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In the 1950s, Leo Fender contracted a strep[disambiguation needed] infection that impaired his health to the point where he decided to wind up his business affairs, selling the Fender company to CBS in 1965. As part of this deal, Leo Fender signed a non-compete clause and remained a consultant with Fender for a while. Shortly after selling the company, he changed doctors and was cured of his illness. In 1971 Forrest White and Tom Walker formed the Tri-Sonix company (often incorrectly referred to as "Tri-Sonic"), based in Santa Ana, California. Tommy Walker and Forrest White went to Leo to help finance their company. It evolved into the formation through Tommy Walker to form Music Man, a name Leo Fender preferred over their name, Tri-Sonix. After considerable financing, in 1975, Leo Fender became its president.

The StingRay bass was an innovative early instrument. Though the body design borrowed heavily from the Precision Bass, the StingRay is largely considered the first production bass with active electronics. The StingRay's two-band active equalizer, high output humbucking pickup, and smooth satin finished neck became a favorite of many influential bassists, including Louis Johnson, John Deacon, and Flea. Later, a three-band active equalizer was introduced on the StingRay. Music Man was active making amplifiers as well, but the HD-130 Reverb, designed to compete with the Twin Reverb, came at a time when the clean sounds of the Twin were going out of fashion.

In 1979, Leo Fender and old friends George Fullerton and Dale Hyatt started a new company called G&L (George & Leo)[5] Musical Products. G&L guitar designs tended to lean heavily upon the looks of Fender's original Guitars such as the Stratocaster and Telecaster, but incorporated innovations such as enhanced tremolo systems and electronics.

In 1979, Fender's wife Esther died of cancer. He remarried in 1980; Phyllis Fender is an Honorary Chairman of G&L. Despite suffering several minor strokes, Fender continued to produce guitars and basses. On March 21, 1991, he died, having long suffered from Parkinson's disease. He was buried at Fairhaven Memorial Park in Santa Ana, California. His accomplishments for "contributions of outstanding technical significance to the recording field" were acknowledged with a Technical Grammy Award in 2009.

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