Navarre Corporation Signs Distribution Agreement With Canon Software Publishing.

Business Editors

MINNEAPOLIS--(BUSINESS WIRE)--Sept. 27, 2000

Agreement expands reach in personal productivity category

Navarre Corporation (NASDAQ:NAVR), a leading distributor of PC software, music and DVD, today announced that its computer products division has signed a distribution agreement with Canon Software Publishing, a division of Canon Computer Systems, Inc. which is a subsidiary of both Canon U.S.A. Inc. (Lake Success, NY) and Canon Inc. (Tokyo, Japan) (NYSE:CAJ).

Under terms of the agreement, Navarre will immediately begin distributing Canon's line of personal productivity products to its entire retail and e-tail customer base. Canon has developed a line of photo imaging products that enhance and expand the use of digital photos and video files. This category is expanding due to the proliferation of digital imaging into the consumer marketplace.

Navarre has previously stated that it has expanded its distribution reach across all PC software categories. The most recent PC Data report shows Navarre's distribution share in the personal productivity category to be 37%. This compares to a 15% share for the same period last year.

Brian Burke, vice president/general manager, computer products division, stated, "We are extremely excited to add Canon Software to our line-up, further strengthening our position in the personal productivity category. Canon has a strong consumer brand name and we believe their products will be successful additions to our retail customer's merchandising plans."

"As we looked to expand our business partners, Navarre was perfectly positioned to complement our existing distribution and support the new markets we'd like to address," said Dave Derse, director of sales, Canon Software Publishing. "Navarre will be key in helping us reach our distribution and sales goals."

Navarre Corporation's major business groups are: Computer Products Division, which distributes quality consumer software to retailers nationwide; Independent Music Distribution, which distributes independent music labels in the United States and now Canada; Alternative Retail Markets, which distributes major label music to non-traditional retail outlets and also distributes DVD Home Video product. Navarre operates a "business to business" Internet E-Commerce web site www.navarre.com; eSplice is a breakthrough provider of business-to-business e-commerce services to packaged goods, service, media, membership and affinity organizations.

Canon Software Publishing (CSP) is a division of Canon Computer Systems Inc., which is a subsidiary of both Canon U.S.A. Inc. (Lake Success, NY) and Canon Inc. (Tokyo, Japan). The division, headquartered in Costa Mesa, Calif., was founded in 1998 to develop, publish and distribute computer software primarily in North and South America. CSP publishes titles from both independent third-party developers and associated Canon companies. Canon is recognized as the world s leading imaging technology company, a leader in printer technology and a top worldwide patent holder. As a global technology leader, Canon achieved $25 billion in worldwide sales in 1999.

The statements in this press release that are not strictly historical are "forward looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are intended to be covered by the safe harbors created by these sections. The forward looking statements are subject to risks and uncertainties and the actual results that the Company achieves may differ materially from these forward-looking statements due to such risks and uncertainties, including developments in the retail and consumer markets for prerecorded music products and computer software products, retail consumer buying patterns, new and different competition in the Company's traditional and new markets, the Company's dependence upon seasonally in its business, the Company's ability to attract and retain large retail customers that account for a significant part of its business, the Company's ability to successfully act as distributor to on-line retailers, the Company's ability to manage its inventory, the Company's dependence upon recording labels and artists, the Company's ability to react to changes in the distribution of software and prerecorded music and the Company's ability to successfully defend itself against litigation. The Company undertakes no obligation to revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release