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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       $ 2.50 million
$195.2 million       $202.8 million       $ 5.00 million
$202.8 million       $210.4 million       $ 7.50 million
$210.4 million       $218.0 million       $10.00 million
$218.0 million       $227.2 million       $11.00 million
$227.2 million       $236.4 million       $12.00 million
$236.4 million       $245.6 million       $13.00 million
$245.6 million       $254.8 million       $14.00 million
$254.8 million       $264.0 million       $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.