis, sales made
          through digital distribution as described in Addendum I, unless
          Addendum I has been intentionally omitted. Label represents that all
          names under which it or any subsidiary or affiliate of Label currently
          markets Recordings are listed on Schedule 1.2, and Label acknowledges
          that such subsidiaries and affiliates and any additional label names
          created by Label or such subsidiaries and affiliates during the Term
          are bound by the terms of this Agreement as though each are original
          signatories hereto.

     1.3. RESERVATION OF DISTRIBUTION RIGHTS. Label reserves the right to sell
          its Recordings at concerts and through its Website(s) provided that
          such sales (i) are not made to Resellers, and (ii) satisfy the
          requirements of Section 4.1.4 of this Agreement.

2. NAVARRE OBLIGATIONS.

     2.1. Navarre shall use its best efforts to promote, distribute and sell the
          Recordings in the ordinary course of its business.

     2.2. Navarre shall maintain suitable offices, warehousing facilities and
          adequate staffing for the performance of its duties under this
          Agreement. Navarre shall conduct its business in its own name and
          shall pay all of its own costs and expenses except as otherwise noted
          in this Agreement.

     2.3  Navarre shall respect the musical, dramatic, artistic and literary
          rights of Label. Navarre shall also respect the property rights of
          Label and any Publisher in the Recordings and any trade names,
          trademarks, logos or other information supplied with or made a part of
          the Recordings or related promotional materials.

     2.4. Navarre shall promptly pay Label in accordance with the payment
          provisions of this Agreement.



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<PAGE>

     2.5. Navarre shall use its best efforts to make available to Label
          manufacturing and printing services for all forms of CD's, DVD's and
          cassettes in accordance with the pricing and terms provided in the
          Manufacturing Services Agreement and Printing Services Agreement, if
          applicable.

     2.6. Navarre will provide Label with a physical inventory upon request but
          not more frequently than semi-annually. Label shall also have the
          right to make its own physical inspection of inventory during
          Navarre's normal business hours upon reasonable advance notice.

3. LABEL'S OBLIGATIONS.

     3.1  Label shall provide Navarre with a minimum of 5 Releases during each
          Contract Year.

     3.2. Label shall accept orders from Navarre for the consignment of
          Recordings, whether manufactured pursuant to the terms of
          Manufacturing Services Agreement or otherwise, and shall promptly
          deliver against those orders. Recordings will be supplied in industry
          acceptable packaging with appropriate UPC stickers or labeling.

     3.3. Label shall reorder Recordings for delivery to Navarre, as reasonably
          required to maintain adequate inventory, based on the shipping report
          issued each week and the order requests issued to Label by Navarre.
          Label SHALL CONSIGN AN INVENTORY of Recordings to Navarre sufficient
          to allow both parties to comply with the terms of this Agreement;
          provided, however, Navarre shall in no event be required to warehouse
          Consigned Product in excess of quantities requested in advance by
          Navarre.

     3.4. Label shall provide Navarre with promotional and advertising materials
          for the Recordings, at no cost to Navarre and in quantities mutually
          agreed upon to be reasonably sufficient to promote and advertise the
          Recordings, but in no event shall Label be required to provide such
          goods in excess of limitations imposed on Label by recording
          agreements with Artists.

     3.5. Label agrees that new pressings covered under the terms of this
          Agreement shall include the statement "Distributed by Navarre
          Corporation, Minneapolis, MN 55428."

     3.6. During the Term of this Agreement, Label shall (i) immediately notify
          Navarre of any disputes or disagreements Label may have with any
          Publishers or others which might have a material adverse impact on
          Navarre's or Label's ability to perform under this Agreement, and (ii)
          if so requested by Navarre, require all Publishers under contract with
          Label to execute a waiver and release in form and substance
          satisfactory to Navarre.



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<PAGE>


     3.7. Label shall pay to Navarre an annual administrative fee of $5000 in
          consideration of the performance of administrative, accounting and
          other services provided by Navarre pursuant to this Agreement. Such
          fee shall be debited by Navarre against the first sums due and owing
          by Navarre to Label. Such fee shall thereafter be due on the first day
          of each Contract Year during the Term.

     3.8. Except as otherwise provided in this Agreement, Label shall be solely
          responsible for making direct payment to all copyright proprietors of
          mechanical and other copyright royalties relating to Compositions
          incorporated into the Recordings. Label shall make such payments when
          due and at the required statutory or contract rates, as applicable. On
          a semi-annual basis, or more frequently if requested by Navarre, Label
          shall provide such documentation as Navarre may require to evidence
          that such payments have been and are being timely made, including
          acknowledgment of receipt of payment by the recipient.

4. PRICING; RESERVES; PAYMENT

          4.1. Pricing. In consideration of the rights granted hereunder and the
               obligations and covenants of the Parties set forth herein,
               Navarre shall pay to Label the Base Price for each Recording sold
               by Navarre to its customers calculated in accordance with
               Schedule A hereto, less any applicable discounts.

               4.1.1. RETAIL PRICE. The current suggested retail prices for the
                    Recordings are shown on Schedule A. Label may change the
                    suggested retail price on a prospective basis by issuing new
                    pricing sheets to Navarre to reflect price changes and new
                    Releases. The new retail pricing, and the corresponding
                    change to the Base Price, shall go into effect thirty (30)
                    days after receipt by Navarre of the new pricing sheets.

               4.1.2. DISCOUNTS. Label also agrees to participate in the
                    following discount programs, with Base Prices for Recordings
                    sold pursuant to such discount programs reduced as set forth
                    below:

                           4.1.2.1. Standard discount for Navarre's sales to
                                    rack jobbers, which is currently five
                                    percent (5%) off the Base Price.

                           4.1.2.2. Standard discount for Navarre's sales to
                                    military bases and installations, which is
                                    currently ten percent (10%) off the Base
                                    Price.

                           4.1.2.3. Label shall participate in Navarre's
                                    "Catalog Program." Navarre's Catalog Program
                                    shall apply to all Recording titles which
                                    were originally released by Label to Navarre
                                    more than six (6) months earlier and are not
                                    on any current billboard chart. During the
                                    first two (2) months of a calendar quarter,
                                    Label's participation shall be at a discount
                                    rate of five percent (5%) off



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<PAGE>





                                    the Base Price. In the last month of the
                                    quarter, Label's participation shall be at
                                    the rate of seven percent (7%) off the Base
                                    Price. Catalog Program sales shall have an
                                    additional sixty (60) days dating.
                                    Accordingly, payments due by Navarre to
                                    Label for these items shall be paid within
                                    one hundred fifty (150) days from the
                                    invoice date.

              4.1.3. PROMOTIONAL MATERIALS. Navarre shall not be required to
                     make any payment to Label for Recordings furnished free of
                     charge by Label or Navarre to third parties for non-resale
                     purposes such as review, sample, advertisement, publicity,
                     promotion or like purposes, or for Recordings sold at or
                     below their manufacturing cost.

              4.1.4. PRICE PROTECTION FOR CONSIGNED PRODUCT. In the event that
                     Label offers Recordings to any third party in the Territory
                     at a lower price than the Base Price charged to Navarre for
                     such Recordings, including raising the discount offered,
                     Label shall immediately adjust its pricing charged to
                     Navarre for the difference between the invoice price
                     charged to Navarre and the reduced price for all copies of
                     such Recordings) held as Consigned Product on and after the
                     date the reduced price is first offered and for so long as
                     such reduced price is in effect. In addition, Label agrees
                     that its pricing for ANY RECORDINGS OUTSIDE THE TERRITORY
                     SHALL BE CONSISTENT WITH the pricing to Navarre within the
                     Territory (e.g., Recordings categorized as "Top-Line
                     Products," "Mid-Line Products," or "Discount Products"
                     shall be priced as such both inside and outside the
                     Territory) and any reclassification or material price
                     change for Recordings outside the Territory shall also
                     automatically apply to Navarre within the Territory. The
                     provisions of this Section 4.1.4 shall not apply to Label's
                     sale of Recordings outside of the Territory if Label can
                     demonstrate that no significant amount of such Recordings
                     will ultimately end up being sold within the Territory.

              4.1.5. PRICE PROTECTION FOR SOLD GOODS. If Navarre's customers
                     request a credit resulting from Label's price reduction on
                     Sold Goods, Label shall credit Navarre for the difference
                     between the invoice price charged to Navarre and the
                     reduced price for each unit of Sold Goods which are sold to
                     Navarre's customers on the date the reduced price is first
                     offered by Label or while the reduced price is still in
                     effect. Should any of Navarre's customers request a price
                     adjustment as outlined in this Section 4.1.5, Navarre
                     shall, at Label's request, provide for an independent third
                     party audit of that customer's inventory at Label's
                     expense. Navarre will use commercially reasonable efforts
                     to provide inventory reporting of its customer's inventory.



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<PAGE>





       4.2.   WEEKLY SUMMARY REPORT. Navarre shall provide a Weekly Summary
              Report to Label on a weekly basis.

       4.3.   INVOICES. Each week during the Term, Label shall issue an invoice
              to Navarre based on the gross total of Sold Goods from the prior
              week as set forth in the Weekly Summary Report. In addition to any
              other discounts, Navarre shall receive a two percent (2%) discount
              on invoice payments made to Label within 90 days of Navarre's
              receipt of such invoice. Payments made on invoices coming due
              during a given week shall be deemed made within ninety (90) days
              if mailed to Label by the end of the preceding week. Navarre shall
              receive such two percent (2%) discount on invoices relating to
              Recordings sold pursuant to Navarre's Catalog Program if such
              payments are made to Label within one hundred fifty (150) days of
              Navarre's receipt of the invoice.

       4.4    RETURN RESERVES. During the Term of this Agreement, prior to
              paying the invoice amount set forth in Section 4.3, Navarre shall
              be entitled to deduct Return Reserves from the invoice amount and
              hold such sum in the Return Reserve Account.

              4.4.1. The Return Reserve amount shall initially be twenty-five
                     percent (25%) of the Base Price (as adjusted from time to
                     time) on all copies of Recordings sold by Navarre.
                     Commencing on the sixth month of this Agreement and
                     continuing thereafter for the remainder of the Term, the
                     Return Reserve percentage shall be revised monthly to
                     reflect the actual percentage of Sold Goods returned to
                     Navarre during the previous six months; provided, however,
                     that the Return Reserve percentage shall never be less than
                     twenty percent (20%) nor more than thirty percent (30%).

              4.4.2. At Label's request, beginning in the seventh month of the
                     Term, if the actual percentage of returns during the
                     previous six months is less than the Return Reserve
                     percentage then in effect, Navarre shall begin to liquidate
                     the Return Reserve Account by liquidating the amount taken
                     in the first (1st) month of the Term and reporting that
                     liquidation on the invoice statement for the seventh (7th)
                     month, and on such basis thereafter. By way of
                     illustration, in the eighth (8th) month of this Agreement,
                     the Return Reserve amount taken in the second (2nd) month
                     shall be liquidated and credited on the invoice statement
                     for the eighth month, in the ninth (9th) month of this
                     Agreement, the Return Reserve amount taken in the third
                     (3rd) month shall be liquidated and credited on the invoice
                     statement for the ninth month and so forth. Upon its being
                     liquidated and reported, the applicable Return Reserve
                     amount shall be applied and credited to Label's account.
                     The Return Reserve Account shall be reduced by the amount
                     so applied. Notwithstanding the foregoing, during the last
                     Contract Year of the Term or as provided for in Section 14
                     of this Agreement, all amounts held in the Return Reserve
                     Account shall continue to be held by Navarre


<PAGE>

                     until it has been paid in full for any and all amounts that
                     Label owes to it under the terms of this Agreement or any
                     ancillary Documents.

              4.4.3. If at any time Navarre determines in its reasonable
                     judgment that its anticipated return liability for
                     Recordings exceeds the projected amount in the Return
                     Reserves Account at the end of the Term, Navarre shall be
                     entitled to deduct amounts from remaining invoices as
                     Navarre deems sufficient to offset the anticipated excess
                     liability. Such amounts shall be held in the Return Reserve
                     Account.

       4.5.   PAYMENTS

              4.5.1. INVOICE PAYMENTS. Navarre shall pay Label the Base Price of
                     all Sold Goods each week as shown on the invoice, less the
                     Return Reserves, less any other applicable discounts set
                     forth in this Section 4, less manufacturing and printing
                     costs (if applicable) and less agreed upon promotional and
                     administrative costs. Further, if the Return Reserve
                     Account is ever in a debit balance during the Term of this
                     Agreement because of excessive returns (and not because of
                     manufacturing, promotion or other costs which may otherwise
                     be due to Navarre from Label), Navarre shall be entitled to
                     withhold the sum necessary to bring the Return Reserve
                     Account to a zero balance.

                            For Example:

  WEEK 1 SALES

  Navarre Base Cost

                   = 7.72 x 1,000 =     $ 7,720.00 Gross Sales for Week
                                        - 1,930.00   For Return Reserve (at 25%)
                                        -   800.00   Manufacturing Cost
                                        -   300.00    Advertising Cost
                                        $ 4,690.00 Net to Label

  WEEK 2 SALES

  Navarre Base Cost

                   = 7.72 x 800 =       $ 6,176.00 Gross Sales for Week
   but returns of Sold Product
                    = $4,000.00 then    - 1,544.00  For Return Reserve (at 25%)
                                            640.00  Manufacturing Cost
                                            160.00  ADVERTISING COST
                                          3,832.00  Due to Label
                                            526.00  Cover Return Debit
                                         $3,306.00  Net to Label


  Note* Week 2
    Return Reserve Account =             $3,474.00
                                          4.000.00 Returns
                                            526.00




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              4.5.2. GROWTH INCENTIVE PAYMENTS. Within 30 days after the end of
                     each Contract Year, Navarre shall pay to Label a Growth
                     Incentive Rebate fee, if any, based on Navarre's Net Sales
                     made to Label during that Contract Year. Any Growth
                     Incentive Rebate fee payable to Label by Navarre shall be
                     calculated in accordance with Schedule A. If the actual
                     amount paid to Label for a given Contract Year is in excess
                     of the amount due Label hereunder, Navarre may, at its
                     option, either (i) require Label 'to remit the overage to
                     Navarre within 30 days or (ii) deduct the overpayment from
                     the next payments) that would otherwise be payable to
                     Label.

5. RETURNS.

       5.1.   RETURNED GOODS; CREDIT FOR RETURNED GOODS. Navarre shall debit
              Label's account for the Base Price plus all return freight charges
              for all Returned Goods. Returned Goods shall be processed by
              Navarre, placed in inventory for resale and deemed Consigned
              Product; provided, however, that if Returned Goods cannot be
              resold because the packaging or the product is damaged, Navarre
              shall destroy such Returned Goods and charge Label its actual fees
              incurred for the destruction and disposal of such Returned Goods
              (e.g. $0.05 -.20 per unit).

       5.2.   RIGHT TO RETURN OR DESTROY CONSIGNED PRODUCT. If Navarre has
              excess Consigned Product in its warehouse it shall have the right
              to, at its option, either (i) mark such excess Consigned Product
              (to evidence that it may not be returned to Navarre for credit)
              and return it to Label, at Label's own expense, or (ii) if not
              accepted for return by Label, destroy such Consigned Product and
              charge Label its actual fees incurred in the destruction and
              disposal of such Consigned Product (e g. $0.05 -.20 per unit),
              recognizing that the rights granted hereunder are an exclusive
              right to distribution. Navarre's right to return Consigned Product
              shall survive the Term and termination of this Agreement. Should
              Label owe Navarre a balance upon reconciliation of its account for
              Returned Goods, freight chargebacks, advertising credits, or other
              costs upon the end of the Term or termination, Label shall issue
              payment therefor within 30 days of the end of such Term or
              termination. If Label has made full payment of all amounts due
              Navarre, Navarre shall use its best efforts to return all
              Consigned Product within 180 days of the termination date of the
              Agreement. If full payment has not been made, Navarre shall be
              entitled to immediately exercise its remedies hereunder including
              those set forth in Sections 14 and 15.


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<PAGE>


6. ACCOUNTING.

       6.1.   ACCOUNTING.

              6.1.1. Navarre shall provide Label with a reconciliation statement
                     of all amounts payable to Label hereunder within 30 days of
                     the end of each Contract Year. All such reconciliation
                     statements rendered by Navarre shall become incontestable
                     by Label and Label will neither have nor make any claim
                     against Navarre with respect to such reconciliation
                     statement unless prior to ninety (90) days after the
                     rendering of such reconciliation statement Label advises
                     Navarre in writing of any objection to such reconciliation
                     statement, setting forth the specific basis for objection,
                     in which case such reconciliation statement shall be
                     incontestable in all respects except those stated in such
                     written objection.

              6.1.2. Navarre shall keep books and records showing the
                     transactions made pursuant to this Agreement. Navarre's
                     books and records supporting receipts of Recordings,
                     shipments of Recordings, and all charges applicable to
                     Label shall be open to inspection during Navarre's normal
                     business hours upon reasonable advance notice.

       6.2.   AUDIT RIGHTS. Label shall have the right, at Label's expense, to
              engage an independent certified public accountant, not then
              conducting or participating in an audit of Navarre's books, to
              audit relevant portions of Navarre's books and records pertaining
              to monies payable to Label pursuant to this Agreement that have
              not been rendered incontestable. Label shall be entitled to
              conduct such audits not more than once during any twelve month
              period. All such audits shall be conducted during Navarre's normal
              business hours and upon reasonable advance notice, and no such
              audits shall be conducted on a contingent fee arrangement.

7. CONSIGNMENT OF INVENTORY.

       7.1    Label shall deliver on consignment to Navarre's warehousing
              facilities an inventory of Recording titles requested by Navarre
              and in amounts mutually determined by Navarre and Label. Label and
              Navarre shall consult regarding the timing and size of
              manufacturing orders for purposes of coordinating availability of
              adequate inventory in accordance with the terms and conditions of
              this Agreement, but Navarre shall at all times have the sole
              authority to determine the amount of inventory stored at its
              premises, and any excess inventory shall be returned to Label or
              destroyed pursuant to Section 5.2 above.

       7.2.   Subject to Navarre's rights under Sections 14 and 15 below, Label
              shall retain title to and ownership of all Recordings delivered by
              it to Navarre until sold. Navarre shall, at its own expense, while
              the Recordings are in Navarre's possession at its warehouse,
              obtain insurance sufficient to protect Label against all



                                     - 11 -

<PAGE>


              risks of loss or damage to the Recordings while in Navarre's
              possession, and Navarre shall have Label named as an additional
              insured under such policy.

       7.3.   Label shall be responsible for payment of shipping costs for
              delivery of the Recordings to Navarre, and Label shall pay the
              shipping costs for any authorized return of Sold Goods to Navarre
              or Label (Returned Goods will be shipped freight collect).

       7.4.   Navarre shall pay those expenses incurred after delivery of
              Recordings to Navarre which relate to insurance, warehousing and
              shipment of Recordings.

       7.5.   Shipment discrepancies between the invoice/bill-of-lading provided
              by Label, and any damage in transit, will be promptly reported.

8. DELETED RECORDINGS.

       8.1.   Label shall have the right to delete certain Recordings from its
              Catalog ("Deleted Recordings"). Label shall give Navarre no less
              than thirty (30) days prior written notice of the date when a
              particular Recording will be deleted from its Catalog. Navarre
              shall have nine (9) months from the Notice Date (as defined below)
              applicable to each particular Deleted Recording to recall from its
              customers all such Deleted Recordings. Label shall then have
              thirty (30) days from the end of such nine (9) month period to
              remove, at Label's expense, all such Deleted Recordings from
              Navarre's warehouse facility. If Label does not remove all such
              Deleted Recordings within such thirty (30) day period, Navarre
              shall have the right to scrap, destroy or dispose of the Deleted
              Recordings, without any further obligation to Label, and charge
              Label for its costs incurred in the scrapping, destruction or
              disposal of such products. Navarre shall, at its option, either
              (i) charge Label's account hereunder an amount equal to such costs
              or (ii) deduct such costs from the Return Reserve Account or (iii)
              bill Label for such costs, in which case Label shall pay such
              costs within thirty (30) days.

       8.2.   Navarre shall not be required to recall Label's Deleted Recordings
              from its customers more than twice during any calendar year of the
              Term. Navarre shall send a recall notice to its customers on or
              about July 1 and February 1 of each calendar year during the Term
              (the "Notice Date"). The recall notice sent on or about July 1
              will reference all Recordings deleted from Label's Catalog during
              the six (6) month period immediately preceding the Notice Date.
              The recall notice sent on or about February 1 will reference all
              Recordings deleted from Label's Catalog during the six (6) month
              period immediately proceeding said Notice Date.

       8.3.   Notwithstanding Sections 8.1 and 8.2 above, Label agrees and
              acknowledges that upon Navarre's receipt of prior written notice
              of the deletion of a particular Recording, Navarre shall be
              entitled to immediately notify its customers that such Recording
              is scheduled to be deleted. Navarre shall also be entitled to
              determine



                                     - 12 -

<PAGE>


              and notify its customers of the date after which Navarre shall no
              longer distribute such Recording or accept returns of such
              Recording.

9. SALES BY NAVARRE.

       9.1.   Navarre is authorized to sell the Consigned Product to any of its
              accounts in the Territory.

       9.2.   Navarre shall be free to establish, at its own discretion, the
              costs, prices and terms of sale with respect to its agents and
              distributors.

10. ADVERTISING AND MARKETING.

       10.1.  Label agrees to support, market and promote the sale of Recordings
              at its own expense. Label's efforts shall include, but shall not
              be limited to, advertisements in trade and consumer publications,
              participation in in-store or media promotions, and the development
              of promotions specifically aimed at facilitating radio air-play of
              the Recordings.

       10.2.  Navarre agrees to use its best efforts to assist Label in
              marketing and promoting the Recordings, but in no event shall
              Navarre be deemed to bear financial responsibility for conducting
              such marketing and promotional activities.

       10.3.  Label shall provide suitable advertising allowances that may be
              used by Navarre or its customers.

       10.4.  Label shall provide to Navarre, free of charge, camera-ready art
              work and all other materials needed for use in advertisements and
              other promotional materials.

       10.5.  Navarre and its customers may produce their own advertisements or
              promotional materials for the Recordings; provided, however, that
              the general concept of such advertisements and promotional
              material, or the general use thereof, must be approved in advance
              by Label. Such approval shall not be unreasonably withheld, and
              Label's decision to grant or deny such approval shall be made
              within five (5) working days of its receipt of Navarre's written
              request for such approval. In the event that Label fails to
              respond within five (5) working days, such approval shall be
              deemed to have been granted by Label.

11. INTELLECTUAL PROPERTY.

       11.1.  Label grants to Navarre, for the Term of this Agreement, a
              transferable license to use the trademarks, trade names and any
              other intellectual property relating to the Recordings in
              connection with the distribution and sale of the Recordings in the
              Territory. Navarre shall have no right to remove or cover such
              marks or names on the Recordings or related packaging. Except for
              the rights granted to Navarre in



                                     - 13 -


<PAGE>



              this Agreement, the trademarks, trade names and any other
              intellectual property relating to the Recordings shall remain the
              exclusive property of Label.

       11.2.  Label warrants that the Recordings, and the sale, distribution and
              intended use thereof, do not infringe any patent, copyright,
              trademark, trade name or other intellectual property right of any
              third party. Label shall provide Navarre with copies of any and
              all agreements between Label and any Artists or other Publishers
              which relate to licensing of the Recordings or any intellectual
              property rights related thereto.

       11.3.  Label shall indemnify, defend and hold harmless Navarre, its
              affiliates, and their officers, directors, agents, employees,
              successors and assigns from and against any and all claims,
              losses, damages, expenses, obligations, penalties, demands, suits,
              proceedings, judgments, costs and liabilities (including, without
              limitation, costs of collection, employee time in depositions and
              document review, reasonable attorney's fees and other costs of the
              defense) incurred by them relating to or arising from any claims
              relating to licensing of the Recording, payment of royalties or
              fees, or of infringement of patent, copyright, trademark, trade
              name or other intellectual property right by any third party. In
              the event such a claim is made, Navarre may, at its option,
              immediately cease the sale and DISTRIBUTION (AND MANUFACTURE AND
              PRINTING, IF APPLICABLE) OF THE RECORDINGS.

       11.4.  In the event a Recording, or the sale, distribution or intended
              use thereof, is found to infringe upon the patent, copyright,
              trademark, trade name or other intellectual property right of a
              third party, Label may, at its option and its expense, procure the
              rights necessary for Navarre to continue the sale and distribution
              (and manufacture and printing, if applicable) of the Recordings
              under this Agreement, or modify or replace the infringing part of
              the Recordings so that Navarre may continue the sale and
              distribution (and manufacture and printing, if applicable) of
              Recordings. Should Label be unable or unwilling to replace or
              modify the infringing part of a Recording, or procure the right to
              the continued use thereof, within thirty (30) days of Label being
              notified of an infringement claim, Navarre may, at its option,
              return all Recordings held as Consigned Product or returned to
              Navarre by its customers for a full cash refund of amounts paid by
              Navarre to Label for such Recordings.

       11.5.  Navarre agrees to respect and abide by the terms and conditions of
              any license to use patents, copyrights, trademarks, trade names or
              other intellectual property for purposes of this Agreement.
              Navarre will indemnify and hold Label harmless against claims by
              third parties arising from a breach by Navarre of the terms and
              conditions of any such license.



                                     - 14 -

<PAGE>


12. REPRESENTATIONS AND WARRANTIES OF LABEL.

       12.1.  As an inducement for Navarre to enter into this Agreement, Label
              hereby warrants and represents to Navarre as follows:

                12.1.1. EXISTENCE. POWER AND AUTHORITY. Label is a corporation
                        duly organized and validly existing in the State of
                        Delaware, and is fully qualified to do business and in
                        good standing in the State of Delaware, and in every
                        other jurisdiction where the nature of its businesses or
                        the character of its properties makes such qualification
                        necessary, and has all requisite power and authority to
                        carry on its businesses as now conducted and as
                        presently proposed to be conducted. Label's legal name
                        is Bodyguard Records.com, Inc. and it conducts business
                        only under that name except as disclosed on Schedule
                        1.2. Label has full power and authority to execute and
                        deliver this Agreement and the Documents. The Documents
                        each constitute the legal, valid and binding obligations
                        of Label enforceable in accordance with their respective
                        terms.

                12.1.2. LICENSES; ROYALTIES AND INFRINGEMENT. Label possesses
                        adequate licenses, permits, franchises, patents,
                        copyrights, trademarks and trade names, or rights
                        thereto, to conduct its respective business
                        substantially as now conducted and as presently proposed
                        to be conducted. There does not exist, and there is no
                        reason to anticipate that there may exist, any liability
                        to Label with respect to any claim of infringement
                        regarding any patent, copyright, trademark, trade name
                        or other intellectual property right relating to the
                        Releases. Label is current on all license and royalty
                        payments owed, including, without limitation, Artist and
                        mechanical royalties.

                12.1.3. DEFAULT. Label is not in default of a material provision
                        under any material agreement, instrument, decree or
                        order to which it is a party or by which it or its
                        respective property is bound or affected.

                12.1.4. CONSENTS. No consent, approval, order or authorization
                        of any governmental authority or any third party is
                        required in connection with the execution and delivery
                        of this Agreement, or any of the agreements or
                        instruments herein mentioned including, without
                        limitation, the Documents, or the carrying out or
                        performance of any of the transactions required or
                        contemplated hereby or thereby or, if required, such
                        consent, approval, order or authorization has been
                        obtained by Label prior to the date hereof.

                12.1.5. OWNERSHIP AND MANAGEMENT. With the exception of
                        affiliations listed on Schedule 1.2 and except as
                        described on the list of owners, directors/governors and
                        officers/managers required by Section 19.2 below,


                                     - 15 -


<PAGE>

                        none of the persons so listed owns, controls or is
                        employed by or affiliated with any recording company or
                        label other than Label.

13.     REPRESENTATIONS AND WARRANTIES OF NAVARRE. Navarre is a Minnesota
        corporation duly organized and validly existing in the State of
        Minnesota, and is fully qualified to do business and in good standing in
        the State of Minnesota, and in every other jurisdiction wherein the
        nature of its businesses or the character of its properties makes such
        qualification necessary, and has all requisite power and authority to
        carry on its businesses as now conducted and as presently proposed to be
        conducted. Navarre's legal name is "Navarre Corporation" and it conducts
        business only under that name. Navarre has full power and authority to
        execute and deliver this Agreement and the Documents. The Documents each
        constitute the legal, valid and binding obligations of Navarre
        enforceable in accordance with their respective terms.

14. DEFAULT; TERMINATION; REMEDIES.

        14.1.   LABEL'S RIGHT TO TERMINATE WITHOUT CAUSE; TERMINATION PREMIUM.
                Label may terminate this Agreement without cause only if it has
                been in effect for a period of at least one calendar year. Label
                must give Navarre at least 180 days advance written notice of
                such termination. Upon such notice, Navarre shall not be
                required to make further payments to Label for a period of 180
                days after the date the termination is effective. Upon
                termination by Label without cause, Label shall pay to Navarre,
                as liquidated damages for the loss of the rights granted under
                this Agreement and not as a penalty, a dollar amount derived
                from the gross margins that would have been realized by Navarre
                during the remaining Term of this Agreement. For this
                calculation, the "gross margin percentages" realized by Navarre
                from the shipment and sale of recordings over the six (6) month
                period preceding the delivery of notice will be used to
                determine the average gross margin dollars realized per month.
                This dollar amount shall then be multiplied by the number of
                months remaining in the Term. Navarre's invoice for this amount
                shall include documentation to support its calculation. Payment
                to Navarre shall be made within thirty (30) days of Label's
                receipt of such invoice. Label shall have the right to audit
                Navarre's books and records to confirm the accuracy of Navarre's
                calculation of its basis for this payment, provided that Label
                shall place the amount of such payment in an escrow account
                pending verification of the amount by the audit. As used herein,
                "gross margin percentage" shall be defined as the sell price
                Navarre charges its customers minus the Base Price Navarre pays
                Label (as defined in Schedule A) divided by the sell price
                Navarre charges its customers.

        14.2.   NAVARRE'S RIGHT TO TERMINATE WITHOUT CAUSE. Navarre may
                terminate this Agreement without cause by giving Label ninety
                (90) days notice of its intent to terminate. The Parties agree
                to as smooth a transition as possible.


                                     - 16 -


<PAGE>


        14.3.   TERMINATION FOR CAUSE. This Agreement may be terminated for
                cause by either Party upon the material breach by Label or
                Navarre of any obligation created hereunder. Except as otherwise
                provided in this Agreement, such termination shall be effected
                by either Party giving thirty (30) days advance written notice
                of its intent to terminate. The notice must give details of the
                claimed breach, and the Party given the notice shall have thirty
                (30) days in which to cure such breach before the termination
                will be effective.

        14.4.   IMMEDIATE TERMINATION. In the event either Navarre or Label
                files or becomes subject to a petition in bankruptcy or other
                assignment for the benefit of creditors, such event shall
                constitute a material breach and may be cause for immediate
                termination of this Agreement unless such bankruptcy petition is
                discharged within thirty (30) days. In such event, all Consigned
                Product held by Navarre shall be delivered to Label, or held for
                Label's benefit at a location designated by Label.

        14.5.   DELIVERY MINIMUM. If the Delivery Minimum set forth in Section
                3.1 of this Agreement with respect to any Contract Year is not
                timely fulfilled, then Navarre shall have the further right, in
                its sole discretion and without limitation of any of its other
                rights, to suspend its obligations hereunder until such Delivery
                Minimum is fulfilled. If SUCH FAILURE CONTINUES FOR A PERIOD OF
                THIRTY (30) days or more, Navarre shall have the further right,
                in its sole discretion without limitation of any of its other
                rights, to terminate the Agreement effective immediately upon
                written notice to Label.

        14.6.   DEBIT BALANCE. If at any time, for any reason, Label has a debit
                balance with Navarre, Label shall pay to Navarre the debit
                balance within thirty (30) days of Navarre's demand for payment.
                If all or any portion of the balance remains unpaid after thirty
                (30) days, Navarre shall be entitled, at its option, to exercise
                any of the remedies set forth in Section 14.8. Navarre
                acknowledges and agrees that if it exercises its rights under
                this Section 14.6, before using the Masters to manufacture
                additional Recordings it will first liquidate substantially all
                of its existing Consigned Product inventory. Further, in the
                event it does manufacture and distribute additional Recordings
                to recoup amounts due by Label to Navarre, then in such
                instances Navarre will be responsible for paying (or setting
                aside funds as necessary to pay) all mechanical, musical,
                composition and other royalties that would be due to the Artists
                and other Publishers of such Recordings.

        14.7.   NOTICE TO NAVARRE'S CUSTOMERS. Label agrees and acknowledges
                that upon Navarre's receipt of written notice of termination
                from Label pursuant to either Section 14.1 or 14.3 or 14.6 , or
                in the event either Party becomes subject to a petition in
                bankruptcy pursuant to Section 14.4, Navarre shall be entitled
                to immediately notify its customers that the Agreement is
                scheduled to be terminated. Navarre shall also be entitled to
                indicate the date after which Navarre shall no longer distribute
                the Recordings or accept returns of Sold Goods. Label



                                     - 17 -

<PAGE>


                further agrees and acknowledges that Navarre may, at its option,
                indicate to its customers the name and address of Label's new
                distributor, if any, who shall accept returns of Sold Goods
                after the date on which Label no longer accepts such returns.

        14.8.   REMEDIES. At any time Label is in default hereunder beyond any
                applicable cure period, Navarre shall be entitled, at its
                option, to exercise any or all of the remedies set forth below:

                        (i) withhold future payments due Label until such debit
                        balance is paid, and/or

                        (ii) liquidate any inventory of Label in the possession
                        or control of Navarre at prices determined by Navarre,
                        in its discretion, in quantities sufficient to fully
                        repay any amounts owed by Label to Navarre and/or

                        (iii) apply any proceeds received from such liquidation
                        towards Label's debit balance and/or

                        (iv) manufacture and sell additional Recordings at
                        prices determined by Navarre, in its discretion, in
                        quantities sufficient to fully repay all amounts owed by
                        Label to Navarre and/or

                        (v) immediately terminate this Agreement.

        14.9.   PAYMENT AND RETURNS UPON TERMINATION. At the end of the Term, or
                upon earlier termination of this Agreement for any reason,
                Navarre shall accept Sold Product returns for 180 days and debit
                the Return Reserve Account for such Returned Goods. Any such
                Returned Goods shall be held by Navarre as security for payment
                of any sums due Navarre by Label under this Agreement or the
                Documents. At the end of the 180 day period, Navarre shall have
                the option to return all Returned Goods to Label for credit, or
                if there is a balance owed to Navarre, Navarre shall first
                deduct amounts owed from the Return Reserve Account, and then
                for any amounts still remaining due, Label shall pay Navarre
                within thirty (30) days. After all amounts due Navarre by Label
                are paid, any sum remaining in the Return Reserve Account shall
                be paid to Label and any Returned Goods or Consigned Product
                shall be returned to Label or to any designated party directed
                by Label.

        14.10.  SURVIVAL. Notwithstanding anything to the contrary in this
                Agreement, so long as Label has a debit balance due to Navarre,
                Navarre's rights to distribute, manufacture and sell Label's
                Recordings and all related licensing rights granted herein to
                Navarre shall continue in perpetuity until such time that all
                amounts owing to Navarre from Label are paid in full.



                                     - 18 -

<PAGE>


15.     SECURITY INTEREST. Label hereby irrevocably assigns and transfers to
        Navarre as collateral security for payment of all amounts which Navarre
        is entitled to charge against Label pursuant to this Agreement and the
        other Documents, or which Label may otherwise owe Navarre, all of
        Label's right, title and interest in and to all inventory, goods and
        merchandise owned by Label which are now or at any time hereafter in the
        possession of Navarre or which are located on any premises owned or
        leased by Navarre, whether on consignment or otherwise, and all
        recordings, records, tapes, CD's, CD ROM's, DVD's, videos or similar
        products delivered to Navarre in connection with this Agreement; and all
        Masters delivered to Navarre for all Releases financed or distributed by
        Navarre, and all manufacturing, distribution and licensing rights and
        copyrights related thereto, and all other license and contract rights
        now existing or hereafter at any time arising, relating to the
        above-referenced collateral, including, without limitation, the right to
        use and exploit the Masters consistent with this Agreement until
        repayment in full of any and all amounts owed by Label to Navarre,
        together with all substitutions and replacements for and products and
        proceeds of any of the foregoing property (the "Collateral"). Upon
        Label's payment of all amounts due Navarre hereunder, Navarre shall
        terminate its security interest in and to the Collateral and shall
        execute any and all documents necessary to effectuate such termination.
        Label warrants and represents that it has not granted and will not grant
        any rights that would be superior to Navarre's rights hereunder in the
        Collateral to any other party by way of assignment, security interest or
        otherwise, and that any GRANT OF RIGHTS with respect to the Collateral
        will be subject to Navarre's rights. Label hereby irrevocably grants to
        Navarre a limited power-of-attorney to execute any and all financing
        statements or other documents (including, without limitation, UCC-1
        forms) which Navarre deems, in its sole discretion, necessary to protect
        its interests in such Collateral and Navarre shall have the right to
        file such statements, in Label's and/or Navarre's name, in any
        jurisdictions) where Navarre deems appropriate.

16.     RELATIONSHIP OF THE PARTIES. Neither Party is the employee, agent or
        legal representative of the other for any purpose whatsoever.

17.     NOTICES. All notices from one Party to the other hereunder, unless
        herein indicated to the contrary, shall be in writing and shall be
        served by mailing a copy thereof, postage prepaid, certified or
        registered mail, return receipt requested, address as specified below or
        such other address as may be substituted by written notice from either
        party to the other:

          To Label:                          To Navarre:

          To the address set forth on        Navarre Corporation
          Page 1 of this Agreement           7400 49" Avenue North
                                             New Hope, MN 55428

                                             Telephone:        763-535-8333
                                             Facsimile:        763-535-2190




                                     - 19 -

<PAGE>



 Notices shall be deemed complete when said notice is deposited in any United
 States mailbox and the date of such mailing shall constitute the date of
 notice. The electronic mail addresses and facsimile numbers set forth above,
 if any, are listed for convenience purposes only, and no communications made
 through such mediums shall constitute notice pursuant to this Section 17.

18. GENERAL PROVISIONS.

        18.1    REFERENCES. All references made in this Agreement to Sections,
                Schedules, Exhibits and Addenda shall be deemed to mean the
                corresponding Sections, Schedules, Exhibits and Addenda of this
                Agreement. All attached Schedules, Exhibits and Addenda are
                incorporated into this Agreement and made a part hereof, and any
                reference to the Agreement shall be deemed to include all such
                Schedules. Exhibits and Addenda.

        18.2    GOVERNING LAW; ARBITRATION. This Agreement shall be governed by
                the laws of the State of Minnesota, without regard to any
                conflict of law provisions that may otherwise apply. Any
                controversy or claim arising out of or relating to the
                Agreement, or the breach thereof, shall be settled by
                arbitration administered by the American Arbitration Association
                under its Commercial Arbitration Rules, and judgment on the
                award rendered by the arbitrators) may be entered in any court
                having jurisdiction thereof. The Parties hereby designate
                Hennepin County, Minnesota, as the locale for such arbitration.

        18.3    ATTORNEYS' FEES; COSTS. Label shall reimburse Navarre for any
                legal fees or other costs, including but not limited to
                reasonable attorneys' fees, costs of collection, and employee
                time in depositions and document review, incurred in connection
                with the arbitration of any controversy or claim arising out of
                or relating to the Agreement, or the breach thereof, or in the
                event Label files a petition in bankruptcy or for reorganization
                or shall be adjudicated a bankrupt or insolvent.

        18.4    ASSIGNMENT. This Agreement may not be assigned by either Party
                without the written consent of both Parties, which shall not be
                unreasonably withheld. Said assignment shall not unreasonably
                impair the rights of the non-assigning Party and shall not be on
                terms less favorable than the terms set forth in this Agreement.
                Notwithstanding the foregoing, Navarre, by giving written notice
                to Label, may make any assignment to a subsidiary, other
                affiliated company or any company purchasing substantially all
                of its assets.

        18.5    THIRD PARTY BENEFICIARIES. No parties, other than Navarre and
                Label, are intended to be a third party beneficiary of this
                Agreement.

        18.6    ENTIRE AGREEMENT. This Agreement and all Schedules, Exhibits and
                Addenda attached hereto supersede all prior oral or written
                proposals and communications between the parties related to this
                Agreement, and shall not be modified, rescinded, waived or
                otherwise changed except pursuant to the written consent


                                     - 20 -

<PAGE>


                signed by a duly authorized corporate officer of each Party.
                This Agreement and the Schedules,. Exhibits and Addenda attached
                hereto set forth the entire agreement between the Parties with
                respect to the subject matter hereof. Both Parties agree that to
                the extent there are any terms contained in any invoices or
                purchase orders issued pursuant to the terms of this Agreement
                that vary with the terms of this Agreement, then the terms set
                forth in this Agreement shall govern unless such purchase order
                or invoice containing the contrary terms is signed by an officer
                of the Party against whom enforcement is sought.

        18.7.   NO INDUCEMENT. Each Party confirms that no inducements, promises
                or representations other than those set forth herein have caused
                it to enter into this Agreement.

        18.8.   WAIVER. No waiver of any provision or default under this
                Agreement shall affect the right of Label or Navarre to enforce
                such provision or to exercise any right or remedy in the event
                of any other default, whether or not similar, at a later time.

        18.9.   HEADINGS. The captions preceding the text of the various
                provisions of this Agreement are inserted solely for reference
                and shall not constitute a part of this Agreement nor affect its
                meaning, construction or effect. Every word or phrase defined
                herein shall, unless HEREIN SPECIFIED TO THE CONTRARY, have the
                same meaning throughout this Agreement. As used herein, whenever
                applicable, the singular shall include the plural and the plural
                shall include the singular, the masculine shall include the
                feminine and the feminine shall include the masculine.

        18.10.  RELIANCE. Navarre shall have no obligation whatsoever to make
                any investigation of the facts relevant to any warranty or
                representation made by Label herein. Neither the furnishing by
                Label nor the receipt by Navarre of any document shall impair
                Navarre's absolute rights to rely, to have relied, and to
                continue to rely on any warranties or representations made by
                Label in this Agreement or the Schedules, Exhibits and Addenda
                attached hereto in connection with such document or the contents
                thereof.

        18.11.  FORCE MAJEURE. In the event of any act of God or force majeure,
                such as strikes, lockouts, accidents, fires, delays in
                manufacturing, delays in delivery of materials, labor
                controversy, government actions, war or any other causes beyond
                their control, neither Party shall be responsible for delay in
                performance hereunder nor shall incur liability to the other due
                to the resulting inability to perform provided that the Party
                relying on such events of force majeure gives notice to the
                other Party of the cause and anticipated duration within thirty
                (30) days of the occurrence of such event. In the event the
                conditions continue for a period in excess of six (6) months,
                then either Party may terminate this Agreement.

        18.12.  VALIDITY. If any part of this Agreement shall be determined to
                be invalid or unenforceable by a court of competent jurisdiction
                or by any other legal



                                     - 21 -

<PAGE>

                constituted body having the jurisdiction to make such
                determination, the remainder of this Agreement shall remain in
                full force and effect provided the part of this Agreement thus
                invalidated or declared unenforceable is not essential to the
                intended operation of this Agreement.

        18.13.  COUNTERPARTS. This Agreement may be executed in any number of
                counterparts which, when taken together, shall constitute one
                and the same instrument.

19.     PRECONDITIONS TO NAVARRE'S SIGNATURE. Prior to Navarre's execution of
        this Agreement, Label shall have provided to Navarre all of the
        following, in form and substance satisfactory to Navarre:


        19.1    Incumbency Certificate setting forth (i) a certified copy
                of Label's Articles of Incorporation/Organization, together
                with all amendments thereto; (ii) a copy of Label's
                By-Laws/Operating Agreement, together with all amendments
                thereto; (iii) a Certificate of Good Standing issued by the
                Secretary of State of Label's state of organization and any
                states in which it has a significant business office; (iv)
                Label's existing officers/managers; (v) Label's chief executive
                office and principal place of business; and (vi) a copy of the
                resolutions of Label's Board of Directors/Governors authorizing
                and approving this Agreement.

        19.2.   List of Label's current, owners-directors/governors and
                officers/managers.

        19.3.   Such other documents, information and actions as Navarre may
                reasonably request.

 The Parties, by the actions of their authorized representatives, have executed
 this Agreement, including the attached Schedules, Exhibits and Addenda, as of
 the date first noted above.


BODYGUARD RECORDS.COM, INC.          NAVARRE CORPORATION

Signature: /s/ John Rollo            Signature: /s/ James S. Chiado
           --------------------                ---------------------

Typed/Printed Name:  John Rollo      Typed/Printed Name:  James S. Chiado
                   ---------------                     -------------------

Title:  President                    Title:  VP/GM Independent Music
      -------------                          ------------------------------


                                     - 22 -


<PAGE>


                                                  REVIEWED AND COMPLETED
                                                 (OR INTENTIONALLY LEFT BLANK)
                                             By: __________________  [INITIALS]
                                                 ON BEHALF OF  BODYGUARD
                                                 RECORDS.COM. Inc.

                                             DATE: ____________________, 2001


                                   SCHEDULE A
                          TO DISTRIBUTION AGREEMENT OF

                                JANUARY 18, 2001
                                     BETWEEN

                           BODYGUARD RECORDS.COM, INC.
                                       AND

                               NAVARRE CORPORATION

                                   BASE PRICES


  Current Base Prices:

Suggested        Base Price Charged     Suggested        Base Price Charged
Retail Price        To Navarre(1)       Retail Price        to Navarre(1)

    2.99                   .96             16.98               8.16
    3.49                  1.34             17.98               8.44
    3.99                  1.50             18.98               8.97
    4.98                  1.92             19.98               9.40
    5.98                  2.20             23.98              11.04
    6.98                  2.88             24.98              11.37
    7.98                  3.45             25.98              11.71
    8.98                  3.93             27.98              12.86
    9.98                  4.51             29.98              13.82
   10.98                  4.89             30.98              14.25
   11.98                  5.85             31.98              14.73
   12.98                  6.28             32.98              15.16
   13.98                  6.81             33.98              15.64
   14.98                  7.20             39.98              18.43
   15.98                  7.72


(1) The Base Prices set forth above have not been adjusted for any discounts
    described in this Agreement Growth

                             GROWTH INCENTIVE REBATE

       Navarre's Annual Net Sales
              (in U.S. Dollars)                              Growth
          To Label for Recordings                Incentive Rebate/Percentage
          -----------------------                ---------------------------

                  0 - $2,000,000                               0
            $2,000,001 - $4,000,000                           2%
            $4,000,001 - $8,000,000                           4%
            $8,000,001 - $12,000,000                          5%
            $12,000,001 - $15,000,000                         6%
              $15,000,001 and over                            7%


                                      -23-

<PAGE>





                                                  REVIEWED AND COMPLETED
                                                 (OR INTENTIONALLY LEFT BLANK)
                                             By: __________________  [INITIALS]
                                                 ON BEHALF OF  BODYGUARD
                                                 RECORDS.COM. Inc.

                                             DATE: ____________________, 2001


                                  SCHEDULE A-2
                          TO DISTRIBUTION AGREEMENT OF
                                JANUARY 18, 2001
                                     BETWEEN
                           BODYGUARD RECORDS.COM, INC.
                                       AND
                               NAVARRE CORPORATION


                              CANADIAN BASE PRICES

  Current Canadian Base Prices (in Canadian Dollars):


                                      Suggested                  Base Price
                                        Retail $                 to Navarre
                                        --------                 ----------
        CD Maxi                           6.98                      3.76
        CD Budget                         8.98                      4.35
        CD Low Mid Price                 13.98                      6.75
        CD Mid Price                     15.98                      7.65
        CD High Mid Price                18.98                      8.47
        CD Full Price                    20.98                     10.25
        CD Double                        32.98                     15.15
        CD High Double                   39.98                     19.00
        CD Box Set                       44.98                     22.25
        CS Full Cassette                 12.98                      6.15
        Video Reg VHS                    21.98                      9.30
        Video High VHS                   24.98                     12.30
        DVD Music                        31.98                     15.50



                                      -24-


<PAGE>





                                                  REVIEWED AND COMPLETED
                                                 (OR INTENTIONALLY LEFT BLANK)
                                             By: __________________  [INITIALS]
                                                 ON BEHALF OF  BODYGUARD
                                                 RECORDS.COM. Inc.

                                             DATE: ____________________, 2001




                                   SCHEDULE B
                          TO DISTRIBUTION AGREEMENT OF
                                JANUARY 18, 2001
                                     BETWEEN
                           BODYGUARD RECORDS.COM, INC.
                                       AND
                               NAVARRE CORPORATION


  LABEL'S CATALOG OF RECORDINGS                         UPC CODES
  -----------------------------                         ---------







                                      -25-


<PAGE>


                           BODYGUARD RECORDS.COM, INC.
                                    BARCODES



      Naked Underneath-        8 02912 - 0001 - 2 9
      Bay City Rollers         8 02912 - 0002 - 2 8
      Live at The Budokan      8 02912 - 0003 - 2 7
      Summer Snowmen-          8 02912 - 0004 - 2 6
      DeCambre-                8 02912 - 0005 - 2 5
      Matt Cheplic-            8 02912 - 0006 - 2 4
      Daphne Hero-             8 02912 - 0007 - 2 3
      Quiet Riot-              8 02912 - 0008 - 2 2
      Love Saves The Day-      8 02912 - 0009 - 2 1
      June-




<PAGE>


                                                  REVIEWED AND COMPLETED
                                                 (OR INTENTIONALLY LEFT BLANK)
                                             By: __________________  [INITIALS]
                                                 ON BEHALF OF  BODYGUARD
                                                 RECORDS.COM. Inc.

                                             DATE: ____________________, 2001


                                  SCHEDULE 1.2
                          TO DISTRIBUTION AGREEMENT OF
                                JANUARY 18, 2001
                                     BETWEEN
                           BODYGUARD RECORDS.COM, INC.
                                       AND
                               NAVARRE CORPORATION


                  CURRENT "D/B/A'S" AND BUSINESS NAMES OF LABEL





                                     -26-


<PAGE>

                                                  REVIEWED AND COMPLETED
                                                 (OR INTENTIONALLY LEFT BLANK)
                                             By: __________________  [INITIALS]
                                                 ON BEHALF OF  BODYGUARD
                                                 RECORDS.COM. Inc.

                                             DATE: ____________________, 2001


                                 SCHEDULE 11.1.1
                          TO DISTRIBUTION AGREEMENT OF
                                JANUARY 18, 2001
                                     BETWEEN
                           BODYGUARD RECORDS.COM, INC.
                                       AND
                               NAVARRE CORPORATION
                           TRADEMARKS AND TRADE NAMES










                                      -27-


<PAGE>





                                   ADDENDUM I
                          TO DISTRIBUTION AGREEMENT OF
                                JANUARY 18, 2001
                                     BETWEEN
                           BODYGUARD RECORDS.COM, INC.
                                       AND
                               NAVARRE CORPORATION

              DIGITAL PERFORMANCE PHONORECORD DELIVERY RIGHTS.
              -----------------------------------------------

1. GRANT OF RIGHTS. Pursuant to this Addendum I, Label hereby grants, licenses,
transfers and assigns to Navarre on a non-exclusive basis:

        1.1.    All digital performance rights owned or controlled by Label,
                including (but not limited to) all rights of the copyright
                proprietors of the Masters under the Digital Performance Rights
                in Sound Recordings Act of 1995, the Digital Millennium
                Copyright Act, and any and all future pertinent legislation,
                insofar as such rights pertain to the digital performance of
                Masters ("Digital Performance Rights"). If Label is associated
                with a Publisher that owns or controls the Compositions embodied
                in such Masters, then Label further grants to Navarre (or will
                cause Publisher to grant to Navarre) a royalty-free license to
                perform the Compositions by means of broadcast over the internet
                in conjunction with Navarre's exercise of the Digital
                Performance Rights granted by Label.

        1.2.    All digital phonorecord delivery rights owned or controlled by
                Label, including (but not limited to) all rights of the
                copyright proprietors of Masters under the Digital Performance
                Rights in Sound Recordings Act of 1995, the Digital Millennium
                Copyright Act, and any and all future pertinent legislation,
                insofar as such rights pertain to digital phonorecord delivery
                of Masters ("Digital Phonorecord Delivery Rights").

        1.3.    The right to use the name, image and likeness of all performing
                Artists who recorded the Masters, in connection with Navarre's
                commercial exploitation of digital performance rights and
                digital phonorecord delivery rights; together with all key art
                embodying such Artist's name, image or likeness that is owned or
                controlled by Label and any promotional videos.

2. TERRITORY. The rights granted to Navarre by Label under this Addendum shall
apply anywhere in the world and shall not be limited to the Territory as defined
elsewhere in the Agreement.



                                     - 28 -


<PAGE>



3. PAYMENTS BY NAVARRE TO LABEL.

        3.1     In consideration of Label's grant of rights to Navarre as set
                forth in this Addendum, Navarre shall pay or credit Label $0.50
                for each occasion that a Title from a Recording is digitally
                delivered by Navarre to a consumer over the internet, except for
                deliveries made pursuant to Section 3.2 and 3.3 of this Addendum
                I.

        3.2.    Navarre is authorized to use Digital Performance Rights for no
                consideration in all cases where Navarre employs a streaming
                technology or other form of encryption scheme that minimizes the
                likelihood that a Master will be downloaded for permanent usage
                by consumers without payment to Navarre.

        3.3     No payment shall be due from Navarre to Label on account of any
                digital distribution of on a free or no-charge basis for
                promotion, review or advertisement purposes, or as a sales or
                marketing inducement. For these purposes, Navarre may express
                any discounts to the price it otherwise would charge to a
                consumer as free goods.

        3.4.    Navarre shall have sole discretion to sell, price, distribute,
                advertise, license, market and promote all rights licensed
                hereunder, and may use facilities it owns or controls in
                connection therewith. The amount payable to Label as set forth
                herein is based ON NAVARRE'S CURRENT PRICING ASSUMPTIONS AND
                POLICIES, which Navarre may change from time to time during the
                Term. Navarre shall give thirty (30) days prior written notice
                of any such modification to Label.

        3.5.    Navarre shall account to and pay Label as set forth in Section 4
                of the Agreement. Digital Performance Rights and Digital
                Phonorecord Delivery Rights, and all sums payable by Navarre to
                Label on account of Navarre's commercial exploitation of such
                rights, shall comprise a single, integrated,
                cross-collateralized accounting unit with all sums due or
                payable to Navarre on account of Navarre's distribution of
                Recordings under this Agreement.

4. COSTS.

        4.1.    Navarre shall be responsible to pay all costs in connection with
                the digital delivery process, including (but not limited to)
                storage of the digital data comprising each Master; the
                advertising, marketing and administration of Navarre's website
                and that of its agents and affiliates; the acquisition and
                maintenance of computer and telecommunications equipment and
                facilities; and credit and collections. For each digital
                delivery, Navarre shall pay any mechanical copyright royalty due
                to the Artists of the applicable Composition. For this purpose,
                Label grants and assigns to Navarre the benefit of any
                "controlled composition" or reduced mechanical royalty rate
                clause set forth in Label's agreement with the Artists of the
                applicable Master. If Label is affiliated with a Publisher that
                owns or controls the applicable Composition, then Label grants
                to Navarre (or will cause Publisher to grant to Navarre) a
                mechanical



                                      -29-


<PAGE>



                license to duplicate such Composition at a rate that is
                three-fourths (3/4) of the statutory copyright royalty rate in
                effect as of the date of the digital delivery.

        4.2     Label shall pay all costs in connection with the origination and
                production of Masters, including (but not limited to) all
                royalties payable to Artists, Publishers, and other persons
                rendering services in connection therewith; and all master use
                royalties or other royalties payable to any licensor of sound
                recordings. Label shall pay any per-unit royalties due to the
                American Federation of Musicians, the American Federation of
                Television and Radio Artists, or any other applicable union or
                guild.

5. OTHER PROVISIONS.

        5.1     Except as set forth in the Agreement and the Addenda attached
                and made a part thereof, all rights in and to the Masters are
                reserved by Label.

        5.2.    Navarre may sub-license or assign all rights granted herein,
                which similarly may be sub-licensed or assigned by any such
                licensee.

           Label shall supply Navarre with all production elements required by
           Navarre, including (but not limited to) digital master tapes or
           discs, key art, and label copy (to include the full name, address and
           performing rights society affiliation of all applicable Publishers),
           at Label's sole costs and expense. Label also shall supply Navarre
           with original analog production elements, if necessary. Label
           authorizes and directs Navarre to utilize the commercial CD version
           of Recordings embodying the Masters in connection with Navarre's
           commercial exploitation of rights hereunder, together with the key
           art appearing on the insert card and booklet packaged with such CD's.

6. TERM AND TERMINATION OF ADDENDUM. The terms and conditions of this Addendum
shall be in effect throughout the Term of the Agreement.

7. CAPITALIZED TERMS. All capitalized terms in this Addendum I shall have the
meanings given to them in the Agreement.

8. TERMS AND CONDITIONS OF AGREEMENT TO APPLY. Except where the context
indicates otherwise, the terms and conditions and the representations and
warranties contained in the Agreement shall apply to this Addendum I; provided,
however, that where the terms of this Addendum I and the Agreement conflict, the
terms of this Addendum I shall govern.


                                      -30-