October 10, 2001

GUITAR
CENTER, INC.
5795 Lindero Canyon Road
Westlake Village, California 91326
Attn: Chief Financial Officer
Fax No. (818) 735-4923

| |  | Re: |  | The "Lenders" defined below; Foothill Capital Corporation, as agent for the Lenders (in such capacity, "Agent"); Guitar Center, Inc. ("GCI"), Guitar Center Stores, Inc. ("GCS"), and Musician's Friend, Inc. ("MFI; and together with GCI and GCS,
individually and collectively, jointly and severally, the "Borrowers")
| |  | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Ladies and Gentlemen:

This
letter agreement (this "Letter Agreement") is entered into by and among, on the one hand, the Borrowers, and, on the other hand,
Agent, the financial institutions (collectively, the "Lenders" and individually, a "Lender") that are
signatories to the "Loan Agreement" defined below, and Fleet Retail Finance Inc., as documentation agent for the Lenders (in such capacity "Documentation
Agent"; and together with Agent and the Lenders, the "Lender Group"), in light of the following:

A.  Borrowers
and the Lender Group have entered into that certain Amended and Restated Loan and Security Agreement, dated as of April 16, 2001 (the
"Loan Agreement").

C.  Borrowers
have requested that the Lender Group consent to a temporary reduction of Required Availability, as described in more detail below.

D.  Subject
to the terms and conditions set forth in this Letter Agreement, the Lender Group is willing to consent to a temporary reduction of Required Availability, as
described in more detail below.

NOW
THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Lender Group and Borrowers represent, covenant, and agree as
follows:

1.  Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Loan Agreement.

2.  Subject
to Borrowers' fulfillment of each of the conditions set forth below,



3.  The
satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Letter Agreement and each and every provision hereof:



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4.  Each
Borrower represents and warrants to each member of the Lender Group as follows:



5.  Nothing
contained in this agreement is intended to or shall be construed as a waiver of any of the rights, remedies, and powers of any member of the Lender Group
against Borrowers or the Collateral, or as a waiver of any Defaults or Events of Default, and each member of the Lender Group hereby reserves expressly all of its rights, remedies, and powers under
the Loan Agreement and the other Loan Documents, at law, in equity, or otherwise. Except as expressly set forth herein, this Letter Agreement shall not operate as a consent to any further or other
matter, under the Loan Documents. All other terms of the Loan Agreement remain in full force and effect, except as expressly set forth herein.

6.  This
Letter Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties
hereto may execute this Letter Agreement by signing any such counterpart. Delivery of an executed counterpart of this Letter Agreement by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Letter Agreement. Any party delivering an executed counterpart of this Letter Agreement by telefacsimile also shall deliver an original executed counterpart of
this Letter Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Letter Agreement.

7.  This
Letter Agreement is a Loan Document.

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8.  All notices given hereunder shall be given in the manner set forth in the Loan Agreement.

[signature
pages follow]

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Please indicate your agreement with the foregoing by signing in the space provided below and returning to the undersigned.

| |  | FOOTHILL CAPITAL CORPORATION,as a Lender and as Agent
| |  | -----------------------------------------------------
| |  | By:                                                  
| |  |                                                      
| |  | Name:                                                
| |  |                                                      
| |  | Title:                                               
| |  |                                                      

|    |  | Acknowledged and Agreed
as of the date first above written:
|--- |  | -----------------------------------------------------------
|    |  | GUITAR CENTER, INC.,a Delaware corporation                 
|By: |  |                                                            
|    |  |                                                            
|    |  | Title:                                                     
|    |  | GUITAR CENTER STORES, INC.,a Delaware corporation          
|By: |  |                                                            
|    |  |                                                            
|    |  | Title:                                                     
|    |  | MUSICIAN'S FRIEND, INC.,a Delaware corporation             
|By: |  |                                                            
|    |  |                                                            
|    |  | Title:                                                     

[signature
pages continue]

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| |  | FLEET RETAIL FINANCE INC,a Delaware corporation, formerly know as BankBoston Retail Finance Inc., as Documentation Agent and as a Lender
| |  | ----------------------------------------------------------------------------------------------------------------------------------------
| |  | By:                                                                                                                                     
| |  | BANK OF AMERICA, N.A.,as a Lender                                                                                                       
| |  | By:                                                                                                                                     
| |  | UNION BANK OF CALIFORNIA, N.A.,as a Lender                                                                                              
| |  | By:                                                                                                                                     

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