Section 1. Registrant’s Business and Operations

Item 1.01.    Entry into a Material Definitive Agreement

On April 30, 2007, Handleman Company (“Handleman”) and certain of its subsidiaries entered into two credit agreements that constitute a $250 million multi-tranche credit facility. The material terms of the two agreements are discussed below.

GE Capital Credit Agreement

On April 30, 2007, Handleman Company and certain subsidiaries of Handleman Company, General Electric Capital Corporation, as Administrative Agent, Agent and Lender; and GE Capital Markets, Inc. as Lead Arranger entered into a Credit Agreement dated April 30, 2007 (“GE Capital Credit Agreement”). Pursuant to the 5-year credit agreement, Handleman may borrow up to $110 million in the aggregate for the purpose of refinancing certain indebtedness of Handleman and its subsidiaries and to provide (a) working capital financing for Handleman and its subsidiaries, (b) funds to repay certain existing indebtedness for Handleman and its subsidiaries, (c) funds for general corporate purposes of Handleman and its subsidiaries, and (d) funds for other purposes permitted by the GE Capital Credit Agreement. Pursuant to the GE Capital Credit Agreement, Handleman has granted to General Electric Capital Corporation, as agent, a security interest in and lien upon all of its existing and after-acquired personal and real property.

Material Terms:

The material terms of the GE Capital Credit Agreement are as follows:

Silver Point Finance Credit and Guaranty Agreement

On April 30, 2007, Handleman Company, and certain Handleman subsidiaries, as Guarantors, certain lenders, Silver Point Finance, LLC (“Silver Point”), as administrative agent for the Lenders, in such capacity as Administrative Agent, as Collateral agent and as co-lead arranger entered into a Credit and Guaranty Agreement dated April 30, 2007. Pursuant to the five-year agreement, Handleman may borrow up to $140 million comprised of (a) $50,000,000 aggregate principal amount of Tranche A Term Loan (“Term Loan A”), (b) $40,000,000 aggregate principle amount of Tranche B Term Loan (“Term Loan B”), and (c) up to $50,000,000 aggregate principle amount of Revolving Commitments (“Revolving Facility”), the proceeds of which shall be used to (i) repay the existing indebtedness and the existing Intercompany Note, (ii) finance the working capital needs and general corporate purposes of Handleman and its subsidiaries, and (iii) pay fees and expenses associated with the loan transaction and refinancing. Handleman is securing the obligations by granting Silver Point, as the collateral agent, liens against substantially all of its assets and where Handleman and certain of its subsidiaries guarantee the obligations by granting the liens.

Material Terms:

The material terms of the Silver Point Finance Credit and Guaranty Agreement are as follows:

Covenants to Credit Agreements

Pursuant to the GE Capital Credit Agreement and the Silver Point Finance Credit and Guaranty Agreement, Handleman must maintain a minimum excess availability, which is subject to increase, in order to borrow under these agreements. Also, if Handleman does not maintain other additional availability levels, as stated in these agreements, then the agreements require that Handleman achieve established EBITDA levels on a trailing twelve month basis prior to permitting borrowings under these agreements.

Item 1.02    Termination of a Material Definitive Agreement

On April 30, 2007, Handleman Company and the relevant parties terminated the amended and restated credit agreement with LaSalle Bank Midwest National Association, as administrative agent, KeyBank National Association, as a co-syndication agent, Comerica Bank, as a co-syndication agent, U.S. Bank N.A., as a co-syndication agent and National City Bank of the Midwest, as documentation agent dated November 22, 2005. The parties terminated that agreement as a result of Handleman Company repaying all amounts outstanding under such credit agreement and securing alternative financing arrangement as discussed above.

Section 9 Financial Statement and Exhibits

Item 9.01.    Financial Statements and Exhibits

Forward-Looking Statements:

This Form 8-K may contain forward-looking statements that are not historical facts. These statements involve risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This Form 8-K should be read in conjunction with the “Forward-Looking Statements” section in Handleman Company’s 2005 Form 10-K (which sections are incorporated by reference herein) and in conjunction with other SEC reports filed by Handleman that disclose other factors that may cause Handleman’s actual results to differ materially. Handleman expressly disclaims any current intention to update any forward-looking statements contained in this report as a result of new information or future events or developments.