Document:

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                                                                 EXHIBIT 10.29

                 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

         THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of January 27, 2003, is entered into by and among the
lenders signatory hereto (the "Lenders"), THE CIT GROUP/BUSINESS CREDIT, INC., a
New York corporation, as agent (in such capacity, "Agent") for the Lenders,
MTS, INCORPORATED, a California corporation, and THREE A'S HOLDINGS, L.L.C., a
Delaware limited liability company (each a "Borrower" and collectively,
"Borrowers").

                                    RECITALS

         A.       Borrowers, Agent and the Lenders have previously entered into
that certain Loan and Security Agreement, dated October 9, 2002, as amended by
that certain First Amendment to Loan and Security Agreement, dated November 18,
2002 (as amended, the "Loan Agreement"), pursuant to which the Lenders have made
certain loans and financial accommodations available to Borrowers. Terms used
herein without definition shall have the meanings ascribed to them in the Loan
Agreement.

         B.       Agent, the Lenders and Borrowers now wish to amend the Loan
Agreement on the terms and conditions set forth herein.

         C.       Borrowers are entering into this Amendment with the
understanding and agreement that, except as specifically provided herein, none
of Agent's or any Lender's rights or remedies as set forth in the Loan Agreement
is being waived or modified by the terms of this Amendment.

                                    AMENDMENT

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

         1.       Amendments to Loan Agreement.

                  (a)      Section 1.84 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:

                           "1.84    "Maximum Credit" shall mean the amount of
                           One Hundred Million Dollars ($100,000,000)."

                  (b)      Section 1.114 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:

                           "1.114   "Real Estate Subline" shall mean, as of any
                           date of determination, the lesser of (a) Seven
                           Million Five Hundred Thousand Dollars ($7,500,000) or
                           (b) twenty-five percent (25%) of the fair market
                           value (as determined by an appraiser selected by
                           Borrowers and acceptable to Agent

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                           but subject to adjustment by Agent, in its reasonable
                           credit judgment, for any conditions or events
                           subsequently occurring or made known to Agent with
                           respect thereto) of the Real Property Collateral;
                           provided, however, such amount shall be reduced as
                           provided for in Section 2.3(b) hereof."

                  (c)      Section 1.125 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:

                           "1.125   "Revolving Loan Limit" shall mean, as of any
                           date of determination, (a) the Maximum Credit, minus
                           (b) the sum of (i) the then outstanding aggregate
                           amount of all Real Estate Loans, (ii) the then
                           outstanding amount of the Term Loan and (iii) the
                           aggregate amount of all issued and undrawn Letter of
                           Credit Accommodations."

                  (d)      Section 9.2 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:

                           "9.2     New Collateral Locations. No Borrower or any
                           Subsidiary of any Borrower, may open any new store,
                           retail location or other location without the prior
                           written consent of Agent and the Required Lenders;
                           provided, however, any Borrower may relocate an
                           existing location within the continental United
                           States so long as (a) such Borrower gives Agent
                           thirty (30) days prior written notice from such
                           Borrower of such intended relocation, (b) such
                           Borrower obtains the prior written consent of Agent
                           with respect to such relocation, which consent shall
                           be granted or withheld in Agent's reasonable credit
                           judgment based on a review of all matters related
                           thereto, (c) such Borrower executes and delivers, or
                           causes to be executed and delivered, to Agent such
                           agreements, documents, and instruments as Agent may
                           deem necessary or desirable to protect Agent's and
                           the Lenders' interests in the Collateral at such
                           location (including, without limitation, Collateral
                           Access Agreements and/or leasehold mortgages) or, in
                           the alternative, Agent may apply an Availability
                           Reserve accordance with the terms of this Agreement,
                           and (d) such relocation does not cause the number of
                           relocations by both Borrowers to exceed 10
                           relocations in any fiscal year."

                  (e)      Section 11.3(b)(v)of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:

                           "(v)     any increase in the borrowing availability
                           under this Agreement including any increase in
                           advance rates, reduction of reserves or any
                           amendment, modification or waiver of the terms of the
                           definitions of or any provisions relating to (or
                           application of discretionary criteria in any manner
                           resulting in an increase to amounts available
                           pursuant to such definitions and provisions relating
                           to) (A) Borrowing Base, (B) Eligible Inventory, (C)
                           Eligible Merchant Payment Receivables, (D) Excess
                           Availability, (E) Availability Reserves, (F) Net
                           Orderly Liquidation

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                           Value, (G) Revolving Loan Limit, (H) In-Transit
                           Inventory, (I) Rental Inventory or (J) Return to
                           Vendor Inventory, except to the extent such
                           amendments or modifications have the effect of making
                           such definitions more restrictive;"

         2.       Effectiveness of this Amendment. Agent must have received the
following items, in form and content acceptable to Agent, before this Amendment
is effective, and before the Lenders are required to extend any further credit
to Borrowers as provided for by this Amendment:

                  (a)      Amendment; Guarantors' Acknowledgement. This
Amendment and the attached Acknowledgement by Guarantors, each fully executed in
a sufficient number of counterparts for distribution to all parties.

                  (b)      Amended and Restated Note. An original Amended and
Restated Revolving Loan Promissory Note, in the form of Exhibit A hereto,
executed by each Borrower.

                  (c)      Fees. The fees required to be paid under the terms of
the Fee Letter shall have been paid in full by Borrowers.

                  (d)      Representations and Warranties. The representations
and warranties set forth herein and in the Loan Agreement must be true and
correct.

                  (e)      Other Required Documentation. All other documents and
legal matters in connection with the transactions contemplated by this
Amendment.

         3.       Representations and Warranties. Borrowers represents and
warrants as follows:

                  (a)      Authority. Each Borrower has the requisite corporate
power and authority to execute and deliver this Amendment, and to perform its
obligations hereunder and under the Financing Agreements (as amended or modified
hereby) to which it is a party. The execution, delivery and performance by each
Borrower of this Amendment have been duly approved by all necessary corporate
action and no other corporate proceedings are necessary to consummate such
transactions.

                  (b)      Enforceability. This Amendment has been duly executed
and delivered by each Borrower. This Amendment and each Financing Agreement (as
amended or modified hereby) is the legal, valid and binding obligation of each
Borrower, enforceable against such Borrower in accordance with its terms, and is
in full force and effect.

                  (c)      Representations and Warranties in Financing
Agreements. The representations and warranties contained in each Financing
Agreement (other than any such representations or warranties that, by their
terms, are specifically made as of a date other than the date hereof) are
correct on and as of the date hereof as though made on and as of the date
hereof.

                  (d)      Due Execution. The execution, delivery and
performance of this Amendment are within the power of each Borrower, have been
duly authorized by all necessary

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corporate action, have received all necessary governmental approval, if any,
and do not contravene any law or any contractual restrictions binding on any
Borrower.

         4.       Choice of Law. The validity of this Amendment, its
construction, interpretation and enforcement, the rights of the parties
hereunder, shall be determined under, governed by, and construed in accordance
with the internal laws of the State of California governing contracts only to be
performed in that State.

         5.       Counterparts. This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.

         6.       Reference to and Effect on the Financing Agreements.

                  (a)      Upon and after the effectiveness of this Amendment,
each reference in the Loan Agreement to "this Agreement", "hereunder", "hereof"
or words of like import referring to the Loan Agreement, and each reference in
the other Financing Agreements to "the Loan Agreement", "thereof" or words of
like import referring to the Loan Agreement, shall mean and be a reference to
the Loan Agreement as modified and amended hereby.

                  (b)      Except as specifically amended above, the Loan
Agreement and all other Financing Agreements, are and shall continue to be in
full force and effect and are hereby in all respects ratified and confirmed and
shall constitute the legal, valid, binding and enforceable obligations of each
Borrower to Agent and the Lenders.

                  (c)      The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of Agent or any Lender under any of the Financing
Agreements, nor constitute a waiver of any provision of any of the Financing
Agreements.

                  (d)      To the extent that any terms and conditions in any of
the Financing Agreements shall contradict or be in conflict with any terms or
conditions of the Loan Agreement, after giving effect to this Amendment, such
terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.

         7.       Ratification. Each Borrower hereby restates, ratifies and
reaffirms each and every term and condition set forth in the Loan Agreement, as
amended hereby, and the Financing Agreements effective as of the date hereof.

         8.       Estoppel. To induce Agent and the Lenders to enter into this
Amendment and to continue to make advances to Borrowers under the Loan
Agreement, each Borrower hereby acknowledges and agrees that, as of the date
hereof, there exists no Event of Default and no right of offset, defense,
counterclaim or objection in favor of such Borrower as against Agent or any
Lender with respect to the Obligations.

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         9.       Integration. This Amendment, together with the other Financing
Agreements, incorporates all negotiations of the parties hereto with respect to
the subject matter hereof and is the final expression and agreement of the
parties hereto with respect to the subject matter hereof.

         10.      Severability. In case any provision in this Amendment shall be
invalid, illegal or unenforceable, such provision shall be severable from the
remainder of this Amendment and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

         11.      Additional Lender. By its signature hereto and as of the
effective date of this Amendment (the "Effective Date"), GMAC Business Credit,
LLC, a Delaware limited liability company ("GMAC"), shall be a party to the Loan
Agreement as a Lender and succeed to all of the rights and be obligated to
perform all of the obligations of a Lender under the Loan Agreement, including
the requirements concerning confidentiality and the payment of indemnification,
with a Commitment in an amount equal to the amount set forth below its signature
hereto. GMAC agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender. As of the Effective Date, the Loan Commitments of
each of the Lenders are as set forth below their signatures hereto. On the
Effective Date, GMAC shall transfer to Agent, in immediately available funds, an
amount equal to its Pro Rata Share of the principal amount of all Committed
Loans outstanding as of the date hereof. Without limiting any of the foregoing
or the effectiveness of any provision of the Loan Agreement, GMAC:

                  (a)      acknowledges that it has received a copy of the Loan
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements of Borrowers, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to become a party to the Loan Agreement;

                  (b)      agrees that it will, independently and without
reliance upon Agent or any Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit and
legal decisions in taking or not taking action under the Loan Agreement;

                  (c)      appoints and authorizes The CIT Group/Business
Credit, Inc. in its capacity as Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Agreement as are delegated to Agent;

                  (d)      represents and warrants to Agent and each Borrower
that under applicable law and treaties no tax will be required to be withheld by
Agent or any Borrower with respect to any payments to be made to GMAC under the
Loan Agreement or any other Financing Agreements;

                  (e)      agrees to furnish (if it is organized under the laws
of any jurisdiction other than the United States or any State thereof) to Agent
and Borrowers prior to the time that Agent or Borrowers are required to make any
payment of principal, interest or fees hereunder, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein GMAC claims entitlement to the benefits of a tax
treaty that

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provides for a complete exemption from U.S. federal income withholding tax on
all payments hereunder) and agrees to provide new Forms 4224 or 1001 upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by GMAC and agrees to comply with all applicable U.S.
laws and regulations with regard to such withholding tax exemption; and

                  (f)      represents and warrants to the parties hereto that
(i) it is duly organized and existing and it has full power and authority to
take, and has taken, all action necessary to execute and deliver this Amendment
and any other documents required or permitted to be executed or delivered by it
in connection with this Amendment or the Loan Agreement, and to fulfill its
obligations hereunder, (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Amendment, and apart
from any agreements or undertakings or filings required by the Loan Agreement,
no further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance, and (iii) this Amendment has been
duly executed and delivered by it and constitutes the legal, valid and binding
obligation of it, enforceable against it in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights to general equitable principles.

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         IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.

                                            M T S, INCORPORATED,
                                            a California corporation

                                            By: ________________________________
                                            Name: Michael T. Solomon
                                            Title:President

                                            THREE A'S HOLDINGS, L.L.C.,
                                            a Delaware limited liability company

                                            By: ________________________________
                                            Name: Michael T. Solomon
                                            Title:Manager

                                            THE CIT GROUP/BUSINESS CREDIT, INC.,
                                            a New York corporation,
                                            as Agent and as a Lender

                                            By: ________________________________
                                            Name: Adrian Avalos
                                            Title:Vice President

                                            Loan Commitment: $35,000,000

                                            CONGRESS FINANCIAL CORPORATION
                                            (WESTERN),
                                            a California corporation

                                            By: ________________________________
                                            Name: ______________________________
                                            Title: _____________________________

                                            Loan Commitment: $15,000,000

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                                            FLEET RETAIL FINANCE, INC.,
                                            a Delaware corporation

                                            By: ________________________________
                                            Name: ______________________________
                                            Title: _____________________________

                                            Loan Commitment: $25,000,000

                                            GMAC BUSINESS CREDIT, LLC,
                                            a Delaware limited liability company

                                            By: ________________________________
                                            Name: ______________________________
                                            Title: _____________________________

                                            Loan Commitment: $25,000,000

                                            Address for Notices:

                                            3000 Town Center, Suite 280
                                            Southfield, Michigan 48075
                                            Attn: Portfolio Manager
                                            Fax: (248) 358-8333
                                            Telephone: (248) 356-4622

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                          ACKNOWLEDGEMENT BY GUARANTORS

                          Dated as of January 27, 2003

         Each of the undersigned, being a Guarantor (each a "Guarantor" and
collectively, the "Guarantors") under their respective Guaranty and Security
Agreements, each dated as of October 9, 2002, made in favor of Agent (as
amended, modified or supplemented, each a "Guaranty" and collectively, the
"Guaranties"), hereby acknowledges and agrees to the foregoing Second Amendment
to Loan and Security Agreement (the "Amendment") and confirms and agrees that
its Guaranty is and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects except that, upon the effectiveness of,
and on and after the date of the Amendment, each reference in such Guaranty to
the Loan Agreement (as defined in the Amendment), "thereunder", "thereof" or
words of like import referring to the "Loan Agreement", shall mean and be a
reference to the Loan Agreement as amended or modified by the Amendment.
Although Agent has informed Guarantors of the matters set forth above, and
Guarantors have acknowledged the same, each Guarantor understands and agrees
that neither Agent nor any Lender has any duty under the Loan Agreement, the
Guaranties or any other agreement with any Guarantor to so notify any Guarantor
or to seek such an acknowledgement, and nothing contained herein is intended to
or shall create such a duty as to any advances or transaction hereafter.

                                           TOWER RECORDS, INCORPORATED,
                                           a Delaware corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           8775 SUNSET, INC.,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                       9

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                                           COLUMBUS & BAY, INC.,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           JEREMY'S HOLDINGS, LLC,
                                           a Delaware limited liability company

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:Manager

                                           R.T. RECORDS, INCORPORATED,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           TOWER DIRECT LLC.,
                                           a Delaware limited liability company

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:Manager

                                           33RD STREET RECORDS, INCORPORATED,
                                           a Delaware corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

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                                           T.R. SERVICES, INCORPORATED,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           IRELAND TR, INCORPORATED,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           PIPERNICK CORP.,
                                           a Delaware corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           TR ARGENTINA, INCORPORATED,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           TR ISRAEL, INCORPORATED,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

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                                           TR MEXICO, INCORPORATED,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           TOWER GRAPHICS, INCORPORATED,
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

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                                    EXHIBIT A

                                     Form of
                              AMENDED AND RESTATED
                         REVOLVING LOAN PROMISSORY NOTE

                                                    Dated as of January 27, 2003

$100,000,000

FOR VALUE RECEIVED, M T S, Incorporated, a California corporation, and Three A's
Holdings, L.L.C., a Delaware limited liability company (each a "Borrower" and
collectively, "Borrowers"), hereby, jointly and severally, absolutely and
unconditionally promise to pay to the order of The CIT Group/Business Credit,
Inc., a New York corporation, as agent (in such capacity, "Agent") for the
Lenders (as defined below) with offices located at 300 South Grand Avenue, 3rd
Floor, Los Angeles, California 90071, in lawful money of the United States of
America and in immediately available funds, the principal amount of One Hundred
Million Dollars ($100,000,000), or such other unpaid principal amount as may be
advanced pursuant to Section 2.1 of that certain Loan and Security Agreement,
dated as of October 9, 2002, by and among Borrowers, the financial institutions
from time to time party thereto (the "Lenders"), and Agent (as amended, modified
or supplements from time to time, the "Loan Agreement"). All capitalized terms
used herein shall have the meaning provided therefor in the Loan Agreement,
unless otherwise defined herein.

This Amended and Restated Revolving Loan Promissory Note (this "Note") is the
Revolving Note referred to in the Loan Agreement, and is issued to evidence
Borrowers' obligation to repay to the Lenders the Revolving Loans. The Revolving
Loans evidenced hereby shall be repayable in accordance with and shall bear
interest as set forth in the Loan Agreement. This Note is subject to, and
entitled to, all of the terms, provisions and benefits thereof and is subject to
optional and mandatory prepayment, in whole or in part, as provided therein.
Subject to the terms of the Loan Agreement, the Revolving Loans evidenced hereby
may be borrowed, repaid and reborrowed by Borrowers. A final balloon payment in
an amount equal to the outstanding aggregate balance of principal and interest
remaining unpaid, if any, under this Note as shown on the books and records of
Agent shall be due and payable on the termination of the Loan Agreement, as set
forth in Section 14.1 thereof. Further, upon the occurrence of any one or more
of the Events of Default specified in the Loan Agreement, all amounts then
remaining unpaid on this Note may become, or be declared to be, immediately due
and payable as provided in the Financing Agreement.

This Note amends, restates, replaces and supersedes that certain Revolving Loan
Promissory Note, dated October 9, 2002, in the original principal amount of
Seventy-Five Million Dollars ($75,000,000), executed by Borrowers to the order
of Agent, which promissory note is null, void, cancelled and of no further legal
force or effect.

<PAGE>

                                           M T S, INCORPORATED
                                           a California corporation

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:President

                                           THREE A'S HOLDINGS, L.L.C.
                                           a Delaware limited liability company

                                           By: _________________________________
                                           Name: Michael T. Solomon
                                           Title:Manager

                                       14<PAGE>
                                                                   EXHIBIT 10.30

12/16/02
James Bain
2815 Barbarell Way
Sacramento, Ca 95821

     Re:  Retention Agreement

Dear Jim;

     MTS, Inc. ("MTS" or "the Company") considers it essential to the best
interests of the Company to take reasonable steps to retain key management
personnel in these uncertain economic times.  MTS has determined that you play a
critical role in the operations of the Company.  In order to induce you to
remain in the employ of the Company, the Company offers to enter into this
letter agreement (the "Agreement") setting forth the following terms and
benefits of your continued employment with the Company.

Not An Employment Contract

     This Agreement does not constitute a contract of employment or impose on
the Company any obligation to retain you as an employee, nor does this Agreement
prevent you from terminating your employment.  Your employment remains at-will,
and either you or the Company may terminate the employment relationship at any
time and for any reason.

Severance Pay in the Event of Termination for Specified Reasons

     Change in Control

     In the event that a Change in Control (as defined below) occurs on or
before December 31, 2005, and anytime within one (1) year thereafter your
employment is terminated by the new Company for a reason other than for Cause
(as defined below) or is terminated by you for Good Reason (as defined below),
then the Company shall pay to you as severance pay, a lump sum equal to eighteen
(18) months of base salary, due within ten (10) days after the Termination Date
(as defined below).

     You agree that after the Termination Date but prior to payment of the
severance pay called for by this Agreement, you shall execute a full release
(based in the form of the Company's standard Release Agreement) of any and all
known or unknown claims you have against the Company and/or its officers,
employees, directors, and affiliates.  You understand that the payment of the
severance pay described in this Agreement is contingent upon your execution and
non-revocation of the Release.

<PAGE>
     Severance Pay Absent a Change in Control

     If there is no change of control and your employment is terminated, your
eligibility for severance benefits will be governed under MTS' ERISA Executive
Severance Plan.  A copy of the plan is attached as exhibit A.

Sole Remedy

        The payment to you of the amounts described above as severance shall
constitute your sole remedy against the Company, its directors, officers,
employees, and affiliates in the event of a termination of your employment based
on the conditions described above.

Definitions

     "CHANGE IN CONTROL" shall mean the consummation of any of the following
events:  (1) a sale, lease, disposition, or liquidation of all or substantially
all of the assets of the Company, or (2) a sale, merger, consolidation,
recapitalization, of the Company with or into any other corporation or
corporations or other entity, or any other corporate reorganization, where the
stockholders of the Company immediately prior to such event do not retain
ownership, directly or indirectly, of more than fifty percent (50%) of the
voting power of and interest in the successor entity or the entity that controls
the successor entity. The effective date of the change in control shall be the
date on which the contemplated event is consummated.

     "DISCHARGE FOR CAUSE" means termination of the employee's employment
because of (a) negligence or misconduct by the employee in the performance of
his/her duties for the Company, (b) non-performance by the employee of his/her
duties for the Company, (c) the employee's conviction for or admission of a
felony offense, or the employee's indictment for a criminal offense involving or
relating to the business of the Company, (d) the employee's act of fraud,
dishonesty, or embezzlement with respect to the Company, or (e) the employee's
misconduct which, in the judgment of the Company, brings the reputation of the
Company into disrepute or causes the employee to be unable to perform his/her
duties.

     "GOOD REASON" shall mean (1) the unilateral relocation by the Company of
your principal work place for the Company to a site more than 50 miles from its
current location; (2) a reduction in your then current base salary without your
consent; (3) material reduction in your essential duties; or (4) a materially
detrimental change in your job title.

     "TERMINATION DATE" shall mean your last day of employment with the Company.

Entire Agreement

        This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to
<PAGE>
the subject matter of the Agreement.  This Agreement may be amended or modified
only by a written instrument executed by the President of the Company and by
you.

Successors and Assigns

     This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns, including any corporation
with which or into which the Company may be merged or which may succeed to its
assets or business, provided, however, that your obligations under the Agreement
are personal and may not be assigned by you.

Severability

     In the event any provision of this Agreement is found invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.

Dispute Resolution

     In the event of any dispute in any way relating to the enforceability,
breach, or interpretation of this Agreement, the parties to this Agreement agree
that any such dispute shall be resolved by the appropriate court of law, without
a jury, in Sacramento, California.   The parties recognize that they are waiving
certain rights to trial by jury and do so knowingly in order to hasten the
resolution of any such dispute and to minimize costs associated therewith.

Governing Law

     This Agreement shall be governed by and construed in accordance with the
laws of the State of California.

     Nothing contained in this letter agreement alters any of the other terms of
your employment with the Company.  If this letter agreement is acceptable to
you, please so indicate by countersigning it in the space provided below,
whereupon it will become a binding agreement between the Company and you.  Thank
you for your continuing dedication and contributions to the Company.

                                          Sincerely,

                                          ____________________________
                                          Michael Solomon
                                          President and CEO of MTS, Inc.

Accepted and agreed to on _______________, 2002. By:________________________

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