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EXHIBIT 10.40

ASSET PURCHASE AGREEMENT

    This Asset Purchase Agreement (the "Agreement") is made as of March 20,
2001, by and among Guitar Center Stores, Inc., a Delaware corporation, with a
principal place of business located at 5155 Clareton Drive, Agoura Hills,
California 91301 ("Buyer"), and American Music Group, Ltd., a New York
corporation, with a principal place of business located at 310 West Jefferson
Street, Syracuse, New York 13202, Eastern Musical Supply Co., Inc., a New York
corporation, with a principal place of business located at 106 Gray Road, West
Falmouth, Maine 04105, Lyons Music, Inc., a New York corporation, with a
principal place of business located at 130 E. St. Charles Road, Suite B, Carol
Stream, Illinois 60188-2075, American Music, Inc., a Florida corporation, with a
principal place of business located at 667 Florida Central Parkway, Longwood,
Florida 32750, American Musical Instruments, Inc., a New York corporation, with
a principal place of business located at 2710 West Bell Road, Suite 1200,
Phoenix, Arizona 85023, Giardinelli Band Instrument Co., Inc., a New York
corporation, with a principal place of business located at 7845 Maltage Drive,
Liverpool, New York 13090, Central Music Supply, Inc., a New York corporation,
with a principal place of business located at 310 West Jefferson Street,
Syracuse, New York 13202, and GBI, Inc., a New York corporation, with a
principal place of business located at 7845 Maltage Drive, Liverpool, New York
13092 (each, a "Seller" and, collectively, the "Sellers"), and the stockholders
of Sellers each of whom is listed on the signature pages hereto (each, a
"Stockholder" and, collectively, the "Stockholders"), pursuant to the following
terms and conditions.

Recitals:

    A. Sellers now own and wish to sell all of their assets, properties and
rights to Buyer on the terms and subject to the conditions set forth herein
below.

    B. Buyer wishes to purchase such assets from Sellers (the "Acquisition").

    C. Each of the Sellers and Buyer has approved the Acquisition.

Agreement:

    NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the adequacy of which is hereby acknowledged, Buyer, the Sellers
and the Stockholders hereby agree as follows:

1.  Definitions.  

    "Acquisition" shall have the meaning set forth in Recital B.

    "Action" means any action, order, writ, injunction, judgment or decree
outstanding or claim, suit, litigation, proceeding, investigation or dispute.

    "Adjustment Amount" shall have the meaning set forth in Section 2.7(c).

    "Agreement" shall have the meaning set forth in the preamble.

    "Ancillary Agreements" means the Noncompete Agreements.

    "Assets" shall have the meaning set forth in Section 2.1.

    "Assumed Liabilities" means (a) the Liabilities of the Sellers shown on the
December 31, 2000 balance sheet included in the Financial Statements, (b) the
Liabilities of the Sellers incurred in the ordinary course of business of the
Sellers consistent with past practice during the period commencing on January 1,
2001 and ending on the Closing Date (other than Employee Plan Liabilities or any
Breach); (c) the Liabilities set forth in Section 1(a) of the Seller Disclosure
Schedule, if any; and (d) the employment obligations identified in Section 6.9;
provided, however, that in no event shall the Assumed Liabilities include
(x) any Taxes of any Seller arising from any event prior to or in connection

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with the Closing or (y) any obligations of any Seller or any Stockholder for the
payment of brokerage, investment banking, legal, accounting and similar fees and
expenses arising in connection with the transactions contemplated by this
Agreement.

    "Auditor" shall have the meaning set forth in Section 2.7(b).

    "Average Parent Common Stock Price" shall mean the average closing price of
the Parent Common Stock on the Nasdaq National Market as reported in the Wall
Street Journal for the five Trading Days ending on the second Trading Day
immediately prior to the Closing Date.

    "Benefit Arrangement" means any employment, consulting, severance or other
similar contract, arrangement or policy (written or oral) and each plan,
arrangement, program, agreement or commitment (written or oral) providing for
insurance coverage (including, without limitation, any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, life, health or
accident benefits (including, without limitation, any "voluntary employees'
beneficiary association" as defined in Section 501(c)(9) of the Code providing
for the same or other benefits) or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, stock purchases or other
forms of incentive compensation or post-retirement insurance, compensation or
benefits which (a) is not a Welfare Plan, Pension Plan or Multiemployer Plan,
(b) is entered into, maintained, contributed to or required to be contributed
to, as the case may be, by any Seller or any ERISA Affiliate or under which any
Seller or any ERISA Affiliate may incur any liability, and (c) covers any
employee or former employee of any Seller or any ERISA Affiliate (with respect
to their relationship with such any entity).

    "Books and Records" means (a) all product, business and marketing plans,
sales and promotional literature and artwork relating to the business of any
Seller or the Assets, (b) all books, records, lists, ledgers, financial data,
files, reports, product and design manuals, plans, drawings, Tax Returns,
technical manuals and operating records of every kind relating to the business
of any Seller or the Assets (including records and lists of customers,
distributors, suppliers and personnel) and (c) all telephone and fax numbers
used in the business of any Seller, in each case whether maintained as hard copy
or stored in computer memory and whether owned by any Seller or its affiliates.

    "Breach" shall have the meaning set forth in Section 3.12.

    "Business" shall have the meaning set forth in Section 2.1.

    "Buyer" shall have the meaning set forth in the preamble.

    "Buyer Disclosure Schedule" means the written disclosure schedule of Buyer
delivered to the Seller Representative prior to the date hereof, a copy of which
is attached hereto.

    "Buyer Indemnified Party" shall have the meaning set forth in Section 10.1.

    "Cash" means cash and cash equivalents, including marketable securities and
short-term investments, calculated in accordance with GAAP applied on a
consistent basis.

    "Cash Consideration" shall mean an amount in cash equal to $14,408,032
(Fourteen Million Four Hundred Eight Thousand Thirty-Two Dollars) minus the
Adjustment Amount, if any.

    "Cash Holdback" means an amount in cash equal to $2,075,000 (Two Million
Seventy-Five Thousand Dollars).

    "Claim" shall have the meaning set forth in Section 10.2.

    "Claim Notice" shall have the meaning set forth in Section 10.2.

    "Closing" shall have the meaning set forth in Section 2.4.

    "Closing Date" shall have the meaning set forth in Section 2.4.

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    "Code" means the Internal Revenue Code of 1986, as amended.

    "Contracts" means all agreements, contracts, Leases (whether for real or
personal property), purchase orders, undertakings, covenants not to compete,
employment agreements, confidentiality agreements, licenses, instruments,
obligations and commitments to which any Seller is a party or by which any
Seller or any of the Assets are bound or affected, whether written or oral.

    "Court Order" means any judgment, decision, consent decree, injunction,
ruling or order of any foreign, federal, state or local court or governmental
agency, department or authority that is binding on any Person or its property
under applicable law.

    "Damages" shall mean any damage, claim, loss, cost, Tax, Liability or
expense, including, without limitation, court costs and expenses of
investigation, reasonable attorney's fees and costs, diminution of value,
response action, removal action or remedial action.

    "Default" means (a) a breach of or default under any Contract or Lease,
(b) the occurrence of an event that with or without the passage of time or the
giving of notice or both would constitute a breach of or default under any
Contract or Lease or (c) the occurrence of an event that with or without the
passage of time or the giving of notice or both would give rise to a right of
termination, renegotiation or acceleration, or the modification of the terms or
conditions, under any Contract or Lease.

    "Deferred Revenue Adjustment" shall have the meaning set forth in
Section 2.7(d).

    "Depreciated Inventory" means those items of Inventory which the Sellers, or
any of them, have depreciated for accounting purposes such that the book value
of those items is zero or a nominal amount.

    "Designated Employees" shall have the meaning set forth in Section 6.9(a).

    "Determination Date" shall have the meaning set forth in Section 2.7(b).

    "Employee Plans" means all Benefit Arrangements, Multiemployer Plans,
Pension Plans and Welfare Plans.

    "Employee Plan Liabilities" means any Liabilities under or with respect to
any Employee Plans, without regard to whether such Liabilities are Liabilities
of such Employee Plans, any Seller or any ERISA Affiliate.

    "Employees" means all officers and directors of any Seller and all other
Persons employed by any Seller on a full or part-time basis together with all
persons retained as "independent contractors" as of the relevant date.

    "Employment Agreement" means the Employment Agreement, by and between Buyer
and David Fleming dated even herewith.

    "Encumbrance" means any claim, lien, pledge, option, charge, easement, Tax
assessment, Security Interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other right of third parties, whether voluntarily incurred or
arising by operation of law, and includes any agreement to give any of the
foregoing in the future, and any contingent sale or other title retention
agreement or Lease in the nature thereof.

    "Environmental Condition" means the state of the environment, including
natural resources (e.g., flora and fauna), soil, surface water, ground water,
any present or potential drinking water supply, subsurface strata or ambient
air, relating to or arising out of the use, handing, storage, treatment,
recycling, generation, transportation, release, spilling, leaking, pumping,
pouring, emptying, discharging, injecting, escaping, leaching, disposal, dumping
or threatened release of Hazardous Substances by any Seller or any of their
respective predecessors of successors in interest, or by any of their respective

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agents, Representatives, employees or independent contractors when acting in
such capacity on behalf of any Seller.

    "Environmental Laws" means all applicable federal, state, district and local
laws, all rules or regulations promulgated thereunder, and all orders, consent
orders, judgments, notices, permits or demand letters issued, promulgated or
entered pursuant thereto, relating to pollution or protection of the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, (a) laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, industrial materials, wastes or other substances into
the environment and (b) laws relating to the identification, generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
recovery, transport or other handling of pollutants, contaminants, chemicals,
industrial materials, wastes or other substances. Environmental Laws shall
include, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the Toxic
Substances Control Act, as amended, the Hazardous Materials Transportation Act,
as amended, the Resource Conservation and Recovery Act, as amended, the Clean
Water Act, as amended, the Safe Drinking Water Act, as amended, the Clean Air
Act, as amended, the Occupational Safety and Health Act, as amended, and all
analogous laws promulgated or issued by any state or other governmental
authority.

    "Environmental, Health and Safety Liability" means any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to: (a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products); (b) fines, penalties,
judgments, awards, settlements, legal or administrative proceedings, damages,
losses, claims, demands and response, investigative, remedial, or inspection
costs and expenses arising under Environmental Law or Occupational Safety and
Health Law; (c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any governmental body or any other Person) and for any natural
resource damages; or (d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law or Occupational Safety and
Health Law. The terms "removal," "remedial," and "response action," include the
types of activities covered by CERCLA.

    "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

    "ERISA Affiliate" means any entity which is (or at any relevant time was) a
member of a "controlled group of corporations" with, under "common control"
with, or a member of an "affiliated service group" with, or otherwise required
to be aggregated with, any Seller as set forth in Section 414(b), (c), (m) or
(o) of the Code.

    "Exchange Act" means the Securities Exchange Act of 1934, as amended.

    "Excluded Liabilities" shall have the meaning set forth in Section 2.2(b).

    "Facilities" means all offices, stores, warehouses, administration
buildings, manufacturing facilities, plants and all real property and related
facilities owned or leased by any Seller, all as identified or listed in
Section 3.4(b) and Section 3.4(c) of the Seller Disclosure Schedule.

    "Financial Statements" means the balance sheets of each Seller (or its
predecessor, as the case may be) as of December 31, 2000 and the related
statements of income, changes in stockholders' equity and cash flows, of each
Seller for the year ended December 31, 2000, in each case which are provided to
Buyer by Sellers.

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    "Fixtures and Equipment" means all of the furniture, fixtures, furnishings,
machinery, computer hardware and other tangible personal property owned or
leased by any Seller, wherever located.

    "Funded Debt" shall have the meaning set forth in Section 3.8.

    "GAAP" means United States generally accepted accounting principles.

    "Hazardous Substances" means all pollutants, contaminants, chemicals, wastes
and any other carcinogenic, ignitable, corrosive, reactive, toxic or otherwise
hazardous substances or materials (whether solids, liquids or gases) subject to
regulation, control or remediation under Environmental Laws.

    "Holdback Amount" shall mean an amount equal to $2,500,000 (Two Million Five
Hundred Thousand Dollars) to be represented by the Cash Holdback and the Shares
Holdback.

    "Holdback Notice" shall have the meaning set forth in Section 11.3.

    "Holdback Period" shall mean the period commencing on the Closing Date and
ending on the Determination Date.

    "Indemnified Party" shall have the meaning set forth in Section 10.2.

    "Indemnifying Party" shall have the meaning set forth in Section 10.2.

    "Intangible Assets" means an asset, such as goodwill, Intellectual Property
rights or similar assets, with no physical properties.

    "Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
and all patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith and all applications, registrations and renewals in connection
therewith, (c) all copyrightable works, all copyrights and all applications,
registrations and renewals in connection therewith, (d) all mask works and all
applications, registrations and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes, techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

    "Inventory" means all merchandise owned and intended for resale, lease or
rental.

    "Investor" shall have the meaning set forth in Section 4.4(a).

    "Lease" means a real property lease or a personal property lease, as
applicable.

    "Leased Property" shall have the meaning set forth in Section 3.4(c).

    "Liability" means any direct or indirect liability, indebtedness,
obligation, commitment, expense, claim, deficiency, guaranty or endorsement of
any type whatsoever, whether accrued or unaccrued, absolute or contingent,
matured or unmatured, liquidated or unliquidated, known or unknown, asserted or
unasserted, due or to become due.

    "LIFO Reserve" means that the inventory valuation reserve for the last-in
first-out method as reflected in the Books and Records of the Sellers.

    "Low Estimate" shall have the meaning set forth in Section 2.7(c).

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    "Material Adverse Effect" or "Material Adverse Change" or a similar phrase
means, with respect to any Person, (a) any material adverse effect on or change
with respect to (i) the business, operations, assets (taken as a whole),
Liabilities (taken as a whole), condition (financial or otherwise), results of
operations or prospects of such Person and its Subsidiaries, taken as a whole,
or (ii) the right or ability of such Person to consummate any of the
transactions contemplated hereby or (b) any event or condition which, with the
passage of time, the giving or receipt of notice or the occurrence or
nonoccurrence of any other circumstance, action or event, would reasonably be
expected to constitute a "Material Adverse Effect" on or "Material Adverse
Change" with respect to such Person.

    "Multiemployer Plan" means any "multiemployer plan," as defined in
Section 4001(a)(3) or 3(37) of ERISA, which (a) any Seller or any ERISA
Affiliate maintains, administers, contributes to or is required to contribute
to, or, after September 25, 1980, maintained, administered, contributed to or
was required to contribute to, or under which any Seller or any ERISA Affiliate
may incur any liability and (b) covers any employee or former employee of any
Seller or any ERISA Affiliate (with respect to their relationship with any such
entity).

    "Negative Spending Adjustment" shall have the meaning set forth in
Section 2.8(b).

    "Noncompete Agreement" shall have the meaning set forth in
Section 2.5(a)(iii).

    "Occupational Safety and Health Law" means any legal requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards.

    "Parent" shall mean Guitar Center, Inc., a Delaware corporation.

    "Parent Common Stock" shall mean the common stock, par value $0.01 per
share, of Parent.

    "Parent Options" shall have the meaning set forth in Section 5.5(b).

    "Parent SEC Reports" shall have the meaning set forth in Section 5.6.

    "Party" shall mean any Person who is a party to this Agreement.

    "PBGC" shall mean the Pension Benefit Guaranty Corporation.

    "Pension Plan" means any "employee pension benefit plan" as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which (a) any Seller or
any ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or, within the five (5) years prior to the Closing Date,
maintained, administered, contributed to or was required to contribute to, or
under which any Seller or any ERISA Affiliate may incur any liability
(including, without limitation, any contingent liability) and (b) covers any
employee or former employee of any Seller or any ERISA Affiliate (with respect
to their relationship with any such entity).

    "Permits" means all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, necessary or desirable for
the past, present or anticipated conduct or operation of the business of any
Seller or ownership of the Assets.

    "Permitted Encumbrances" means (a) statutory liens of landlords, liens of
carriers, warehousepersons, mechanics and materialpersons incurred in the
ordinary course of business for sums (i) not yet due and payable or (ii) being
contested in good faith if, in either case, an adequate reserve shall have been
made therefor in such Person's financial statements, (b) liens incurred or
deposits made in connection with workers' compensation, unemployment insurance
and other similar types of social security programs or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids, Leases,
government contracts, performance and return of money bonds and similar
obligations, in each case in the ordinary course of business consistent with
past practice, (c) easements, rights-of-way, restrictions and other similar
charges or encumbrances, in each case which do not

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interfere with the ordinary conduct of business by any Seller and do not
materially detract from the value of the property upon which such encumbrance
exists and (d) liens securing Taxes, assessments and governmental charges not
yet delinquent.

    "Person" means an individual, partnership, limited liability company,
corporation, association joint stock company, trust, joint venture,
unincorporated organization or governmental entity (or any department, agency or
political subdivision thereof).

    "Proprietary Rights" means any or all of, and all rights in, arising out of,
or associated with, the following: (a) U.S. and foreign patents and applications
therefor and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof, (b) U.S. and foreign
trademarks, service marks, trade dress, logos, trade names and corporate names
and the goodwill associated therewith and registrations and applications for
registration thereof, (c) U.S. and foreign copyrights and registrations and
applications for registration thereof, (d) U.S. and foreign mask work rights and
registrations and applications for registration thereof, (e) trade secrets,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, technical data, works of
authorship and confidential business information (including financial, marketing
and business data, pricing and cost information, business and marketing plans
and customer and supplier lists and information), (f) all computer software,
including all source code, object code, firmware, development tools, files,
records and data, all media on which any of the foregoing is recorded, all Web
addresses, sites and domain names; (g) all databases and data collections and
all rights therein throughout the world; (h) any similar, corresponding or
equivalent rights to any of the foregoing, (i) licenses granting any rights with
respect to any of the foregoing and (j) all drawings, designs, renderings,
specifications and other documentation embodying or related to any of the
foregoing.

    "Purchase Consideration" shall mean the Cash Consideration and the Share
Consideration.

    "Regulations" means any laws, statutes, ordinances, regulations, rules,
notice requirements, court decisions, agency guidelines, and orders of any
foreign, federal, state or local government and any other governmental
department or agency, including without limitation energy, motor vehicle safety,
public utility, zoning, building and health codes, Environmental Laws,
occupational safety and health and laws respecting employment practices,
employee documentation, terms and conditions of employment and wages and hours.

    "Related Party" means (i) any officer, director or stockholder of any
Seller, and any officer, director, partner, manager associate or relative of
such officers, directors and stockholders, (ii) any Person in which any Seller
or any stockholder of any Seller or any affiliate, associate or relative of any
such Person has any direct or indirect interest and (iii) any direct or indirect
trustee or beneficiary of any stockholder of any Seller.

    "Representative" means, with respect to any Person, any officer, director,
principal, attorney, accountant, agent, employee, financing source or other
representative of such Person.

    "SEC" means the Securities and Exchange Commission.

    "Securities Act" means the Securities Act of 1933, as amended.

    "Security Interest" means any mortgage, pledge, lien, Encumbrance, charge or
other security interest, other than (a) mechanic's, materialmen's and similar
liens, (b) liens for Taxes not yet due, (c) purchase money liens and liens
securing rental payments under capital lease arrangements and (d) other liens
arising in the ordinary course of business of Sellers and not incurred in
connection with the borrowing of money.

    "Seller" shall have the meaning set forth in the preamble.

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    "Seller Disclosure Schedule" means the written disclosure schedule of
Sellers delivered to Buyer prior to the date hereof, a copy of which is attached
hereto.

    "Seller Indemnified Party" shall have the meaning set forth in Section 10.1.

    "Seller Representative" shall mean Robert A. Scheiwiller.

    "Selmer Contract" shall mean the Agreement, dated as of September 1, 1985,
by and between The Selmer Company and Lyon's Music, Inc.

    "Share Consideration" means the number of shares of Parent Common Stock
equal to $2,516,968 (Two Million Five Hundred Sixteen Thousand Nine Hundred
Sixty-Eight Dollars) divided by the Average Parent Common Stock Price.

    "Shares Holdback" means the number of shares of Parent Common Stock equal to
$425,000 (Four Hundred Twenty-Five Thousand Dollars) divided by the Average
Parent Common Stock Price, rounded down to the nearest whole share; provided,
however, that if Buyer exercises its option pursuant to the last sentence of
Section 2.3, then "Shares Holdback" means an amount in cash equal to $425,000
(Four Hundred Twenty-Five Thousand Dollars).

    "Stockholder" shall have the meaning set forth in the preamble.

    "Stockholder Disclosure Schedule" means the written disclosure schedule of
the Stockholders delivered to Buyer prior to the date hereof, a copy of which is
attached hereto.

    "Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the vote of sufficient securities to elect a majority of the
directors.

    "Tax" means any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including Taxes under Section 59A of the Code),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not.

    "Tax Return" means any report, return, document, declaration or other
information or filing required to be supplied to any taxing authority or
jurisdiction (foreign or domestic) including information returns, and any
documents with respect to or accompanying requests for the extension of time in
which to file any such report, return, document, declaration or other
information.

    "Third Party Claim" shall have the meaning set forth in Section 10.2.

    "Trading Day" means any day on which the Nasdaq National Market is open and
available for at least five hours for the trading of securities.

    "Unearned Accounts Receivable" means, as of a particular date, the aggregate
amount to be recognized as revenue in future accounting periods with respect to
all "Rent-to-Purchase" contracts validly outstanding, such amount to be
calculated on a nominal basis (i.e., not reduced to present value). For
comparison purposes, the amount of Unearned Accounts Receivable for the Business
as of December 31, 2000 was $23,692,000 (Twenty-Three Million Six Hundred
Ninety-Two Thousand Dollars).

    "Welfare Plan" means any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA, which (a) any Seller or any ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or under which any
Seller or any ERISA Affiliate may incur any liability and (b) covers any
employee or former employee of any Seller or any ERISA Affiliate (with respect
to their relationship with any such entity).

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    "Year End Financial Statements" shall have the meaning set forth in
Section 2.7(a).

    "Year End Unearned Accounts Receivable" shall have the meaning set forth in
Section 2.7(a).

2.  Purchase and Sale of Assets; Closing.  

    2.1  Purchase of Assets.  Upon the terms and subject to the conditions
contained herein, Buyer hereby agrees to purchase from each Seller, and each
Seller hereby agrees to sell, transfer, convey and deliver to Purchaser at the
Closing, any and all of such Seller's rights, title and interest in and to all
assets, properties and rights of such Seller or used in or useful in connection
with such Seller's business of marketing, renting, selling, leasing or otherwise
providing musical instruments, as well as other products, parts, materials,
supplies and services related to the marketing, rental, sale, lease or other
distribution of musical instruments (the "Business"), including, without
limitation, all of such Seller's (a) real property, leaseholds and subleaseholds
therein, improvements, fixtures and fittings thereon and easements,
rights-of-way and other appurtenants thereto (such as appurtenant rights in and
to public streets), (b) tangible personal property (such as machinery,
equipment, inventories, manufactured and purchased parts, goods in process and
finished goods, furniture, automobiles, trucks, tractors, trailers, tools, jigs
and dies), (c) Intellectual Property, licenses and sublicenses granted and
obtained with respect thereto, and rights thereunder, remedies against
infringements thereof and rights to protection of interests therein under the
laws of all jurisdictions, (d) leases, subleases and rights thereunder,
(e) agreements, contracts, indentures, mortgages, instruments, Security
Interests, guaranties other similar arrangements and rights thereunder,
(f) accounts, notes and other receivables, (g) securities (such as the capital
stock in its Subsidiaries, if any), (h) claims, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery, rights of setoff and
rights of recoupment (including any such item relating to the payment of Taxes),
(i) franchises, approvals, permits, licenses, orders, registrations,
certificates, variances and similar rights obtained from governments and
governmental agencies, (j) books, records, ledgers, files, documents,
correspondence, lists, customer information databases, studies, plans, samples,
goodwill, plats, architectural plans, drawings and specifications, creative
materials, advertising and promotional materials, Web sites and domain names,
studies, reports and other printed or written materials, (k) operating systems,
servers, PCs and other computer hardware, (l) Cash and (m) any and all goodwill
related to the Business or any of the foregoing (collectively, the "Assets");
provided, however, that the Assets shall not include (i) the corporate charter,
qualifications to conduct business as a foreign corporation, arrangements with
registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books, blank stock
certificates and other documents relating to the organization, maintenance and
existence of any Seller as a corporation, (ii) the rights of any Seller under
this Agreement or (iii) the Selmer Contract.

    2.2  Liabilities of Sellers and the Stockholders.  

    (a) Assumed Liabilities. Upon the terms and subject to the conditions set
forth herein, as of the Closing Buyer shall assume only the Assumed Liabilities.
Buyer agrees to pay, perform and discharge the Assumed Liabilities. Buyer hereby
agrees to indemnify and hold each Seller and each Stockholder harmless from any
and all claims, costs, expenses, liabilities, losses or damages, including
attorneys' fees and court costs, relating to or arising out of the Assumed
Liabilities.

    (b) Excluded Liabilities. Each Seller and each Stockholder acknowledges that
Buyer is not purchasing, assuming or becoming responsible for any Liability
including, without limitation, any Employee Plan Liability and any liability for
Taxes of (i) any Seller or any Stockholder or (ii) the Assets or any portion
thereof arising from any event prior to or in connection with the Closing
(collectively, the "Excluded Liabilities"), in each case other than the Assumed
Liabilities. Each Seller hereby agrees, and each Stockholder hereby agrees to
cause Sellers, to pay, perform and discharge the Excluded Liabilities. Each
Seller and each Stockholder hereby agree to jointly and severally indemnify and
hold Buyer harmless from any and all claims, costs, expenses, liabilities,

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losses or damages, including attorneys' fees and court costs, relating to or
arising out of the Excluded Liabilities, no matter when incurred.

    2.3  Purchase Consideration.  In consideration of the purchase of the Assets
and each Seller's and each Stockholder's covenants and agreements set forth in
this Agreement, Buyer agrees (a) to pay to Sellers an aggregate amount of cash
equal to the Cash Consideration, of which (i) an amount equal to the Cash
Consideration less the Cash Holdback shall be delivered on the Closing Date and
(ii) the Cash Holdback shall become an element of the Holdback Amount and, upon
the terms and subject to the conditions specified in Section 11, be delivered
promptly after the Determination Date and (b) to issue to Sellers the Share
Consideration for distribution to the Investor, of which (x) a number of shares
of Parent Common Stock equal to the Share Consideration less the Shares Holdback
will be delivered on the Closing Date and (y) the Shares Holdback shall become
an element of the Holdback Amount and, upon the terms and subject to the
conditions specified in Section 11, be delivered promptly after the
Determination Date. Notwithstanding the foregoing, Buyer shall have the right,
in its sole discretion, to pay to Sellers, in lieu of issuing the Share
Consideration pursuant to clause (b) of the immediately preceding sentence, an
aggregate amount of cash equal to $2,516,968 (Two Million Five Hundred Sixteen
Thousand Nine Hundred Sixty-Eight Dollars), of which $2,091,968 (Two Million
Ninety-One Thousand Nine Hundred Sixty-Eight Dollars) shall be delivered on the
Closing Date and $425,000 (Four Hundred Twenty-Five Thousand Dollars) shall
constitute the Shares Holdback and, upon the terms and subject to the conditions
specified in Section 11, delivered promptly after the Determination Date. The
Parties agree that all Shares of Parent Common Stock acquired by the Investor
pursuant to this Agreement (including, without limitation, any shares of Parent
Common Stock constituting a portion of the Shares Holdback), shall be deemed to
have been acquired by the Investor on the Closing Date for purposes of
Rule 144(d)(3)(iii) under the Securities Act.

    2.4  Closing.  The closing of the Acquisition (the "Closing") shall be held
at 9:00 a.m., local time, on the second business day following the satisfaction
or waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby (other than conditions with respect to actions
the respective parties shall take at the Closing) (the "Closing Date") at the
offices of Latham & Watkins located at 633 West Fifth Street, Los Angeles,
California 90071, unless the parties otherwise agree. The Assets will be
transferred to Buyer at the Closing on the Closing Date, and each of the Sellers
and each of the Stockholders will do all things that are deemed necessary by
Buyer for the valid transfer of the Assets.

    2.5  Closing Obligations.  

    (a) Seller Deliveries. Each Seller shall deliver or cause to be delivered to
Buyer at and as of the Closing Date:

    (i) assignments (including Intellectual Property, Lease and Contract
transfer documents) in the forms attached hereto as Exhibit 2.5(a)(i) and such
other instruments of sale, transfer, conveyance and assignment as Buyer and its
counsel may request;

    (ii) an executed and notarized Bill of Sale transferring such Seller's
right, title and interest in and to the Assets in the form attached hereto as
Exhibit 2.5(a)(ii) and such other instruments of sale, transfer, conveyance and
assignment as Buyer and its counsel may request;

    (iii) an Agreement Not to Compete in the form of Exhibit 2.5(a)(iii) (each,
a "Noncompete Agreement");

    (iv) an IRS Form W-9;

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    (v) a certificate to the effect that representations and warranties of each
Seller and each Stockholder contained in this Agreement were accurate as of the
date of this Agreement and are accurate as of the Closing Date as if made on the
Closing Date;

    (vi) a legal opinion of Byrne, Costello & Pickard, P.C., counsel to Sellers,
dated as of the Closing Date in the form of Exhibit 2.5(a)(v);

    (vii) a payoff letter in form reasonably satisfactory to Buyer with respect
to any Assumed Liability which constitutes indebtedness for borrowed money or
outstanding letter of credit or similar obligation set forth in Section 3.8 of
the Seller Disclosure Schedule; and

    (viii) the non-disturbance agreement(s) pursuant to Section 3.4(c), if any.

    (b) Stockholder Deliveries. Each Stockholder shall deliver or cause to be
delivered to Buyer at and as of the Closing:

    (i) with respect to David Fleming only, the Employment Agreement;

    (ii) a Noncompete Agreement;

    (iii) an IRS Form W-9;

    (iv) a certificate to the effect that the representations and warranties of
each Seller and such Stockholder contained in this Agreement were accurate as of
the date of this Agreement and are accurate as of the Closing Date as if made on
the Closing Date; and

    (v) a legal opinion of Byrne, Costello & Pickard, P.C., counsel to the
Stockholders, dated as of the Closing Date in the form of Exhibit 2.5(a)(v).

    (c) Buyer's Deliveries.  Buyer shall deliver or cause to be delivered to
Sellers at and as of the Closing:

    (i) immediately available funds in an aggregate amount equal to the Cash
Consideration less the Cash Holdback by wire transfer to the bank account(s)
designated by Sellers;

    (ii) subject to the exercise of Buyer's option set forth in the last
sentence of Section 2.3, the Share Consideration less the Shares Holdback,
registered in the Investor's name;

    (iii) a counterpart signature page to the Employment Agreement;

    (iv) a counterpart signature page to each Noncompete Agreement; and

    (v) a certificate to the effect that the representations and warranties of
Buyer contained in this Agreement were accurate as of the date of this Agreement
and are accurate as of the Closing Date as if made on the Closing Date.

    2.6  Allocation.  The Parties agree to allocate the Purchase Consideration
(and all other capitalizable costs) among the Assets and the Noncompete
Agreements for all purposes (including financial accounting and Tax purposes) in
accordance with the allocation schedule attached hereto as Exhibit 2.6. The
Parties will file all Tax Returns in a manner consistent with such allocation.
The Cash Consideration and the Share Consideration shall be distributed among
the Sellers and the Stockholders as set forth on Exhibit 2.6. Execution of this
Agreement by the Sellers and the Stockholders represents their express agreement
to such allocation.

    2.7  Deferred Revenue Adjustment.  

    (a) Calculation of Unearned Accounts Receivable. As soon as reasonably
practicable following December 31, 2001, Buyer shall cause to be prepared and
delivered to the Seller Representative financial statements with respect to the
Business (the "Year End Financial Statements") as of and for the period ended
December 31, 2001 and a calculation of Unearned Accounts Receivable as of

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December 31, 2001 ("Year End Unearned Accounts Receivable"). The Year End
Financial Statements shall (i) be prepared in accordance with GAAP, (ii) fairly
present the financial position of the Business as of and for the period ended
December 31, 2001 and (iii) reflect all adjustments required to be included on
financial statements under GAAP. The Sellers and the Stockholders shall provide
all assistance reasonably requested by Buyer in connection with the preparation
of the Year End Financial Statements and the calculation of Year End Unearned
Accounts Receivable, including, without limitation, access by Buyer and its
Representatives to their respective records to the extent reasonably related to
Buyer's preparation of the Year End Financial Statements.

    (b) Resolution of Disputes as to Year End Unearned Accounts Receivable. Upon
delivery of the Year End Financial Statements and the related calculation of
Year End Unearned Accounts Receivable, Buyer will provide the Seller
Representative and his Representatives full access to Buyer's records to the
extent reasonably related to the Seller Representative's evaluation of the
calculation of Year End Unearned Accounts Receivable. If the Seller
Representative shall disagree with the calculation Year End Unearned Accounts
Receivable, he shall notify Buyer of such disagreement in writing, setting forth
in reasonable detail the particulars of such disagreement, within thirty
(30) days after his receipt of the calculation of Year End Unearned Accounts
Receivable. In the event that the Seller Representative does not provide such a
notice of disagreement within such thirty (30) day period, the Seller
Representative shall be deemed to have accepted the calculation of Year End
Unearned Accounts Receivable delivered by Buyer, which shall be final, binding
and conclusive on the Sellers for the purposes of determining the Adjustment
Amount. In the event any such notice of disagreement is timely provided, Buyer
and the Seller Representative shall use commercially reasonable efforts for a
period of thirty (30) days (or such longer period as they may mutually agree) to
resolve any disagreements with respect to the calculation of Year End Unearned
Accounts Receivable. If, at the end of such period, they are unable to resolve
such disagreements, then an independent accounting firm of recognized national
standing mutually selected by Buyer and the Seller Representative (the
"Auditor") shall resolve any remaining disagreements. The Auditor shall
determine as promptly as practicable whether the calculation of Year End
Unearned Accounts Receivable was made in accordance with the standards set forth
in Section 2.7(a) and (only with respect to the remaining disagreements
submitted to the Auditor) whether and to what extent (if any) Year End Unearned
Accounts Receivable requires adjustment. The Auditor shall promptly deliver to
Buyer and the Seller Representative its determination in writing, which
determination shall be made subject to the definitions and principles set forth
in this Agreement and shall be (i) consistent with either the position of the
Seller Representative or Buyer or (ii) between the positions of the Seller
Representative and Buyer. The fees and expenses of the Auditor shall be paid
one-half by Buyer and one-half by the Stockholders. The determination of the
Auditor shall be final, conclusive and binding on the parties. The date on which
Year End Unearned Accounts Receivable is finally determined in accordance with
this Section 2.7(b) is hereinafter referred as to the "Determination Date."

    (c) The Sellers and the Stockholders, jointly and severally, covenant to
Buyer that Year End Unearned Accounts Receivable will be not less than
$26,681,000 (the "Low Estimate").

    (d) If, but only if, (i) Year End Unearned Accounts Receivable is less than
the Low Estimate and/or (ii) the Seller Representative consents to an increase
in sales, general and administrative expenses proposed by Buyer pursuant to
Section 2.8(a), there shall be calculated the "Adjustment Amount" equal to the
Deferred Revenue Adjustment, if any, plus the Negative Spending Adjustment, if
any; provided, however, that the absolute value of the Adjustment Amount shall
not be greater than $2,500,000 (Two Million Five Hundred Thousand Dollars). The
"Deferred Revenue

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Adjustment," which may only be a negative amount, shall be equal to (x) $0.72
(Seventy-Two Cents) multiplied by (y) Year End Unearned Accounts Receivable
minus the Low Estimate.

    In the event of such a negative Adjustment Amount, then upon final
determination of Year End Unearned Accounts Receivable in accordance with
Section 2.7(b), the Cash Holdback and the Shares Holdback otherwise payable or
issuable, as the case may be, by Buyer pursuant to Section 11 shall be reduced
on a pro rata basis by an aggregate amount equal to the absolute value of the
Adjustment Amount. In the event that the Holdback Amount has been reduced to
compensate any Buyer Indemnified Party for any Damages as a result of any
inaccuracy or breach of any representation, warranty, covenant or agreement of
any Seller or any Stockholder pursuant to the provisions of Section 11 such that
the Adjustment Amount exceeds the Holdback Amount, any such unpaid Adjustment
Amount shall be promptly remitted to Buyer by the Sellers and the Stockholders
in cash.

    2.8  Operation of Assets; Negative Spending Adjustment.  

    (a) The Parties agree that, upon the occurrence of the Closing, (i) all
rights to operate and manage the Business shall immediately and fully vest with
Buyer, which shall be free to operate the Assets for the exclusive benefit of
Buyer in its sole and absolute discretion and (ii) any and all rights of each
Seller and each Stockholder to participate in the Business in any respect shall
terminate. The Parties further agree that the Low Estimate was established based
on the expense budget for the Business for 2001 prepared by the Sellers and
attached as Exhibit 2.8. In the event that Buyer concludes that this budget will
prove inadequate (x) to support the activities of the Business or (y) to achieve
the Low Estimate, Buyer will propose to the Seller Representative an increase in
sales, general and administrative expenditures and seek the consent of the
Seller Representative (which consent shall not be unreasonably withheld or
delayed) with respect to such proposal.

    (b) In the event that the Seller Representative consents to an increase in
sales, general and administrative expenses proposed by Buyer pursuant to
Section 2.8(a), then sales, general and administrative expenditures shall be
increased by such amount. The "Negative Spending Adjustment," which may only be
a negative amount, shall mean (i) budgeted sales, general and administrative
expenses as set forth in Exhibit 2.8 minus (ii) actual sales, general and
administrative expenditures as proposed by Buyer and consented to by the Seller
Representative pursuant to this Section 2.8. In the event that the Seller
Representative does not consent to an increase in sales, general and
administrative expenses proposed by Buyer pursuant to Section 2.8(a), then the
Negative Spending Adjustment shall be zero.

3.  Representations and Warranties of the Sellers and the Stockholders.  As an
inducement of Buyer to enter into this Agreement, each Seller and each
Stockholder hereby makes, jointly and severally, as of the date hereof and as of
the Closing Date, the following representations and warranties to Buyer, except
as otherwise set forth in the Seller Disclosure Schedule; provided, however,
that the representations and warranties set forth in Sections 3.6, 3.14(a),
3.14(b) and 3.21(l) are made without regard to any disclosure made in the Seller
Disclosure Schedule. The sections of the Seller Disclosure Schedule are numbered
to correspond to the various subsections of this Section 3 setting forth certain
exceptions to the representations and warranties contained in this Section 3 and
certain other information called for by this Agreement. Unless otherwise
specified, no disclosure made in any particular section of the Seller Disclosure
Schedule shall be deemed made in any other section of the Seller Disclosure
Schedule unless expressly made therein (by cross-reference or otherwise) or the
Seller Disclosure Schedule otherwise expressly and completely discloses the
specific exception.

    3.1  Organization and Good Standing.  

    (a) Each Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, with full
corporate power and authority to conduct its

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business as presently conducted, to own or use the properties and assets that it
purports to own or use and to perform all its obligation under each Contract.
Each Seller is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each state or other jurisdiction in which either
the ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification. Section 3.1(a) of the
Seller Disclosure Schedule contains a complete and accurate list of all states
or other jurisdictions in which any Seller is qualified to do business as a
foreign corporation.

    (b) Each Seller has delivered to Buyer complete and correct copies of its
articles or certificate of incorporation, as the case may be, and its bylaws,
and any amendment thereto.

    (c) No Seller has, nor has any Seller ever had, any Subsidiary.

    (d) Other than capital stock owned by the Stockholders, no Seller has issued
and outstanding any shares of capital stock or any options, warrants,
convertible securities or rights of any kind to purchase or otherwise acquire
any shares of capital stock or other securities of any Seller.

    3.2  Authorization.  Each Seller has all necessary corporate or other power
and authority to enter into this Agreement and the Ancillary Agreements to which
it is a party and has taken all corporate or other action necessary to
consummate the transactions contemplated hereby and thereby and to perform its
obligations hereunder and thereunder. This Agreement has been duly executed and
delivered by each Seller, and this Agreement is, and upon execution and delivery
thereof each Ancillary Agreement will be, a valid and binding obligation of each
Seller, enforceable against each Seller in accordance with its terms, except
that enforceability may be limited by the effect of (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors or (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).

    3.3  Bank Accounts.  Section 3.3 of the Seller Disclosure Schedule contains
a list of all bank accounts and safe deposit boxes of each Seller and the
persons authorized to draw thereon or having access thereto.

    3.4  Real Property.  

    (a) General. Each Seller leases all real property necessary for the conduct
of the Business as presently conducted, and the Facilities are in such operating
condition and repair, subject to normal wear and tear, as is necessary for the
conduct of the Business in compliance with applicable legal requirements. There
is no deferred maintenance, nor any significant pending maintenance
requirements, with respect to any Facility. The Facilities are identified in
Section 3.4(a) of the Seller Disclosure Schedule.

    (b) Owned Real Property. There are no Facilities owned by any Seller or to
be acquired by any Seller prior to the Closing Date.

    (c) Leased Real Property. Section 3.4(c) of the Seller Disclosure Schedule
sets forth all Leases pursuant to which Facilities are leased by any Seller,
true and correct copies of which have been delivered to Buyer. Such Leases
constitute all Leases, subleases or other occupancy agreements pursuant to which
any Seller occupies or uses Facilities. Each Seller has good and valid leasehold
title to, and enjoys peaceful and undisturbed possession of, all leased property
described in such Leases (the "Leased Property"), free and clear of any and all
Encumbrances other than any Permitted Encumbrances which would not permit the
termination of the Lease therefor by the lessor or otherwise adversely affect
the rights of any Seller under any such Lease; provided, however, that the
foregoing shall not prohibit the existence of preexisting mortgages of the
Leased Property, to the extent that Buyer is the beneficiary of an enforceable,
written non-disturbance agreement executed by the mortgagor and the mortgagee of
such Leased Property, substantially in

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the form attached hereto as Exhibit 3.4(c). With respect to each such parcel of
Leased Property, (i) there are no pending or, to the knowledge of any Seller,
threatened, condemnation proceedings relating to, or any pending or, to the
knowledge of any Seller, threatened, Actions relating to, any Seller's leasehold
interests in such Leased Property or any portion thereof, (ii) no Seller nor, to
any Seller's knowledge, any third party has entered into any sublease, license,
option, right, concession or other agreement or arrangement, written or oral,
granting to any Person the right to use or occupy such Leased Property or any
portion thereof or interest therein, except in connection with a Permitted
Encumbrance, and (iii) no Seller has received notice of any pending or
threatened special assessment relating to such Leased Property or otherwise has
any knowledge of any pending or threatened special assessment relating thereto.

    With respect to each Lease listed in Section 3.4(c) of the Seller Disclosure
Schedule, (i) there has been no Default under any such Lease by any Seller or,
to any Seller's knowledge, by any other Person, (ii) the execution, delivery and
performance of this Agreement and the Noncompete Agreements and the consummation
of the transactions contemplated hereby and thereby (including, without
limitation, assignment of the Lease to Buyer) will not cause (with or without
notice and with or without the passage of time) a Default under any such Lease,
(iii) to each Seller's knowledge, such Lease is a valid and binding obligation
of the lessor, is in full force and effect with respect to and is enforceable by
the applicable Seller in accordance with its terms, (iv) no action has been
taken by any Seller, and to each Seller's knowledge no event has occurred which,
with notice or lapse of time or both, would permit termination, modification or
acceleration by a party thereto other than any Seller without such Seller's
consent under any such Lease, (v) no Person has repudiated any term thereof or
threatened to any Seller to terminate, cancel or not renew any such Lease and
(vi) no Seller has assigned, transferred, conveyed, mortgaged or encumbered any
interest therein or in any Leased Property subject thereto (or any portion
thereof).

    3.5  Personal Property.  

    (a) General. Each Seller owns or leases all personal property Assets
necessary for the conduct of the Business as presently conducted, and the
personal property Assets are in such operating condition and repair, subject to
normal wear and tear, as is necessary for the conduct of the Business in
compliance with applicable legal requirements. There is no deferred maintenance,
nor any significant pending maintenance requirements, with respect to any
personal property Assets. The personal property owned or leased by the Sellers
is located solely on the premises identified in Section 3.4(a) of the Seller
Disclosure Schedule.

    (b) Owned Personal Property. Except as set forth in Section 3.5(b) of the
Seller Disclosure Schedule, each Seller has good and marketable title to all
such personal property Assets owned by it, free and clear of any and all
Encumbrances, except Permitted Encumbrances. With respect to each such item of
personal property Assets, (i) there are no Leases, subleases, licenses, options,
rights, concessions or other agreements, written or oral, granting to any party
or parties the right of use of any portion of such item of personal property,
(ii) there are no outstanding options or rights of first refusal in favor of any
other party to purchase any such item of personal property or any portion
thereof or interest therein and (iii) there are no parties (other than any
Seller) who are in possession of or who are using any such item of personal
property.

    (c) Leased Personal Property. Section 3.5(c) of the Seller Disclosure
Schedule sets forth all Leases for personal property involving annual payments
in excess of $5,000, true and correct copies of which have been delivered or
made available to Buyer. Each Seller has good and valid leasehold title to all
Fixtures and Equipment, vehicles and other tangible personal property Assets
leased by it from third parties, free and clear of any and all Encumbrances
other than Permitted Encumbrances.

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    With respect to each Lease listed in Section 3.5(c) of the Seller Disclosure
Schedule, (i) there has been no Default under such Lease by any Seller, or, to
any Seller's knowledge, by any other Person, (ii) the execution, delivery and
performance of this Agreement and the Noncompete Agreements and the consummation
of the transactions contemplated hereby and thereby will not cause (with or
without notice and with or without the passage of time) a Default under any such
Lease, (iii) to each Seller's knowledge, such Lease is a valid and binding
obligation of the lessor, is in full force and effect and is enforceable by the
applicable Seller in accordance with its terms, (iv) no action has been taken by
any Seller and, to each Seller's knowledge, no event has occurred which, with
notice or lapse of time or both, would permit termination, modification or
acceleration by a party thereto other than by such Seller without the applicable
Seller's consent under any such Lease, (v) no Person has repudiated any term
thereof or threatened to terminate, cancel or not renew any such Lease and
(vi) no Seller has assigned, transferred, conveyed, mortgaged or encumbered any
interest therein or in any leased personal property subject thereto (or any
portion thereof).

    3.6  Environmental Matters.  Notwithstanding any disclosure made in the
Seller Disclosure Schedule, each Seller is, and at all times has been, in full
compliance with, and has not been and is not in violation of or liable under,
any Environmental Law. Notwithstanding any disclosure made in the Seller
Disclosure Schedule, no Seller has any basis to expect, nor has any other Person
for whose conduct any Seller is or may be held to be responsible received, any
actual or threatened order, notice, or other communication from (i) any Person
or private citizen acting in the public interest or (ii) the current or prior
owner or operator of any Facility, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or threatened
obligation to undertake or bear the cost of any Environmental, Health and Safety
Liability with respect to any of the Facilities or any other properties or
assets (whether real, personal or mixed) in which any Seller has had an
interest. Notwithstanding any disclosure made in the Seller Disclosure Schedule,
no underground tank or other underground storage receptacle for Hazardous
Substances is currently located on any Facility, and there have been no releases
of any Hazardous Substances from any such underground tank or related piping and
there have been no releases of Hazardous Substances in quantities exceeding the
reportable quantities as defined under federal or state law on, upon or into any
Facility other than those authorized by Environmental Laws. In addition and
notwithstanding any disclosure made in the Seller Disclosure Schedule, to the
knowledge of each Seller, there have been no such releases by predecessors of
any Seller and no releases in quantities exceeding the reportable quantities as
defined under federal or state law on, upon or into any real property in the
immediate vicinity of any of the Facilities other than those authorized by
Environmental Laws which, through soil or ground water contamination, may have
come to be located on the properties of any Seller. Notwithstanding any
disclosure made in the Seller Disclosure Schedule, no Seller is party, whether
as a direct signatory or as successor, assign or third-party beneficiary, or
otherwise bound, to any Lease or any Contract under which any Seller is
obligated by or entitled to the benefits of, directly or indirectly, any
representation, warranty, indemnification, covenant, restriction or other
undertaking concerning any Environmental Condition. Notwithstanding any
disclosure made in the Seller Disclosure Schedule, no Seller has released any
other Person from any claim under any Environmental Law or waived any rights
concerning any Environmental Condition.

    3.7  Contracts.  

    (a) Disclosure. Section 3.7(a) of the Seller Disclosure Schedule sets forth
a complete and accurate list of all of the Contracts of the following
categories:

    (i) Contracts not made in the ordinary course of business;

    (ii) license agreements or royalty agreements involving any form of
Proprietary Rights, whether any Seller is the licensor or licensee thereunder
(excluding licenses that are commonly available on standard commercial terms,
such as software "shrink-wrap" licenses);

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    (iii) confidentiality and non-disclosure agreements (whether any Seller is
the beneficiary or the obligated party thereunder);

    (iv) Contracts or commitments involving future expenditures or Liabilities
in excess of $10,000 after the date hereof or otherwise material to the business
of any Seller or the Assets;

    (v) Contracts or commitments relating to commission arrangements with others
that are material to the business of any Seller;

    (vi) employment contracts, consulting contracts, severance agreements,
"stay-bonus" agreements and similar arrangements, including Contracts (A) to
employ or terminate executive officers or other personnel and other contracts
with present or former officers or directors of any Seller or (B) that will
result in the payment by, or the creation of any Liability of any Seller, the
Stockholders or Buyer to pay any severance, termination, "golden parachute," or
other similar payments to any present or former personnel following termination
of employment or otherwise as a result of the consummation of the transactions
contemplated by this Agreement;

    (vii) indemnification agreements;

    (viii) promissory notes, loans, agreements, indentures, evidences of
indebtedness, letters of credit, guarantees, or other instruments relating to an
obligation to pay money, whether any Seller shall be the borrower, lender or
guarantor thereunder (excluding credit provided by any Seller in the ordinary
course of business to buyers of its products and obligations to pay vendors in
the ordinary course of business consistent with past practice);

    (ix) Contracts containing covenants limiting the freedom of any Seller, or
any officer, director, employee or affiliate of any Seller, to engage in any
line of business or compete with any Person that relates directly or indirectly
to the business of any Seller or Buyer's business;

    (x) Any Contract with the federal, state or local government or any agency
or department thereof;

    (xi) Any Contract or other arrangement with a Related Party;

    (xii) Leases of real or personal property involving annual payments of more
than $10,000; and

    (xiii) Any other Contract under which the consequences of a Default or
termination would reasonably be expected to have a Material Adverse Effect on
any Seller, individually or in the aggregate.

    Complete and accurate copies of all of the Contracts listed in
Section 3.7(a) of the Seller Disclosure Schedule, including all amendments and
supplements thereto, have been made available to Buyer.

    (b) Absence of Defaults. Except as set forth in Section 3.7(b) of the Seller
Disclosure Schedule, all of the Contracts are valid and binding obligations of
the applicable Seller and enforceable against such Seller and, to each Seller's
knowledge, the other parties thereto in accordance with their terms with no
existing or, to each Seller's knowledge, threatened Default or dispute by Seller
or, to each Seller's knowledge, any other party thereto. Each Seller has
fulfilled, or taken all action necessary to enable it to fulfill when due, all
of its material obligations under each of such Contracts. To each Seller's
knowledge, all parties to such Contracts have complied with the provisions
thereof, no party is in Default thereunder and no notice of any claim of Default
has been given to any Seller.

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    (c) Product Warranty. No Seller has committed any act, and there has been no
omission, which may result in, and there has been no occurrence which may give
rise to, product liability or Liability for breach of warranty (whether covered
by insurance or not) on any Seller's part, with respect to products designed,
manufactured, assembled, marketed, rented, leased, sold, repaired, maintained,
delivered or installed or services rendered prior to or on the Closing Date
which could reasonably be expected to result in Liability to any Seller
exceeding $10,000 in the aggregate.

    (d) Rental Contracts. All contracts pertaining to the rental or lease of
items of Inventory are valid, binding and enforceable against all parties
thereto.

    3.8  No Conflict or Violation; Consents.  None of the execution, delivery or
performance of this Agreement or any Ancillary Agreement, the consummation of
the transactions contemplated hereby or thereby, nor compliance by any Seller
with any of the provisions hereof or thereof, will (a) violate or conflict with
any provision of any Seller's governing documents, (b) violate, conflict with,
or result in a breach of or constitute a Default (with or without notice or the
passage of time) under, or result in the termination of, or accelerate the
performance required by, or result in a right to terminate, accelerate, modify
or cancel under, or require a notice under, or result in the creation of any
Encumbrance upon any of its respective assets under, any Contract, Lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, security interest or
other arrangement to which any Seller is a party or by which any Seller is bound
or to which the Assets or any portion thereof are subject, (c) violate any
applicable Regulation or Court Order or (d) impose any Encumbrance on any Assets
or the business of any Seller. Except as set forth in Section 3.8 of the Seller
Disclosure Schedule, no notices to, declaration, filing or registration with,
approvals or consents of, or assignments by, any Persons (including any federal,
state or local governmental or administrative authorities) are necessary to be
made or obtained by any Seller in connection with the execution, delivery or
performance of this Agreement or any Ancillary Agreement or the consummation of
the transactions contemplated hereby or thereby. As of the date hereof, the
Assumed Liabilities do not, and as of the Closing will not, include any
indebtedness for borrowed money (including, without limitation, any capital
Lease) or outstanding letter of credit or similar obligation except as set forth
in Section 3.8 of the Seller Disclosure Schedule (the "Funded Debt"). Except as
set forth in Section 3.8 of the Seller Disclosure Schedule, each such obligation
may be prepaid at any time upon tender of the outstanding principal amount and
accrued but unpaid interest without payment of any premium, pre-payment fee or
similar charge or expense.

    3.9  Permits.  Section 3.9 of the Seller Disclosure Schedule sets forth a
complete list of all Permits, all of which are as of the date hereof, and will
be as of the Closing Date, in full force and effect. Each Seller and its
predecessors have, and at all times have had, all Permits required under any
applicable Regulation in the operation of its business or in its ownership of
the Assets, and owns or possesses such Permits free and clear of all
Encumbrances other than Permitted Encumbrances. No Seller is in Default, nor, to
each Seller's knowledge, has any Seller received any notice of any claim of
Default, with respect to any such Permit. Except as otherwise governed by law,
all such Permits are renewable by their terms or in the ordinary course of
business without the need to comply with any special qualification procedures or
to pay any amounts other than routine filing fees and, except as set forth in
Section 3.9 of the Seller Disclosure Schedule, will not be adversely affected by
the completion of the transactions contemplated by this Agreement.

    3.10  Financial Statements; Books and Records.  

    (a) General. The Financial Statements of each Seller are complete, are in
accordance with such Seller's Books and Records and fairly present the financial
condition, results of operations, cash flows and changes in stockholders' equity
of such Seller as of the dates and for the periods indicated thereby, in
accordance with GAAP consistently applied throughout the periods covered

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thereby (except as otherwise expressly indicated in the notes to the Financial
Statements and, in the case of interim financial statements, for the lack of
footnotes.

    (b) Internal Controls. Each Seller maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed with management's authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in accordance with GAAP
and to maintain accountability for assets, (iii) access to assets is permitted
only in accordance with management's authorization and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

    (c) Books and Records. The Books and Records of each Seller, in reasonable
detail, accurately and fairly reflect the activities of such Seller and its
business and have been provided to Buyer for its inspection.

    (d) All Accounts Recorded. No Seller has engaged in any transaction,
maintained any bank account or used any corporate funds except for transactions,
bank accounts or funds which have been and are reflected in the normally
maintained Books and Records.

    (e) Corporate Records. Each Seller's stock records and minute books that
have been made available to Buyer fully reflect all minutes of meetings,
resolutions and other material actions and proceedings of its stockholders and
board of directors and all committees thereof, all issuances, transfers and
redemptions of capital stock of which such Seller is aware and contain true,
correct and complete copies of its articles, or certificate, as the case may be,
of incorporation and bylaws and all amendments thereto through the date hereof.

    3.11  Absence of Certain Changes or Events.  Except as set forth in
Section 3.11 of the Seller Disclosure Schedule, since December 31, 2000 there
has not been any:

    (a) Material Adverse Change related to the business of any Seller or the
Assets;

    (b) failure to operate the business of any Seller in the ordinary course
consistent with past practice so as to preserve such business intact and to
preserve the continued services of each Seller's employees and the goodwill of
suppliers, customers and others having business relations with any Seller or its
Representatives;

    (c) resignation or termination of any Employee, or any increase in the rate
of compensation payable or to become payable to any Employee or Representative
of Seller, including the making of any loan to, or the payment, grant or accrual
of any bonus, incentive compensation, service award or other similar benefit to,
any such Person, or the addition to, modification of, or contribution to any
Employee Plan;

    (d) any payment, loan or advance of any amount to or in respect of, or the
sale, transfer or lease of any properties or the Assets to, or entering into of
any contract with, any Related Party except regular compensation to Employees on
historical rates and terms (it being understood that all such payments to any
Stockholder or any Related Party are identified in Section 3.11(d) of the Seller
Disclosure Schedule);

    (e) except in the ordinary course of business consistent with past practice,
sale, assignment, license, transfer or Encumbrance (other than Permitted
Encumbrances) of any of the Assets, tangible or intangible, singly or in the
aggregate;

    (f)  new Contracts, or extensions, modifications, terminations or renewals
thereof, except where entered into, modified or terminated in the ordinary
course of business consistent with past practice;

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    (g) to each Seller's knowledge, actual or threatened termination of any
material customer account or group of accounts or actual or threatened material
reduction in purchases or royalties payable by any such customer or occurrence
of any event that is likely to result in any such termination or reduction;

    (h) except in the ordinary course of business consistent with past practice,
disposition or lapsing of any of any Seller's Proprietary Rights, in whole or in
part;

    (i)  any disclosure of any trade secret, process or know-how to any Person
not an Employee or not otherwise subject to a non-disclosure agreement or
fiduciary obligation of confidentiality;

    (j)  change in accounting methods or practices by any Seller;

    (k) revaluation by any Seller of any of the Assets or any portion thereof,
including writing off or establishing reserves with respect to inventory, notes
or accounts receivable;

    (l)  damage, destruction or loss (whether or not covered by insurance)
materially adversely affecting the Assets or the business or prospects of any
Seller;

    (m) declaration, setting aside or payment of any dividend or distribution of
cash, property or otherwise in respect of any capital stock of any Seller or any
redemption, purchase or other acquisition of any equity securities of any
Seller;

    (n) issuance or reservation for issuance by any Seller of, or commitment of
it to issue or reserve for issuance, any shares of capital stock or other equity
securities or obligations or securities convertible into or exchangeable for
shares of capital stock or other equity securities;

    (o) increase, decrease or reclassification of the capital stock of any
Seller;

    (p) amendment of the articles, or certificate, as the case may be, of
incorporation or bylaws of any Seller;

    (q) capital expenditure or execution of any lease or any incurring of
Liability therefor by any Seller, involving payments or obligations in excess of
$20,000 in the aggregate;

    (r) failure to pay any material obligation of any Seller when due or other
change in any Seller's practices regarding payment of operating expenses and
accounts payable;

    (s) cancellation of any indebtedness or waiver of any rights of substantial
value to any Seller, except in the ordinary course of business consistent with
past practice;

    (t)  indebtedness incurred by any Seller for borrowed money or any
commitment to borrow money entered into by such Seller, or any loans made or
agreed to be made by any Seller;

    (u) liability incurred by any Seller except in the ordinary course of
business consistent with past practice, or any increase or change in any
assumptions underlying or methods of calculating any bad debt, contingency or
other reserves;

    (v) payment, discharge or satisfaction of any Liabilities of any Seller
other than the payment, discharge or satisfaction in the ordinary course of
business consistent with past practice of Liabilities reflected or reserved
against in the Financial Statements or incurred in the ordinary course of
business consistent with past practice since December 31, 2000;

    (w) acquisition of any equity interest in any other Person; or

    (x) agreement by any Seller directly or indirectly to do any of the
foregoing.

    3.12  Liabilities.  No Seller has any Liabilities or obligations (absolute,
accrued, contingent or otherwise) except (i) Liabilities which are reflected and
properly reserved against in the Financial Statements, (ii) Liabilities incurred
in the ordinary course of business consistent with past practice since

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the date of the Financial Statements and (iii) Liabilities arising under the
Contracts set forth in Section 3.7(a) of the Seller Disclosure Schedule or
otherwise expressly identified in Section 3.12 of the Seller Disclosure
Schedule. None of the Liabilities described in this Section 3.12 relates to any
breach of Contract, breach of warranty, tort, infringement or violation of law
or arose out of any Action (collectively, a "Breach").

    3.13  Litigation.  There is no Action pending or, to each Seller's
knowledge, threatened or anticipated (a) against, relating to or affecting any
Seller, any of the Assets or any of their respective Employees as such,
(b) which seeks to enjoin or obtain damages in respect of the transactions
contemplated hereby or (c) with respect to which there is a reasonable
likelihood of a determination which would prevent any Seller from consummating
the transactions contemplated hereby. None of the Actions, if adversely
determined against any Seller, its directors or officers, or any other Person
could reasonably be expected to result in a loss to such Seller, individually or
in the aggregate, in excess of $10,000. To each Seller's knowledge, there is no
basis for any Action, which if adversely determined against any Seller, its
directors or officers, or any other Person could reasonably be expected to
result in a loss to such Seller, individually or in the aggregate, in excess of
$10,000. There are presently no outstanding judgments, decrees or orders of any
court or any governmental or administrative agency against or affecting any
Seller or its business or any of the Assets. Section 3.13 of the Seller
Disclosure Schedule contains a complete and accurate description of all Actions
since any Seller's organization to which any Seller or any predecessor has been
a party or which relate to any of the Assets or Employees of any Seller, or any
such Actions which were settled prior to the institution of formal proceedings,
with the exception of Actions in which the sole involvement of the Sellers, or
any of them, is as plaintiff and in the ordinary course of business in which the
amount in controversy is less than or equal to $10,000 in the aggregate.

    3.14  Labor Matters.  

    (a) General. No Seller is a party to any labor agreement with respect to its
Employees with any labor organization, group or association, and no Seller has
experienced any attempt by organized labor or its representatives to make such
Seller conform to demands of organized labor relating to its Employees or to
enter into a binding agreement with organized labor that would cover any of such
Seller's Employees. Notwithstanding any disclosure made in the Seller Disclosure
Schedule, there is no unfair labor practice charge or complaint against any
Seller pending before the National Labor Relations Board or any other
governmental agency arising out of any Seller's activities, and no Seller has
knowledge of any facts or information which would give rise thereto; there is no
labor strike or labor disturbance pending or threatened against any Seller nor
is any grievance currently being asserted against it; and no Seller has
experienced a work stoppage or other labor difficulty. Notwithstanding any
disclosure made in the Seller Disclosure Schedule, there are no material
controversies pending or, to each Seller's knowledge, threatened between any
Seller and any of its Employees, and no Seller is aware of any facts which could
reasonably result in any such controversy.

    (b) Compliance. Notwithstanding any disclosure made in the Seller Disclosure
Schedule, each Seller is in compliance with all applicable Regulations
respecting employment practices, terms and conditions of employment, wages and
hours, equal employment opportunity, and the payment of social security and
similar Taxes and is not engaged in any unfair labor practice. Notwithstanding
any disclosure made in the Seller Disclosure Schedule, no Seller is liable for
any claims for past due wages or any penalties for failure to comply with any of
the foregoing.

    (c) Severance Obligations. No Seller has entered into any severance,
"stay-bonus" or similar arrangement in respect of any present or former Employee
that will result in any obligation (absolute or contingent) of Buyer or any
Seller to make any payment to any present or former Employee following
termination of employment (voluntary or involuntary) or upon consummation

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of the transactions contemplated by this Agreement (whether or not employment is
continued for any specified period after the Closing Date). Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in the acceleration or vesting of
any other rights of any Person to benefits under any Employee Plan.

    (d) Highly Compensated Employees. Attached hereto as Section 3.14(d) of the
Seller Disclosure Schedule is a list of the names of all present Employees with
total compensation exceeding $75,000 in the fiscal year ending December 31, 2000
and their current compensation payable by any Seller.

    3.15  Employees' Proprietary Rights.  No Seller is aware that any of its
Employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
the use of such Employee's efforts to promote the interests of any Seller or
that would conflict with such Seller's business as conducted. Neither the
execution nor delivery of this Agreement and the Ancillary Agreements, nor the
carrying on of each Seller's business by such Seller's Employees, nor the
conduct of any Seller's business as conducted, will, to the best of each
Seller's knowledge, conflict with or result in a breach of the terms, conditions
or provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such Employees is now obligated. No Seller
believes it is or will be necessary to utilize any Proprietary Rights of any of
its Employees (or people it currently intends to hire) created prior to their
employment by such Seller.

    3.16  Employee Benefit Plans.  Section 3.16 of the Seller Disclosure
Schedule contains a complete list of Employee Plans. True and complete copies of
each of the following documents have been delivered by Sellers to Buyer:
(i) each Employee Plan (and, if applicable, related trust agreements, annuity
contracts or other funding instruments) and all amendments thereto, all summary
plan descriptions, summary of material modifications (as defined in ERISA) and
all written interpretations and descriptions thereof which any Seller generally
has distributed to participants therein, the number of and a general description
of the level of employees covered by each Benefit Arrangement and a complete
description of any Employee Plan which is not in writing, (ii) for the three
(3) most recent plan years, Annual Reports on Form 5500 Series required to be
filed with any governmental agency for each Welfare Plan, (iii) a description of
complete age, salary, service and related data as of the last day of the last
plan year for each Seller's employees and former employees, and (iv) a
description setting forth the amount of any liability of each Seller as of the
Closing Date for payments more than thirty (30) calendar days past due with
respect to any Welfare Plan.

    (a) Pension Plans

    (i)  The funding method used in connection with each Pension Plan which is
subject to the minimum funding requirements of ERISA is acceptable and the
actuarial assumptions used in connection with funding each such plan are
reasonable. As of the last day of the last plan year of each Pension Plan and as
of the Closing Date, the "amount of unfunded benefit liabilities" as defined in
Section 4001(a)(18) of ERISA (but excluding from the definition of "current
value" of "assets" of such Pension Plan, accrued but unpaid contributions) did
not and will not exceed zero. No "accumulated funding deficiency" (for which an
excise tax is due or would be due in the absence of a waiver) as defined in
Section 412 of the Code or as defined in Section 302(a)(2) of ERISA, whichever
may apply, has been incurred with respect to any Pension Plan with respect to
any plan year, whether or not waived. No Seller nor any ERISA Affiliate has
failed to pay when due any "required installment," within the meaning of
Section 412(m) of the Code and Section 302(e) of ERISA, whichever may apply,
with respect to any Pension Plan. No Seller nor any ERISA Affiliate is subject
to any lien imposed under Section 412(n) of the Code or Section 302(f) of ERISA,
whichever may apply, with respect to

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any Pension Plan. No Seller nor any ERISA Affiliate has any liability for unpaid
contributions with respect to any Pension Plan.

    (ii) No Seller nor any ERISA Affiliate is required to provide security to a
Pension Plan which covers or has covered employees or former employees of any
Seller or a Subsidiary under Section 401(a)(29) of the Code.

    (iii) Each Pension Plan and each related trust agreement, annuity contract
or other funding instrument which covers or has covered employees or former
employees of any Seller or a Subsidiary (with respect to their relationship with
such entities) is qualified and tax-exempt under the provisions of Code Sections
401(a) (or 403(a), as appropriate) and 501(a) and has been so qualified during
the period from its adoption to date.

    (iv) Each Pension Plan, each related trust agreement, annuity contract or
other funding instrument which covers or has covered employees or former
employees of any Seller or a Subsidiary (with respect to their relationship with
such entities) presently complies and has been maintained in compliance with its
terms and, both as to form and in operation, with the requirements prescribed by
any and all statutes, orders, rules and regulations which are applicable to such
plans, including but not limited to ERISA and the Code.

    (v) Each Seller has paid all premiums (and interest charges and penalties
for late payment, if applicable) due the PBGC with respect to each Pension Plan
for each plan year thereof for which such premiums are required. No Seller nor
any ERISA Affiliate has engaged in, or is a successor or parent corporation to
an entity that has engaged in, a transaction described in Section 4069 of ERISA.
There has been no "reportable event" (as defined in Section 4043(b) of ERISA and
the PBGC regulations under such Section) with respect to any Pension Plan. No
filing has been made by any Seller or any ERISA Affiliate with the PBGC, and no
proceeding has been commenced by the PBGC, to terminate any Pension Plan. No
condition exists and no event has occurred that could constitute grounds for the
termination of any Pension Plan by the PBGC. No Seller nor any ERISA Affiliate
has, at any time, (A) ceased operations at a facility so as to become subject to
the provisions of Section 4068(e) of ERISA, (B) withdrawn as a substantial
employer so as to become subject to the provisions of Section 4063 of ERISA, or
(C) ceased making contributions on or before the Closing Date to any Pension
Plan subject to Section 4064(a) of ERISA to which any Seller or any ERISA
Affiliate made contributions during the five years prior to the Closing Date.

    (b) Multiemployer Plans. No Seller nor any ERISA Affiliate has ever
maintained any Liability with respect to a Multiemployer Plan, and no Liability
will arise or be imposed on any Seller or any ERISA Affiliate under, or with
respect to, any Multiemployer Plan.

    (c) Welfare Plans. Each Welfare Plan which covers or has covered employees
or former employees of any Seller (with respect to their relationship with such
Seller) currently complies in all material respects and has been maintained in
compliance in all material respects with its terms and, both as to form and
operation, with the requirements prescribed by any and all statutes, orders,
rules and regulations which are applicable to such Welfare Plan, including,
without limitation, ERISA and the Code. Except as required by Section 4980B of
the Code or Part 6 of Title 1, Subtitle B of ERISA, none of any Seller, any
ERISA Affiliate or any Welfare Plan has any present or future obligation to make
any payment to, or with respect to any present or former employee of any Seller
or any ERISA Affiliate pursuant to, any retiree medical benefit plan, or other
retiree Welfare Plan, and no condition exists which would prevent any Seller or
an ERISA Affiliate from amending or terminating any such benefit plan or such
Welfare Plan. Each Welfare Plan which covers or has covered employees or former
employees of any Seller (with respect to their relationship with Seller) and
which is a "group health plan," as defined in Section 607(1) of ERISA, presently
complies in all material respects with and has been operated in compliance in
all

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material respects with provisions of Part 6 of Title I, Subtitle B of ERISA and
Sections 162(k) and 4980B of the Code at all times. No Seller nor any ERISA
Affiliate has, at any time, maintained, contributed to or had any obligation to
maintain or contribute to any Welfare Plan that is a "multiemployer plan," as
defined in Section 3(37) of ERISA. The insurance policies or other funding
instruments, if any, for each Welfare Plan provide coverage for each employee,
consultant, independent contractor or retiree of each Seller or any of its
Subsidiaries (and, if applicable, their respective dependents) who has been
advised by any Seller, whether through an Employee Plan or otherwise, that he or
she is covered by such Welfare Plan.

    (d) Benefit Arrangements. Each Benefit Arrangement presently complies and
has been maintained in compliance in all material respects with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations which are applicable to such Benefit Arrangement, including, without
limitation, the Code. Except as provided by law or in any employment agreement
set forth in Section 3.16(d) of the Seller Disclosure Schedule, the employment
of all persons presently employed or retained by each Seller is terminable at
will without prior notice.

    (e) Deductibility of Payments. There is no contract, agreement, plan or
arrangement covering any employee or former employee of any Seller (with respect
to such employee's relationship with such Seller) that, individually or
collectively, requires the payment by any Seller of any amount (i) that is not
deductible under Section 162(a)(1) or 404 of the Code or (ii) that is an "excess
parachute payment" pursuant to Section 280G of the Code.

    (f)  Fiduciary Duties and Prohibited Transactions. No Seller nor any plan
fiduciary of any Welfare Plan or Pension Plan which covers or has covered
employees or former employees of any Seller or any ERISA Affiliate has engaged
in, or has any liability in respect of, any transaction in violation of Sections
404 or 406 of ERISA or any "prohibited transaction," as defined in
Section 4975(c)(1) of the Code, for which no exemption exists under Section 408
of ERISA or Section 4975(c)(2) or (d) of the Code, or has otherwise violated the
provisions of Part 4 of Title I, Subtitle B of ERISA so as to create any
liability of any Seller or any of its Subsidiaries or any Employee Plan. No
Seller has participated in a violation of Part 4 of Title I, Subtitle B of ERISA
by any plan fiduciary of any Welfare Plan so as to create any material liability
of any Seller, and no Seller nor its Subsidiaries have been assessed any civil
penalty under Section 502(l) of ERISA.

    (g) Litigation. There is no action, order, writ, injunction, judgment or
decree outstanding or claim (other than routine claims for benefits), suit,
litigation, proceeding, arbitration proceeding, governmental audit or
investigation relating to or seeking benefits under any Employee Plan that is
pending or, to the knowledge of each Seller, anticipated or threatened against
any Seller, any ERISA Affiliate or any Employee Plan.

    (h) No Amendments. No Seller nor any ERISA Affiliate has announced to
employees, former employees, consultants or directors an intention to create, or
otherwise created, a legally binding commitment to adopt any additional Employee
Plan which is intended to cover employees or former employees of any Seller
(with respect to their relationship with such Seller) or to amend or modify any
existing Employee Plan which covers or has covered employees or former employees
of any Seller or any of its Subsidiaries (with respect to their relationship
with such Seller or any of its Subsidiaries).

    (i)  No Acceleration or Creation of Rights. Except as set forth in
Section 3.16(i) of the Seller Disclosure Schedule, neither the execution and
delivery of this Agreement or the Ancillary Agreements by any Seller nor the
consummation of the transactions contemplated hereby or the related transactions
will result in the acceleration or creation of any rights of any person to
benefits under any Employee Plan (including, without limitation, the
acceleration of the vesting or exercisability of any stock options, the
acceleration of the vesting of any restricted stock or the

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acceleration or creation of any rights under any severance, parachute or change
in control agreement).

    (j)  Full Funding. All payments or contributions due with respect to any
Employee Plan have been timely made or deposited, as applicable and no Seller
nor any ERISA Affiliate has any Liability for any unpaid or untimely
contributions with respect to any Employee Plan.

    (k) No Other Material Liability. No event has occurred in connection with
which any Seller, any ERISA Affiliate or any Employee Plan, directly or
indirectly, could be subject to any material Liability (A) under any statute,
regulation or governmental order relating to any Employee Plan or (B) pursuant
to any obligation of any Seller to indemnify any person against Liability
incurred under any such statute, regulation or order as they relate to the
Employee Plans.

    3.17  Transactions with Related Parties.  Except for (x) employment
agreements and other compensation arrangements disclosed in Section 3.17 of the
Seller Disclosure Schedule and (y) their respective equity interests in any
Seller, no Related Party has (a) borrowed or loaned money or other property to
any Seller which has not been repaid or returned, (b) any contractual
relationship or other claims, express or implied, of any kind whatsoever against
any Seller or (c) any interest in any property (including, without limitation,
any Proprietary Rights) used by any Seller.

    3.18  Compliance with Law.  Each Seller and its predecessors have conducted
the business of such Seller in compliance with all applicable Regulations and
Court Orders. No Seller has received any notice to the effect that, or has
otherwise been advised that, such Seller or any predecessor is not in compliance
with any such Regulations or Court Orders, and no Seller nor any predecessor has
any reason to anticipate that any existing circumstances are likely to result in
a violation of any of the foregoing.

    3.19  Intellectual Property.  

    (a) General. Section 3.19(a) of the Seller Disclosure Schedule sets forth
with respect to each Seller's Proprietary Rights: (i) for each invention
material to the business of each Seller, whether or not patented, the date of
conception and reduction to practice, names of inventors, priority date of
patent applications (if any), and issue dates of any issued patents, (ii) for
each trademark, tradename or service mark, whether or not registered, the date
first used, the application serial number or registration number, the class of
goods covered, the nature of the goods or services, the countries in which the
names or mark is used and the expiration date for each country in which a
trademark has been registered, (iii) for each copyrighted work, whether or not
registered, the date of creation and first publication of the work, the number
and date of registration for each country in which a copyright application has
been registered, (iv) for each mask work (if any), whether or not registered,
the date of first commercial exploitation and if registered, the registration
number and date of registration, (v) a description of all Trade secrets that are
material to the business of each Seller, (vi) all such Proprietary Rights in the
form of licenses, and (vii) for any URL or domain name, the registration date,
any renewal date and name of registry. True and correct copies of all
Proprietary Rights (including all pending applications, application related
documents and materials and written materials relating to Trade secrets) owned,
controlled or used by or on behalf of any Seller or in which any Seller has any
interest whatsoever have been provided or made available to Buyer.

    (b) Adequacy. Each Seller's Proprietary Rights are all those necessary for
the normal conduct of the Business as presently conducted including the
procurement, distribution, rental, lease and sale of all products and services
currently under development, planned for development or in practice.

    (c) Royalties and Licenses. Except as set forth in Section 3.19(c) of the
Seller Disclosure Schedule, no Seller has any obligation to compensate any
Person for the use of any of its

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Proprietary Rights nor has any Seller granted to any Person any license, option
or other rights to use in any manner any of its Proprietary Rights, whether
requiring the payment of royalties or not.

    (d) Ownership. Each Seller owns or has a valid right to use its Proprietary
Rights, and such Proprietary Rights will not cease to be valid rights of such
Seller by reason of the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.

    (e) Absence of Claims. No Seller has received (i) any notice alleging, or
otherwise has knowledge of facts that might give rise to, invalidity with
respect to any of such Seller's Proprietary Rights or (ii) any notice of alleged
infringement of any rights of others due to any activity by such Seller. Each
Seller's use of its Proprietary Rights in its past and current products does not
and would not infringe upon or otherwise violate the valid rights of any third
party anywhere in the United States. No other Person has notified any Seller
that it is claiming any ownership of or right to use any Proprietary Rights of
any Seller, or, to each Seller's knowledge, is infringing upon any such
Proprietary Rights in any way.

    (f)  Protection of Proprietary Rights. All of the pending applications for
each Seller's Proprietary Rights have been duly filed and, to each Seller's
knowledge, all other actions to protect such Proprietary Rights have been taken.
Each Seller has taken reasonable steps necessary or appropriate (including,
entering into appropriate confidentiality and nondisclosure agreements with
officers, directors, subcontractors, consultants, Employees, licensees and
customers in connection with the Assets) to safeguard and maintain the secrecy
and confidentiality of, and the proprietary rights in, the Proprietary Rights
that are material to each Seller's business. No Seller has knowledge of any
breach of any such confidentiality or nondisclosure agreement by any party
thereto.

    3.20  Assets Necessary to Continue to Conduct Business.  The Assets
constitute all of the assets, properties and rights used in, necessary or useful
in connection with the conduct of the Business, and upon consummation of the
transactions contemplated by this Agreement Buyer will obtain the resources
necessary to conduct the Business as previously conducted by Sellers. The
Business is conducted solely through the Sellers. No interest in any asset,
property or right used in, necessary or useful in connection with the conduct of
the Business is held, directly or indirectly, by any Person other than the
Sellers. None of the Assets constitute securities, including, without
limitation, any capital stock of any Subsidiary of any Seller.

    3.21  Tax Matters.  

    (a) Filing of Tax Returns. Each Seller has duly and timely filed with the
appropriate taxing authorities all Tax Returns required to be filed through the
date hereof. All such Tax Returns filed are complete and accurate in all
respects. All Taxes owed by any Seller (whether or not shown on any Tax Return)
have been paid. Except as set forth in Section 3.21(a) of the Seller Disclosure
Schedule, no Seller is currently the beneficiary of any extension of time within
which to file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where any Seller does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction.

    (b) Payment of Taxes. Each Seller's unpaid Taxes (i) did not, as of the date
of the Financial Statements, exceed the reserve for Tax Liability (excluding any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the balance sheets contained in
such Seller's Financial Statements (or in any notes thereto), and (ii) will not
exceed that reserve as adjusted for operations and transactions through the
Closing Date in accordance with the past custom and practice of such Seller in
filing its Tax Returns. The consummation by Buyer of the transactions
contemplated by this Agreement will not result in the

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imposition of any Tax on Buyer or any Assets except as set forth in
Section 3.21(b) of the Seller Disclosure Schedule.

    (c) Audits, Investigations or Claims. No deficiencies for Taxes have been
claimed, proposed or assessed by any taxing or other governmental authority
against any Seller. There are no pending or, to each Seller's knowledge,
threatened audits, investigations, disputes or claims or other Actions for or
relating to any Liability for Taxes with respect to any Seller, and there are no
matters under discussion by any Seller with any governmental authorities, or
known to any Seller, with respect to Taxes that are reasonably likely to result
in an additional Liability for Taxes with respect to any Seller. Audits of
federal, state and local Tax Returns by the relevant taxing authorities have
been completed for the periods set forth in Section 3.21(c) of the Seller
Disclosure Schedule and, except as set forth in the Seller Disclosure Schedule,
no Seller nor any predecessor has been notified that any taxing authority
intends to audit a Tax Return for any other period. Each Seller has delivered to
Buyer complete and accurate copies of federal, state and local Tax Returns of
such Seller and its predecessors for all tax years since such Seller's
inception, and complete and accurate copies of all examination reports and
statements of deficiencies assessed against or agreed to by Seller since its
inception. Except as set forth in Section 3.21(c) of the Seller Disclosure
Schedule, no Seller has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency.

    (d) Lien. There are no Encumbrances for Taxes (other than for current Taxes
not yet due and payable) on any of the Assets or any shares of any Seller's
capital stock.

    (e) Tax Elections. All elections with respect to Taxes affecting any Seller,
or the Assets, as of the date hereof are set forth in Section 3.21(e) of the
Seller Disclosure Schedule. No Seller has: (i) consented at any time under
Section 341(f)(1) of the Code to have the provisions of Section 341(f)(2) of the
Code apply to any disposition of any Assets; (ii) agreed, or is required, to
make any adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise; (iii) made an election, or is required, to treat
any Asset as owned by another Person pursuant to the provisions of
Section 168(f) of the Code or as tax-exempt bond financed property or tax-exempt
use property within the meaning of Section 168 of the Code; (iv) acquired and
does not own any assets that directly or indirectly secure any debt the interest
on which is tax exempt under Section 103(a) of the Code; (v) made and will not
make a consent dividend election under Section 565 of the Code; (vi) elected at
any time to be treated as an S corporation within the meaning of Sections 1361
and 1362 of the Code; or (vii) made any of the foregoing elections or is
required to apply any of the foregoing rules under any comparable state or local
Tax provision.

    (f)  Prior Affiliated Groups. No Seller is nor has any Seller ever been a
member of an affiliated group of corporations within the meaning of Section 1504
of the Code or any group that has filed a combined, consolidated or unitary Tax
Return. No Seller has Liability for the Taxes of any Person (other than such
Seller) (i) under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign law), (ii) as a transferee or successor,
(iii) by contract or (iv) otherwise.

    (g) Tax Sharing Agreements. There are no Tax-sharing agreements or similar
arrangements (including indemnity arrangements) with respect to or involving any
Seller, the Assets or the business of any Seller and, after the Closing Date,
none of any Seller, the Assets or the business of any Seller shall be bound by
any such Tax-sharing agreements or similar arrangements or have any Liability
thereunder for amounts due in respect of periods prior to the Closing Date.

    (h) Partnerships and Single Member LLC's. No Seller (i) is subject to any
joint venture, partnership, or other arrangement or contract which is treated as
a partnership for Tax purposes, (ii) owns a single member limited liability
company which is treated as a disregarded entity, (iii) is

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a shareholder of a "controlled foreign corporation" as defined in Section 957 of
the Code (or any similar provision of state, local or foreign law) or (iv) is a
"personal holding company" as defined in Section 542 of the Code (or any similar
provision of state, local or foreign law).

    (i)  No Withholding. No Seller has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897 of the Code, and none of any
Seller's stockholders is a "foreign person" as defined in Section 1445(f)(3) of
the Code. Each Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any Employee,
Representative, independent contractor, creditor, stockholder or other third
party. The transactions contemplated herein are not subject to the Tax
withholding provisions of Section 3406 of the Code, or of Subchapter A of
Chapter 3 of the Code or of any other provision of law.

    (j)  International Boycott. No Seller has ever participated in nor is any
Seller participating in an international boycott within the meaning of
Section 999 of the Code.

    (k) Permanent Establishment. No Seller has nor has any Seller ever had a
permanent establishment in any foreign country, as defined in any applicable Tax
treaty or convention between the United States of America and such foreign
country.

    (l)  Florida Sales Tax Audit. Notwithstanding any disclosure made in the
Seller Disclosure Schedule, the audit being conducted by the State of Florida
with respect to the sales tax of American Music, Inc. from March 1994 through
February 1999 will not result in Liability to Buyer in excess of $5,000 (Five
Thousand Dollars).

    3.22  Insurance.  Section 3.22 of the Seller Disclosure Schedule contains a
complete and accurate list of all policies or binders of insurance (showing as
to each policy or binder the carrier, policy number, coverage limits, expiration
dates, annual premiums, a general description of the type of coverage provided
and any pending claims thereunder) of which any Seller is the owner, insured or
beneficiary. All of such policies are sufficient for (i) compliance with all
Regulations and all of the Contracts, (ii) covering all reasonably foreseeable
damage to and liabilities or contingencies relating to the applicable Seller's
conduct of its business and (iii) providing replacement cost insurance coverage
for all of the Assets, Fixtures and Equipment and all leasehold improvements. No
Seller is in Default under any of such policies or binders, nor failed to give
any notice or to present any material claim under any such policy or binder in a
due and timely fashion. There are no facts known to any Seller upon which an
insurer might be justified in reducing or denying coverage or increasing
premiums on existing policies or binders. There are no outstanding unpaid claims
under any such policies or binders. Such policies and binders are in full force
and effect on the date hereof and shall be kept in full force and effect by each
Seller through the Closing Date.

    3.23  Accounts Receivable.  The accounts and notes receivable reflected in
the Financial Statements, and all accounts or notes receivable arising since the
date thereof, represent bona fide claims against debtors for sales, services
performed or other charges arising on or before the date of recording thereof,
and all the goods delivered and services performed which gave rise to said
accounts were delivered or performed in accordance with the applicable orders,
Contracts or customer requirements.

    3.24  Inventory.  The value at which the Inventory is shown on the Financial
Statements has been determined in accordance with the normal valuation policy of
the Sellers, consistently applied and in accordance with GAAP. The Inventory and
the specific items acquired or manufactured subsequent to the date of the
Financial Statements consists only of items of quality and quantity commercially
usable and saleable in the ordinary course of business, except for any items of
obsolete material or material below standard quality, all of which have been
written down to net realizable market value, or for which adequate reserves have
been provided in the Financial Statements, and the present quantity of

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all Inventory is reasonable in the present circumstances of the Business.
Section 3.24 of the Seller Disclosure Schedule contains a complete and accurate
list of all Inventory as of the date of the Financial Statements and the
addresses at which such Inventory is located.

    3.25  Purchase Commitments and Outstanding Bids.  As of the date of this
Agreement, the aggregate of all Contracts for the purchase of products or
services by all Sellers, other than in the ordinary course of business, does not
exceed $20,000. No outstanding purchase or outstanding lease commitment of any
Seller presently is in excess of the normal, ordinary and usual requirements of
the business of such Seller or was made at any price in excess of the now
current market price or contains terms and conditions more onerous than those
usual and customary in such Seller's business. There are outstanding no pending
obligations to lease real property other than to those identified in
Section 3.4(c) of the Seller Disclosure Schedule.

    3.26  Customers and Suppliers.  

    (a) Customers. Section 3.26(a) of the Seller Disclosure Schedule sets forth
a complete and accurate list of the names and addresses of the ten
(10) customers with the greatest dollar volume of purchases from Sellers during
the last fiscal year and during the last fiscal quarter, showing the approximate
total purchases in dollars from each Seller from each such customer during such
fiscal year. Since December 31, 2000, there has been no adverse change in the
business relationship of any Seller with any customer named in Section 3.26(a)
of the Seller Disclosure Schedule. No Seller has received any written
communication from any customer named in Section 3.26(a) of the Seller
Disclosure Schedule of any intention to return, terminate or materially reduce
purchases from or supplies to any Seller.

    (b) Suppliers. Section 3.26(b) of the Seller Disclosure Schedule sets forth
a complete and accurate list of the names and addresses of the ten
(10) suppliers with the greatest dollar volume of sales to Sellers during the
last fiscal year and during the last fiscal quarter, showing the approximate
total purchases in dollars by each Seller from each such supplier during such
fiscal year. Since December 31, 2000, there has been no adverse change in the
business relationship of any Seller with any supplier named in Section 3.26(b)
of the Seller Disclosure Schedule. No Seller has received any written
communication from any supplier named in Section 3.26(b) of the Seller
Disclosure Schedule of any intention to return, terminate or materially reduce
purchases from or supplies to any Seller.

    3.27  Brokers; Transactions Costs.  No Seller has entered into or will enter
into any contract, agreement, arrangement or understanding with any Person which
has or will result in the obligation of Buyer or any Seller to pay any finder's
fee, brokerage commission, legal, accounting or similar payment in connection
with the transactions contemplated hereby.

    3.28  No Other Agreements to Sell the Assets.  No Seller nor any Stockholder
has any legal obligation, absolute or contingent, to any other Person to sell
the Assets or any portion thereof or to sell any capital stock of any Seller or
to effect any merger, consolidation or other reorganization of any Seller or to
enter into any agreement with respect thereto, except pursuant to this
Agreement.

    3.29  Foreign Corrupt Practices Act.  No Seller nor any predecessor, nor to
each Seller's knowledge, any agent, employee or other Person associated with or
acting on behalf of any Seller or any predecessor has, directly or indirectly,
used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity, made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns from corporate funds, violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or made any
bribe, rebate, payoff, influence payment, kickback or other similar unlawful
payment.

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    3.30  Financial Projections; Operating Plan.  Each Seller has made available
to Buyer certain financial projections with respect to the such Seller's
business which projections were prepared for internal use only. No Seller makes
any representation or warranty regarding the accuracy of such projections or as
to whether such projections will be achieved, except that each Seller represents
and warrants that such projections were prepared in good faith, represent
management's present operating plan and are based on assumptions believed by it
to be reasonable as of the date of this Agreement.

    3.31  Approvals.  Section 3.31 of the Seller Disclosure Schedule contains a
list of all material approvals or consents relating to the Business conducted by
each Seller which are required to be given to or obtained by any Seller from any
Person in connection with the consummation of the transactions contemplated by
this Agreement.

    3.32  Material Misstatements or Omissions.  No representations or warranties
by any Seller in this Agreement or in any document, written information,
exhibit, statement, certificate or schedule heretofore or hereinafter furnished
by any Seller or any of its Representatives to Buyer or any of its
Representatives pursuant hereto, or in connection with the transactions
contemplated by this Agreement contains or will contain any untrue statement of
a material fact, or omits or will omit to state any material fact necessary to
make the statements or facts contained therein not misleading.

4.  Additional Representations and Warranties of the Stockholders.  As an
inducement of Buyer to enter into this Agreement and in addition to the
representations and warranties of the Stockholders set forth in Section 3 above,
each Stockholder hereby makes, severally and not jointly, as of the date hereof
and as of the Closing Date, the following representations and warranties to
Buyer, except as otherwise set forth in the Stockholder Disclosure Schedule,
provided that the representations and warranties made in Section 4.4 shall be
deemed made solely by the Investor. The sections of the Stockholder Disclosure
Schedule are numbered to correspond to the various subsections of this Section 4
setting forth certain exceptions to the representations and warranties contained
in this Section 4 and certain other information called for by this Agreement.
Unless otherwise specified, no disclosure made in any particular section of the
Stockholder Disclosure Schedule shall be deemed made in any other section of the
Stockholder Disclosure Schedule unless expressly made therein (by
cross-reference or otherwise) or the Stockholder Disclosure Schedule otherwise
expressly and completely discloses the specific exception.

    4.1  Authorization.  Such Stockholder has all necessary power and authority
to enter into this Agreement and the Ancillary Agreements to which it is a party
and has taken all action necessary to consummate the transactions contemplated
hereby and thereby and to perform its obligations hereunder and thereunder. This
Agreement has been duly executed and delivered by such Stockholder, and this
Agreement is, and upon the execution and delivery thereof each Ancillary
Agreement will be, a valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms, except that
enforceability may be limited by the effect of (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors or (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).

    4.2  No Conflict or Violation; Consents.  None of the execution, delivery or
performance of this Agreement or any Ancillary Agreement to which such
Stockholder is a party, the consummation of the transactions contemplated hereby
or thereby, nor compliance by such Stockholder with any of the provisions hereof
or thereof, will violate, conflict with, or result in a breach of or constitute
a Default (with or without notice or the passage of time) under, or result in
the termination of, or accelerate the performance required by, or result in a
right to terminate, accelerate, modify or cancel under, or require a notice
under, or result in the creation of any Encumbrance upon any of its respective
assets under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, security interest or other arrangement to

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which such Stockholder is a party or by which such Stockholder is bound or to
which any of its assets are subject. Except as set forth in Section 4.2 of the
Stockholder Disclosure Schedule, no notices to, declaration, filing or
registration with, approvals or consents of, or assignments by, any Persons
(including any federal, state or local governmental or administrative
authorities) are necessary to be made or obtained by such Stockholder in
connection with the execution, delivery or performance of this Agreement or any
Ancillary Agreement to which such Stockholder is a party or the consummation of
the transactions contemplated hereby or thereby.

    4.3  Brokers; Transaction Costs.  No Stockholder has entered into nor will
any Stockholder enter into any contract, agreement, arrangement or understanding
with any Person which has or will result in the obligation of Buyer or any
Seller to pay any finder's fee, brokerage commission, legal, accounting, or
similar payment in connection with the transactions contemplated hereby.

    4.4  Securities Laws Representations.  

    (a) The Share Consideration to be issued pursuant to this Agreement will be
distributed by Sellers solely to David Fleming (the "Investor"), and no other
Person (including, without limitation, any Seller or other Stockholder) will
have any record or beneficial interest therein. The Investor (i) is an
"accredited investor" as such term is defined in Rule 501(a) promulgated under
the Securities Act; (ii) is receiving the shares of Parent Common Stock acquired
by him for investment for his own account and not with a view to, or for resale
in connection with, the distribution or other disposition thereof; (iii) has
been given the opportunity to obtain any information or documents relating to,
and to ask questions and receive answers about, Parent and the business and
prospects of Parent which he deems necessary to evaluate the merits and risks
related to his investment in such shares and to verify the information received,
and the Investor's knowledge and experience in financial and business matters
are such that he is capable of evaluating the merits and risks of his receipt of
such shares. Without limiting the generality of the foregoing, the Investor
acknowledges that he has received and reviewed copies of (i) Parent's Annual
Report on Form 10-K for the years ended December 31, 1999 and 2000,
(ii) Parent's Proxy Statement on Schedule 14A for the Annual Meeting of
Stockholders held on May 2, 2000, (iii) Parent's Quarterly Reports on Form 10-Q
for the quarters ending March 31, 2000, June 30, 2000 and September 20, 2000 and
(iv) Parent's Report on Form 8-K dated February 14, 2001.

    (b) The Investor's financial condition is such that he can afford to bear
the economic risk of holding the shares of Parent Common Stock acquired by him
for an indefinite period of time and has adequate means for providing for the
Investor's current needs and contingencies and to suffer a complete loss of his
investment in such shares of Parent Common Stock.

    (c) All information that the Investor has provided to Parent or Buyer
concerning himself, his jurisdiction of domicile and his financial position is
correct and complete.

    (d) The Investor has been advised that (i) the issuance of shares of Parent
Common Stock to the Investor will not have been registered under the Securities
Act, (ii) such shares may need to be held indefinitely, and the Investor must
continue to bear the economic risk of the investment in such shares unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available, (iii) there may not be a public market for such
shares, (iv) when and if such shares may be disposed of without registration in
reliance on Rule 144 promulgated under the Securities Act, such disposition can
be made only in limited amounts in accordance with the terms and conditions of
such Rule unless the requirements of Rule 144(k) are satisfied, (v) if the
Rule 144 exemption is not available, public sale without registration will
require compliance with

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an exemption under the Securities Act and (vi) a restrictive legend in the
following form shall be placed on the certificates representing such shares:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER
ANY APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION UNDER THE STATE ACTS OR EXEMPTIONS FROM SUCH REGISTRATION OR
QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE SECURITIES ACT, THE
EXEMPTION AFFORDED BY RULE 144). UNLESS WAIVED BY GUITAR CENTER, INC., GUITAR
CENTER, INC. SHALL BE FURNISHED WITH AN OPINION OF COUNSEL IN FORM SATISFACTORY
TO IT OPINING AS TO THE AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND
QUALIFICATION AS A PRECONDITION TO ANY SUCH TRANSFER.

    4.5  Material Misstatements or Omissions.  No representations or warranties
by such Stockholder in this Agreement or in any document, written information,
exhibit, statement, certificate or schedule heretofore or hereinafter furnished
by such Stockholder or any of its Representatives to Buyer or any of its
Representatives pursuant hereto, or in connection with the transactions
contemplated by this Agreement contains or will contain any untrue statement of
a material fact, or omits or will omit to state any material fact necessary to
make the statements or facts contained therein not misleading.

5.  Buyer's Representations and Warranties.  As an inducement of each Seller and
each Stockholder to enter into this Agreement, Buyer hereby makes, as of the
date hereof and as of the Closing Date, the following representations and
warranties to each Seller and to each Stockholder, except as otherwise set forth
in the Buyer Disclosure Schedule, provided that the representations and
warranties contained in Section 5.5 and Section 5.6 shall be made solely to the
Investor. The sections of the Buyer Disclosure Schedule are numbered to
correspond to the various subsections of this Section 5 setting forth certain
exceptions to the representations and warranties contained in this Section 5 and
certain other information called for by this Agreement. Unless otherwise
specified, no disclosure made in any particular section of the Buyer Disclosure
Schedule shall be deemed made in any other section of the Buyer Disclosure
Schedule unless expressly made therein (by cross-reference or otherwise) or the
Buyer Disclosure Schedule otherwise expressly and completely discloses the
specific exception

    5.1  Organization.  Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as presently being
conducted.

    5.2  Authorization.  Buyer has all necessary corporate power and authority
to enter into this Agreement and the Ancillary Agreements and has taken all
corporate action necessary to consummate the transactions contemplated hereby
and thereby and to perform its obligations hereunder and thereunder. This
Agreement has been duly executed and delivered by Buyer, and this Agreement is,
and upon execution and delivery thereof each Ancillary Agreement will be, a
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, except that enforceability may be limited by the effect of
(a) bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors or (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).

    5.3  No Conflict or Violation; Consents.  Except as set forth in Section 5.3
of the Buyer Disclosure Schedule, none of the execution, delivery or performance
of this Agreement or any Ancillary Agreement, the consummation of the
transactions contemplated hereby or thereby, nor compliance by

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Buyer with any of the provisions hereof or thereof, will (a) violate or conflict
with any provision of Buyer's governing documents, (b) violate, conflict with,
or result in a breach of or constitute a Default (with or without notice or the
passage of time) under, or result in the termination of, or accelerate the
performance required by, or result in a right to terminate, accelerate, modify
or cancel under, or require a notice under, or result in the creation of any
Encumbrance upon any of its respective assets under, any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, security interest or
other arrangement to which Buyer is a party or by which Buyer is bound or to
which the assets of Buyer are subject, (c) violate any applicable Regulation or
Court Order or (d) impose any Encumbrance on the business of Buyer. Except as
set forth in Section 5.3 of the Buyer Disclosure Schedule, no notices to,
declaration, filing or registration with, approvals or consents of, or
assignments by, any Persons (including any federal, state or local governmental
or administrative authorities) are necessary to be made or obtained by Buyer in
connection with the execution, delivery or performance of this Agreement or any
Ancillary Agreement or the consummation of the transactions contemplated hereby
or thereby.

    5.4  Brokers; Transactions Costs.  Buyer has not entered into and will not
enter into any contract, agreement, arrangement or understanding with any Person
which has or will result in the obligation of any Seller to pay any finder's
fee, brokerage commission, legal, accounting or similar payment in connection
with the transactions contemplated hereby.

    5.5  Capitalization of Parent.  

    (a) As of the date of this Agreement, Parent has authorized under its
Restated Certificate of Incorporation 50,000,000 shares of Parent Common Stock
and 5,000,000 shares of preferred stock, par value $0.01 per share. As of
December 31, 2000, Parent had outstanding 22,086,129 shares of Parent Common
Stock and no shares of any other class of capital stock.

    (b) Except for shares reserved for issuance upon the exercise of options
granted or available for grant under Parent's stock option and stock purchase
plans (collectively, the "Parent Options") and any agreements made herein, there
are no outstanding options, warrants, convertible securities or rights of any
kind to purchase or otherwise acquire any shares of capital stock or other
securities of Parent.

    (c) All outstanding shares of Parent Common Stock issued or to be issued
upon exercise of any of the Parent Options will be validly issued, fully paid
and non-assessable. There are no preemptive rights with respect to the Parent
Common Stock.

    (d) The shares of Parent Common Stock to be issued pursuant to the terms of
this Agreement have been duly authorized and, when issued in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable. Assuming
that the representations of the Investor set forth in this Agreement are true
and correct, the issuance of such shares of Parent Common Stock is exempt from
registration under the Securities Act.

    5.6  SEC Reports; Financial Statements.  Buyer has made available to the
Investor a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by Parent with the SEC (as such
documents have since the time of their filing been amended, the "Parent SEC
Reports"), which are all the documents (other than preliminary material) that
Parent was required to file with the SEC since December 31, 2000. As of their
respective dates, the Parent SEC Reports complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such Parent
SEC Reports or such other forms, reports or other documents, and none of the
Parent SEC Reports contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which

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they were made, not misleading. The financial statements of Parent included in
the Parent SEC Reports complied as of their respective dates of filing with the
SEC as to form in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with GAAP applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited statements, to normal,
recurring audit adjustments, which were not individually or in the aggregate
material) in all material respects the consolidated financial position of Parent
and its Subsidiaries as at the dates thereof and the results of its operations
and cash flows for the periods then ended.

6.  Covenants.  

    6.1  General.  Each of the Parties will use all reasonable commercial
efforts to take all action and to do all things necessary, proper or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including the satisfaction, but not waiver, of closing conditions).
Each Seller and each Stockholder agrees that at any time and from time to time
it will execute and deliver to Buyer such further instruments or documents and
take such further actions as may be required to give effect to the transactions
contemplated by this Agreement.

    6.2  Notices and Consents.  Each Seller and each Stockholder will give any
notices to third parties, and will use its reasonable best efforts to obtain any
third party consents, that the Buyer may request in connection with the
consummation of the transactions contemplated by this Agreement. Each of the
Parties will give any notices to, make any filings with and use its reasonable
best efforts to obtain any authorizations, consents and approvals of governments
and governmental agencies required in connection with the consummation of the
transactions contemplated by this Agreement.

    6.3  Access and Investigation.  Each Seller will, and will cause its
Representatives to, (a) afford Buyer and its Representatives full access to such
Seller's personnel, premises, properties (including subsurface testing if deemed
appropriate), contracts, Books and Records and other documents and data,
(b) furnish Buyer and its Representatives with copies of all such contracts,
Books and Records and other existing documents and data as Buyer may request and
(c) furnish Buyer and its Representatives with such additional financial,
operating and other data and information as Buyer may request.

    6.4  Operation and Preservation of Business of Sellers.  During the period
between the date of this Agreement and the Closing, no Seller shall engage in
any practice, take any action or enter into any transaction outside the ordinary
course of business of such Seller. Without limiting the generality of the
foregoing, during the period between the date of this Agreement and the Closing
no Seller shall (a) declare, set aside or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase or otherwise
acquire any of its capital stock or revise the compensation of any Stockholder
or Related Party, (b) pay any amount to any third party with respect to any
Liability or obligation (including any costs and expenses such Seller has
incurred or may incur in connection with this Agreement and the transactions
contemplated hereby) or otherwise engage in any practice, take any action or
enter into any transaction of the sort described in Section 3.8 or Section 3.11
above, (c) do any other action which would (i) cause any representation or
warranty of any Seller or any Stockholder in this Agreement to become untrue or
(ii) that is not in the ordinary course of business consistent with past
practice or (d) directly or indirectly take, agree to take or otherwise permit
to occur any of the actions described in clauses 6.4(a) through (c). During the
period between the date of this Agreement and the Closing, each Seller will keep
its business and properties intact, including its present operations, physical
facilities, working conditions and relationships with lessors, licensors,
suppliers, customers and employees.

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    6.5  Required Approvals and Provision of Financial Data.  As promptly as
practicable after the date of this Agreement, each Seller will make all filings
required by any Regulation to be made by it in order to consummate the
transactions contemplated by this Agreement. Each Seller will (a) cooperate with
Buyer with respect to all filings that Buyer elects to make or is required by
any Regulation to make in connection with the transactions contemplated by this
Agreement, and (b) cooperate with Buyer in obtaining all required consents.

    6.6  Notification.  Each Seller and each Stockholder shall promptly notify
Buyer in writing if it becomes aware of (a) any fact or condition that causes or
constitutes a breach of any representation or warranty of any Seller or any
Stockholder contained in this Agreement or (b) the occurrence after the date of
this Agreement of any fact or condition that would cause or constitute a breach
of any such representation or warranty had such representation or warranty been
made as of the time of occurrence or discovery of such fact or condition. No
disclosure by any Party pursuant to this Section 6.6, however, shall be deemed
to amend or supplement its respective Disclosure Schedule or to prevent or cure
any misrepresentation, breach of warranty or breach of covenant.

    6.7  No Negotiation.  During the period between the date of this Agreement
and the Closing, no Seller nor any Stockholder shall, directly or indirectly,
sell, transfer, pledge, hypothecate, encumber or otherwise dispose or surrender
possession of, the Assets or any portion thereof or any interest therein, except
in the ordinary course of business consistent with past practice. Until such
time, if any, as this Agreement is terminated pursuant to Section 9, neither any
Seller or nor any Stockholder will, directly or indirectly, solicit, initiate or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any inquiries or
proposals from, any Person (other than Buyer) relating to any transaction
involving the sale of the Assets or any portion thereof or any capital stock of
any Seller, or any merger, consolidation, business combination or similar
transaction involving any Seller, and each Seller and each Stockholder shall
immediately notify Buyer in writing of any such inquiries or proposals.

    6.8  Accrued Salaries and Lease Payments.  Prior to the Closing, each Seller
shall pay all accrued and unpaid salaries, accrued and unpaid lease payments and
all other accrued and unpaid amounts due and owing from such Seller.

    6.9  Employee Matters.  

    (a) Section 6.9(a) of the Seller Disclosure Schedule sets forth the list of
the employees of each Seller that are to become employees of Buyer (the
"Designated Employees"), together with a summary of the material terms of each
such Person's current employment. Buyer agrees to make an offer of employment to
each such Designated Employee on terms no less favorable than presently
applicable to such Designated Employee as set forth in Section 6.9(a) of the
Seller Disclosure Schedule and to assume any employment contract identified in
Section 3.7(a) of the Seller Disclosure Schedule. Each Seller shall terminate
the employment of all Designated Employees immediately prior to the Closing, and
each Seller and each Stockholder shall cooperate with and use its reasonable
best efforts to assist Buyer in its efforts to secure satisfactory employment
arrangements with the Designated Employees.

    (b) Nothing contained in this Agreement shall confer upon any Designated
Employee any right with respect to employment, or continuance thereof, with
Buyer, nor shall anything herein interfere with the right of Buyer to terminate
the employment of any of the Designated Employees at any time, with our without
cause and with or without prior notice, or restrict Buyer in the exercise of its
independent business judgment in modifying any of the terms and conditions of
the employment of the Designated Employees.

    6.10  Consent to Assignment of Lease.  Notwithstanding the provisions
contained in any Lease, in the event that Buyer desires to assign any Lease to a
third party each Seller and each Stockholder

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agrees, and shall cause each of its affiliates, not to arbitrarily or
unreasonably withhold any consent required to effect such assignment.

7.  Buyer's Conditions to Closing.  Buyer's obligation to purchase the Assets
and to take the other actions required to be taken by Buyer at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Buyer, in whole or in part,
in Buyer's sole discretion):

    7.1  Accuracy of Representations of Sellers and Stockholders.  All of the
representations and warranties of each Seller and each Stockholder contained in
this Agreement shall have been accurate as of the date of this Agreement and
shall be accurate as of the Closing Date as if made on the Closing Date.

    7.2  Performance of Sellers and Stockholders.  

    (a) All of the covenants and obligations that any Seller and/or any
Stockholder are required to perform or to comply with pursuant to this Agreement
at or prior to the Closing shall have been duly performed and complied with.

    (b) Each document required to be delivered by any Seller and/or any
Stockholder pursuant to Section 2.5 or any other provision of this Agreement or
any Ancillary Agreement shall have been delivered, and each of the other
covenants and obligations of Sellers and Stockholders in Section 6 shall have
been performed and complied with.

    (c) Buyer shall have received from all Sellers and/or all Stockholders all
financial statements, schedules and notes thereto and all other information
concerning each Seller each and Stockholder, reasonably required by Buyer.

    7.3  Additional Conditions.  

    (a) Buyer shall have completed, to the satisfaction of Buyer in its sole
discretion, its due diligence review of the Assets and Assumed Liabilities and
such related documents and accounts of Sellers and the Stockholders as may be
requested by Buyer or its Representatives (it being understood, however, that
such review shall have no effect on the ability of Buyer to rely on the
representations, warranties and covenants of Sellers and the Stockholders);

    (b) Buyer shall have received certificates confirming payment by the
Stockholders of any sales Taxes due with regard to the operation of the Business
prior to the Closing;

    (c) all applicable state bulk sales law requirements shall have been
complied with;

    (d) all necessary consents from government agencies and third parties to
permit Buyer to continue to operate the Business as contemplated by this
Agreement shall have been obtained and be in full force and effect;

    (e) Buyer shall have available to it on terms acceptable to it in its sole
discretion the funds required to complete the Acquisition, including to
refinance the Funded Debt, which shall not exceed $16,600,000 (Sixteen Million
Six Hundred Thousand Dollars) in the aggregate;

    (f)  this Agreement shall have been approved by Parent's Board of Directors;
and

    (g) all applicable legal requirements shall have been complied with.

    7.4  No Proceedings.  There shall not be existing or threatened any Action
or other proceeding (a) involving any challenge to, or seeking damages or other
relief in connection with, any of the transactions contemplated by this
Agreement, or (b) that may have the effect of preventing, delaying, making
illegal or otherwise interfering with any of the transactions contemplated by
this Agreement.

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    7.5  No Claim Regarding Asset Ownership or Sale Proceeds.  There shall not
have been made or threatened by any Person any claim asserting that any Seller
is not, or the Sellers collectively are not, (a) the rightful owner(s) of, or
have an ownership interest in, the Assets, or (b) entitled to all or any portion
of the Purchase Consideration.

    7.6  No Prohibition.  Neither the consummation nor the performance of any of
the transactions contemplated by this Agreement or any Ancillary Agreement will,
directly or indirectly (with or without notice or lapse of time), contravene, or
conflict with, or result in a material violation of, or cause Buyer or any
Person affiliated with Buyer to suffer any Material Adverse Change under,
(a) any applicable Regulation or Court Order or (b) any Regulation or Court
Order that has been published, introduced, or otherwise proposed by or before
any governmental agency.

    7.7  Approval of Documentation.  The form and substance of all certificates,
instruments, opinions and other documents delivered to Buyer under this
Agreement shall be reasonably satisfactory to Buyer and its counsel, and Buyer
shall have received copies of such documents and instruments as Buyer and its
counsel may request in connection with the transactions contemplated by this
Agreement.

    7.8  Force Majeure.  All or any material part of the Assets shall not have
been materially and adversely affected in any way by any act of God, fire,
flood, war, legislation (proposed or enacted) or other event or occurrence,
whether or not covered by insurance.

    7.9  Release of Liens, Claims, etc.  Prior to the Closing, Buyer shall have
received releases, in form and substance satisfactory to Buyer, of all
Encumbrances against the Assets, and Buyer shall be satisfied that, as a result,
the Sellers have good and marketable title to the Assets, free and clear of any
Encumbrances.

    7.10  No Material Adverse Change.  There shall not have occurred any
Material Adverse Change with respect the Assets or the Sellers.

8.  Sellers' Conditions to Closing.  Sellers' obligation to sell the Assets and
to take the other actions required to be taken by Sellers at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Sellers, in whole or in part
in Sellers' sole discretion):

    8.1  Accuracy of Representations of Buyer.  All of the representations and
warranties of Buyer contained in this Agreement shall have been accurate as of
the date of this Agreement and shall be accurate as of the Closing Date as if
made on the Closing Date.

    8.2  Performance of Buyer.  

    (a) All of the covenants and obligations that Buyer is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing shall
have been performed and complied with.

    (b) Each document required to be delivered by Buyer pursuant to Section 2.5
or any other provision of this Agreement or any Ancillary Agreement shall have
been delivered, and each of the other covenants and obligations of Buyer in
Section 6 shall have been performed and complied with.

    8.3  Consents.  Each of the consents identified in Section 5.3 of the Buyer
Disclosure Schedule shall have been obtained.

    8.4  No Proceedings.  There shall not be existing or threatened any Action
or other proceeding (a) involving any challenge to, or seeking damages or other
relief in connection with, any of the transactions contemplated by this
Agreement, or (b) that may have the effect of preventing, delaying, making
illegal or otherwise interfering with any of the transactions contemplated by
this Agreement.

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    8.5  No Prohibition.  Neither the consummation nor the performance of any of
the transactions contemplated by this Agreement or any Ancillary Agreement will,
directly or indirectly (with or without notice or lapse of time), materially
contravene, or conflict with, or result in a material violation of, or cause any
Seller or any Stockholder or any Person affiliated with any Seller or any
Stockholder to suffer any Material Adverse Change under, (a) any applicable
Regulation or Court Order or (b) any Regulation or Court Order that has been
published, introduced, or otherwise proposed by or before any governmental
agency.

    8.6  Approval of Documentation.  The form and substance of all certificates,
instruments, opinions and other documents delivered to Sellers and the
Stockholders under this Agreement shall be reasonably satisfactory to such
Sellers and Stockholders and their respective counsel, and the Sellers and the
Stockholders shall have received copies of such documents and instruments as
they and their respective counsel may request in connection with the
transactions contemplated by this Agreement.

9.  Termination.  

    9.1  Termination Rights.  This Agreement may be terminated at any time prior
to the Closing by:

    (a) mutual written consent of Buyer, Sellers and the Stockholders;

    (b) Buyer, any Seller or any Stockholder if the Closing shall not have
occurred on or before April 30, 2001; provided, however, that this provision
shall not be available (i) to Buyer if any Seller or any Stockholder has the
right to terminate this Agreement pursuant to Section 9.1(e) or (ii) to any
Seller or any Stockholder if Buyer has the right to terminate this Agreement
pursuant to Section 9.1(c);

    (c) Buyer if there is a material breach of any representation or warranty
set forth in Section 3 or Section 4 or any covenant or agreement to be complied
with or performed by any Seller or any Stockholder pursuant to the terms of this
Agreement or the failure of a condition to the obligations of Buyer set forth in
Section 7 to be satisfied (and such condition is not waived in writing by Buyer)
on or prior to the Closing Date, or the occurrence of any event which results or
would result in the failure of a condition to the obligations of Buyer set forth
in Section 7 to be satisfied on or prior to the Closing Date; provided, however,
that such breach or failure is through no fault of Buyer and, provided further,
that Sellers or the Stockholders have not cured such failure upon fifteen
(15) days' written notice from Buyer;

    (d) Buyer if Buyer, in its sole discretion, is not satisfied with the
results of its due diligence review of the Assets and Assumed Liabilities and
related documents and accounts of Sellers and the Stockholders pursuant to
Section 7.3(a); or

    (e) any Seller or any Stockholder if there is a material breach of any
representation or warranty set forth in Section 5 or of any covenant or
agreement to be complied with or performed by Buyer pursuant to the terms of
this Agreement or the failure of a condition to the obligations of Sellers set
forth in Section 8 to be satisfied (and such condition is not waived in writing
by Seller) on or prior to the Closing Date; provided, however, that such breach
is through no fault of any Seller or any Stockholder and, provided further, that
Buyer has not cured such failure upon fifteen (15) days' written notice from
Sellers or the Stockholders, as applicable.

    9.2  Effect of Termination.  In the event of termination of this Agreement,
each Party will redeliver all documents, work papers and other material of any
other Party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the Party furnishing the same
or, in the alternative, destroy such materials and, upon request, confirm such
destruction in writing. Whether or not the Closing takes place, the Stockholders
waive, and will cause the Sellers to waive, any cause of action, right or claim
arising out of the access of Buyer or its Representatives to

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any trade secrets or other confidential information of the Seller, except for
the intentional competitive misuse by Buyer of such trade secrets or
confidential information.

10.  Indemnity; Remedies.  

    10.1  Indemnification.  Each Seller and each Stockholder agree, jointly and
severally, to fully defend, indemnify and hold Buyer, Parent and each of their
respective officers, directors, employees and affiliates (each, a "Buyer
Indemnified Party") harmless from and against any and all Damages as a result of
(a) the Excluded Liabilities or (b) any inaccuracy or breach of any
representation, warranty, covenant or agreement of any Seller contained herein
or in any Ancillary Agreement or instrument delivered by any Seller pursuant
hereto or thereto. Each Seller agrees, jointly and severally, and each
Stockholder agrees, severally and not jointly, to fully defend, indemnify and
hold the Buyer Indemnified Parties harmless from and against any and all Damages
as a result of any inaccuracy or breach of any representation, warranty,
covenants or agreement of such Stockholder contained herein or in any Ancillary
Agreement or instrument delivered by such Stockholder pursuant hereto or
thereto. Buyer agrees to fully defend, indemnify and hold each Seller and each
Stockholder and their respective officers, directors, employees and affiliates
(each, a "Seller Indemnified Party") harmless from and against any and all
Damages as a result of (a) the Assumed Liabilities or (b) any inaccuracy or
breach of any representation, warranty, covenant or agreement of Buyer contained
herein or in any Ancillary Agreement or instrument delivered by Buyer pursuant
hereto or thereto. The right to indemnification, payment of Damages or other
remedy based on such representations, warranties, covenants and agreements will
not be affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or in accuracy of or compliance with, any such representation,
warranty, covenant or agreement.

    10.2  Procedures for Claims.  If a claim for Damages (a "Claim") is to be
made by a person entitled to indemnification hereunder, the person claiming such
indemnification (the "Indemnified Party") shall give written notice (a "Claim
Notice") to the indemnifying person (the "Indemnifying Party") reasonably
promptly after the Indemnified Party becomes aware of any fact, condition or
event which may give rise to Damages for which indemnification may be sought
under this Section 10, provided that if the Indemnified Party is a Seller
Indemnified Party, such Claim Notice shall only be valid if it is delivered by
the Seller Representative, and provided further that if the Indemnified Party is
a Buyer Indemnified Party, such Claim Notice shall be valid if it is delivered
to the Seller Representative. The failure of any Indemnified Party to give
timely notice hereunder shall not affect rights to indemnification hereunder,
except and only to the extent that, the Indemnifying Party demonstrates actual
material damage caused by such failure, and then only to the extent thereof. In
the case of a Claim involving the assertion of a claim by a third party (whether
pursuant to a lawsuit, other legal action or otherwise, a "Third-Party Claim"),
if the Indemnifying Party shall acknowledge in writing to the Indemnified Party
that the Indemnifying Party shall be obligated to indemnify the Indemnified
Party under the terms of its indemnity hereunder in connection with such
Third-Party Claim, then (A) the Indemnifying Party shall be entitled and, if it
so elects, shall be obligated at its own cost, risk and expense, (1) to take
control of the defense and investigation of such Third-Party Claim and (2) to
pursue the defense thereof in good faith by appropriate actions or proceedings
promptly taken or instituted and diligently pursued, including, without
limitation, to employ and engage attorneys of its own choice reasonably
acceptable to the Indemnified Party to handle and defend the same, and (B) the
Indemnifying Party shall be entitled (but not obligated), if it so elects, to
compromise or settle such claim, which compromise or settlement shall be made
only with the written consent of the Indemnified Party, such consent not to be
unreasonably withheld. In the event the Indemnifying Party elects to assume
control of the defense and investigation of such lawsuit or other legal action
in accordance with this Section 10.2, the Indemnified Party may, at its own cost
and expense, participate in the investigation, trial and defense of such
Third-Party Claim, provided that if the named persons to a

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lawsuit or other legal action include both the Indemnifying Party and the
Indemnified Party and the Indemnified Party has been advised by counsel that
there may be one or more legal defenses available to such Indemnified Party that
are different from or additional to those available to the Indemnifying Party,
the Indemnified Party shall be entitled, at the Indemnifying Party's cost, risk
and expense, to retain one firm of separate counsel of its own choosing. If the
Indemnifying Party fails to assume the defense of such Third-Party Claim in
accordance with this Section 10.2 within ten (10) calendar days after receipt of
the Claim Notice, the Indemnified Party against which such Third-Party Claim has
been asserted shall (upon delivering notice to such effect to the Indemnifying
Party) have the right to undertake, at the Indemnifying Party's cost, risk and
expense, the defense, compromise and settlement of such Third-Party Claim on
behalf of and for the account of the Indemnifying Party; provided that such
Third-Party Claim shall not be compromised or settled without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld. In the event the Indemnifying Party assumes the defense of the claim,
the Indemnifying Party shall keep the Indemnified Party reasonably informed of
the progress of any such defense, compromise or settlement, and in the event the
Indemnified Party assumes the defense of the claim, the Indemnified Party shall
keep the Indemnifying Party reasonably informed of the progress of any such
defense, compromise or settlement. The Indemnifying Party shall be liable for
any settlement of any Third-Party Claim effected pursuant to and in accordance
with this Section 10.2 and for any final judgment (subject to any right of
appeal), and the Indemnifying Party agrees to indemnify and hold harmless each
Indemnified Party from and against any and all Damages by reason of such
settlement or judgment.

    10.3  Remedies.  Buyer, each Seller and each Stockholder acknowledge and
agree that the other parties hereto would be irreparably damaged in the event
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. Accordingly, each of the
Parties hereto agrees that he, she or it each shall be entitled to an injunction
or injunctions to prevent breaches of any of the provisions of this Agreement to
enforce specifically this Agreement in any action instituted in any court of the
United States or any state having competent jurisdiction as provided for in this
Agreement, in addition to any other remedy to which such Party may be entitled,
at law or in equity.

11.  Holdback Amount.  

    11.1  Compensation of Buyer Indemnified Parties.  The Holdback Amount shall
be available (a) to offset any Adjustment Amount pursuant to Section 2.7 and/or
(b) to compensate any Buyer Indemnified Party for any Damages (whether or not
involving a Third Party Claim), incurred or sustained by such Buyer Indemnified
Party as a result of (i) the Excluded Liabilities or (ii) any inaccuracy or
breach of any representation, warranty, covenant or agreement of any Seller or
any Stockholder contained herein or in any instrument delivered by any Seller or
any Stockholder pursuant to this Agreement as provided for in Section 10. The
Parties agree that (i) any reduction in the Holdback Amount otherwise payable to
Sellers shall be applied against the Cash Holdback and the Shares Holdback on a
pro rata basis and (ii) the value of each share of Parent Common Stock
constituting a portion of the Shares Holdback shall, for all purposes, be equal
to the Average Parent Common Stock Price. Buyer, each Seller and each
Stockholder each acknowledge that any such Damages would relate to unresolved
contingencies existing on the Closing Date, which if resolved on the Closing
Date would have led to a reduction in the Purchase Consideration.

    11.2  Satisfaction of Claims.  Buyer shall have the right to reduce the
amount of the Holdback Amount to be delivered by Buyer to Sellers after the
Closing Date by an amount that is necessary in the reasonable judgment of Buyer
to satisfy any pending unpaid (a) Adjustment Amount or (b) claim for
indemnification pursuant to Section 10, which claims have been or are specified
in written notice to the Seller Representative prior to such date that the
Holdback Amount was otherwise due to be remitted by Buyer. Promptly after the
later of (x) the Determination Date and (y) the date on which all

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such claims, if any, have been resolved, Buyer shall deliver to Sellers the
remaining portion of any Holdback Amount, if any, not required to satisfy such
claims.

    11.3  Procedures.  Upon receipt by the Seller Representative, at any time on
or before the last day of the Holdback Period, of written notice from Buyer (a
"Holdback Notice") (i) stating that a Buyer Indemnified Party has paid or
properly accrued or reasonably anticipates that it will have to pay or accrue
Damages as a result of (a) the Excluded Liabilities or (b) any inaccuracy or
breach of any representation, warranty, covenant or agreement of any Seller or
any Stockholder contained herein or in any instrument delivered pursuant to this
Agreement, as the case may be and (ii) specifying in reasonable detail the
individual items of Damages included in the amount so stated, the date each such
item was paid or properly accrued, or the basis for such anticipated liability,
the Seller Representative shall have thirty (30) days to review and, if it
disagrees with any matter set forth in the Holdback Notice, object in writing to
such Holdback Notice. In case the Seller Representative shall not object in
writing to any claim or claims made in any Holdback Notice within such 30-day
period, the Sellers and the Stockholders shall be deemed to have agreed to the
Holdback Notice and to the reduction of the Holdback Amount as set forth
therein. Delivery of a Holdback Notice shall not foreclose or limit any other
remedy available to a Buyer Indemnified Party under this Agreement, at law or in
equity.

    11.4  Resolution of Disputes.  In case the Seller Representative shall
object in writing to any claim or claims made in any Holdback Notice within the
30-day period provided for in Section 11.3, the Seller Representative and Buyer
shall attempt in good faith to agree upon the rights of the respective Parties
with respect to each of such claims. If the Seller Representative and Buyer
should so agree, such agreement shall be set forth in writing and signed by both
parties. If no such agreement can be reached after good faith negotiation,
either Buyer or the Seller Representative may pursue all remedies available to
it under the provisions of this Agreement, at law or in equity.

12.  Seller Representative; Power of Attorney.  

    12.1  Seller Representative.  The Seller Representative is appointed as
agent and attorney-in-fact for each Seller and each Stockholder, to give and
receive notices and communications, to object to Buyer's calculation of Year End
Unearned Accounts Receivable, to consent to an increase in sales, general and
administrative expenses proposed by Buyer pursuant to Section 2.8, to object to
any matter set forth in any Claim Notice or Holdback Notice, to agree to,
negotiate, enter into settlements and compromises of, and commence or pursue
legal action and comply with orders of courts and awards of arbitrators with
respect to such claims, and to take all actions necessary or appropriate in the
judgment of the Seller Representative for the accomplishment of the foregoing.
Such agency may be changed by the Sellers and the Stockholders from time to time
upon not less than thirty (30) days prior written notice to Buyer; provided,
however, that the Seller Representative may not be removed unless holders of at
least a two-thirds interest in the Holdback Amount agree to such removal and to
the identity of the substituted Seller Representative. Any vacancy in the
position of Seller Representative may be filled by approval of the holders of a
majority in interest of the Holdback Amount. No bond shall be required of the
Seller Representative, and the Seller Representative shall not receive
compensation for his services. Notices or communications to or from the Seller
Representative shall constitute notice to or from each of the Sellers and each
of the Stockholders.

    12.2  Exculpation.  The Seller Representative shall not be liable for any
act done or omitted hereunder as Seller Representative while acting in good
faith and in the exercise of reasonable judgment.

    12.3  Actions of the Seller Representative.  A decision, act, consent or
instruction of the Seller Representative shall constitute a decision for all of
the Sellers and the Stockholders and shall be final, binding and conclusive upon
each of such Sellers and Stockholders. Buyer may rely exclusively upon any such
decision, act, consent or instruction of the Seller Representative as being the
decision, act, consent or instruction of every such Seller. Buyer is hereby
relieved from any liability to any person for

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any acts done by them in accordance with such decision, act, consent or
instruction of the Seller Representative.

13.  General Provisions.  

    13.1  Applicable Law.  The execution, performance and interpretation of this
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws of the State of California, without regard to that State's
choice of law rules.

    13.2  Notices.  All notices required or permitted to be given under this
Agreement shall be in writing, and will be deemed given on the date of receipt
if delivered in person, or on the date of mailing if mailed by overnight courier
or registered or certified mail, postage prepaid, return receipt requested, to
the applicable Party at its address indicated in the preamble or the signatures
pages, as the case may be, to this Agreement. Any Party may change its address
for purposes of this Agreement by giving fifteen (15) days' prior written notice
of such change of address to the other Party in the manner described in this
Section 13.2.

    13.3  Binding Effect; Assignment.  No Seller nor any Stockholder shall
assign any of its or his rights, or delegate any of its or his obligations under
this Agreement to any third party without the prior written consent of Buyer.
This Agreement is binding upon, and shall inure solely to the benefit of, the
parties hereto and their respective heirs, personal representatives, successors
and permitted assigns. This Agreement is not intended to benefit, and shall not
be construed as benefiting, any third party, and no third party shall have
standing to enforce any provision of this Agreement.

    13.4  Modification.  No purported modification, amendment or waiver of any
term of this Agreement shall be effective unless it is in writing, subsequent to
this Agreement and signed by all parties hereto.

    13.5  Expenses.  Buyer, each Seller and each Stockholder shall each pay its
or his own respective legal, accounting, advisory and other fees, and other
out-of-pocket expenses incurred in connection with the transactions contemplated
herein and will not look to any other Party for any contribution toward such
expenses.

    13.6  Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same agreement. Facsimile copies shall
also be deemed originals.

    13.7  Severability.  Buyer, each Seller and each Stockholder agree that the
provisions of this Agreement are severable and separate and that the
unenforceability of any specific provision or part of any provision shall not
affect the validity of any other provision or term of this Agreement.

    13.8  Entire Agreement.  This Agreement, together with the Ancillary
Agreements, constitutes the entire agreement of Buyer, each Seller and each
Stockholder with respect to the subject matter hereof and supersedes any and all
prior and contemporaneous understandings or agreements, whether oral or written,
concerning such subject matter, including, without limitation, the letter of
intent dated as of October 6, 2000. Each Party acknowledges that it enters into
this Agreement without relying on any statement by the other Party which is not
specifically set forth in this Agreement.

    13.9  Interpretation of Agreement.  

    (a) The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, schedule and
exhibit references are to this Agreement unless otherwise specified. The meaning
of defined terms shall be equally applicable to the singular and plural forms of
the defined terms. The terms "include" and "including" are not limiting and mean
"including without limitation."

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    (b) References to agreements and other documents shall be deemed to include
all subsequent amendments and other modifications thereto.

    (c) References to statutes shall include all regulations promulgated
thereunder and references to statutes or regulations shall be construed as
including all statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation.

    (d) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement.

    (e) The Parties participated jointly in the negotiation and drafting of this
Agreement and the language used in this Agreement shall be deemed to be the
language chosen by the Parties to express their mutual intent. If an ambiguity
or question of intent or interpretation arises, then this Agreement will
accordingly be construed as drafted jointly by the Parties, and no presumption
or burden of proof will arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement.

    (f)  The annexes, schedules and exhibits to this Agreement are a material
part hereof and shall be treated as if fully incorporated into the body of the
Agreement.

    13.10  Set-Off.  Buyer is hereby authorized at any time after the giving of
prior written notice to the Seller Representative, and from time to time, to
set-off and apply any and all amounts owing by Buyer to any Seller or any
Stockholder under this Agreement, any agreement entered into in connection
herewith or otherwise against any and all of the obligations of Sellers and the
Stockholders to Buyer (whether matured or unmatured) now or hereafter existing
under this Agreement, any agreement entered into in connection herewith or
otherwise. The rights of Buyer under this Section 13.10 are in addition to the
other rights and remedies (including, without limitation, other rights of
set-off) which Buyer may have.

    13.11  Public Announcements.  Any public announcement or similar publicity
with respect to the this Agreement or the transactions contemplated hereby will
be issued, if at all, at such time and in such manner as Buyer and the Seller
Representative mutually determine. Unless consented to by Buyer and the Seller
Representative in advance or required by Regulation applicable to Buyer
(including, without limitation, its obligations pursuant to the Exchange Act and
the rules of Nasdaq), this Agreement shall be strictly confidential and may not
be disclosed to any Person. Sellers, the Stockholders and Buyer will consult
with each other concerning the means by which the employees, customers and
suppliers of, and others having dealings with, Sellers will be informed of the
transactions contemplated by this Agreement, and Buyer shall have the right to
be present for any such communication.

    13.12  Waiver of Jury Trial.  EACH SIGNATORY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY PERMITTED CLAIM
OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT, THE ANCILLARY AGREEMENTS ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY DEALINGS BETWEEN ANY OF THE
SIGNATORIES HERETO RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY. The scope of this waiver is intended to be
all encompassing of any and all disputes that may be filed in any court and that
relate the subject matter of this Agreement or any of the transactions
contemplated hereby, including, without limitation, contract claims, tort
claims, and all other common law and statutory claims. This waiver is
irrevocable, meaning that it may not be modified either orally or in writing,
and this waiver shall apply to any subsequent amendments, supplements or other
modifications to this Agreement, any of the transactions contemplated hereby or
to any other document or agreement relating to the transactions contemplated
hereby.

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    13.13  Attorney Fees.  If any Party to this Agreement brings an action to
enforce its rights under this Agreement in accordance with the provisions
hereof, the prevailing Party shall be entitled to recover its actual
out-of-pocket costs and expenses, including without limitation attorneys' fees
and court costs reasonably incurred in connection with such action, including
any appeal of such action.

    13.14  Service of Process; Consent to Jurisdiction.  EACH OF THE PARTIES
HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY PROCESS, PLEADING, NOTICES OR
OTHER PAPERS BY THE MAILING OF COPIES THEREOF BY REGISTERED, CERTIFIED OR FIRST
CLASS MAIL, POSTAGE PREPAID, TO SUCH PARTY AT SUCH PARTY'S ADDRESS SET FORTH
HEREIN, OR BY ANY OTHER METHOD PROVIDED OR PERMITTED UNDER CALIFORNIA LAW.

    EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (I) AGREES THAT ANY SUCH
SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF THIS AGREEMENT MAY BE
BROUGHT IN THE UNITED STATES DISTRICT COURT IN THE CENTRAL DISTRICT OF THE STATE
OF CALIFORNIA OR, IF SUCH COURT DOES NOT HAVE JURISDICTION OR WILL NOT ACCEPT
JURISDICTION, IN ANY COURT OF GENERAL JURISDICTION IN THE COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA; (II) CONSENTS TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH SUIT, ACTION OR PROCEEDING; AND (III) WAIVES ANY OBJECTION WHICH SUCH PARTY
MAY HAVE OT THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
SUCH COURT.

    (Signature Pages Follow)

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

 
 
BUYER:
GUITAR CENTER STORES, INC.
 
 
By:
/s/ BRUCE L. ROSS   

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    Name: Bruce Ross
Title: President
 
 
SELLERS:
AMERICAN MUSIC GROUP, LTD.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

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    Name: Robert A. Schweiller
Title: President
 
 
EASTERN MUSIC SUPPLY CO., INC.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

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    Name: Robert A. Schweiller
Title: President
 
 
LYONS MUSIC, INC.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

--------------------------------------------------------------------------------

    Name: Robert A. Schweiller
Title: President

45

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    AMERICAN MUSIC, INC.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

--------------------------------------------------------------------------------

    Name: Robert A. Schweiller
Title: President
 
 
AMERICAN MUSICAL INSTRUMENTS, INC.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

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    Name: Robert A. Schweiller
Title: President
 
 
GIARDINELLI BAND INSTRUMENT CO., INC.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

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    Name: Robert A. Schweiller
Title: President
 
 
CENTRAL MUSIC SUPPLY, INC.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

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    Name: Robert A. Schweiller
Title: President
 
 
GBI, INC.
 
 
By:
/s/ ROBERT A. SCHWEILLER   

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    Name: Robert A. Schweiller
Title: President

 
STOCKHOLDERS:
 
/s/ ROBERT A. SCHWEILLER   

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Name: Robert A. Scheiwiller
Address: 105 Spinnaker Lane
Jupiter, Florida 33477

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/s/ DAVID FLEMING   

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Name: David Fleming
Address: 200 Summerhaven Drive
East Syracuse, New York 13057
 
/s/ DAN SCHMID   

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Name: Dan Schmid
Address: 6 Old Country Lane
Fairport, New York 14450
 
/s/ DANIEL FLEISCHMAN   

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Name: Daniel Fleischman
Address: 156 South Street
Auburn, New York 13021
 
/s/ THOMAS RINALDI   

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Name: Thomas Rinaldi
Address: 10 Stone Ridge Lane
Greenfield, Massachusetts 01301
 
/s/ GREG SCHEIWILLER   

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Name: Greg Scheiwiller
Address: 6288 Garrett Street
Jupiter, Florida 33458
 
/s/ ROBERT T. SCHEIWILLER   

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Name: Robert T. Scheiwiller
Address: 888 East Washington Street
Orlando, Florida 32801
 
/s/ JEFF SCHEIWILLER   

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Name: Jeff Scheiwiller
Address: 8483 Dunham Road
Baldwinsville, New York 13027
 
/s/ CAROL CHARETTE   

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Name: Carol Charette
Address: 7896 Rose Court Drive
Cicero, New York 13039

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