Document:

Exhibit 10.1

Exhibit 10.1

SXC HEALTH SOLUTIONS CORP.

INCENTIVE PLAN

I. Purposes

The purposes of the SXC Health Solutions Corp. Incentive Plan (the “Plan”) are to retain and
motivate the officers and other employees of SXC Health Solutions Corp. and its subsidiaries who
have been designated by the Committee to participate in the Plan for a specified Performance Period
by providing them with the opportunity to earn incentive payments based upon the extent to which
specified performance goals have been achieved or exceeded for the Performance Period. It is
intended that all amounts payable to Participants who are “covered employees” within the meaning of
Section 162(m) of the Code will constitute “qualified performance-based compensation” within the
meaning of U.S. Treasury regulations promulgated thereunder, and the Plan and the terms of any
Awards hereunder shall be so interpreted and construed to the maximum extent possible.

II. Definitions

“Annual Base Salary” shall mean for any Participant an amount equal to the rate of annual base
salary in effect or approved by the Committee or other authorized person at the time or immediately
before performance goals are established for a Performance Period, including any base salary that
otherwise would be payable to the Participant during the Performance Period but for his or her
election to defer receipt thereof.

“Applicable Period” shall mean, with respect to any Performance Period, a period commencing on
or before the first day of the Performance Period and ending not later than the earlier of (a) the
90th day after the commencement of the Performance Period and (b) the date on which
twenty-five percent (25%) of the Performance Period has been completed. Any action required to be
taken within an Applicable Period may be taken at a later date if permissible under Section 162(m)
of the Code or U.S. Treasury regulations promulgated thereunder.

“Award” shall mean an award to which a Participant may be entitled under the Plan if the
performance goals for a Performance Period are satisfied. An Award may be expressed in U.S. dollars
or pursuant to a formula that is consistent with the provisions of the Plan.

“Board” shall mean the Board of Directors of the Company.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Compensation Committee of the Board comprised of members of the
Board that are “outside directors” within the meaning of Section 162(m) of the Code, or such other
committee designated by the Board that satisfies any then applicable requirements of the principal
national stock exchange on which the common stock of the Company is then traded to constitute a
compensation committee, and which consists of two or more members of the Board, each of whom is an
“outside director” within the meaning of Section 162(m) of the Code.

“Company” shall mean SXC Health Solutions Corp., a corporation existing under the laws of the
Yukon Territory of Canada, and any successor thereto.

“Participant” shall mean an officer or other employee of the Company or any of its
subsidiaries who is designated by the Committee to participate in the Plan for a Performance
Period, in accordance with Article III.

“Performance Period” shall mean any period commencing on or after January 1, 2011 for which
performance goals are established pursuant to Article IV. A Performance Period may be coincident
with one or more fiscal years of the Company or a portion of any fiscal year of the Company.

 

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“Plan” shall mean the SXC Health Solutions Corp. Incentive Plan as set forth herein, as it may
be amended from time to time.

III. Administration

3.1 General. The Plan shall be administered by the Committee, which shall have the full power and
authority to interpret, construe and administer the Plan and Awards granted hereunder (including in
each case reconciling any inconsistencies, correcting any defaults and addressing any omissions).
The Committee’s interpretation, construction and administration of the Plan and all its
determinations hereunder shall be final, conclusive and binding on all persons for all purposes.

3.2 Powers and Responsibilities. The Committee shall have the following discretionary powers,
rights and responsibilities in addition to those described in Section 3.1.

	 	(a)	 	to designate within the Applicable Period the Participants for a Performance
Period;

	 
	 	(b)	 	to establish within the Applicable Period the performance goals and targets and
other terms and conditions that are to apply to each Participant’s Award;

	 
	 	(c)	 	to certify in writing prior to the payment with respect to any Award that the
performance goals for a Performance Period and other material terms applicable to the
Award have been satisfied;

	 
	 	(d)	 	subject to Section 409A of the Code, to determine whether, and under what
circumstances and subject to what terms, an Award is to be paid on a deferred basis,
including whether such a deferred payment shall be made solely at the Committee’s
discretion or whether a Participant may elect deferred payment; and

	 
	 	(e)	 	to adopt, revise, suspend, waive or repeal, when and as appropriate, in its
sole and absolute discretion, such administrative rules, guidelines and procedures for
the Plan as it deems necessary or advisable to implement the terms and conditions of
the Plan.

3.3 Delegation of Power. The Committee may delegate some or all of its power and authority
hereunder to the Chief Executive Officer or other executive officer of the Company as the Committee
deems appropriate; provided, however, that with respect to any person who is a “covered employee”
within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to
be a covered employee at any time during the applicable Performance Period or during any period in
which an Award may be paid following a Performance Period, only the Committee shall be permitted to
(a) designate such person to participate in the Plan for such Performance Period, (b) establish
performance goals and Awards for such person, and (c) certify the achievement of such performance
goals.

IV. Performance Goals

4.1 Establishing Performance Goals. The Committee shall establish within the Applicable Period of
each Performance Period one or more objective performance goals (the outcome of which, when
established, shall be substantially uncertain) for each Participant or for any group of
Participants (or both). Performance goals shall be based on the attainment of specified levels of
one or any combination of the following: revenue growth; new revenue growth; earnings before taxes;
earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization;
operating income; pre- or after-tax income; cash flow; cash flow per share; net earnings; earnings
per share; return on equity; return on invested capital; return on assets; economic value added (or
an equivalent metric); share price performance; total shareholder return; improvement in or
attainment of expense levels; improvement in or attainment of working capital levels; attainment of
strategic and operational initiatives; market share; gross profits; and/or comparisons with various
stock market indices of the Company or any affiliate, division or business unit of the Company for
or within which the Participant is primarily employed. Such performance goals also may be based
solely by reference to the Company’s performance or the performance of an affiliate, division or
business unit of the Company, or based upon the relative performance of other companies or upon
comparisons of any of the indicators of performance relative to other companies. With respect to
Participants who are not “covered employees” within the meaning of Section 162(m) of the Code and
who, in the Committee’s

 

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judgment, are not likely to be covered employees at any time during the
applicable Performance Period or during
any period in which an Award may be paid following a Performance Period, the performance goals
established for the Performance Period may consist of any objective or subjective corporate-wide or
subsidiary, division, operating unit or individual measures, whether or not listed herein.
Performance goals shall be subject to such other special rules and conditions as the Committee may
establish at any time within the Applicable Period; provided, however, that to the extent such
goals relate to Awards to “covered employees” within the meaning of Section 162(m) of the Code,
such special rules and conditions shall not be inconsistent with the provisions of Treasury
regulation Section 1.162-27(e) or any successor regulation describing “qualified performance-based
compensation.”

4.2 Impact of Extraordinary Items or Changes in Accounting. The measures utilized in establishing
performance goals under the Plan shall, to the extent applicable (i.e., if the relevant performance
goal is based on a GAAP measure), be determined in accordance with GAAP and in a manner consistent
with the methods used in the Company’s audited consolidated financial statements, without regard to
(a) extraordinary or other nonrecurring or unusual items, as determined by the Company’s
independent public accountants in accordance with GAAP, (b) changes in accounting, as determined by
the Company’s independent public accountants in accordance with GAAP, or (c) special charges, such
as restructuring or impairment charges, unless, in each case, the Committee decides otherwise
within the Applicable Period or as otherwise required under Section 162(m) of the Code.

V. Terms of Awards

5.1 Performance Goals and Targets. At the time performance goals are established for a Performance
Period, the Committee also shall establish an Award opportunity for each Participant or group of
Participants, which shall be based on the achievement of one or more specified targets of
performance goals. The targets shall be expressed in terms of an objective formula or standard
which may be based upon the Participant’s Annual Base Salary or a multiple thereof. In all cases
the Committee shall have the sole and absolute discretion to reduce the amount of any payment with
respect to any Award that would otherwise be made to any Participant or to decide that no payment
shall be made. With respect to each Award, the Committee may establish terms regarding the
circumstances in which a Participant will be entitled to payment notwithstanding the failure to
achieve the applicable performance goals or targets (e.g., where the Participant’s employment
terminates due to death or disability or where a change in control of the Company occurs);
provided, however, that with respect to any Participant who is a “covered employee” within the
meaning of Section 162(m) of the Code, the Committee shall not establish any such terms that would
cause an Award payable upon the achievement of the performance goals not to satisfy the conditions
of Treasury regulation Section 1.162-27(e) or any successor regulation describing the “qualified
performance-based compensation.”

5.2 Payments. At the time the Committee determines an Award opportunity for a Participant, the
Committee shall also establish the payment terms applicable to such Award. Such terms shall
include when such payments will be made; provided, however, that the timing of such payments shall
in all instances either (A) satisfy the conditions of an exception from Section 409A of the Code
(e.g., the short-term deferrals exception described in Treasury Regulation Section 1.409A-1(b)(4)),
or (B) comply with Section 409A of the Code and provided, further, that in the absence of such
terms regarding the timing of payments, such payments shall occur no later than the 15th
day of the third month of the calendar year following the calendar year in which the Participant’s
right to payment ceased being subject to a substantial risk of forfeiture.

5.3 Maximum Awards. No Participant shall receive a payment under the Plan with respect to any
Performance Period having a value in excess of $3,000,000, which maximum amount shall be
proportionately adjusted with respect to Performance Periods that are less than or greater than one
year in duration.

VI. General

6.1 Effective Date. The Plan shall be submitted to the shareholders of the Company for approval at
the 2010 annual meeting of shareholders and, if approved by the affirmative vote of a majority of
the shares of common stock present in person or represented by proxy at such meeting, shall become
effective for Performance Periods beginning on and after January 1, 2011. In the event that the
Plan is not approved by the shareholders of the Company, the Plan shall be null and void with
respect to Participants who are “covered employees” within the meaning of Section 162(m) of the
Code.

 

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6.2 Amendments and Termination. The Board may amend the Plan as it shall deem advisable, subject
to any requirement of shareholder approval required by applicable law, rule or regulation,
including Section 162(m) of the Code. The Board may terminate the Plan at any time.

6.3 Non-Transferability of Awards. No award under the Plan shall be transferable other than by
will, the laws of descent and distribution or pursuant to beneficiary designation procedures
approved by the Company. Except to the extent permitted by the foregoing sentence, no award may be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by
operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any
attempt to sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any such
award, such award and all rights thereunder shall immediately become null and void.

6.4 Tax Withholding. The Company shall have the right to require, prior to the payment of any
amount pursuant to an award made hereunder, payment by the Participant of any Federal, state, local
or other taxes which may be required to be withheld or paid in connection with such award.

6.5 No Right of Participation or Employment. No person shall have any right to participate in the
Plan. Neither the Plan nor any award made hereunder shall confer upon any person any right to
continued employment by the Company or any subsidiary or affiliate of the Company or affect in any
manner the right of the Company or any subsidiary or affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.

6.6 Designation of Beneficiary. If permitted by the Company, a Participant may file with the
Committee a written designation of one or more persons as such Participant’s beneficiary or
beneficiaries (both primary and contingent) in the event of the Participant’s death.

Each beneficiary designation shall become effective only when filed in writing with the
Committee during the Participant’s lifetime on a form prescribed by the Committee. The spouse of a
married Participant domiciled in a community property jurisdiction shall join in any designation of
a beneficiary other than such spouse. The filing with the Committee of a new beneficiary
designation shall cancel all previously filed beneficiary designations.

If a Participant fails to designate a beneficiary, or if all designated beneficiaries of a
Participant predecease the Participant, then each outstanding award shall be payable to the
Participant’s executor, administrator, legal representative or similar person.

6.7 Governing Law. The Plan and each award hereunder, and all determinations made and actions
taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United
States, shall be governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of laws.

6.8 Other Plans. Payments pursuant to the Plan shall not be treated as compensation for purposes
of any other compensation or benefit plan, program or arrangement of the Company or any of its
subsidiaries, unless either (a) such other plan provides that compensation such as payments made
pursuant to the Plan are to be considered as compensation thereunder or (b) the Board or the
Committee so determines in writing. Neither the adoption of the Plan nor the submission of the
Plan to the Company’s shareholders for their approval shall be construed as limiting the power of
the Board or the Committee to adopt such other incentive arrangements as it may otherwise deem
appropriate.

6.9 Binding Effect. The Plan shall be binding upon the Company and its successors and assigns and
the Participants and their beneficiaries, personal representatives and heirs. If the Company
becomes a party to any merger, consolidation or reorganization, then the Plan shall remain in full
force and effect as an obligation of the Company or its successors in interest, unless the Plan is
amended or terminated pursuant to Section 6.2.

 

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6.10 Unfunded Arrangement. The Plan shall at all times be entirely unfunded and no provision shall
at any time be made with respect to segregating assets of the company for payment of any benefit
hereunder. No Participant
shall have any interest in any particular assets of the Company or any of its affiliates by reason
of the right to receive a benefit under the Plan and any such Participant shall have only the
rights of an unsecured creditor of the Company with respect to any rights under the Plan.

 

5exv10w1

Exhibit 10.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), made and entered into as of this
17th day of May, 2010, is by and between Encore Software, Inc., a Minnesota corporation
(“Purchaser”), Navarre Corporation, a Minnesota corporation (“Navarre”) (solely
with respect to Sections 5.2 and 5.4), and Punch Software LLC, a Delaware limited
liability company (“Seller”).

RECITALS:

A. Seller has developed (or had developed on its behalf) proprietary Software programs, described
on the attached Exhibit A (collectively, such Software, along with all versions,
modifications and improvements thereto and derivatives thereof, the “Seller Proprietary
Software”), that enable end users to produce two and three dimensional designs to engage in (i)
home, landscape and interior design, including customized floor plans, room dimensions, roofing,
decks, landscaping, flooring, paint, mantels, and cabinetry, (ii) design other products, including
furniture and jewelry, and (iii) for use with professional design applications employed by
professional mechanical CAD users, such as reverse engineering, packaging design and aerospace.
All of the titles and brand names in which Seller currently markets, sells and distributes the
Seller Proprietary Software are set forth on the attached Exhibit B (the “Software
Titles”).

B. Seller is in the business of developing, programming, marketing, improving, selling,
distributing, supporting and servicing the Seller Proprietary Software and similar software and
Seller operates the Seller Websites (as defined below) and markets, sells and distributes the
Software Titles directly to consumers (collectively, the “Business”).

C. Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller,
substantially all of the assets of Seller and acquire certain Liabilities and obligations of
Seller, described in and on the terms and subject to the conditions indicated below, in each case,
relating to the Business.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt, sufficiency and mutuality
of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1.

CERTAIN DEFINITIONS

“Affiliate” means, with respect to any Person, any Person controlled by, controlling, or
under common control with such Person. For purposes of this definition, “control” when used with
respect to any specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise.

“Benefit Plans” means, collectively, any retirement plan, bonus or profit-sharing plan,
stock option or purchase plan or other employee contract or non-terminable (whether with or without
penalty) arrangement, group life, health, medical, dental or hospitalization insurance, plan or

 

 

program or other employee or fringe benefit plan, including tuition reimbursement plans, vacation
plans or programs and sick leave plans or programs.

“Contract” means any written or oral legally binding contract, agreement, instrument,
commitment or undertaking of any nature (including leases, licenses, mortgages, notes, guarantees,
sublicenses, subcontracts, letters of intent and purchase orders).

“Encumbrance” means, with respect to any asset, whether tangible or intangible, any
mortgage, deed of trust, lien, pledge, charge, security interest, title retention device,
conditional sale or other security arrangement, collateral assignment, charge, adverse claim of
title, easement filed of record, right of way dedicated to the public, ownership or right to use,
restriction or other encumbrance of any kind in respect of such asset (including any restriction on
(A) the voting of any security or the transfer of any security or other asset, (B) the receipt of
any income derived from any asset, (C) the use of any asset, and (D) the possession, exercise or
transfer of any other attribute of ownership of any asset).

“Environmental Law” means all Legal Requirements relating to pollution or protection of the
environment (including ambient air, surface water, ground water, land surface or subsurface strata,
inland wetlands and watercourses) and worker health and safety, including such Legal Requirements
relating to solid waste, community right-to-know, hazard communication, noise, radioactive
material, natural resource protection, and emissions, discharges, releases or threatened releases
of hazardous materials, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of hazardous materials.

“Existing Consumer Data” shall mean any and all consumer and customer data collected,
purchased, held or stored, in any form (whether in one or more database(s) or otherwise), by or on
behalf of Seller in connection with the marketing, sale and/or distribution of any Seller
Proprietary Software.

“Governmental Entity” means any supranational, national, state, municipal, local or foreign
government, any court, tribunal, arbitrator, administrative agency, commission or other
governmental official, authority or instrumentality, in each case whether domestic or foreign, any
stock exchange or similar self-regulatory organization or any quasi-governmental or private body
exercising any regulatory, taxing or other governmental or quasi-governmental authority.

“Harmful Code” means any program routine, device or other feature that is not documented in
the Seller Proprietary Software technical documentation and that is intended to delete, disable,
interfere with, perform unauthorized modifications to, or provide unauthorized access to any
Software, including the Seller Proprietary Software, including any virus, data bug, Trojan horse,
trap door, back door, Easter egg, worm, time bomb, cancel bot or other code that causes any
Software, including the Seller Proprietary Software, to cease operating, to damage, or to interrupt
or interfere with any end user’s hardware, software or data.

“Intellectual Property” means algorithms, APIs, databases, data collections, diagrams,
domain names, inventions, methods and processes (whether or not patentable), trade secrets,
trademarks, service marks and other brand identifiers, network configurations and architectures,
proprietary information, patents, patent applications, protocols, schematics, specifications,
software (in any form, including source code and executable code), proprietary techniques,
interfaces, URLs and

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works of authorship, in each case whether or not registered with a Governmental Entity or embodied
in any tangible form.

“Intellectual Property Rights” means all rights of the following types, whether registered
or unregistered, which may exist or be created under the laws of any jurisdiction: (A) rights
associated with works of authorship, including exclusive exploitation rights, copyrights, and moral
rights; (B) trademark, service mark, and trade name rights and similar rights; (C) trade secret
rights; (D) patents and industrial property rights; (E) any other similar proprietary rights
applicable to Intellectual Property; (F) all proprietary rights related to the ownership, control
and/or operation of Seller Websites; and (G) rights in or relating to registrations, renewals,
extensions, combinations, divisions, and reissues of, and applications for, any of the rights
referred to in clauses (A) through (F) above.

“IRC” means the Internal Revenue Code of 1986, as amended, and regulations promulgated
thereunder.

“Lease” means that certain Lease Agreement, by and between Seller and Dihedral Investment
Company, dated as of November 5, 2007.

“Leased Real Property” means that certain real property and improvements thereto, located
at 553 Industrial Drive, Hartland, WI 53029, as more fully described in the Lease.

“Legal Requirements” means any federal, state, foreign, local, municipal or other law,
statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule,
regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Entity and any orders, writs,
injunctions, awards, judgments and decrees applicable to Seller or to any of its assets, properties
or businesses.

“Liabilities” means all debts, liabilities and obligations, whether accrued or fixed,
absolute or contingent, matured or unmatured, determined or determinable, asserted or unasserted,
known or unknown, including those arising under any Legal Requirements or proceeding and those
arising under any Contract.

“Material Adverse Effect” with respect to any Person means any change, event, development,
circumstance or effect (each, an “Effect”) that, individually or taken together with all
other Effects, and regardless of whether or not such Effect constitutes a breach of the
representations or warranties made by such Person in this Agreement, is, or would be reasonably
expected to, (A) be materially adverse to the condition (financial or otherwise), assets (including
intangible assets), Liabilities (taken together), business or results of operations of such Person
and its subsidiaries, taken as a whole, or (B) materially impede or delay such Person’s ability to
consummate the transactions contemplated by this Agreement in accordance with its terms and
applicable Legal Requirements, except to the extent any such Effect primarily results from or
primarily arises out of: (i) changes in general economic conditions (provided that such changes do
not affect such Person in a substantially disproportionate manner compared to other companies in
such Person’s industry), (ii) changes affecting the industry generally in which such Person
operates (provided that such changes do not affect such Person in a substantially disproportionate
manner compared to other companies in such Person’s industry), (iii) the taking

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of any action expressly required by this Agreement, (iv) changes in Legal Requirements or in
generally accepted accounting principals (“GAAP”), (v) failure by Seller to achieve
earnings or other financial projections or forecasts or (vi) the announcement, execution, delivery
or performance of this Agreement in accordance with its terms, including without limitation, the
impact thereof on relationships with customers, suppliers or employees.

“Permitted Encumbrances” means, to the extent set forth on Schedule 1, (A) the
Assumed Liabilities (as defined in Section 3.3 below) and liens and security interests associated
therewith, (B) any liens for Taxes which are not yet due or which are being contested in good faith
by appropriate proceedings diligently prosecuted, (C) any carrier’s, warehouseman’s, mechanic’s,
materialman’s, repairman’s, landlord’s or any other statutory or inchoate liens incidental to the
ordinary conduct of the Business which involve an obligation that is not past due or which is being
contested in good faith by appropriate proceedings diligently prosecuted, and (D) any interests of
a governmental agency or instrumentality in any lawfully made pledge or deposit under workers’
compensation, unemployment insurance or other social security statutes.

“Person” means an individual, corporation, limited liability company, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

“Publicly Available Software” means: (A) any Software that contains, or is derived in any
manner in whole or in part from, any Software that is distributed as free Software, open source
Software (e.g. Linux) or under similar licensing or distribution models; (B) any Software that
requires as a condition of use, modification or distribution that such Software or other Software
incorporated into, derived from or distributed with such Software: (i) be disclosed or distributed
in source code form; (ii) be licensed for the purpose of making derivative works; or (iii) be
redistributable at no charge; and (C) Software licensed or distributed under any of the following
licenses or distribution models, or licenses or distribution models similar to any of the
following: (t) GNU’s General Public License (GPL) or Lesser/Library GPL (LGPL); (u) the Artistic
License (e.g., PERL); (v) the Mozilla Public License; (w) the Netscape Public License; (x) the Sun
Community Source License (SCSL); (y) the Sun Industry Source License (SISL); and (z) the Apache
Software License.

“Seller Websites” means the URLs, internet domains and websites (i) owned, licensed or
controlled by Seller, or (ii) used by Seller and integral to the operation of the Business, and all
Intellectual Property and Intellectual Property Rights related thereto, including the URLs set
forth on the attached Exhibit C.

“Software” means any computer program, operating system, applications system, firmware or
software code of any nature, whether under development or otherwise, including all object code,
source code, data files, rules, definitions or methodology derived from the foregoing and any
derivations, updates, enhancements and customization of any of the foregoing, processes, operating
procedures, methods and all other Intellectual Property embodied with the foregoing, technical
manuals, user manuals and other documentation thereof, whether in machine-readable form,
programming language or any other language or symbols and whether stored, encoded, recorded or
written on disk, tape, film, memory device, paper or other media of any nature.

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“Target Working Capital” means Three Million Two Hundred Thousand and 00/100 Dollars
($3,200,000.00).

“Tax” means any multi-national, federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration,
value added, excise, natural resources, entertainment, amusement, severance, stamp, occupation,
premium, windfall profit, environmental, customs, duties, real property, personal property, ad
valorem, capital stock, social security, unemployment, disability, payroll, license, employee or
other withholding, or other tax, of any kind whatsoever, including any interest, penalties or
additions to Tax or additional amounts in respect of the foregoing; the foregoing shall include any
transferee or secondary liability for a Tax and any liability assumed by agreement or arising as a
result of being (or ceasing to be) a member of any Affiliated Group (or being included (or required
to be included) in any tax return relating thereto).

“Third Party Intellectual Property” means all Intellectual Property owned by third parties
that is used by Seller in the conduct of the Business, including any Third Party Software.

“Third Party Software” means all Software owned by third parties that is used by Seller in
the conduct of the Business.

“Transitioning Employees” means the employees listed on the attached Exhibit D.

“Transaction Documents” means this Agreement, the Non-Competition Agreement, the Note (as
such term is defined in Section 3.1) and each other document contemplated hereby or
described herein.

ARTICLE 2.

PURCHASE OF ASSETS

2.1 Purchased Assets. On the terms and subject to the conditions contained in this
Agreement, on the Closing Date (as such term is defined in Section 2.2), Seller shall sell,
transfer and assign to Purchaser, and Purchaser shall purchase from Seller, the following, free and
clear of all Encumbrances (other than Permitted Encumbrances) (all assets of Seller to be purchased
by Purchaser are collectively referred to as the “Purchased Assets”):

          (a) Business Contracts. All of Seller’s right, title and interest in (i) the
Contracts set forth on Schedule 2.1(a)(i), (ii) sales and customer purchase commitments and
customer purchase and sales orders, (iii) any existing Contracts containing any confidentiality
agreements, work for hire agreements and other restrictive covenants with any of the Seller’s
current and former employees in favor of Seller set forth on Schedule 2.1(a)(iii) and (iv)
the Lease (collectively, the “Assumed Contracts”), in each case, expressly excluding
Contracts set forth on attached Schedule 2.1(a)(v) (the “Excluded Contracts”).

          (b) Receivables. All accounts receivable of Seller, including those set forth on
Schedule 2.1(b), and all of Seller’s rights to receive payments under the Assumed Contracts
(the “Acquired Receivables”).

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          (c) Inventories. All of Seller’s inventory (including raw materials, work-in-process
and finished goods), product labels and packaging materials used in connection with the Business.

          (d) Equipment. All of the computer and technical equipment owned and or used (to the
extent used pursuant to an Assumed Contract) by Seller, including, without limitation, the computer
and technical equipment set forth on Schedule 2.1(d) (it being understood that Purchaser is
not purchasing the personal computer of Paul Bay, but all information relating to the Business
thereon shall be transferred to Purchaser).

          (e) Advances and Refunds. All of Seller’s rights relating to prepaid royalties or
licensing fees paid by Seller to third parties arising under Assumed Contracts, purchase or sales
accruals of Seller against minimum quantity or purchase commitments of Seller arising under the
Assumed Contracts, prepaid expenses and deferred charges of Seller arising under Assumed Contracts,
and all rights of Seller relating to any claims for refunds or rebates and rights to offset
relating to the Purchased Assets.

          (f) Permits. All permits, licenses and other governmental approvals held by Seller
with respect to the Business, to the extent they are lawfully transferable.

          (g) Insurance Claims and Benefits. All of Seller’s rights in and to insurance claims
and benefits arising from or relating to the Purchased Assets or the Assumed Liabilities (as
defined in Section 3.3); provided, however, that Seller shall retain all rights and
proceeds arising from or relating to worker’s compensation and other employee-related insurance
claims and benefits that relate to facts, circumstances or other occurrences arising on or prior to
the Closing Date except with respect to the Transitioning Employees (but only to the extent
Purchaser has Losses (as defined in Section 8.1) in connection therewith).

          (h) Causes of Action. All rights to causes of action, lawsuits, judgments, claims and
demands of any nature whether choate or inchoate, known or unknown, contingent or non-contingent,
available to or being pursued by Seller with respect to the Business or the ownership, use,
function or value of any Purchased Asset, whether arising by way of counterclaim or otherwise,
other than any counterclaims relating to Liabilities retained by Seller pursuant to Section
3.3.

          (i) Intangible Property. All of Seller’s rights in and to the Seller Proprietary
Software, Seller Websites and, to the extent the same relate to the Business, all Seller’s
Intellectual Property Rights (other than Third-Party Intellectual Property), including applications
and registrations pertaining thereto, including without limitation, the property described on
attached Schedule 2.1(i) (collectively, the “Transferred Intellectual Property” and
along with the Seller Proprietary Software, the “Business Intellectual Property”) and
including the rights to institute or maintain any action or investigation for and to recover
damages for any past infringement thereof or any actions of unfair competition relating thereto.
All of Seller’s rights in and to documents or other tangible materials embodying technology or
Intellectual Property Rights owned by, licensed to or otherwise controlled by Seller, whether such
properties are located on Seller’s business premises or on the business premises of Seller’s
suppliers or customers, including, without limitation all Seller Proprietary Software (including
both source

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and object codes) and related documentation for Seller Proprietary Software and the Seller
Websites.

          (j) Warranty Claims. All warranty and other claims of Seller against any other Person
relating to the Purchased Assets, whether choate or inchoate, known or unknown, contingent or
noncontingent other than such claims that are not capable of being assigned set forth on
Schedule 2.1(j).

          (k) Rights Under Uniloc Settlement. Seller’s rights and obligations under Section 4
and Section 5, respectively, of that certain Settlement Agreement with Uniloc USA, Inc. and Uniloc
Private Limited, dated May 5, 2010.

          (l) Supplier, Contractor, Subcontractor & Customer/Merchant Information. All of
Seller’s supplier, vendor, contractor, subcontractor, customer and merchant lists, including all
Existing Consumer Data, and all other information of Seller or in Seller’s possession relating to
Seller’s suppliers, vendors, manufacturers, contractors, subcontractors, customers and merchants
with respect to the Business.

          (m) Records. Other than Seller’s corporate minute books, stock registry and returns
with respect to Taxes of any kind (true and correct copies of which shall be provided to Seller at
or before Closing), all of Seller’s books, records, manuals and other materials (in any form or
medium), including all records and materials maintained at the headquarters or any other
office/location of Seller (including the home office(s) and home computer(s) of any of Seller’s
employees), quotes and bids and all product catalogs and brochures, advertising matter, catalogues,
price lists, correspondence, sales orders and sales order log books, mailing lists, customer lists,
referral sources, distribution lists, commission records, photographs, sales and promotional
materials and records, purchasing materials and records, personnel records (subject to Legal
Requirements), material safety data sheets, financial and accounting records, quality control
records and procedures, service and warranty records, and sales order files and litigation files of
Seller and/or relating to the Business (collectively, the “Records”).

          (n) Names. The names “Punch Software LLC”, “Punch! Software”, “Punch Software” or any
combination of words in which such names appears or any right of Seller to use any such name in all
jurisdictions in which Seller either currently uses any such name or has any right to use any such
name.

          (o) Telephone Numbers; Email Addresses. To the extent transferable, the current
telephone and facsimile numbers and listings and email addresses of the Business and the right to
use the same currently being used in connection with the Business.

          (p) Goodwill. Goodwill (including all goodwill associated with and symbolized by the
name or names identified in Section 2.1(n) above as used as a trademark or service mark and
all goodwill associated with and symbolized by any other trademark or service mark, trade name or
corporate name used in the conduct of the Business as now conducted), all related tangibles and
intangibles which Seller uses in the conduct of the Business and all of Seller’s rights to continue
to use the Purchased Assets in the conduct of a going business.

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2.2 Closing. Closing on the purchase and sale of the Purchased Assets (the
“Closing”) shall take place at the offices of Winthrop & Weinstine, P.A., 225 South Sixth
Street, Suite 3500, Minneapolis, Minnesota 55402 as of the date hereof or at such other date and
place as may be mutually agreed upon by the parties to this Agreement (such date is referred to in
this Agreement as the “Closing Date”).

2.3 Title and Risk of Loss. Seller shall bear all cost and expense, and shall assume and
bear all risk of loss, damage and destruction, due to theft, expropriation, seizure, destruction,
damage, fire or other casualty of or related to the Purchased Assets until title thereto is passed
to Purchaser on the Closing Date. The effective time of the closing shall be as of 12:01 a.m.,
Central Standard Time, on the Closing Date.

ARTICLE 3.

PURCHASE PRICE; TERMS OF PAYMENT

3.1 Purchase Price Amount. The purchase price (the “Purchase Price”) to be paid
for the Purchased Assets by the Purchaser shall consist of and be paid as follows: (w) Eight
Million and 00/100 Dollars ($8,000,000.00) shall be due and payable in full on the Closing Date,
subject to adjustment pursuant to Section 3.6 below, (x) Purchaser shall issue a promissory
note to the Seller on the Closing Date bearing interest at an interest rate per annum equal to
0.67% with an aggregate payment, constituting principal and interest, of One Million One Hundred
Thousand and 00/100 Dollars ($1,100,000.00), due and payable on the first (1st) anniversary of the
Closing Date (the “Note”), a form of which is attached hereto as Exhibit E; (y) the
aggregate amount of Assumed Liabilities, and (z) the aggregate Earn Out Amounts paid pursuant to
Section 3.5 below.

3.2 Sales and Use Tax; Straddle Period Taxes.

          (a) Seller shall be responsible for payment of any and all sales, use and other transfer taxes
relating to or resulting from the purchase and sale of the Purchased Assets as described in this
Agreement.

          (b) All real property taxes, personal property taxes and similar ad valorem obligations levied
with respect to the Purchased Assets for a taxable period which includes (but does not end on) the
Closing Date (collectively, the “Straddle Period Taxes”) shall be apportioned between
Purchaser and Seller based on the number of days of such taxable period ending on and including the
Closing Date, which shall be the responsibility of Seller, and the number of days of such taxable
period after the Closing Date, which shall be the responsibility of Purchaser.

          (c) Taxes described in Section 3.2(a) and Straddle Period Taxes shall be timely paid,
and all applicable filings, reports and returns shall be filed, as provided by applicable law. The
paying party shall be entitled to reimbursement from the non-paying party in accordance with
Section 3.2(a) or (b), as applicable. Upon payment of any such Tax, the paying
party shall present a statement to the non-paying party setting forth the amount of reimbursement
to which the paying party is entitled under Section 3.2(a) or (b), as applicable,
together with such supporting evidence as is reasonably necessary to calculate the amount to be

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reimbursed. The non-paying party shall make such reimbursement promptly but in no event later
than ten (10) days after the presentation of such statement.

3.3 Assumption of Liabilities. Purchaser will assume (i) Seller’s trade payables,
including without limitation those existing as of April 30, 2010 and described on the attached
Schedule 3.3, and other accrued liabilities set forth on Schedule 3.3, other than
(A) trade payables and accrued liabilities under Excluded Contracts and (B) penalties, fees and
interest relating to any payables that are in default as of the Closing Date, except to the extent
included in the calculation of the Net Working Capital, (ii) all Liabilities relating to Assumed
Contracts other than to the extent arising as a result of a breach thereof prior to Closing and
(iii) all Liabilities arising from the use of the Purchased Assets by Purchaser after the Closing
(collectively, the “Assumed Liabilities”). It is expressly understood that Purchaser is
assuming only the Assumed Liabilities. Purchaser shall have no responsibility or liability for any
liabilities or other obligations of Seller other than the Assumed Liabilities, and all liabilities
and other obligations of Seller other than the Assumed Liabilities shall remain obligations of
Seller. Without limiting the generality of the preceding sentence:

          (a) Seller shall retain and be responsible for paying, performing and discharging all
Liabilities of Seller, other than the Assumed Liabilities, regardless of when incurred, and
regardless of whether or not Purchaser is alleged to have liability as a successor to Seller, if
any.

          (b) Except for the Assumed Liabilities, Purchaser is not, directly or indirectly, assuming any
Liability of or claim against Seller of any kind whatsoever, whether known or unknown, actual or
contingent, matured or unmatured, currently existing or arising in the future.

          (c) Purchaser shall not, as a result of the transactions contemplated by this Agreement or
otherwise, acquire or be responsible for any Liabilities of or claims against Seller other than the
Assumed Liabilities.

          (d) Except for the Assumed Liabilities, Seller shall be solely responsible for all Liabilities
related to the operation of the Business prior to the Closing Date, including, without limitation,
the costs and expenses relating to any and all pending and threatened litigation, together with any
litigation commenced after the Closing Date that relates to facts, circumstances or other
occurrences arising on or prior to the Closing Date.

          (e) Notwithstanding anything herein to the contrary, Seller shall be responsible for providing
continuation coverage for all employees or former employees of Seller, as required by Section 4980B
of the IRC and Part 6 of Title I of the Employee Retirement Income Security Act and the regulations
promulgated thereunder (together “COBRA”), or any relevant benefit continuation
requirements under Legal Requirements; provided that if at any time following the Closing Date,
Seller ceases to maintain a “group health plan” (as defined in COBRA), Purchaser shall, to the
extent required by COBRA and commencing on the date of such cessation, make available group health
plan continuation coverage under group health plan of Purchaser to each “M&A qualified beneficiary”
(as defined in COBRA) of Seller.

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          (f) Seller shall retain and be responsible for any Taxes relating to the operation of the
Business or the ownership or disposition of the Purchased Assets on or prior to the Closing Date.

3.4 Escrow Amount. All payments under the Note shall first be paid to the Escrow Agent
designated in the Escrow Agreement, attached hereto as Exhibit F (the “Escrow
Agreement”), until an amount equal to One Million One Hundred Thousand and 00/100 Dollars
($1,100,000.00) (the “Escrow Amount”) has been placed into escrow pursuant to the Escrow
Agreement, and the remainder shall be paid to the Seller. The Escrow Agent shall hold the Escrow
Amount and all interest and other amounts earned thereon in escrow until the date that is twenty
four (24) months after the Closing Date pursuant to the Escrow Agreement for purposes of securing
any amounts payable by Seller to Purchaser on account of any and all indemnification obligations
under Article 8 hereof.

3.5 Earn Out Amount; Subordination.

          (a) In addition to the cash payment, the Note and the Assumed Liabilities described above,
Seller shall be entitled to receive an earn out amount not to exceed Two Million Five Hundred
Thousand and 00/100 Dollars ($2,500,000.00), as determined below (collectively, the payment of the
amounts under this Section 3.5 shall be referred to as the “Earn Out Amounts”):

          (i) in the event that the Net Revenue equals or exceeds Eight Million and 00/100
Dollars ($8,000,000.00) between the Closing Date and the first anniversary of the Closing
Date (the “Initial Earn Out Period”), Purchaser shall pay Seller Five Hundred
Thousand and 00/100 Dollars ($500,000.00); plus

          (ii) in the event that the Net Revenue exceeds Eight Million and 00/100 Dollars
($8,000,000.00) in the Initial Earn Out Period, Purchaser shall pay Seller an additional
amount of fifty percent (50%) of the Net Revenue actually received by Purchaser during the
Initial Earn Out Period in excess of Eight Million and 00/100 Dollars ($8,000,000.00), in an
amount not to exceed Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00); plus

          (iii) in the event that the Net Revenue equals or exceeds Eight Million and 00/100
Dollars ($8,000,000.00) between the first and second anniversary of the Closing Date (the
“Subsequent Earn Out Period” and, collectively with the Initial Earn Out Period, the
“Earn Out Periods”), Purchaser shall pay Seller Five Hundred Thousand and 00/100
Dollars ($500,000.00); plus

          (iv) in the event that the Net Revenue exceeds Eight Million and 00/100 Dollars
($8,000,000.00) in the Subsequent Earn Out Period, Purchaser shall pay Seller an additional
amount of fifty percent (50%) of the Net Revenue actually received by Purchaser during the
Subsequent Earn Out Period in excess of Eight Million and 00/100 Dollars ($8,000,000.00), in
an amount not to exceed Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00).

- 10 -

 

For purposes hereof, the term “Net Revenues” shall mean net sales from sales or license of
the Software Titles or any other Software where a material portion of the relevant source code and
object code is comprised of or derived from Seller Proprietary Software (the “Earn Out
Products”), including, without limitation all royalties received by Seller, in each case
using the same accounting principles, procedures, policies and methods employed in preparing the
Financial Documents (as defined in Section 4.4). For purposes of clarification of the term
“Net Revenues”, the following items shall reduce Purchaser’s gross sales revenue for the
purposes of calculating Purchaser’s “net sales” of the Earn Out Products (in each case, without
duplication and to the extent included in gross sales revenue): (i) rebates and discounts allowed
and taken, returns, adjustments and other credits (whether relating to the periods before or after
Closing), (ii) shipping and mailing charges, (iii) sales, use and similar taxes, (iv) other
pass-through costs and expenses, (v) reasonable out-of-pocket costs incurred in connection with the
collection of past due accounts receivable, (vi) amounts owed to any distributor, including the
ordinary, customary and reasonable amounts in which Navarre charges Purchaser for its services (it
being understood that the terms and conditions between Navarre and Purchaser shall in no event be
less favorable to Purchaser than current terms and conditions between Navarre and Seller prior to
the date hereof) and (vii) credits, costs and expenses given or incurred in connection with
slotting fees, price protection and deal buys related to Earn Out Products and Earn Out Products
destroyed in the field; provided that credits, costs and expenses given or incurred in connection
with (a) attending tradeshows, exhibitions and conventions and (b) cooperative advertising,
including but not limited to costs of endcaps/displays, broadsheets and flyers, planogram (POG)
fees, online/web ads/programs, special tray packs, and other special advertising programs, shall
not reduce Purchaser’s gross sales revenue for the purposes of calculating Purchaser’s “net sales”
of the Earn Out Products.

          (b) The amount of Net Revenues in either given Earn Out Period shall be determined and
calculated in good faith by Purchaser within sixty (60) days after the end of the fiscal quarter of
Purchaser in which an Earn Out Period ends. Purchaser shall prepare and deliver to Seller the
calculation of Net Revenues prior to the expiration of each such period (the “Purchaser’s Net
Revenues Report”).

          (c) Seller shall, not later than fifteen (15) calendar days after receipt of the Purchaser’s
Net Revenues Report, deliver a report thereon (the “Seller’s Net Revenues Report”) to
Purchaser. During such fifteen (15) day period, Buyer shall make reasonably available during
normal business hours to Seller’s officers, representatives and agents such documents and
information as may be requested by Seller to prepare the Seller’s Net Revenues Report. The
Seller’s Net Revenues Report shall list those items included in the Purchaser’s Net Revenues
Report, if any, to which Seller takes exception and Seller’s proposed adjustment. If Seller fails
to deliver to Purchaser the Seller’s Net Revenues Report within fifteen (15) calendar days
following its receipt of the Purchaser’s Net Revenues Report or does not set forth any exceptions,
Seller shall be deemed to have accepted the Purchaser’s Net Revenues Report for purposes of
Section 3.5(a) and for all other purposes of this Agreement. If Purchaser does not give
Seller notice of its objections to the Seller’s Net Revenues Report within fifteen (15) calendar
days following receipt of the Seller’s Net Revenues Report, Purchaser shall be deemed to have
accepted the Net Revenues as adjusted by Seller in the Seller’s Net Revenues Report for purposes of
Section 3.5(a) and for all other purposes of this Agreement. If Purchaser gives Seller
notice of its objections to the Seller’s Net Revenues Report, and if Purchaser and Seller are

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unable, within fifteen (15) calendar days after receipt by Seller of the notice from Purchaser
of its objections, to resolve the disputed exceptions, such disputed exceptions will be referred
to a reputable independent accounting firm mutually acceptable to Purchaser and Seller (the
“Independent Accounting Firm”). The Independent Accounting Firm shall, within forty-five
(45) days following its selection, deliver to Purchaser and Seller a written report determining
such disputed exceptions (and only such disputed exceptions), and its determinations will be
conclusive and binding upon the parties thereto for the purposes Section 3.5(a) and for all
other purposes of this Agreement. The fees and disbursements of the Independent Accounting Firm
acting under this Section 3.5(c) shall be apportioned between Seller and Purchaser based on
the total dollar value of disputed exceptions resolved in favor of each such party, with each such
party bearing such percentage of the fees and disbursements of the Independent Accounting Firm as
the aggregate disputed exceptions resolved against that party bears to the total dollar value of
all disputed exceptions considered by the Independent Accounting Firm.

          (d) Payments of the Earn Out Amounts shall be made on the first business day that is two (2)
days after the amount of Net Revenues is finally determined under Section 3.5(c) (each such
date, a “Payment Date”). Any payment by Purchaser to Seller under this Section
3.5(d) shall be made by wire transfer of immediately available funds to such account as Seller
shall designate in writing to Purchaser. In the event that Purchaser fails to pay any of the Earn
Out Amounts on a Payment Date, from and after such Payment Date, interest shall accrue on the
unpaid principal balance of such Earn-Out Amount at a per annum interest rate of nine percent
(9.0%).

          (e) Purchaser’s obligations under the Note and this Section 3.5 are intended to be and shall
be subject to the provisions set forth in that certain Subordination Agreement (the
“Subordination Agreement”), dated as of the date hereof, by and among Seller, Purchaser,
Navarre and Wells Fargo Capital Finance, LLC (f/k/a Wells Fargo Foothill, LLC) (“Wells
Fargo”), relating to an existing credit facility evidenced by that certain Credit Agreement,
dated as of November 12, 2009, by and between Navarre and Wells Fargo, as agent and for certain
lenders executing the same. Furthermore, Seller agrees to execute and deliver such additional
subordination agreement(s) (containing terms and conditions substantially the same as, and not
materially less favorable to Seller than, those in the Subordination Agreement) as reasonably
requested by Purchaser and/or Navarre in favor of Purchaser’s and/or Navarre’s current or future
institutional lenders in connection with additional financing, refinancing or modifications,
amendments or restatements of any exiting financing arrangement with such institutional lenders to
reflect the subordinated nature of the Note and this Section 3.5 so long as the amount of
obligations to which Seller is subordinated are not increased as a result thereof. Purchaser
agrees that it shall reimburse Seller for the reasonable costs and expenses, including reasonable
attorney’s fees, incurred by Seller in connection with the review and execution of any such
additional subordination agreements.

3.6 Purchase Price Adjustment. The Purchase Price shall be subject to adjustment as
follows:

          (a) Schedule 3.6(a) sets forth a calculation of the Net Working Capital, as of April
30, 2010. For purposes of this Agreement, “Net Working Capital” means, as of any date, the
current assets included in the Purchased Assets less the current liabilities included in the
Assumed Liabilities. The Net Working Capital, as of any specified date, shall be in accordance

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with GAAP and using the same accounting principles, procedures, policies and methods employed
in preparing the Financial Documents to the extent not inconsistent with GAAP.

          (b) Not more than seven (7) Business Days nor less than three (3) Business Days before the
Closing Date, Seller shall deliver to Purchaser a separate report (the “Estimated Working
Capital Report”) setting forth the estimated Net Working Capital as of 12:01 a.m. as of the
Closing Date (the “Estimated Closing Net Working Capital”). The Estimated Working Capital
Report shall be prepared in the same manner as the Financial Documents and following the accounting
principles, procedures, policies and methods employed in preparing the Financial Documents. If (i)
the Estimated Closing Net Working Capital exceeds the Target Working Capital, the Purchase Price
shall be increased on a dollar-for-dollar basis at Closing by the amount of such excess, or (ii)
the Estimated Closing Net Working Capital is less than the Target Working Capital, the Purchase
Price shall be reduced on a dollar-for-dollar basis at Closing by the amount of such deficiency.

          (c) Within ninety (90) days after the Closing Date, Purchaser will prepare and deliver to
Seller a separate report (the “Closing Working Capital Report”) setting forth the actual
Net Working Capital as of 12:01 a.m. on the Closing Date (the “Closing Net Working
Capital”). The Closing Working Capital Report shall be prepared in the same manner as the
Financial Documents and following the accounting principles, procedures, policies and methods
employed in preparing the Financial Documents. For the avoidance of doubt, in no event shall the
method for calculating Seller’s inventory for purposes of determining Closing Net Working Capital
be adjusted to reflect any determination by Purchaser or any other Person that such inventory is
not salable in the ordinary course, obsolete, slow-moving or carried above net realizable value.
Seller shall, not later than fifteen (15) calendar days after receipt of the Closing Working
Capital Report, deliver a report thereon (the “Seller’s Net Working Capital Report”) to
Purchaser. During such fifteen (15) day period, Buyer shall make available during normal business
hours to Seller’s officers, representatives and agents such documents and information as may be
requested by Seller to prepare the Seller’s Net Working Capital Report. The Seller’s Net Working
Capital Report shall list those items included in the Closing Working Capital Report, if any, to
which Seller takes exception and Seller’s proposed adjustment. If Seller fails to deliver to
Purchaser the Seller’s Net Working Capital Report within fifteen (15) calendar days following its
receipt of the Closing Working Capital Report or does not set forth any exceptions, Seller shall be
deemed to have accepted the Closing Working Capital Report for the purposes of any adjustment to
the Purchase Price under Section 3.6(d) and for all other purposes of this Agreement. If
Purchaser does not give Seller notice of its objections to the Seller’s Net Working Capital Report
within fifteen (15) calendar days following receipt of the Seller’s Net Working Capital Report,
Purchaser shall be deemed to have accepted the Closing Working Capital Report as adjusted by Seller
in the Seller’s Net Working Capital Report for the purposes of any adjustment to the Purchase Price
under Section 3.6(d) and for all other purposes of this Agreement. If Purchaser gives
Seller notice of its objections to the Seller’s Net Working Capital Report, and if Purchaser and
Seller are unable, within fifteen (15) calendar days after receipt by Seller of the notice from
Purchaser of its objections, to resolve the disputed exceptions, such disputed exceptions will be
referred to an Independent Accounting Firm mutually acceptable to Purchaser and Seller. The
Independent Accounting Firm shall, within forty-five (45) days following its selection, deliver to
Purchaser and Seller a written report determining such disputed exceptions (and only such disputed
exceptions), and its determinations will be conclusive and

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binding upon the parties thereto for the purposes of any adjustment to the Purchase Price
under Section 3.6(d) and for all other purposes of this Agreement. The fees and
disbursements of the Independent Accounting Firm acting under this Section 3.6(c) shall be
apportioned between Seller and Purchaser based on the total dollar value of disputed exceptions
resolved in favor of each such party, with each such party bearing such percentage of the fees and
disbursements of the Independent Accounting Firm as the aggregate disputed exceptions resolved
against that party bears to the total dollar value of all disputed exceptions considered by the
Independent Accounting Firm.

          (d) Post-Closing Adjustment.

          (i) If the Closing Net Working Capital, as finally determined under
Section 3.6(c), is more than the Estimated Closing Net Working Capital, Purchaser
shall, within three (3) Business Days following the final determination of the Closing Net
Working Capital pursuant to Section 3.6(c), and based upon such final determination,
pay to Seller the amount of such excess in cash. Any payment by Purchaser to Seller under
this Section 3.6(d) shall be made by wire transfer of immediately available funds to
such account as Seller shall designate in writing to Purchaser.

          (ii) If the Closing Net Working Capital, as finally determined under
Section 3.6(c), is less than the Estimated Closing Net Working Capital, Seller
shall, within three (3) Business Days following the final determination of the Closing Net
Working Capital pursuant to Section 3.6(c), and based upon such final determination,
pay to Purchaser the amount of such deficiency in the form of a deduction from any
outstanding balance due on the Note (it being understood that in the event of any dispute
pursuant to Section 3.6(c) Purchaser shall remain obligated to timely pay in
accordance with the payment terms contained in the Note the difference between any amount in
dispute as set forth in the Dispute Notice and the amount then due to Seller under the
Note).

          (iii) In addition, any outstanding principal balance on all Acquired Receivables, net
of any reserves for doubtful or uncollectible accounts, included in the calculation of
Closing Net Working Capital other than Acquired Receivables due from Navarre or its
Affiliates or customers thereof (the “Navarre Receivables”) and not collected during the
term of the Note other than upon the exercise of any right of return in the ordinary course
of business, shall be deducted from the outstanding balance due on the Note on the Maturity
Date (as defined in the Note). Purchaser and Navarre shall use commercially reasonable
efforts to collect all such Acquired Receivables.

	3.7	 	Allocation of Purchase Price. The parties agree to allocate the Purchase Price among
the Purchased Assets for all purposes (including financial accounting and Tax purposes) in
connection with the determination of Seller’s Net Working Capital on the Closing Date as
provided in Section 3.6 above. Purchaser shall deliver its allocation of the Purchase Price
within ninety (90) days of the Closing Date. To the extent Seller agrees with Purchaser’s
allocation, it shall report such allocation consistently for all Tax purposes. Seller and
Purchaser will cooperate with each other in filing any returns or reports required to be filed
by each of them under Legal Requirements with respect to such allocation. Notwithstanding the
foregoing, to the extent any applicable Taxing authority

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	 	 	takes a position in connection with an audit of any Tax return of Purchaser or Seller or
otherwise that is inconsistent with any allocation on the allocation determined as provided
herein, the parties shall take an appropriate defensive position with respect to such
allocation until the controversy is finally determined.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF SELLER

In connection with and as an inducement to Purchaser to enter into and be bound by the terms of
this Agreement, Seller hereby represents and warrants to Purchaser as follows:

4.1 Organization, Standing and Power. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of Delaware and has
all requisite limited liability company power and authority to own, lease and operate its
properties and assets and to carry on the Business as is now being conducted. Seller has delivered
to Purchaser complete and correct certified copies of the Certificate of Formation and the limited
liability company agreement of Seller as are currently in effect. Seller is duly qualified to
transact business as a foreign limited liability company and is in good standing under the laws of
each state in which it maintains any offices, any bank accounts or has any employees who reside
and/or normally perform their employment services in such state, or as otherwise may be required by
Legal Requirements, except where the failure to be so qualified would not have a Material Adverse
Effect on Seller.

4.2 Authority. Seller has the full limited liability company power and authority to enter
into, execute and deliver and to consummate the transactions contemplated by this Agreement and the
Transaction Documents to which it is a party. This Agreement and each of the Transaction Documents
to which Seller is a party has been duly and validly executed and delivered by Seller and
constitute valid and binding obligations of Seller according to their respective terms, enforceable
against Seller, except as the enforceability thereof may be restricted, limited or delayed by any
applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws relating to or affecting the rights or remedies of creditors, or general principles of equity,
whether considered in a proceeding in equity or at law (including the possible unavailability of
specific performance or injunctive relief).

4.3 No Violation. Except as set forth on Schedule 4.3, neither the execution and
delivery by Seller of this Agreement and each of the Transaction Documents to which Seller is a
party, nor the consummation of the transactions contemplated hereby and thereby, nor compliance by
Seller with any of the provisions hereof or thereof will:

          (a) violate or conflict with any provision of the Certificate of Formation or limited
liability company agreement of Seller or any agreement among its members;

          (b) violate or constitute a material default under or give rise to any right of termination,
cancellation or acceleration under the terms, conditions or provisions of any agreement or
instrument to which Seller is a party or by which any of its properties or assets is bound except
as has been duly and validly waived, consented to or approved of by the other parties to such
agreement or instrument;

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          (c) result in the creation or imposition of any Encumbrance (other than Permitted
Encumbrances) upon any of the Purchased Assets; or

          (d) violate any Legal Requirement applicable to Seller or any of the Purchased Assets.

4.4 Financial Information. Prior to the execution of this Agreement, the Seller has
provided to Purchaser copies of (i) audited balance sheet, statements of income and cash flow, and
statements of member’s equity for the years ended December 31, 2008 and December 31, 2009 for
Seller, and (ii) financial statements for the period ended April 30, 2010 for Seller (all of the
foregoing financial statements are collectively referred to in this Agreement as the “Financial
Documents”). The Financial Documents, including the footnotes thereto, have been prepared in
accordance with GAAP, consistently applied throughout the periods indicated, and present fairly in
all material respects the financial condition, results of operations and cash flows of Seller at
the respective dates and for the respective periods indicated in all material respects, except that
the financial statements for the period ended April 30, 2010 for Seller do not contain footnotes or
year-end adjustments.

4.5 Purchased Assets; Inventory

          (a) Seller has good and marketable title to all of the Purchased Assets and has the right to
transfer title of the Purchased Assets to Purchaser free and clear of all Encumbrances (other than
Permitted Encumbrances). The Purchased Assets constitute all of the material assets used by Seller
in the Business during the one (1) year period prior to the Closing Date, except for such assets as
may have been replaced and/or disposed of by Seller in the ordinary course of business prior to the
Closing Date.

          (b) Except as would not be material, Seller’s inventory of raw materials, work-in-process and
finished goods relating to the Business consists of items of a quality and quantity usable in the
ordinary course of business. Seller has on hand or has ordered and expects timely delivery of such
quantities of raw materials and has on hand such quantities of work in process and finished goods
as are reasonably believed to be necessary to timely fill current orders to be shipped within
thirty (30) days from the date hereof.

          (c) True, correct and complete copies of the Lease and all amendments, extensions,
supplements, letter agreements, renewals, waivers and writings exercising rights therewith, to
which Seller is a party or by which it is bound has been provided to Purchaser. Seller has, in all
material respects, peaceful undisturbed possession of the Leased Real Property, and Seller has not
assigned the Lease. To the knowledge of Seller, there are no leases, subleases, licenses,
concessions or other agreements, written or oral, granting to any Person other than the Company the
right of use or occupancy of the Leased Real Property or any portion thereof. To the knowledge of
Seller, the Leased Real Property is in materially good operating condition, and the full security
deposit, if any is required, is held under the Lease.

4.6 Books, Records and Accounts. The accounts, books and records material to the Business
do not contain any material inaccuracies or discrepancies of any kind and have been properly and
accurately kept and completed in all material respects.

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4.7 Judgments; Litigation. There are no unsatisfied judgments of record against Seller.
Except as set forth in Schedule 4.7, Seller, its assets, properties and the Business are
subject to no pending or, to the knowledge of Seller, threatened, litigation, action, suit or
proceeding by or before any court, arbitrator or federal, state or other Governmental Entity or by
any private party.

4.8 Liabilities. Except for those Liabilities incurred by Seller in the ordinary course of
business since April 30, 2010, Seller has no knowledge of material Liabilities of any kind or
character outstanding for which Seller is liable that are not reflected on Seller’s April 30, 2010
balance sheet, a copy of which is included in the Financial Documents, other than Liabilities
incurred in the ordinary course, consistent with past practice, which are of the type that
ordinarily recur and, individually or in the aggregate, are not material in nature or amount and do
not result from any breach of contract, tort or violation of Legal Requirements.

4.9 Accounts Receivable. Schedule 2.1(b) sets forth an accurate list of the
Acquired Receivables, an aging of the Acquired Receivables in the aggregate as of the close of
business the business day before the Closing Date and the identity and address of the party from
whom such receivable is owing. The Acquired Receivables arose in the ordinary course of business,
consistent with past practices, represented bona fide claims against obligors for sales and other
charges, and to the knowledge of Seller, except to the extent included in the reserves for doubtful
or uncollectible accounts in the calculation of Closing Net Working Capital, are collectible in the
ordinary course of business. Except to the extent expressly included in the reserves for doubtful
or uncollectible accounts reflects in the calculation of Closing Net Working Capital, none of the
Acquired Receivables are subject to any claim of offset, recoupment, setoff or counter-claim, other
than agreements relating to a right of return, and Seller has no knowledge of any specific facts or
circumstances (whether asserted or unasserted) that could reasonably be expected to give rise to
any such claim. Except as set forth in Schedule 4.9, no Person has any Encumbrance on any
of Acquired Receivables and none of the Acquired Receivables are subject to prior assignment and no
agreement for deduction or discount has been made with respect to any of such Acquired Receivables,
other than agreements relating to a right of return. Except as set forth in Schedule 4.9,
none of the obligors of the Acquired Receivables have refused or given notice that it refuses to
pay the full amount thereof, and none of the obligors of such Acquired Receivables is an Affiliate
of Seller. Anything contained in this Agreement to the contrary notwithstanding, no representation
or warranty is given with respect to the Navarre Receivables.

4.10 No Adverse Change. Except as set forth in Schedule 4.10, since December 31,
2009, there has not been:

          (a) one or more events, occurrences or developments which, individually or in the aggregate,
has had, or could reasonably be expected to have, a Material Adverse Effect on the operations,
assets or financial condition of the Business;

          (b) any write off as uncollectible of any Acquired Receivables;

          (c) with respect to the Business, any material delay or postponement of any payment of any
accounts payable of Seller, or any extension or agreement to extend the payment date of any such
accounts payable Seller other than in the ordinary course of business;

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          (d) with respect to the Business, any change by Seller in its method of accounting or
accounting practice that affects the Financial Statements, other than changes required under
applicable Law, or any failure by Seller to maintain in all material respects its books, accounts
and records in the ordinary course of business; or

          (e) any agreement, understanding or commitment by Seller to do any of the foregoing.

4.11 Assumed Contracts.

          (a) Except as set forth in Schedule 4.11(a), Seller has performed in all material
respects all of the obligations required to be performed by it and, to the knowledge of Seller, is
entitled to all benefits under, and is not alleged to be in material default in respect of, any
Assumed Contract. Except as set forth in Schedule 4.11(a), there exists no default or
event of default or event, occurrence, condition or act, with respect to Seller or, to Seller’s
knowledge, any other contracting party, which, with the giving of notice, the lapse of time or the
consummation of the transactions contemplated by the Transaction Documents, would constitute (i) a
material breach, default or event of default under any Assumed Contract, or (ii) give any third
party (A) the right to declare a material breach or default or exercise any material remedy under
any Assumed Contract, (B) the right to a rebate, chargeback, refund, credit, penalty or change in
delivery schedule under any Assumed Contract, (C) the right to accelerate the maturity or
performance of any material obligation of Seller under any Assumed Contract, (D) the right to
cancel, terminate or modify any Assumed Contract, or (E) the right to claim any interest in the
Business Intellectual Property.

          (b) Except as set forth in Schedule 4.11(b), Seller has not received any written
notice or, to Seller’s knowledge, any other communication regarding any actual or possible material
violation or breach of, default under, or intention to cancel or modify any Assumed Contract.

          (c) Each of the Assumed Contracts is in full force and effect and constitutes a legal, valid
and binding agreement of Seller, and Seller has no knowledge that any Assumed Contract is not a
legal, valid and binding agreement of any other party thereto, subject only to the effect, if any,
of (i) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws relating to or affecting the rights or remedies of creditors, or (ii) general principles of
equity, whether considered in a proceeding in equity or at law (including the possible
unavailability of specific performance or injunctive relief). Except as set forth in Schedule
4.11(c), immediately following the Closing Date, each Assumed Contract shall be a legal, valid
and binding agreement of Purchaser and, to the knowledge of Seller, each other party thereof,
enforceable against Purchaser in accordance with its respective terms and, to the knowledge of
Seller, enforceable against each other party thereto in accordance with its respective terms,
subject only to the effect, if any, of (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws relating to or affecting the rights or remedies of
creditors, or (ii) general principles of equity, whether considered in a proceeding in equity or at
law (including the possible unavailability of specific performance or injunctive relief).

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          (d) Except as set forth in Schedule 4.11(d), all Assumed Contracts are in written and
executed form. True and complete copies of each Assumed Contract, together with all amendments and
supplements thereto, whether or not executed, and all waivers of any terms thereof (including in
facsimile and other electronic form), have been provided or made available to Purchaser prior to
the Closing Date.

          (e) Schedule 4.11(e) contains an accurate and complete list of all Contracts in which
Seller is a party relating to the Business other than the Assumed Contracts that involve payments
or expenditures by Seller or any other Person of less than Five Thousand Dollars ($5,000.00) over
the life of the applicable Contract and other than contracts relating to generally commercially
available “off-the-shelf” or “shrink-wrapped” Software.

4.12 Taxes. Seller has filed all federal, state, county, local and foreign income Tax
returns and all other material returns with respect to Taxes of any kind that are required to be
filed. Seller is not currently the beneficiary of any extension of time within which to file any
such return. All income and other material Taxes owed by Seller have been paid. All material
Taxes required to be withheld or collected by Seller on or prior to the Closing Date from the
Transitioning Employees (including Persons designated as independent contractors) have been
properly withheld and, if required on or prior to the Closing Date, have been deposited with, or
paid as directed by, the appropriate Governmental Entity. Except as set forth on Schedule
4.12, there are no audits of Tax returns of Seller pending or, to the knowledge of Seller,
threatened, and all past audits of Tax returns of Seller, if any, have been settled. There are no
deficiencies proposed or assessed as a result of any pending audit. Seller is not a party to any
pending or, to the knowledge of Seller, threatened action or proceeding against Seller for the
assessment or collection of Taxes by any Governmental Entity, and there is no basis for any such
action or proceeding. There are no Encumbrances (other than Permitted Encumbrances) on the
Purchased Assets for Taxes (other than Taxes that are not yet due and payable). Seller has not
waived any statute of limitations in respect of Taxes or agreed to any extension of time with
respect to a tax assessment or deficiency.

4.13 Labor. With respect to Transitioning Employees: (a) there are no disputes pending or,
to the knowledge of Seller, threatened against Seller involving the Transitioned Employees; and (b)
Seller has complied in all material respects with all Legal Requirements relating to employment of
labor, including all Legal Requirements relating to wages, hours, collective bargaining, employment
discrimination, civil rights, safety and health, workers’ compensation, pay equity, classification
of employees, and the collection and payment of social security and similar Taxes. Seller is not a
party to any collective bargaining agreement or other labor union contract applicable to
Transitioning Employees and, to the knowledge of Seller, there are not any activities and
proceedings of any labor union to organize any such Transitioning Employees. All of the Contracts
containing any confidentiality agreements, work for hire agreements and other restrictive covenants
with any of the Seller’s current and former employees in favor of Seller are set forth on
Schedule 2.1(a)(iii).

4.14 Compliance with ERISA. With respect to the Transitioning Employees, each employee
benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), which Seller has established or maintained or to which Seller is or has been
obligated to contribute, or in which Seller’s employees participate is in compliance with the
applicable provisions of ERISA and the IRC except where noncompliance would not reasonably

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be expected to result in a Material Adverse Effect. For purposes of this Section 4.14, the
term “employee benefit plan” shall have the meaning assigned thereto in Section 3 of ERISA.

4.15 Compliance With Laws.

          (a) Seller is in material compliance in all respects with all applicable Legal Requirements.
Seller has all material permits and licenses from governmental authorities required to conduct the
Business as it is now being conducted.

          (b) Seller, the Business and the Purchased Assets are and have been operated and maintained in
compliance in all material respects with all applicable Environmental Laws. The Seller has not
received any written communication from a Governmental Entity or any other Person, alleging that
Seller is not in such compliance. No event has occurred which, with or without the passage of time
or the giving of notice, or both, would constitute a material non-compliance by Seller with, or a
material violation by Seller of, the Environmental Laws.

4.16 Intangible Property.

          (a) Exhibit A contains an accurate and complete list and description (including a
name, product description, version level, and language in which it is written) of all Seller
Proprietary Software. Exhibit C contains an accurate and complete list of all URLs owned
or controlled by Seller. Schedule 2.1(i) contains an accurate and complete list and
description of all applications and registrations pertaining to the Business Intellectual Property.
Schedule 4.16(a) contains an accurate and complete list and description (including a name,
product description and version level) of all Third Party Software that is (i) licensed, offered or
provided to customers of Seller as part of or in conjunction with the Seller Proprietary Software
and Seller Websites, or (ii) material to the use of the Seller Proprietary Software and Seller
Websites.

          (b) Except as set forth in Schedule 4.16(b), Seller owns all Business Intellectual
Property free and clear of any Encumbrances (other than Permitted Encumbrances), and no Person has
any ownership interest in or other right to any Business Intellectual Property, including the right
to royalty payments based on Seller’s or any of Seller’s customers’ license or use of the Seller
Proprietary Software. Seller has not received any written notice or claims challenging Seller’s
exclusive ownership of any Business Intellectual Property or the validity or enforceability of any
Business Intellectual Property. Seller has not granted to any Person any exclusive rights in any
Business Intellectual Property.

          (c) Seller has the right to transfer and assign the Transferred Intellectual Property free and
clear of any Encumbrances (other than Permitted Encumbrances) to Purchaser.

          (d) The Business Intellectual Property, together with the Third Party Intellectual Property
including the Seller Proprietary Software, constitutes all of the material Intellectual Property
necessary to operate the Business as currently conducted, including all Intellectual Property
embodied in Seller Proprietary Software. Except as set forth in Schedule 4.16 (d), all
rights of Seller in and to all Third Party Intellectual Property may be transferred or sub-licensed
(on a perpetual, worldwide, royalty free basis), to Purchaser. The use of any Third Party
Intellectual Property by Seller in connection with the Business is in material compliance with all
licenses applicable thereto.

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          (e) The Business Intellectual Property does not infringe, misappropriate, or otherwise violate
(collectively, “Infringe”) on any Intellectual Property Right of any Person, and no claim
of such Infringement is pending or, to the knowledge of Seller, threatened, against Seller or, to
the knowledge of Seller, any Person who may be entitled to be indemnified, defended, held harmless,
or reimbursed by Seller for such Infringement. No Business Intellectual Property is subject to any
Proceeding or subject to any outstanding order (in each case involving Seller) that restricts in
any material respect the use, transfer or licensing thereof by Seller or may adversely affect the
validity or enforceability of Business Intellectual Property. To the knowledge of Seller, no
Person has Infringed, or is Infringing, any of the Intellectual Property Rights applicable to
Business Intellectual Property.

          (f) Except as set forth in Schedule 4.16(f), all current and former employees,
consultants and contractors of the Seller have executed and delivered and, to the knowledge of the
Seller, are in compliance with, enforceable agreements regarding the protection of the confidential
information relating to the Business and providing work for hire language and/or valid written
assignments, as appropriate, of all Business Intellectual Property conceived or developed by such
employees, consultants, or contractors in the course of their employment or engagement with Seller.

          (g) With respect to the Business, Seller has taken reasonable and practicable steps designed
to safeguard and maintain the secrecy and confidentiality of all material proprietary information
that Seller holds or purports to hold as a trade secret.

          (h) Seller maintains (i) machine-readable copies of Seller Proprietary Software and the Third
Party Software, and (ii) reasonably complete technical documentation or user manuals for all
releases or versions thereof currently in use by Seller. Such machine-readable copies conform to
the corresponding source code listing in all material respects.

          (i) Seller Proprietary Software and, to the knowledge of Seller, any Third Party Software that
is used in connection with any Seller Proprietary Software, does not contain any Harmful Code and
does not contain and is not in any manner derived from any Publicly Available Software.
Schedule 4.16(h) lists all Publicly Available Software used in connection with any Seller
Proprietary Software, including in the development or testing thereof, and describes (i) the manner
in which such Publicly Available Software was used, (ii) whether (and, if so, how) such Publicly
Available Software was modified by or for Seller, and (iii) how such Publicly Available Software is
integrated with or interacts with Seller Proprietary Software.

          (j) The Seller Proprietary Software meets in all material respects the specifications and
feature descriptions set forth in current written specifications or any other relevant
documentation provided by Seller, including on any product packaging, Seller Websites, in the
product manual and in any user guide or otherwise (collectively, the “Specifications”).
The Seller Proprietary Software (excluding Software under development), (i) functions, repeatedly,
without interruption, loss of data or erroneously or improperly formatted output, and (ii) there
are no technical problems with any of Seller Proprietary Software which would materially and
adversely affect the performance of such Seller Proprietary Software to fail to substantially
conform to the Specifications.

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4.17 Sufficiency of Assets. Except to the extent of Excluded Contracts, employees of
Seller that are not Transitioning Employees and assets of Seller that are not Purchased Assets, the
Purchased Assets comprise all of the assets that are necessary for Purchaser to conduct the
Business in all material respects after the Closing Date in a manner consistent with past practice
and constitute all of the assets used by Seller in the Business.

4.18 Customers and Suppliers.

          (a) Schedule 4.18(a) sets forth an accurate list of the revenues generated from each
of Seller’s customers for both the year-ended December 31, 2009 and the three (3) months ended
April 30, 2010 that account for, individually, at least five percent (5%) of Seller’s gross revenue
for such periods (the “Significant Customers”). Except as set forth in Schedule
4.18(a), Seller is not aware of any outstanding material disputes concerning any the
relationships with such Significant Customers. Except as set forth in Schedule 4.18(a),
Seller has no knowledge (i) of any material dissatisfaction on the part of any of Significant
Customers, and (ii) that any of the Significant Customers intends to cease or materially reduce its
purchases from Seller. that any of the Significant Customers intends to cease or materially reduce
its purchases from Seller (excluding general macro-economic conditions). Except as set forth in
Schedule 4.18(a), Seller has not received any written notice from any Significant Customer
that such client shall not continue as a client of Seller (or Purchaser) after the Closing under
the Business or that any of Seller’s customers intends to terminate or materially modify existing
Contracts with Seller (or Purchaser). Since January 1, 2005, Seller has stored and maintained all
Existing Consumer Data in a manner consistent in all material respects with industry practice and
has not licensed or sold the same to, or entered into any Contract to license or sell the same
with, any Person other than as contemplated herein.

          (b) Attached hereto as Schedule 4.18(b) are the privacy policies of or related to the
Business which have been in effect since January 1, 2005, including the dates in which such
policies were in effect (the “Privacy Policies”). Seller has been in material compliance
with the Privacy Policies and any and all Legal Requirements related thereto. The transfer of any
Existing Consumer Data from Seller to Purchaser as contemplated herein shall be in full and
complete compliance with the Privacy Policies and any and all Legal Requirements related thereto.

          (c) Schedule 4.18(c) sets forth an accurate list of each supplier of Seller who, for
the year-ended December 31, 2009 and the three (3) months ended April 30, 2010, was one of the ten
(10) largest suppliers of products and/or services to the Business, based on amounts paid or
payable (each, a “Significant Supplier”). Seller has no outstanding material dispute
concerning products and/or services provided by any Significant Supplier. Seller has not received
any information from any Significant Supplier that such supplier shall not continue as a supplier
to Seller or, following Closing, Purchaser or that any Significant Supplier intends to terminate or
materially modify existing Contracts with Seller or, following closing, Purchaser.

4.19 Terms and Conditions; Warranties. Purchaser has been furnished with complete and
correct copies of the terms and conditions of end user license agreements and warranty information
currently provided with respect to the sale of any Seller Proprietary Software. Attached hereto as
Schedule 4.19 is a list of all forms of end user license agreements currently used by
Seller with respect to the sale of any Seller Proprietary Software. No Seller Proprietary

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Software nor any other services sold, delivered or rendered by or on behalf of Seller with respect
to the Business is subject to any guaranty, warranty, or other indemnity, express or implied,
beyond such end user license agreement terms and conditions.

4.20 Product and Service Liability. Except as would not reasonably be expected to
materially and adversely affect the Business, or as otherwise described on Schedule 4.20,
Seller does not have any Liability or obligations of any nature (whether known or unknown, accrued,
absolute, contingent or otherwise, and whether due or to become due), whether based on strict
liability, negligence, breach of warranty (express or implied), breach of contract or otherwise to
any Significant Customer or Significant Supplier with respect to the Business or service rendered
on or prior to the Closing Date by or on behalf of, Seller that is not otherwise fully and
adequately reserved against as reflected in the Financial Documents to the extent required by GAAP.

4.21 Consents; Approvals. Schedule 4.21 sets forth a list of all material notices,
reports, filings, approvals, orders, authorizations, consents, licenses, permits, qualifications or
registrations, or qualifications, registrations or applications for new approvals, orders,
authorizations, consents, licenses, permits, qualifications or registrations, or waivers of any of
the foregoing, required to be obtained from or made with, or any notice, statement or other
communications required to be filed with or delivered to, any Governmental Entity or any other
Person (each, an “Approval”) and the Assumed Contracts associated therewith (if any) that
are required as a result of the execution, delivery and performance by Seller of any of the
Transaction Documents and the consummation of the transactions contemplated thereby. Except where
the failure to obtain such Approval would not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect, no other Approval is required or necessary in
connection with the execution and delivery of the Transaction Documents or the consummation of the
transactions contemplated thereby. Except as set forth on Schedule 4.21, none of the
Assumed Contracts will terminate as the result of any failure to obtain any Approval required
thereunder in connection with the transactions contemplated by the Transaction Documents. The
execution, delivery and performance of the Transaction Documents by Seller and the consummation of
the transactions contemplated thereby are not subject to the jurisdiction or approval of any
Governmental Entity. Seller does not require the consent of any Governmental Entity to permit it
to operate the Business in the manner in which the Business is presently being operated. Seller
possesses all material permits, licenses and other authorizations, if any, from all Governmental
Entities presently required to permit it to operate the Business in the manner in which the
Business is presently conducted.

4.22 Broker or Finder. Other than Updata Advisors, Inc., Seller is not obligated for the
payment of any fees or expenses of any investment banker, broker, advisor, finder or similar party
in connection with the origin, negotiation or execution of the Transaction Documents, or in
connection with the transaction contemplated thereby. Seller shall be solely responsible for any
and all costs and fees associated with any investment banker, broker, advisor, finder or similar
party retained by Seller.

4.23 No Other Representations or Warranties. Except for the representations and warranties
contained in this Article 4: (i) Seller makes no other express or implied representation or
warranty to Purchaser; and (ii) Seller makes no representations with respect to any plan(s) of
Purchaser for the future conduct of the Business, or any implied warranties of merchantability or
fitness for a particular purpose. For the avoidance of doubt, except for the representations and

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warranties contained in this Article 4, no warranty or representation is given on the contents of
the documents provided during due diligence, including any information in any data room and any
other reports, financial forecasts, projections or information furnished by or on behalf of Seller
or its officers, directors, employees, agents or representatives or in any other documents or other
information not contained in this Agreement or the Transaction Documents.

4.24 Knowledge of Seller. When used herein, the words “knowledge of Seller” or words of
like import shall mean the actual knowledge of Paul Bay, Kenneth Beerman and Craig Birmingham,
Timothy Olson, Ryan Verity, Jeffrey Steinke and/or Matthew Hopkins of the particular fact or matter
after reasonable inquiry of appropriate Seller personnel reporting directly to them and review of
the books and records of Seller.

Subject to Article 8, including, without limitation, Sections 8.7 and 8.8,
except for the representations and warranties contained in Sections 4.1, 4.2,
4.3(a), 4.12 and 4.22, which shall survive until the later or (i) payment
of all amounts due under Section 3.5 and (ii) release of the Escrow Amount pursuant to the Escrow
Agreement, all representations and warranties of Seller in this Agreement, and any certificate or
document delivered pursuant to this Agreement, shall survive the Closing and the consummation of
the transactions contemplated hereby for a period of twenty four (24) months. Subject to
Article 8, including, without limitation, Sections 8.7 and 8.8, the
covenants and post-closing obligations of the Seller in this Agreement shall survive until the
later or (i) payment of all amounts due under Section 3.5 and (ii) release of the Escrow Amount
pursuant to the Escrow Agreement.

ARTICLE 5.

REPRESENTATIONS, WARRANTIES OF PURCHASER

AND NAVARRE

In connection with and as an inducement to Seller to enter into and be bound by the terms of this
Agreement, Purchaser, and solely with respect to Sections 5.2 and 5.4, Navarre,
hereby represent and warrant to Seller as follows:

5.1 Organization; Capitalization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota.

5.2 Authority. Each of Purchaser and Navarre has full power and authority to enter into,
execute and deliver and to consummate the transactions contemplated by this Agreement and the
Transaction Documents to which it is a party. Each of Purchaser and Navarre has duly and validly
executed and delivered this Agreement and Transaction Documents to which it is a party and this
Agreement and each Transaction Document constitutes a valid and binding obligation of Purchaser
and/or Navarre, as applicable, according to its terms. The execution of this Agreement and each
Transaction Document by Purchaser has been duly authorized by the Board of Directors of Purchaser.
The execution of this Agreement and each Transaction Document to which it is a party by Navarre has
been duly authorized by the Board of Directors of Navarre.

5.3 Broker or Finder. Purchaser is not obligated for the payment of any fees or expenses
of any investment banker, broker, advisor, finder or similar party in connection with the origin,
negotiation or execution of the Transaction Documents, or in connection with the transaction
contemplated thereby. Purchaser shall be solely responsible for any and all costs and fees

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associated with any investment banker, broker, advisor, finder or similar party retained by
Purchaser.

5.4 Guarantee. Navarre guarantees the full and timely performance of all of Purchaser’s
obligations under this Agreement and the Transaction Documents, including, without limitation,
Purchaser’s obligations pursuant to Sections 3.1, 3.4 and 8.2 of this
Agreement.

All representations and warranties of Purchaser and Navarre contained in this Agreement and in any
certificate or document delivered pursuant to this Agreement shall survive indefinitely. The
obligations and covenants of the Purchaser and Navarre in this Agreement shall survive
indefinitely.

ARTICLE 6.

DELIVERY OF DOCUMENTS

6.1 By Purchaser to Seller. On the Closing Date, Purchaser shall deliver the following to
Seller all of which shall be in form and substance reasonably acceptable to Seller (delivery of the
items in this Section 6.1 shall be an express precondition on the obligations of the Seller
to close the transactions set forth in the Transaction Documents):

          (a) Authorizing Resolutions. A copy of the duly adopted resolutions of the Board of
Directors of Purchaser approving this Agreement and authorizing the execution and delivery of each
Transaction Document to which Purchaser is a party and the consummation of the transactions
contemplated thereby.

          (b) Non-Competition Agreement. A duly executed Non-Competition Agreement, in the form
set forth as Exhibit G, signed by an authorized officer of Purchaser (the
“Non-Competition Agreement”).

          (c) Note. A duly executed original Note, signed by an authorized officer of
Purchaser, and Guaranty thereof, signed by an authorized officer of Navarre.

          (d) Assignment of Lease. A duly executed Assignment and Assumption of Lease by
Purchaser.

          (e) Subordination Agreement. A duly executed original Subordination Agreement, signed
by an authorized officer of Purchaser, Navarre and Wells Fargo.

          (f) Opinion of Counsel. An opinion of Purchaser’s counsel, in a form requested by
Seller.

6.2 By Seller to Purchaser. On the Closing Date, Seller shall deliver the following to
Purchaser, all of which shall be in form and substance reasonably acceptable to Purchaser (delivery
of the items in this Section 6.2 shall be an express precondition on the obligations of the
Purchaser to close the transactions set forth in the Transaction Documents):

          (a) Certificate of Good Standing. Certificate of Good Standing of Seller from the
Delaware Secretary of State, dated no more than ten (10) days prior to the Closing Date.

- 25 -

 

          (b) Assignments and Consents. Each assignment and consent document set forth on
Schedule 6.2(b), in form and content acceptable to Purchaser and duly executed by an
authorized manager of Seller or an authorized officer of Seller’s lienholders, as applicable.

          (c) Assignment of Lease. A duly executed Assignment and Assumption of Lease, by each
of Seller and Dihedral Investment Company.

          (d) Subordination Agreement. A duly executed original Subordination Agreement, signed
by an authorized officer of Seller.

          (e) Authorizing Resolutions. A copy of the duly adopted resolutions of the members
and the managers of Seller approving this Agreement and authorizing the execution and delivery of
the Transaction Documents and the consummation of the transactions contemplated thereby.

          (f) Non-Competition Agreement. A duly executed Non-Competition Agreement, signed by
an authorized manager of Seller, and each of the following persons: Paul Bay and Kenneth Beerman.

          (g) Opinion of Counsel. An opinion of Seller’s counsel, in a form requested by
Purchaser.

          (h) Other Documents. All other documents, instruments or writings required to be
delivered to Purchaser at or prior to Closing pursuant to this Agreement, and such other
certificates of authority and documents as Purchaser may reasonably request.

ARTICLE 7.

ADDITIONAL COVENANTS AND COMMITMENTS

7.1 Proration of Obligations to Employees. Seller shall be responsible for the payment of
all wages and other remuneration due to Transitioning Employees with respect to their services as
employees of Seller through the close of business on the Closing Date, including pro rata bonus
payments, severance payments and all vacation/paid time off pay earned prior to the Closing Date.
Seller shall be liable for any claims made or incurred by Transitioning Employees and their
beneficiaries through the Closing Date under the Benefit Plans.

For purposes of the immediately preceding sentence, a claim will be deemed incurred, in the case of
hospital, medical or dental benefits, when the services that are the subject of the claim are
performed and, in the case of other benefits (such as disability or life insurance), when an event
has occurred or when a condition has been diagnosed that entitles the employee to the benefit.

7.2 Post-Closing Payments. On or after the Closing Date, any payments received by Seller
relating to the Acquired Receivables or from any of Seller’s customers or otherwise in connection
with the Business shall be immediately (but in no event more than five (5) business days following
receipt thereof) transferred by Seller to Purchaser.

7.3 Business Operations.

- 26 -

 

          (a) Seller shall bear all responsibility for ownership and operation of the Purchased Assets
and the underlying business on and prior to the Closing Date, including the responsibility for any
claims by third parties that relate to such business and matters that occur on or prior to the
Closing Date other than the Assumed Liabilities. Purchaser shall bear all responsibility for
ownership and operation of the Purchased Assets and the underlying business after the Closing Date,
including responsibility for any claims by third parties that relate to such business and matters
that occur after the Closing Date.

          (b) After the Closing and through the Earn Out Periods, Purchaser shall use its commercially
reasonable efforts to continue to market and sell or license the Earn Out Products in a manner
reasonably designed, in good faith, to maximize operating income relating to the sale of the Earn
Out Products; provided, however, that (i) Purchaser may, in its business judgment, select which of
the Earn Out Products it elects to market and sell and/or license and may make revisions,
modifications and subsequent versions to the same, if such actions are taken in good faith with the
intent of maximizing operating income and (ii) nothing herein shall require Purchaser to continue
to market and sell and/or license any Earn Out Products to the extent that such endeavors, in
Purchaser’s business judgment, are reasonably unlikely to maximize operating income; provided
further, that in each case, Purchaser shall not take any action the primary purpose of which is to
shift Net Revenues from any Earn Out Period to a later period.

7.4 Brokers. Each of Seller and Purchaser will bear its own expenses in connection with
the proposed transactions described in this Agreement incurred in connection with the preparation,
execution, and performance of this Agreement, the other Transaction Documents and the transactions
contemplated herein, including fees and expenses of agents, brokers, representatives, counsel, and
accountants.

7.5 Litigation Support.

          (a) In the event and for so long as any party is actively contesting or defending against any
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand in connection
with any fact, situation, condition, activity, occurrence, incident, action, failure to act, or
transaction arising prior to the Closing Date involving Seller, Seller will, upon prior reasonable
request, cooperate in the contest or defense, make available its personnel, and provide such
testimony and access to their books and records to Purchaser as may be necessary in connection with
the contest or defense, all at the sole cost and expense of Seller (unless the contesting or
defending party is entitled to indemnification therefor under Article 8 below).

          (b) In the event and for so long as any party is actively contesting or defending against any
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand in connection
with any fact, situation, condition, activity, occurrence, incident, action, failure to act, or
transaction arising after the Closing Date involving Purchaser, Purchaser will, upon prior
reasonable request, cooperate in the contest or defense, make available its personnel, and provide
such testimony and access to their books and records to Seller as may be necessary in connection
with the contest or defense, all at the sole cost and expense of Purchaser (unless the contesting
or defending party is entitled to indemnification therefor under Article 8 below).

7.6 Access to Books and Records. Purchaser shall, upon reasonable notice, permit
representatives of Seller to have reasonable access during normal business hours and under

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reasonable circumstances to personnel, premises, properties, assets, books and records, contracts
and documents pertaining to the Business or the Purchased Assets in connection with Seller’s
preparation of Tax returns. Within fifteen (15) days of Closing, Seller shall provide to Purchaser
copies of its balance sheet, statements of income and cash flow, and statements of member’s equity
and all supporting schedules including but not limited to the accounts receivable listing,
inventory listing, prepaid assets and other current assets summary, accounts payable listing,
accrued reserves and liabilities summary, and deferred revenue summary for the period ended as of
the Closing Date for Seller (it being understood that Seller makes no representation or warranty
with respect to such financial statements or information).

7.7 Mutual Cooperation. Purchaser and Seller agree to work together and cooperate to the
extent reasonably necessary so as to facilitate closing on the transactions contemplated by the
Transaction Documents. Further, subsequent to Closing, Purchaser and Seller, at the reasonable
request of the other, shall each execute, deliver and acknowledge all such further instruments and
documents and do and perform all such other acts and deeds as may be reasonably required to
consummate the transactions contemplated by the Transaction Documents and to carry out the purpose
and intent of the Transaction Documents. During the period beginning on the Closing Date and (i)
ending thirty (30) days thereafter, Seller agrees that, upon the reasonable request of Purchaser,
it shall use commercially reasonable efforts to reasonably assist Purchaser in the delivery of the
inventory purchased by Purchaser pursuant to this Agreement and (ii) ending ninety (90) days
thereafter, Seller agrees that, upon the reasonable request of Purchaser, it shall use commercially
reasonable efforts to address the financial questions of Purchaser relating to the Business;
provided that, in any event, Seller shall have no obligation to employ or otherwise retain the
services of any employees of Seller and shall have no liability with respect to the foregoing
obligations. Purchaser shall reimburse Seller for any reasonable out of pocket expenses (excluding
salaries and other payments made to employees or contractors of or consultants to Seller) incurred
by Seller in connection with the foregoing.

7.8
Third Party Consents. Purchaser acknowledges that certain
consents to the transactions contemplated by this Agreement may be
required from parties to Assumed Contracts as set forth in the
Schedules to this Agreement and such consents may not be obtained
prior to Closing. Purchaser agrees that neither Seller shall have any
liability whatsoever to Purchaser (and Purchaser shall not be entitled
to assert any claims against Seller) arising out of or relating to
the failure to obtain any such consents required in connection with
the transactions contemplated by this Agreement or any result or
consequence thereof. Seller shall cooperate in any reasonable manner
in connection with obtaining any such required consents; provided
that such cooperation shall not include any requirement of Seller to
expend money, commence any arbitration  proceeding or litigation or
offer or grant any accommodation (financial or otherwise) to any third
party.

ARTICLE 8.

INDEMNIFICATION

8.1 Indemnification by Seller. After the Closing, Purchaser, its Affiliates and their
respective officers, directors, shareholders, employees, agents, successors and assigns
(collectively, the (“Purchaser Indemnified Parties”) shall be indemnified and held harmless
by Seller against any and all Liabilities, losses, damages, claims, costs, expenses, interest,
awards, judgments and penalties, including related attorney and consultant fees and expenses
(hereinafter collectively a “Loss”), actually suffered or incurred by them, arising out of,
relating to or resulting from (a) the inaccuracy of any representation(s) or warranty(ies) made by
Seller in the Transaction Documents, (b) the breach by Seller of any of its covenants or agreements
in the Transaction Documents and (c) any Liability of Seller not expressly constituting an Assumed
Liability (except to the extent the same are subject to a good faith dispute).

8.2 Indemnification by Purchaser. After the Closing, Seller, its Affiliates and their
respective managers, members, employees, agents, successors and assigns shall be indemnified and
held harmless by Purchaser against any and all Losses actually directly incurred by them arising
out of, relating to or resulting from (a) the inaccuracy of any representation(s) or warranty(ies)
made by Purchaser in the Transaction Documents, (b) the breach by Purchaser of any of its covenants
or agreements in the Transaction Documents, (c) failure to pay Assumed Liabilities (except to

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the extent the same are subject to a good faith dispute) or (d) the operation of the Business by
Purchaser after the Closing Date.

8.3 Certain Limitations on Damages; Mitigation.

          (a) Anything contained in this Agreement to the contrary notwithstanding, Losses for which
Purchaser or Seller shall be entitled to indemnification shall not include consequential, indirect
or punitive damages regardless of the form of the claim or action, except to the extent such
damages are payable by Purchaser in respect of third party claims.

          (b) Each of Purchaser and Seller shall use commercially reasonable efforts to mitigate any
Losses for which it may seek indemnification under this Agreement. Losses for which Purchaser or
Seller shall be entitled to indemnification pursuant to this Article 8 shall be reduced by
the amount of (i) any Tax benefits realized as a result thereof or (ii) insurance proceeds and
other third party recoveries actually received by such party in respect thereof (net of the
out-of-pocket cost of recovery thereof) provided that Purchaser shall have no affirmative
obligation to file any claim under any insurance policy to recover such Loss(es) with respect to
claims related to Intellectual Property Rights.

8.4 Claim Procedures. Any party seeking indemnification hereunder (an “Indemnified
Party”) shall give to the party from whom indemnification is sought (an “Indemnifying
Party”) a notice (a “Claim Notice”) describing in reasonable detail the facts giving
rise to any claim for indemnification hereunder and shall include in such Claim Notice (if then
known) the amount or the method of computation of the amount of such claim, and a reference to the
provision of the Transaction Documents upon which such claim is based; provided that a Claim Notice
in respect of any action at law or suit in equity by or against a third Person as to which
indemnification will be sought shall be given promptly after the action or suit is commenced. Any
indemnification payment under this Article 8 shall be treated as an adjustment to the
Purchase Price for all tax purposes. After the giving of any Claim Notice pursuant hereto, the
amount of indemnification to which an Indemnified Party shall be entitled under this Article
8 shall be determined: (i) by the written agreement between the Indemnified Party and the
Indemnifying Party; or (ii) if the Indemnified Party and the Indemnifying Party have not otherwise
agreed upon the amount of indemnification due the Indemnified Party within ninety (90) days of the
giving of such Claim Notice, such Claim will be resolved by a court as provided in Section
9.4.

8.5 Notice and Opportunity to Defend. The Indemnified Party shall promptly, and in all
events within ninety (90) days of obtaining actual knowledge thereof, notify the Indemnifying Party
of the existence of any claim, demand or other matter requiring a defense to which the Indemnifying
Party’s obligations under this Article 8 would apply. The Indemnified Party shall give the
Indemnifying Party a reasonable opportunity to defend the claim, demand or matter at the
Indemnifying Party’s own expense and with counsel selected by the Indemnifying Party and reasonably
satisfactory to the Indemnified Party; provided that the Indemnified Party shall at all times also
have the right to fully participate in the defense at its sole cost and expense. Any such claim,
demand or other matter shall not be settled or compromised without the consent of the Indemnified
Party. If the Indemnifying Party shall, within a reasonable time after receipt of notice, fail to
defend, the Indemnified Party shall have the right, but not the obligation, to undertake the
defense, and to compromise or settle, exercising reasonable business judgment, the claim, demand or
other matter on behalf, for the account and at the risk of the Indemnifying

- 29 -

 

Party and shall provide notice of the terms of any judgment or settlement to the Indemnifying Party
within ten (10) days thereof. If the claim is one that cannot by its nature be defended solely by
the Indemnifying Party (including any federal or state Tax proceeding), the Indemnified Party shall
make available, or cause to be made available, all information that the Indemnifying Party may
reasonably request.

8.6 Set-Off. Upon notice to Seller specifying in reasonable detail the basis therefor, and
upon providing a fifteen (15) day period to cure the breach resulting therefrom, Purchaser may set
off any amount which it is actually entitled to under this Article 8 against amounts
otherwise payable to Seller in respect of the Note or the Earn Out Payments by deducting such
amounts from the outstanding balance due on the Note or the amount of the Earn Out Payments due.
The exercise of such right of setoff by Purchaser in good faith, whether or not ultimately
determined to be justified, will not constitute default or breach of any Transaction Document.

8.7 Sole Remedy; Equitable Relief. From and after the Closing, except in the case of
fraud, the sole and exclusive remedy of the parties for any matter related to, connected with or
arising or resulting from the transactions contemplated by the Transaction Documents shall be the
right to indemnification provide by this Article 8; provided, however, that the
parties may enforce the Transaction Documents by injunctive or other equitable relief to be issued
by or against the other parties, it being understood that both damages and specific performance
will be proper modes of relief and are not to be understood as alternative remedies.

8.8 Limitation of Indemnification Obligations. The parties agree that the obligations of
Seller to indemnify Purchaser from damages arising out of the breach or inaccuracy of any
representation or warranty as described in Sections 8.1(a) shall (A) become operative after
the aggregate amount of all claims for indemnification under said Section 8.1(a) exceeds
One Hundred Thousand and 00/100 Dollars ($100,000.00) (the “Indemnification Basket”) and in
the event that the aggregate amount of such indemnification claims exceeds the Indemnification
Basket, Seller shall be liable for such claims solely to the extent in excess of the
Indemnification Basket; and the aggregate maximum Liability of Seller under Article 8 shall
be limited to the Note, the Escrow Amount and the Earn Out Payments and Purchaser’s sole recourse
shall be a right of set-off against the Note and the Earn Out Payments and claims against the
Escrow Amount.

ARTICLE 9.

MISCELLANEOUS PROVISIONS

9.1 Notices. All notices, offers, requests or other communications from either of the
parties hereto to the other shall be in writing and shall be considered to have been duly delivered
or served if sent by first class certified mail, return receipt requested, postage prepaid, to the
party at its address as set forth below or to such other address as such party may hereafter
designate by written notice to the other party:

	 	 	 	 	 

	 

	 	If to Purchaser, to:
	 	If to Seller:
	 
	 	 	 	 
	 

	 	Encore Software, Inc.
	 	Punch Software LLC
	 

	 	999 N. Sepulveda Blvd., Suite 700
	 	c/o Insight Venture Partners
	 

	 	El Segundo, CA 90245
	 	680 Fifth Avenue, 8th Floor

- 30 -

 

	 	 	 	 	 

	 

	 	Attn: Corporate Counsel
	 	New York, NY 10019

Attn: Blair Flicker
	 
	 	 	 	 
	 

	 	With copies (which will not
	 	With copies (which will not
	 

	 	constitute notice) to:
	 	constitute notice) to:
	 
	 	 	 	 
	 

	 	Navarre Corporation
	 	Willkie Farr & Gallagher LLP
	 

	 	7400 49th Avenue North
	 	787 Seventh Avenue
	 

	 	New Hope, MN 55428
	 	New York, NY 10019
	 

	 	Attn: General Counsel
	 	Attn: Morgan Elwyn
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	Winthrop & Weinstine, P.A.	 	 
	 

	 	Suite 3500	 	 
	 

	 	225 South Sixth Street	 	 
	 

	 	Minneapolis, MN 55402	 	 
	 

	 	Attn: Scott J. Dongoske	 	 

9.2 Entire Agreement; Waiver. This Agreement and the Transaction Documents express the
whole agreement between the parties with respect to the transactions contemplated hereby and
supersede all prior agreements and understandings, both oral and written, between the parties with
respect to the transactions contemplated hereby. Any and all agreements by the parties hereto to
amend, change, extend, revise or discharge this Agreement, in whole or in part, shall be binding
upon the parties to such agreement, even though such agreements may lack legal consideration,
provided such agreements are in writing and executed by the party against whom enforcement is
sought. No failure on the part of either party to exercise, and no delay in exercising any right
or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of
any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or by law.

9.3 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

9.4 Governing Law; Consent to Jurisdiction. This Agreement shall be deemed to be a
contract made under the laws of the State of Minnesota and for all purposes it, plus any related or
supplemental documents and notices, shall be construed in accordance with and governed by the laws
of such state. The parties to this Agreement hereby irrevocably submit to the jurisdiction of any
Minnesota state court or federal court over any action or proceeding arising out of or related to
this Agreement and the documents related hereto or executed in connection herewith, and the parties
hereby irrevocably agree that all claims in respect of such actions or proceedings may be heard and
determined in such Minnesota state or federal court. The parties hereto hereby irrevocably waive,
to the fullest extent they may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding in Minnesota. The parties hereby agree that judgment
final by appeal, or expiration of time to appeal without an appeal being taken, in

- 31 -

 

any such action or proceeding shall be conclusive and may be enforced in any other jurisdictions by
suit on the judgment or in any other manner provided by law.

9.5 Construction. Wherever possible, each provision of this Agreement and each related
document shall be interpreted in such manner as to be effective and valid under applicable law, but
if any provision of this Agreement or any related document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining provisions of this
Agreement or such related documents. The language used in this Agreement is to be deemed to be the
language chosen by the parties to express their mutual intent. The terms of this Agreement have
been cooperatively negotiated by and among the parties, and this Agreement shall not be construed
against any party hereto as its author. Unless otherwise expressly provided, the words “include”
and “including” whenever used in this Agreement do not limit the preceding words or terms.

9.6 Titles and Sub-Titles. The titles of the paragraphs and subparagraphs are placed
herein for convenient reference only and shall not to any extent have the effect of modifying,
amending or changing the expressed terms and provisions of this Agreement.

9.7 No Third-party Beneficiaries. This Agreement is a contract solely among Purchaser,
Seller and, solely with respect to Sections 5.2 and 5.4, Navarre. No third-party
beneficiaries (including employees and customers of Purchaser) are intended and none shall be
inferred, and no party other than Purchaser, Seller and, solely with respect to Sections
5.2 and 5.4, Navarre may assert any right, make any claim or otherwise attempt to
enforce any provision of or under this Agreement; provided that Seller acknowledges and agrees that
Purchaser and Navarre have granted a security interest in their respective rights under this
Agreement to Wells Fargo, as administrative agent for certain of Purchaser’s and Navarre’s lenders,
and that Wells Fargo or any successor administrative agent for Purchaser’s and Navarre’s lenders,
may assert or enforce Purchaser’s and Navarre’s rights under this Agreement pursuant to the terms
of a security agreement and all other loan documents executed by Purchaser and Navarre and certain
of their affiliates in favor of Wells Fargo.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

- 32 -

 

IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the date
and year first above written.

	 	 	 	 	 	 	 

	 	 	PURCHASER:
	 
	 	 	 	 	 	 
	 	 	ENCORE SOFTWARE, INC.
	 
	 	 	 	 	 	 
	 	 	Signed:
	 

	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	NAVARRE (SOLELY WITH RESPECT 

TO SECTIONS
5.2 AND 5.4):
	 
	 	 	 	 	 	 
	 	 	NAVARRE CORPORATION
	 
	 	 	 	 	 	 
	 	 	Signed:
	 

	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SELLER:
	 
	 	 	 	 	 	 
	 	 	PUNCH SOFTWARE LLC
	 
	 	 	 	 	 	 
	 	 	Signed:
	 

	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Its:

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