Conditional Unsecured Promissory Note

CONDITIONAL UNSECURED PROMISSORY NOTE


$650,000.00 July 31, 2002
Los Angeles, California


INDEBTEDNESS. FOR VALUE RECEIVED, but expressly subject to the condition indicated under the section titled "Conditional Obligation" below, Navarre Corporation, a Minnesota corporation (hereinafter referred to as "Maker"), promises to pay to the bankruptcy estate of Encore Software, Inc. (hereinafter referred to as "Holder" or "Encore"), or order, at 2029 Century Park East, Suite 300, Los Angeles, CA 90067 or at such other place as may be designated in writing by the holder of this Promissory Note (hereinafter referred to as this the principal sum of Six Hundred Fifty Thousand and 00/100 Dollars ($650,000.00), together with interest accrued thereon if not paid when due. This Note evidences a portion of the purchase price payable by Maker to Encore for the property purchased under that certain Asset Purchase Agreement dated June 7, 2002, as amended and modified by that certain Amended and Restated Asset Purchase Agreement dated July 10, 2002, and by that certain First Amendment dated July 31, 2002 to the Amended and Restated Asset Purchase Agreement (collectively referred to hereinafter as the "Asset Purchase Agreement"), between Maker and Encore.


INTEREST. Except as provided in the immediately following sentence, no interest shall accrue under this Note. In th ...