Document:

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

                              EMPLOYMENT AGREEMENT

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

                              W I T N E S S E T H:

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

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

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

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

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

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

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

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

<PAGE>

                               A G R E E M E N T:

                                   ARTICLE 1.
                           Employment and Compensation

         1.1 Term and Position.

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

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

                  1.1.3 Deleted Intentionally.

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

         1.2 Salary and Bonus Compensation.

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

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

<PAGE>

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

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

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

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

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

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

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

                                   ARTICLE 2.
                           Documents, Confidentiality

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

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

<PAGE>

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

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

         2.4 Improvements and Inventions.

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

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

<PAGE>

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

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

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

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

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

<PAGE>

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

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

         2.8 Remedies.

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

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

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

         2.9 Non-violation of Law and Restrictions.

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

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

         2.10 Infringement Indemnity from Executive.

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

<PAGE>

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

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

         2.11 Definitions.

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

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

                                   ARTICLE 3.
                         Term of Agreement; Termination

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

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

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

         3.4 Effect of Termination.

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

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

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

<PAGE>

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

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

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

         3.5 Certain Definitions. For purposes of this ARTICLE 3:

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

                  3.5.2 Cause. Termination for "Cause" shall mean:

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

<PAGE>

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

                                   ARTICLE 4.
                                     General

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

[SIGNATURE PAGE FOLLOWS]

<PAGE>

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

                                           ENCORE ACQUISITION CORPORATION

________________________________             By:___________________________
         Michael Bell                        Its:__________________________

<PAGE>

                                LIMITED GUARANTY:

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

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

         Executed this __ day of August, 2002.

         Navarre Corporation

         By: ________________________
         Its: _____________________<PAGE>

         EXHIBIT 10.4 STOCK BUY AND SELL AGREEMENT

                          STOCK BUY AND SELL AGREEMENT

                                         Prepared by:
                                         Larry A. Koch
                                         MASLON EDELMAN BORMAN & BRAND, LLP

                                         3300 Wells Fargo
                                         Center 90 South Seventh
                                         Street Minneapolis,
                                         Minnesota 55402-4140
                                         (612) 672-8200

      Copyright, 1999, 2000, 2001, 2002 Maslon Edelman Borman & Brand, LLP

<PAGE>

                  (i) STOCK BUY AND SELL AGREEMENT

         THIS AGREEMENT is entered into effective as of the ____ day of August,
2002 (the "Effective Date"), by and among Encore Acquisition Corporation, a
Minnesota corporation (the "Company"), and Michael Bell ("Bell").

                                  INTRODUCTION

         The Company issues to Bell and Bell owns 20,000 shares of the Common
Stock of the Company representing 20% of the outstanding common stock of the
Company as of the date hereof. The Stock was issued on condition that Bell
execute this Buy & Sell Agreement.

         The parties hereto believe it to be in their best interests to restrict
the transfer of such stock and any other stock of the Company Bell may acquire
in the future and to provide for the orderly future disposition of such shares
if certain contingencies occur.

                  (ii) AGREEMENT

         NOW, THEREFORE, in consideration of the facts stated above, which are a
part of this Agreement, the parties agree as follows:

                RESTRICTIONS ON TRANSFER AND GENERAL DEFINITIONS

         Restrictions on Transfer.

                  Governing Principle.

                           No Transfer (defined below) or attempted Transfer of
                  Shares (defined below) during lifetime or at death, whether
                  voluntary or involuntary, or with or without consideration,
                  will be effective and binding upon Bell or the Company unless
                  the parties first comply with all of the applicable provisions
                  of this Agreement relative to any such transfer.

                           During the first ten (10) years of this Agreement,
                  Bell shall not Transfer nor attempt to Transfer all or any of
                  the Shares to any person or entity other than the Company or
                  Navarre Corporation (Navarre) without the prior written
                  consent of the Company and Navarre.

                  Compliance with Securities Laws. No Transfer of any Shares
         shall be made or be effective unless and until such Transfer complies
         with all federal and state securities laws applicable to such
         transaction. At the request of the Company, the Transferring
         Shareholder shall deliver to the Company an opinion of counsel, which
         counsel and opinion shall be reasonably satisfactory to the Company, to
         the effect that the Transfer satisfies this Section.

<PAGE>

                  Conditions to Transfer. No Transfer or attempted Transfer of
         Shares by Bell during lifetime or at death, whether voluntary or
         involuntary, or with or without consideration, whether or not permitted
         under the terms of this Agreement, will be effective and binding upon
         the Company unless the parties to the Transfer first comply with the
         provisions of this Agreement that are relative to any such transfer
         including the following conditions:

                           Any Shares Transferred shall remain subject to this
                  Agreement as if they were held by the Shareholder, except that
                  the Transferee(s) shall be substituted for the Shareholder or
                  the Shareholder's legal representative with respect to any
                  notices, payments or Transfer of Shares under this Agreement.

                           The Company and the Other Shareholders may require
                  the Transferee(s) and any beneficial owners of the Transferred
                  Shares, including, but not limited to, any beneficiaries,
                  partners or their guardians, to sign reasonable
                  acknowledgments that the Shares Transferred are subject to the
                  terms of this Agreement and powers of attorney authorizing the
                  execution of documents necessary to insure compliance with the
                  terms of this Agreement.

                           The Shareholder shall give the Company prompt written
                  notice of the Transfer together with such information
                  regarding the Transferee(s), or the trustee(s) as the case may
                  be, and any beneficial owners, as the Company may reasonably
                  request.

                  Transfers Not In Compliance. In the event any purported
         Transfer of Shares by Bell does not comply with this Agreement, the
         purported Transferee or successor by operation of law shall not be
         deemed to be a shareholder of the Company for any purpose and shall not
         be entitled to any of the rights of a shareholder, including, without
         limitation, the right to vote the Shares or to receive a certificate
         for the Shares or any dividends or other distributions on or with
         respect to the Shares.

         General Definitions. In addition to the terms defined above and
elsewhere in this Agreement, the following capitalized terms, for purposes of
this Agreement, have the respective meanings set forth below:

                  "Affiliate" shall have the meaning set forth in Rule 405
         promulgated under the Securities Act.

                  "Affected Shares" means Shares subject to an actual or
         proposed Voluntary or Involuntary Transfer, an Option or a right of
         first refusal hereunder.

                  "Bell" means Michael Bell.

                  "Business Day(s)" means any weekday excluding Sundays,
         Saturdays and federal holidays.

<PAGE>

                  "Direct Lineal Descendants" of an individual means his or her
         children, grandchildren, great grandchildren and so on, by natural
         birth or legal adoption; including without limitation (i) any
         illegitimate child acknowledged by his or her parent as the parent's
         child, if the parent is such individual or his or her Direct Lineal
         Descendant; and (ii) the Direct Lineal Descendants of such child.

                  "Involuntary Transfer" means a Transfer by legal process as
         described in Section 2.3.2.2.

                  "Involuntary Transferee" means a person or entity that
         receives Shares by reason of an Involuntary Transfer under Section
         2.3.2.2 of this Agreement or a successor in title to such Affected
         Shares.

                  "Option" means the right or option of any Shareholder or the
         Company to acquire Affected Shares pursuant to Article 2 hereof.

                  "Option Period" means, unless another option period is
         specifically provided, the thirty (30) day period following the date on
         which the last of the Other Shareholders received written notice of a
         proposed Transfer, unpermitted Transfer or Involuntary Transfer of
         Affected Shares or the occurrence of any other event giving rise to a
         right or option to acquire Affected Shares, in which the Permitted
         Transferees may elect to purchase such Affected Shares pursuant to the
         terms of this Agreement.

                  "Other Shareholders" means shareholders other than Bell who
         hold shares other than Shares Transferred directly or indirectly from
         Bell.

                  "Other Shares" means shares of stock of the Company held by
         Other Shareholders.

                  "Permitted Affiliate" means an Affiliate of the Shareholder
         the equity interests of which are held solely by the Shareholder,
         Shareholder's spouse, Direct Lineal Descendant, parents, Permitted
         Trusts and Permitted Partnerships.

                  "Permitted Partnership" means a partnership, the equity
         interests of which are held solely by the Shareholder, Shareholder's
         spouse, Direct Lineal Descendant, parents, Permitted Trusts and
         Permitted Affiliates.

                  "Permitted Transfer" means any voluntary Transfers of Affected
         Shares as permitted under this Agreement.

                  "Permitted Transferee" means (except as provided below):

                           the Shareholder's Spouse,

                           the Shareholder's Lineal Descendants,

                           the Shareholder's Parents,

<PAGE>

                           a Permitted Affiliate,

                           a Permitted Trust,

                           a Permitted Partnership,

                           the Company,

                           in the event of the dissolution, liquidation or
                  winding up of any Shareholder that is a trust, partnership,
                  limited liability company or corporation, the beneficiaries of
                  a trust that is a Shareholder, the partners of a partnership
                  that is such Shareholder, the members of a limited liability
                  company that is such Shareholder, the stockholders of a
                  corporation that is such Shareholder, or a successor trust all
                  of the beneficiaries of which, a successor partnership all of
                  the partners of which, or a successor limited liability
                  company all of the members of which, or a successor
                  corporation all of the stockholders of which, are the Persons
                  who were the partners of such partnership, members of such
                  limited liability company or the stockholders of such
                  corporation immediately prior to the dissolution, liquidation
                  or winding up of such Person, or

                           any Person to whom Shares are Transferred in
                  compliance with the terms of this Agreement.

                           Notwithstanding the foregoing, if the Company is an
                  "S corporation" under the Internal Revenue Code, a Permitted
                  Transferee shall not include any of the foregoing Persons
                  whose ownership of any Shares would cause the Company to cease
                  to be an "S corporation".

                  "Permitted Trust" means any of the Trusts described below:

                           A revocable trust created by the Shareholder
                  primarily for the Shareholder's benefit during his or her
                  lifetime and/or for his spouse, Direct Lineal Descendants,
                  parents or charities are the primary beneficiaries upon
                  his/her death.

                           An irrevocable trust created by the Shareholder
                  primarily for the benefit of his or her spouse, Direct Lineal
                  Descendants and/or parents.

                  "Person" shall mean any individual, trust or trustee, firm,
         partnership, limited liability company, corporation or other entity,
         and shall include any successor (by merger or otherwise) of any such
         individual or entity.

                  "Securities Act" shall mean the Securities Act of 1933, as
         amended, and the rules and regulations promulgated thereunder.

                  "Shareholder" means unless the context otherwise requires a
         different meaning, Michael Bell, any direct or indirect Transferee of
         any of the Shares to whom any Affected Shares are Transferred in

<PAGE>

         accordance with the terms of this Agreement and solely for purposes of
         subjecting any purported Transferee to the terms of this Agreement, any
         Transferee of any of the Shares even if the Transfer was not in
         compliance with the terms of this Agreement, such Transferee not being
         entitled to vote, to receive distributions or otherwise exercise or be
         entitled to any rights, distributions or preferences on liquidation of
         the Company.

                  "Shares" means the Shares set forth in the Introduction and
         any other Shares of the capital stock of the Company held directly or
         indirectly by Bell or a Shareholder as defined herein.

                  "Transfer" means (i) as a noun, any actual or proposed or
         attempted voluntary or involuntary, directly or indirectly through the
         transfer of interests in controlled Affiliates or otherwise transfer
         (by operation of law, bankruptcy proceedings, court order, testamentary
         instrument or otherwise), sale, exchange, gift, assignment, pledge,
         hypothecation, or other encumbrance, foreclosure of a security interest
         upon, or other disposition of an item or the consummation of any such
         transaction, or the agreement or soliciting of any offer or agreement
         to consummate any of the foregoing; or (ii) as a verb, to voluntarily
         or involuntarily cause or attempt to cause a Transfer of an item.
         "Transferred" means, as an adjective, that an item has been the subject
         of a Transfer.

                  "Transferee" means a person or entity that has received a
         Transfer of an item.

                  "Transferee Shareholder" means a Shareholder who is a
         Transferee of Affected Shares pursuant to a Transfer of Shares by Bell
         or a Shareholder who is a Transferee of Shares directly or indirectly
         from Bell.

                  "Transferring Shareholder" means a Shareholder who Transfers
         Affected Shares.

                  "Transferor" means any person or entity that Transfers
         Affected Shares.

                      PERMITTED TRANSFERS/PURCHASE OPTIONS

         Transfers to Permitted Transferees. A Shareholder may Transfer all or
part of the Shareholder's Shares to Permitted Transferees as specified in this
Section 2.1 but only after complying with all conditions to such Transfer set
forth in this Agreement including but not limited to the conditions set forth in
Section 1.1 and this Section 2.1. The Shareholder shall give the Company prompt
written notice of the Transfer (in no event later than thirty (30) days after
the Transfer) together with such information regarding the Transferees as the
Company may reasonably request.

         Transfers to Other than Permitted Transferees. A Shareholder may
Transfer his or her Shares to a Person other than a Permitted Transferee, but
only as and to the extent provided for in this Agreement and only after
complying with all of the terms and conditions set forth herein for such a
Transfer, including, but not limited to, the provisions of Section 2.3.

<PAGE>

         Options to Purchase.

                  General. Upon the occurrence of an Option Event, the Company
         shall have the Option to purchase the Affected Shares on the terms set
         forth herein for each such Option Event. If the Company does not
         exercise the Option granted under this Section, the Other Shareholders
         whose Shares are not the Affected Shares shall have an Option to
         purchase the Affected Shares as provided in Article 3.

                  Option Events.

                           Voluntary Transfers to Non-Permitted Transferees.

                                    Any Shareholder who desires to voluntarily
                           Transfer all or any of his or her Shares to any
                           Person other than a Permitted Transferee shall first
                           offer the Affected Shares for sale to the Company.
                           Any such offer shall be made in writing to the
                           Company by the Transferor and shall contain the name
                           and address of each person to whom such Shareholder
                           intends to Transfer such Affected Shares and the
                           consideration, if any, and other terms and conditions
                           of the intended Transfer. Except in the case of a
                           Transfer without consideration, the Company may,
                           prior to the Transfer of any Shares hereunder,
                           require evidence of a bona fide offer to purchase or
                           provide such Shares as security.

                                    After receipt of the Offer, and during the
                           Option Period as described in Section 2.3, the
                           Company shall have the Option, exercised as provided
                           in Section 2.3.3, to purchase all (but not less than
                           all) of the Affected Shares at the price and on the
                           terms set forth below:

                                    If the Shareholder offers Affected Shares
                           intending to sell or exchange such Shares, the
                           Company may purchase all such Affected Shares either
                           (i) at the price and on the terms and conditions of
                           the intended sale or exchange, as stated in the
                           Transferor's offer, or (ii) at the price and on the
                           terms specified in Articles 4 and 5 hereof, whichever
                           the Company elects.

                                    If the Shareholder offers Affected Shares
                           intending to Transfer, pledge or otherwise encumber,
                           or otherwise dispose of such Affected Shares in any
                           manner not described in Article 2, the Company shall
                           have the Option to purchase such Shares at the price
                           and on the terms specified in Articles 4 and 5
                           hereof.

                                    If the Company does not exercise the Option
                           granted under this Section, the Other Shareholders
                           whose shares are not the Affected Shares shall have
                           an Option to purchase the Affected Shares as provided
                           in Article 3.

<PAGE>

                                    If neither the Company nor any of such Other
                           Shareholders exercise their respective options, then
                           the Transferor may Transfer the Affected Shares but
                           only (i) in strict accordance with the terms of the
                           Offer made to the Company, (ii) during a period of
                           thirty (30) days following the expiration of the
                           Other Shareholders' Option, (iii) solely to the
                           persons or entities identified in the Offer to the
                           Company, and (iv) only if such persons or entities,
                           in writing, accept and become bound by all the terms
                           and conditions of this Agreement. If the Transferor's
                           proposed disposition is not consummated within such
                           thirty (30) day period, such Shares shall again be
                           subject to all the terms and conditions of this
                           Agreement.

                           Involuntary Transfers.

                                    In the event of any Involuntary Transfer of
                           all or any of the Shares of any Shareholder by reason
                           of (i) sale pursuant to a levy of execution, (ii)
                           foreclosure of pledge, (iii) garnishment, (iv)
                           attachment, (v) property settlement in a marriage
                           dissolution proceeding, or (vi) other legal process,
                           such Shareholder shall notify the Company in writing
                           in advance of such impending Transfer.

                                    If any such Involuntary Transfer of the
                           Affected Shares does occur, then each resulting
                           Involuntary Transferee of Affected Shares shall be
                           deemed (whether or not the Company received notice of
                           such Transfer) to be a Shareholder solely for
                           purposes of this Section 2.3.2.2 subject to this
                           Agreement and such Involuntary Transferee shall
                           immediately offer the Affected Shares for sale to the
                           Company.

                                    The Company shall have the Option during the
                           Option Period set forth in Section 2.3 to purchase
                           all (but not less than all) such Affected Shares (i)
                           at the price and on the terms under which the
                           Affected Shares were acquired by such Involuntary
                           Transferee, or (ii) at the price and on the terms
                           specified in Articles 4 and 5 hereof, whichever the
                           Company elects.

                                    Such offer by an Involuntary Transferee
                           shall be made in writing to the Company and shall
                           disclose the terms and conditions of the acquisition
                           of such Affected Shares by such Involuntary
                           Transferee.

                                    If the Company does not exercise the Option
                           granted under this Section, the Other Shareholders
                           whose Shares are not the Affected Shares shall have
                           an Option to purchase the Affected Shares as provided
                           in Article 3.

                                    If neither the Company nor any of such Other
                           Shareholders exercise their respective options, then
                           the Affected Shares in the hands of the Involuntary

<PAGE>

                           Transferee, shall remain subject to the terms and
                           conditions of this Agreement as if such Involuntary
                           Transferee was a Shareholder.

                           Bankruptcy.

                                    If, pursuant to any bankruptcy proceeding,
                           title to a Shareholder's Shares passes other than to
                           the bankruptcy estate of such Shareholder, the
                           Company shall have the Option for a period of six (6)
                           months from the date the Company receives notice of
                           such Transfer to purchase some or all of such Shares
                           at the price and on the terms specified in Articles 4
                           and 5 hereof.

                                    If the Company does not exercise the Option
                           granted under this Section, then the Other
                           Shareholders whose Shares are not the Affected Shares
                           shall have an Option to purchase some or all of such
                           Affected Shares as provided in Article 3.

                                    If neither the Company nor any of such Other
                           Shareholders exercise their respective Options with
                           respect to all of the Affected Shares, then the
                           Affected Shares in the hands of any persons or
                           entities who receive them from the bankruptcy estate
                           shall remain subject to the terms and conditions of
                           this Agreement.

                           Sale of Assets. Upon sale of substantially all of the
                  Company's assets, the Company shall have the Option during the
                  Option Period to purchase all (but not less than all) of the
                  Shares at the price equal to the net price per share which
                  would be paid to all Shareholders upon liquidation of the
                  Company in the manner provided by law immediately after such
                  sale after payment of or establishment of reserves for all
                  liabilities of the Company.

                           Sale of Substantially all of the Other Shares. Upon
                  the sale of substantially all of the Other Shares of the
                  Company to Persons or entities in one or more related
                  transactions, the Company shall have the Option to purchase
                  all, but not less than all, of the Shares belonging to the
                  Shareholder at the average price and on substantially the
                  terms at which the holders of the Other Shares sold their
                  Other Shares in the Company.

                           Death of Bell. Upon the death of Bell, the Company
                  shall have an Option to purchase for a period of nine (9)
                  months from the later of (i) the date on which a personal
                  representative is appointed, or (ii) if none is appointed, the
                  date of Bell's death, all, but not less than all, of the
                  Shares held by Bell, his heirs, or his estate, or any
                  Transferee Shareholder, at the price equal to and on the terms
                  specified in Articles 4 and 5 hereof.

                           Termination of Bell's Employment Other Than by Death.
                  If Bell's employment with the Company terminates for any
                  reason other than his death, the Company shall have the Option

<PAGE>

                  during the Option Period to purchase all (but not less than
                  all) of the Shares owned by Bell or any Transferee Shareholder
                  at the price and on the terms specified in Articles 4 and 5
                  hereof.

                  Exercise of Option.

                           The exercise of any Option by the Company pursuant to
                  this Article 2 shall be accomplished by mailing or personally
                  delivering written notice of such exercise to the Shareholder
                  of the Affected Shares or to his or her Transferee or legal
                  representative, as the case may be, within the Option Period.
                  Failure to give such written notice of exercise within the
                  Option Period shall constitute a rejection of the Offer or
                  waiver of the Option as the case may be.

                           If any such Option is not fully exercised by the
                  Company, then on or prior to the last day of the Option
                  Period, the Company shall mail or otherwise deliver written
                  notice of such non-exercise to all Other Shareholders.

         Restriction on Company Purchase. Notwithstanding any other provisions
of this Agreement, the Company shall neither elect nor be obligated to purchase
any Shares if the payment of the Purchase Price would render the Company unable
to pay its debts in the ordinary course of business or would violate any terms
of any agreement to which the Company is a party provided such agreement was
entered into in the ordinary course of business and not with a view to prevent
redemptions under this Agreement.

         Transferee Stock. If the Company has the right or Option to purchase
the Shares held by the Shareholder, subject to the Option as provided in Article
3, the Company shall have the right and Option, but not the obligation, to
purchase any of the Transferred Shares previously owned by the Shareholder and
Transferred by the Shareholder whether such Transferee was or was not a
Permitted Transferee unless such right was expressly waived in writing by the
Company and the Other Shareholders. If the Company has the right, Option or
obligation to purchase the Affected Shares held by the Shareholder, subject to
the Option as provided in Article 3, the Company shall have the right, Option
and obligation to purchase any of the Transferred Shares previously owned by the
Shareholder unless such right was expressly waived in writing by the Company and
the Other Shareholders.

         Required Purchase of Shares.

                  Bell's  Put Right.

                           Within thirty (30) days after any calendar quarter
                  beginning on or after the Effective Date, Bell, at his sole
                  option, may cause the Company to repurchase that number of
                  Shares which when added to all Shares previously purchased by
                  the Company pursuant to this Section is equal to or less than
                  fifty percent (50%) of 20,000 as adjusted for any stock splits
                  multiplied by the Acquisition Percentage (defined below) (the
                  "Put Right") at the purchase price per share determined

<PAGE>

                  pursuant to Section 0. Bell shall exercise the Put Right by
                  delivering written notice of same to the Company in compliance
                  with Section 0.

                           Within thirty (30) days after the end of any calendar
                  quarter beginning after the date which is five (5) years after
                  the Effective Date, Bell, at his sole option, may cause the
                  Company to repurchase all or any of Shares not previously
                  purchased pursuant to this Section 2.6.1.1 at the purchase
                  price determined under Section 0.

                  Deceased Shareholder's Put Option. After the death of Bell,
         the personal representative of Bell (or if no personal representative
         is appointed, Bell's heirs at law, devisees and any Permitted
         Transferees who are Shareholders but only as and to the extent that
         they received a Transfer of Shares from Bell) may during each of the
         five (5) consecutive twelve (12) month periods beginning on Bell's
         death require the Company to purchase from such personal
         representative, heirs at law, devises or Permitted Transferees in each
         such twelve (12) month period up to twenty percent (20%) of the Shares
         held by such personal representative, heirs at law, devisees or
         Permitted Transferees, as the case may be, at the price and on the
         terms specified in Articles 4 and 5 hereof. To require such purchase,
         the personal representative, heirs at law, devisees or Permitted
         Transferees, as applicable, shall mail or personally deliver written
         notice of such required purchase to the Company.

                  Tag-Along Rights. Except as provided below, if during a
         twenty-four (24) month period, the Other Shareholders sell more than
         fifty percent (50%) of their Other Shares to one or more Persons who
         are not Affiliates of the Company or the Transferring Other
         Shareholder, in one or a series of related transactions, such Other
         Shareholders or the Company shall provide Bell and each Shareholder who
         is a Transferee of Bell (each a "Notice Recipient") and the Company
         with not less than twenty (20) business days' prior written notice of
         such proposed sale, which notice shall include all of the material
         terms and conditions of such proposed sale and which shall identify
         such Shares and such purchaser (the "Sale Notice"); and each Notice
         Recipient shall have the Option, exercisable by written notice to the
         Company or such Transferring Other Shareholder within ten (10) business
         days after receipt of the Sale Notice, to require the Transferring
         Other Shareholders to arrange for such purchaser to purchase the same
         percentage (the "Percentage") of such Shares then owned by such Notice
         Recipient as the ratio of the total number of such Other Shares which
         are to be sold by the Other Shareholders pursuant to the proposed sale
         to the total number of such Shares owned by the Other Shareholders
         immediately prior to such Transfer, or any lesser amount of such Shares
         as such Notice Recipient shall desire, together with the Other Shares
         at the same time as, and upon the same terms and conditions (including
         all direct or indirect consideration or compensation) at which, the
         Other Shareholders sell their Other Shares. If a Notice Recipient shall
         so elect, the Other Shareholders shall either (a) arrange for the
         proposed purchaser to purchase all (or such portion as such Notice
         Recipient shall specify) of the same Percentage of such Shares then
         owned by such Notice Recipient at the same time as, and upon the same
         terms and conditions at which the Other Shareholders sell their Other
         Shares, including any related covenant not to compete or similar

<PAGE>

         restriction, provided that, if such purchaser shall elect to purchase
         only such aggregate number of such Shares as originally agreed with the
         Other Shareholders, then the number of such Shares to be sold by the
         Other Shareholders and all Notice Recipients electing to participate in
         the proposed sale shall be reduced pro rata to such aggregate number,
         or (b) not effect the proposed sale to such purchaser. In the event
         that a Notice Recipient does not exercise its right to participate in
         such sale or declines to so participate, the Other Shareholders shall
         have one hundred twenty (120) days from the date of such Sale Notice to
         consummate the transaction on terms substantially no more favorable
         than those set forth therein without being required to provide an
         additional Sale Notice to the Shareholders.

                         PURCHASE BY OTHER SHAREHOLDERS

         Other Shareholders' Option to Purchase. If any Option granted by
Article 2 is not exercised by the Company, then such Option shall be considered
to have been granted to the Other Shareholders whose Shares are not subject to
any such Option. For a period of thirty (30) days commencing on the day
following the expiration of the Company's Option Period, such Other Shareholders
shall have the right and Option to purchase all (but not less than all) of such
Affected Shares at the same terms and per-share price at which such Affected
Shares were made available to the Company under Article 2. If the Company had an
election under Article 2 regarding the per-share price and terms, the per-share
price and terms for purchase by the Shareholders under this Section shall be the
per-share price and terms elected by the vote of a majority of the Other Shares
owned by the Other Shareholders exercising the Option to purchase the Shares.

         Procedure. The exercise of any Option by a Other Shareholder to
purchase Affected Shares pursuant to Section 3.1 shall be accomplished by
mailing or personally delivering written notice of such exercise to the
Shareholder (or his or her Transferee, successor, or legal representative, as
the case may be) of the Affected Shares, within the thirty (30)-day Option
Period. An Other Shareholder's failure to give such written notice of exercise
within the thirty (30)-day period shall constitute a rejection of the Offer made
by the Shareholder (or Transferee, successor, or legal representative) of the
Affected Shares.

         Proportional Purchases. If more than one Other Shareholder exercises
any Option to purchase Affected Shares pursuant to Section 3.1, each Other
Shareholder so exercising the Option shall be entitled to purchase the same
proportion of the Affected Shares as the total number of Shares owned by such
Other Shareholder, on the first day the Option is exercisable, bears to the
total number of Other Shares owned on that date by all Other Shareholders
electing to exercise that Option.

<PAGE>

                                 PURCHASE PRICE

         Purchase Price.

                  Except as otherwise provided in Article 2 or this Article, the
         Purchase Price of each Share held by a Shareholder shall be the Formula
         Value of each Share, as determined pursuant to Section 4.2, multiplied
         by, the Acquisition Percentage set forth in Section 4.1.2.

                  Except as provided below, the Acquisition Percentage shall be
         as set forth in the following table:

<TABLE>
<CAPTION>
         ------------------------------------------------------------------------------------ -----------------

                                                                                                 Acquisition
                  The Period in which the Termination of Bell's Employment                       Percentage
         occurs or the occurrence of the event giving rise to the Option to
         buy or the Put, which ever is earlier:
         ------------------------------------------------------------------------------------ -----------------
<S>      <C>                                                                                  <C>
                  After the Date hereof and on or before September 30, 2002                                 1%
         ------------------------------------------------------------------------------------ -----------------

                  On or after October 1, 2002 and on or before December 31, 2002                            4%
         ------------------------------------------------------------------------------------ -----------------

                  On or after January 1, 2003 and on or before March 31, 2003                              10%
         ------------------------------------------------------------------------------------ -----------------

                  On or after April 1, 2003 and on or before June 30, 2003                                 15%
         ------------------------------------------------------------------------------------ -----------------

                  On or after July 1, 2003 and on or before September 30, 2003                             20%
         ------------------------------------------------------------------------------------ -----------------

                  On or after October 1, 2003 and on or before December 31, 2003                           25%
         ------------------------------------------------------------------------------------ -----------------

                  On or after January 1, 2004 and on or before March 31, 2004                              30%
         ------------------------------------------------------------------------------------ -----------------

                  On or after April 1, 2004 and on or before June 30, 2004                                 35%
         ------------------------------------------------------------------------------------ -----------------

                  On or after July 1, 2004 and on or before September 30, 2004                             40%
         ------------------------------------------------------------------------------------ -----------------

                  On or after October 1, 2004 and on or before December 31, 2004                           45%
         ------------------------------------------------------------------------------------ -----------------
</TABLE>

<PAGE>

<TABLE>
         ------------------------------------------------------------------------------------ -----------------
<S>      <C>                                                                                  <C>
                  On or after January 1, 2005 and on or before March 31, 2005                              50%
         ------------------------------------------------------------------------------------ -----------------

                  On or after April 1, 2005 and on or before June 30, 2005                                 55%
         ------------------------------------------------------------------------------------ -----------------

                  On or after July 1, 2005 and on or before September 30, 2005                             60%
         ------------------------------------------------------------------------------------ -----------------

                  On or after October 1, 2005 and on or before December 31, 2005                           65%
         ------------------------------------------------------------------------------------ -----------------

                  On or after January 1, 2006 and on or before March 31, 2006                              70%
         ------------------------------------------------------------------------------------ -----------------

                  On or after April 1, 2006 and on or before June 30, 2006                                 75%
         ------------------------------------------------------------------------------------ -----------------

                  On or after July 1, 2006 and on or before September 30, 2006                             80%
         ------------------------------------------------------------------------------------ -----------------

                  On or after October 1, 2006 and on or before December 31, 2006                           85%
         ------------------------------------------------------------------------------------ -----------------

                  On or after January 1, 2007 and on or before March 31, 2007                              90%
         ------------------------------------------------------------------------------------ -----------------

                  On or after April 1, 2006 and on or before June 30, 2007                                 95%
         ------------------------------------------------------------------------------------ -----------------

                  On or after July 1, 2007                                                                100%
         ------------------------------------------------------------------------------------ -----------------
</TABLE>

                  Notwithstanding the foregoing table, the Acquisition
         Percentage shall be one hundred percent (100%):

                           Upon a termination of Bell's employment with the
                  Company by the Company for any reason (including but not
                  limited to death or disability) other than Cause as defined
                  herein, or the reduction of Bell's responsibilities in the
                  Company for any reason other than Cause; or

                           Upon the occurrence of a Change of Control as defined
                  herein; or

                           Upon Bell's termination of his employment by the
                  Company for Good Reason as defined below.

<PAGE>

                  Cause.  Termination for "Cause" shall mean:

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

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

                           Notwithstanding the foregoing, Bell shall not be
                  deemed to have been terminated for Cause without (i)
                  reasonable notice to Bell setting forth the reasons for the
                  Company's intention to terminate for Cause, (ii) an
                  opportunity for Bell, together with his counsel, to be heard
                  before the Board, (iii) delivery to Bell of a Notice of
                  Termination from the Board finding that in the good faith
                  opinion of the Board Bell was guilty of conduct set forth
                  above in Sections 0 or 0 hereof, and specifying the
                  particulars thereof in detail and (iv) a period not to exceed
                  thirty (30) days after such Notice of Termination to cure such
                  breach provided that Bell shall be entitled to only one cure
                  period within any twelve (12) consecutive monthly period.

                  Change in Control. A "Change in Control" of the Company shall
                  occur if:

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

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

<PAGE>

                           the merger or consolidation with or into another
                  corporation other than an Affiliate of Navarre, but only if
                  such transaction results in which the shareholders of the
                  Company immediately before such event do not hold directly or
                  indirectly more than fifty percent (50%) of the voting stock
                  of the merged or consolidated companies; or

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

                  Good Reason. Termination for "Good Reason" shall mean one or
         more of the following:

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

                           A material change in the principle business of the
                  Company.

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

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

                           any material breach by the Company of any provision
                  of this Agreement or Bell's Employment Agreement with the
                  Company which is not cured within 30 days (10 days in the
                  event of a failure to pay money) of written notice to the
                  Company of such breach, provided, that the Company shall be
                  entitled to only one such breach in any twelve (12)
                  consecutive monthly period.

         Formula Value.

                  The "Formula Value" of each Affected Share shall be determined
         as of the end of the month preceding the month in which the Company's
         sixty (60)-day option period commences to run pursuant to Article 2, or
         as of the end of the month immediately preceding the date of the
         deceased Shareholder's death or the date of the notice of required
         purchase under Section 2.6.1 or the end of the month immediately
         preceding the date on which Bell exercises his Put Right , whichever
         applies, and shall be equal to (a) the amount determined under Section
         0, divided by (b) the total number of shares of common stock (voting
         and non-voting) then outstanding.

                  The amount determined under this Section shall be equal to:
         (a) the Weighted Net Sales (defined below) multiplied by thirteen and
         one-half percent (13.5%), plus (b) the Weighted EBITDA (defined below)
         multiplied by four hundred percent (400%), minus

<PAGE>

         (c) Acquisition Cost (defined below), minus (d) New Debt (defined
         below), minus (e) New Leases (defined below), and minus (f) any amount
         previously paid to Bell pursuant to this Agreement.

                  Definitions.  For purposes of Section 0:

                           "Net Sales" shall mean the Company's gross sales less
                  returns and allowances for the immediately preceding four
                  quarters, determined in accordance with generally accepted
                  accounting principles.

                           "EBITDA" shall mean earnings before interest, income
                  taxes, depreciation and amortization for the immediately
                  preceding fiscal year, determined in accordance with generally
                  accepted accounting principles.

                           "Acquisition Cost" shall mean the sum of Ten million
                  Dollars ($10,000,000.00).

                           "New Debt" means outstanding principle and accrued
                  interest attributable to any interest bearing debt existing on
                  the date of exercise of the Put Right but not assumed in
                  connection with the purchase of the assets of the Company.

                           "New Leases" means the present value of minimum lease
                  commitments, determined as of the date of exercise of the Put
                  Right in accordance with generally accepted accounting
                  principles, less the present value of minimum lease
                  commitments on the date the assets of the Company were
                  purchased by Navarre and/or its affiliated entities.

                            "Weighted EBITDA" means an amount equal to: (a) the
                  sum of (i) the EBITDA for the most recent completed fiscal
                  year of the Company multiplied by three, plus (ii) the EBITDA
                  for the fiscal year of the Company next preceding the most
                  recent completed four quarters of the Company, divided by (b)
                  four (4).

                           "Weighted Net Sales" means an amount equal to: (a)
                  the sum of (i) the Net Sales for the most recent completed
                  four quarters of the Company multiplied by three, plus (ii)
                  the Net Sales for the four quarters nos. 5, 6, 7 and 8 divided
                  by (b) four (4).

                  The Formula Value shall be determined, by the independent
         public accountants then serving the Company, in accordance with
         generally accepted accounting principles applied consistently with the
         principles previously followed in preparing annual financial statements
         of the Company. The expense of determining the Formula Value shall be
         borne by the selling Shareholder (or his or her transferee or legal
         representative, as the case may be) if the Shareholder is exercising
         any right under this Agreement to have his Shares purchased and by the
         Company if the Company is exercising its right or option to purchase
         Shares pursuant to this Agreement.

<PAGE>

                            PAYMENT OF PURCHASE PRICE

         Payment in Cash or by Installments. Except as otherwise provided in
Article 2, the Purchase Price of any Affected Shares purchased by the Company or
any Shareholder pursuant to this Agreement shall be payable in installments by
delivery of a negotiable promissory note of the purchaser, substantially in the
form attached hereto as Exhibit 5.1, payable in forty-eight (48) equal monthly
installments of principal and interest, commencing on the date of tender as
provided in Section 6.1, and bearing interest from the date of tender at the
mid-term applicable federal rate, compounded monthly (determined under Internal
Revenue Code Section 1274(d)). Notwithstanding the foregoing, the payment
hereunder shall not be less than the amount necessary to pay any payment due
under any obligation to the Company arising in connection with the acquisition
of such Shares by Bell from the Company.

                              CLOSING AND SECURITY

         Closing of Purchase. If the Company is required to purchase Shares
pursuant to Article 2 or if the Company exercises any of its Options under
Article 2 to purchase Shares, then within thirty (30) days after the event
giving rise to the Company's purchase obligation or the expiration of the
Company's Option Period under Article 2, whichever applies, the Company shall
tender to the selling Shareholder or other offeror, as the case may be, the
Purchase Price for such Shares, in cash or as otherwise provided in Article 5.
If any Shareholders exercise any of their Options to purchase Shares pursuant to
Article 3, then within thirty (30) days after the expiration of the
Shareholders' Option Period, the Shareholders exercising such Option shall
tender the Purchase Price for the Shares in cash or as otherwise provided in
Article 5. Coincident with the payment of said Purchase Price, the Shareholder
or other offeror shall deliver the certificate or certificates representing such
Shares to the Company, duly endorsed in blank for transfer of record upon the
books of the Company. In the case of a purchase from a transferee or legal
representative of a Shareholder, the certificates shall be accompanied by
satisfactory evidence of its title.

         Security for Installment Payments. If the Company or any Shareholder
acquiring any Affected Shares pays all or a portion of the purchase price in
installments, the certificates representing the Affected Shares so purchased,
together with a stock power and pledge agreement reasonably acceptable to the
Transferring Shareholder and signed by the Transferee Shareholder indicating
that such Shares have been pledged as security for the payment shall thereupon
be delivered to the Company and the Company shall deliver new certificates for
the Affected Shares so purchased in the name of the Transferee Shareholder or
the Company as the case may be and such certificates shall be delivered together
with the pledge agreement to the Transferring Shareholders.

                  If such pledge agreement is not effective under applicable
         law, the certificates together with the stock power shall be delivered
         by the Transferring Shareholder in escrow to a bank or other
         institution agreed upon by the Transferring Shareholder and the Company
         or the Transferee Shareholder, to serve as security for the payment of
         the promissory note issued by the acquiring Shareholder or the Company
         as the case may be. If the purchaser is other than the Company, then

<PAGE>

         the Shares held in escrow shall, for so long as the purchaser is not in
         default under the terms of such promissory note, be treated as though
         they were held by the Transferee Shareholder for the purposes of
         voting, dividends and other rights. In the event that a default under
         the terms of such promissory note remains uncured for thirty (30) days
         after written notice of such default is given to the maker of the note,
         the holder of the note may take either or both of the following
         actions:

                           The holder of the note may declare the full amount of
                  such note (including accrued interest, collection costs and
                  attorneys' fees) due and payable forthwith by so notifying the
                  maker of the note.

                           The escrow agent shall, upon request of the holder of
                  the note and subject to all applicable securities laws, offer
                  such Shares for public or private sale after ten (10) days
                  notice to the Company (and any other maker of the note), and
                  the maker of such a note hereby waives all other notice and
                  legal requirements for foreclosure. The proceeds of any such
                  sale shall be applied first to expenses of sale (including
                  legal expenses), then to sums due on such note, and then to
                  the maker of the note.

                           Upon payment in full of such note, the escrow agent
                  shall release the certificates representing the Transferred
                  Shares securing the note to the pledgor of such Shares.

                REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS

         Representations and Warranties of the Company. The Company represents
and warrants to each Shareholder, as of the date hereof, as follows:

                  Corporate Authority. The Company has full power and authority
         to execute, deliver and perform this Agreement;

                  Due Authorization. This Agreement has been duly and validly
         authorized, executed and delivered by the Company and constitutes a
         valid and binding obligation of the Company, enforceable against the
         Company in accordance with its terms, except that (i) the
         enforceability hereof may be limited by bankruptcy, insolvency,
         reorganization, moratorium or other similar laws now or hereafter in
         effect affecting creditors' rights, (ii) the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to certain equitable defenses and to the discretion of the
         court before which any proceedings therefor may be brought, and (iii)
         the rights to indemnity hereunder may be limited by federal or state
         securities laws or the public policy underlying such laws;

                  No Conflict. The execution, delivery and performance of this
         Agreement by the Company do not violate or conflict with or constitute
         a default under (i) the Company's certificate of incorporation or
         by-laws, (ii) any judgment, order or decree, or statute, law,

<PAGE>

         ordinance, rule or regulation, of any governmental entity applicable to
         the Company or (iii) any material agreement to which it is a party or
         by which it or its property is bound;

                  Registration Rights. Except as provided herein, no other party
         is entitled to any registration or similar right with respect to any
         securities of the Company; and

                  Voting Agreements. Except as set forth herein, the Company is
         not aware of any voting trust, voting agreement or arrangement with
         respect to any of its voting securities.

         Representations and Warranties of the Shareholders. Each Shareholder
individually represents and warrants to each other Shareholder and the Company
as follows:

                  Corporate Authority. The Shareholder has full power, capacity
         and authority to execute, deliver and perform this Agreement;

                  Due Authorization. This Agreement has been duly and validly
         authorized, executed and delivered by the Shareholder and constitutes a
         valid and binding obligation of the Shareholder, enforceable against
         the Shareholder in accordance with its terms, except that (i) the
         enforceability hereof may be limited by bankruptcy, insolvency,
         reorganization, moratorium or other similar laws now or hereafter in
         effect affecting creditors' rights, (ii) the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to certain equitable defenses and to the discretion of the
         court before which any proceedings therefor may be brought, and (iii)
         the rights to indemnity and contribution hereunder may be limited by
         federal or state securities laws or the public policy underlying such
         laws; and

                  No Conflict. The execution, delivery and performance of this
         Agreement by the Shareholder do not violate or conflict with or
         constitute a default under (A) the Shareholder's organizational
         documents, (B) any judgment, order or decree or statute, law,
         ordinance, rule or regulation of any governmental entity applicable to
         the Shareholder, or (C) any material agreement to which it is a party
         or by which it or its property is bound.

                         LEGEND AND CONSENT TO AGREEMENT

         Legend.

                  Contemporaneously with the execution of this Agreement, the
         Shareholders shall deliver to the Company certificates for all Shares
         and the Company shall cause a legend, reading as follows, to be
         conspicuously endorsed on each certificate:

<PAGE>

                                    "NOTICE"

                           The transfer or pledge of the Shares represented by
                  this Certificate is restricted by, and subject to, the
                  provisions of a certain Stock Buy and Sell Agreement between
                  the Company and Michael Bell, dated ______, 2002, providing
                  restrictions on the transfer of this stock. A copy of said
                  Stock Buy and Sell Agreement is on file at the registered
                  office of the Company. By accepting this Certificate the
                  holder thereof agrees to be bound by the terms of said Stock
                  Buy and Sell Agreement.

                  During the term of this Agreement, a legend reading as above
         shall be conspicuously endorsed on each certificate representing Shares
         hereafter issued by the Company. The failure of (a) the Shareholders to
         surrender their stock certificates, or (b) the Company to endorse a
         legend on the certificates shall not void this Agreement as between the
         parties to the Agreement or any Person with knowledge of this
         Agreement.

         Filing of Agreement. An executed counterpart of this Agreement shall be
placed and remain on file at the registered office of the Company.

         Transferee Consent to Agreement. No sale, Transfer, assignment,
exchange, pledge, encumbrance or other disposition of Shares shall be made by
any Shareholder (or his or her transferee or legal representative) to any person
(including any individual, partnership, corporation or other entity) unless and
until such person shall agree in writing to take such Shares subject to, and
shall subscribe to the terms and conditions of, this Agreement. Any person who
so agrees in writing to take Shares subject to, and subscribes to the terms and
conditions of this Agreement shall become a "Shareholder" as that term is used
in this Agreement and shall be entitled to the benefits of, and shall be bound
by, this Agreement.

                                    REMEDIES

         It is understood and agreed by the parties hereto that, in the event of
any breach (whether threatened or hereafter existing) of this Agreement, the
measure of damages at law to the affected party would be difficult to ascertain
and the remedy at law would be inadequate. Accordingly, it is specifically
agreed that any party hereto shall be entitled to any and all appropriate
equitable remedies, including without limitation, the remedies of specific
performance and temporary and permanent injunctions to affirmatively enforce the
terms and conditions of this Agreement, as well as temporary or permanent
injunctive relief prohibiting threatened or existing breaches of this Agreement.
Such equitable remedies as shall be available from time to time during the term
of this Agreement, shall be cumulative, not exclusive, and shall be in addition
to any other remedies which the party may have at law or otherwise. For purposes
of this Agreement, time shall be considered of the essence.

<PAGE>

                         SHAREHOLDER CONTROL PROVISIONS

         Voting Rights. It is the intent of the parties that neither Bell nor
any Transferee of Bell shall have limited right to exercise the voting rights
attributable to the Shares. To that end, Bell and his Transferees hereby
irrevocably assigns to the Other Shareholders as of the date hereof in
proportion to their ownership of Stock in the Company ("Current Shareholders")
that portion of Bell and his Transferees' voting rights determined by
subtracting the corresponding to Acquisition Percentage (determined as if the
Employee's employment had terminated as of the earlier of , the actual
termination of Bell's employment or the date of the vote on any issue coming
before the shareholders of the Company) set forth in Section 0 from 100%. To the
extent necessary to effectuate the parties' intent, Bell and his Transferees
hereby grant such Current Shareholders an irrevocable proxy to vote the Shares
held by Bell and his Transferees and further agree, as necessary, to exercise
all voting rights with respect to the Shares which the Other Shareholders are
entitled to vote as may be directed by each Current Shareholder from time to
time with respect to such Current Shareholder's pro rata share of the voting
rights of the Shares and to execute and deliver all documents reasonably
requested by such Current Shareholders to effectuate such rights. In addition,
Bell and his Transferees hereby irrevocably appoint the Current Shareholders as
their lawful attorney-in-fact, with full right of substitution, to execute such
documents and take such action for and on behalf of Bell and his Transferees as
may be necessary or appropriate to effectuate the intent of the parties with
respect to such voting rights.

                            COVENANT NOT TO COMPETE.

         Covenant Not To Compete.

                  In consideration of the purchase of all or part of the Share
         of owned by Bell or his Transferee's, Bell hereby agrees that, during
         the "Restricted Period" (defined below), Bell shall not, without the
         Company's prior written consent (which may be withheld with or without
         reason), "engage or be interested, directly or indirectly" (as
         hereinafter defined), whether alone or together with or on behalf of or
         through any "other entity" (as hereinafter defined), whether as sole
         proprietor, partner, investor, stockholder, or any type of principal
         whatever, or as agent, technical advisor (except as Bell is employed by
         the Company), lender, trustee, beneficiary, or otherwise, in any phase
         of the "Restricted Business" in the "Restricted Area" (defined below)
         with any Customer (as defined below) or any Prospective Customer (as
         defined below).

         Definitions.

                  Except as provided below, the term "Restricted Business" as
         used herein means any business any part of which consists of the
         [design, manufacture and/or sale and servicing of equipment and
         supplies of the type sold by the Company at any time] and likewise
         includes any business of a kind in whole or in part similar to that
         engaged in by the Company. The term "Restricted Business" shall not
         include [Exclusions].

<PAGE>

                  The term "other entity" as used herein means any person, firm,
         partnership, association, trust, venture, corporation or business
         organization, entity or enterprise, or any combination thereof.

                  The term "engage or be interested, directly or indirectly" as
         used herein shall include, without limitation, giving advice or
         technical or financial assistance by loan, guarantees, stock
         transactions or in any other manner or to any other entity doing or
         about to do such Restricted Business in the Restricted Area covered by
         this Agreement, but shall not by itself include the ownership of less
         than one percent (1%) of the outstanding stock of a corporation the
         shares of which are publicly traded (other than shares of the Company).

                  The "Restricted Period" means the period commencing on the
         date hereof and ending on the earlier of (i) the date that Bell no
         longer is receiving or being paid his salary and benefits or (ii) the
         date which is five (5) years after the date that the Bell ceases to
         render services to the Company under this Agreement for any reason.

                  The "Restricted Area" means any location in the world where
         the Company has sold products during the one (1) year period ending on
         the date hereof.

                  The term "Customers" as used herein means any person or entity
         that has purchased goods or services form the Company during the one
         (1) year period ending on the date of the Bell's termination of
         employment.

                  The term "Prospective Customers" as used herein means any
         other entity that the Company has actively sought as a customer during
         the one (1) year period ending on the date of the Bell's termination of
         employment.

         Extended Duration. The duration of the foregoing covenant shall be
extended beyond the time period set forth therein for a period equal to the
duration of any breach or default of such covenant by Bell.

                                     GENERAL

         Benefit and Assignment. This Agreement shall bind and, except as
otherwise stated herein, shall inure to the benefit of the parties hereto, their
successors, assigns, heirs and legal representatives, as the case may be. The
Company, by action of its Board of Directors, may assign, in whole or in part,
with or without consideration, any option or other rights given it hereunder to
the Shareholders on a pro rata basis.

         Termination. This Agreement shall terminate upon the voluntary written
agreement of all parties to this Agreement or, except as otherwise specifically
provided hereunder, upon the bankruptcy, receivership or dissolution of the
Company. Upon the termination of this Agreement, the Shareholders shall
surrender to the Company their certificates for their Shares and the Company
shall issue to them new certificates for an equal number of Shares without the
legend set forth in Section 8.1 hereof.

<PAGE>

         Notices.

                  Any and all notices provided for in this Agreement shall be in
         writing and sent, by prepaid registered or certified mail, to the
         respective party's address, as set forth below:

<TABLE>
<S>               <C>                       <C>
                  If to the Company:        To the address of the Company's principal office.
                  If to a Shareholder:      To the address last shown for the Shareholder in
                                            the records of the Company or to such other
                                            address as the Shareholder may hereafter designate
                                            by written notice to the other parties.
</TABLE>

                  Any party hereto may change its address by notice to the other
         parties given as set forth above. Any notice and any payment due
         hereunder shall be deemed given or paid, as the case may be, when
         mailed as set forth above.

         Proxy. For so long as this Agreement is in effect, if any Shareholder
fails or refuses to vote that Shareholder's Shares pursuant to this Agreement,
then, without further action by such Shareholder, each other Shareholder shall
have an irrevocable proxy coupled with an interest to vote such Shareholder's
Shares in accordance with this Agreement, and each Shareholder hereby grants to
the other Shareholders such irrevocable proxy coupled with an interest.

         Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the transactions contemplated hereby, and
contains all of the terms and conditions thereof and supersedes all prior
agreements and understandings relating to the subject matter hereof.

         Amendment. This Agreement may be altered, amended or terminated only by
a writing signed by the Company and all the Shareholders.

         Construction. This Agreement shall be governed by and construed
according to the laws of the State of Minnesota without regard to such state's
principles regarding conflict of laws. Venue for any proceeding regarding the
terms of this Agreement or the enforcement thereof shall be only in Hennepin
County, Minnesota. The headings and captions are for the benefit of the reader
and shall not be taken into account in interpreting the terms of this Agreement.

         Jury Trial/Arbitration. THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY
TRIAL WITH RESPECT TO DISPUTES HEREUNDER AND ALL SUCH DISPUTES SHALL BE SETTLED
BY BINDING ARBITRATION PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION IN MINNEAPOLIS, MINNESOTA AND THE ORDER OF SUCH ARBITRATORS SHALL BE
CONCLUSIVE, FINAL AND BINDING ON ALL PARTIES HERETO AND MAY BE ENTERED AS A
JUDGMENT IN ANY COURT HAVING JURISDICTION OVER THE PARTIES.

         Severability. If any provision of this Agreement is held to be unlawful
or unenforceable in any respect by a court of competent jurisdiction, such
provision shall be severed and shall not affect the validity or enforceability
of the remaining provisions. Further, if any provision of this Agreement is held

<PAGE>

to be over broad, such provision shall be deemed amended to narrow the
application to the extent necessary to render the provision enforceable
according to applicable law.

         Counterparts. This Agreement may be executed in any number of
counter-parts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above stated.

                                            ENCORE ACQUISITION CORPORATION

                                            By  ________________________________
                                                Its ____________________________
                                                               "COMPANY"

                                                ________________________________
                                                        Michael Bell
                                                             "SHAREHOLDER"

<PAGE>

         LIMITED GUARANTY

         The undersigned hereby guarantees the collection of all amounts payable
by Encore Acquisition Corporation ("Encore") to Michael Bell pursuant to that
certain Stock Buy & Sell Agreement dated August 1, 2002 between Encore and
Michael Bell (the "Buy & Sell Agreement") during the twelve month period
beginning on the Effective Date of the Buy & Sell Agreement but only as and to
the extent that the undersigned as received disproportionate distributions of
cash or property from Encore.

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

         Executed this ___ day of August, 2002.

         Navarre Corporation

         By: ________________________
         Its: _________________________

<PAGE>

                                   EXHIBIT 5.1

                                 PROMISSORY NOTE

$______________                                           Minneapolis, Minnesota
                                                          -----------, ---------

         FOR VALUE RECEIVED, _____________________________ ("Maker"), promises
to pay to the order of [Holder] ("Holder") at its office at [Holder's Address]
or at such other place as the Holder hereof may from time to time designate in
writing, in lawful money of the United States of America, the principal sum of
____________________ and ___/100 Dollars ($___________), together with interest
from the date hereof on the principal balance from time to time unpaid at the
rate of ____ percent (_____%) per annum compounded (monthly) (annually). In no
event shall interest hereunder be in excess of the maximum interest rate
permitted by law.

1. The principal sum and interest thereon shall be payable in _______ (___)
equal monthly installments of principal and interest, in the amount of
_______________________________Dollars ($___________________) each, the first of
said installments of principal and interest being due and payable on
______________, 20 ___, and thereafter on the same day of every succeeding month
until ______________, 20___, when a final installment will be due and payable,
equal to the remaining balance, if any, of principal and accrued interest. All
payments hereunder shall be applied first to interest then due and the balance,
if any, to be applied on the principal.

2. [Option: At the option of the Holder, the entire principal and interest due
under this Note shall be due and payable in full upon (i) the sale of
substantially all of the assets of the Maker or (ii) a change in control as
defined in Minnesota Statutes '302A.671 or (iii) the merger or consolidation of
the Maker with another entity or (iv) the redemption of all or part of the stock
of any shareholder owning more than [twenty percent (20%)] of the outstanding
shares of stock, by class, of the Maker.]

3. This Note and the obligation hereunder are subject to the terms of that
certain Stock Buy-Sell Agreement between the Maker and the Holder dated [date].

4. This Note may be prepaid in whole or in part at any time without payment of
any prepayment penalty or fee, but with interest on the unpaid balance until
paid in full. Any prepayment shall be applied to principal payments due in the
inverse order of the date such principal payments are due and payable.

5. The Maker shall remain liable for the payment of this Note, including
interest and any other charges payable hereunder, notwithstanding any extension
or extensions of time for payment or any indulgence of any kind that Holder may
grant to Maker.

                                       1
<PAGE>

6. The occurrence of any one of the following events shall constitute an event
of default under this Note (each such event is hereinafter referred to as an
"Event of Default"):

                  6.1 the failure of Maker to make any payment required to be
         made under this Note on or before the date such payment is required;

                  6.2 the failure of Maker to make any other payment that Maker
         owes to Holder within five (5) days after such payment is due and
         payable or the failure of Maker to perform, observe or keep any other
         obligation that Maker owes to Holder if the same is not cured within
         the earlier of either (i) five (5) days after notice of such failure is
         sent by Holder to Maker, or (ii) five (5) days after Maker knew or
         should have known of such failure;

                  6.3 The occurrence of any of the following events with respect
         to the Maker of the Note:

                           6.3.1 the admission in writing of insolvency or
                  inability to pay debts generally as they become due;

                           6.3.2 the commission of an act of bankruptcy,
                  including, but not limited to, an assignment for the benefit
                  of creditors, the calling of a meeting of creditors, the
                  appointment of a committee of creditors or a liquidating
                  agent, or an offer of a composition or an extension to
                  creditors;

                           6.3.3 if by the order of a court of competent
                  jurisdiction, a receiver or liquidator or trustee of the Maker
                  is appointed and shall have not been discharged within a
                  period of ten (10) days or if, by decree of such a court, the
                  Maker is adjudicated a bankrupt or any substantial part of his
                  property shall be sequestered and such decree shall continue
                  undischarged and unstayed for a period of ten (10) days after
                  the entry thereof pursuant to the Federal Bankruptcy Code, as
                  it now exists or as it may hereafter be amended or pursuant to
                  any other analogous statute applicable to the Maker as now or
                  hereinafter in effect, shall be filed against Maker and shall
                  not be dismissed within ten (10) days;

                           6.3.4 if the Maker files a petition of voluntary
                  bankruptcy under any provision of any bankruptcy law or a
                  petition to take advantage of any insolvency act, or consents
                  to the appointment of a receiver or receivers for all or any
                  part of its business or consents to the filing of any
                  bankruptcy, arrangement or reorganization petition by or
                  against it under any provision of the bankruptcy law, or
                  (without limiting the generality of the foregoing) the Maker
                  files a petition or answer seeking an arrangement or
                  reorganization of the Maker pursuant to the Federal Bankruptcy
                  Code, as it now exists or as it may hereafter be amended, or
                  pursuant to any other analogous statute applicable to the
                  Maker as now or hereafter in effect;

<PAGE>

                           6.3.5 the entry of a judgment or issuance of a writ
                  of attachment or injunction before or after the date of this
                  Note against Maker or against any property of Maker or the
                  commencement of any proceedings supplementary to execution
                  relating to any judgment against Maker and such judgment, writ
                  of attachment, injunction or supplementary proceedings is not
                  stayed, satisfied, vacated, enjoined or bonded-off within ten
                  (10) days from the entry, issuance or commencement thereof;

                           6.3.6 the death or dissolution of Maker;

                           6.3.7 if any material representation, warranty or
                  statement made by Maker to Holder shall be incorrect or
                  misleading in any material respect.

         For purposes of defining an "Event of Default" under this Note, a
notice shall be conclusively deemed to have been sent by Holder at the time such
notice is deposited with the United States Postal Service.

7. Upon the occurrence of one or more Events of Default, Holder may, at its sole
and absolute discretion, declare all outstanding obligations by Maker to Holder,
whether evidenced by this Note or any other instrument, although otherwise
unmatured or contingent, to be immediately due and payable in full without
demand. From and after maturity, whether by acceleration or otherwise, the
principal balance hereunder shall bear interest at the "Default Rate", which
shall be the lesser of (i) the highest rate permitted by law, or (ii) ten
percent (10%). Other provisions of this Note to the contrary notwithstanding, on
the occurrence and during the existence of any default, any amounts or payments
thereafter held or received by Holder for application to this Note may be
applied to any amounts owed under this Note in such manner as Holder may
determine, in its sole discretion, regardless of any contrary instructions
Holder may receive respecting such application.

8. The Maker agrees to pay on demand the costs of collection, including, without
limitation, reasonable attorneys' fees incurred by Holder in collecting or
attempting to collect any amount under this Note that is not paid when due or to
enforce its rights under this Note. All such costs of collection shall bear
interest, payable on demand, from the date of payment thereof by Holder until
paid in full by Maker at the rate applicable to the principal amount of this
Note.

9. Holder shall not by any act of omission or commission be deemed to waive any
of its rights or remedies hereunder unless such waiver is in writing and signed
by an authorized officer of Holder and then only to the extent specifically set
forth therein. A waiver on one occasion shall not be construed to be a
continuing waiver of such right or remedy on any other occasion.

10. Every person who is at any time liable for the payment of the debt evidenced
by this Note hereby waives presentment for payment, demand, notice of nonpayment
of this Note, protest and notice of protest, and the right to trial by jury in
any litigation arising out of, relating to, or connected with this Note or with
any instrument given as security herefor, and hereby agrees that Holder may

<PAGE>

extend, without affecting their liability hereon, the time for payment of any
part of or the whole of the debt evidenced by this Note, at any time, at the
request of any other person or entity liable for said debt.

11. Should this Note be signed by more than one person, partnership or
corporation or any combination thereof, all of the obligations herein contained
shall be considered joint and several obligations of each signer hereof. In such
case, the liability of each such signer shall be absolute and unconditional and
without regard to the liability of any other party hereto.

12. This Note is given and accepted as evidence of indebtedness only and not in
payment of or in satisfaction of any indebtedness or obligation.

13. The form and essential validity of this Note shall be governed by the laws
of the State of Minnesota applicable to contracts made and to be performed
wholly within Minnesota, without giving effect to conflicts of laws principles.
All lawsuits and judicial proceedings regarding the interpretation of this Note,
any dispute arising hereunder or the collection of any amount due under this
Note shall be brought and heard in the District Court, State of Minnesota,
Fourth Judicial District, and Maker hereby consents to such jurisdiction. If any
portion of this Note is unenforceable, the remainder of this Note shall continue
in full force and effect.

14. Time is of the essence with respect to all of Maker's obligations and
agreements under this Note.

15. This Note and all the provisions, conditions, promises and covenants hereof
shall inure to the benefit of Holder, its successors and assigns, and shall be
binding upon the Maker, his personal representatives, heirs, successors and
assigns.

         IN WITNESS WHEREOF, the Maker has caused this Note to be signed on its
behalf on the day and year first above written.

                                              ----------------------------------

                                                           "MAKER"

<PAGE>

                           UNANIMOUS ACTION IN WRITING
                              IN LIEU OF MEETING OF
                   THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
                         ENCORE ACQUISITION CORPORATION

         The undersigned, constituting all of the members of the Board of
Directors and Shareholders of ENCORE ACQUISITION CORPORATION ("Company") do
hereby make and adopt the following unanimous action in lieu of a meeting, said
action to have the same force and effect as if taken at a meeting of the Board
of Directors and Shareholders called and held on the date hereof.

                          AGREEMENTS WITH MICHAEL BELL

         WHEREAS, the Board of Directors of the corporation has determined that
it is in the best interests of the Company to continue to employ Michael Bell as
its Chief Executive Officer,

         NOW, THEREFORE, BE IT HEREBY

                  RESOLVED, that the Employment Agreement, Stock Purchase
         Agreement, and Buy & Sell Agreement with Michael Bell in the form
         attached as Exhibits A, B and C hereto are hereby approved and
         ratified. The Secretary shall retain one copy of said Agreements as
         part of the permanent records of the Company.

                  RESOLVED FURTHER, that the officers of the Company be and they
         hereby are authorized and directed to execute and deliver the aforesaid
         Agreements for and on behalf of the Company and to settle and approve
         all details in connection with said Agreement exercising their
         discretion to the extent that they shall deem appropriate in
         determining questions which may arise and to approve the final form of
         said agreement and to execute the same for and on behalf of the
         Company.

         IN WITNESS WHEREOF, the undersigned have hereunto set their hands
effective as of the ________ day of __________, 2002.

<PAGE>

---------------------------------------     ------------------------------------
Navarre Corporation, Sole Shareholder                Charles Cheney, Director

  --------------------------------------    ------------------------------------
  Eric Paulson, Director                             Jim Sippl, Director

  -------------------------------------     ------------------------------------
  Michael Snow, Director                             Alfred Teo, Director

  -------------------------------------     ------------------------------------
  Tom Weyl, Director                               Dickinson Wiltz, Director

<PAGE>

                                    Exhibit A
                     Employment Agreement with Michael Bell

<PAGE>

                                    Exhibit B
                        Stock and Unit Purchase Agreement

<PAGE>

                                    Exhibit C
                             Buy and Sell Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}]]