Document:

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                                                                    EXHIBIT 10.6

                         EXECUTIVE EMPLOYMENT AGREEMENT

     ENTERED INTO on February 28, 2005 by and between James R. Gillis
("EXECUTIVE"), an individual presently domiciled in Naples, Florida, and SOURCE
INTERLINK COMPANIES, INC. (the "COMPANY"), a Missouri corporation having its
principal executive offices at 27500 Riverview Center Blvd., Suite 400, Bonita
Springs, Florida 34134.

     WHEREAS, Executive is currently employed by the Company pursuant to a
certain Employment and Non-Competition Agreement dated as of December 14, 1998
as amended by a certain Amendment to Employment and Non-Competition Agreement
dated as of August 3, 2000 and by a certain Second Amendment to Employment and
Non-Competition Agreement dated as of July 5, 2002 (collectively, the "Existing
Agreement"), and the Company desires to assure itself of the continued benefit
of Executive's services and experience, and

     WHEREAS, Executive desires to continue in the employ of the Company under
the terms and provisions set forth in this Agreement following the merger
contemplated by the Merger Agreement (defined in Section 2), and

     WHEREAS, the Existing Agreement shall remain in full force and effect
unless and until the Effective Time defined by the Merger Agreement and
concurrently with such Effective Time, this Agreement shall supercede the
Existing Agreement and each party shall be fully and finally released from all
obligation under the Existing Agreement.

     NOW, THEREFORE, with the intent to be legally bound, the Company and
Executive do hereby covenant and agree as follows.

Section 1. Employment of Executive.

     1.1. The Company hereby agrees to employ Executive in the positions
described in Section 1.2 below, and Executive hereby accepts such employment,
under the terms and provisions set forth in this Agreement.

     1.2. During the Period of Employment (defined in Section 2. below),
Executive shall serve in the position of President and Chief Operating Officer
of the Company, based at the Company's corporate headquarters in Bonita Springs,
Florida, reporting directly to the Company's Chief Executive Officer. Executive
shall have the usual and customary duties, responsibilities and authority of
chief operating officer, and shall perform such other and additional duties and
responsibilities as are consistent with that position and as the Board of
Directors of Source Interlink Companies, Inc. (the "BOARD") or the Company's
Chief Executive Officer may reasonably require.

     1.3. Executive shall devote all of his working time, attention and energy
using his best efforts to the performance of his duties and responsibilities,
and shall apply the level of skill, diligence, energy, and cooperation to
protecting and advancing the interests of the Company and

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its subsidiaries as can be reasonably expected from a faithful, dedicated,
experienced and prudent corporate executive (as applicable under this Section 1)
under similar circumstances.

Section 2. Term of Employment.

     The term of employment of Executive under this Agreement shall be a
five-year period commencing at the Effective Time defined 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 (the "MERGER AGREEMENT") and expiring on the fifth annual
anniversary thereof (the "PERIOD OF EMPLOYMENT"). Not later than One Hundred
Eighty (180) days prior to the expiration of the Period of Employment, the
Company and the Executive will meet to discuss their respective intentions
concerning the continued employment of Executive following the expiration of the
Period of Employment.

Section 3. Early Termination.

     3.1. Notwithstanding the provisions of Section 2 hereof, the Period of
Employment shall be subject to early termination at any time:

     (a) at the Company's election, by dismissal of Executive from employment
with or without Proper Cause (defined in Section 3.2 below) pursuant to
resolution of the Board, or

     (b) at the Company's election, upon determination of Disability of
Executive pursuant to Section 3.3 below, or

     (c) upon death of Executive, or

     (d) at Executive's election, by voluntary resignation upon 30 days' advance
written notice, with or without Good Reason (defined in Section 3.5 below).

In the event of early termination pursuant to the foregoing paragraphs (a), (b),
(c) or (d), the Company's obligations to Executive shall be as set forth in
Sections 3.2, 3.3, 3.4 or 3.5, respectively; and Executive shall have no other
rights or claims under this Agreement except for (i) reimbursement of previously
incurred expenses pursuant to Section 5.1 below and (ii) indemnification
pursuant to Section 5.2 below.

     3.2. (a) In the event of early termination pursuant to Section 3.1(a)
without Proper Cause, the Company shall be and remain obligated to pay and
provide to Executive (or his estate) during the remainder of the Period of
Employment provided for under Section 2.:

          (i) The Base Compensation provided for under Section 4.2 below at the
annual salary rates stated therein without further adjustment.

          (ii) The Guaranteed Bonus provided for under Section 4.3 below for
each remaining year of the Period of Employment.

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          (iii) The right to continued participation in the Company's healthcare
and medical expense reimbursement plan (referred to in Section 4.5 below) under
and subject to the same terms and provisions (including without limitation
contribution to premiums, deductibles, co-payments and caps) as are applicable
during such period to the Company's executive officers generally. For purposes
of Executive's eligibility to participate in the programs and plans described in
Section 4.5 during the remaining portion of the Period of Employment, Executive
shall be deemed to be an employee of the Company.

          (b) In the event of early termination pursuant to Section 3.1(a) with
Proper Cause, the Company shall thereupon be relieved of its obligations to pay
or provide any and all compensation and benefits under Section 4 hereof (except
for accrued and unpaid items).

          (c) The occurrence of any of the following events or circumstances
shall constitute "PROPER CAUSE" for dismissal of Executive from employment under
this Agreement:

          (i) Disclosure to third parties of trade secrets or other Confidential
Information (defined in Section 6 below), or any other misuse or
misappropriation thereof, by Executive in violation of the obligations imposed
by Section 6 hereof;

          (ii) Violation by Executive of the restrictions imposed by Section 7
of this Agreement on competitive activities by Executive;

          (iii) Abandonment by Executive of his employment with the Company or
any subsidiary or repeated and deliberate failure or refusal by Executive to
fulfill his duties and responsibilities under this Agreement in any material
respect and Executive's failure or refusal to initiate corrective action within
10 days after written notice by the Company setting forth in reasonable detail
the conditions alleged to be encompassed by the foregoing clause;

          (iv) Perpetration of any defalcations by Executive or any other act of
financial dishonesty or theft affecting the Company or any of its subsidiaries;

          (v) Willful, reckless or grossly negligent conduct by Executive
entailing a material violation of the laws or governmental regulations or orders
applicable to the Company or its subsidiaries, or imposition by any court or
governmental agency of any material restriction upon Executive's ability to
perform his duties and responsibilities hereunder;

          (vi) Repeated and deliberate failure or refusal by Executive to comply
with lawful policies of the Company or lawful directives of the Board;

          (vii) Conviction of Executive of a crime in any federal, state or
foreign court, or entry of any governmental decree or order against Executive
based upon violation of any federal, state or foreign law, and the determination
by the Board, made in its reasonable discretion, that, in the circumstances, the
continued association of Executive with the Company will, more likely than not,
have a material adverse effect upon the Company, its business or its reputation.

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     3.3. The term of employment of Executive under this Agreement may be
terminated at the election of the Company upon a determination by the Board,
made in its reasonable discretion, that Executive is, or will be, unable, by
reason of physical or mental incapacity ("DISABILITY") whether caused by
accident, illness, disease or otherwise, to substantially perform the material
duties and responsibilities assigned to him pursuant to this Agreement for a
period longer than 90 consecutive days or more than 180 days in any consecutive
12-month period. In the exercise of its discretion, the Board shall give due
consideration to, among such other factors as it deems appropriate to the best
interests of the Company, the opinion of Executive's personal physician or
physicians and the opinion of any physician or physicians selected by the Board
for these purposes. Executive shall submit to examination by any physician or
physicians so selected by the Board, and shall otherwise cooperate with the
Board in making the determination contemplated hereunder (such cooperation to
include without limitation consenting to the release of information by any such
physician(s) to the Board). In the event of early termination for Disability
pursuant to Section 3.1(b), the Company shall thereupon be relieved of its
obligations to pay or provide any and all compensation and benefits under
Section 4 hereof (except for accrued and unpaid items), but shall be obligated
to provide to Executive:

          (a) For the period commencing on the date of early termination and
ending on the expiration of 24 full calendar months next following the date of
early termination, a disability income benefit, payable in monthly installments,
in an amount equal to 50% of the annual rate of Base Compensation provided for
under Sections 4.2 below, at the annual salary rate in effect on the date of
determination of Disability without further adjustment;

          (b) For the period commencing on the date which is 24 full calendar
months following the date of early termination, a supplemental disability income
benefit equal to $12,000 per month for the period commencing on the date of
early termination and ending on January 4, 2018 or Executive's earlier death;
and

          (c) The right to continued participation in the Company's healthcare
plan (referred to in Section 4.5 below) under and subject to the same terms and
provisions (including without limitation contribution to premiums, deductibles,
co-payments and caps) as are applicable during such period to the Company's
executive officers generally.

The Company shall be entitled to credit, against its obligation to pay the
foregoing benefits, the amounts received from time to time by Executive pursuant
to any disability income insurance policy maintained by the Company or under the
Source Interlink Companies, Inc. Supplemental Executive Retirement Plan dated as
of March 1, 2005.

     3.4. In the event of early termination pursuant to Section 3.1(c), the
Company shall thereupon be relieved of its obligations to pay or provide any and
all compensation and benefits under Section 4 hereof (except for accrued and
unpaid items).

     3.5 (a) In the event of early termination pursuant to Section 3.1(d) with
Good Reason, the provisions of Section 3.2(a) shall apply.

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          (b) In the event of early termination pursuant to Section 3.1(d)
without Good Reason, the provisions of Section 3.2(b) shall apply.

          (c) The occurrence of any of the following events or circumstances
shall constitute "GOOD REASON" under this Agreement.

          (i) repeated and deliberate failure by the Company to substantially
comply with its obligations to pay or provide the compensation, benefits and
other amounts due and payable to Executive under Sections 4 and 5 below;

          (ii) a material reduction in Executive's duties, responsibilities and
authority during the Period of Employment; and

in the case of clause (i) or (ii), the failure or refusal by the Company (and/or
any successor in interest to the Company) to initiate corrective action within
30 days after written notice by Executive to the Secretary of the Company
setting forth in reasonable detail the conditions alleged to be encompassed by
the foregoing clause (i) or (ii);

          (iii) a Change of Control (defined in Section 3.5(d)).

          (d) The occurrence of any of the following events or circumstances
shall constitute a "CHANGE OF CONTROL" under this Agreement.

          (i) A change in the composition of the Board, as a result of which
fewer than one-half (1/2) of the incumbent directors are directors who either:
(A) had been directors of the Company on the first day of the Period of
Employment (the "ORIGINAL DIRECTORS"); or (B) were elected, or nominated for
election, to the Board 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 (the "CONTINUING DIRECTORS"); or

          (ii) Any "PERSON" (defined below) who by the acquisition or
aggregation of securities, is or becomes the "BENEFICIAL OWNER" (defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote at elections of directors (the "BASE CAPITAL STOCK"); except that any
change in the relative beneficial ownership of the Company'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 Company; or

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

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

For purposes of subsection (ii) 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 Company or a parent
or subsidiary and (2) a corporation owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as their
ownership of the common stock of the Company.

Any other provision of this Section 3.5(d) notwithstanding, no event shall
constitute a Change of Control under this Agreement if: (A) the sole purpose of
the event was to change the state of the Company's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such transaction;
(B) the event was contemplated by the Merger Agreement; 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.

Section 4. Compensation and Benefits.  As consideration for Executive's
undertakings set forth in this Agreement and his/her services hereunder, the
Company shall pay and provide to Executive during the Period of Employment
hereunder, and Executive hereby agrees to accept, the compensation and benefits
described in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 below.

     4.1 Concurrently with the execution and delivery of this Agreement, the
Company shall pay to Executive, in cash, the sum of Three Hundred Thousand
Dollars ($300,000).

     4.2. The Company shall pay to Executive Base Compensation in the form of
salary at the following annual rates: (a) during the period from the first day
of the Period of Employment through and including January 31, 2006--Four Hundred
Seventy-Five Thousand Dollars ($475,000); (b) during the period from February 1,
2006 through and including January 31, 2007--Five Hundred Twenty-Five Thousand
Dollars ($525,000); (c) during the period from February 1, 2007 through and
including January 31, 2008--Six Hundred Thousand Dollars ($600,000); (d) during
the period from February 1, 2008 through and including January 31, 2009--Six
Hundred Twenty-Four Thousand Dollars ($624,000); and (e) during the period from
February 1, 2009 through and including the last day of the Period of
Employment--Six Hundred Forty-Nine Thousand Dollars ($649,000); provided
however, that such annual rates may be adjusted from time to time by the
Compensation Committee of the Board after having taken into account the
performance of the Executive and such other factors deemed relevant by such
committee. Base Compensation shall be payable in such installments and at
intervals prescribed from time to time under the Company's payroll policies and
practices, and shall be subject to such withholdings as are required thereunder
or by applicable law.

     4.3 Executive also shall be entitled to receive a bonus (the "Annual
Bonus") each year during the Period of Employment in an amount equal to the
greater of:

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          (a) 50% of Executive's Base Compensation as in effect for such year;
or

          (b) Such other amount as the Company's Chief Executive Officer may
recommend, and the Compensation Committee of the Board of the Company may
approve, based on such criteria, as they shall have established in their sole
and absolute discretion.

Executive's Annual Bonus shall be payable as follows: (A) on the first day of
the Company's first fiscal quarter commencing after the first day of the Period
of Employment, and continuing thereafter on the first day of each succeeding
fiscal quarter, the Company shall pay to Executive a portion of the Annual Bonus
(the "Guaranteed Bonus") equal to 12.5% of Executive's Base Compensation as then
in effect except that during the period ending on January 31, 2006 no quarterly
payment shall be less than Sixty-Two Thousand Five Hundred Dollars ($62,500),
and (B) not more than 90 days after the end of each fiscal year concluded during
the Period of Employment, the Company shall pay to Executive a sum equal to the
positive difference, if any, between the Annual Bonus and the aggregate amounts
paid by the Company during the then most recently concluded fiscal year pursuant
to the immediately preceding clause (A).

     4.4. The Company shall permit Executive to participate in all stock option,
stock purchase, stock bonus and other equity-based incentive plans and programs
(if any) as may be approved by the Board or its Compensation Committee and as
the Company chooses to maintain from time to time with respect to its executive
officers generally. Executive's level of participation and entitlements (if any)
thereunder shall be subject to the eligibility requirements and all other terms
and provisions of such plans and programs (including without limitation
amendment and termination), and the determinations of their duly appointed
administrators.

     4.5 The Company shall permit Executive to participate in all healthcare,
supplemental medical expense reimbursement, retirement, life insurance and
disability income plans and programs as may be duly adopted and as the Company
chooses to maintain from time to time with respect to its executive officers
and/or employees generally. Executive's level of participation and benefits
thereunder shall be subject to the eligibility requirements and all other terms
and provisions of such plans and programs (including without limitation
amendment and termination), and the determinations of their duly appointed
administrators.

     4.6. Executive shall be entitled to 20 business days vacation on an annual
basis and all holidays provided under Company policy. For any calendar year
during which Executive is employed for only a portion of the year, Executive
shall be entitled to the appropriate proportion of the vacation days. Vacation
days will not be cumulative, will accrue only for the current year, and must be
taken by Executive during the calendar year in which the vacation time accrues.
Vacation days will not be converted into cash. Executive shall arrange his
vacation so as not to conflict with the needs of the Company.

     4.7. The Company shall pay directly, or shall reimburse Executive for, such
all items of expense incurred by Executive in the operation and maintenance
(including, without limitation, all reasonably necessary insurance premiums) of
one automobile.

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     4.8. The Company shall pay directly, or shall reimburse Executive for, such
all dues and other charges of one country club incurred by Executive in
furtherance of the Company's business.

Section 5. Expenses and Indemnification.

     5.1. The Company shall pay directly, or shall reimburse Executive for, such
items of reasonable and necessary expense as are incurred by Executive in the
interest of the business of the Company. All such expenses paid by Executive
shall be reimbursed by the Company upon the presentation by Executive of an
itemized account of such expenditures, sufficient to support their deductibility
by the Company for federal income tax purposes (without regard to whether or not
the Company's deduction for such expenses is limited for federal income tax
purposes), such submissions to be made within thirty (30) days after the date
such expenses are incurred.

     5.2. In addition to such rights of indemnification as are provided to
Executive by the Certificate of Incorporation and/or Bylaws of the Company and
its subsidiaries, the Company agrees that, absent a written opinion of
independent legal counsel that it would be unlawful to do so, the Company shall
promptly pay or advance all costs and expenses (including without limitation
attorneys fees) reasonably incurred by Executive in defense of any and all
claims, causes of action and charges which may be threatened, asserted or filed
against him/her in any judicial, governmental or arbitration proceedings,
inquiry or investigation (whether of a civil or criminal nature), arising out of
his/her employment under this Agreement or the performance in good faith of
his/her duties hereunder, other than such claims, causes of action or charges
that may be initiated against Executive upon approval by the Board or the Chief
Executive Officer. Executive hereby agrees to promptly reimburse to the Company
all such costs and expenses as have been paid or advanced by the Company if it
is finally determined as a matter of law that Executive was not entitled to be
indemnified for them by the Company. In addition, Executive shall remit to the
Company the proceeds of any insurance received by him to defray such costs and
expenses as have been paid or advanced by the Company.

Section 6. Protection of Confidential Information and Property.

     6.1. Executive acknowledges that, except for information that from time to
time has been properly disclosed by the Company in public filings and
announcements and commercial dealings, the Company has or may have a legitimate
need for and/or interest in protecting the confidentiality of all information
and data pertaining to the business and affairs of the Company and its
subsidiaries, including without limitation information and data relating to (i)
manufacturing operations and costs, (ii) distribution and servicing methods and
costs, (iii) merchandising techniques, (iv) sales and promotional methods, (v)
customer, vendor and personnel relationships and arrangements, (vi) research and
development projects, (vii) information and data processing technologies, and
(viii) strategic and tactical plans and initiatives (all such information and
data, other than that which has been properly disclosed as aforesaid, being
hereinafter referred to as "CONFIDENTIAL INFORMATION").

     6.2. Executive acknowledges that, in the course of his employment, (i) he
has participated and/or will participate in the development of Confidential
Information, (ii) he has

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been and/or will be involved in the use and application of Confidential
Information for corporate purposes, and (iii) he otherwise has been and/or will
be given access to and entrusted with Confidential Information for corporate
purposes.

     6.3. Executive agrees that, during the term of his employment under this
Agreement, he shall possess and use the Confidential Information solely and
exclusively to protect and advance the interests of the Company and its
subsidiaries; and that at all times thereafter, he (i) shall continue to treat
the Confidential Information as proprietary to the Company, and (ii) shall not
make use of, or divulge to any third party, all or any part of the Confidential
Information unless and except to the extent so authorized in writing by the
Company or required by judicial, legislative or regulatory process.

     6.4. Executive acknowledges that, in the course of his employment, he will
create and/or be furnished with (i) materials that embody or contain
Confidential Information (in written and electronic form) and (ii) other
tangible items that are the property of the Company and its subsidiaries.
Executive agrees that, upon expiration or other termination of his term of
employment under this Agreement, or sooner if the Company so requests, he shall
promptly deliver to the Company all such materials and other tangible items so
created and/or furnished, including without limitation drawings, blueprints,
sketches, manuals, letters, notes, notebooks, reports, lists of customers and
vendors, personnel lists, computer disks and printouts, computer hardware and
printers, and that he shall not retain any originals or copies of such
materials, or any of such tangible items, unless and except to the extent so
authorized in writing by the Company.

     6.5. Executive agrees to inform all prospective employers of the content of
this Section 6 and of Section 7 of this Agreement prior to his acceptance of
future employment.

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Section 7. Restrictions against Competition and Solicitation.

     7.1. Executive agrees that, during the term of his employment hereunder and
during the Restricted Period (defined in Section 7.2 below), he shall not in any
way, directly or indirectly, manage, operate, control, accept employment or a
consulting position with or otherwise advise or assist or be connected with, or
own or have any financial interest in, any Competitive Enterprise (defined in
Section 7.2 below).

     7.2. For purposes of this Section 7:

          (a) "RESTRICTED PERIOD" means the greater of:

               (i) Period of Employment plus the period of twelve months next
following expiration of the Period of Employment; or

               (ii) the period during which Executive is receiving payments or
benefits from the Company pursuant to Section 3.2(a), 3.3, or 3.5(a) of this
Agreement; or

               (iii) the period of 24 months next following early termination of
the Period of Employment other than without Proper Cause or for Good Reason.

          (b) "COMPETITIVE ENTERPRISE" means any person or business organization
engaged, directly or indirectly, in the business of (i) designing, manufacturing
and marketing front-end fixtures, shelving and other display equipment and
accessories for use by retail stores; (ii) designing, manufacturing and
marketing custom wood fixtures, furnishings and millwork for use by commercial
enterprises, (iii) distribution and fulfillment of magazines, books,
pre-recorded music, video and video games, and other merchandise, (iv) rendering
third party billing and collection services with respect to claims for
manufacturer rebates and incentive payments payable to retailers respecting the
sale of magazines, periodicals, confections and general merchandise, and/or (v)
providing sales and marketing data and analyses to retailers and vendors of
products distributed by the Company.

     7.3. Without limitation of the Company's rights and remedies under this
Agreement or as otherwise provided by law or in equity, it is understood and
agreed between the parties that the right of Executive to receive and retain any
payments otherwise due under this Agreement shall be suspended and canceled if
and for so long as he is in violation of the foregoing covenant not to compete.

     7.4. If the Period of Employment hereunder shall have been terminated
without Proper Cause pursuant to Section 3.1(a) or 3.1(d) for Good Reason, and
if Executive shall have duly complied with and observed the covenants of Section
6 and this Section 7, Executive may, at his election, be discharged from the
covenants of Section 7.1 at any time on or before the thirtieth (30th) day
following such termination by filing with the Company a duly executed statement
(in form and content reasonably satisfactory to the Board) releasing the Company
and its

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subsidiaries (and, if applicable, its insurance carriers) from any and all
obligations it (or they) may have by reason of such termination (except for
accrued and unpaid items).

     7.5. Executive agrees further that, during the Restricted Period, he will
not, directly or indirectly, either for himself or on behalf of any other person
or entity, employ or attempt to employ or solicit the employment or services of
any person who is at that time, or has been within six months immediately prior
thereto, employed by the Company or any subsidiary of the Company.

Section 8. Injunctive Relief and Costs.

     8.1. Executive acknowledges that any violation of or failure to comply with
the provisions of Sections 6, 7.1 and 7.5 of this Agreement may cause
substantial and irreparable harm to the Company and its subsidiaries (and their
constituencies), and that the nature and magnitude of the harm may be difficult
or impossible to measure precisely or to compensate adequately with monetary
damages.

     8.2. Executive agrees that the Company shall have the right to enforce
his/her performance of and compliance with any and all provisions of Sections 6,
7.1 and 7.5 by seeking a restraining order and/or an order of specific
performance and/or other injunctive relief against Executive from a court of
competent jurisdiction, at any time or from time to time, if it appears that
Executive has violated or is about to violate any such provision.

     8.3. Executive further agrees that he/she shall be liable for reimbursement
of all costs and expenses incurred by the Company and its subsidiaries
(including without limitation reasonable attorneys' fees) in connection with any
judicial proceeding or arbitration arising out of any violation of or failure to
comply with the provisions of Sections 6, 7.1 and 7.5.

     8.4. The provisions of this Section 8 are in addition to, and not in lieu
of, any other rights and remedies that may be available to the Company for
breach of any portion of this Agreement.

Section 9. Compliance with Law and Company Policies.

     9.1. Executive warrants and represents to the Company that he/she is not
now under any legal or contractual duty or obligation which could prevent, limit
or impair in any way his/her full and faithful performance of this Agreement.
Executive shall indemnify and hold the Company harmless from and against any
claim, loss, damage, liability, cost or expense (including without limitation
reasonable attorneys' fees) incurred by or asserted against the Company arising
out of or in connection with any breach of this representation and warranty.

     9.2. Executive acknowledges that he/she has received and read and
understands the intent and purposes of the Company's Code of Business Code and
Ethics. Executive shall comply with all lawful rules and policies of the
Company, as in effect from time to time.

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     9.3. Nothing contained in this Agreement shall be interpreted, construed or
applied to require the commission of any act contrary to law and whenever there
is any conflict between any provision of this Agreement and any statute, law
ordinance, order or regulation, the latter shall prevail; but in such event any
such provision of this Agreement shall be curtailed and limited only to the
extent necessary to bring it within applicable legal requirements.

     9.4. Executive acknowledges and agrees that, notwithstanding anything to
the contrary in this Agreement, he/she shall not be entitled to, and this
Agreement does not confer on Executive, any benefits that constitute (or which,
in the Company's good faith determination based on the advice of counsel, would
likely constitute) a personal loan in violation of Section 402 of the
Sarbanes-Oxley Act of 2002, including any implementing regulations thereunder,
or any similar provision of applicable law (collectively, "Section 402"). In the
event that the Company, in good faith and upon the advice of counsel, determines
that any provision of this Agreement would, absent this Section, give rise to a
potential violation of Section 402, Executive and the Company shall promptly
negotiate, in good faith, towards an appropriate amendment to this Agreement
that would eliminate such potential violation, but which would, as closely as
reasonably possible, afford both the Company and Executive, the same relative
economic benefits of their bargain hereunder prior to such amendment.

Section 10. Effect of Business Combination Transactions.  In the event of the
merger or consolidation of the Company with any unrelated corporation or
corporations, or of the sale by the Company of a major portion of its assets or
of its business and good will to an unrelated third party, this Agreement shall
remain in effect and be assigned and transferred to the Company's successor in
interest as an asset of the Company, and the Company shall cause such assignee
to assume the Company's obligations hereunder; and in such event Executive
hereby confirms his/her agreement to continue to perform his/her duties and
responsibilities according to the terms and conditions hereof for such assignee
or transferee of this Agreement. It is understood and agreed, however, that the
scope of Executive's services under Section 1.1 hereof shall be appropriately
modified, at the election of such successor, to cover the segment of such
successor's enterprise represented by the Company's assets and operations at the
time of such aforementioned transaction.

Section 11. Successors and Assigns.

     11.1. This Agreement shall be binding upon, and shall inure to the benefit
of, Executive and the Company and their respective permitted successors,
assigns, heirs, legal representatives and beneficiaries.

     11.2 Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect; provided, however, that nothing in this Section 10 shall
preclude the assumption of such rights by executors, administrators or other
legal representatives of Executive or his estate and their assigning any rights
hereunder to the person or persons entitled thereto.

                                      -12-

<PAGE>

Section 12. Notices.  Any and all notices required or permitted to be given
under this Agreement shall be sufficient if furnished in writing and personally
delivered, or if sent by registered or certified mail to the last known
residence address of Executive or to the Company, Attention: Chief Executive
Officer, 27500 Riverview Center Blvd., Suite 400, Bonita Springs, Florida 34134,
or such other place as Executive or the Company may designate in writing to the
other for these purposes.

Section 13. Miscellaneous.

     13.1. The waiver by either party of a breach or violation of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
subsequent breach hereof.

     13.2. The headings to the Sections hereof are for convenience of reference
only, and in case of any conflict, the text of this Agreement, rather than the
headings, shall control.

     13.3. This Agreement sets forth the entire understanding of the parties in
respect of the subject matter contained herein and supersedes all prior
agreements, arrangements and understandings relating to the subject matter and
may only be amended by a written agreement signed by both parties hereto or
their duly authorized representatives. Except as expressly stated herein,
however, nothing in this Agreement shall be deemed to affect the Company's
duties and obligations, or Executive's rights and benefits, under the Company's
existing under the Company's existing Source Interlink Companies 401(k).

     13.4. Should a court or arbitrator declare any provision hereof to be
invalid, such declaration shall not affect the validity of the Agreement as a
whole or any part thereof, other than the specific portion declared to be
invalid.

     13.5. This Agreement shall be interpreted, construed and governed according
to the laws of the State of Florida.

     13.6. Any claim, controversy or dispute arising with respect to this
Agreement between the parties hereto or anyone claiming under or on behalf of
either of the parties (a " Dispute"), other than a Dispute to which Section 8
hereof applies, shall be submitted to final and binding arbitration in
accordance with the following:

     (a) Any party to an unresolved Dispute may file a written Demand for
Arbitration pursuant to this Section 13.5 with the Regional Office of the
American Arbitration Association nearest to Bonita Springs, and shall
simultaneously send a copy of such Demand to the other party or parties to such
Dispute;

     (b) Arbitration proceedings under this Section 13.6 shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, except that all decisions and awards rendered shall be accompanied
by a written opinion setting forth the rationale for such decisions and awards;

                                      -13-

<PAGE>

     (c) Venue for all evidentiary hearings conducted in such proceedings shall
be in Lee or Collier County, Florida, as determined by the Arbitrator.

     (d) Unless otherwise agreed by the parties thereto, arbitration proceedings
under this Section 13.6 shall be conducted before one impartial arbitrator
selected through the procedures of the American Arbitration Association. On all
matters, the decisions and awards of the arbitrator shall be determinative.

     (e) To the extent practicable, the arbitration proceedings under this
Section 13.6 shall be conducted in such manner as will enable completion within
sixty (60) days after the filing of the Demand for Arbitration hereunder.

     (f) The arbitrator may award attorney's fees and costs of arbitration to
the substantially prevailing party. Unless and except to the extent so awarded,
the costs of arbitration shall be shared equally by the parties, and each party
shall bear the fees and expenses of its own attorney. Punitive damages shall not
be allowed by the arbitrator. The award may be enforced in such manner as
allowed by law.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.

                                        SOURCE INTERLINK COMPANIES, INC.

                                        By: /s/ S. Leslie Flegel
                                            ------------------------------------
                                        Name: S. Leslie Flegel
                                        Title: Chairman & Chief Executive
                                        Officer

                                        /s/ James R. Gillis
                                        ----------------------------------------
                                        James R. Gillis

                                      -14-<PAGE>
                                                                   EXHIBIT 10.21

                         EXECUTIVE EMPLOYMENT AGREEMENT

     ENTERED INTO on March 1, 2005 by and between S. LESLIE FLEGEL
("EXECUTIVE"), an individual presently domiciled in Naples, Florida, and SOURCE
INTERLINK COMPANIES, INC. (the "COMPANY"), a Missouri corporation having its
corporate headquarters in Bonita Springs, Florida.

     WHEREAS, Executive was the founder of the Company and is currently employed
as its Chief Executive Officer under an Employment and Non-Competition Agreement
dated as of May 21, 2003, and

     WHEREAS, the Company's Board of Directors (the "BOARD") desires to assure
the continued benefit of Executive's services and experience following the
merger provided for under the Agreement and Plan of Merger dated November 18,
2004 by and among the Company, Alliance Entertainment Corp. and Alligator
Acquisition, LLC, and

     WHEREAS, Executive desires to continue in the employ of the Company until
January 31, 2010 under the terms and provisions set forth in this Agreement, and

     WHEREAS, Executive and the Company have agreed to enter into a Consulting
Agreement (the "CONSULTING AGREEMENT"), in substantially the form attached
hereto as EXHIBIT A, pursuant to which Executive will be required to make
himself available to serve the Company and its subsidiaries as an independent
consultant for an additional five-year period after expiration of the term of
employment of Executive under this Agreement,

     NOW, THEREFORE, with the intent to be legally bound, the Company and
Executive do hereby covenant and agree as follows.

Section 1. Employment of Executive.

     1.1. The Company hereby agrees to employ Executive in the position
described in Section 1.2 below, and Executive hereby accepts such employment,
under the terms and provisions set forth in this Agreement.

     1.2. During the Period of Employment (defined in Section 2.1 below),
Executive shall serve in the position of Chief Executive Officer of the Company,
based at the Company's corporate headquarters in Bonita Springs, Florida,
reporting directly to the Board. Executive shall have the usual and customary
duties, responsibilities and authority of chief executive officer, and shall
perform such other and additional duties and responsibilities (including without
limitation development and implementation of a leadership succession plan in
collaboration with the Board) as are consistent with that position and as the
Board may reasonably require.

     1.3. Unless prohibited by the Company's Bylaws or any laws, rules or
regulations applicable to the Company, Executive shall also be nominated for
election by the Company's

<PAGE>

stockholders to the position of, and shall serve as, a member and Chairman of
the Board of Directors throughout the Period of Employment under this Agreement.

     1.4. Executive shall devote substantially all of his working time,
attention and energy using his best efforts to the performance of his duties and
responsibilities, and shall apply the level of skill, diligence, energy, and
cooperation to protecting and advancing the interests of the Company and its
subsidiaries as can be reasonably expected from a faithful, dedicated,
experienced and prudent corporate executive under similar circumstances.

Section 2. Term of Employment.

     2.1. The term of employment of Executive under this Agreement shall be the
period commencing March 1, 2005 and ending on January 31, 2010 (the "PERIOD OF
EMPLOYMENT").

     2.2. The term of Executive's employment under this Agreement will expire on
January 31, 2010. As set forth in Section 10 below, the Company and Executive
have agreed to enter into a consulting relationship that will become effective
for a period of five years commencing February 1, 2010.

Section 3. Early Termination.

     3.1. Notwithstanding the provisions of Section 2.1 hereof, the Period of
Employment shall be subject to early termination at any time:

          (a) at the Company's election, by dismissal of Executive from
employment with or without Proper Cause (defined in Section 3.2 below) pursuant
to resolution of the Board, or

          (b) at the Company's election, upon determination of Disability of
Executive pursuant to Section 3.3 below, or

          (c) upon death of Executive, or

          (d) at Executive's election, by voluntary resignation upon 30 days'
advance written notice, with or without Good Reason (defined in Section 3.5
below).

In the event of early termination pursuant to the foregoing paragraphs (a), (b),
(c) or (d), the Company's obligations to Executive shall be as set forth in
Sections 3.2, 3.3, 3.4 or 3.5, respectively; and Executive shall have no other
rights or claims under this Agreement except for (i) reimbursement of previously
incurred expenses pursuant to Section 5(a) below and (ii) indemnification
pursuant to Section 5(b) below.

     3.2. (a) In the event of early termination pursuant to Section 3.1(a)
without Proper Cause and provided that Executive executes and delivers an
agreement containing covenants substantially similar to those contained in
Section 7 hereof (but establishing a Restricted Period of three (3) years), the
Company shall be and remain obligated to pay to Executive, within five

                                       -2-

<PAGE>

(5) business days after such early termination (or such longer period during
which such payments are prohibited under applicable law, rules or regulations),
in cash, an amount equal to the sum of:

               (i) The Base Compensation provided for under Section 4.2 below at
the annual salary rate then in effect without further adjustment for the
remainder of the Period of Employment;

               (ii) The fixed Retainer Fee provided under Section 3.1 of the
Consulting Agreement for the entire Period of Engagement (defined in the
Consulting Agreement);

               (iii) the product of $900,000 times the number of fiscal years
remaining to be concluded during the Period of Employment;

               (iv) an amount equal to (A) $3.5 million if such early
termination occurs during the Company's 2006 fiscal year, (B) $4.375 million if
such early termination occurs during the Company's 2007 fiscal year, and (C)
$5.25 million if such early termination occurs during the Company's 2008 fiscal
year, in full settlement of Executive's interest in the Challenge Grant Program
described in Section 4.4; and

               (v) Until the earlier of January 31, 2010 or his death, the right
to continued participation in the Company's healthcare plans (referred to in
Section 4.6 below) under and subject to the same terms and provisions (including
without limitation contribution to premiums, deductibles, co-payments and caps)
as are applicable during such period to the Company's executive officers
generally in the same manner as if Executive continued to be employed by the
Company.

          (b) In the event of early termination pursuant to Section 3.1(a) with
Proper Cause, the Company shall thereupon be relieved of its obligations to pay
or provide any and all compensation and benefits under Section 4 hereof (except
for accrued and unpaid items).

          (c) The occurrence of any of the following events or circumstances
shall constitute "PROPER CAUSE" for dismissal of Executive from employment under
this Agreement:

               (i) Disclosure to third parties of trade secrets or other
Confidential Information (defined in Section 6 below), or any other misuse or
misappropriation thereof, by Executive in violation of the obligations imposed
by Section 6 hereof;

               (ii) Violation by Executive of the restrictions imposed by
Section 7 of this Agreement on competitive activities by Executive;

               (iii) Abandonment by Executive of his employment with the Company
or any subsidiary or repeated and deliberate failure or refusal by Executive to
fulfill his duties and responsibilities under this Agreement in any material
respect and Executive's failure or refusal to initiate corrective action within
30 days after written notice by the Company setting forth in reasonable detail
the conditions alleged to be encompassed by the foregoing clause;

                                       -3-

<PAGE>

               (iv) Perpetration of any act of financial dishonesty or theft
materially affecting the Company or any of its subsidiaries;

               (v) Willful, reckless or grossly negligent conduct by Executive
entailing a material violation of the laws or governmental regulations or orders
applicable to the Company or its subsidiaries, or imposition by any court or
governmental agency of any material restriction upon Executive's ability to
perform his duties and responsibilities hereunder;

               (vi) Repeated and deliberate failure or refusal by Executive to
comply with lawful and ethical policies of the Company or lawful and ethical
directives of the Board;

               (vii) Conviction of Executive of a crime in any federal, state or
foreign court, or entry of any governmental decree or order against Executive
based upon violation of any federal, state or foreign law, and the determination
by the Board, made in its reasonable discretion, that, in the circumstances, the
continued association of Executive with the Company will, more likely than not,
have a material adverse effect upon the Company, its business or its reputation.

     3.3. The term of employment of Executive under this Agreement may be
terminated at the election of the Company upon a determination by the Board,
made in its sole discretion, that Executive is, or will be, unable, by reason of
physical or mental incapacity ("DISABILITY") whether caused by accident,
illness, disease or otherwise, to substantially perform the material duties and
responsibilities assigned to him pursuant to this Agreement for a period longer
than 90 consecutive days or more than 180 days in any consecutive 12-month
period. In the exercise of its discretion, the Board shall give due
consideration to, among such other factors as it deems appropriate to the best
interests of the Company, the opinion of Executive's personal physician or
physicians and the opinion of any physician or physicians selected by the Board
for these purposes. Executive shall submit to examination by any physician or
physicians so selected by the Board, and shall otherwise cooperate with the
Board in making the determination contemplated hereunder (such cooperation to
include without limitation consenting to the release of information by any such
physician(s) to the Board). In the event of early termination for Disability
pursuant to Section 3.1(b), the Company shall thereupon be relieved of its
obligations to pay or provide any and all compensation and benefits under
Section 4 hereof, other than as set forth below (and except for accrued and
unpaid items), but shall be obligated to provide to Executive or the Beneficiary
(defined in Section 4.10):

          (a) For the period commencing on the date of early termination and
ending on the earliest to occur of his death, January 31, 2010 or the expiration
of 24 full calendar months next following the date of early termination, a
disability income benefit, payable in monthly installments, in an amount equal
to 33 1/3% of the annual rate of Base Compensation provided for under Section
4.2 below, at the annual salary rate in effect on the date of determination of
Disability without further adjustment;

                                       -4-

<PAGE>

          (b) a payment equal to the short term incentive payment described in
Section 4.3 times a fraction the numerator of which is the number of months
during the then current fiscal year in which Executive served the Company and
the denominator of which is 12;

          (c) For the period commencing on the date of early termination and
ending on the earliest to occur of his death, January 31, 2010 or the expiration
of 24 full calendar months next following the date of early termination, the
right to continued participation in the Company's healthcare plans (referred to
in Section 4.6 below) under and subject to the same terms and provisions
(including without limitation contribution to premiums, deductibles, co-payments
and caps) as are applicable during such period to the Company's executive
officers generally in the same manner as if Executive continued to be employed
by the Company; and

          (d) The Death Benefit Amount (defined in Section 4.10) not later than
90 days after the death of Executive, without regard to the date of Executive's
death.

The Company shall be entitled to credit, against its obligation to pay such
disability income benefit, the amounts received from time to time by Executive
pursuant to any disability income insurance policy maintained by the Company;

     3.4. In the event of early termination pursuant to Section 3.1(c), the
Company shall thereupon be relieved of its obligations to pay or provide any and
all compensation and benefits under Section 4 hereof, other than as set forth
below (and except for accrued and unpaid items), but shall be obligated to
provide to Executive or the Beneficiary (defined in Section 4.10):

          (a) a payment equal to the short term incentive payment described in
Section 4.3 times a fraction the numerator of which is the number of months
during the then current fiscal year in which Executive served the Company and
the denominator of which is 12; and

          (b) The Death Benefit Amount (defined in Section 4.10) not later than
90 days after the death of Executive, without regard to the date of Executive's
death.

     3.5. (a) In the event of early termination pursuant to Section 3.1(d) by
Executive for Good Reason, the provisions of Section 3.2(a) shall apply.

          (b) In the event of early termination pursuant to Section 3.1(d) by
Executive without Good Reason, the Company shall thereupon be relieved of its
obligations to pay or provide any and all compensation and benefits under
Section 4 hereof (except for accrued and unpaid items).

          (c) The occurrence of any of the following events or circumstances
shall constitute "GOOD REASON" under this Agreement.

               (i) repeated and deliberate failure by the Company to
substantially comply with its obligations to pay or provide the compensation,
benefits and other amounts due and payable to Executive under Sections 4 and 5
below;

                                       -5-

<PAGE>

               (ii) a material reduction in Executive's duties, responsibilities
and authority during the Period of Employment;

               (iii) Failure or refusal by the Company to execute and deliver
the Consulting Agreement as required by Section 10;

               (iv) Failure or refusal by the Company (and/or any successor in
interest to the Company) to comply with the duties and obligations imposed upon
the Company by Section 11 in a due, proper and timely manner; and

in any such case, the failure or refusal by the Company (and/or any successor in
interest to the Company) to initiate corrective action within 30 days after
written notice by Executive to the Secretary of the Company setting forth in
reasonable detail the conditions alleged to be encompassed by the foregoing
clause (i), (ii), (iii) or (iv) as the case may be.

               (v) a Change of Control (defined in Section 3.5(d)).

          (d) The occurrence of any of the following events or circumstances
shall constitute a "CHANGE OF CONTROL" under this Agreement.

               (i) A change in the composition of the Board, as a result of
which fewer than one-half (1/2) of the incumbent directors are directors who
either: (A) had been directors of the Company on the first day of the Period of
Employment (the "ORIGINAL DIRECTORS"); or (B) were elected, or nominated for
election, to the Board 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 (the "CONTINUING DIRECTORS"); or

               (ii) Any "PERSON" (defined below) who by the acquisition or
aggregation of securities, is or becomes the "BENEFICIAL OWNER" (defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote at elections of directors (the "BASE CAPITAL STOCK"); except that any
change in the relative beneficial ownership of the Company'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 Company; or

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

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

                                       -6-

<PAGE>

For purposes of subsection (ii) 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 Company or a parent
or subsidiary and (2) a corporation owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as their
ownership of the common stock of the Company.

Any other provision of this Section 3.5(d) notwithstanding, no event shall
constitute a Change of Control under this Agreement if: (A) the sole purpose of
the event was to change the state of the Company's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such transaction;
or (B) the event was contemplated by the 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.

Section 4. Compensation and Benefits.  As consideration for Executive's
undertakings set forth in this Agreement and his services hereunder, the Company
shall pay and provide to Executive during the Period of Employment hereunder,
and Executive hereby agrees to accept, the compensation and benefits described
in Sections 4.1 through 4.10, inclusive below, and the Company shall pay or
provide the Death Benefit Amount and Gross-Up Amount (each defined in Section
4.10 below) to the Beneficiary (therein defined).

     4.1 Concurrently with the execution and delivery of this Agreement, the
Company shall pay to Executive, in cash, the sum of Seven Hundred Fifty Thousand
Dollars ($750,000).

     4.2. During the Period of Employment, the Company shall pay to Executive
Base Compensation in the form of salary at an annual rate of Nine Hundred
Fifteen Thousand Dollars ($915,000). Base Compensation shall be payable in such
installments and at intervals prescribed from time to time under the Company's
payroll policies and practices, and shall be subject to such withholdings as are
required thereunder or by applicable law.

     4.3 Executive also shall be entitled to receive a short term incentive
payment following each fiscal year ended during the Period of Employment, if and
to the extent earned, but subject to the maximum amount specified, under the
"Short Term Incentive Program" set forth in EXHIBIT B attached hereto. The short
term incentive payment shall be paid at the times and in the manner set forth in
the Short Term Incentive Program.

     4.4 Executive also shall be entitled to participate in the Source Interlink
Companies, Inc. Challenge Grant Program a copy of which is set forth in EXHIBIT
C attached hereto, and to receive a disbursement equal to 35% of the Aggregate
Payout made pursuant thereto, if and to the extent earned under the terms and
conditions thereof.

     4.5. The Company shall permit Executive to participate in all stock option,
stock purchase, stock bonus and other equity-based incentive plans and programs
(if any) as may be approved by the Board or its Compensation Committee and as
the Company chooses to maintain

                                       -7-

<PAGE>

from time to time with respect to its executive officers generally. Executive's
level of participation and entitlements (if any) thereunder shall be subject to
the eligibility requirements and all other terms and provisions of such plans
and programs (including without limitation amendment and termination), and the
determinations of their duly appointed administrators.

     4.6 The Company shall permit Executive to participate in all healthcare,
supplemental medical expense reimbursement, retirement, life insurance and
disability income plans and programs as may be duly adopted and as the Company
chooses to maintain from time to time with respect to its executive officers
and/or employees generally. Executive's level of participation and benefits
thereunder shall be subject to the eligibility requirements and all other terms
and provisions of such plans and programs (including without limitation
amendment and termination), and the determinations of their duly appointed
administrators.

     4.7. Executive shall be entitled to 20 business days vacation on an annual
basis and all holidays provided under Company policy. For any calendar year
during which Executive is employed for only a portion of the year, Executive
shall be entitled to the appropriate proportion of the vacation days. Vacation
days will not be cumulative, will accrue only for the current year, and must be
taken by Executive during the calendar year in which the vacation time accrues.
Vacation days will not be converted into cash. Executive shall arrange his
vacation so as not to conflict with the needs of the Company.

     4.8. The Company shall pay directly, or shall reimburse Executive for, all
items of expense incurred by Executive in the operation and maintenance
(including, without limitation, all reasonably necessary insurance premiums) of
one automobile.

     4.9. The Company shall pay directly, or shall reimburse Executive for, all
dues and other charges of one country club incurred by Executive in furtherance
of the Company's business.

     4.10.(a) The Company shall pay to such person or persons then most
recently designated by Executive (the "Beneficiary") by written notice to the
Company given in accordance with Section 13, the sum of Two Million Dollars
($2,000,000) (the "DEATH BENEFIT AMOUNT") not later than 90 days after the death
of Executive, if his date of death occurs on or before March 1, 2015.

          (b) The Company shall be deemed to have satisfied its obligation set
forth in Section 4.10(a) above if the Company shall have caused one or more
policies of insurance to be issued on the life of Executive by one or more
underwriters of recognized standing and duly licensed in the State of Florida,
with benefits payable to the Beneficiary upon death of Executive on or before
March 1, 2015 in the amount of Two Million Dollars (in aggregate), shall have
caused the ownership of such policy or policies to be fully vested in the
Beneficiary, and shall pay all premiums required to be paid in order that such
policy or policies will remain in full force and effect until the earlier of
March 1, 2015 or Executive's death. Simultaneously with the payment of any
premium installment, the Company shall also pay to Executive an amount equal to:
(the premium paid divided by (100%-highest federal income tax percentage rate))
minus the premium paid.

                                       -8-

<PAGE>

          (c) If the Company has not satisfied its obligation under Section
4.10(a) in the manner allowed by Section 4.10(b), then, simultaneously with the
payment to the Beneficiary of the Death Benefit Amount, the Company shall also
pay to the Beneficiary an amount (the "GROSS-UP AMOUNT") derived by application
of the following formula: (Death Benefit Amount divided by (100%-highest federal
income tax percentage rate)) minus the Death Benefit Amount.

          (d) The Company may cause one or more additional policies of insurance
to be issued on the life of Executive with benefits payable to the Beneficiary
and/or Company upon death of Executive.

Section 5. Expenses and Indemnification.

     5.1. The Company shall pay directly, or shall reimburse Executive for, such
items of reasonable and necessary expense as are incurred by Executive during
the Period of Employment in the interest of the business of the Company. All
such expenses paid by Executive shall be reimbursed by the Company upon
presentation by Executive of an itemized account of such expenditures,
sufficient to support their deductibility by the Company for federal income tax
purposes (without regard to whether or not the Company's deduction for such
expenses is limited for federal income tax purposes), such submissions to be
made within 30 days after the date such expenses are incurred.

     5.2. In addition to such rights of indemnification as are provided to
Executive by the Certificate of Incorporation and/or Bylaws of the Company and
its subsidiaries, the Company agrees that, absent a written opinion of
independent legal counsel that it would be unlawful to do so, the Company shall
promptly pay or advance all costs and expenses (including without limitation
attorneys' fees) reasonably incurred by Executive in defense of any and all
claims, causes of action and charges which may be threatened, asserted or filed
against him in any judicial, governmental or arbitration proceedings, inquiry or
investigation (whether of a civil or criminal nature), arising out of his
employment under this Agreement or the performance in good faith of his duties
hereunder, other than such claims, causes of action or charges that may be
initiated against Executive upon approval by the Board. Executive hereby agrees
to promptly reimburse to the Company all such costs and expenses as have been
paid or advanced by the Company if (and to the extent) it is finally determined
as a matter of law that Executive was not entitled to be indemnified for them by
the Company. In addition, Executive shall remit to the Company the proceeds of
any insurance received by him to defray such costs and expenses as have been
paid or advanced by the Company.

Section 6. Protection of Confidential Information and Property.

     6.1. Executive acknowledges that, except for information that from time to
time has been properly disclosed by the Company in public filings and
announcements and commercial dealings, the Company has or may have a legitimate
need for and/or interest in protecting the confidentiality of all information
and data pertaining to the business and affairs of the Company and its
subsidiaries, including without limitation information and data relating to (i)
manufacturing operations and costs, (ii) distribution and servicing methods and
costs,

                                       -9-

<PAGE>

(iii) merchandising techniques, (iv) sales and promotional methods, (v)
customer, vendor and personnel relationships and arrangements, (vi) research and
development projects, (vii) information and data processing technologies, and
(viii) strategic and tactical plans and initiatives (all such information and
data, other than that which has been properly disclosed as aforesaid, being
hereinafter referred to as "CONFIDENTIAL INFORMATION").

     6.2. Executive acknowledges that, in the course of his employment, (i) he
has participated and/or will participate in the development of Confidential
Information, (ii) he has been and/or will be involved in the use and application
of Confidential Information for corporate purposes, and (iii) he otherwise has
been and/or will be given access to and entrusted with Confidential Information
for corporate purposes.

     6.3. Executive agrees that, during the term of his employment under this
Agreement, he shall possess and use the Confidential Information solely and
exclusively to protect and advance the interests of the Company and its
subsidiaries; and that at all times thereafter, he (i) shall continue to treat
the Confidential Information as proprietary to the Company, and (ii) shall not
make use of, or divulge to any third party, all or any part of the Confidential
Information unless and except to the extent so authorized in writing by the
Company or required by judicial, legislative or regulatory process.

     6.4. Executive acknowledges that, in the course of his employment, he will
create and/or be furnished with (i) materials that embody or contain
Confidential Information (in written and electronic form) and (ii) other
tangible items that are the property of the Company and its subsidiaries.
Executive agrees that, upon expiration or other termination of his term of
employment under this Agreement, or sooner if the Company so requests, he shall
promptly deliver to the Company all such materials and other tangible items so
created and/or furnished, including without limitation drawings, blueprints,
sketches, manuals, letters, notes, notebooks, reports, lists of customers and
vendors, personnel lists, computer disks and printouts, computer hardware and
printers, and that he shall not retain any originals or copies of such
materials, or any of such tangible items, unless and except to the extent so
authorized in writing by the Company.

     6.5. Executive agrees to inform all prospective employers and consulting
clients of the content of this Section 6 and of Section 7 of this Agreement
prior to his acceptance of future employment and consulting engagements.

Section 7. Restrictions against Competition and Solicitation.

     7.1. Executive agrees that, during the term of his employment hereunder and
during the Restricted Period (defined in Section 7.2 below), he shall not in any
way, directly or indirectly, manage, operate, control, accept employment or a
consulting position with or otherwise advise or assist or be connected with, or
own or have any financial interest in, any Competitive Enterprise (defined in
Section 7.2 below).

     7.2. For purposes of this Section 7:

                                      -10-

<PAGE>

          (a) "RESTRICTED PERIOD" means:

               (i) in the case of Disability, the period during which Executive
is receiving payments or benefits from the Company pursuant to Section 3.3 of
this Agreement;

               (ii) in the case of early termination of the Period of Employment
without Proper Cause or for Good Reason, the period ending on the date of such
early termination; or,

               (iii) in all other cases, the Period of Employment plus the
period of twelve months next following expiration of the Period of Employment.

          (b) "COMPETITIVE ENTERPRISE" means any person or business organization
engaged, directly or indirectly, in the business of (i) designing, manufacturing
and marketing front-end fixtures, shelving and other display equipment and
accessories for use by retail stores; (ii) designing, manufacturing and
marketing custom wood fixtures, furnishings and millwork for use by commercial
enterprises, (iii) distribution and fulfillment of magazines, books,
pre-recorded music, video and video games, and other merchandise, (iv) rendering
third party billing and collection services with respect to claims for
manufacturer rebates and incentive payments payable to retailers respecting the
sale of magazines, periodicals, confections and general merchandise, and/or (v)
providing sales and marketing data and analyses to retailers and vendors of
products distributed by the Company.

     7.3. Without limitation of the Company's rights and remedies under this
Agreement or as otherwise provided by law or in equity, it is understood and
agreed between the parties that the right of Executive to receive and retain any
payments otherwise due under this Agreement shall be suspended and canceled if
and for so long as he is in violation of the foregoing covenant not to compete.

     7.4. Executive agrees further that, during the Restricted Period, he will
not, directly or indirectly, either for himself or on behalf of any other person
or entity, employ or attempt to employ or solicit the employment or services of
any person who is at that time, or has been within six months immediately prior
thereto, employed by the Company or any subsidiary of the Company.

Section 8. Injunctive Relief and Costs.

     8.1. Executive acknowledges that any violation of the provisions of
Sections 6, 7.1 and 7.4 of this Agreement may cause substantial and irreparable
harm to the Company and its subsidiaries (and their constituencies), and that
the nature and magnitude of the harm may be difficult or impossible to measure
precisely or to compensate adequately with monetary damages.

     8.2. Executive agrees that the Company shall have the right to enforce his
performance of and compliance with any and all provisions of Sections 6, 7.1 and
7.4 by seeking a restraining order and/or an order of specific performance
and/or other injunctive relief against

                                      -11-

<PAGE>

Executive from a court of competent jurisdiction, at any time or from time to
time, if it appears that Executive has violated or is about to violate any such
provision.

     8.3. Executive further agrees that he shall be liable for reimbursement of
all costs and expenses incurred by the Company and its subsidiaries (including
without limitation reasonable attorneys' fees) in connection with any judicial
proceeding or arbitration arising out of any violation of or failure to comply
with the provisions of Sections 6, 7.1 and 7.4.

     8.4. The provisions of this Section 8 are in addition to, and not in lieu
of, any other rights and remedies that may be available to the Company for
breach of any portion of this Agreement.

Section 9. Compliance with Law and Company Policies.

     9.1. Executive represents and warrants to the Company that he is not now
(and will not be in the future) under any legal or contractual duty or
obligation which could prevent, limit or impair in any way his full and faithful
performance of this Agreement. Executive shall indemnify and hold the Company
harmless from and against any claim, loss, damage, liability, cost or expense
(including without limitation reasonable attorneys' fees) incurred by or
asserted against the Company arising out of or in connection with any breach of
this representation and warranty.

     9.2. Executive acknowledges that he has received and read and understands
the intent and purposes of the Company's Code of Business Conduct and Ethics.
Executive shall comply with all lawful rules and policies of the Company, as in
effect from time to time.

     9.3. Nothing contained in this Agreement shall be interpreted, construed or
applied to require the commission of any act contrary to law; and whenever there
is any conflict between any provision of this Agreement and any applicable
statute, law ordinance, order or regulation, the latter shall prevail; but in
such event any such provision of this Agreement shall be curtailed and limited
only to the extent necessary to bring it within applicable legal requirements.

     9.4. Executive acknowledges and agrees that, notwithstanding anything to
the contrary in this Agreement, he shall not be entitled to any benefits that
constitute (or which, in the Company's good faith determination based on the
advice of counsel, would likely constitute) a personal loan in violation of
Section 402 of the Sarbanes-Oxley Act of 2002 or any regulations thereunder. In
the event that the Company, in good faith and upon the advice of counsel,
determines that any provision of this Agreement would, absent this Section, give
rise to a potential violation of said statute or regulations, Executive and the
Company shall promptly negotiate, in good faith, towards an appropriate
amendment to this Agreement that would eliminate such potential violation, but
which would, as closely as reasonably possible, afford both the Company and
Executive, the same relative economic benefits of their bargain hereunder prior
to such amendment.

     9.5. In the event that any payment, coverage or benefit provided under this
Agreement would, in the opinion of counsel for the Company, not be deemed to be
deductible in whole or in

                                      -12-

<PAGE>

part in the calculation of the Federal income tax of the Company, or any other
person making such payment or providing such coverage or benefit, by reason of
Section 280G of the Code, the aggregate payments, coverages or benefits provided
hereunder shall be reduced to the "safe harbor" level under Section 280G so that
no portion of such amount which is paid to Executive is not deductible by reason
of Section 280G of the Code. Furthermore, the Company shall hold such portions
not paid to Executive in escrow pending a final determination of whether such
amounts would be deductible if paid to Executive. The Company shall use its best
efforts to seek and obtain a ruling from the Internal Revenue Service that any
portion of such payments, coverages or benefits not paid to Executive pursuant
to this Section 9.5 would continue to be deductible if paid to Executive, and
the Company shall pay to Executive any portion of such amounts for which such a
ruling is received.

     If the IRS has not favorably ruled on such matter within six (6) months
after the date on which any payment, coverage or benefit provided under this
Agreement is required to be paid or provided, the Company shall pay to Executive
an additional amount (the "280G PAYMENT") such that the net amount retained by
Executive, after giving effect to any excise tax on the payment, coverages or
benefits and any Federal, state or local income taxes and excise tax on the 280G
Payment, shall be equal to the value of such payments, coverages and benefits
prior to giving effect to the excise tax. For purpose of determining the 280G
Payment, Executive shall be deemed to pay Federal, state and local income tax at
the highest marginal rate of taxation in the calendar year in which the
payments, coverages or benefits are paid or provided. State and local income
taxes shall be determined based on the state and locality of Executive's
domicile on the date of termination of the Period of Employment.

Section 10. Consulting Agreement.

     The Company and Executive shall execute and deliver the Consulting
Agreement on or about October 31, 2009, and cause it to become effective on
February 1, 2010; provided, however, the Company shall be relieved automatically
of its obligations set forth in this Section 10 immediately upon early
termination of the Period of Employment hereunder.

Section 11. Effect of Business Combination Transactions.  In the event of the
merger or consolidation of the Company with any unrelated corporation or
corporations, or of the sale by the Company of a major portion of its assets or
of its business and good will to an unrelated third party, this Agreement shall
remain in effect and be assigned and transferred to the Company's successor in
interest as an asset of the Company, and the Company shall cause such assignee
to assume the Company's obligations hereunder.

Section 12. Successors and Assigns.

     12.1. This Agreement shall be binding upon, and shall inure to the benefit
of, Executive and the Company and their respective permitted successors,
assigns, heirs, legal representatives and beneficiaries.

     12.2 Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge,

                                      -13-

<PAGE>

pledge or hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect; provided, however,
that nothing in this Section 12.2 shall preclude the assumption of such rights
by executors, administrators or other legal representatives of Executive or his
estate and their assigning any rights hereunder to the person or persons
entitled thereto.

Section 13. Notices.

     Any and all notices required or permitted to be given under this Agreement
shall be sufficient if furnished in writing and personally delivered, or if sent
by registered or certified mail to the last known residence address of Executive
or to the Company, Attention: Corporate Secretary, 27500 Riverview Center Blvd.,
Suite 400, Bonita Springs, Florida 34134, or such other place as Executive or
the Company may designate in writing to the other for these purposes.

Section 14. Miscellaneous.

     14.1. The waiver by either party of a breach or violation of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
subsequent breach or violation hereof.

     14.2. The headings to the Sections hereof are for convenience of reference
only, and in case of any conflict, the text of this Agreement, rather than the
headings, shall control.

     14.3. This Agreement (together with the Exhibits attached hereto) sets
forth the entire understanding of the parties in respect of the subject matter
contained herein, and supersedes the Employment and Non-Competition referred to
in the Preambles as well as any and all other prior agreements, arrangements and
understandings relating to the subject matter. This Agreement 6may only be
amended by a written agreement signed by both parties hereto or their duly
authorized representatives. Except as expressly stated herein, however, nothing
in this Agreement shall be deemed to affect the Company's duties and
obligations, or Executive's rights and benefits, under the Company's existing
Source Interlink Companies 401(k) Plan.

     14.4. Should a court or arbitrator declare any provision hereof to be
invalid, such declaration shall not affect the validity of the Agreement as a
whole or any part hereof, other than the specific portion declared to be
invalid.

     14.5. This Agreement shall be interpreted, construed and governed according
to the laws of the State of Florida.

     14.6. Any claim, controversy or dispute arising with respect to this
Agreement between the parties hereto or anyone claiming under or on behalf of
either of the parties (a "DISPUTE"), other than a Dispute to which Section 8
hereof applies, shall be submitted to final and binding arbitration in
accordance with the following:

                                      -14-

<PAGE>

          (a) Any party to an unresolved Dispute may file a written Demand for
Arbitration pursuant to this Section 14.6 with the Regional Office of the
American Arbitration Association nearest to Bonita Springs, Florida and shall
simultaneously send a copy of such Demand to the other party or parties to such
Dispute;

          (b) Arbitration proceedings under this Section 14.6 shall be conducted
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, except that all decisions and awards rendered shall be accompanied
by a written opinion setting forth the rationale for such decisions and awards;

          (c) Venue for all evidentiary hearings conducted in such proceedings
shall be in Lee or Collier County, Florida, as determined by the Arbitrator.

          (d) Unless otherwise agreed by the parties thereto, arbitration
proceedings under this Section 14.6 shall be conducted before one impartial
arbitrator selected through the procedures of the American Arbitration
Association. On all matters, the decisions and awards of the arbitrator shall be
determinative.

          (e) To the extent practicable, the arbitration proceedings under this
Section 14.6 shall be conducted in such manner as will enable completion within
sixty (60) days after the filing of the Demand for Arbitration hereunder.

          (f) The arbitrator may award attorney's fees and costs of arbitration
to the substantially prevailing party. Unless and except to the extent so
awarded, the costs of arbitration shall be shared equally by the parties, and
each party shall bear the fees and expenses of its own attorney. Punitive
damages shall not be allowed by the arbitrator. The award may be enforced in
such manner as allowed by law.

          IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.

                                   SOURCE INTERLINK COMPANIES, INC.

                                   By: /s/ Aron S. Katzman
                                       -----------------------------------------
                                   Name: Aron S. Katzman
                                   Title: Chairman of the Compensation Committee
                                          of the Board of Directors

                                   S. Leslie Flegel
                                   ---------------------------------------------
                                   S. Leslie Flegel

                                      -15-

<PAGE>

                                                                    EXHIBIT A TO
                                                            EMPLOYMENT AGREEMENT

                              CONSULTING AGREEMENT

     ENTERED INTO as of January 31, 2010 by and between S. LESLIE FLEGEL
("CONSULTANT"), an individual presently domiciled in Naples, Florida, and SOURCE
INTERLINK COMPANIES, INC. (the "COMPANY"), a Missouri corporation having its
corporate headquarters in Bonita Springs, Florida.

     WHEREAS, Consultant was the founder of the Company and served for many
years as its Chief Executive Officer, and

     WHEREAS, the Period of Employment under the Executive Employment Agreement
dated March 1, 2005 between Consultant and the Company (the "EMPLOYMENT
AGREEMENT") expires on the date of this Agreement, and

     WHEREAS, the Company does not wish to lose the benefit of Consultant's
knowledge of the Company and his years of experience, and

     WHEREAS, the Company and Consultant have previously agreed, in conjunction
with the preparation, execution and delivery of the Employment Agreement, to
establish a consulting relationship under the terms and provisions set forth in
this Agreement,

     NOW, THEREFORE, with the intent to be legally bound, the Company and
Consultant do hereby covenant and agree as follows.

     1.   Term.

          The term of the consulting relationship established by this Agreement
shall be the five-year period commencing February 1, 2010 and ending on January
31, 2015 (the "PERIOD OF ENGAGEMENT"), unless earlier terminated pursuant to
Section 5 below.

     2.   Services.

     2.1 The Company hereby appoints Consultant as an independent consultant to
the Company, and Consultant hereby accepts such appointment. Consultant shall
provide such consulting services to the Company and its subsidiaries, during
normal business hours, as the Board of Directors or the Chief Executive Officer
of the Company may reasonably request from time to time in connection with
strategic planning, merger and acquisition transactions, investor relations,
customer relations, financial affairs, operations and executive recruitment.

     2.2 Consultant further agrees to serve as a member of the Board of the
Company and/or as a member of the board of directors of any subsidiary of the
Company if and when elected to any such position.

                                      -16-

<PAGE>

     2.3 Consultant further agrees, if so requested, to represent the Company's
interests in one or more trade associations and to participate in charitable and
community organizations which the Company wishes to support.

     2.4  (a) This Agreement does not create any employment or agency
relationship between Consultant and the Company. The relationship of the
Consultant will be solely as an independent contractor to the Company. The
Company has not authorized Consultant to, and Consultant acknowledges that he
has no authority to, commit, bind or speak for the Company, and Consultant shall
not knowingly do any act which might cause any third party to reasonably believe
that Consultant has the power or authority to contract or incur any commitment
on behalf of Company, or that Consultant is an employee or agent of Company.

          (b) As an independent contractor, Consultant acknowledges that
Consultant will not be eligible for or receive any benefits for which employees
of the Company are eligible. Since Consultant is an independent contractor, the
Company will not withhold any state or federal FICA or other withholding taxes,
social security taxes, Medicare taxes, disability or other insurance payments or
any other taxes, assessments or payments (collectively, "EMPLOYMENT TAXES"). The
Company will issue to Consultant an Internal Revenue Service Form 1099 at the
time, in the manner and containing the information required by the Internal
Revenue Code of 1986, as amended (the "CODE"). Consultant is solely responsible
for the payment of any and all Employment Taxes and any other taxes, assessments
or payments owed in connection with its receipt of compensation paid by Company
hereunder.

     3. Compensation.  As consideration for Consultant's undertakings set forth
in this Agreement and his services hereunder, the Company shall pay to
Consultant, and he hereby agrees to accept, the compensation described in
Sections 3.1, 3.2, 3.3 and 3.4 below.

     3.1 A fixed Retainer Fee in the amount of $415,000 per year, payable in
equal monthly installments. The Company's obligation to pay such fixed Retainer
Fee during the term specified in Section 1 is absolute and unconditional,
regardless of the amount of time actually devoted by Consultant in rendering
services under this Agreement.

     3.2 For his services (if any) as a director pursuant to Section 2.2, such
director compensation as is provided for, from time to time, under then current
corporate policy applicable to non-employee directors.

     3.3 The Death Benefit Amount and Gross-Up Amount provided for in Section
4.10 of the Employment Agreement (it being understood and agreed that the
Company's obligation may be satisfied in the manner set forth in Section 4.10(b)
thereof).

     3.4 The right to continued participation in the Company's healthcare plans
(referred to in Section 4.6 of the Employment Agreement) under and subject to
the same terms and provisions (including without limitation contribution to
premiums, deductibles, co-payments and caps) as are applicable during such
period to the Company's most senior executive officers in the same manner as if
Consultant were employed by the Company.

                                      -17-

<PAGE>

     Nothing in this Section 3 shall be deemed to affect the Company's duties
and obligations, or Consultant's rights and benefits, under the Employment
Agreement or any of the Company's retirement or other benefit plans in which
Consultant is or was a participant.

     4.   Facilities, Expenses and Indemnification.

     4.1 The Company shall supply Consultant with such office facilities and
clerical support services as he may reasonably request to carry out his duties
under this Agreement.

     4.2 The Company shall pay directly, or shall reimburse Consultant for, such
items of reasonable and necessary expense as are incurred by Consultant during
the Period of Engagement in the interest of the business of the Company. All
such expenses paid by Consultant shall be reimbursed by the Company upon
presentation by Consultant of an itemized account of such expenditures,
sufficient to support their deductibility by the Company for federal income tax
purposes (without regard to whether or not the Company's deduction for such
expenses is limited for federal income tax purposes), such submissions to be
made within 30 days after the date such expenses are incurred.

     4.3. In addition to such rights of indemnification as are provided to
Consultant by the Certificate of Incorporation and/or Bylaws of the Company and
its subsidiaries and/or the Employment Agreement, the Company agrees that,
absent a written opinion of independent legal counsel that it would be unlawful
to do so, the Company shall promptly pay or advance all costs and expenses
(including without limitation attorneys' fees) reasonably incurred by Consultant
in defense of any and all claims, causes of action and charges which may be
threatened, asserted or filed against him in any judicial, governmental or
arbitration proceedings, inquiry or investigation (whether of a civil or
criminal nature), arising out of his consultancy under this Agreement or the
performance in good faith of his duties hereunder, other than such claims,
causes of action or charges that may be initiated against Consultant upon
approval by the Board. Consultant hereby agrees to promptly reimburse to the
Company all such costs and expenses as have been paid or advanced by the Company
if (and to the extent) it is finally determined as a matter of law that
Consultant was not entitled to be indemnified for them by the Company. In
addition, Consultant shall remit to the Company the proceeds of any insurance
received by him to defray such costs and expenses as have been paid or advanced
by the Company.

     5.   Early Termination.

     5.1 Notwithstanding the provisions of Section 1, the Period of Engagement
shall be subject to early termination at any time:

          (a) at the Company's election, by dismissal of Consultant from the
engagement with or without Proper Cause (defined in Section 5.2(c) below)
pursuant to resolution of the Board, or

          (b) at the Company's election, upon determination of Disability of
Consultant (defined in Section 3.3 below), or

                                      -18-

<PAGE>

          (c) upon death of Consultant, or

          (d) at Consultant's election, by voluntary resignation upon 30 days'
advance written notice, with or without Good Reason (defined in Section 3.5(b)
below).

In the event of early termination pursuant to the foregoing paragraphs (a), (b),
(c) or (d), the Company's obligations to Consultant shall be as set forth in
Sections 5.2, 5.3, 5.4 or 5.5, respectively; and Consultant shall have no other
rights or claims under this Agreement except for reimbursement of previously
incurred expenses and indemnification pursuant to Section 4.2 and 4.3,
respectively.

     5.2  (a) In the event of early termination pursuant to Section 5.1(a)
without Proper Cause, the Company shall be and remain obligated to pay to
Consultant, within five (5) business days after such early termination (or such
longer period during which such payments are prohibited under applicable law,
rules or regulations), in cash, an amount equal to the sum of (i) the sum of all
fixed Retainer Fee installments payable for the remainder of the Period of
Engagement, plus (ii) all accrued and unpaid items.

          (b) In the event of early termination pursuant to Section 5.1(a) with
Proper Cause, the Company shall thereupon be relieved of its obligations to pay
or provide any and all compensation and benefits under Section 3 hereof (except
for accrued and unpaid items).

          (c) The occurrence of any of the following events or circumstances
shall constitute "PROPER CAUSE" for dismissal of Consultant from engagement
under this Agreement:

               (i) Disclosure to third parties of trade secrets or other
Confidential Information (defined in Section 6 below), or any other misuse or
misappropriation thereof, by Consultant in violation of the obligations imposed
by Section 6 hereof;

               (ii) Violation by Consultant of the restrictions imposed by
Section 7 of this Agreement on competitive activities by Consultant;

               (iii) Abandonment by Consultant of his engagement with the
Company or any subsidiary or repeated and deliberate failure or refusal by
Consultant to fulfill his substantive duties and responsibilities under this
Agreement in any material respect and Consultant's failure or refusal to
initiate corrective action within 30 days after written notice by the Company
setting forth in reasonable detail the conditions alleged to be encompassed by
the foregoing clause;

               (iv) Perpetration of any act of theft materially affecting the
Company or any of its subsidiaries;

               (v) Willful, reckless or grossly negligent conduct by Consultant
entailing a material violation of the laws or governmental regulations or orders
applicable to the Company or its subsidiaries, or imposition by any court or
governmental agency of any material restriction upon Consultant's ability to
perform his duties and responsibilities hereunder;

                                      -19-

<PAGE>

               (vi) Repeated and deliberate failure or refusal by Consultant to
comply with lawful and ethical policies of the Company or lawful and ethical
directives of the Board to the extent consistent with the provisions of this
Agreement;

               (vii) Conviction of Consultant of a crime in any federal, state
or foreign court, or entry of any governmental decree or order against
Consultant based upon violation of any federal, state or foreign law, and the
determination by the Board, made in its reasonable discretion, that, in the
circumstances, the continued association of Consultant with the Company will,
more likely than not, have a material adverse effect upon the Company, its
business or its reputation.

     5.3 In the event of early termination pursuant to Section 5.1(b), the
Company shall thereupon be relieved of its obligations to pay or provide any and
all compensation and benefits under Section 3 hereof, but shall be obligated to
pay or provide to Consultant or the Beneficiary (i) the Death Benefit Amount
when and as required by Section 4.10 of the Employment Agreement and, (ii) all
accrued and unpaid items.

     5.4 In the event of early termination pursuant to Section 5.1(c), the
Company shall thereupon be relieved of its obligations to pay or provide any and
all compensation and benefits under Section 3 hereof, other than the Death
Benefit Amount (and except for accrued and unpaid items).

     5.5 (a) In the event of early termination pursuant to Section 5.1(d) by
Consultant with Good Reason, the provisions of Section 5.2(a) shall apply.

          (b) In the event of early termination pursuant to Section 5.1(d) by
Consultant without Good Reason, the provisions of Section 5.2(b) shall apply.

          (c) The occurrence of any of the following events or circumstances
shall constitute "GOOD REASON" under this Agreement:

               (i) repeated and deliberate failure by the Company to
substantially comply with its obligations to pay or provide the compensation,
benefits and other amounts and support due Consultant under Sections 3 and 4
above; or

               (ii) the failure or refusal of the Company (and/or any successor
in interest to the Company) to comply with the duties and obligations under
Section 10 in a due, proper and timely manner; and

               (iii) failure or refusal by the Company (and/or any such
successor) to initiate corrective action within 30 days after written notice by
Consultant to the full Board and to the Company's General Counsel setting forth
in reasonable detail the conditions alleged to be encompassed by the foregoing
clause (i) or (ii) (as the case may be).

     6.   Protection of Confidential Information and Property.

                                      -20-

<PAGE>

     6.1. Consultant acknowledges that, except for information that from time to
time has been properly disclosed by the Company in public filings and
announcements and commercial dealings, the Company has or may have a legitimate
need for and/or interest in protecting the confidentiality of all information
and data pertaining to the business and affairs of the Company and its
subsidiaries, including without limitation information and data relating to (i)
manufacturing operations and costs, (ii) distribution and servicing methods and
costs, (iii) merchandising techniques, (iv) sales and promotional methods, (v)
customer, vendor and personnel relationships and arrangements, (vi) research and
development projects, (vii) information and data processing technologies, and
(viii) strategic and tactical plans and initiatives (all such information and
data, other than that which has been properly disclosed as aforesaid, being
hereinafter referred to as "CONFIDENTIAL INFORMATION").

     6.2. Consultant acknowledges that, in the course of his employment and
consultancy, (i) he has participated and/or will participate in the development
of Confidential Information, (ii) he has been and/or will be involved in the use
and application of Confidential Information for corporate purposes, and (iii) he
otherwise has been and/or will be given access to and entrusted with
Confidential Information for corporate purposes.

     6.3. Consultant agrees that, during the Period of Engagement under this
Agreement, he shall possess and use the Confidential Information solely and
exclusively to protect and advance the interests of the Company and its
subsidiaries; and that at all times thereafter, he (i) shall continue to treat
the Confidential Information as proprietary to the Company, and (ii) shall not
make use of, or divulge to any third party, all or any part of the Confidential
Information unless and except to the extent so authorized in writing by the
Company.

     6.4. Consultant acknowledges that, in the course of his engagement, he will
create and/or be furnished with (i) materials that embody or contain
Confidential Information (in written and electronic form) and (ii) other
tangible items that are the property of the Company and its subsidiaries.
Consultant agrees that, upon expiration or other termination of his Period of
Engagement under this Agreement, or sooner if the Company so requests, he shall
promptly deliver to the Company all such materials and other tangible items so
created and/or furnished, including without limitation drawings, blueprints,
sketches, manuals, letters, notes, notebooks, reports, lists of customers and
vendors, personnel lists, computer disks and printouts, computer hardware and
printers, and that he shall not retain any originals or copies of such
materials, or any of such tangible items, unless and except to the extent so
authorized in writing by the Company.

     6.5. Consultant agrees to inform all prospective employers and consulting
clients of the content of this Section 6 and of Section 7 of this Agreement
prior to his acceptance of future employment and consulting engagements.

     7.   Restrictions against Competition and Solicitation.

     7.1. Consultant agrees that, during the Period of Engagement hereunder and
during the Restricted Period (defined in Section 7.2 below), he shall not in any
way, directly or indirectly,

                                      -21-

<PAGE>

manage, operate, control, accept employment or a consulting position with or
otherwise advise or assist or be connected with, or own or have any financial
interest in, any Competitive Enterprise (defined in Section 7.2 below).

     7.2. For purposes of this Section 7:

          (a) "RESTRICTED PERIOD" means the greater of:

               (i) Period of Engagement; or

               (ii) the period during which Consultant is receiving payments or
benefits from the Company pursuant to Section 5.2(a), 5.3(a), or 5.5(a) of this
Agreement; or

               (iii) the period of 24 months next following early termination of
the Period of Engagement other than without Proper Cause or for Good Reason.

          (b) "COMPETITIVE ENTERPRISE" means any person or business organization
engaged, directly or indirectly, in the business of (i) designing, manufacturing
and marketing front-end fixtures, shelving and other display equipment and
accessories for use by retail stores; (ii) designing, manufacturing and
marketing custom wood fixtures, furnishings and millwork for use by commercial
enterprises, (iii) distribution and fulfillment of magazines, books,
pre-recorded music, video and video games, and other merchandise, (iv) rendering
third party billing and collection services with respect to claims for
manufacturer rebates and incentive payments payable to retailers respecting the
sale of magazines, periodicals, confections and general merchandise, and/or (v)
providing sales and marketing data and analyses to retailers and vendors of
products distributed by the Company.

     7.3. Without limitation of the Company's rights and remedies under this
Agreement or as otherwise provided by law or in equity, it is understood and
agreed between the parties that the right of Consultant to receive and retain
any payments otherwise due under this Agreement shall be suspended and canceled
if and for so long as he is in violation of the foregoing covenant not to
compete.

     7.4. If the Period of Engagement hereunder shall have been terminated
without Proper Cause pursuant to Section 5.1(a) or for Good Reason pursuant to
Section 5.1(d), and if Consultant shall have duly complied with and observed the
covenants of Section 6 and this Section 7, Consultant may, at his election, be
discharged from the covenants of Section 7.1 at any time on or before the
thirtieth (30th) day following such termination by filing with the Company a
duly executed statement (in form and content reasonably satisfactory to the
Board of Directors of the Company) releasing the Company and its subsidiaries
(and, if applicable, its insurance carriers) from any and all obligations it (or
they) may have by reason of such termination (except for accrued and unpaid
items).

     7.5. Consultant agrees further that, during the Restricted Period, he will
not, directly or indirectly, either for himself or on behalf of any other person
or entity, employ or attempt to employ or solicit the employment or services of
any person who is at that time, or has been

                                      -22-

<PAGE>

within six months immediately prior thereto, employed by the Company or any
subsidiary of the Company.

     8.   Injunctive Relief and Costs.

          (a) Consultant acknowledges that any violation of the provisions of
Sections 6, 7.1 and 7.5 of this Agreement may cause substantial and irreparable
harm to the Company and its subsidiaries (and their constituencies), and that
the nature and magnitude of the harm may be difficult or impossible to measure
precisely or to compensate adequately with monetary damages.

          (b) Consultant agrees that the Company shall have the right to enforce
his performance of and compliance with any and all provisions of Sections 6, 7.1
and 7.5 by seeking a restraining order and/or an order of specific performance
and/or other injunctive relief against Consultant from a court of competent
jurisdiction, at any time or from time to time, if it appears that Consultant
has violated or is about to violate any such provision.

          (c) Consultant further agrees that he shall be liable for
reimbursement of all costs and expenses incurred by the Company and its
subsidiaries (including without limitation reasonable attorneys' fees) arising
out of any violation of the provisions of Sections 6, 7.1 and 7.5, whether or
not in connection with judicial proceedings.

          (d) The provisions of this Section 8 are in addition to, and not in
lieu of, any other rights and remedies that may be available to the Company for
breach of any portion of this Agreement.

     9.   Compliance with Law and Company Policies.

     9.1. Consultant represents and warrants to the Company that he is not now
(and will not be in the future) under any legal or contractual duty or
obligation which could prevent, limit or impair in any way his full and faithful
performance of this Agreement. Consultant shall indemnify and hold the Company
harmless from and against any claim, loss, damage, liability, cost or expense
(including without limitation reasonable attorneys' fees) incurred by or
asserted against the Company arising out of or in connection with any breach of
this representation and warranty.

     9.2. Consultant acknowledges that he has received and read and understands
the intent and purposes of the Company's Code of Business Conduct and Ethics.
Consultant shall comply with all lawful rules and policies of the Company, as in
effect from time to time.

     9.3. Nothing contained in this Agreement shall be interpreted, construed or
applied to require the commission of any act contrary to law; and whenever there
is any conflict between any provision of this Agreement and any applicable
statute, law ordinance, order or regulation, the latter shall prevail; but in
such event any such provision of this Agreement shall be curtailed and limited
only to the extent necessary to bring it within applicable legal requirements.

                                      -23-

<PAGE>

     9.4. Effect of Business Combination Transactions.  In the event of the
merger or consolidation of the Company with any unrelated corporation or
corporations, or of the sale by the Company of a major portion of its assets or
of its business and good will to an unrelated third party, this Agreement shall
remain in effect and be assigned and transferred to the Company's successor in
interest as an asset of the Company, and the Company shall cause such assignee
to assume the Company's obligations hereunder; and in such event Consultant
hereby confirms his agreement to continue to perform his/her duties and
responsibilities according to the terms and conditions hereof for such assignee
or transferee of this Agreement. It is understood and agreed, however, that the
scope of Consultant's services under Section 1 hereof shall be appropriately
modified, at the election of such successor, to cover the segment of such
successor's enterprise represented by the Company's assets and operations at the
time of such aforementioned transaction.

     10.  Successors and Assigns.

          (a) This Agreement shall be binding upon, and shall inure to the
benefit of, Consultant and the Company and their respective heirs, legal
representatives, successors and assigns.

          (b) Except as required by law, no right of Consultant to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
10(b) shall preclude the assumption of such rights by executors or other legal
representatives of Consultant or his estate and their assignment of any rights
hereunder to the person or persons entitled thereto.

     11. Notices.  Any and all notices required or permitted to be given under
this Agreement shall be sufficient if furnished in writing and personally
delivered, or if sent by registered or certified mail to the last known
residence address of Consultant or to the Company, Attention: Corporate
Secretary, 27500 Riverview Center Blvd., Suite 400, Bonita Springs, Florida
34134, or such other place as Consultant or the Company may designate in writing
to the other for these purposes.

     12.  Miscellaneous.

     12.1 The waiver by either party of a breach or violation of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
subsequent breach hereof.

     12.2 The headings to the Sections hereof are for convenience of reference
only, and in case of any conflict, the text of this Agreement, rather than the
headings, shall control.

     12.3 Should a court or arbitrator declare any provision hereof to be
invalid, such declaration shall not affect the validity of the Agreement as a
whole or any part, other than the specific portion declared to be invalid.

                                      -24-

<PAGE>

     12.4 Any claim, controversy or dispute arising with respect to this
Agreement between the parties hereto or anyone claiming under or on behalf of
either of the parties (a " Dispute"), other than a Dispute to which Section 8
hereof applies, shall be submitted to final and binding arbitration in
accordance with the following:

          (a) Any party to an unresolved Dispute may file a written Demand for
Arbitration pursuant to this Section 12.4 with the Regional Office of the
American Arbitration Association nearest to Bonita Springs, and shall
simultaneously send a copy of such Demand to the other party or parties to such
Dispute;

          (b) Arbitration proceedings under this Section 12.4 shall be conducted
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, except that all decisions and awards rendered shall be accompanied
by a written opinion setting forth the rationale for such decisions and awards;

          (c) Venue for all evidentiary hearings conducted in such proceedings
shall be in Lee or Collier County, Florida, as determined by the Arbitrator.

          (d) Unless otherwise agreed by the parties thereto, arbitration
proceedings under this Section 12.4 shall be conducted before one impartial
arbitrator selected through the procedures of the American Arbitration
Association. On all matters, the decisions and awards of the arbitrator shall be
determinative.

          (e) To the extent practicable, the arbitration proceedings under this
Section 12.4 shall be conducted in such manner as will enable completion within
sixty (60) days after the filing of the Demand for Arbitration hereunder.

          (f) The arbitrator may award attorney's fees and costs of arbitration
to the substantially prevailing party. Unless and except to the extent so
awarded, the costs of arbitration shall be shared equally by the parties, and
each party shall bear the fees and expenses of its own attorney. Punitive
damages shall not be allowed by the arbitrator. The award may be enforced in
such manner as allowed by law.

                                      -25-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.

                                        SOURCE INTERLINK COMPANIES, INC.

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        ----------------------------------------
                                        S. Leslie Flegel

                                      -26-

<PAGE>

                                                                       EXHIBIT B

                          SHORT TERM INCENTIVE PROGRAM

DEFINITIONS.

"BUDGET"--means as to each fiscal year concluded during the Period of
Employment, an operating budget prepared by management and approved by the Board
on or before March 15 of each fiscal year; provided however that such operating
budget for the Company's fiscal year ending January 31, 2006 shall be prepared
by management and approved by the Board on or before April 30, 2005.

"CHALLENGE GRANT"--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.

"COMMITTEE"--means the Compensation Committee of the Board of Directors of
Source Interlink Companies, Inc.

"NOI"--means as to each fiscal concluded during the Period of Employment,
operating income as shown on the Company's annual audited financial statements
plus (a) compensation expense recorded in the income statement related to the
Challenge Grant 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 Company.

CALCULATION OF SHORT TERM INCENTIVE PAYMENT

The Short Term Incentive Payment shall be equal to that amount set forth in the
following table opposite the applicable percentage of NOI as shown on the Budget
for the fiscal year with respect to which the Short Term Incentive Payment is to
be determined represented by the NOI shown on the Company's annual financial
statements for such fiscal year:

<TABLE>
<CAPTION>
           NOI ACHIEVEMENT
(expressed as a percentage of Budget)
-------------------------------------       SHORT TERM
  EQUAL TO OR MORE THAN   LESS THAN     INCENTIVE PAYMENT
  ---------------------   ---------     -----------------
<S>                       <C>           <C>
             0                50%           $        0
            50%               80%           $  600,000
            80%              100%           $  750,000
           100%              105%           $  900,000
           105%              110%           $1,350,000
           110%              115%           $1,575,000
           115%           unlimited         $1,800,000
</TABLE>

                                      -27-

<PAGE>

ADJUSTMENT OF CALCULATION UPON ACQUISITION OR DISPOSITION. The Committee
reserves the right, but has no obligation, to adjust, upward or downward, the
NOI Achievement Percentages set forth above if during the Period of Employment
the Company completes the acquisition or disposition of a significant amount of
assets, otherwise than in the ordinary course of business. Any such adjustment
during the Period of Employment 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 Company 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 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.

PAYMENT OF SHORT TERM INCENTIVE PAYMENT. The Short Term Incentive Payment shall
be disbursed in cash to Executive as soon as practicable after January 31, but
in any case not later than the date on which the Annual Report on Form 10-K for
each of the Company's fiscal years ending during the Period of Employment is
filed with the U. S. Securities and Exchange Commission. To the extent required
by the law in effect at the time payments are made, the Company shall withhold
from payments made hereunder any taxes required to be withheld by the Federal or
any state or local government.

                                      -28-

<PAGE>

                                                                       EXHIBIT C

                        SOURCE INTERLINK COMPANIES, INC.

                             CHALLENGE GRANT PROGRAM

                             EFFECTIVE MARCH 1, 2005

                        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:

                                      -29-

<PAGE>

     (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");

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.

                                      -30-

<PAGE>

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.

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.

                                      -31-

<PAGE>

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>

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

                                      -32-

<PAGE>

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 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.

                                      -33-

<PAGE>

     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 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.

                                      -34-

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