Exhibit 10.47
  
  ORLANDO CORPORATION
  NAVARRE CORPORATION
 
 LEASE




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ORLANDO CORPORATION
 INDUSTRIAL LEASE
 TABLE OF CONTENTS
 SectionARTICLE I  DEMISE & TERMPremises
    
    
    1.01Use of Common Areas
    
    
    1.02Term
    
    
    1.03Early Access
    
    
    1.04Option to Extend
    
    
    1.05Acceptance of Premises
    
    
    1.06Quiet Enjoyment
    
    
    1.07ARTICLE II  RENTIntent of Lease
    
    
    2.01Basic Rent
    
    
    2.02Calculation of Basic Rent
    
    
    2.03Additional Rent
    
    
    2.04Deposit Payable to Landlord
    
    
    2.05Payments to Landlord
    
    
    2.06Pre-Authorized Bank Debit
    
    
    2.07Overdue Rent
    
    
    2.08Set-Off
    
    
    2.09Review of Tenants Financial Statements
    
    
    2.10ARTICLE III  TAXESTaxes Payable by Landlord
    
    
    3.01Taxes Payable by Tenant
    
    
    3.02Tenants Business and Other Taxes
    
    
    3.03Payment of Taxes
    
    
    3.04ARTICLE IV  OPERATING COSTSTenants Covenant to Pay Operating Costs
    
    
    4.01Payment of Operating Costs
    
    
    4.02ARTICLE V  UTILITIESUtility Charges
    
    
    5.01Meters
    
    
    5.02




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SectionHeating
    
    
    5.03Service Contracts
    
    
    5.04ARTICLE VI  MAINTENANCE & REPAIRTenant to Maintain and Repair
    
    
    6.01Repair Where Tenant at Fault
    
    
    6.02Alterations
    
    
    6.03Notice of Accidents
    
    
    6.04Construction Liens
    
    
    6.05Removal of Fixtures and Improvements
    
    
    6.06Roof & Office Rooftop HVAC Replacement
    
    
    6.07Repairs on Termination
    
    
    6.08Landlords Repair Obligation
    
    
    6.09ARTICLE VII  ASSIGNING AND SUBLETTINGAssigning or Subletting
    
    
    7.01Change of Control
    
    
    7.02Sublet of Part of Premises
    
    
    7.03Excess Rent
    
    
    7.04Mortgage of Leasehold
    
    
    7.05Advertising Premises
    
    
    7.06Disposition by Landlord
    
    
    7.07ARTICLE VIII  USEUse of Leased Premises
    
    
    8.01Rules and Regulations
    
    
    8.02Observance of Law
    
    
    8.03Waste and Nuisance
    
    
    8.04Exterior Walls
    
    
    8.05Signs
    
    
    8.06Energy Conservation
    
    
    8.07Overloading Systems
    
    
    8.08Parking
    
    
    8.09Refuse and Garbage
    
    
    8.10Overloading Floors
    
    
    8.11Plumbing Fixtures
    
    
    8.12Outside Storage
    
    
    8.13ARTICLE IX  INSURANCE AND INDEMNITYTenants Insurance
    
    
    9.01Landlords Insurance
    
    
    9.02
 -ii-




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SectionNot to Affect Landlords Insurance
    
    
    9.03Limit of Landlords Liability
    
    
    9.04Limit of Tenants Liability
    
    
    9.05Indemnity
    
    
    9.06ARTICLE X  CONTROL OF COMPLEXControl of Complex
    
    
    10.01ARTICLE XI  DAMAGE & DESTRUCTIONAbatement of Rent
    
    
    11.01Termination
    
    
    11.02ARTICLE XII  DEFAULTEvents of Default
    
    
    12.01Accelerated Rent
    
    
    12.02Right of Re-entry
    
    
    12.03Reletting
    
    
    12.04Distress
    
    
    12.05Right of Landlord to Cure Defaults
    
    
    12.06Cross Default
    
    
    12.07Remedies Not Exclusive
    
    
    12.08Non-Waiver
    
    
    12.09Recovery of Adjustments
    
    
    12.10ARTICLE XIII  SUBORDINATION & ACKNOWLEDGEMENTSMortgages
    
    
    13.01Certificates
    
    
    13.02Recognition Agreement
    
    
    13.03ARTICLE XII  ACCESS BY LANDLORDExhibiting Leased Premises
    
    
    14.01Expansion, Alteration
    
    
    14.02
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SectionARTICLE XV  MISCELLANEOUSNotice
    
    
    15.01Registration
    
    
    15.02Planning Act
    
    
    15.03Obligations as Covenant
    
    
    15.04Severability
    
    
    15.05Unavoidable Delays
    
    
    15.06Evidence of Payments
    
    
    15.07Overholding
    
    
    15.08Lien
    
    
    15.09Goods and Services Tax
    
    
    15.10Time of Essence
    
    
    15.11Law
    
    
    15.12Captions/Headings
    
    
    15.13Joint and Several Liability
    
    
    15.14Tenant Partnership
    
    
    15.15Environmental Assessments
    
    
    15.16Easements
    
    
    15.17Entire Agreement
    
    
    15.18Effect of Lease
    
    
    15.19ARTICLE XVI  ADDITIONAL PROVISIONSOption to Terminate
    
    
    16.01Landlord Interest
    
    
    16.02
 SCHEDULES
 
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THIS INDENTURE th
  ORLANDO CORPORATION
 Landlord
 OF THE FIRST PART
  NAVARRE CORPORATION  Tenant
 OF THE SECOND PART
 ARTICLE I  DEMISE & TERM :
 Premises
 1.01 WITNESSETH
 Use of Common Areas
 1.02
 Term
 1.03 st th
  Early Access
 1.04




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Option to Extend
 1.05
 (a)
    
    There shall be no Landlords Work or Early Access;(b)
    
    There shall be no further option to extend this Lease; and(c)
    
    The Basic Rent payable by the Tenant during such extended term shall be
fair market rent as of the date of commencement of the extended term based on similar
terms, considering premises of similar age, location and use as the Leased Premises.
If the Landlord and the Tenant cannot agree on the Basic Rent for the extended term
at least ninety (90) days prior to the commencement of the extended term, the same
shall be determined by arbitration as hereinafter set out.In the case of any dispute between the Landlord and the Tenant
with respect to the Basic Rent payable in the extended term, each of the
Landlord and the Tenant shall at once agree upon the appointment of an
arbitrator and shall submit the dispute to the arbitrator for determination
in accordance with the provisions of the Arbitration Act, 1991of Ontario.
The decision of the arbitrator so appointed shall be final and binding upon
the Landlord and the Tenant who covenant one with the other that such dispute
shall be decided by arbitration alone and not by recourse to any court by
action at law. If within a reasonable time the Landlord and the Tenant do
not agree upon an arbitrator, the arbitrator may upon petition of either the
Landlord or the Tenant be appointed by a justice of the Superior Court of
Justice. The cost of arbitration shall be apportioned between the Landlord
and the Tenant as the arbitrator may decide.
  Acceptance of Premises
 1.06




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Quiet Enjoyment
 1.07
 ARTICLE II  RENT :
 Intent of Lease
 2.01
 Basic Rent
 2.02
 Calculation of Basic Rent
 2.03
 Additional Rent
 2.04
 Deposit Payable to Landlord
 2.05
 (a)
    
    $17,882.61 (inclusive of goods and services tax), to be held by the Landlord
and applied on account of the Basic Rent and Additional Rent for the first month of the
Term; and




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(b)
    
    $17,031.06 (exclusive of goods and services tax), to be held by the Landlord as
security for the full and faithful performance by the Tenant of all the agreements,
terms, covenants and conditions herein set forth and applied against expenses or other
costs or damages incurred by the Landlord and, subject to Section 12.02 hereof to be
payable as liquidated damages and not as penalty, upon forfeiture, default or early
termination, without prejudice to any further claims by the Landlord for damages and/or
any remedy for recovery thereof. In the event the Tenant observes and performs the
terms and conditions on its part under this Lease throughout the Term and the Leased
Premises are then in proper repair, such monies shall be returned to the Tenant within
thirty (30) days following the expiry of the Term of this Lease.
 Payments to Landlord
 2.06
 Pre-Authorized Bank Debit
 2.07
 Overdue Rent
 2.08
 Set-Off
 2.09
 Review of Tenants Financial Statements
 2.10
 ARTICLE III  TAXES :
 Taxes Payable by Landlord
 3.01




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Taxes Payable by Tenant
 3.02
    (a)
    
    If there is a separate assessment for Taxes with respect to the Leased Premises (which
separate assessment shall be deemed to include any valuation of the Leased Premises by the
relevant realty tax assessor, as evidenced by such assessors separate valuation and/or
working papers that may be available to the Landlord from time to time), and if such separate
assessment together with all other separate assessments for such other lands and/or buildings
included in the assessment roll (the Complex) equals the total assessment for Taxes for the
Complex, and if the Landlord so directs, the Tenant shall pay as Additional Rent, the amount
calculated by multiplying such assessment for the Leased Premises by the applicable Tax Rate
which amount shall, for the purposes of this Article III only and notwithstanding anything
else herein contained, be the Tenants Proportionate Share of Taxes for the Complex.
 (b)
    
    If there is no separate assessment for Taxes with respect to the Leased
Premises, or if there is a separate assessment but such assessment together with all
other separate assessments relating to the Complex does not equal the total
assessment for the Taxes for the Complex, then until such time as there is a separate
assessment for Taxes with respect to the Leased Premises which together with all
other such separate assessments equals the total assessment for Taxes for the
Complex, and until such time as the Landlord has issued a direction to pay Taxes
pursuant to paragraph (a) of this Section 3.02, the Tenant shall pay to the Landlord,
as Additional Rent, its Proportionate Share of the Taxes for the Complex, adjusting
the occupied tax rate for the Tenants specific use of the Leased Premises; provided
that the Landlord may, at its option acting reasonably, apportion the total
assessment for Taxes for the Complex amongst the leaseable premises of the Complex,
including the Leased Premises, based on generally accepted real estate appraisal
practices applied consistently and equitably.(c)
    
    Notwithstanding paragraphs (a) and (b) of this Section 3.02, if the Leased
Premises or the Complex is not fully assessed as an occupied commercial or industrial
property for determination of Taxes in any Year, then the Landlord shall adjust the
Taxes to an amount that would have been determined if the Leased Premises and the
Complex were fully assessed as an occupied commercial or industrial property.
Furthermore, if the Leased Premises are at any time during the Term assessed for the
support of Separate Schools, or if the Taxes are increased by reason of any
installations made in or upon or any alterations made in or to the Leased Premises by
the Tenant or by the Landlord on behalf of the Tenant, the Tenant shall pay the
amount of such increase forthwith to the Landlord upon receipt of notice thereof.
 Tenants Business and Other Taxes
 3.03
 (a)
    
    all taxes, rates, duties, assessments and other charges that are levied,
rated, charged or assessed against or in respect of all improvements, equipment and
facilities of the Tenant on or in the Leased Premises or the Complex or any part
thereof; and(b)
    
    every tax and license fee which is levied, rated, charged or assessed
against or in respect of and every business carried on in the Leased Premises or in
respect of the use or occupancy thereof or any part of the Lands or the Building by
the Tenant and every subtenant or licensee of the Tenant or against the Landlord on
account of its interest in the Complex, save and except capital tax personal to the
Landlord (which is not otherwise provided for under this Lease) and whether in any
case, any such taxes, rates, duties, assessments or license fees are rated, charged
or assessed by any federal, provincial, municipal, school or other body during the
Term; and




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(c)
    
    the full amount of any taxes in the nature of a business transfer tax,
value added tax, sales tax or any other tax levied, rated, charged or assessed in
respect of the Rent payable by the Tenant under this Lease or in respect of the
rental of space under this Lease, whether characterized as a goods and services tax,
sales tax, value added tax, business transfer tax or otherwise.
 Payment of Taxes
 3.04
    (a)
    
    The Landlord shall be entitled at any time or times in any Year, upon at least fifteen
(15) days notice to the Tenant to require the Tenant to pay to the Landlord the Tenants
Proportionate Share of the Taxes for such Year in equal monthly installments. Such monthly
amount shall be determined by dividing the Tenants Proportionate Share of Taxes by the
number of months for the period from January 1st in each Year of the Term until the due date
of the final installment of Taxes as established by the applicable taxing authority from time
to time in each Year (Installment Period) and shall be paid by the Tenant to the Landlord,
monthly as Additional Rent, on the date for payment of monthly rental payments during the
Installment Period. The Landlord shall be entitled subsequently during such Year, upon at
least fifteen (15) days notice to the Tenant, to revise its estimate of the amount of
increase of such Taxes and the said monthly installment shall be revised accordingly. All
amounts received under this provision in any Year on account of the estimated amount of such
Taxes shall be applied in reduction of the actual amount of such Taxes for such Year. If the
amount received is less than the Tenants Proportionate Share of the actual Taxes, the Tenant
shall pay any deficiency to the Landlord as Additional Rent within fifteen (15) days
following receipt by the Tenant of notice of the amount of such deficiency. If the amount
received is greater than the Tenants Proportionate Share of the actual Taxes, the Landlord
shall either refund the excess to the Tenant as soon as possible after the end of the Year in
respect of which such payments were made or, at the Landlords option, shall apply such
excess against any amounts owing or becoming due to the Landlord by the Tenant, provided that
if the Tenant is then in default hereunder, the Landlord may defer dealing with such excess
until the default is cured.
 (b)
    
    Taxes payable pursuant to paragraphs (a) and (b) of Section 3.03 shall be
paid by the Tenant when due if separate tax bills are issued and otherwise shall be
paid to the Landlord within ten (10) days written demand therefor.(c)
    
    Taxes payable pursuant to paragraph (c) of Section 3.03 shall be paid to
the Landlord within ten (10) days written demand therefor or at such time or times as
the Landlord from time to time determines by notice in writing to the Tenant.(d)
    
    If the Term of this Lease commences or ends on any day other than the first
or last day, respectively, of a Year, the Tenant shall be liable only for the portion
of the Taxes for such Year as falls within the Term, determined on a per diem basis.
 ARTICLE IV  OPERATING COSTS:
 Tenants Covenant to Pay Operating Costs
 4.01
 Payment of Operating Costs
 4.02




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ARTICLE V  UTILITIES:
 Utility Charges
 5.01
 Meters
 5.02
 Heating
 5.03
 Service Contracts
 5.04
 ARTICLE VI  MAINTENANCE & REPAIR :
 Tenant to Maintain and Repair
 6.01




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Repair Where Tenant At Fault
 6.02
 Alterations
 6.03




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Notice of Accidents
 6.04
 Construction Liens
 6.05
 Removal of Fixtures and Improvements
 6.06
 Roof & Office Rooftop HVAC Replacement
 6.07




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Repair on Termination
 6.08
 (a)
    
    deliver up possession of the Leased Premises to the Landlord together with
all Leasehold Improvements which the Tenant is required or permitted to leave therein
or thereon in the same condition in which the Tenant is required under this Lease to
repair and maintain the Leased Premises subject to reasonable wear and tear, the
cumulative effect of which does not amount to a state of disrepair, free and clear of
all encumbrances and in a clean and tidy condition and free of all rubbish and to
deliver to the Landlord all keys and security devices;(b)
    
    remove from the Complex, at the option of and to the satisfaction of the
Landlord, all machine bases, cabling (electrical or otherwise), piping (pneumatic,
water or otherwise) and wiring (electrical, computer or otherwise) and wall plates
for telephones, computers and other appliances (together with associated repairs such
as drywall patching and painting as may be required by the Landlord) installed by or
on behalf of the Tenant;(c)
    
    remove any and all materials which may be deemed by any applicable
legislation as contaminated or hazardous and which have been brought onto the Complex
by the Tenant or those for whom the Tenant is in law responsible or which have been
brought onto the Leased Premises during the Term by any party (other than by the
Landlord or those for whom the Landlord is in law responsible), and clean up any and
all resultant contamination in compliance with all Applicable Laws and regulations;
and(d)
    
    remove from the Complex, in compliance with all Applicable Laws and
regulations, any and all storage and/or holding tanks and associated bases (whether
above or below ground) installed by or on behalf of the Tenant and all pits, trench
drains and sloped floors created by or on behalf of the Tenant and restore the Leased
Premises to base building condition in good repair.
   Landlords Repair Obligation
 6.09




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ARTICLE VII  ASSIGNING & SUBLETTING:
 Assigning or Subletting
 7.01
    (a)
    The Tenant shall not assign this Lease or sublet or franchise, license, grant
concessions in, or otherwise part with or share possession of the Leased Premises, or any
part thereof, (each of the foregoing hereinafter referred to as a Transfer) without the
prior written consent of the Landlord, which consent will not be unreasonably or arbitrarily
withheld or delayed; at the time the Tenant requests such consent the Tenant shall deliver to
the Landlord such information in writing (the required information) as the Landlord may
reasonably require, including, without limitation, a copy of the proposed offer or
agreement, if any, to Transfer and the name, address and nature of business and evidence as
to the financial strength of the proposed assignee or subtenant or other user (any of the
foregoing hereinafter referred to as a Transferee). The Landlord shall have fifteen (15)
days from the date of its receipt of the required information to respond to the Tenants
request for any consent to a Transfer.Notwithstanding anything else herein contained, in no event shall any Transfer of
this Lease release or relieve the Tenant in any regard whatsoever from any of its
obligations or liabilities under or in respect of this Lease including any renewal
or extension thereof.PROVIDEDhowever, and it is made a condition to any Transfer that:
 (i)
    
    The proposed Transferee of this Lease shall agree in writing
with the Landlord to assume and perform all of the terms, covenants,
conditions and agreements by this Lease imposed upon the Tenant herein in a
form to be approved by the solicitor for the Landlord acting reasonably (which
form shall also be executed by the Tenant) and shall obtain occupancy approval
from the local building and fire departments and provide evidence thereof to
the Landlord prior to taking occupancy of the Leased Premises;(ii)
    
    The Transferee shall also waive any rights which it may
have at common law in respect of relief from forfeiture and any rights it may
have pursuant to Sections 21 and 39 (2) of the Commercial Tenancies Act
(Ontario), as amended from time to time;(iii)
    
    The Tenant shall pay the Landlord all property inspection,
administration and legal fees in connection with the Transfer;(iv)
    
    The consent of the Landlord is not a waiver of the
requirement of the Landlords consent for subsequent Transfers;(v)
    
    The acceptance by the Landlord of Rent from a Transferee
without the Landlords consent shall not constitute a waiver of the
requirement of such consent nor shall it constitute an acceptance of such
party as the Tenant;(vi)
    
    The Landlord may, at its option, cancel any rights of first
refusal or first opportunity on additional space referred to in this Lease,
if any;(vii)
    
    The Leased Premises, at the time of the Transfer, shall
comply in all respects with the standard of repair and maintenance required
of the Tenant pursuant to this Lease and the Lease shall otherwise be in good
standing;




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(viii)
    
    The Landlord shall have received from the Tenant or the Transferee a cash
deposit or letter of credit (on terms satisfactory to the Landlord) equal to
the last three (3) months Basic Rent hereunder (pro-rated in the case of a
request relating to a portion only of the Leased Premises), as security for
the performance of the repair and maintenance obligations of the Tenant and
the Transferee, to be held by the Landlord pending delivery up of the Leased
Premises (or the portion thereof which is subject to the Transfer) by the
Transferee in the condition and to the standard required hereunder;(ix)
    
    If the Transfer of the Leased Premises does not take place
within sixty (60) days of the giving of consent by the Landlord the consent
shall, at the Landlords option, expire and become null and void; and(x)
    
    If, following any assignment of this Lease, it is
disaffirmed, disclaimed or terminated by any trustee in bankruptcy of a
Transferee, the original Tenant named in this Lease will be deemed on notice
from the Landlord given within sixty (60) days from the date of such
disaffirmation, disclaimer or termination to have entered into a Lease with
the Landlord containing the same terms and conditions as in this Lease.
 (b)
    
    If a Transfer occurs without the consent of the Landlord when required, the
Landlord may collect Rent from the party in whose favour the Transfer was made and
apply the net amount collected to the Rent herein reserved but no such Transfer will
be considered a waiver of this covenant or the acceptance of the party in whose
favour the Transfer was made as a tenant hereunder.(c)
    
    Subject to the Landlords rights to terminate this Lease as set out above,
the Tenant acknowledges and agrees that the Landlord is permitted to take into
account all reasonable factors, information and other criteria regarding a proposed
Transferee when considering a Tenants request for a Transfer pursuant to paragraph
(a) of this Section 7.01, and that the Landlord may refuse to grant a consent where
the proposed Transferee does not have a sound financial covenant or a sound business
history, reputation or experience.(d)
    
    Notwithstanding anything to the contrary contained in this Lease, the
Tenant shall have the right, without consent but on prior written notice to the
Landlord, to effect a Transfer to an affiliate of the Tenant (as that term is defined
in the Business Corporations Act(Ontario)) or the sale of all or substantially all
of the assets of the Tenant, provided that the tangible net worth of the resulting
purchaser shall be no less than $20,000,000.00 immediately prior to such purchase,
and further provided that such Transferee and the Tenant sign and deliver to the
Landlord prior to the date of such Transfer, the Landlords form of lease assumption
agreement (to be prepared by the Landlords solicitor at the reasonable cost of the
Tenant) in accordance with the provisions of this Lease. In no event shall such
Transfer of the Lease release or relieve the Tenant from any of its obligations or
liabilities under or in respect this Lease as the same may be extended from time to
time by such Transferee. For purposes of this section, tangible net worth shall
mean the shareholders equity in the Tenant (being the amount of its total assets in
excess of the amount of its total liabilities, less its goodwill and other intangible
assets set forth in its current balance sheet, prepared on a review engagement
basis).
 Change of Control
 7.02
 Sublet of Part of Premises




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7.03
 Excess Rent
 7.04
 Mortgage of Leasehold
 7.05
 Advertising Premises
 7.06
 Disposition by Landlord
 7.07
 ARTICLE VIII  USE
 Use of Leased Premises
 8.01
 Rules and Regulations
 8.02




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Observance of Law
 8.03
 Waste and Nuisance
 8.04
    (a)
    The Tenant shall not do, suffer or permit any waste,
damage, disfiguration or injury to the Leased Premises
or the fixtures and equipment thereof and shall not
permit any dangerous or noxious conditions to exist at
the Leased Premises and shall not do or permit anything
to be done or brought upon or about the Leased Premises
or the Complex which may reasonably be a nuisance,
annoyance, grievance, interference or disturbance to
the use or occupation of the Building or adjacent lands
or premises by its owners or occupants, nor cause or
permit any fire alarm to be falsely triggered (and in
the case of any alarm response charge levied by the
local fire department the cost thereof, plus the
Landlords fifteen percent (15%) management fee, shall
be paid by the Tenant to the Landlord on written
demand), nor use the Leased Premises in any manner nor
conduct any processes (whether contemplated by the
permitted uses herein or not) which, in the opinion of
the Landlord acting reasonably, are detrimental or may
cause damage to the Building, or any part thereof (and
in the case of any damage to the Building caused by
such use or conduct, including without limitation, the
Buildings floors, steel and other structural
components, the Tenant shall be required upon
reasonable written notice, at its expense, to make good
such damage or replace the damaged Building components
if required to the satisfaction of the Landlord); nor
keep, sell, use, handle or dispose of any goods,
materials or things which may cause persistent odours
either inside or outside the Building or which may
reasonably be considered a nuisance in, at or on the
Leased Premises; nor cause any annoyance, nuisance or
disturbance to the occupiers or owners of, or damage to
any adjoining lands and/or premises; and the Tenant
shall keep the Leased Premises and the Complex free of
hazardous waste and contamination and shall take every
reasonable precaution to protect the Leased Premises
and the Complex from danger of fire, water damage or
the elements.(b)
    The Tenant covenants and agrees to utilize the Leased Premises and operate its
business in a manner so that no part of the Leased Premises or surrounding lands are
used to generate, manufacture, refine, treat, transport, store, handle, dispose of,
transfer, produce or process any Hazardous Substances. Furthermore, and without
limiting the foregoing, the Tenant covenants and agrees with the Landlord not to
install any underground storage tanks at the Leased Premises. Further the Tenant
hereby covenants and agrees to indemnify and save harmless the Landlord and those for
whom the Landlord is in law responsible from any and all losses, costs, claims,
damages, liabilities, expenses or injuries caused or contributed to by any Hazardous
Substances which are at any time after the Tenant takes occupancy of the Leased
Premises located, handled, placed, stored or incorporated in any part of the Leased
Premises except by the Landlord, its workmen or contractors or migrating onto the
Leased Premises from adjacent properties through no fault or neglect of the Tenant, its
employees, agents, contractors, or those for whom in law it is responsible. The Tenant
hereby agrees that the Landlord or its authorized representatives shall have the right
at the Landlords expense to conduct such environmental site reviews and investigations
(Audit) as it may deem




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necessary for the purposes of ensuring compliance with this Section 8.04, provided that
if such Audit discloses that the Tenant is in violation of any of the foregoing
provisions of this Section 8.04, or if such Audit is undertaken to ensure compliance
with this Section 8.04 at the end of the Term, then the Tenant shall pay all of the
Landlords costs of such Audit and all follow-up enquiries and investigations (plus the
Landlords management and administrative fee of fifteen percent (15%) as Additional
Rent) within fifteen (15) days of receipt of an invoice therefore.
 Exterior Walls
 8.05
 Signs
 8.06
 Energy Conservation
 8.07
 Overloading Systems
 8.08
 Parking
 8.09
 Refuse and Garbage




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8.10
 Overloading Floors
 8.11
 Plumbing Fixtures
 8.12
 Outside Storage
 8.13
 ARTICLE IX  INSURANCE AND INDEMNITY:
 Tenants Insurance
 9.01
 (a)
    
    Public Liability insurance, written on a comprehensive basis, with coverage
against third-party claims for bodily injury, including death, and property damage
(including but not limited to personal injury liability, blanket contractual
liability, products liability, employers liability, owners & contractors protective
liability in the case of construction, and tenants legal liability) with such
coverage to include the activities and operations conducted by the Tenant, or for
which the Tenant is legally liable, and any other person performing work on behalf of
the Tenant and those for whom the Tenant is in law responsible, in amounts required
by the Landlord and any mortgagee of the Building or any part thereof from time to
time but in no event less than Five Million Dollars ($5,000,000.00) per occurrence;
and(b)
    
    All risks insurance covering all property owned by the Tenant, or installed
by or on behalf of the Tenant, located within the Leased Premises and all other
property for which the Tenant is responsible pursuant to this Lease and/or which has
been installed by or on behalf of the Tenant (including without limitation chattels,
equipment, machinery, furniture, inventory, fixtures, property of others in the
Tenants care, custody or control, and all Leasehold Improvements) in an amount equal
to the full (100%) replacement value thereof; and(c)
    
    Comprehensive boiler and machinery insurance on a blanket repair and
replacement basis with limits for each accident in an amount of at least the
replacement cost of all leasehold improvements and of all boilers, pressure vessels,
air conditioning equipment and miscellaneous electrical apparatus or mechanical
equipment owned or operated by the Tenant or by others (except for the Landlord) on
behalf of the Tenant in the Leased Premises, or relating to or serving the Leased
Premises; and(d)
    
    Business interruption insurance in an amount that will reimburse the Tenant
for direct or indirect loss of gross earnings attributable to all perils insured
against under Section 9.01 (b) and (c) herein, and other




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perils commonly insured against by prudent tenants, or attributable to prevention of
access to the Leased Premises as a result of those perils; and
 (e)
    (i)
    Environmental Impairment Liability insurance (EIL insurance) for
claims arising from the use of or operations at the Leased Premises, including
coverage for sudden and accidental and gradual pollution conditions, and including
incidents arising out of the storage, disposal, release or escape of any Hazardous
Substances into or upon the Leased Premises, land, sediments, soils, groundwater,
atmosphere, or any watercourse or body of water, and for all third-party claims for
bodily injury or property damage as well as the cost of clean-up and/or remediation
of any contamination or environmental hazard in, upon or around the Leased Premises,
Lands and adjoining lands, which insurance shall be issued for a limit of no less
than Five Million Dollars ($5,000,000.00) per claim; and
 (ii)
    In the case of the Tenant in use and occupation of the Leased
Premises being Navarre Corporation only, the Landlord acknowledges that the
Tenant is not required to obtain EIL insurance unless: (i) Hazardous Substances
at any time during the Term are found to be present at the Leased Premises; (ii)
the use permitted under this Lease is modified or changed, with or without the
Landlords consent; or (iii) any assignment of this Lease or sublease of all or
part of the Leased Premises takes place, in which case, the Tenant shall
immediately comply with the original requirement for EIL insurance set out in
Section 9.01 (e) (i) above covering both sudden and accidental and gradual
pollution exposures. If pursuant to this Section 9.01 (e) (ii), the Tenant is
not required to obtain EIL insurance, it shall nonetheless obtain limited
pollution liability insurance covering claims for bodily injury and property
damage resulting from: (i) an unexpected or unintentional spill, discharge,
dispersal, release or escape of pollutants upon or around the Leased Premises or
the Lands that does not occur in a quantity or with a quality that is routine or
usual to the business of the Tenant conducted at the Leased Premises and that is
detected within 120 hours of the occurrence and reported within 120 hours of
detection; and/or (ii) caused by the heat, smoke or fumes from a fire which
becomes uncontrollable or breaks out from where it was intended to be, all with
a limit of no less than Five Million Dollars ($5,000,000.00) per claim; and
 (f)
    
    Standard owners form automobile insurance providing third-party liability
insurance with Two Million Dollars ($2,000,000.00) inclusive limits, and accident
benefits insurance, covering all licensed vehicles owned or operated by or on behalf
of the Tenant; and(g)
    
    Such other forms of insurance as may be reasonably required by the Landlord
and its mortgagee from time to time.
  Landlords Insurance
 9.02




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Not to Affect Landlords Insurance
 9.03
 Limit of Landlords Liability
 9.04
    (a)
    The Landlord shall not be responsible in any
way for, and is hereby released and discharged
in respect of: (i) any injury to any person
(including death) except to the extent directly
caused by the negligence or willful misconduct
of the Landlord or those for whom it is in law
responsible; or (ii) for any loss of or damage
to any property within the Leased Premises or
belonging to the Tenant or to other occupants
of the Leased Premises or to their respective
employees, agents, invitees, customers,
licensees or other persons from time to time
attending at the Leased Premises, howsoever
caused, while such person or property is in or
about the Lands, the Leased Premises, the
Building, or any areaways, parking areas,
lawns, sidewalks, steps, truckways, platforms,
corridors, stairways, elevators or escalators
in connection therewith, including without
limiting the foregoing, any loss of or damage
to any property caused by theft or breakage, or
by steam, water, rain or snow or for any loss
or damage caused by or attributable to the
condition or arrangements of any electrical or
other wiring or for any damage caused by smoke
or anything done or omitted to be done by any
other tenant of premises in the Building or
Buildings or for any other loss whatsoever with
respect to the Leased Premises, goods placed
therein or any business carried on therein.(b)
    In the event that the Leased Premises or the Complex or any part or parts
thereof are closed, inaccessible or unusable by reason of damage, necessary repair or
by virtue of any other cause or condition whatsoever, whether within or beyond the
Landlords control, the Landlord shall not be liable or responsible in any way for
any loss of business or any other damage to or loss, direct, indirect, consequential
or otherwise sustained or suffered by the Tenant nor shall the Tenant be entitled to
any abatement of Rent, except, in the case of damage to the Leased Premises and as
expressly provided in Article XI hereof.
 Limit of Tenants Liability
 9.05 th
 Indemnity




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9.06
 ARTICLE X  CONTROL OF COMPLEX:
 Control of Complex
 10.01
    (a)
    The Complex shall, at all times, be subject to the
exclusive control of the Landlord and, without limiting
the generality of the foregoing, the Landlord shall
have the right from time to time throughout the Term:
 (i)
    
    to construct in, to or on the Complex, to make alterations,
additions and subtractions thereto and therefrom to erect new buildings on the
Complex and to build additional storeys on the existing buildings;(ii)
    
    to monitor access to any of the parking areas by means of
barriers, control booths or any other method which the Landlord deems proper;(iii)
    
    to change the location of driveways and sidewalks and the
location, layout or size of the parking area; and(iv)
    
    to do or perform such other acts in and to the Complex as the
Landlord, acting as a prudent owner, deems advisable for the more efficient
and proper operation of the Complex.
 (b)
    The Landlord will operate and maintain the Complex in such a first class manner
consistent with a complex of the same age, location and use. Without limiting the
scope of such discretion, the Landlord shall have the full right and authority to
employ all personnel and to make all rules and regulations pertaining to and necessary
for the proper operation and maintenance of the Complex.(c)
    The Landlord shall not be liable for any diminution or alteration of the common
area of the Complex resulting from the exercise of the Landlords rights under this
Section and the Tenant shall not be entitled to a reduction or abatement of Rent or to
compensation therefor.
  ARTICLE XI  DAMAGE AND DESTRUCTION
 Abatement of Rent
 11.01




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mutatis mutandis
 Termination
 11.02
    (a)
    Notwithstanding the provisions of Section 11.01 hereof,
if the Leased Premises or any portion thereof are (i)
damaged or destroyed by any cause whatsoever and cannot
in the reasonable opinion of the Landlord be rebuilt or
made fit for the purposes of the Tenant as aforesaid
within two hundred and seventy (270) days of the date
of such damage or destruction, or (ii) the Leased
Premises are damaged or destroyed by an uninsured
peril, the Landlord may, at its option, terminate this
Lease by giving to the Tenant, within sixty (60) days
after the date of such damage or destruction, notice of
termination and thereupon Rent shall be apportioned and
paid to the date of such damage or destruction and the
Tenant shall immediately deliver up possession of the
Leased Premises to the Landlord.(b)
    Irrespective of whether the Leased Premises or any portion thereof are damaged
or destroyed as aforesaid, in the event that fifty per cent (50%) or more of the
Building, as determined by the Landlord, is damaged or destroyed by any cause
whatsoever and if, in the reasonable opinion of the Landlord, such area cannot be
rebuilt or made fit for the purposes of the tenants thereof within one hundred and
eighty (180) days of the date of such damage or destruction or the Building is damaged
or destroyed by an uninsured peril, the Landlord may at its option terminate this Lease
by giving to the Tenant within sixty (60) days after the date of such damage and
destruction, notice of termination requiring vacant possession of the Leased Premises
sixty (60) days after delivery of the notice of termination and thereupon Rent shall be
apportioned and paid to the date on which vacant possession is given and the Tenant
shall deliver up possession of the Leased Premises to the Landlord in accordance with
such notice of termination.(c)
    If the Landlord does not elect to terminate the Lease pursuant to paragraphs
(a) or (b) of this Section, it shall, with reasonable diligence, repair and restore the
Leased Premises and/or the Building, in accordance with the provisions of Section
11.01.
 ARTICLE XII  DEFAULT:
 Events of Default
 12.01
    An Event of Default shall occur whenever:
 (a)
    the Tenant fails to pay the Rent hereby reserved or any part thereof within
five (5) days from the giving of written notice by the Landlord to the Tenant in
respect thereof (provided that if the Landlord is required to give the notice
hereunder on two (2) occasions in any twenty-four (24) consecutive months, the
Landlord shall for have no further obligation to give notice hereunder and an Event
of Default shall be deemed to occur on the date the Tenant fails to pay Rent on the
due date as provided for in the Lease);(b)
    the Tenant shall have breached or failed to comply with any of its
covenants and agreements contained in this Lease (save for non-payment of Rent) and
shall have failed to remedy such breach or non-compliance within fifteen (15) days
(or such longer period as the Landlord may reasonably determine, having regard to the
nature of the default) after written notice thereof given by the Landlord to the
Tenant;(c)
    the Tenant shall make any assignment for the benefit of creditors or become
bankrupt or insolvent or take the benefit of any Act now or hereinafter in force for
bankrupt or insolvent debtors;




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(d)
    
    the Tenant is a corporation and any order shall be made for the winding-up
of the Tenant or other termination of the corporate existence of the Tenant;(e)
    
    the Tenant makes or attempts to make a bulk sale of assets not in the
ordinary course of the Tenants business;(f)
    
    a trustee, receiver, interim receiver, receiver and manager, custodian or
liquidator is appointed for the business, property, affairs or revenue of the Tenant;(g)
    
    this Lease or any of the Tenants assets on the Leased Premises are taken
or seized under writ of execution, an assignment, pledge, charge, debenture or other
security instrument;(h)
    
    the Tenant abandons or attempts to abandon the Leased Premises;(i)
    
    the Tenant makes or applies to the relevant authority for a permit or
approval for, any installation, alteration, addition, modification or improvement to
the Leased Premises without the prior written approval or authorization of the
Landlord except when such approval or authorization is not required under this Lease;(j)
    
    the Leased Premises shall be used by any person other than the Tenant or
the Tenants permitted assignees or for any purpose other than as set out in Section
8.01;(k)
    
    any insurance policy on the Building or any part thereof shall be cancelled
or shall be threatened by the insurer to be cancelled or the coverage thereunder
reduced in any way by the insurer by reason of the use or occupation of the Leased
Premises or any part thereof by the Tenant and the Tenant shall have failed to remedy
the condition giving rise to such cancellation, threatened cancellation or reduction
of coverage within forty-eight (48) hours written notice given by the Landlord to the
Tenant;(l)
    
    the Tenant sells or disposes of the goods, chattels or equipment in the
Leased Premises or removes, commences or threatens to remove them from the Leased
Premises so that in the opinion of the Landlord there would not, in the event of such
sale, disposal or removal, be sufficient goods on the Leased Premises subject to
distress which would satisfy all Rent due or accruing hereunder for a period of six
(6) months;(m)
    
    the Tenant shall at any time during the Term use the Leased Premises,
whether within the use permitted by Section 8.01 or not, in a manner which imposes
upon the Landlord any obligation to modify, extend, alter or replace any part of the
Leased Premises or any of the machinery, equipment or other facilities used in
connection with the Leased Premises, which obligation is not fulfilled by the Tenant
at its own cost in a timely manner;(n)
    
    the Leased Premises are vacant for any period in excess of twenty (20) days
other than during repairs or renovations; or(o)
    
    the Tenant defaults in the performance or observation of any terms,
conditions, covenants or provisions of any other lease agreement in respect of
premises leased by the Tenant from the Landlord, which default is not remedied or
cured within any applicable grace period.
 Accelerated Rent12.02
    
    Upon the occurrence of an Event of Default then:
 (a)
    
    notwithstanding anything to the contrary in this Lease, such portion of the
Landlords Leasing Costs as are unamortized as at the day prior to such Event of
Default (assuming a straight-line amortization over the Term of this Lease) shall be
deemed to be outstanding to the Landlord and shall become immediately due and payable
as Rent, and the Landlord may, at its option, apply all or any monies or




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other security as may have been deposited or lodged with the Landlord as security
for the performance of the Tenants obligations under this Lease (collectively,
Security), against such amounts owing, all without prejudice to any further
claims by the Landlord for damages and/or remedy for recovery thereof and/or the
right of the Landlord to apply any Security against other amounts owing hereunder
or against other expenses, costs or damages incurred by the Landlord; and(b)
    
    in addition to and without limiting the foregoing and notwithstanding the
Bankruptcy and Insolvency Act(Canada) or otherwise the then current months Rent and
next ensuing three (3) months Rent, after appropriate adjustments to take into
account the fact that portions of the Leasing Costs amortized into Basic Rent may
have been accelerated under paragraph (a) of this Section, shall immediately become
due and be paid by the Tenant to the Landlord as accelerated Rent and the Landlord
may immediately distrain for the same together with any Rent arrears then unpaid.
 Right of Re-entry
 12.03
 (a)
    
    Upon the occurrence of an Event of Default, the Landlord may at any time
thereafter, without notice to the Tenant, re-enter the Leased Premises or any part
thereof in the name of the whole and terminate this Lease and all the rights of the
Tenant thereunder.(b)
    
    If and whenever the Landlord exercises its option to re-enter the Leased
Premises and terminate this Lease pursuant to paragraph (a) of this Section:
 (i)
    
    the Tenant shall immediately vacate the Leased Premises and
the Landlord may remove or cause to be removed from the Leased Premises the
Tenant and/or any other occupant or occupants thereof and if the Tenant has
not removed all property therefrom or completely vacated the Leased Premises
within three (3) days of the Landlord terminating this Lease and entering the
Leased Premises, then such property shall be deemed to be abandoned and the
Landlord may, at its discretion, remove all property therefrom and sell or
dispose of such property as the Landlord considers appropriate without
liability for loss or damage and without prejudice to the rights of the
Landlord to recover arrears of Rent or damages incurred by the Landlord;(ii)
    
    the Landlord shall be immediately entitled to the payment
of Rent up to the date of termination together with all expenses incurred by
the Landlord in respect of such termination and the value of the Rent,
calculated at the date of termination, for the unexpired portion of the Term.
 Reletting
 12.04
 Distress




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12.05
 Right of Landlord to Cure Defaults
 12.06
 Cross Default
 12.07
 Remedies Not Exclusive
 12.08
 Non-Waiver
 12.09
 Recovery of Adjustments
 12.10
 ARTICLE XIII  SUBORDINATION & ACKNOWLEDGEMENTS :
 Mortgages
 13.01




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(a)
    
    attorn to such mortgagee, chargee or trustee and become its tenant of the
Leased Premises or the tenant of the Leased Premises of any purchaser from such
mortgagee, chargee or trustee in the event of an exercise of any permitted power of
sale contained in any such mortgage, charge or deed of trust for the then unexpired
residue of the Term on the terms herein contained; and/or(b)
    
    postpone and subordinate this Lease to such mortgage, charge or deed of
trust to the intent that this Lease and all right, title and interest of the Tenant
in the Leased Premises shall be subject to the rights of such mortgagee, chargee or
trustee as fully as if such mortgage, charge or deed of trust had been executed and
registered and the money thereby secured had been advanced before the execution of
this Lease (and notwithstanding any authority or consent of such mortgagee, or
trustee, express or implied, to the making of this Lease).
  Certificates
 13.02
 ARTICLE XIV  ACCESS BY LANDLORD :
 Exhibiting Leased Premises
 14.01
 Expansion, Alteration
 14.02




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ARTICLE XV  MISCELLANEOUS:
 Notice
 15.01
    (a)
    Any notice, request, statement or other writing pursuant to this Lease shall be deemed
to have been given if mailed by registered prepaid post or by facsimile transmission as
follows:In the case of the Landlord, to:ORLANDO CORPORATION6205 Airport Road5th FloorMississauga, OntarioL4V lE3Attention:      PresidentFacsimile #:      (905) 677-2824In the case of the Tenant, to:NAVARRE CORPORATIONat the Leased PremisesAttention:      General CounselFacsimile #      (763) 504-1107With a copy to:NAVARRE CORPORATION7400 49th Avenue NorthNew Hope, MN 55428Attention:       General CounselFacsimile #:       (763) 504-1107and such notice shall be deemed to have been received by the Landlord or the
Tenant (as applicable) on the third business day after the date on which it shall
have been so mailed (provided that in the event that there is an interruption of
postal service, the aforesaid period shall be extended for a period equivalent to
the period of such interruption) or on the day of facsimile transmission if made
before 5:00 p.m. Eastern Time on a business day, otherwise on the business day
next following, as evidenced by a written confirmation of such facsimile
transmission.(b)
    Notice shall also be sufficiently given if and when the same shall be
delivered, in the case of notice to the Landlord, to an executive officer of the
Landlord or a person holding an executive position with the Landlord, and in the case
of notice to the Tenant, to him personally or if the Tenant is a




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corporation to an officer or manager of the Tenant or to the most senior employee
present at the Leased Premises when service is effected. Such notice, if
delivered, shall be conclusively deemed to have been given and received at the
time of such delivery. If in this Lease two or more persons are named as Tenant,
such notice shall also be sufficiently given if and when the same shall be
delivered personally to any one of such persons.
  Registration
 15.02
 Planning Act
 15.03 Planning Act
 Obligations as Covenants
 15.04
 Severability
 15.05
 Unavoidable Delays
 15.06
 Evidence of Payments
 15.07
 Overholding
 15.08




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Lien
 15.09
 Goods and Services Tax
 15.10 Excise Tax Act
 Time of Essence
 15.11
 Law
 15.12
 Captions/Headings
 15.13
 Joint and Several Liability
 15.14
 Tenant Partnership
 15.15
 Environmental Assessments
 15.16
    (a)
    The Landlord or its agent shall have the right to enter upon the Complex (including
but not limited to the Leased Premises) and conduct environmental assessment audits from time
to time during the Term upon forty-eight (48) hours prior notice (except where
contamination is actually present or threatened, in which case no notice shall be required).
In exercising its rights under this section, the Landlord shall use commercially reasonable
efforts to minimize its interference with the Tenants business operations.(b)
    Subject to and in accordance with Section 8.04 (b) of this Lease, the
Tenant covenants and agrees to execute forthwith upon written demand therefor, at its
own cost and expense, the complete remediation/clean-up of any and all contamination
of the Complex arising out of the Tenants use or occupation of the Leased Premises.
The aforesaid covenant contained in this paragraph (b) shall survive the expiry or
other termination of the Term.
 Easements




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15.17
 (a)
    
    such further easements in favour of adjoining lands for purposes of ingress
and egress, as may be requested by the Landlord from time to time; and(b)
    
    easements regarding utilities, services or sewers, as may be required from
time to time.
 Entire Agreement
 15.18
 Effect of Lease
 15.19
 ARTICLE XVI  ADDITIONAL PROVISIONS
 Option to Terminate
 16.01
 (a)
    
    the Tenant shall surrender the Leased Premises and deliver up vacant
possession thereof to the Landlord on the Termination Date, all in accordance with
and subject to the repair/surrender provisions set out in this Lease;(b)
    
    Rent shall (if necessary) be adjusted as of the Termination Date and shall
become payable by the Tenant to the Landlord in full within thirty (30) days of
invoicing;(c)
    
    neither party shall have any further liability or obligation to the other
after the Termination Date except for any default under this Lease by the Landlord or
Tenant occurring on or before the




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Termination Date, subject to final adjustment by the Landlord and Tenant on
account of Additional Rent; and(d)
    
    if requested by the Landlord, the Tenant shall fully surrender this Lease
to the Landlord on the Termination Date by execution of a formal document of
surrender prepared by the Landlord.
 Landlord Interest
 16.02
 IN WITNESS WHEREOF
 LANDLORD:
    ORLANDO CORPORATIONPer:
    /s/ Phil KingAuthorized Signing OfficerName:
    Phil KingTitle:
    PresidentPer:
    /s/ William ORourkeAuthorized Signing OfficerName:
    William ORourkeTitle:
    Senior Vice President, FinanceTENANT:
    We have authority to bind the Corporation
 NAVARRE CORPORATIONPer:
    /s/ Cary L. DeaconAuthorized Signing OfficeName:
    Cary L. DeaconTitle:
    CEOPer:
    /s/ Diane LappAuthorized Signing OfficerName:
    Diane LappTitle:
    VP FinanceI/We have authority to bind the Corporation