EX-10.1






EXHIBIT 10.1




FOURTH AMENDMENT TO FOURTH AMENDED AND

RESTATED CREDIT AGREEMENT




     This FOURTH AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), is dated as of the 30th day of October, 2008, 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 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 2 hereof:




     (a) The following definition set forth in Annex A to the Credit Agreement is hereby
amended and restated, effective as of September 30, 2008, in its entirety to read as follows:



     “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, 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 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, 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



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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,
and (viii) 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 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.”



     (b) The following definition set forth in Annex A to the Credit Agreement is hereby
amended and restated in its entirety to read as follows:



     “Index Rate” means, for any day, a rate per annum equal to the highest of (a) the rate
last quoted by The Wall Street Journal as the “base rate on corporate loans posted by at least 75%
of the nation’s largest banks” in the United States or, if The Wall Street Journal ceases to quote
such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal
Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or,
if such rate is no longer quoted therein, any similar rate quoted therein (as determined by Agent)
or any similar release by the Federal Reserve Board (as determined by Agent), (b) the sum of 0.5%
per annum and the Federal Funds Rate, and (c) the sum of (x) the LIBOR Rate, for an Interest Period
of three months as it appears on Reuters Screen LIBOR01 Page as of 11:00 A.M. (London, England
time) two (2) Business Days prior to such day, plus (y) the excess of the Applicable Revolver LIBOR
Margin over the Applicable Revolver Index Margin, in each instance, as of such day. Any change in
the Index Rate due to a change in any of the foregoing shall be effective on the effective date of
such change in the “bank prime loan” rate, the Federal Funds Rate, or LIBOR Rate for a LIBOR Period
of three months. If no such offered rate for the LIBOR Rate exists, such rate will be the rate of
interest per annum, as determined by the Agent (rounded upwards, if necessary, to the nearest 1/100
of 1%) at which deposits of Dollars in immediately available funds are offered at 11:00 A.M.
(London, England time) two (2) Business Days prior to the applicable day by major financial
institutions reasonably satisfactory to the



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Agent in the London interbank market for such LIBOR Period for the applicable principal amount
on such date of determination.”


SECTION 2. Conditions to Effectiveness. This Amendment shall be effective once it has been
duly executed and delivered by the Borrower, the Credit Parties, the Agent and each Lender.



SECTION 3. 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;



     (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; and



     (d) no Default or Event of Default has occurred and is continuing.


SECTION 4. 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



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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 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.



SECTION 6. 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 7. 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:  	 	 



S-2









 






	 	 	 	 	 



	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL 
CORPORATION, as Agent and
Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



S-2









 






	 	 	 	 	 




     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:  	 	 



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:  	 	 



 









 







	 	 	 	 	 
	 	FUNIMATION CHANNEL, INC., as Credit Party

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: