THIRD AMENDMENT AND WAIVER TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.59

THIRD AMENDMENT AND WAIVER TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

     This THIRD AMENDMENT AND WAIVER TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this “ Amendment ”), is dated as of 12 day of June, 2008, by NAVARRE CORPORATION, a Minnesota corporation (“ Borrower ”), the Credit Parties signatory hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as agent (the “ Agent ”) for itself and the Lenders under and as defined in the Credit Agreement (as hereinafter defined), and the Lenders. Unless otherwise specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them by the Credit Agreement.

RECITALS

     WHEREAS, the Borrower, the Credit Parties, the Agent and the Lenders have entered into that certain Fourth Amended and Restated Credit Agreement, dated as of March 22, 2007 (as amended, supplemented, restated or otherwise modified from time to time, the “ Credit Agreement ”); and

     WHEREAS, the Borrower, the Credit Parties, the Agent and the Lenders have agreed to amend certain provisions of the Credit Agreement as herein set forth.

     NOW THEREFORE, in consideration of the foregoing recital, mutual agreements contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Credit Parties, the Agent, and the Lenders hereby agree as follows:

SECTION 1. Amendments . Subject to the satisfaction of each of the conditions to effectiveness set forth in Section 3 hereof, the Credit Agreement is hereby amended as follows:

     (a)  Section 1.1 (a) of the Credit Agreement is hereby amended by adding the following sentence at the end thereof:

     “Notwithstanding anything to the contrary set forth herein or otherwise, Borrower may not repay Revolving Credit Advances so that the outstanding principal balance of the Revolving Credit Advances is, at any time on or prior to the first anniversary of the Third Amendment Date, less than the Designated Amount.”

     (b)  Section 1.5 (a) of the Credit Agreement is hereby amended and restated to read as its entirety as follows:

“(a) Borrower shall pay interest to Agent, for the ratable benefit of Lenders in accordance with the Loans being made by each Lender, in arrears on each applicable Interest Payment Date, at the Index Rate plus 6.25% per annum or, at the election of Borrower, at the applicable LIBOR Rate plus 7.50% per annum; provided , however , that to the extent that the outstanding principal balance of the Revolving Credit Advances is in excess of the Designated Amount, Borrower shall pay interest on such excess principal amount to Agent, for the ratable benefit of Lenders in accordance with the Loans being made by each Lender, in arrears on each applicable Interest Payment Date,

not at the rate as determined above, but at the Index Rate plus the Applicable Revolver Index Margin per annum or, at the election of Borrower, at the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based on the aggregate Revolving Credit Advances outstanding from time to time.

As of July 1, 2008, the Applicable Margins are as follows:

Applicable Revolver Index Margin			1.50	%
Applicable Revolver LIBOR Margin			2.75	%
Applicable L/C Margin			2.75	%
Applicable Unused Line Fee Margin			0.375	%

     The Applicable Margins shall be adjusted (up or down) prospectively on a quarterly basis as determined based upon the average daily Borrowing Availability for the then most recently ended Fiscal Quarter, commencing with the Fiscal Quarter ending on June 30, 2008. All adjustments in the Applicable Margins thereafter shall be implemented quarterly on a prospective basis at any time there is a need for an adjustment (the determination as to whether an adjustment is necessary to be made by Agent in good faith). Adjustments in Applicable Margins will be determined by reference to the following grids:

If average daily Borrowing		Level of
Availability for the Fiscal Quarter is:		Applicable Margins:
³ $45,000,000		Level I
³ $35,000,000, but < $45,000,000		Level II
³ $20,000,000, but < $35,000,000		Level III
³ $7,500,000, but < $20,000,000		Level IV
< $7,500,000		Level V

		Level I				Level II				Level III				Level IV				Level V
Applicable Revolver Index Margin			0.75	%			1.00	%			1.25	%			1.50	%			1.75	%
Applicable Revolver LIBOR Margin			2.00	%			2.25	%			2.50	%			2.75	%			3.00	%
Applicable L/C Margin			2.00	%			2.25	%			2.50	%			2.75	%			3.00	%
Applicable Unused Line Fee Margin			0.375	%			0.375	%			0.375	%			0.375	%			0.375	%

If any Default or an Event of Default has occurred and is continuing at the time any reduction in the Applicable Margins is to be implemented, that reduction shall be deferred until the first day of the first calendar month following the date on which all Defaults or Events of Default are waived or cured.”

     (c)  Section 1.9 (c) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(c) If, on or prior to the third anniversary of the Third Amendment Date, Borrower prepays the Revolving Loan and/or reduces or terminates the Revolving Loan Commitment, whether voluntarily or involuntarily and whether before or after acceleration of the Obligations or if the Revolving Loan Commitments are reduced or terminated, Borrower shall pay to Agent, for the benefit of Lenders as liquidated damages and compensation for the costs of being prepared to make funds available hereunder an amount equal to the Applicable Percentage (as defined below) multiplied by the amount of the reduction of the Revolving Loan Commitment. As used herein, the term “ Applicable Percentage ” shall mean (x) one and one half of one percent (1.5%), in the case of a reduction on or prior to the first anniversary of the Third Amendment Date, (y) one percent (1%), in the case of a reduction after the first anniversary of the Third Amendment Date but on or prior to the second anniversary thereof and (z) one half of one percent (0.5%), in the case of a reduction after the second anniversary of the Third Amendment Date but on or prior to the third anniversary thereof. The Credit Parties agree that the Applicable Percentages are a reasonable calculation of Lenders’ lost profits in view of the difficulties and impracticality of determining actual damages resulting from an early termination of the Revolving Loan Commitment. Notwithstanding the foregoing, no prepayment fee shall be payable by Borrower upon a mandatory prepayment made pursuant to Sections 1.3(b) 1.16(c) or 5.4(d) ; provided that Borrower does not permanently reduce or terminate the Revolving Loan Commitment upon any such prepayment and, in the case of prepayments made pursuant to Sections 1.3(b)(ii) or (b)(iii) , the transaction giving rise to the applicable prepayment is a sale of a Subsidiary or division of Borrower expressly permitted under Section 6 .”

     (d)  Section 6.3(a)(vii) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

          “(vii) [Intentionally Omitted]”

     (e) A new Section 6.21 , which shall read in it entirety as follows, is hereby added to the Credit Agreement immediately following Section 6.20 :

          “6.21 Independent Advisor. The Credit Parties hereby agree that they shall not fail to engage the Independent Advisor on or prior to July 14, 2008.”

     (f) The following definitions are hereby added to Annex A to the Credit Agreement in alphabetical order:

     “ Designated Amount ” shall mean $6,000,000; provided , however , on the 15th day after the delivery of the financial statements and related documents required by clause

(c) of Annex E for each Fiscal Year of the Borrower to end after the Third Amendment Date, as long as the Borrower has provided a calculation, in detail and form acceptable to the Agent, of the Excess Cash Flow for such Fiscal Year, the Designated Amount shall be reduced, to an amount not less than zero, by 50% of the Excess Cash Flow for such Fiscal Year.

     “ Excess Cash Flow ” shall mean, with respect to the Borrower for any period, an amount (if positive) equal to: (i) the amount for such period of EBITDA, minus (ii) the sum, without duplication, of the amounts for such period of (a) scheduled repayments of Indebtedness for borrowed money, (b) Capital Expenditures (net of any proceeds of (y) any related financing, including purchase money financings, with respect to such expenditures and (z) any Capital Expenditures made with the proceeds of asset dispositions), (c) Interest Expense, (d) taxes paid in cash during such period based upon net income, and (e) the aggregate Net Vendor Advances made during such period.

     “ Independent Advisor ” shall mean a third party advisory firm engaged by the Credit Parties (from a list of three firms provided by Agent) to review the Projections for the Fiscal Year ending on or about March 31, 2009, with the scope and timing of such review to be satisfactory to Agent in its sole discretion.”

     “ Third Amendment Date ” shall mean June 12, 2008

     (g) The following definitions set forth in Annex A to the Credit Agreement are hereby amended and restated in their entirety to read as follows:

     “ Commitment Termination Date ” means the earliest of (a) March 22, 2012, (b) the date of termination of Lenders’ obligations to make Advances and to incur Letter of Credit Obligations or permit existing Loans to remain outstanding pursuant to Section 8.2(b) , and (c) the date of indefeasible prepayment in full by Borrower of the Loans and the cancellation and return (or stand-by guarantee) of all Letters of Credit or the cash collateralization of all Letter of Credit Obligations pursuant to Annex B , and the permanent reduction of the Commitments to zero dollars ($0).

     “ EBITDA ” means, with respect to any Person for any fiscal period, without duplication, an amount equal to (a) consolidated net income of such Person for such period, determined in accordance with GAAP, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii) gain from extraordinary items for such period, (iv) any aggregate net gain (but not any aggregate net loss) during such period arising from the sale, exchange or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities), (v) any other non-cash gains that have been added in determining consolidated net income, in each case to the extent included in the calculation of net income of such Person for such period in accordance with GAAP, but without duplication and (vi) amounts paid on behalf of or for the benefit of Goldhil Media, Tower Records or any trust, trustee or fund relating thereto or successor to any of the foregoing, plus (c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary items for such period, (iv) depreciation and

amortization for such period (other than amortization with respect to Vendor Advances), (v) amortized debt discount for such period, (vi) the amount of any deduction to consolidated net income as the result of any grant to any members of the management of such Person of any Stock, (vii) write-offs of Accounts owing to Borrower from (x) Goldhil Media in the aggregate amount not to exceed $2,100,000 and (y) Tower Records in the aggregate amount not to exceed $1,900,000 and (viii) losses arising from the operations of Navarre Entertainment in an aggregate amount not to exceed (w) $3,233,000 with respect to the 12 month period ending on March 31, 2008 (x) $1,368,000 with respect to t