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EXHIBIT 10.3 EMPLOYMENT AGREEMENT BETWEEN ENCORE SOFTWARE, INC. AND
MICHAEL BELL.


                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is entered into effective as of
the Effective Date (as defined below), by and between Encore Acquisition
Corporation, a corporation organized under the laws of the State of Minnesota
(the "Company") and Michael Bell ("Executive").


                              W I T N E S S E T H:

         WHEREAS, the Company is presently a wholly owned subsidiary of Navarre
Corporation ("Navarre") a corporation organized under the laws of the State of
Minnesota;

         WHEREAS, the Company was organized by Navarre for the sole purpose of
acquiring certain assets pursuant to, and in connection with, a federal
bankruptcy reorganization proceeding;

         WHEREAS, the Company desires to employ Executive as its Chief Executive
Officer;

         WHEREAS, Executive desires to be employed by the Company on the terms
and conditions contained herein;

         WHEREAS, the best interests of the Company are served by providing
Executive with long-term incentive compensation, including ownership rights
through restricted stock defined in this Agreement and vesting in Executive on
the terms and conditions set forth herein;

         WHEREAS, this Agreement includes certain restrictive covenants pursuant
to which Executive agrees to refrain for a specified period of time from
disclosure of the Company's confidential information, and from any interference
with relationships between the Company and its Executives and persons and
organizations doing business with the Company; and

         WHEREAS, such restrictive covenants and the availability to Company of
the services of Executive after the date hereof are important considerations in
Company's decision to provide Executive employment, and Company is unwilling to
employ Executive unless Executive executes and delivers this Agreement to
Company.

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Company and Executive agree as follows:

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                               A G R E E M E N T:

                                   ARTICLE 1.
                           Employment and Compensation

         1.1 Term and Position.

                  1.1.1 Subject to earlier termination as provided in ARTICLE 3
         hereof, during the Term of this Agreement (as defined in Section 3.1),
         Company shall employ Executive and Executive shall be employed by the
         Company in the capacity of its Chief Executive Officer.

                  1.1.2 While employed pursuant to this Agreement, Executive
         shall report only to the Board of Directors of the Company and shall
         devote substantially his full working time, effort, skill and attention
         to the affairs of the Company. In his capacity as Chief Executive
         Officer, Executive shall perform such duties as the Board of Directors
         shall direct from time to time which duties shall be consistent with
         the Executives' position. The Company shall not require the Executive
         to perform duties of any other office without the consent of the
         Executive, nor shall the Company appoint a person or reduce the
         Executive's responsibilities in any manner which would likely reduce
         the ability of the Executive to effect the operations of the Company.
         The Executive shall devote such time and attention as is reasonably
         necessary to carry-out his duties as the Chief Executive Officer.

                  1.1.3 Deleted Intentionally.

                  1.1.4 The Executives principle place of work shall be the
         Company's principle executive offices which offices shall not be
         located outside the Southern California area without the consent of the
         Executive.

         1.2 Salary and Bonus Compensation.

                  1.2.1 For the services and duties to be rendered and performed
         by the Executive hereunder, Company shall pay Executive for every year
         of this Agreement a salary (the "Initial Base Salary") of One Hundred
         Eighty-Five Thousand and no/100 U.S. Dollars ($185,000.00).

                  1.2.2 Salary adjustments in future years of this Agreement
         shall be determined annually by the Board of Directors, but in no event
         will Executive's annual salary be reduced below the Initial Base Salary
         adjusted for the increase, if any, in the Consumer Price Index as
         published by the U.S. Department of Commerce for the area in which the
         principle executive offices of the Company are located from the
         Effective Date. Executive's annual salary shall be payable in equal,
         semi-monthly installments or at such time as is customary for the
         payment of executive payroll of the Company. Such payments shall be
         made without offset or reduction other than for taxes or other amounts
         required to be withheld or deducted by law or court order.


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                  1.2.3 Executive shall be entitled to an annual performance
         bonus of up to 40 percent of Executive's annual salary to be determined
         by the Board of Directors of the Company, at its sole discretion, based
         upon: (i) Executive's satisfaction of certain performance objectives;
         and (ii) the Company's satisfaction of certain performance objectives.
         The performance objectives of Executive and the Company shall be
         established by mutual agreement of Executive and the Board of
         Directors.

         1.3 Signing Bonus. Executive shall be entitled to a bonus of Five
Thousand Five Hundred and no/100 Dollars ($5,500.00) payable upon the Effective
Date.

         1.4 Benefits. During the Term of this Agreement, the Company shall make
available to Executive the usual and customary benefits offered by the Company
from time to time to its executives. The Company will use reasonable efforts to
make available to the Executive health insurance benefits on such terms as the
Company shall determine.

         1.5 Vacation. Executive shall receive three (3) weeks of vacation per
year during the first two (2) years of the Term of this Agreement and four (4)
weeks of vacation per year during the remainder of the Term of this Agreement.

         1.6 Expenses. The Company shall periodically reimburse Executive for
reasonable business expenses incurred in connection with his duties upon
submission of an itemized accounting thereof to the appropriate Company
personnel.

         1.7 Car Allowance. In addition to any other benefits, the Company shall
pay to the Executive a non-accountable car allowance in the amount of Seven
Hundred Fifty and no/100 Dollars ($750.00) per month.

         1.8 D & O Insurance. The Company shall use reasonable efforts to obtain
director's and officer's liability insurance covering the actions of the
Executive in his capacity as an officer of the Company in such amounts of
coverage and at such premiums as the Company determines is reasonable under the
circumstances.

                                   ARTICLE 2.
                           Documents, Confidentiality

         2.1 Definition. For purposes of this Article, the term "Company" shall
include any and all subsidiaries of the foregoing and any entities related
through common controlling ownership to the Company.

         2.2 Documents. Executive shall not (except in the performance of
Executive's duties hereunder) at any time or in any manner, make or cause to be
made any copies, pictures, duplicates, facsimiles or other reproductions or
recordings or any abstracts or summaries of any reports, studies, memoranda,
correspondence, manuals, records, plans or other written, printed or otherwise
recorded materials of any kind whatever belonging to or in the possession of the
Company or any customer or client of the Company. Executive shall have no right,
title or


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interest in any such material, and Executive agrees that (except in the
performance of Executive's duties under this Agreement) Executive will not,
without the prior written consent of the Company, remove any material from the
premises of the Company and that Executive will surrender all such material to
the Company immediately upon the termination of Executive's services or at any
time prior thereto upon the request of the Company.

         2.3 Proprietary Information, Confidentiality. Without the prior written
consent of the Company (which may be withheld with or without reason), Executive
shall not at any time (after the date hereof, whether during or after the term
of this Agreement), directly or indirectly, use for Executive's own benefit or
purposes or for the benefit or purposes of any other person, firm, partnership,
association, corporation or business organization, entity or enterprise, or
disclose (except in the performance of Executive's duties hereunder) in any
manner to any person, firm, partnership, association, corporation or business
organization, entity or enterprise, any trade secrets, information, data,
know-how or knowledge (including, but not limited to, trade secrets,
information, data, know-how or knowledge related to costs, products, equipment,
computers, computer software, manufacturing know-how and processes,
merchandising and marketing methods, suppliers, customers, personnel training
programs, business expansion plans or financing) which is proprietary to the
Company or any client or customer of the Company. This Section 2.3 shall not
apply to any such data, information, know-how or knowledge which (a) is publicly
known or which hereafter becomes publicly known through no fault of Executive;
or (b) the disclosure of which is legally compelled. Executive acknowledges that
the Company intends any and all information referred to above to be proprietary
unless a policy to the contrary is adopted by the Company's Board of Directors.

         2.4 Improvements and Inventions.


                  2.4.1 Notification and Disclosure. Executive shall promptly
         notify the Company in writing of the existence and nature of, and shall
         promptly and fully disclose to the Company, any and all ideas,
         products, processes, improvements and inventions, whether or not they
         are believed to be patentable (all of which are hereinafter sometimes
         referred to as "Inventions"), which Executive has conceived or first
         actually reduced to practice and/or may conceive or first actually
         reduce to practice during the term of this Agreement and any extension
         thereof or which Executive may conceive or reduce to practice within
         six (6) months after termination of this Agreement or any extension
         thereof. The definition of Invention shall not include any idea,
         product, process, improvement or invention for which no equipment,
         supplies, facility or trade secret information of the Company was used
         and which was developed entirely on Executive's own time, and which
         does not relate to the "Restricted Business" (as defined below) of the
         Company or to the Company's actual anticipated research or development
         known to the Executive, or which does not result from any work
         performed by Executive for the Company.

                  2.4.2 Ownership of Inventions and Work Product. All Inventions
         and all right, title, and interest of every kind and nature, in and to
         any intellectual property, including, but not limited to, any computer
         software programs, trademarks, service marks, copyrights, films,
         scripts, ideas, creations, processes, properties and products invented,

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         created, written, developed, furnished, produced, or disclosed by
         Executive, in the course of rendering services to the Company under and
         pursuant to this Agreement relating to the Restricted Business
         (hereinafter "Work Product") shall be the sole and exclusive property
         of the Company or its nominee. All such Work Product shall be
         considered a "work for hire" and the Executive hereby sells assigns,
         transfers and conveys all of his right, title and interest therein to
         the Company, and during the term of Executive's employment and
         thereafter, whenever requested to do so by the Company, Executive shall
         execute and assign any and all applications, assignments and other
         instruments which the Company shall deem necessary or convenient in
         order to apply for and obtain Letters Patent or Copyright Registration
         of the United States and/or of any foreign countries for such
         Inventions and/or Work Product and in order to assign and convey to the
         Company or its nominee the sole and exclusive right, title and interest
         in and to such Inventions and/or Work Product, and Executive will
         render reasonable aid and assistance in any interference or litigation
         pertaining thereto, all expenses reasonably incurred by Executive at
         the request of the Company to be borne by the Company. In this
         connection, as to work which requires Executive's time after
         termination of this Agreement, Executive shall be entitled to
         compensation for the time requested by the Company at an hourly rate
         equal to the pro rata hourly rate at which Executive is being paid for
         a monthly period immediately prior to the request for services. All
         Inventions and Work Product resulting from Executive's services to the
         Company shall be considered "work for hire" for purposes of the United
         States copyright laws and other intellectual property laws and all
         rights therein shall be the exclusive property of the Company.

         2.5 Business Relationships. Executive hereby agrees that, during the
Restricted Period, Executive shall not, without prior written consent of the
Company (which may be withheld with or without reason):

                  2.5.1 request, induce, advise or encourage any customer or
         supplier, or any other entity having business dealings with the
         Company, to the extent such business dealings are in connection with
         the Restricted Business, to withdraw, curtail or cancel such business
         dealings; or

                  2.5.2 hire as employee or independent contractor, or request,
         induce, advise or encourage a termination of employment by, any other
         Executive of the Company, whether acting directly or indirectly and
         whether acting alone or together with or on behalf of or through any
         other entity.

         2.6 Interests in Other Businesses. Executive hereby agrees (as a part
of Executive's commitment to the Company) that, during the period commencing on
the date hereof and ending on the date Executive ceases to provide services to
the Company, Executive shall not have any financial or ownership interest,
directly or indirectly, whether alone or together with or on behalf of or
through any other entity whether as sole proprietor, partner, investor,
stockholder or any type of principal whatever, or as lender, guarantor, trustee,
beneficiary or otherwise, in any type of Restricted Business; provided, however,
that such interest shall not by itself include the



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ownership of less than five percent (5%) of the outstanding stock of a
corporation the shares of which are publicly traded (other than the Company).

         2.7 Obligations Regarding Employees, Agents and Contractors. Executive
will use his reasonable best efforts to obtain from all of the Company's
employees, officers, and contractors who have access to any confidential
information referred to herein their written agreement to keep all confidential
information of the Company confidential on substantially the same terms of this
ARTICLE 2 as if they were the Executive hereunder.

         2.8 Remedies.

                  2.8.1 Executive acknowledges and agrees that the Company's
         remedy at law for any breach of any of Executive's obligations under
         ARTICLE 2 of this Agreement would be inadequate, and agrees and
         consents that temporary and permanent injunctive relief may be granted
         in any proceeding that may be brought to enforce any provision of any
         of such sections, without the necessity of proof of actual damage. The
         Company's seeking or obtaining injunctive relief shall not prevent the
         Company from seeking damages in addition to temporary or permanent
         injunctive relief.

                  2.8.2 In the event that any dispute between the parties
         concerning this Agreement leads to legal action, the prevailing party
         shall be entitled to reimbursement by the other party for all its costs
         and expenses incurred in such action, including, without limitation,
         such party's reasonable attorneys' fees.

                  2.8.3 If any restriction on Executive's actions contained in
         this Agreement is considered by a court of competent jurisdiction to be
         too broad in scope, area or duration to permit enforcement of such
         restriction to its full extent, such restriction shall be considered
         modified and valid to the extent such court may determine is reasonable
         under the circumstances.

         2.9 Non-violation of Law and Restrictions.

                  2.9.1 Except as otherwise provided in any agreements set forth
         in Schedule 2.9 hereto, the Executive is not under any contractual
         restrictions (the restrictions) as to confidentiality, non-competition
         and/or non-solicitation. Executive has provided the Company with true
         and correct copies of all such agreements as amended. Executive will
         honor all such Restrictions and will not divulge to the Company any
         confidential information or trade secrets of any other person or
         entity in violation of any applicable law or agreement.

                  2.9.2 Executive will defend and indemnify Company against a
         claim that Executive has violated any such law or Restrictions.

         2.10 Infringement Indemnity from Executive.

                  2.10.1 Except as provided below, the Company will defend and
         indemnify Executive against a claim that any Work Product provided by
         Executive to the Company pursuant to this Agreement and used within the

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         scope of this Agreement infringes a United States copyright, trademark
         or patent and any reasonable attorney fees and costs incurred by
         Executive in connection with such claim.

                  2.10.2 Notwithstanding the foregoing, the Executive will
         indemnify the Company against a claim that any Work Product provided by
         Executive to the Company pursuant to this Agreement and used within the
         scope of this Agreement infringes a United States copyright or patent
         where the Executive has knowingly used the work of others, who are not
         employees or contractors of the Company who have assigned their rights
         in such work to the Company, in his Work Product.

         2.11 Definitions.

                  2.11.1 "Restricted Business" means any business any part of
         which consists of publishing video games, and any business of any kind
         in whole or in part similar to that engaged in by the Company prior to
         the termination of the Executive's employment.

                  2.11.2 "Restricted Period" means the period commencing on the
         date hereof and ending on the date which is two (2) years after the
         date that the Employee ceases to render services to the Company under
         this Agreement for any reason.

                                   ARTICLE 3.
                         Term of Agreement; Termination

         3.1 Term of Agreement. Unless earlier terminated pursuant to the
provisions of Sections 3.2 or 3.3 below, this Agreement shall have a term (the
"Term") of five years.

         3.2 Termination by the Company. The Company may terminate the
Executive's employment with the Company at any time for any or no reason.

         3.3 Termination by Executive. Executive may terminate his employment
and this Agreement at any time for any reason or no reason.

         3.4 Effect of Termination.

                  3.4.1 Notwithstanding the foregoing, the provisions of ARTICLE
         2, ARTICLE 3 and ARTICLE 4 shall survive any termination of the
         Executive's employment or this Agreement pursuant to this ARTICLE 3.

                  3.4.2 Except as provided below, upon termination of this
         Agreement or the Executive's employment by the Company, all of
         Executive's rights to compensation, benefits and expense reimbursement
         shall cease to accrue as of the date of such termination.

                  3.4.3 Notwithstanding the foregoing, if this Agreement or the
         Executive's employment by the Company is terminated by the Company
         within two (2) years after a Change of Control, the Company shall pay

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         the to Executive an amount equal to the Executive's compensation which
         would have been paid to the Executive during the period from the date
         of termination to the end of the Term had this Agreement not been
         terminated upon a Change of Control, provided that the maximum amount
         payable under this paragraph shall not exceed the maximum amount
         payable under Section 280G of the Internal Revenue Code of 1986
         (provided the Company makes a reasonable commercial effort to obtain
         shareholder approval under Section 280G) as amended without the
         imposition of any excise tax on the Executive or the denial of any
         deduction to the Company with respect to such payment.

                  3.4.4 Notwithstanding Section 3.4.2, if this Agreement or the
         Executive's employment is terminated by the Executive for Good Reason
         (as defined below) or by the Company for any reason other than death,
         disability or Cause (as defined below), the Executive shall continue to
         be entitled to receive the base salary, bonus (if there is a consistent
         past practice of bonus payments) and health benefits (or an amount
         equal to the net after tax equivalent of such health benefits if the
         Executive is not entitled to continue to participate in such health
         benefits under the terms of such health benefit programs) for the
         remainder of the Term without any obligation on the part of the
         Executive to mitigate any such payments provided that the Executive is
         not in breach of his obligations under ARTICLE 2 hereof and is not in
         breach of his obligations under any other agreement between the Company
         and the Executive, which breaches are not cured as provided for under
         this Agreement or other applicable agreement.

                  3.4.5 Nothing contained in this Agreement shall prevent the
         Company from terminating the Executive's employment with the Company
         (as opposed to this Agreement) for any reason or no reason and nothing
         contained herein shall prevent the Employee from terminating his
         employment with the Company for any reason.

         3.5 Certain Definitions. For purposes of this ARTICLE 3:

                  3.5.1 Disability shall mean any physical or mental impairment
         resulting in Executive's inability to perform the duties of his office
         for a period in excess of 60 days, as reasonably determined by a
         physician selected by mutual agreement of Executive (or his spouse or
         other representative in the event of Executive's mental incapacity) and
         the Company.

                  3.5.2 Cause. Termination for "Cause" shall mean:

                  3.5.2.1 the willful and continued failure by Bell to
         substantially perform his material duties under his Employment
         Agreement with the Company (other than any such failure resulting from
         Bell's incapacity due to physical or mental illness or any such actual
         or anticipated failure after the issuance of a Notice of Termination by
         Bell for Good Reason), after written demand for substantial performance
         of his material duties is delivered by the Company that specifically
         identifies the manner in which the Company believes Bell has not
         substantially performed his material duties, or

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                  3.5.2.2 the willful engaging by Bell in misconduct which is
         materially injurious to the Company, monetarily or otherwise. No act,
         or failure to act, on Bell's part shall be considered "willful" unless
         done, or omitted to be done, by him not in good faith and without
         reasonable belief that his action or omission was in the best interest
         of the Company.

                  3.5.2.3 Notwithstanding the foregoing, Bell shall not be
         deemed to have been terminated for Cause without (i) reasonable notice
         to Bell setting forth the reasons for the Company's intention to
         terminate for Cause, (ii) an opportunity for Bell, together with his
         counsel, to be heard before the Board, and (iii) delivery to Bell of a
         Notice of Termination from the Board finding that in the good faith
         opinion of the Board Bell was guilty of conduct set forth above in
         Sections 3.5.2.1, or 3.5.2.2 hereof, and specifying the particulars
         thereof in detail and (iv) a period not to exceed thirty (30) days
         after such Notice of Termination to cure such breach provided that Bell
         shall be entitled to only one cure period within any twelve (12)
         consecutive monthly period.

         3.5.3 Change in Control. A "Change in Control" shall occur if:

                  3.5.3.1 any person (as defined in Sections 3 (a) (9) and
         13(d)(3) of the '34 Act) becomes the "beneficial owner" (as defined in
         Rule 13d-3 promulgated pursuant to the '34 Act), directly or
         indirectly, of more than 50% of the combined voting power of the
         Company's or its parents then outstanding securities; provided,
         however, that if any such person is now the beneficial owner of more
         than 50% of such voting power as of the date of execution of this
         Agreement, the present existence of such ownership shall not constitute
         a "Change in Control" unless such person changes in identity or
         composition or the same person becomes the beneficial owner, directly
         or indirectly, of 50% of such voting power; or

                  3.5.3.2 the occurrence within any twelve (12)-month period
         during the term of the Agreement of a change in the Board with the
         result that the Incumbent Members (those directors who were directors
         as of the date hereof or whose replacements were approved by such
         directors) do not constitute a majority of the Board; or

                  3.5.3.3 the merger or consolidation of the Company or its
         parent corporation with or into another corporation or a transaction
         having a like effect, but only if such transaction results in the
         shareholders of the Company or the parent corporation of the Company,
         as the case may be, immediately before such event do not hold more than
         fifty percent (50%) of the voting power of the merged or consolidated
         companies; or

                  3.5.3.4 the consummation of an agreement to sell or otherwise
         dispose of all or substantially all of the Company's or its parent
         corporation's assets (including a plan of liquidation).

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         3.5.4 "Good Reason" for termination includes the occurrence of any of
following events without the prior consent of Executive:

                  3.5.4.1 A demeaning or a material adverse involuntary change
         in Executive's duties, status, title or position as Chief Executive
         Officer of the Company, such as the removal of Executive as Chief
         Executive Officer, or a reduction of his responsibilities without the
         consent of the Executive; or

                  3.5.4.2 A material change in the principle business of the
         Company; or

                  3.5.4.3 a reduction by the Company in Executive's base salary
         as in effect on the date hereof or as the same may be increased from
         time to time during the term of this Agreement; or

                  3.5.4.4 an involuntary transfer of Executive's place of work
         to a location which is more than fifty miles from Executive's place of
         work as of the date hereof; or

                  3.5.4.5 any material breach by the Company of any provision of
         this Agreement which is not cured within 30 days (10 days in the event
         of a failure to pay money) of written notice to the Company of such
         breach, provided however, that the Company shall be entitled to only
         one such cure period in any twelve (12) month period.

                                   ARTICLE 4.
                                     General

         4.1 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties concerning the subject matter hereof and
supersedes all prior agreements, arrangements and understandings between the
parties with respect to such subject matter. No representation, promise,
inducement or statement of intention has been made by or on behalf of either
party hereto that is not set forth in this Agreement. This Agreement may not be
amended or modified except by written instrument executed by the parties hereto,
duly authorized by majority vote of Company's Board of Directors.

         4.2 Binding Effect. The terms and provisions of this Agreement shall be
binding on and inure to the benefit of the Executive, his heirs, estate and
legal representatives, and shall be binding on and inure to the benefit of
Company, its affiliates, and its successors and assigns. Company shall only have
the right to assign this Agreement to any affiliate which it controls or to any
person or entity which buys all or substantially all of the assets of Company or
a controlling portion of the stock of Company, or with which Company merges or
consolidates.

         4.3 Governing Laws, Etc. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which it may be entitled. This Agreement shall
be governed by and be construed under the laws of the State of California,
except that the choice of law rules of such State shall not apply. In the event

<PAGE>

that any provision of this Agreement is held unenforceable, such provision shall
be severed and shall not affect the validity or enforceability of the remaining
provisions. The headings are for convenience only and shall not be taken into
account in interpreting this Agreement. Venue for any dispute shall lie in the
state or federal courts located in Hennepin County, Minnesota.

         4.4 Waivers. The failure of either party at any time or from time to
time to require performance of any of the other party's obligations under this
Agreement shall in no manner affect the right to enforce any provisions of this
Agreement at a subsequent time, and the waiver of any rights arising out of any
breach shall not be construed as a waiver of any rights arising out of any
subsequent breach.

         4.5 Withholding. The Company may deduct, from any compensation
(including, but not limited to, any incentive compensation) payable to the
Executive, the amount of any tax required by any governmental authority to be
withheld and paid to such authority for the account of the Executive.

         4.6 Notices. Any notice given under this Agreement shall be in writing
and sent by prepaid registered mail:

                  4.6.1 To the Company: at the address of its principal
         executive offices.

                  4.6.2 To Executive: at the address set forth in the books and
         records of the Company, as the same may be modified from time to time.

                  4.6.3 Any notice shall be deemed given when mailed as provided
         above.

         4.7 Effective Date. The "Effective Date" shall be the close of the
acquistion by the the Company of purchase of selected assets of Encore, Inc. as
approved by the Bankruptcy Court.

[SIGNATURE PAGE FOLLOWS]


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         IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first above written.

                                           ENCORE ACQUISITION CORPORATION


________________________________             By:___________________________
         Michael Bell                        Its:__________________________




<PAGE>


                                LIMITED GUARANTY:

         The undersigned hereby guarantees the collection of all amounts of
salary, bonus and other monetary compensation payable by Encore Acquisition
Corporation to Michael Bell pursuant to that certain Employment Agreement dated
August __, 2002 between Encore and Michael Bell (the "Employment Agreement")
during the twelve month period beginning on the Effective Date of the Employment
Agreement and agrees to pay any reasonable attorney fees and expenses incurred
by Bell in successfully enforcing his rights under this Guaranty, provided that
in no event shall the undersigned be liable for an amount in excess of $250,000
in the aggregate under this Guaranty.

         This Guaranty shall be governed by the laws of the State of California
without regard to such State's conflict of laws principles.

         Executed this __ day of August, 2002.

         Navarre Corporation


         By: ________________________
         Its: _____________________