Exhibit 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into as of the 29th day
of August, 2007 by and between Steinway & Sons a New York corporation (the
“Company”), and Thomas Kurrer (the “Executive”).

WHEREAS, the Executive is currently employed by the Company on the basis of a
Contract of Employment executed in 1989 (the “1989 Employment Contract”) as the
Managing Director of Hamburg, Germany and responsible for all the Company’s
operations outside the America’s; and

WHEREAS, the Company would like to expand the Executive’s responsibilities to
include all of the piano operations within Steinway Musical Instruments, Inc.
(“SMI”), the Company’s parent corporation.

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

1.                                       Term of
Employment.                               The Company agrees to continue to
employ the Executive, and the Executive hereby agrees to accept his expanded
responsibilities, commencing January 1, 2008 (the “Commencement Date”), and
continuing until December 31,2010, unless otherwise terminated in accordance
with the terms set forth in paragraph 7 of this Agreement (including any
extensions, the “Term”).

2.                                       Duties and Responsibilities

a.                                       The Executive shall be employed as the
President of the Company, and shall perform such duties as are from time to time
assigned to him by the Board of Directors of the Company (the “Board”) and that
are ordinarily and customarily performed by a person holding such position, and
shall include primary responsibility for all piano operations of SMI.  The
Executive shall report to the President of SMI.

b.                                      During the period of his employment
hereunder, the Executive agrees to devote his entire business time, attention,
energies and his best efforts to the performance of his duties.

3.                                       Compensation

a.                                       For all services to be performed by the
Executive during the Term, the Company shall pay to him, together with other
compensation as hereinafter provided, an annual salary of €340,000 (subject to
such deductions and withholdings as may be required by law or by further
agreement with the Executive), beginning on the Commencement Date.

b.                                      Without limiting and in addition to the
foregoing, each year the Executive shall be eligible to receive an annual bonus
in accordance with the IPS Plan.  For 2008, the bonus amount shall not be less
than the average bonus payment earned under the Company’s

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IPS Plan for the three years ended December 31, 2007.  For 2009 and thereafter,
the bonus shall be as determined in accordance with the IPS Plan.

c.                                       The Executive shall be eligible to
receive annual salary increases based on his performance of his duties, but any
such increase shall be in the sole and absolute discretion of the Board.

4.                                       Benefits.  In addition to any other
items of compensation provided for in this Agreement, the Executive shall be
entitled to the following benefits (the “Benefits”):

a.                                       The Executive shall be entitled to
participate in (i) any retirement, life insurance, health, medical, disability
or other plans or benefits, whether insured or self-insured, which the Company
in its sole and absolute discretion may make available generally from time to
time to its executives and (ii) any bonus plans, incentive or otherwise, which
the Company, in its sole and absolute discretion, may establish from time to
time for its executives.

b.                                      The Executive shall be entitled to an
annual vacation of thirty (30) working days.

c.                                       The Executive shall be entitled to a
leased automobile and all out-of-pocket expenses for the upkeep and maintenance
of the automobile.  The Executive’s personal use thereof shall be deemed
additional compensation and, therefore, subject to income tax to him.  Any such
income taxes shall be the sole responsibility of the Executive.

d.                                      The Company shall continue to provide a
company pension policy for the Executive as agreed under the 1989 Employment
Contract and the “Versorgungszusage” dated June 29, 1990/ “Nachtrag 1 zur
Versorgungszusage der Firma Steinways & Sons, Hamburg, für Herrn Thomas Kurrer”
dated March 17, 1995.

e.                                       The Company shall continue to provide
the Executive with an insurance policy for death or disability as currently in
place.

5.                                       Reimbursement of Expenses.  The
Executive shall be entitled to be reimbursed for all reasonable travel and
entertainment expenses that are (a) incurred by him in the performance of his
duties hereunder and (b) evidenced by appropriate documentation.

6.                                       Restrictive Covenants.  The Executive
acknowledges that certain of the Company’s products and services are proprietary
in nature and have been manufactured, assembled and marketed through the use of
customer lists, supplier lists, trade secrets, methods of operation and other
confidential information possessed by the Company and disclosed in confidence to
the Executive (the “Trade Secrets”), which may not be easily accessible to other
persons in the trade.  The Executive also acknowledges that he will have
substantial and ongoing contact with the Company’s customers and suppliers and
will thereby gain knowledge of customer needs and references, sources of equity
funding, sources of supply, methods of assembly and other valuable information
necessary for the success of the Company’s business.  Therefore, except as
provided in subparagraphs (a) and (d) below, and except as provided in paragraph
8, during the time the Executive is employed under the provisions of this
Agreement and until the date of the second anniversary of the termination of the
executive’s employment, the Executive shall not, without the prior written
consent of the Company:

a.                                       During the Term, engage in any business
activity that competes with the

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Company in the manufacturing of musical instruments or other business in which
the Company is engaged, or exploits or utilizes any of the Trade Secrets;
provided, however, that the Executive may invest in any publicly-traded company
that is similar in nature to the business in which the Company is engaged,
provided that such investment shall not exceed 5% of the equity interest in such
company on a fully diluted basis;

b.                                      Solicit any person employed by the
Company or any affiliate of the Company, appointed as a representative of the
Company, or any affiliate of the Company, to join him as a partner, co-venturer,
employee, investor or otherwise, in any substantial business activity
whatsoever;

c.                                       Intentionally disclose or reveal any
Trade Secrets or other confidential information of the Company to anyone which
disclosure results in harm to the Company; or

d.                                      Become employed by or associated with,
any entity that owns, operates, manages or has a substantial interest in any
business activity that competes with the Company in the manufacturing of musical
instruments or other significant business in which the Company is engaged, or
exploits or utilizes any of the Trade Secrets; provided, however, if the
Executive’s employment is terminated by the Company other than for Cause (as
defined herein), said period for the purposes of this subparagraph d shall be
reduced to one year after the termination of his employment.

7.                                       Termination.

a.                                       The Company shall have the option to
terminate the Executive’s employment for “Cause”, which shall be defined as
follows:  (i) any felony committed by the Executive in connection with the
performance of the Executive’s duties to the Company that causes damage to the
Company or any of its properties, assets or businesses; (ii) any fraud,
misappropriation or embezzlement by the Executive involving properties, assets
or funds of the Company; (iii) a conviction of the Executive, or plea of nolo
contendere by the Executive, to any crime or offense involving monies or other
property of the Company; or (iv) the violation by the Executive of any
non-competition or confidentiality agreement with the Company.  In the event of
termination of the Executive’s employment for Cause, any obligation of the
Company to provide any compensation and Benefits to him, as herein set forth,
shall cease immediately except as provided in paragraph 10.

b.                                      In the event of termination of the
Executive’s employment by reason of death or permanent disability, he and/or his
estate shall be entitled to his salary and Benefits under the terms of this
Agreement for a period of six months following the date of his death or the date
upon which he becomes permanently disabled, in addition to any other benefits
provided by the Company.

c.                                       In the event of termination of the
Executive’s employment by reason of his resignation, written notice of which
shall be given by him to the Company at least sixty days prior thereto, he shall
be entitled to his salary and Benefits hereunder up to the date of such
termination, subject to extension of Benefits required by any governmental laws
and regulations.

8.                                       Renewal

a.                                       Upon completion of the initial three
year Term, this Agreement shall automatically renew on an annual basis for an
additional twelve months, unless the

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Company provides the Executive with written notice of its intent not to renew at
least sixty (60) days prior to the expiration of the then current Term.

b.                                      If this Agreement is not renewed, then
the terms of paragraph 6(d) shall not apply and the Company shall pay to the
Executive a severance benefit on the date of the non-renewal equal to his latest
annual salary plus bonus in consideration for which the Executive agrees that he
will not become employed by or associated with any entity which owns, operates,
manages, or has a substantial interest in any business activity that competes
with the Company as a manufacturer of musical instruments for a period of two
years after the date of the non-renewal.

9.                                       Indemnification.   The Company agrees
to indemnify the Executive to the same extent that the Company agrees to
indemnify other officers and directors of the Company in their capacity as
such.  The Company further agrees that such indemnification shall survive the
Executive’s resignation, termination or expiration of this Agreement, with
respect to actions taken by him during his employment with the Company, unless
such actions could have been grounds for termination for Cause.

10.                                 Employment Benefits to Continue After
Termination.  If the Executive’s employment is terminated by the Company with or
without Cause, or by resignation, he shall be entitled to continue to
participate in any health and medical plans maintained by the Company at his
employee rate if he so elects and pays the premium cost of such insurer in
advance to the Company until such time as he becomes a participant in another
plan or for an additional period of time in accordance with governmental laws
and regulations.  The Company is not obligated to maintain any such benefit
plans under this Agreement.

11.                                 Limitation on Assignment.  The Company
agrees that if the assets of the business are transferred to any other entity
the Executive shall have the right to have this contract assigned to such
entity.

12.                                 Entire Agreement.  This Agreement
constitutes the entire agreement between the parties in connection with the
subject matter hereof, supersedes any and all prior agreements or understandings
between the parties and may only be changed by agreement in writing between the
parties.

13.                                 Binding Nature of Agreement Assignment. 
This Agreement shall be binding upon the parties hereto, the heirs and legal
representatives of the Executive and the successors and assigns of the Company.

14.                                 Governing Law/Jurisdiction. This Agreement
shall be construed and enforced in accordance with the laws of Germany. If any
legal action relating to or other proceeding is brought by any party for the
enforcement of this Agreement, or because of an alleged dispute, breach or
default in connection with any provisions of this Agreement, such action shall
be commenced in Hamburg, and the parties hereto agree that Hamburg shall have
exclusive jurisdiction thereof; provided, however, if any court in Hamburg shall
decline to afford injunctive relief to the Company on account of the breach or
threatened breach of this Agreement by the Executive, the Company shall be
entitled to seek such relief from any other court of competent jurisdiction,
wherever located.

15.                                 Serverability.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision or provisions were omitted.

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16.                                 Section Headings.  The section headings
herein have been inserted for convenience of reference only and shall in no way
modify or restrict any of the terms or provisions hereof.

17.                                 Waiver of Breach.  The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver by said party of any other or subsequent breach.

18.                                 Notices.  All notices and other
communications required or permitted to be given under the terms of this
Agreement shall be given in writing and shall be deemed to have been duly given
(a) when delivered personally, (b) if sent by telecopy, when receipt thereof is
acknowledged at the telecopy number listed below for the receiving party, (b)
the day following the day on which the same has been delivered prepaid for
overnight delivery to a national air courier service or (d) three days following
deposit in the mail, registered or certified, postage prepaid, in each case
addressed as follows (or to such other addresses that may have been designated
by the respective parties hereto for this purpose):

If to the Company:

Steinway Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, Massachusetts  02453-1472

Fax: (781) 894-9803

Attention:                                         Dennis M. Hanson

With a copy to:

Milbank, Tweed, Hadley & McCloy

601 South Figueroa Street, 30th Floor

Los Angeles, California  90017

Fax: (213) 629-5063

Attention:                                         Neil Wertlieb

If to the Executive:

Thomas Kurrer

Heimhuder Strasse 78

20148 Hamburg

Germany

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

Steinway & Sons

 

 

 

 

 

/s/ Dennis M. Hanson

 

 

Dennis M. Hanson

 

Executive V.P.

 

 

 

 

 

/s/ Thomas Kurrer

 

 

Thomas Kurrer

 

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