CONFIDENTIAL
TREAMTNET HAS BEEN REQUESTED


FOR
PORTIONS OF THIS EXHBIT


EXHIBIT
10.23


DISTRIBUTION
AGREEMENT





THIS
AGREEMENT is made and entered into on March 28,2002,
by and between Roxio Inc., a Delaware corporation (“Roxio”), and Navarre, Inc.,
a Minnesota corporation (“Distributor”).




IN
CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES AGREE AS
FOLLOWS:




1.           DEFINITIONS




1.1           “Like Distributor”
shall mean a distributor that sells the same Products to the same customer base
in the Territory.




1.2           “Price List” shall
mean the Roxio Distribution Authorized Products and Price List, as amended from
time to time by Roxio, prevailing at the time Roxio accepts a Purchase Order
from Distributor.




1.3           “Products” shall mean
those products and services listed on Exhibit A
hereto.  Products may be changed, deleted or added by Roxio, at its
sole discretion.  Roxio shall be under no obligation to continue the
production of any Product.




1.4           “Purchase Order” shall
mean the written purchase orders by which Distributor orders the Products, as
more particularly described in Section 4 below.




1.5         
“Term” shall
mean the term of this Agreement, which shall commence on the Effective Date and
continue for one (1) year thereafter, unless earlier terminated under the
provisions of Section 14 of this Agreement.  This Agreement shall
automatically renew for additional one (1) year periods, unless either party
provides notice of termination sixty (60) days prior to the expiration of the
then-current term.




1.6          
“Territory”
shall mean the Territory set forth on Exhibit
B.




2.           APPOINTMENT
AND AUTHORITY




2.1           Appointment.  Roxio
hereby appoints Distributor as Roxio’s non-exclusive distributor for the
Products to the Distribution Accounts in the Territory, subject to the terms and
conditions contained in this Agreement, and Distributor hereby accepts such
appointment.  Distributor shall have the right to license Products
from Roxio for distribution to the Distribution Accounts in the Territory,
subject to the terms of this Agreement, including but not limited to, the
restrictions specified in Section 11.2.  Roxio reserves the right to
appoint other distributors and representatives and/or to market Products
directly to the Distribution Accounts and in the Territory.




2.2           Independent
Contractors.  The parties shall act as independent contractors
in the performance of this Agreement, and nothing contained in this Agreement
shall be construed to (i) give either party the power to direct and control the
day-to-day activities of the other; (ii) constitute the parties as partners,
joint venturers, co-owners, agents or otherwise as participants in a joint or
common undertaking; or (iii) allow Distributor to create or assume any
obligation on behalf of Roxio for any purpose
whatsoever.  Specifically, without limitation, neither party will
enter into any Agreement, contract, or arrangement with any government or
government representative or with any person, firm, corporation or other
enterprise imposing any legal obligations or liability of any kind whatsoever on
the other and, without limiting the generality of the foregoing, neither party
will sign the other’s name to any commercial paper, contract or other instrument
and will not contract any debt or enter into any Agreement, either expressed or
implied, binding the other to the payment of money and/or in any other
regard.  All financial obligations associated with Distributor’s
business are the sole responsibility of Distributor.  All sales and
other agreements between Distributor and its customers are Distributor’s
exclusive responsibility and shall have no effect on Distributor’s obligations
under this Agreement.









3.           DISTRIBUTOR
GENERAL OBLIGATIONS




3.1           Promotion of
Products.  Distributor shall, at its own expense, vigorously
promote the sale of the Products to all Distribution Accounts, to Distributor’s
maximum capacity.




3.2           Market
Assistance.  Distributor shall, at it own expense and
consistent with the sales policies of Roxio, (i) assist Roxio in assessing
customer requirements for the Product, including modifications and improvements
thereto, in terms of quality, design, functional capability, and other features;
and (ii) submit market research information, as reasonably requested by Roxio,
regarding competition and changes in the market in the Territory.




3.3           General
Conduct.  Distributor agrees:  (i) to conduct
business in a manner that reflects favorably at all times on the Products and
the good name, goodwill and reputation of Roxio; (ii) to avoid deception,
misleading or unethical practices that are or might be detrimental to Roxio or
the public, including but not limited to, disparagement of Roxio or its
Products; (iii) not to publish or employ or cooperate in the publication or
employment of, any misleading or deceptive advertising material; (iv) to make no
representations, warranties or guarantees to customers or to the trade with
respect to the specifications, features or capabilities of Products that are
inconsistent with the literature distributed by Roxio; and (v) not to engage in
any acts prohibited by local, state, federal or national law, including
antitrust or unfair trade practice laws, which prohibit various forms of
predatory, discriminatory or below-cost pricing.




3.4           Export
Requirements.  Distributor shall, at its own expense, pay for
all export licenses and permits, pay customs charges and duty fees, and take all
other actions required to accomplish to export of the Products purchased by
Distributor.  Distributor warrants that it shall comply in all
respects with the export and re-export restrictions applicable to the Products,
including those set forth in the export license for every Product shipped to
Distributor, and shall indemnify Roxio for any losses resulting from
Distributor’s noncompliance.




3.5           Reports.  Distributor
agrees to prepare and forward to Roxio, reports as may be reasonably requested
by Roxio, including, without limitation, monthly reports of inventory on hand,
intra-location transfers and sales data relating to the
Products.  Within ten (10) days after the close of each month,
Distributor shall submit sales data which shall include, without limitation:
Distributor shipping location; customer account number; customer name, address,
city, state, zip code, phone number; Distributor part number; Roxio part number;
quantity of Products sold (either sold or RMA issued); and customer price using
cost of goods sold.




3.6           Audit
Rights.  Roxio reserves the right to have an authorized Roxio
representative, at Roxio’s cost, audit Distributor’s records relating to sales
and inventories of Products, including, without limitation, records pertaining
to any claims submitted by Distributor for sales and inventories of Products
(including claims for price protection, stock rotation, returned products, ship
from stock and debit, and other transactions) or otherwise as necessary to
verify Distributor’s compliance with this Agreement.  Upon prior
written notice, Distributor shall provide access to such records during normal
business hours at Distributor’s locations(s).  Distributor agrees to
maintain all such records by location for a minimum of three (3) years after the
date of the transaction.  If an audit indicates an underpayment of
five percent (5%) or more of any amounts due hereunder or other non-monetary
noncompliance, Distributor will promptly reimburse Roxio for the reasonable cost
of the audit.  Such rights will remain in effect through a period
ending one year from the termination of this Agreement.




4.           PURCHASE
TERMS




4.1           Purchase
Orders.  All orders for Products submitted by Distributor shall
be initiated by a written purchase order (“Purchase Order”) in accordance with
this Section 4 provided, however, Distributor may place an order verbally, by
fax if a confirmational Purchase Order is received by Roxio within five (5) days
thereafter.  All orders shall be for at least the Minimum Shipment
Quantity as defined in Section 5.4.  No Purchase Order shall be
binding until accepted by Roxio in writing.  Roxio shall have no
liability to Distributor with respect to Purchase Orders that are not accepted
in writing.  Any additional or inconsistent terms in Distributor’s
Purchase Order or acknowledgment are considered deleted and of no force or
effect.







4.2           Purchase Order
Terms.  All Purchase Orders shall state:  (i) the type,
model and quantity of the Products ordered, using Roxio part numbers; (ii) the
“billable” purchase order number; (iii) the requested delivery date; (iv) the
requested location for shipment and (if different) the “bill to”
address.  All Purchase Orders must be signed by an authorized
purchasing agent of Distributor; provided, however, that absent express
instructions from Distributor to the contrary, Roxio shall be entitled to assume
that any signed Purchase Orders are duly authorized.  Standard
lead-time for Purchase Orders of standard Products initially is four (4) weeks,
although Roxio may modify such lead-time from time to time.  Roxio
shall use its reasonable commercial efforts to deliver Products as soon as is
reasonably practical.




4.3           Change
Orders/Cancellations.  Distributor may cancel a Purchase Order
or reschedule delivery under a Purchase Order within forty-eight (48) hours of
Roxio’s receipt of the Purchase Order.  Outside of this forty-eight
hour period, Distributor may only cancel a Purchase Order or reschedule delivery
under a Purchase Order fifteen (15) days or more in advance of the scheduled
delivery date for such Purchase Order; provided, however, that in the case of
rescheduling by the Distributor, the rescheduled date for shipment must be
within sixty (60) days of the originally scheduled shipping
date.  Roxio reserves the right to request non-cancelable orders for
specific circumstances, at Roxio’s sole option.




4.4           Distributor
Breach.  Notwithstanding any prior acceptance by Roxio of a
Purchase Order, Roxio shall not be obligated to ship Products if Distributor is
in breach of this Agreement at the time of the scheduled shipment.




4.5           Delivery.  All
Products shall be packed for shipment in Roxio’s standard shipping cartons,
marked for shipment to Distributor’s address requested in the Purchase Order,
and delivered to Distributor or its carrier EXW (per Incoterms 2000), at Roxio’s
shipping dock at the location stated on the Roxio Purchase Order (or if not
stated, Roxio’s then-current headquarters in California, USA) Title to Products
and risk of loss shall pass to Distributor when such Products leave the
applicable Roxio shipping dock in the U.S. Roxio will select the ground shipment
carrier and pay ground freight charges.  Drop shipments to
Distributor’s customers shall be permitted on a case-by-case basis, with Roxio’s
written approval.  If Distributor requests a method of shipment other
than ground shipment, Distributor may select the method of shipment, carrier and
type of conveyance, at Distributor’s expense (subject to Section
5.4).  Roxio may make partial shipments of Products, which shall be
separately invoiced.  Partial shipments shall not affect Distributor’s
obligation relating to the balance of the Purchase Order.




4.6           Inspection/Acceptance.  Distributor
shall inspect all Products promptly following receipt and, within thirty (30)
days following receipt, shall notify the freight forwarder and Roxio of any
claim for damages or shortages.  Within thirty (30) days after receipt
(the “Inspection Period”), Distributor shall give Roxio notice of any claim that
a Product does not conform with Roxio’s published specifications in effect at
the time of Distributor’s order.  To reject a Product, Distributor
shall notify Roxio in writing or by fax of its rejection and request a Return
Material Authorization (“RMA”) number.  Roxio shall issue RMA numbers
in accordance with its then current standard procedures.  Within ten
(10) days of receipt of the RMA number, Distributor shall return the rejected
Product to Roxio (i) in accordance with Roxio’s RMA policies, procedures and
instructions; (ii) freight prepaid; and (iii) in its original shipping carton
with the RMA number prominently displayed on the outside of the
carton.  Roxio reserves the right to refuse to accept any rejected
Products that do not bear an RMA number on the outside of the carton or which
otherwise do not comply with Roxio’s RMA policies, procedures and
instructions.  Any Product not properly rejected by Distributor within
the Inspection Period shall be deemed accepted.




5.           DISTRIBUTOR
PRICE; PAYMENT




5.1           Price.  Distributor’s
purchase price (the “Price”) for each of the Products purchased by Distributor
for resale to the Distribution Accounts shall be as set forth in the Price List
in effect at the time of Roxio’s acceptance of a Purchase Order from
Distributor, except as otherwise set forth in this Section 5.  Prices
are stated and shall be paid in United States currency.  Distributor
shall be free to establish its selling price for sale of the Products to
Distributor’s customers in the Distribution Accounts.







5.2          Price
Modifications.  Roxio reserves the right to revise the Price
for any Product at any time upon Roxio’s publishing revisions to the Price List
and providing written notice to Distributor of such changes.  Such
revised Prices shall apply to all Purchase Orders accepted after the date of
such revision, except as provided below.




(a)           In
the event of a Price increase, Distributor may order any quantity of Products
during the thirty (30) day period after Distributor receives notice of change of
Price for such Product, for requested delivery within sixty (60) days of the
date of notification at the non-revised (lower) Price.  Any Products
which are scheduled for delivery more than sixty (60) days from the date of such
notification shall be invoiced at the revised (increased) Price.




(b)           In
the event of a Price decrease for a Product or if Roxio offers a Product at a
lower price to any other Like Distributor, Roxio shall apply such decreased
Price to all units of such Product on order but unshipped at the time of
notification of such Price decrease.  In addition, for Price decreases
on a Product, (i) Distributor shall receive a credit for [***]1 for all
such Products which are still in Distributor’s inventory or such products which
are in transit to Distributor and were shipped to Distributor within [***] prior
to Roxio’s notice of the Price decrease; and (ii) at Distributor’s option, those
customers listed in Exhibit C shall receive [***] for all such Products that (a)
are still in a customer’s inventory; provided that customer can provide written
documentation reasonably acceptable to Roxio that such Products are in
customer’s inventory and (b) are in-transit to customer and were shipped to such
customer within [***] prior to Roxio’s notice of the Price
decrease.  To qualify for an inventory credit, Distributor must,
within [***] after the date of such Price decrease, provide Roxio with a written
list of all units of such Product for which Distributor claims credit, and Roxio
shall have a right of access (during normal business hours) to audit such
claims.  Audit and credit verification shall be completed within [***]
after Roxio received a written claim from
Distributor.  [***]  To quality for any credits under this
Section 5.2, Distributor must provide Roxio with a promotion number of UPC code
for all units of Product for which Distributor claims credit.




5.3          Taxes.  The
Price does not include any federal, state or local taxes, duties or assessments
that may be applicable to the sale of the Products, and which taxes, duties or
assessments shall be paid by Distributor.  When Roxio has the legal
obligation to collect such taxes, duties or assessments, the appropriate amount
shall be added to Distributor’s invoice and paid by Distributor, in accordance
with the payment terms set forth in Section 5.5 below, unless Distributor
provides Roxio with a valid tax exemption certificate authorized by the
appropriate taxing authority.




5.4          Delivery
Costs.  The Price does not include any insurance or expedited
shipping expenses, special packing expenses, or similar charges associated with
delivery of the Products to Distributor (the “Delivery Costs”), which shall be
paid by Distributor, in accordance with the payment terms, provided that
Distributor orders and accepts delivery of the minimum per shipment quantity
(the “Minimum Shipment Quantity”) for a Product specified in the Price List or
as otherwise specified by Roxio.  Shipments of smaller quantities of a
Product requested by Distributor shall be shipped freight collect by
Distributor’s designated freight carrier.  Notwithstanding anything
else herein, freight charges for ground shipments only shall be paid by
Roxio.  If Distributor requests an alternative shipment method,
Distributor shall pay the difference between the charges for ground shipment and
such alternative shipment method.







1 [***]
Omitted pursuant to a confidential treatment request.  The
confidential portion has been filed separately with the SEC.









5.5          Payment.  Distributor’s
credit terms shall be subject to review and approval of Roxio’s credit
department from time to time.  Standard terms for payment of Products
are as follows:  (i) Distributor will receive a 2% discount off the
invoice if Distributor pays such invoice within 20 days from the date of Roxio’s
invoice, (ii) Distributor will receive a 1% discount off the invoice if
Distributor pays such invoice within 30 days from the date of Roxio’s invoice,
and (iii) payment due in full within forty-five (45) days from the date of
Roxio’s invoice, all subject to credit approval.  Invoices shall not
be dated earlier than the date of shipment.




5.6          Late
Payment.  Roxio may impose a late charge on all overdue amounts
at a rate equal to the lesser of (i) one and one-half percent (1-1/2%) per
month; or (ii) the maximum rate permitted by applicable law, until such amount,
and all accrued late charges, is paid in full to Roxio.




6.           INVENTORY




6.1          Inventory.  Subject
to any applicable government restrictions and availability of Products to
Distributor by Roxio, Distributor shall maintain sufficient on-hand inventory of
Roxio’s Products to supply anticipated customer requirements.




6.2          Product
Discontinuance.  Roxio reserves the right to obsolete or
discontinue any of its Products, upon thirty (30) days advance notice, and
Distributor shall have the right to place end-of-life orders for delivery within
such thirty (30) day period.  Distributor and those customers listed
on Exhibit C may return all inventory of any Products that Roxio discontinues or
makes obsolete for the 180 day period following the date on which Roxio provides
such notice to Distributor.  Roxio shall have the right to modify its
product discontinuance program and notification period in its sole discretion,
effective upon written notice to Distributor.




6.3          Quarterly
Adjustment.  Within the first forty-five (45) days of each
fiscal quarter of every year during the term of this Agreement, slow moving
inventory may be returned by Distributor to Roxio for credit against the
simultaneous purchase of new Products of equal or greater aggregate value,
subject to the following limitations set forth below.  Notwithstanding
anything else herein, (i) all purchase orders for such new Products are
non-cancellable and must be received by Roxio by the time Roxio issues a return
RMA and (ii) all such new Products must be shipped within ninety (90) days of
the date of such purchase order.




(a)           Distributor
may return up to [***]2 ([***]%)
of the amount of the previous [***] purchases by Distributor of all Products;
provided, however, that Distributor will notify Roxio in writing if it wishes to
discuss the disposition of additional Products and Roxio agree to discuss such
disposition within ten (10) days of receiving a request from
Distributor.




(b)           Products
must be returned in factory-shipped condition in the original and undamaged
Roxio -supplied package;





2 [***]
Omitted pursuant to a confidential treatment request.  The
confidential portion has been filed separately with the SEC.









(c)           Distributor
must obtain an RMA from Roxio prior to any return and all returns must comply
with Roxio’s policies, procedures and instructions;




(d)           All
freight charges for returns shall be paid by Distributor; and




(e)           All
Products authorized for return shall be subject to inspection by Roxio to
confirm that Products meet Roxio’s product and packaging quality
standards.




7.           ROXIO
OBLIGATIONS




7.1          Promotional and Technical
Materials.  Roxio agrees to supply Distributor with its usual
sales promotion and advertising material without cost to Distributor, and to
support the efforts of Distributor with its usual advertising and other sales
promotion efforts.  Roxio agrees to furnish Distributor, without
charge, except as may be otherwise agreed upon, reasonable quantities of
technical, advertising and selling data and literature concerning the Products,
which Roxio may from time to time produce or have available for trade
circulation.  All such material (other than that which was distributed
to others by Distributor) shall be returned to Roxio in good condition, other
than reasonable wear, immediately upon demand by Roxio.




7.2          Cooperative
Advertising.




(a)           Roxio
shall, to the extent it deems necessary and reasonable, (and consistent with its
policies in effect) support Distributor in its efforts regarding the supply of
advertising material (and equipment and personnel when possible) for trade
shows.  To assist Distributor in advertising, promotion and training
for the sale of the Products, Roxio agrees to reimburse certain qualified
expenses incurred by Distributor for advertising, promotion and trade shows, all
subject to the terms and conditions determined by Roxio from time to time, in
its sole discretion.




(b)           Prior
to implementing any advertising program for which Distributor seeks approval and
contribution, Distributor shall submit a written request to Roxio in a form
reasonably acceptable to Roxio, together with a copy of the proposed
advertisement.  Roxio shall, in its sole discretion, approve or reject
the proposal within fifteen (15) working days after receipt
thereof.  Any proposal not expressly approved by Roxio shall be deemed
rejected.




(c)           Upon
completion of an approved advertising program, Distributor shall submit the
notices provided by Distributor and Roxio pursuant to Section 7.2(b) above; (ii)
a copy of the original advertisement; and (iii) a copy of all invoices verifying
the expenses.  Within thirty (30) days after receipt of the claim
package, Roxio shall pay any authorized amounts to Distributor for all
advertisements which meet all qualifications reasonably required by Roxio
(including the requirement that the accounts be current in
payment).  Roxio shall reimburse up to one hundred percent (100%) of
the actual, certifiable, pre-authorized expenses (design, production, printing,
medial charges, postage and the like) devoted to the Products, not to exceed the
amount of available co-op advertising funds earned by and available to
Distributor.  Reimbursement by Roxio is contingent upon Distributor’s
compliance with (i) Roxio’s reasonable requirements; (ii) guidelines regarding
use of Roxio’s Products and applications; and (iii) any other then current
guidelines specifically intended to ensure that the Products are represented in
the proper light.  Roxio shall not unreasonably withhold reimbursement
from Distributor if Distributor complies with all the above
requirements.




(d)           Co-funding
by Roxio of trade shows and any other non-print advertising must be approved by
Roxio prior to commitment of funds by Distributor.







8.           WARRANTY




8.1           Warranty.  Roxio
warrants to Distributor only that (i) the Products shall comply with the
specifications on the data sheet for such Product in effect when such Product is
shipped; and (ii) the Products shall be free from defects in material and
workmanship under normal use and service for the period specified for that
specific hardware Product and ninety (90) days for software Products, from the
date of shipment from Distributor to its customers.  Roxio warrants to
Distributor’s reseller customers for ninety (90) days from the date of purchase
of a specific Product that such Product shall be free from defects in material
and workmanship under normal use and service.  Roxio will provide a
warranty to Distributor’s end-users for Product as described in Roxio’s End User
License Agreement accompanying such Product.  Roxio’s obligations
under this warranty are limited, at its sole option, to (i) replacing; (ii)
repairing; or (iii) giving credit for such Product, not to exceed the amount
actually paid by Distributor.  The Product must be returned within the
warranty period, to Roxio’s factory; in accordance with Roxio’s RMA policies,
procedures and instructions, transportation charges prepaid, and such Product
must be disclosed to Roxio’s satisfaction after examination to be covered by
warranty.  If a Product is defective, Roxio shall use commercially
reasonable efforts to repair, replace or give credit for such defective Product
within a reasonable period of time following Roxio’s receipt of the Product and
determination that the Product is covered by warranty.  The cost of
returning repaired or replaced defective Products to Distributor shall be borne
by Roxio.  Prior to returning any Product to Roxio, Distributor must
request and obtain an RMA from Roxio and follow Roxio’s return shipment
instructions.  This warranty shall not apply to any Products: (i)
which have been repaired or altered except by Roxio; (ii) which have been
subject to misuse, negligence or accident; (iii) which have not been maintained
in accordance with handling or operating instructions supplied by Roxio; or (iv)
which are not returned in accordance with Roxio’s RMA’s policies, procedures and
instructions.  Products which have either been repaired or replaced by
Roxio under this warranty shall carry a warranty of ninety (90) days from
shipment or the balance of the original warranty period, whichever is
greater.




8.2           No Customer
Warranty.  Except as specifically permitted in Section 8.1, the
warranty set forth in Section 8.1 above is made to Distributor only and may not
be passed on to Distributor’s customers.  Distributor agrees not to
make any representation, promise, guarantee or warranty on Roxio’s
behalf.  Distributor further agrees that it has no authority to assume
or create any obligation on Roxio’s behalf, expressed or implied, regarding
Roxio’s products or otherwise.  Except with respect to the warranty
provided to customers by Roxio as set forth in Section 8.1, Distributor shall
otherwise be solely responsible for any warranties or service obligations for
the Products that Distributor makes or provides to its customers.




8.3           Warranty
Disclaimer.  EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE,
ALL PRODUCTS PROVIDED HEREUNDER ARE PROVIDED “AS IS” AND ROXIO MAKES NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, REGARDING THE PRODUCTS,
AND EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, OR NONINFRINGEMENT.  FURTHER, ROXIO DOES NOT WARRANT
RESULTS OF USE OR THAT ANY SOFTWARE PRODUCT IS BUG FREE OR THAT ITS USE WILL BE
UNINTERRUPTED.




9.           LIMITATION
OF LIABILITY




9.1           Limitation.  EXCEPT
FOR A BREACH OF SECTION 11.2, IN NO EVENT SHALL EITHER APRTY BE LIABLE OR
OBLIGATED WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT OR UNDER ANY
CONTRACT, NEGLIGENCE, STRICT LIABIITY OR OTHER LEGAL OR EQUITABLE THEORY (I) FOR
ANY COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY, SERVICES OR RIGHTS;;
(II) FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES; OR (III) FOR
INTERRUPTION OF USE OR LOSS OR CORRUPTION OF DATA, EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.  IN NO EVENT SHALL ROXIO BE LIABLE OR
OBLIGATED FOR ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF THE FEES PAID TO IT
HEREUNDER WITH RESPECT TO THE APPLICABLE PRODUCTS.









9.2          Force
Majeure.  Except for the payment of any monies due under this
Agreement, nonperformance of either party shall be excused, and any performance
date shall be extended, to the extent that performance is rendered impossible by
strike, fire, flood, governmental acts or orders or restriction, breakdown of
machinery, failure or delay of suppliers, or any other reason where failure to
perform is beyond the control and not caused by the negligence of the
nonperforming party.




9.3          Termination.  In
the event termination by either party in accordance with any of the provisions
of the Agreement, except as specified in this Agreement, neither party shall be
liable to the other, because of such termination, for compensation,
reimbursement or damages on account of the loss of prospective profits or
anticipated sales or on account of expenditures, inventory, investments, leases
or commitments in connection with the business or goodwill of Roxio or
Distributor.




10.      
   INDEMNITY




10.1        Distributor.  Distributor
shall be solely responsible for, and shall indemnify, defend and hold Roxio free
and harmless from, any and all claims, damages or lawsuits (including Roxio’s
attorneys’ fees) arising out of Distributor’s breach of Sections 8.2 or
11.2.




10.2        Patent and Copyright
Indemnity.




(a)           Roxio
agrees to defend, or at Roxio’s option settle, at Roxio’s own expense and under
Roxio’s sole control, any claim, suit or proceeding brought against Distributor
on the issue of infringement of any United States patent, copyright or
trademark, or the misappropriation of a trade secret, by a Product purchased by
Distributor hereunder, subject to the limitations herein.  Roxio shall
pay any final judgment entered in such action.  Roxio shall be
relieved of the foregoing obligations unless Distributor (i) notifies Roxio
promptly in writing of such claim, suit or proceeding; and (ii) gives Roxio
information and assistance to settle or defend any such claim.  If a
Product, or any part thereof, are finally adjudicatively determined to be, or in
Roxio’s sole opinion may become, the subject of any claim, suit or proceeding
for infringement of any United States patent, copyright, trademark, or
misappropriation of a trade secret, or if the sale or use of the Product, or any
part thereof, is enjoined, then Roxio may, at Roxio’s option and
expense:  (i) procure for Distributor and its customers the right to
sell or use the Product, or such part thereof, under such patent, copyright,
trademark or the misappropriation of a trade secret; or (ii) replace the
Product, or part thereof, with other suitable Product or part; or (iii) suitably
modify the Product, or part thereof; or (iv) if the use of the Product, or part
thereof, is prevented by injunction, accept the return of the Product, or part
thereof, and refund the Price paid therefor by Distributor, less a reasonable
sum for use and damage Roxio shall not be liable for any costs or expenses
incurred without its prior written authorization.




(b)           Notwithstanding
the provisions of Section 10.2 above, Roxio assumes no liability for (i)
infringement of patent claims covering completed equipment or any assembly,
circuit, combination, method or process in which any of the Products may be used
but not covering a Product standing alone; (ii) any trademark infringements
involving any marking or branding not applied by Roxio, or involving any marking
or branding applied at the request of Distributor; or (iii) the modification of
a Product, or any part thereof, unless such modification was made by
Roxio.




(c)           The
foregoing provisions of this Section 10 state the entire liability and
obligations of Roxio and the exclusive remedy of Distributor with respect to any
alleged patent, copyright, trademark infringement or misappropriation of a trade
secret by the Products or any part thereof.




11.     
    PROPRIETARY OWNERSHIP RIGHTS




11.1        Property
Rights.  Distributor agrees that Roxio owns all right, title,
and interest in the intellectual property rights related to the Products,
including, without limitation, all patents, trademarks, trade names, inventions,
copyrights, know-how, and trade secrets relating to the design, manufacture,
operation or service of the Products.  The use by Distributor of any
of these property rights is authorized only for the purposes and to the extent
expressly set forth in this Agreement, and upon termination of this Agreement
for any reason such authorization shall cease.







11.2        Sale Conveys no Right to
Manufacture or Copy.  The Products are licensed by Roxio
subject in each case to the condition that such license does not convey a
license, expressly or by implication, to manufacture, duplicate or otherwise
reproduce any of the Products.  To the maximum extent permitted by
applicable law, Distributor agrees that it shall not: (i) alter, reverse
engineer, decompile or disassemble the Products or otherwise attempt to discover
any source code or underlying ideas or algorithms of any Products; (ii)
reproduce any components of the Products without Roxio’s prior written consent,
(iii) modify, translate, or otherwise create derivative works of any Product or
Product packaging, (iv) distribute any Product without Roxio’s end-user license
agreement included by Roxio with such Product, or (v) remove, alter, cover,
or obscure any notice or mark that appears on a Product or Product
packaging.  Distributor may only distribute Products to customers that
it has entered into written agreement with, which contain restrictions
substantially similar to terms set forth in this Section 11.2 and shall take
appropriate steps to assure compliance with the restrictions contained in this
Section 11.2.




11.3        Software
License.  The software Products, or software (if any) provided
with a Product, are not sold, but are licensed to Distributor for redistribution
and are subject to a license on the terms included with such
Product.  Specifically, Products are subject to a break-the-seal
(“shrinkwrap”) or downloadable (“click-thru”) end user license
agreement.  By their terms, such end-user license agreements prohibit
unauthorized copying.  Distributor agrees to abide by these license
agreements, to inform its customers of them, and to actively pursue correction
of known breaches by any of its customers.  Violation of Roxio’s
license agreements by Distributor or Distributor’s customers may result in
termination of this Agreement.  All references to sales or purchases
of the software Products herein shall mean a license.




11.4        OEM
Agreements.  Distributor is not authorized to enter into or
negotiate OEM license agreements on behalf of Roxio.




12.       
  TRADEMARKS AND TRADE NAMES




12.1        Use.  During
the term of this Agreement, Distributor shall have the right to indicate to the
public that it is an Authorized Distributor of Roxio Products, as and to the
extent set forth in this Agreement and to advertise such Products under the
trademarks, service marks, and trade names that Roxio may adopt from time to
time which are owned exclusively by Roxio (“Roxio Trademarks”).  Roxio
Trademarks are not deemed to include any third party marks, regardless of
whether used by Roxio in connection with the Products.




12.2        Limitations.  Distributor
shall not alter or remove any Roxio Trademarks applied to the Products by
Roxio.  Nothing herein shall grant to Distributor any right, title or
interest in Roxio Trademarks.  At no time during or after the term of
this Agreement shall Distributor challenge or assist others to challenge Roxio
Trademarks or the registration thereof, or attempt to register any trademarks,
service marks or trade names confusingly similar to the Roxio Trademarks, in any
language.




12.3        Approval of
Representations.  All representation of Roxio Trademarks that
Distributor intends to use shall first be submitted to Roxio for approval (which
shall not be unreasonably withheld) of design, color, and other details which
are not exact copies of those used by Roxio.  If any Roxio Trademarks
is to be used in conjunction with another trademark on or in relation to the
Products, then the Roxio Trademark shall be presented equally legibly, equally
prominently, and/or of greater size than the other but nevertheless separated
from the other so that each appears to be a mark in its own right, distinct from
the other mark.




13.         CONFIDENTIALITY




13.1        Confidential
Information.  The software (if any) provided with the Product,
in object code form is not considered Confidential
Information.  Roxio’s proprietary information in it’s products,
technical data, or know-how relating to the software, shall be considered
Confidential Information of Roxio and shall be governed by that certain Mutual
Non-Disclosure Agreement signed by the parties on March 22, 2002, and attached
hereto as Exhibit
D.







14.          TERMINATION




14.1        Termination for
Convenience.  This Agreement may be terminated by either party
for any or no reason by giving the other party written notice ninety (90) days
in advance.




14.2        Termination for
Cause.  If either party defaults in the performance of any
material provision of this Agreement, then the nondefaulting party may give
notice to the defaulting party that if the default is not cured within thirty
(30) days the Agreement shall be terminated.  If the nondefaulting
party gives such notice and the default is not cured, then the Agreement
automatically shall terminate at the end of that period.




14.3        Termination for
Insolvency.  This Agreement shall terminate, without notice,
(i) upon the institution by or against Distributor of insolvency, receivership
or bankruptcy proceedings or any other proceedings for the settlement of
Distributor’s debts; (ii) upon Distributor’s making a general assignment for the
benefit of creditors; or (iii) upon Distributor’s dissolution.




14.4        Orders for Distributor
Accounts; Termination Effect.  In the event of the termination
of this Agreement, all orders received and accepted by Roxio as of the effective
date of such termination shall be reviewed for cancellation or confirmation by
Distributor, which action must be communicated in writing to Roxio within ten
(10) days of the effective date of termination.  Unless this Agreement
is terminated by Roxio under Section 14.2, Roxio shall accept orders from
Distributor for additional Products which Distributor is contractually obligated
to furnish to its customers and does not have in its inventory, provided
Distributor notifies Roxio of any and all such transactions in writing within
thirty (30) days after the termination date.  Not withstanding the
foregoing, Roxio shall not be required to deliver further Product to Distributor
if this Agreement is terminated by Roxio under Section 14.2 or 14.3




14.5        Inventory; Termination
Effect.  Unless this Agreement is terminated by Roxio under
Section 14.2, at Distributor’s option, exercised in writing within thirty (30)
days after such termination date, Roxio shall repurchase Products remaining in
Distributor’s inventory in excess of that required to meet Distributor’s
contractual obligations existing at the time of the termination.




14.6        Return of
Materials.  Within thirty (30) days after termination of this
Agreement, Distributor shall prepare all items in its possession which were
provided by Roxio for shipment to Roxio, as Roxio may direct, at Roxio’s
expense.  Distributor shall not make or retain any copies of any
Confidential Information which may have been entrusted to
it.  Effective upon the termination of this Agreement, Distributor
shall cease to use all trademarks, service marks, and trade names of
Roxio.




14.7        Survival of Certain
Terms.  The provisions of Sections 2.2, 3.4, 3.5, 3.6, 4.3,
4.5, 4.6, 5.3, 5.4, 5.5, 5.6, 8, 9, 10, 11, 12.2, 13, and the relevant portions
of Sections 14 and 15 shall survive the termination of this Agreement for any
reason.  Any payment obligations of the parties shall cease upon
termination of this Agreement.




14.8        Remedies.  Neither
party shall be liable to the other in any manner on account of the termination
of this Agreement.  Both Distributor and Roxio are aware of the
possibility of expenditures necessary in preparing for performance hereunder and
the possible losses and damages which may occur to each in the event of
termination.  Violation of obligations under this Agreement may cause
irreparable harm and damage which may not be recovered at law, and remedies for
breach of this Agreement may be in equity through injunctive
relief.




15.          MISCELLANEOUS




15.1        Governing
Law.  This Agreement shall be governed in all respects by the
substantive laws of the State of California, The parties agree that the United
Nations Convention on Contracts for the International Sale of Goods (1980) is
specifically excluded from application to this Agreement.







15.2        Attorneys’
Fees.  In the event of any litigation or arbitration by the
parties under this Agreement, the prevailing party shall be entitled to costs
and reasonable attorneys’ fees.




15.3        Assignment.  Distributor
shall not assign or otherwise transfer any of its rights, obligations or
licenses hereunder without the prior written consent of Roxio, including any
assignment by operation of law as a result of the merger or acquisition of
Distributor.  Distributor will not transfer, pledge, or assign this
Agreement, or any part thereof or interest therein, or any commissions or
compensation due to it hereunder, without first obtaining in each instance the
written consent of Roxio.  Roxio may assign this Agreement to any
successor, in interest to its business and goodwill as they relate to the
Products covered hereby.  Subject to the foregoing, the provisions of
this Agreement shall apply to and bind the successors and permitted assigns of
the parties.




15.4        Waiver.  Failure
by any party to enforce any of its rights under this Agreement shall not be
deemed a waiver of any right which that party has under this
Agreement.




15.5        Amendment.  This
Agreement shall not be amended, altered or changed except by written agreement
signed by authorized representatives of both parties.




15.6        Allocation of
Risk.  The parties acknowledge and affirm that the provisions
in this Agreement regarding warranties, indemnity, disclaimer, limitation of
liability and damage limitation allocate risk between the
parties.  This allocation is reflected in the terms hereof, including
pricing, and is an essential element of the basis of the bargain between the
parties.




15.7        Export
Control.




(a)           Representations.  Distributor
agrees to comply strictly and fully with all export controls imposed on the
Products by any country or organization in whose jurisdiction Distributor
operates or does business.  Distributor shall not knowingly, export or
reexport any Product to any country prohibited under United States Export
Administration Regulations, without first obtaining a valid license to so export
or reexport the Products.




(b)           Responsibility.  All
export permits, import certificates, insurance, duty, customers clearance
charges and/or licenses and related costs shall be Distributor’s
responsibility.




(c)           Regulations.  Because
Roxio is subject to the United States Foreign Assets Control Regulations,
Transaction Control Regulations and other United States export regulations,
specifically without limitation to the above, Distributor will not directly or
indirectly initiate or take part in any act which may constitute a violation of
such laws or regulations.  Distributor also agrees to assist Roxio in
every way in assuring compliance with such laws or regulations.




15.8        Foreign Corrupt Practices
Act.  Roxio is subject to the Foreign Corrupt Practices Act
(Public Law 95 213), which among other things, generally makes it illegal for
Roxio, or any agent of Roxio, to pay, promise to pay or authorize the payment of
any money or offer, gift, or promise to give or authorize the giving of anything
of value to any foreign political candidate, or to any person while knowing or
having reason to know that all or a portion of such money or thing of value will
be offered, given or promised directly or indirectly to any foreign official, to
any foreign political party, or to any candidate for foreign political office
for any of the purposes described in the act.  Distributor shall not
do any act or thing which shall be a violation of said law and further agrees to
cooperate with Roxio in assuring that Roxio and Distributor are in full
compliance with such law and regulations issued thereunder including any and all
reporting requirements.




15.9        Controlling
Document.  All purchase orders for the Products shall be
governed by this Agreement.  Any additional, inconsistent or
conflicting clauses in any order, release, acceptance or other written
correspondence between the parties shall be considered null and void, unless
expressly executed by duly authorized representatives of both
parties.







15.10      Notices.  All
notices, requests, consents and other communications hereunder shall be in
writing and delivered personally, by a recognized international courier (e.g.,
Federal Express, DHL) or by facsimile (with facsimiles to be promptly confirmed
in writing).  All such written communications delivered by mail shall
be forwarded to the parties hereto at their respective addresses as set forth on
the first page of this Agreement, subject to the right of either party to change
its address by delivering written notice to the other.  Notices shall
be deemed to be effective upon receipt.




15.11      Severability.  Should
any provisions of the Agreement contravene any law or valid regulation of any
government jurisdiction over the parties, then such provisions shall be
automatically terminated and performance thereof by the parties waived, and all
other provisions of this Agreement shall continue in full force an
effect.




15.12      Entire
Agreement.  This Agreement (including the exhibits attached
hereto) reflects the entire agreement of the parties regarding the subject
matter hereof, and supersedes all prior agreements between the parties, whether
written or oral.  This Agreement is executed in the English
language.




15.13      Counterparts.  This
Agreement may be executed in counterparts, each of which constitutes an
original, and together which constitute the Agreement.





IN
WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly
authorized representatives, effective as of the date first set forth
above.




ROXIO,
      INC.
              NAVARRE,
      INC.By:
              /s/ Elliot Carpenter
              
              By:
              /s/ James GilbertsonTitle:  Chief
      Financial Officer
              Title:  Chief
      Financial OfficerEffective
      Date:  April 4, 2002
              Effective
      Date:  March 28,
2002







EXHIBIT
A




PRODUCTS
AND SERVICES




All
standard Roxio products included on monthly distributor price
list.







EXHIBIT
B




TERRITORY





The
Americas to include the United States, Canada and Latin America.










EXHIBIT
C




DISTRIBUTOR’S
CUSTOMERS




[***]3







3 [***]
Omitted pursuant to a confidential treatment request.  The
confidential portion has been filed separately with the
SEC.





EXHIBIT
D




MUTUAL
NONDISCLOSURE AGREEMENT




(to be
attached)





MUTUAL
NONDISCLOSURE AGREEMENT





Each
undersigned party (the “Receiving Party”) understands that the other party (the
“Disclosing Party”) has disclosed or may disclose information relating to Roxio
Products and business or to the Disclosing Party’s business (including, without
limitation, computer programs, technical drawings, algorithms, know-how,
formulas, processes, ideas, inventions (whether patentable or not), schematics
and other technical, business, financial, customer and product development
plans, forecasts, strategies and information), which to the extent previously,
presently, or subsequently disclosed to the Receiving Party is hereinafter
referred to as “Proprietary Information” of the Disclosing Party.




In
consideration of the parties’ discussions and any access of the Receiving Party
to Proprietary Information of the Disclosing Party, the Receiving Party hereby
agrees as follows:




1.           The
Receiving Party agrees (i) to hold the Disclosing Party’s Proprietary
Information in confidence and to take reasonable precautions to protect such
Proprietary Information (including, without limitation, all precautions the
Receiving Party employs with respect to its confidential materials), (ii) not to
divulge any such Proprietary Information or any information derived therefrom to
any third person, (iii) not to make any use whatsoever at any time of such
Proprietary Information except to evaluate internally its relationship with the
Disclosing Party, (iv) not to copy or reverse engineer any such Proprietary
Information and (v) not to export or reexport (within the meaning of U.S.
or other export control laws or regulations) any such Proprietary Information or
product thereof. Without granting any right or license, the Disclosing Party
agrees that the foregoing shall not apply with respect to any information after
five years following the disclosure thereof or any information that the
Receiving Party can document (i) is or becomes (through no improper action or
inaction by the Receiving Party or any affiliate, agent, consultant or employee)
generally available to the public, or (ii) was in its possession or known by it
without restriction prior to receipt from the Disclosing Party, or (iii) was
rightfully disclosed to it by a third party without restriction, or (iv) was
independently developed without use of any Proprietary Information of the
Disclosing Party by employees of the Receiving Party who have had no access to
such information. The Receiving Party may make disclosures required by law or
court order provided the Receiving Party uses diligent reasonable efforts to
limit disclosure and to obtain confidential treatment or a protective order and
has allowed the Disclosing Party to participate in the proceeding.




2.           Immediately
upon a request by the Disclosing Party at any time the Receiving Party will turn
over to the Disclosing Party all Proprietary Information of the Disclosing Party
and all documents or media containing any such Proprietary Information and any
and all copies or extracts thereof. The Receiving Party understands that nothing
herein (i) requires the disclosure of any Proprietary Information of the
Disclosing Party or (ii) requires the Disclosing Party to proceed with any
transaction or relationship.




3.           This
Agreement applies only to disclosures made before the first anniversary of this
Agreement. The Receiving Party acknowledges and agrees that due to the unique
nature of the Disclosing Party’s Proprietary Information, there can be no
adequate remedy at law for any breach of its obligations hereunder, which breach
may result in irreparable harm to the Disclosing Party, and therefore, that upon
any such breach or any threat thereof, the Disclosing Party shall be entitled to
appropriate equitable relief, without the requirement of posting a bond, in
addition to whatever remedies it might have at law. In the event that any of the
provisions of this Agreement shall be held by a court or other tribunal of
competent jurisdiction to be illegal, invalid or unenforceable, such provisions
shall be limited or eliminated to the minimum extent necessary so that this
Agreement shall otherwise remain in full force and effect. This Agreement shall
be governed by the law of the State of California without regard to the
conflicts of law provisions thereof. This Agreement supersedes all prior
discussions and writings and constitutes the entire agreement between the
parties with respect to the subject matter hereof. The prevailing party in any
action to enforce this Agreement shall be entitled to costs and attorneys’ fees.
No waiver or modification of this Agreement will be binding upon a party unless
made in writing and signed by a duly authorized representative of such party and
no failure or delay in enforcing any right will be deemed a
waiver.







March 28,
2002




ROXIO,
      INC.By:
                /s/ Elliot CarpenterNAVARRE,
      INC.By:
                /s/ Richard
Vick