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                                                                   EXHIBIT 10.56

                        SOURCE INTERLINK COMPANIES, INC.

                             CHALLENGE GRANT PROGRAM

                             EFFECTIVE MARCH 1, 2005

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                        SOURCE INTERLINK COMPANIES, INC.

                             CHALLENGE GRANT PROGRAM

SECTION 1 - ESTABLISHMENT AND PURPOSE OF PROGRAM

1.1   ESTABLISHMENT AND DURATION OF PROGRAM. The Board of Directors of Source
      Interlink Companies, Inc., a Missouri corporation, hereby establishes the
      Source Interlink Companies, Inc. Challenge Grant Program, effective March
      1, 2005. The Program shall commence on March 1, 2005 and continue until
      all earned disbursements are made following the end of the Challenge
      Period.

1.2   PURPOSE OF PROGRAM. The Challenge Grant Program has been adopted by Source
      Interlink Companies, Inc. to motivate key executive personnel to maximize
      shareholder value resulting from the transactions contemplated by a
      certain Agreement and Plan of Merger, dated November 18, 2004, by and
      among Source Interlink Companies, Inc., Alliance Entertainment Corp. and
      Alligator Acquisition, LLC.

SECTION 2 - EFFECTIVE DATE

The effective date of the Program is March 1, 2005.

SECTION 3 - DEFINITIONS

3.1   "AGGREGATE PAYOUT" -- means the total sum payable under the Program to all
      Executives.

3.2   "CHALLENGE PERIOD" -- means the three year period commencing February 1,
      2005 and ending January 31, 2008.

3.3   "COMMITTEE" -- means the Compensation Committee of the Board of Directors
      of the Corporation.

3.4   "CHANGE OF CONTROL" -- means the occurrence of any of the following
      events:

      (a) A change in the composition of the Board of Directors occurs, as a
      result of which fewer than one-half (1/2) of the incumbent directors are
      directors who either:

            (i) Had been directors of the Corporation on the "look-back date"
            (as defined below) (hereinafter referred to as the "original
            directors"); or

            (ii) Were elected, or nominated for election, to the Board of
            Directors with the affirmative votes of at least a majority of the
            aggregate of the original directors who were still in office at the
            time of the election or nomination and the directors whose election
            or nomination was previously so approved (hereinafter referred to as
            the "continuing directors");

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or,

      (b) Any "person" (as defined below) who by the acquisition or aggregation
      of securities, is or becomes the "beneficial owner" (as defined in Rule
      13d-3 under the Securities Exchange Act of 1934, as amended), directly or
      indirectly, of securities of the Corporation representing 50% or more of
      the combined voting power of the Corporation's then outstanding securities
      ordinarily (and apart from rights accruing under special circumstances)
      having the right to vote at elections of directors (hereinafter referred
      to as the "Base Capital Stock"); except that any change in the relative
      beneficial ownership of the Corporation's securities by any person
      resulting solely from a reduction in the aggregate number of outstanding
      shares of Base Capital Stock, and any decrease thereafter in such person's
      ownership of securities, shall be disregarded until such person increases
      in any manner, directly or indirectly, such person's beneficial ownership
      of any securities of the Corporation;

or

      (c) The consummation of a merger or consolidation of the Corporation with
      or into another entity or any other corporate reorganization in which the
      Corporation is not the acquiring entity for accounting purposes;

or

      (d) The consummation of a sale, transfer or other disposition of all or
      substantially all of the Corporation's assets.

For purposes of subsection (a) above, the term "look-back" date shall mean the
later of (1) the Effective Date of the Program, or (2) the date 24 months prior
to the date of the event that may constitute a Change of Control.

For purposes of subsection (b) above, the term "person" shall have the same
meaning as when used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended, but shall exclude (1) a trustee or other fiduciary holding
securities under an employee benefit plan maintained by the Corporation or a
parent or subsidiary and (2) a corporation owned directly or indirectly by the
shareholders of the Corporation in substantially the same proportions as their
ownership of the common stock of the Corporation.

Any other provision of this Section 3.4 notwithstanding, no event shall
constitute a Change of Control if: (A) the sole purpose of the event was to
change the state of the Corporation's incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons
who held the Corporation's securities immediately before such transaction; (B)
the event was contemplated by that certain Agreement and Plan of Merger, dated
November 18, 2004, by and among Source Interlink Companies, Inc., Alliance
Entertainment Corp. and Alligator Acquisition, LLC.; or (C) following such
event, S. Leslie Flegel is employed by the Company or any successor entity with
the duties and responsibilities of such entity's principal executive officer.

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3.5   "CORPORATION" -- means Source Interlink Companies, Inc., a Missouri
      corporation, or its subsidiaries and any successor thereto.

3.6   "EXECUTIVE" -- means S. Leslie Flegel and any employee who is designated
      as eligible to participate in the Program by the Chief Executive Officer
      with, in the case of Executives that are also officers of the Corporation
      subject to the reporting requirements of Section 16 promulgated under the
      Securities Exchange Act of 1934, as amended, the approval of the
      Committee. Only management and highly-compensated employees within the
      meaning of the Employee Retirement Income Security Act of 1974, as
      amended, shall be eligible to participate in the Program.

3.7   "NOI" -- means cumulatively as to the entire Challenge Period, operating
      income as shown on the Corporation's annual audited financial statements
      plus (a) compensation expense recorded in the income statement related to
      the Program and (b) amortization expense or impairment charges
      attributable solely to intangible assets identified and recorded as a
      result of the merger (the "MERGER") effected on February 28, 2005 between
      Alliance Entertainment Corp. and Alligator Acquisition. LLC, a
      wholly-owned subsidiary of the Corporation.

3.8   "PROGRAM" -- means the Source Interlink Companies, Inc. Challenge Grant
      Program and its successors, as described herein and as the same may be
      amended from time to time.

SECTION 4 - CALCULATION OF AGGREGATE PAYOUT

4.1. CONCLUSION OF CHALLENGE PERIOD. The Aggregate Payout under the Program
shall be equal to that amount set forth in the following table opposite the
applicable range which encompasses NOI:

<TABLE>
<CAPTION>
             NOI RANGE
    MORE THAN         LESS THAN OR EQUAL TO        AGGREGATE PAYOUT
    ---------         ---------------------        ----------------
<S>                   <C>                          <C>
 $    0                  $195.2 million            $    0
 $195.2 million          $202.8 million            $ 2.50 million
 $202.8 million          $210.4 million            $ 5.00 million
 $210.4 million          $218.0 million            $ 7.50 million
 $218.0 million          $227.2 million            $10.00 million
 $227.2 million          $236.4 million            $11.00 million
 $236.4 million          $245.6 million            $12.00 million
 $245.6 million          $254.8 million            $13.00 million
 $254.8 million          $264.0 million            $14.00 million
 $264.0 million             unlimited              $15.00 million
</TABLE>

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4.2. UPON CHANGE OF CONTROL. If a Change of Control shall occur during the
Challenge Period, the Aggregate Payout under the Program shall be equal to that
amount set forth in the following table opposite the applicable period in which
the Change of Control occurs.

<TABLE>
<CAPTION>
TWELVE MONTH PERIOD ENDING      AGGREGATE PAYOUT
--------------------------      ----------------
<S>                             <C>
     January 31, 2006            $10.0 million
     January 31, 2007            $12.5 million
     January 31, 2008            $15.0 million
</TABLE>

4.3. ADJUSTMENT OF CALCULATION UPON ACQUISITION OR DISPOSITION. The Committee
reserves the right, but has no obligation, to adjust, upward or downward, the
NOI Ranges set forth in Section 4.1 if during the Challenge Period the
Corporation completes the acquisition or disposition of a significant amount of
assets, otherwise than in the ordinary course of business. Any such adjustment
during the Challenge Period shall be reasonably related to any increase or
decrease in the NOI projected to result from the completion of such acquisition
or disposition.

As used herein the term "ACQUISITION" means every purchase, acquisition by
lease, exchange, merger, consolidation, or succession, other than the
construction or development of property by or for the Corporation or its
subsidiaries or the acquisition of materials for such purpose. As used herein
the term "DISPOSITION" means every sale, disposition by lease exchange, merger,
consolidation, mortgage, assignment or hypothecation of assets, whether for the
benefit of creditors or otherwise, abandonment, or destruction, other than with
respect to real property held for use by or for the Corporation other than with
respect to real property held for use by or for the Company.

An acquisition or disposition shall be deemed to involve a significant amount of
assets if such transaction is required to be disclosed on a Current Report on
Form 8-K through a filing with the U.S. Securities and Exchange Commission.

SECTION 5 - PAYMENT AND ALLOCATION OF AGGREGATE PAYOUT

5.1   ALLOCATION OF AGGREGATE PAYOUT. The Aggregate Payout shall be allocated
      among the Executives in such amounts and proportions as may be determined
      by the Chief Executive Officer with, in the case of Executives that are
      also officers of the Corporation subject to the reporting requirements of
      Section 16 promulgated under the Securities Exchange Act of 1934, as
      amended, the approval of the Committee; provided however that 35% of the
      Aggregate Payout shall be allocated to S. Leslie Flegel. Nothing contained
      in this Program shall require that the entire Aggregate Payout be
      allocated or disbursed.

5.2   PAYMENT OF AGGREGATE PAYOUT. The Aggregate Payout shall be disbursed in
      cash to each Executive in such proportions as they may be allocated in
      accordance with Section 5.1 as soon as practicable after January 31, 2008,
      but in any case not later than the date on

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      which the Annual Report on Form 10-K for the Corporation's fiscal year
      ending January 31, 2008 is filed with the U. S. Securities and Exchange
      Commission.

5.3   PAYMENT ON CHANGE OF CONTROL. In the event of a Change of Control, the
      Aggregate Payout shall be disbursed in cash to each Executive in such
      proportions as they may be allocated in accordance with Section 5.1 not
      later than the effective date of such Change of Control.

SECTION 6 - CONDITIONS TO DISBURSEMENT

6.1   WITHHOLDING; UNEMPLOYMENT TAXES. To the extent required by the law in
      effect at the time payments are made, the Corporation shall withhold from
      payments made hereunder any taxes required to be withheld by the Federal
      or any state or local government.

6.2   NO VESTED RIGHT TO DISBURSEMENT. The Program is designed specifically as a
      bonus program in which each Executive (other than S. Leslie Flegel) have
      only a mere expectancy and not as a deferred compensation plan, retirement
      benefit plan or other entitlement program in which the Executives have or
      may acquire any vested interest of any kind or nature. Therefore, should
      any Executive cease to be employed by the Corporation for any reason
      whatsoever prior to the time at which the Aggregate Payout is actually
      disbursed, no disbursement shall be made to such Executive (or his or her
      estate), Notwithstanding the foregoing, S. Leslie Flegel shall have a vest
      right to disbursement in accordance with any then effective agreement
      between the Corporation and Mr. Flegel with respect to his employment by
      the Corporation.

SECTION 7 - ADMINISTRATION

7.1   UNSECURED CLAIM, FUNDING AND NON-ASSIGNABILITY. The right of an Executive
      to receive a distribution hereunder shall be an unsecured claim against
      the general assets of the Corporation, and no Executive shall have any
      rights in or against any amount credited to any accounts under this
      Program or any other assets of the Corporation. The Program at all times
      shall be considered entirely unfunded both for tax purposes and for
      purposes of Title I of the Employee Retirement Income Security Act of
      1974, as amended. Any disbursement which may be payable pursuant to this
      Program are not subject in any manner to anticipation, sale, alienation,
      transfer, assignment, pledge, encumbrance, attachment, or garnishment by
      creditors of an Executive. The Program constitutes a mere promise by the
      Corporation to make cash disbursements in the future. No interest or right
      to receive a disbursement may be taken, either voluntarily or
      involuntarily, for the satisfaction of the debts of, or other obligations
      or claims against, such person or entity, including claims for alimony,
      support, separate maintenance and claims in bankruptcy proceedings.

7.2   ADMINISTRATION OF PROGRAM. An integral part of the Program is the ongoing
      administration of the Program. The Program shall be administered by the
      Committee, which shall have the authority, duty and power to interpret and
      construe the provisions of the Program. The Committee shall have the duty
      and responsibility of maintaining

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      records, making the requisite calculations and disbursing the payments
      hereunder. The interpretations, determinations, regulations and
      calculations of the Committee shall be final and binding on all persons
      and parties concerned, absent manifest error. The Committee shall have the
      right at any time to appoint a person or committee to perform
      administrative functions delegated to it by the Committee on the
      administration of the Program.

7.3   EXPENSE OF ADMINISTRATION. Expenses of administration shall be paid by the
      Corporation. The Committee of the Corporation shall be entitled to rely on
      all tables, valuations, certificates, opinions, data and reports furnished
      by any actuary, accountant, controller, counsel or other person employed
      or retained by the Corporation with respect to the Program.

7.4   RIGHTS OF EXECUTIVE. The sole rights of an Executive under this Program
      shall be to have this Program administered according to its provisions, to
      receive whatever benefits he may be entitled to hereunder, and nothing in
      the Program shall be interpreted as a guaranty that any assets of the
      Corporation will be sufficient to pay any disbursement payable hereunder.
      Further, the adoption and maintenance of this Program shall not be
      construed as creating any contract of employment between the Corporation
      and any Executive. The Program shall not affect the right of the
      Corporation to deal with any Executives in employment respects, including
      their hiring, discharge, compensation, and conditions of employment.