Document:

exv4w3

 

Exhibit 4.3

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

          This
Registration Rights Agreement (this “Agreement”) is made and entered into as of March
                    ,
2006, by and among Navarre Corporation, a Minnesota corporation (the
“Company”), and the
investors signatory hereto (each a “Purchaser” and
collectively, the “Purchasers”).

          This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof among the Company and the Purchasers (the “Purchase
Agreement”).

          The Company and the Purchasers hereby agree as follows:

     1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the respective meanings set
forth in this Section 1:

          “Advice” has the meaning set forth in Section 6(d).

          “Effective Date” means, as to a Registration Statement, the date on which such Registration
Statement is first declared effective by the Commission.

          “Effectiveness Date” means (a) with respect to the initial Registration Statement required to
be filed under Section 2(a), the earlier of: (i) the 120th day following the Closing
Date; provided, that, if the Commission reviews and has written comments to the filed
Registration Statement that would require the filing of a pre-effective amendment thereto with the
Commission, then the Effectiveness Date under this clause (a)(i) shall be the 150th day
following the Closing Date, and (ii) the fifth Trading Day following the date on which the Company
is notified by the Commission that the initial Registration Statement will not be reviewed or is no
longer subject to further review and comments; and (b) with respect to a Registration Statement
required to be filed under Section 2(b), the earlier of: (b)(i) the 90th day following
the date on which the Company becomes eligible to utilize Form S-3 to register the resale of Common
Stock; provided, that, if the Commission reviews and has written comments to such filed
Registration Statement that would require the filing of a pre-effective amendment thereto with the
Commission, then the Effectiveness Date under this clause (b)(i) shall be the 120th day
following the date on which the Company becomes eligible to utilize Form S-3 to register the resale
of Common Stock, and (ii) the fifth Trading Day following the date on which the Company is notified
by the Commission that the initial Registration Statement will not be reviewed or is no longer
subject to further review and comments.

          “Effectiveness Period” shall have the meaning set forth in Section 2(a).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

 

          “Filing Date” means (a) with respect to the initial Registration Statement required to be
filed under Section 2(a), the 30th day following the Closing Date; and (b) with respect
to a Registration Statement required to be filed under Section 2(b), the 30th day
following the date on which the Company becomes eligible to utilize Form S-3 to register the resale
of Common Stock.

          “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of
Registrable Securities.

          “Indemnified Party” shall have the meaning set forth in Section 5(c).

          “Indemnifying Party” shall have the meaning set forth in Section 5(c).

          “Losses” shall have the meaning set forth in Section 5(a).

          “New York Courts” means the state and federal courts sitting in the City of New York, Borough
of Manhattan.

          “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

          “Prospectus” means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a prospectus filed
as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed to be incorporated
by reference in such Prospectus.

          “Registrable Securities” means all of (i) the Shares, (ii) the Warrant Shares issued and
issuable pursuant to the Warrants as of the trading day immediately preceding the applicable date
of determination, subject to adjustment as provided for in the Warrants, without regard to any
limitations on exercises of the Warrants and (iii) any securities issued or issuable upon any stock
split, dividend, or other distribution, recapitalization or similar event, or any conversion price
adjustment with respect to any of the Shares or Warrant Shares.

          “Registration Statement” means the initial registration statement required to be filed in
accordance with Section 2(a) and any additional registration statement(s) required to be filed
under Section 2(b), including (in each case) the Prospectus, amendments and supplements to such
registration statements or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in
such registration statements.

          “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

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          “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

          “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Shares” shall have the meaning set forth in the Purchase Agreement.

          “Warrant Shares” shall have the meaning set forth in the Purchase Agreement.

     2. Registration.

          (a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a
Registration Statement covering the resale of all Registrable Securities not already covered by an
existing and effective Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415, on Form S-1 (or on another form appropriate for such purpose). Such
Registration Statement shall contain (except if otherwise required pursuant to written comments
received from the Commission upon a review of such Registration Statement) the “Plan of
Distribution” attached hereto as Annex A. The Company shall cause such Registration Statement to
be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts
to keep the Registration Statement continuously effective under the Securities Act until the date
which is the earlier of (i) five years after its Effective Date, (ii) such time as all of the
Registrable Securities covered by such Registration Statement have been publicly sold by the
Holders, or (iii) such time as all of the Registrable Securities covered by such Registration
Statement may be sold by the Holders pursuant to Rule 144(k) as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (the
“Effectiveness Period”). By 5:00 p.m. (New
York City time) on the Effective Date, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final prospectus to be used in connection with sales
pursuant to such Registration Statement (whether or not such filing is technically required under
such Rule).

          (b) Promptly following any date on which the Company becomes eligible to use a registration
statement on Form S-3 to register the Registrable Securities for resale, the Company shall file a
registration statement on Form S-3 covering the Registrable Securities (or a post-effective
amendment on Form S-3 to the then effective Registration Statement) and shall cause such
Registration Statement to be declared effective as soon as possible thereafter, but in any event
prior to the Effectiveness Date therefor. Such Registration Statement shall contain (except if
otherwise required pursuant to written comments received from the Commission upon a review of such
Registration Statement) the “Plan of Distribution” attached hereto as Annex A. The Company
shall cause such Registration Statement to be declared effective under the Securities Act as soon
as possible but, in any event, by its Effectiveness Date, and shall use its

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reasonable best efforts to keep such Registration Statement continuously effective under the Securities Act during the
entire Effectiveness Period. By 5:00 p.m. (New York City time) on the Effective Date of such
Registration Statement, the Company shall file with the Commission in accordance with Rule 424
under the Securities Act the final prospectus to be used in connection with sales pursuant to such
Registration Statement (whether or not such filing is technically required under such Rule). Any
Registration Statement required to be filed under this Section shall include a number of shares of
Common Stock equal to not less than the sum of (i) all of the Shares not then covered by an
effective Registration Statement and (ii) all Warrant Shares issued and issuable pursuant to the
Warrants as of the trading day immediately preceding the applicable date of determination which are
not then covered by an effective Registration Statement, subject to adjustment as provided for in
the Warrants (without regard to any limitations on exercises of the Warrants, but assuming all such
exercises occurred on the Trading Day immediately prior to the date such Registration Statement is
filed) and (iii) any securities issued or issuable upon any stock split, dividend, or other
distribution, recapitalization or similar event, or any conversion price adjustment with respect to
any of the Shares or Warrant Shares.

          2.3 If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the
Company files a Registration Statement without affording the Holders the opportunity to review and
comment on the same as required by Section 3(a) hereof, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) a Registration Statement is not declared effective by the
Commission on or prior to its required Effectiveness Date or if by the Business Day immediately
following the Effective Date the Company shall not have filed a “final” prospectus for the
Registration Statement with the Commission under Rule 424(b) in accordance with Section 2(a) or
2(b) herein, as the case may be (whether or not such a prospectus is technically required by such Rule), or (iii) after its Effective Date, without regard for the reason thereunder or
efforts therefore, such Registration Statement ceases for any reason to be effective and available
to the Holders as to all Registrable Securities to which it is required to cover at any time prior
to the expiration of its Effectiveness Period for more than an aggregate of 20 Trading Days (which
need not be consecutive) (any such failure or breach being referred to as an “Event,” and for
purposes of clauses (i) or (ii) the date on which such Event occurs, or for purposes of clause
(iii) the date which such 20 Trading Day-period is exceeded,
being referred to as “Event Date”),
then in addition to any other rights the Holders may have hereunder or under applicable law, on
each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured
by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount
in cash, as partial liquidated damages and not as a penalty, equal to 1.0% of the aggregate
Investment Amount paid by such Holder for Shares pursuant to the Purchase Agreement until such time
as applicable Event shall have been cured; provided, however, that the total amount of partial
liquidated damages payable by the Company pursuant to all Events under this Section shall be capped
at an aggregate of 9% of the aggregate Investment Amount paid by the Holders under the Purchase
Agreement. The partial liquidated damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event.

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     3. Registration Procedures.

          In connection with the Company’s registration obligations hereunder, the Company shall:

          (a) Not less than three Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, the Company shall furnish to the Holders
copies of the “Selling Shareholders” section of such document, the “Plan of Distribution” and any
risk factor contained in such document that addresses specifically this transaction or the Selling
Shareholders, as proposed to be filed which disclosure will be subject to the comment of such
Holders and which the Company agrees will be incorporated into the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company shall not file a Registration
Statement or any such Prospectus or any amendments or supplements thereto that does not contain the
disclosure containing such Holder as a “Selling Shareholder” as provided to the Company by such
Holder in connection therewith unless otherwise agreed by such Holder.

          (b) (i) Use reasonable best efforts to prepare and file (electronically on EDGAR) with the
Commission such amendments, including post-effective amendments, to each Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep such Registration Statement
continuously effective as to the applicable Registrable Securities for its Effectiveness Period and
prepare and file with the Commission such additional Registration Statements in order to register
for resale under the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably
possible to any comments received from the Commission with respect to each Registration Statement
or any amendment thereto and, as promptly as reasonably possible provide the Holders true and
complete copies of all correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to the Holders of material and non-public information concerning the Company; and
(iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act
with respect to the Registration Statements and the disposition of all Registrable Securities
covered by each Registration Statement.

          (c)Notify the Holders as promptly as reasonably possible (and, in the case of (i)(A) below,
not less than two Trading Days prior to such filing and, in the case of (vi) below, not less than
three Trading Days prior to the financial statements in any Registration Statement becoming
ineligible for inclusion therein) and (if requested by any such Person) confirm such notice in
writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B)
when the Commission notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration Statement (the
Company shall provide true and complete copies thereof and all written responses thereto to each of
the Holders that pertain to the Holders as a Selling Stockholder or to the Plan of Distribution,
but not information which the Company believes would constitute material and non-public
information); and (C) with respect to each Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any other Federal or
state governmental authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the

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suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose; (v) of a pending proceeding against the Company
under Section 8A of the Securities Act in connection with the offering of the Registrable
Securities; and (vi) of the occurrence of any event or passage of time that makes the financial
statements included in a Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that requires any revisions to
such Registration Statement, Prospectus or other documents so that, in the case of such
Registration Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading.

          (d) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

          (e) Furnish to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested by such Person
(including those previously furnished) promptly after the filing of such documents with the
Commission.

          (f) Upon notification by the Commission that a Registration Statement will not be reviewed or
is no longer subject to further review and comments, the Company shall request acceleration of such
Registration Statement such that it becomes effective at 5:00 p.m. (New York City time) on such
Effective Date.

          (g) Deliver to each Holder, by 9:00 a.m. (New York City time) on the day following the
Effective Date, without charge, an electronic copy of each Prospectus or Prospectuses (including
each form of prospectus) and each amendment or supplement thereto. The Company hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders
in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto provided in then current form.

          (h) Prior to any public offering of Registrable Securities, use its reasonable best efforts to
register or qualify or cooperate with the selling Holders in connection with the registration or
qualification (or exemption from such registration or qualification) of such Registrable Securities
for offer and sale under the securities or Blue Sky laws of all applicable jurisdictions within the
United States, to keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things necessary or advisable
to enable the disposition in such jurisdictions of the Registrable Securities covered by the
Registration Statements; provided, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified or subject the
Company to any material tax in any such jurisdiction where it is not then so subject.

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          (i) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to the
Registration Statements, which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.

          (j) Upon the occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to
the affected Registration Statements or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

          (k) Each Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling Holder Questionnaire”). The Company
shall not be required to include the Registrable Securities of a Holder in a Registration Statement
and shall not be required to pay any liquidated or other damages under Section 2(d) hereof to such
Holder who fails to furnish to the Company a fully completed Selling Holder Questionnaire prior to
the Filing Date (subject to the requirements of Section 3(a)).

          (l) The Company has read and understands the exercise limitations contained in the Warrants
and will not challenge the effective application of those provisions in any Registration Statement
or other filing with the Commission.

     4. Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required
to be made with any Trading Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority
of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder.

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     5. Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors,
agents, investment advisors, partners, members, shareholders and employees of each of them, each
Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading or any material violation of
Section 3(c) of this Agreement, except to the extent, but only to the extent, that (1) such untrue
statements or omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but
only if and to the extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been corrected. The
Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions contemplated by this Agreement.

          (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising
solely out of or based solely upon: (x) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements therein not
misleading to the extent, but only to the extent that, (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates to such Holder or
such Holder’s proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved

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Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an
occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an
amended or supplemented Prospectus, but only if and to the extent that following the receipt of the
Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such
Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.

          All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten
Trading Days of written notice thereof to the Indemnifying Party

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(regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder;
provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined that such Indemnified
Party is not entitled to indemnification hereunder).

          (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.

     The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually
received by such Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.

     The indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.

     6. Miscellaneous

          (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.

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          (b) No Piggyback on Registrations. Except as and to the extent specified in
Schedule 3.1(v) to the Purchase Agreement, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the
Company in a Registration Statement other than the Registrable Securities, and the Company shall
not after the date hereof enter into any agreement providing any such right to any of its security
holders. Except as and to the extent specified in Schedule 3.1(v) of the Purchase
Agreement, the Company has not previously entered into any agreement granting any registration
rights with respect to any of its securities to any Person which have not been fully satisfied.

          (c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.

          (d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of
such Registrable Securities under the Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised
in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this
paragraph.

          (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there
is not an effective Registration Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in connection with stock
option or other employee benefit plans, then the Company shall send to each Holder written notice
of such determination and, if within fifteen days after receipt of such notice, any such Holder
shall so request in writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such Holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration rights.

          (f) Amendments and Waivers. The provisions of this Agreement, including the provisions
of this Section 6(f), may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of at least sixty-six and two-thirds percent of the then
outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to the rights of
certain Holders and that does not directly or indirectly affect the rights of other Holders may be
given by Holders of at least a majority of the Registrable Securities to which such waiver or
consent relates, provided, that the provisions of this sentence may not be

11

 

amended, modified, or supplemented except in accordance with the provisions of the immediately preceding
sentence.

          (g) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile telephone number specified in this Section prior to 6:30 p.m. (New
York City time) on a Trading Day, (ii) the Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone number specified in
this Agreement later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m.
(New York City time) on such date, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and communications shall be as
follows:

	 	 	 
	If to the Company:

	 	Navarre Corporation
	 

	 	7400 49th Avenue North
	 

	 	New Hope, MN 55428
	 

	 	Attn: Chief Financial Officer
	 

	 	Facsimile No.: (763) 504-1107
	 
	 	 
	With a copy to:

	 	Winthrop & Weinstine, P.A.
	 

	 	225 South Sixth Street, Suite 3500
	 

	 	Minneapolis, MN 55402
	 

	 	Attn: Philip T. Colton, Esq.
	 

	 	Facsimile No.: (612) 604-6929
	 
	 	 
	If to SF Capital Partners Ltd.

	 	c/o Stark Investments
	 

	 	 3600 South Lake Drive
	 

	 	St. Francis, WI 53235
	 

	 	Facsimile No.: (414) 294-7692
	 

	 	Attention: Todd M. W. Turall, Esq.
	 
	 	 
	With a copy to:

	 	Bryan Cave LLP
1290 Avenue of the Americas
	 

	 	New York, NY 10104
	 

	 	Facsimile No.: (212) 541-1432
	 

	 	Attention: Eric L. Cohen, Esq.
	 
	 	 
	If to any other Purchaser:

	 	To the address set forth under such Purchaser’s name
on the signature pages hereof;
	 
	 	 

12

 

	 	 	 
	If to any other Person who
is then the registered Holder:

	 	
	 

	 	To the address of such Holder as it appears in the stock
transfer books of the Company

or such other address as may be designated in writing hereafter, in the same manner, by such
Person.

          (h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder. Each Holder may assign their respective rights hereunder in
the manner and to the Persons as permitted under the Purchase Agreement.

          (i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.

          (j) Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents) shall be commenced
exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to
the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If a party shall commence a Proceeding to enforce any provisions of this
Agreement, then the prevailing party in such Proceeding shall be reimbursed by the non-prevailing
parties to such Proceeding for its attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

          (k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

13

 

          (l) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.

          (m) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          (n) Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser hereunder is several and not joint with the obligations of any other Purchaser
hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser hereunder. The decision of each Purchaser to purchase Securities pursuant
to the Transaction Documents has been made independently of any other Purchaser. Nothing contained
herein or in any other agreement or document delivered at any closing, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with
making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Securities or enforcing its rights under the
Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any proceeding for such
purpose. The Company acknowledges that each of the Purchasers has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and
not because it was required or requested to do so by any Purchaser.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
 SIGNATURE PAGES TO FOLLOW]

14

 

          IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 
	 	NAVARRE CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK 
SIGNATURE PAGES OF PURCHASER TO FOLLOW]

 

 

          IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 
	 	 	NAME OF INVESTING ENTITY
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	Facsimile No.: [ ]
	 	 	Attn: [ ]

16

 

Annex A

Plan of Distribution

     The Selling Shareholders and any of their pledgees, donees, transferees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on
any stock exchange, market or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. The Selling Shareholders may use
any one or more of the following methods when selling shares:

	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits Investors;
	 
	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell
a portion of the block as principal to facilitate the transaction;
	 
	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	 
	•	 	an exchange distribution in accordance with the rules of the applicable exchange;
	 
	•	 	privately negotiated transactions;
	 
	•	 	to cover short sales made after the date that this Registration Statement is declared effective by the
Commission;
	 
	•	 	broker-dealers may agree with the Selling Shareholders to sell a specified number of such shares at a
stipulated price per share;
	 
	•	 	a combination of any such methods of sale; and
	 
	•	 	any other method permitted pursuant to applicable law.

     The Selling Shareholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.

     Broker-dealers engaged by the Selling Shareholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The Selling Shareholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions involved.

     The Selling Shareholders may from time to time pledge or grant a security interest in some or
all of the Shares owned by them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell shares of Common Stock from time to
time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling Shareholders to
include the pledgee, transferee or other successors in interest as selling Shareholders under this
prospectus.

17

 

     Upon the Company being notified in writing by a Selling Shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common Stock through a block
trade, special offering, exchange distribution or secondary distribution or a purchase by a broker
or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b)
under the Securities Act, disclosing (i) the name of each such Selling Shareholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such
the shares of Common Stock were sold, (iv)the commissions paid or discounts or concessions allowed
to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in this prospectus,
and (vi) other facts material to the transaction. In addition, upon the Company being notified in
writing by a Selling Shareholder that a donee or pledgee intends to sell more than 500 shares of
Common Stock, a supplement to this prospectus will be filed if then required in accordance with
applicable securities law.

     The Selling Shareholders also may transfer the shares of Common Stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.

     The Selling Shareholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Discounts, concessions, commissions and similar selling
expenses, if any, that can be attributed to the sale of Securities will be paid by the Selling
Shareholder and/or the purchasers. Each Selling Shareholder has represented and warranted to the
Company that it acquired the securities subject to this registration statement in the ordinary
course of such Selling Shareholder’s business and, at the time of its purchase of such securities
such Selling Shareholder had no agreements or understandings, directly or indirectly, with any
person to distribute any such securities.

     The Company has advised each Selling Shareholder that it may not use shares registered on this
Registration Statement to cover short sales of Common Stock made prior to the date on which this
Registration Statement shall have been declared effective by the Commission. If a Selling
Shareholder uses this prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Shareholders will be
responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and
the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as
applicable to such Selling Shareholders in connection with resales of their respective shares under
this Registration Statement.

     The Company is required to pay all fees and expenses incident to the registration of the
shares, but the Company will not receive any proceeds from the sale of the Common Stock. The
Company has agreed to indemnify the Selling Shareholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act. If the Selling Shareholders use
this prospectus for any sale of the Common Stock, they will be subject to the prospectus delivery
requirements of the Securities Act.

18

 

Annex B

NAVARRE CORPORATION

Selling Securityholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the “Common Stock”), of Navarre Corporation (the
“Company”) understands that the Company has filed or intends to file with the Securities and
Exchange Commission (the “Commission”) a Registration Statement for the registration and resale of
the Registrable Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of [ ], 2006 (the “Registration Rights Agreement”), among the Company and the Investors
named therein. A copy of the Registration Rights Agreement is available from the Company upon
request at the address set forth below. All capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:

QUESTIONNAIRE

1. Name.

	 	(a)	 	Full Legal Name of Selling Securityholder
	 
	 	 	 	 

	 
	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
	 
	 	 	 	 

	 
	 	(c)	 	Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire) and relationship to Purchaser:
	 
	 	 	 	 

2. Address for Notices to Selling Securityholder:

 

 

 

Telephone:_____________________________________________________________________________________________

19

 

Fax:
________________________________________________________________________________________________

Contact Person:
_______________________________________________________________________________________

3. Beneficial Ownership of Registrable Securities:

Type and Number of Registrable Securities beneficially owned:

 

 

 

4. Broker-Dealer Status:

	 	(a)	 	Are you a broker-dealer?

Yes
o          No o

	 	 	 	 	 
	 

	 	Note:
	 	If yes, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

	 	(b)	 	Are you an affiliate of a broker-dealer?

Yes
o          
No 
o

	 	(c)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?

Yes
o          No o

	 	 	 	 	 
	 

	 	Note:
	 	If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.

Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

 

20

 

 

 

6. Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

 

 

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof and prior to the Effective
Date for the Registration Statement.

By signing below, the undersigned consents to the disclosure of the information contained herein in
its answers to Items 1 through 6 and the inclusion of such information in the Registration
Statement and the related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 	 	 
	Dated: __________________	 	Beneficial Owner: __________________
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:

Winthrop & Weinstine, P.A.

225 South Sixth Street, Suite 3500

Minneapolis, MN 55402

Attn: Philip T. Colton, Esq.

Facsimile No.: (612) 604-6929

21exv4w4

 

Exhibit 4.4

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

NAVARRE CORPORATION

WARRANT

			
	Warrant No. 2006-<<No>>
	 	Original Issue Date: March 21, 2006

     Navarre
Corporation, a Minnesota corporation (the “Company”), hereby certifies that, for value
received, <<Investor>> or its registered
assigns (the “Holder”), is entitled to purchase from the Company up to
a total of <<Warrants>> shares of common stock, no par value (the “Common
Stock”), of the Company (each such
share, a “Warrant Share” and all such shares, the
“Warrant Shares”) at an exercise price equal to
$5.00 per share (as adjusted from time to time as provided in
Section 9, the “Exercise Price”), at
any time and from time to time on and after the six month anniversary of the Original Issue Date
and through and including September 21, 2011 (the
“Expiration Date”), and subject to the following
terms and conditions:

     1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein shall have the meanings given to such terms
in the Securities Purchase Agreement to which the Company and the original Holder are parties (as
amended from time to time, the “Purchase Agreement”).

     “Original Issue Date” means the Original Issue Date first set forth on the first page of this
Warrant.

     2. Registration of Warrant. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.

 

 

     3. Registration of Transfers. The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached hereto duly completed and signed, to the Company at its address specified
herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a
“New Warrant”), evidencing the
portion of this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed
the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

     4. Exercise and Duration of Warrants.

          (a) This Warrant shall be exercisable by the registered Holder at any time and from time to
time on or after the six month anniversary of the Original Issue Date and through and including the
Expiration Date. At 6:30 p.m. (New York City time) on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value. Except as set forth
below in Section 4(b), the Company may not call or redeem any portion of this Warrant without the
prior written consent of the affected Holder.

          (b) Subject to the provisions of this Section 4(b), if at any time following the one-year
anniversary of the Original Issue Date, (i) the VWAP (as defined below) of the Common Stock for
each of the 30 consecutive Trading Days after such fees and anniversary is greater than $8.50
(subject to equitable adjustment as a result of the events set forth in Section 9), (ii) the
Warrant Shares are either registered for resale pursuant to an effective registration statement
naming the Holder as a selling stockholder thereunder (and the prospectus thereunder is available
for use by the Holder as to all Warrant Shares) or freely transferable without volume restrictions
pursuant to Rule 144(k) promulgated under the Securities Act, as determined by counsel to the
Company pursuant to a written opinion letter addressed and in form and substance reasonably
acceptable to the Holder and the transfer agent for the Common Stock, and (iii) the Company shall
have complied in all material respects with its obligations under this Warrant and the Transaction
Documents and the Common Stock shall at all times be listed or quoted on a Trading Market, then the
Company may in its sole discretion, elect to require the exercise of all (but not less than all) of
the then unexercised portion of this Warrant at the Exercise Price, on the date that is the fifth
(5th) day after written notice thereof (a “Call Notice”) is received by the Holder (the
“Call Date”) at the address last shown on the records of the Company for the Holder or given by the
Holder to the Company for the purpose of notice. The Company and the Holder agree that, if and to
the extent Section 11 of this Warrant would restrict the ability of the Holder to exercise this
Warrant in full in the event of a delivery of a Call Notice, then notwithstanding anything to the
contrary set forth in the Call Notice, the Call Notice shall be deemed automatically amended to
apply only to such portion of this Warrant as may be exercised by the Holder by the Call Date in
accordance with such Sections as are then in effect. The Holder will promptly (and, in any event,
prior to the Call Date) notify the Company in writing following receipt of a Call Notice if Section
11 would restrict its exercise of the Warrant, specifying therein the number of Warrant Shares so
restricted. The Company covenants and agrees that it will honor all Exercise Notices tendered
through 6:30 p.m. (New York City time) on the Call Date. “VWAP” for purposes of this section means
on any particular Trading Day or
 

-2-

 

for any particular period, the volume weighted average trading price per share of Common Stock
on such date or for such period as reported by Bloomberg L.P., or any successor performing similar
functions.

     5. Delivery of Warrant Shares.

          (a) To effect exercises hereunder, the Holder shall not be required to physically surrender
this Warrant unless the aggregate Warrant Shares represented by this Warrant is being exercised or
delivery is required by the Warrant transfer agent and such transfer agent is not the Company.
Upon delivery of the Exercise Notice (in the form attached hereto) to the Company (with the
attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment
of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after
the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the
Warrant Shares issuable upon such exercise. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of the Warrant Shares
has been declared effective by the Securities and Exchange Commission, use its best efforts to
deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions, if available, provided,
that, the Company may, but will not be required to change its transfer agent if its current
transfer agent cannot deliver Warrant Shares electronically through the Depository Trust
Corporation. A “Date of Exercise” means the date on which the Holder shall have delivered to the
Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) if such Holder is not utilizing the cashless exercise provisions
set forth in this Warrant, payment of the Exercise Price for the number of Warrant Shares so
indicated by the Holder to be purchased.

          (b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder
will have the right to rescind such exercise.

          (c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant to Section 5(a) and Purchaser
provides written notice of the same to the Company, and if after such third Trading Day and prior
to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y)
the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue by (B) the closing bid price of
the Common Stock on the Date of Exercise and (2) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not
honored or deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In.

-3-

 

          (d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to
enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing Warrant
Shares upon exercise of the Warrant as required pursuant to the terms hereof.

     6. Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise
of this Warrant shall be made without charge to the Holder for any issue or transfer tax,
withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance
of such certificates, all of which taxes and expenses shall be paid by the Company; provided,
however, that the Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a
name other than that of the Holder. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into account the adjustments
and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

-4-

 

     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this Section
9.

          (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. If any event requiring an adjustment under this
paragraph occurs during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

          (b) Fundamental Transactions. If, at any time while this Warrant is outstanding, (1)
the Company effects any merger or consolidation of the Company with or into another Person, (2) the
Company effects any sale of all or substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (4) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (in any such case, a
“Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the same amount and kind of securities, cash or property as it would have
been entitled to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the
“Alternate Consideration”). For purposes of
any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental Transaction. At the Holder’s
option and request, any successor to the Company or surviving entity in such Fundamental
Transaction shall, either (1) issue to the Holder a new warrant substantially in the form of this
Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase
the Alternate Consideration for the aggregate Exercise Price upon exercise thereof, or (2) purchase
the Warrant from the Holder for a purchase price, payable in cash within five Trading Days after
 

-5-

 

such request (or, if later, on the effective date of the Fundamental Transaction), equal to
the Black Scholes value of the remaining unexercised portion of this Warrant on the date of such
request. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with the provisions of
this paragraph (b) and insuring that the Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

          (c) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to this Section 9, the number of Warrant Shares that may be purchased upon exercise
of this Warrant shall be increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to such adjustment.

          (d) Calculations. All calculations under this Section 9 shall be made to the nearest
cent or the nearest 1/100th of a share, as applicable. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.

          (e) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will promptly compute such adjustment in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s Transfer Agent.

          (f) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including
without limitation any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits shareholder approval for any Fundamental Transaction or (iii) authorizes
the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Holder a notice describing the material terms and conditions of such
transaction (but only to the extent such disclosure would not result in the dissemination of
material, non-public information to the Holder), at least 20 calendar days prior to the applicable
record or effective date on which a Person would need to hold Common Stock in order to participate
in or vote with respect to such transaction, and the Company will take all steps reasonably
necessary in order to insure that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any defect therein shall not affect
the validity of the corporate action required to be described in such notice.

-6-

 

     10. Payment of Exercise Price. The Holder may pay the Exercise Price in one of the
following manners:

          (a) Cash Exercise. The Holder may deliver immediately available funds; or

          (b) Cashless Exercise. If an Exercise Notice is delivered at a time when a
registration statement permitting the Holder to resell the Warrant Shares is not then effective or
the prospectus forming a part thereof is not then available to the Holder for the resale of the
Warrant Shares, then the Holder may notify the Company in an Exercise Notice of its election to
utilize cashless exercise, in which event the Company shall issue to the Holder the number of
Warrant Shares determined as follows:

	 	 	 	 	 
	 

	 	 	 	X = Y [(A-B)/A]
	 
	 	 	 	 
	 

	 	where:	 	 
	 
	 	 	 	 
	 

	 	 	 	X = the number of Warrant Shares to be issued to the Holder.
	 
	 	 	 	 
	 

	 	 	 	Y = the number of Warrant Shares with respect to which this Warrant
is being exercised.
	 
	 	 	 	 
	 

	 	 	 	A = the average of the closing prices for the five Trading Days
immediately prior to (but not including) the Exercise Date.
	 
	 	 	 	 
	 

	 	 	 	B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued.

     11. Limitation on Exercise.

          (a) Notwithstanding anything to the contrary contained herein, the number of Warrant Shares
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Holder and
its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% of the
total number of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will constitute a
representation by the Holder that it has evaluated the limitation set forth in this paragraph and
determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is
permitted under this paragraph. This provision shall not restrict the number of shares of Common
Stock which a Holder may receive or beneficially own in order to determine the amount of securities
or other consideration

-7-

 

that such Holder may receive in the event of a Fundamental Transaction as contemplated in
Section 9 of this Warrant. By written notice to the Company, an Investor may waive the provisions
of this Section 11(a) as to itself but any such waiver will not be effective until the
61st day after delivery thereof and such waiver shall have no effect on any other
Investor.

          (b) Notwithstanding anything to the contrary contained herein, the number of Warrant Shares
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Holder and
its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the
total number of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will constitute a
representation by the Holder that it has evaluated the limitation set forth in this paragraph and
determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is
permitted under this paragraph. This provision shall not restrict the number of shares of Common
Stock which a Holder may receive or beneficially own in order to determine the amount of securities
or other consideration that such Holder may receive in the event of a Fundamental Transaction as
contemplated in Section 9 of this Warrant. This restriction may not be waived.

     12. No Fractional Shares. No fractional Warrant Shares will be issued in connection
with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be
issuable, the Company shall pay cash equal to the product of such fraction multiplied by the
closing price of one Warrant Share as reported by the applicable Trading Market on the date of
exercise.

     13. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New
York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required
to be given. The addresses for such communications shall be: (i) if to the Company, to the
address set forth in the Purchase Agreement, or (ii) if to the Holder, to the address or facsimile
number appearing on the Warrant Register or such other address or facsimile number as the Holder
may provide to the Company in accordance with this Section.

     14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent

-8-

 

shall be a party or any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor warrant agent shall
promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage
prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

     15. Miscellaneous.

          (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder and their successors and assigns.

          (b) All questions concerning the construction, validity, enforcement and interpretation of
this Warrant shall be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement and defense of this
Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party
hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York
Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any
New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum.
Each party hereto hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Warrant or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other party for its
attorney’s fees and other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.

          (c) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

          (d) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties

-9-

 

will attempt in good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.

          (e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a shareholder with respect to the Warrant Shares.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

-10-

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 	 	 
	 	 	NAVARRE CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

-11-

 

EXERCISE NOTICE

NAVARRE CORPORATION

WARRANT DATED MARCH 21, 2006

The
undersigned Holder hereby irrevocably elects to purchase
                     shares of Common Stock
pursuant to the above referenced Warrant. Capitalized terms used herein and not otherwise defined
have the respective meanings set forth in the Warrant.

(1) The undersigned Holder hereby exercises its right to purchase                      Warrant Shares
pursuant to the Warrant.

(2) The Holder intends that payment of the Exercise Price shall be made as (check one):

	 	 	 	 	 
	 

	 	___
	 	“Cash Exercise” under Section 10
	 
	 	 	 	 
	 

	 	___
	 	“Cashless Exercise” under Section 10

(3) If the holder has elected a Cash Exercise, the holder shall pay the sum of $                     to the
Company in accordance with the terms of the Warrant.

(4) Pursuant to this Exercise Notice, the Company shall deliver to the holder                     
Warrant Shares in accordance with the terms of the Warrant.

(5) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company
that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in
excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant to which
this notice relates.

     By its delivery of this Exercise Notice, the undersigned represents and warrants to the
Company that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act of
1933.

	 	 	 	 	 	 	 
	Dated:
__________, ________	 	Name of Holder:
	 
	 	 	 	 	 	 
	 

	 	(Print)	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	(Signature must conform in all respects to name of holder as
specified on the face of the Warrant)

 

 

Warrant Shares Exercise Log

	 	 	 	 	 	 	 
	Date

	 	Number of Warrant

Shares Available to
be Exercised
	 	Number of Warrant
Shares 
Exercised
	 	Number of Warrant Shares

 Remaining to
be Exercised
	 

 

 

NAVARRE CORPORATION

WARRANT ORIGINALLY ISSUED MARCH 21, 2006

WARRANT NO. 2006-<<NUM>>

FORM OF ASSIGNMENT

     [To be completed and signed only upon transfer of Warrant]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                             the right represented by the within Warrant to purchase
                    
shares of Common Stock of Navarre Corporation to which the within Warrant relates and
appoints                                          attorney to transfer said right on the books of the Company with full
power of substitution in the premises.

	 	 	 	 	 
	Dated:
___________, ____
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	 

	 	 	 	(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
	 
	 	 	 	 
	 

	 	 	 	 

	 

	 	 	 	Address of Transferee
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	In the presence of:

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