<PAGE>   1
                                                                    EXHIBIT 10.6

                           FIRST AMENDMENT dated as of October 5, 2001 (this
                  "Amendment"), to the Amended and Restated Credit Agreement
                  dated as of April 27, 2001 (the "Credit Agreement"), among
                  MTS, INCORPORATED, a California corporation ("MTS"); TOWER
                  RECORDS KABUSHIKI KAISHA, a Japanese corporation ("TRKK" and,
                  together with MTS, the "Borrowers"); the LENDERS party thereto
                  (the "Lenders"); and THE CHASE MANHATTAN BANK, as
                  Administrative Agent (the "Agent").

                  WHEREAS the Borrowers have requested that certain provisions
of the Credit Agreement be amended in the manner provided for in this Amendment,
and the Lenders are willing to agree to such amendments on the terms and
conditions hereinafter set forth.

                  NOW, THEREFORE, the parties hereto hereby agree as follows:

                  1. Defined Terms. Capitalized terms used and not defined
herein shall have the meanings given to them in the Credit Agreement, as amended
hereby.

                  2. Amendments to Credit Agreement.
(a) Section 1.01 of the Credit Agreement is hereby amended by amending the
definition of "EBITDA" to replace the reference therein to "US$10,500,000" with
a reference to "US$12,500,000".

                  (b) Paragraph (b) of Section 2.09 of the Credit Agreement is
hereby amended and restated in its entirety as follows:

                  "(b) The Commitments will be automatically reduced, pro rata
     as between Facility A and Facility B (based on the respective aggregate
     amounts of the Facility A Commitments and the Facility B Commitments and on
     Exchange Rates prevailing on the dates of such Commitment reductions), (i)
     on July 31, 2001, by US$15,000,000, (ii) on October 5, 2001, by an
     additional US$5,000,000 and (iii) on December 31, 2001, by an additional
     US$10,000,000, in each case in addition to any reductions made pursuant to
     paragraph (d) below (other than any such reductions resulting from the
     receipt of net cash proceeds from the monetization of the cash surrender
     value of life insurance maintained by the Parent, MTS or any Subsidiary,
     which shall be credited against the reductions required to be made under
     this paragraph), and the Facility A Borrowings and Facility B Borrowings
     will be prepaid to the extent required under paragraph (c) below after
     giving effect to such reductions."

<PAGE>   2
                  (c) Section 5.01 of the Credit Agreement is hereby further
     amended by (i) in the lead-in sentence to the Section, adding the words
     "(except in the case of paragraph (l))" immediately after the words "The
     Borrowers' Agent will furnish to the Administrative Agent and",
     (ii)deleting the word "and" appearing at the end of paragraph (k), (iii)
     relettering existing paragraph (l) as paragraph (m) and (iv) adding a new
     paragraph (l) as follows:

                  "(l) promptly (on a basis acceptable to the Administrative
          Agent) after receipt thereof, delivery to the Administrative Agent
          (which shall not be under any obligation to forward such information
          to the Lenders) of any bids received in connection with any proposed
          sale of the businesses, operations and/or assets of MTS and the
          Subsidiaries; and"

                  (d) Section 5.13 of the Credit Agreement is hereby amended by
     deleting paragraphs (d) and (e)thereof.

                  (e) Section 6.13 of the Credit Agreement is hereby amended and
     restated in its entirety as follows:

                  "SECTION 6.13. EBITDA. The Borrowers will not permit EBITDA of
          MTS and the Subsidiaries for any period set forth below to be less
          than the amount set forth below opposite such period:

<TABLE>
<CAPTION>
                  Period                               Min EBITDA
                  ------                               ----------
<S>                                                    <C>
                  02/01/01 - 04/30/01                  US$ 7,580,000
                  03/01/01 - 05/31/01                     11,410,000
                  04/01/01 - 06/30/01                     11,330,000
                  05/01/01 - 07/31/01                     11,500,000
                  08/01/01 - 08/31/01                      2,000,000
                  08/01/01 - 09/30/01                      4,225,000
                  08/01/01 - 10/31/01                      6,350,000
                  09/01/01 - 11/30/01                      7,750,000
                  10/01/01 - 12/31/01                     17,500,000
                  11/01/01 - 01/31/02                     19,600,000
                  12/01/01 - 02/28/02                     18,320,000
                  01/01/02 - 03/31/02                     10,050,000"
</TABLE>

                  (f) Section 6.14 of the Credit Agreement is hereby amended and
     restated in its entirety as follows:

                      "SECTION 6.14. Leverage Ratio. The Borrowers will not
          permit the Leverage Ratio as of any date during any period set forth
          below to be greater than the ratio set forth below opposite such
          period:
<PAGE>   3

<TABLE>
<CAPTION>
                  Period                                Ratio
                  ------                                -----
<S>               <C>                                   <C>
                  04/27/01 - 05/30/01                   11.17:1.00
                  05/31/01 - 06/29/01                    7.37:1.00
                  06/30/01 - 07/30/01                    7.08:1.00
                  07/31/01 - 08/30/01                    7.10:1:00
                  08/31/01 - 09/29/01                          N/A
                  09/30/01 - 10/30/01                          N/A
                  10/31/01 - 11/29/01                   12.75:1.00
                  11/30/01 - 12/30/01                   10.60:1.00
                  12/31/01 - 01/30/02                    4.25:1:00
                  01/31/02 - 02/27/02                    4.00:1:00
                  02/28/02 - 03/30/02                    4.35:1.00
                  03/31/02 - 04/23/02                    7.80:1.00"
</TABLE>


                  (g) Clause (iv) of Section 9.02(b) is hereby amended by
     deleting the reference therein to "5.13".

                  3. Effect of Amendments. Except as expressly set forth herein,
this Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights or remedies of the Lenders, the
Collateral Agent or the Administrative Agent under the Credit Agreement, as
amended by this Amendment, or any other Loan Document, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement, as amended by this
Amendment, or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect. Nothing herein shall
be deemed to entitle the Borrower to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement, as amended by this
Amendment, or any other Loan Document in similar or different circumstances.
This Amendment shall apply and be effective only with respect to the provisions
of the Credit Agreement set forth herein. After the date hereof, any reference
to the Credit Agreement shall mean the Credit Agreement as modified hereby. This
Amendment shall constitute a "Loan Document" for all purposes of the Credit
Agreement and the other Loan Documents. The date referred to in Section
2.09(b)(ii), as amended by Section 2(b) hereof, shall mean October 5, 2001, New
York City time.

                  4. Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Lenders as of the date hereof as
follows:

                  (a) No Default or Event of Default has occurred and is
continuing.

                  (b) The execution, delivery and performance by the Borrower of
this Amendment have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, notice to

<PAGE>   4

or action by, any person (including any governmental agency) in order to be
effective and enforceable. The Credit Agreement as amended by this Amendment
constitutes the legal, valid and binding obligation of the Borrower, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

                  (c) All representations and warranties of the Borrower
contained in Article III of the Credit Agreement (other than representations or
warranties expressly made only on and as of the Restatement Effective Date) are
true and correct in all material respects as of the date hereof.

                  5. Effectiveness. This Amendment shall become effective (the
"Amendment Effective Date") only upon satisfaction of the following conditions
prior to 5:00 p.m., New York time, on October 5, 2001:

                  (i) the Agent shall have received counterparts hereof duly
     executed and delivered by the Borrower and the Lenders; and

                  (ii) the Borrower shall have paid an amendment fee to each
     Lender that has delivered an executed counterpart of this Amendment to the
     Agent by the Amendment Effective Date, equal to 0.375% of the aggregate
     amount of such Lender's Loans and unused Commitments (such payment to be
     made by wire transfer of immediately available funds to the Agent for the
     respective accounts of such Lenders).

Once effective, the amendments set forth in this Amendment shall be retroactive
to September 30, 2001.

                  6. Expenses. The Borrower agrees to reimburse the Agent for
its out-of-pocket expenses in connection with this Amendment, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Moore, counsel
for the Agent.
<PAGE>   5

                  7. GOVERNING LAW; COUNTERPARTS. (a) THIS AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAW PRINCIPLES.

                  (b) This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which together shall constitute a single instrument. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart hereof.

                  8. Submission to Jurisdiction. The provisions of Section 9.09
of the Credit Agreement shall apply mutatis mutandis to this Amendment and any
action or proceeding in respect hereof.

<PAGE>   6
                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.

                                       MTS, INCORPORATED,

                                       By /s/ Russell Solomon
                                           -------------------------------------
                                       Name: Russell Solomon
                                       Title: Chairman


                                       TOWER RECORDS KABUSHIKI KAISHA,

                                       By /s/ Michael Solomon
                                           -------------------------------------
                                       Name: Michael Solomon
                                       Title: Director


                                       THE CHASE MANHATTAN BANK,
                                       Individually and as Administrative Agent

                                       By  /s/ Susan E. Atkins
                                           -------------------------------------
                                       Name: Susan E. Atkins
                                       Title: Managing Director
<PAGE>   7
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT



                                                To approve the First Amendment:

                                               Name of Institution: BNP Paribas

                                            By: /s/ Edward V. Canale
                                                -------------------------------
                                            Name: Edward V. Canale
                                            Title: Managing Director


                                            By: /s/ Barbara Eppolito
                                                -------------------------------
                                            Name: Barbara Eppolito
                                            Title: Vice President

<PAGE>   8
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                                   Name of Institution: California Bank & Trust

                                         By: /s/ Thomas C. Paton, Jr.
                                             ----------------------------------
                                         Name: Thomas C. Paton, Jr.
                                         Title: Senior Vice President & Manager




<PAGE>   9

                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT



                                                 To approve the First Amendment:

                                 Name of Institution: First Union National Bank

                                              By: /s/ M. G. Hyde
                                                  -----------------------------
                                              Name: M. G. Hyde
                                              Title: Director

<PAGE>   10
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                                    Name of Institution: The Fuji Bank, Limited

                                              By: /s/ Masahito Fukuda
                                                  -----------------------------
                                              Name: Masahito Fukuda
                                              Title: Senior Vice President

<PAGE>   11
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                                       Name of Institution: Lloyds TSB Bank PLC


                                   By: /s/ David Rodway
                                       ----------------------------------------
                                   Name: David Rodway
                                   Title: Vice President, Credit Services, USA


                                   By: /s/ Mark Grant
                                       ---------------------------------------
                                   Name: Mark Grant
                                   Title: Senior V.P. & Chief Credit Officer




<PAGE>   12
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

              Name of Institution: The Mitsubishi Trust and Banking Corporation

                                                   By: /s/ Makoto Ueno
                                                       ------------------------
                                                   Name: Makoto Ueno
                                                   Title: Joint General Manager

<PAGE>   13

                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                                            Name of Institution: Sanwa Bank Ltd


                                                    By: /s/ Patrick Mansoorian
                                                        -----------------------
                                                    Name: Patrick Mansoorian
                                                    Title: Vice President
<PAGE>   14

                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                                          Name of Institution: Societe Generale


                                             By: /s/ R. Wayne Hutton
                                                 ------------------------------
                                             Name: R. Wayne Hutton
                                             Title: Director, Corporate Banking





<PAGE>   15
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                       Name of Institution: Sumitomo Mitsui Banking Corporation

                                                    By: /s/ William M. Ginn
                                                        -----------------------
                                                    Name: William M. Ginn
                                                    Title: General Manager




<PAGE>   16
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                            Name of Institution: Union Bank of California, N.A.


                                                   By: /s/ Cecilia M. Valente
                                                       ------------------------
                                                   Name: Cecilia M. Valente
                                                   Title: Senior Vice President
<PAGE>   17
                                                              SIGNATURE PAGE to
                                                    FIRST AMENDMENT dated as of
                                                                October 5, 2001
                                                          to MTS, INCORPORATED/
                                                 TOWER RECORDS KABUSHIKI KAISHA
                                          AMENDED AND RESTATED CREDIT AGREEMENT




                                                To approve the First Amendment:

                                 Name of Institution: U.S. Bank National Assoc.


                                                          By: /s/ Mark A. Esnoz
                                                              -----------------
                                                          Name: Mark A. Esnoz
                                                          Title: Vice President