SEPARATION, CONSULTING AND GENERAL RELEASE AGREEMENT

<PAGE>
                                                                    EXHIBIT 10.1


              SEPARATION, CONSULTING AND GENERAL RELEASE AGREEMENT


         This Separation, Consulting and General Release Agreement (this
"Agreement") is being entered into by and between Source Interlink Companies,
Inc. ("Source" or the "Company") and S. Leslie Flegel ("Flegel") (collectively,
the "Parties") as of the date of Flegel's execution of this Agreement (the "Date
of this Agreement"), subject to the provisions of Section 6(b) below.

         WHEREAS, Flegel was employed by the Company pursuant to an Employment
Agreement dated as of March 1, 2005 (the "Employment Agreement");

         WHEREAS, subject to the provisions of Section 6(b) below, the Parties
wish to terminate their employment relationship and the Employment Agreement on
mutually acceptable terms and conditions effective as of November 10, 2006; and

         THEREFORE in consideration of the foregoing promises and the terms and
conditions set forth below, the Parties agree as follows:

         1. Termination; Resignation from Board. Subject to the provisions of
Section 6(b) below, Flegel acknowledges the termination of his employment from
any and all positions within the Company or any of its affiliates, as an
employee, officer and/or director (or any comparable position) effective as of
November 10, 2006 (the "Termination Date"), and hereby resigns from such
positions. Subject to the provisions of Section 4 below, Flegel understands that
he is giving up any right or claim to compensation or benefits of employment
with the Company beyond the Termination Date, including without limitation, any
compensation, benefits or other rights under the Employment Agreement, except
that he shall be entitled to the compensation and benefits provided in this
Agreement and to payment of his annual bonus for 2006 in the amount of Nine
Hundred Thousand Dollars and Zero Cents ($900,000.00), less applicable
withholding. Such annual bonus will be payable in 2007 when other senior
management bonuses are paid, but in no event later than March 15, 2007. Subject
to the provisions of Section 6(b) below, Flegel resigns, effective as of the
Termination Date, as a director of the Company and Chairman of the Board of
Directors of the Company.

         2. Severance Payments. Provided that Flegel timely signs and delivers,
and does not revoke, this Agreement, Flegel shall be paid Four Million Six
Hundred Thousand Dollars and Zero Cents ($4,600,000.00) as a lump sum severance
payment, on May 21, 2007. In addition, Flegel shall continue to have use of his
current leased automobile at Company expense for the balance of the lease,
provided, however, that Flegel shall pay the lease costs for the first six (6)
months of the Term (as "Term" is defined in Section 3(a) below), and the Company
shall reimburse him for such payments on May 21, 2007. All remaining lease
payments after the first six (6) months of the Term will be paid by the Company
directly.

<PAGE>


         3. Consulting Agreement. Provided that Flegel timely signs and
delivers, and does not revoke, this Agreement, Flegel shall become a consultant
to the Company upon the terms set forth herein.

                  a. Term. The term of Flegel's consulting arrangement shall
begin on the Termination Date and end on the third anniversary of the
Termination Date, unless earlier terminated by the Company for "Cause" or due to
Flegel's death or disability (the "Term").

         For purposes of this Agreement, "Cause" shall mean a determination by
the Board of Directors of the Company (the "Board") that:

                           (1) Flegel has been convicted of or pleaded nolo
contendere to a felony;

                           (2) Flegel has at any time stolen, embezzled or
misappropriated any money, property or assets (tangible or intangible) of the
Company or its affiliates (de minimus personal use of office supplies,
equipment; or company services shall not constitute "Cause");

                           (3) Flegel has failed to comply with polices of the
Company or any laws, rules or regulations applicable to Flegel or the Company,
and has failed or refused to correct such failure within thirty (30) days after
written notice of such failure;

                           (4) Flegel has failed to fulfill his substantive
duties and responsibilities as set forth in Section 3(c) of this Agreement in
any material respect, and has failed or refused to correct such failure within
thirty (30) days after written notice of such failure;

                            (5) Flegel has failed to comply with any lawful
direction of the Board, the Chairman of the Board, the Chief Executive Officer
of the Company or such senior-level executive(s) as the Board and/or, the
Chairman of the Board or Chief Executive Officer may designate from time to time
to direct Flegel's services; or

                           (6) Flegel has materially breached any term of this
Agreement, including without limitation, any violation of the restrictions set
forth or referred to in Sections 9, 10, 11, 12, 13, 14, 15 and 16 of this
Agreement, which (if remediable) Flegel has failed or refused to correct within
thirty (30) days after written notice of such breach.

         The Company acknowledges that no facts disclosed prior to the date of
this Agreement to the Shareholder Designated Directors (as defined in the
Stockholder's Agreement dated February 28, 2005) either in writing or during
Board of Directors meetings constitute


                                       2
<PAGE>


"Cause" for terminating this Agreement; provided, however, that such
acknowledgement is only effective to the extent any such facts were fully and
accurately disclosed.

                  "Disability" shall mean a determination by the Board that
Flegel has been unable to perform consulting services effectively for ninety
(90) or more consecutive days, or for one hundred twenty (120) or more days in
any calendar year.

                  In the event of a termination of Flegel's consulting services
for "Cause", the Company shall notify Flegel in writing of the date of such
termination, and the grounds for such termination. In the event of a termination
of Flegel's consulting services for "Cause," Disability," or death, the Company
shall have no further obligation to provide any future payments or benefits
pursuant to this Agreement after the Termination Date, except the Company shall
remain obligated to pay the $900,000.00 annual bonus as set forth in Section 1,
the $4,600,000.00 severance payment as set forth in Section 2, any un-reimbursed
automobile expenses incurred during the Term as set forth in Section 2, any
Earned but Unpaid Monthly Fee as set forth in Section 3(d), any Earned but
Unpaid Joint Venture Bonus as set forth in Section 3(e)(1), any Earned but
Unpaid Magazine Bonus as set forth in Section 3(e)(2), any Earned but Unpaid
Music Bonus as set forth in Section 3(e)(3), reimbursement for healthcare
insurance paid by Flegel during the Term as set forth in Section 3(g), any
un-reimbursed expenses incurred during the Term as set forth in Section 3(h),
and any Earned but Unpaid payment under Section 5.5. For purposes of this
Section 3(a) and Section 13(c) below, "Earned but Unpaid" with respect to the
bonuses provided for in Section 3(e)(1), (2) and (3) shall mean that all events
required to have occurred for Flegel to be entitled to payment of a bonus have
occurred during the Term and within the time frames required under Sections
3(e)(1), (2) and/or (3), as applicable, but the bonus has not yet been paid. For
purposes of this Section 3(a) and Section 13(c) below, "Earned but Unpaid" with
respect to the Monthly Fee shall mean the unpaid Monthly Fee multiplied by the
number of completed months of service during the Term. With respect to any
payment under Section 5.5, "Earned but Unpaid" shall mean an Excise Tax Gross-Up
Payment under Section 5.5 with respect to payments under this Agreement, made to
Flegel during the Term or that are Earned but Unpaid during the Term, that are
subject to the Excise Tax. Notwithstanding any provision of this paragraph, in
the event that Flegel's consulting services were terminated for "Cause" or
"Disability" or Flegel died in the middle of a month, Flegel shall be paid a
portion of the Monthly Fee, defined in Section 3(d) below, for that month,
pro-rated in accordance with Section 3(d).

                           b. Reporting Relationship. Flegel shall report to the
Board, the Chairman of the Board and the Chief Executive Officer of the Company
or such senior-level executive(s) as the Board and/or the Chairman of the Board
or Chief Executive Officer may designate from time to time.

                           c. Duties. The Company hereby appoints Flegel as an
independent consultant to the Company, and Flegel hereby accepts such
appointment. During the Term, Flegel shall provide such consulting services to
the Company and its subsidiaries, during normal business hours, as the Board of
Directors or the Chairman of the Board or the Chief Executive Officer of the
Company may reasonably request, from


                                       3
<PAGE>


time to time, in connection with (among other things) high-level strategic
planning, merger and acquisition transactions, investor relations, customer
relations, contract negotiation, litigation, financial affairs, operations and
executive recruitment, including, without limitation, assisting the Company in
the formation of strategic ventures, negotiating agreements with certain
prospective customers and assisting the Company in any and all respects with the
pursuit or defense of any investigations, claims, disputes or litigation. This
Agreement does not create any employment or agency relationship between Flegel
and the Company. The relationship of Flegel during the Term will be solely as an
independent contractor to the Company. The Company has not authorized Flegel to,
and Flegel acknowledges that he has no authority to, commit, bind or speak for
the Company, and Flegel shall not knowingly do any act which might cause any
third party to reasonably believe that Flegel has the power or authority to
contract or incur any commitment on behalf of Company, or that Flegel is an
employee or agent of Company.

                  d. Consulting Fees. Subject to Section 5 below, Flegel shall
be paid Eighty Three Thousand Three Hundred Thirty Three Dollars Thirty Three
Cents ($83,333.33) per calendar month during the Term (the "Monthly Fee"). The
Monthly Fee shall be paid in accordance with, and on such dates as, base
compensation is paid to senior executive employees of the Company; provided
however, that the Monthly Fee for the first six months of the Term shall be paid
on May 21, 2007. To the extent that the Term begins and/or ends in the middle of
a calendar month, Flegel shall be paid a portion of the Monthly Fee determined
by multiplying the Monthly Fee by a fraction the numerator of which is the
number of days in that month that fall within the Term and the denominator of
which is the total number of days in that month.

                  e. Consulting Bonus Payments. Flegel shall be eligible for
three bonus payments during the Term:

                           (1) Joint Venture Bonus. If prior to the eighteen
(18) month anniversary of the Date of this Agreement, the Company enters into
definitive agreement(s) regarding a joint venture with the parties listed on
Schedule 1 hereto then within fifteen (15) business days after entering into
such definitive agreement(s), the Company shall, subject to Section 5 below, pay
Flegel One Million Dollars and Zero Cents ($1,000,000.00);

                           (2) Magazine Bonus. If prior to the twelve (12) month
anniversary of the Date of this Agreement, the Company enters into the
definitive agreement(s) described on Schedule 2 , then within fifteen (15)
business days after entering into such definitive agreement(s), the Company
shall, subject to Section 5 below, pay Flegel One Million Dollars and Zero Cents
($1,000,000.00); and

                           (3) Music Bonus. If the Company enters into the
definitive agreement(s) described on Schedule 3, then within the time period
referenced on Schedule 3, the Company shall, subject to Section 5 below, pay
Flegel bonuses totaling up to Two Million Dollars and Zero Cents
($2,000,000.00).


                                        4
<PAGE>


                  The Company shall have sole and absolute discretion to
determine whether or not to pursue the joint venture or agreement(s) referenced
above and nothing in this Agreement shall be interpreted to obligate the Company
to pursue such agreement(s) or approve or agree to any joint venture or
agreement(s) referenced above. If the Company pursues such joint venture or
agreement(s), then the Company shall have sole and absolute discretion to accept
or reject any proposed terms related thereto and to elect not to enter into any
definitive agreement(s). If the Company elects for any reason not to pursue the
joint venture or agreement(s) referenced above, or pursues but ultimately elects
for any reason not to enter into definitive agreement(s) within the time periods
referenced above, the Company shall have no liability to Flegel and no
obligation pay Flegel any of the bonus payments referenced above.

                           f. Office Facility and Support. Until the first
anniversary of the Date of the Agreement, the Company shall provide Flegel with
an office and an assistant. The office shall be at the Company's headquarters or
a location that the Company determines to be suitable for Flegel's performance
of his consulting services required under this Agreement. Notwithstanding the
forgoing, if before the first anniversary of the Date of this Agreement, the
proposed joint venture describe in Section 3(e)(i) provides Flegel with an
office and assistant, then the Company shall be relieved of its obligation under
this Section 3(f) to do so.

                           g. Healthcare Insurance. During the Term, the Company
shall provide, at the Company's expense, Flegel with healthcare insurance
substantially similar to that provided to Flegel immediately prior to the
execution of this Agreement. Provided, however, that Flegel shall pay the costs
of such participation for the first six months of the Term, and the Company
shall reimburse Flegel for such payments on May 21, 2007. To accomplish this
provision, the Company shall, if practicable, provide for Flegel's participation
in the Company's healthcare insurance plan. In the event that the Company cannot
include Flegel in the Company's healthcare insurance plan, the Company may
satisfy a part of its obligations under this Section by paying Flegel's COBRA
premium so long as he remains eligible for COBRA benefits during the Term;
provided, however, that Flegel shall pay the costs of such participation for the
first six (6) months of the Term, and the Company shall reimburse him for such
payments on May 21, 2007. In the event that the Term extends beyond the COBRA
coverage period, the Company shall arrange for healthcare insurance for Flegel
substantially similar to the coverage provided under the Company's plan then in
effect, at the Company's expense. In the event that it is not practicable for
the Company to arrange for healthcare coverage substantially similar to coverage
provided under the Company's plan after the expiration of the COBRA period,
Flegel agrees to enroll in Medicare and the Company agrees to provide, at the
Company's expense, Medicare supplemental insurance to Flegel. Such Medicare and
Medicare supplemental insurance to provide, to the extent practicable, coverage
for Flegel substantially similar to the coverage provided under the Company's
plan then in effect. Notwithstanding the foregoing, if Flegel becomes eligible
for healthcare benefits under a plan or program of the joint venture described
in Section 3(e)(1), the Company shall be relieved of its obligation under this
Section 3(g) at such time as Flegel becomes eligible for such healthcare
benefits. The Company's obligations


                                       5
<PAGE>


under this Section 3(g) shall be contingent upon Flegel's reasonable cooperation
with any application or other process necessary to secure insurance.

                           h. Except as set forth in Section 3(g), Flegel
acknowledges that during the Term and as an independent contractor, Flegel will
not be eligible for or receive any benefits for which employees of the Company
are eligible. Notwithstanding the above, the Parties anticipate that Flegel will
assume responsibility and pay for the Two Million Dollar and Zero Cent
($2,000,000.00) ten year term life insurance policy issued by Banner Life
(policy number 17B812262) and/or the One Million Dollar and Zero Cent
($1,000,000.00) ten year term life insurance policy issued by United of Omaha
(policy number Bu1053878). The Company hereby agrees to reasonably cooperate
with Flegel to effectuate his assumption of responsibility for one or both of
these policies.

                           i. Expense Reimbursement. The Company shall pay
directly, or shall reimburse for, reasonable and necessary expenses approved in
advance by the Company's Chief Financial Officer and incurred by Flegel during
the Term in the interest of the business of the Company. In the event Flegel is
required to travel to perform his duties under Section 3(c) of this Agreement,
his travel expenses and accommodations shall be consistent with Company's
regular practices for reimbursing senior executives' travel. All such expenses
paid by Flegel shall be promptly reimbursed by the Company upon presentation by
Flegel 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.

                  4. Sole Financial Obligation. The compensation and benefits
set forth in Sections 1, 2 and 3 of this Agreement are the sole and exclusive
financial obligations of the Company to Flegel under this Agreement or otherwise
in connection with Flegel's employment, consulting, or the termination of his
employment or consulting. Notwithstanding the above, Flegel's rights under any
applicable retirement, 401k, pension, stock, stock option, restricted stock
plan, the Company's Nonqualified Excess Plan effective January 1, 1997 and the
Company's Deferred Compensation Plan effective July 1, 2005 shall not be
modified by this Agreement, and his rights shall be consistent with the
provisions of such plans and agreements entered into pursuant to those plans.
Flegel understands that, leaving aside any rights under any applicable
retirement, 401k, pension, stock, stock option, restricted stock plan, the
Company's Nonqualified Excess Plan effective January 1, 1997 or the Company's
Deferred Compensation Plan effective July 1, 2005 and leaving aside Flegel's
right to indemnification under applicable law and the Company's articles and
bylaws for claims brought against him arising out of his service as an officer
and/or director of the Company and its subsidiaries and affiliates, he is
otherwise giving up any and all rights and benefits of employment.

                  5. Tax Withholding. The Company shall withhold from any
payment or benefit under Sections 1 and 2 of this Agreement any and all
withholding taxes it believes are required by applicable law, and to otherwise
take all actions it believes necessary to satisfy it


                                       6
<PAGE>


obligations to pay such withholding taxes. With regard to payment and benefits
provided under Section 3 of this Agreement, because Flegel will serve as 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 Flegel an Internal
Revenue Service Form 1099 at the time, in the manner and containing the
information required by the Internal Revenue Code of 1985, as amended (the
"Code"). Flegel 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.

                  5.5. Excise Tax.

                           a. If any of the amounts Flegel would receive under
this Agreement will be subject to the tax imposed by Section 4999 of the Code,
(the "Excise Tax") (or any similar tax that may hereafter be imposed), the
Company shall also pay to Flegel in cash an additional amount (the "Excise Tax
Gross-up Payment") such that the net amount retained by Flegel, after deduction
from payments received pursuant to this Agreement (the "Affected Payments") and
the Excise Tax Gross-up Payment of any Excise Tax imposed upon the Affected
Payments and any federal, state, local and other taxes (including income taxes,
payroll taxes, Excise Tax and any other taxes) imposed upon the Excise Tax
Gross-up Payment, shall be equal to the original amount of the Affected
Payments, prior to deduction of any Excise Tax imposed with respect to the
Affected Payments. The Excise Tax Gross-up Payment is intended to place Flegel
in the same economic position he would have been in if the Excise Tax did not
apply. For purposes of determining the Excise Tax Gross-up Payment pursuant to
this Agreement, the Affected Payments shall also include any amounts which would
be considered "parachute payments" (within the meaning of Section 280G(b)(2) of
the Code) to Flegel paid pursuant to this Agreement such that the Company will
absorb the full cost of any Excise Tax thereon and all taxes relating to the
Compan