STOCKHOLDERS AGREEMENT BY AND AMONG STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC. AND THE PAULSON STOCKHOLDERS

Exhibit 4.2

STOCKHOLDERS AGREEMENT

BY AND AMONG

STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.

AND

THE XXXXXXX STOCKHOLDERS

[ • ], 2022

TABLE OF CONTENTS

				Page
SECTION I.		DEFINITIONS			1
1.1		Drafting Conventions; No Construction Against Drafter			1
1.2		Defined Terms			2
SECTION II.		REPRESENTATIONS AND WARRANTIES			3
2.1		Representations and Warranties of the Xxxxxxx Stockholders			3
2.2		Representations and Warranties of the Company			3
SECTION III.		CORPORATE GOVERNANCE			4
3.1		Board of Directors			4
3.2		Agreement of Company			6
SECTION IV.		MISCELLANEOUS PROVISIONS			6
4.1		Access Rights			6
4.2		Confidentiality			6
4.3		Reliance			7
4.4		Access to Agreement; Amendment and Waiver; Actions of the Board			7
4.5		Notices			7
4.6		Counterparts; Electronic Delivery			8
4.7		Remedies; Severability			8
4.8		Entire Agreement			8
4.9		Termination			8
4.10		Governing Law			8
4.11		Successors and Assigns; Beneficiaries			8
4.12		Consent to Jurisdiction; Specific Performance; WAIVER OF JURY TRIAL			9
4.13		Further Assurances; Company Logo			9
4.14		Regulatory Matters			9
4.15		No Third Party Liability			10
4.16		Effectiveness of Agreement			10
4.17		Removal of Legends			10
4.18		Inconsistent Agreements			10

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STOCKHOLDERS AGREEMENT

This Stockholders Agreement (this “Agreement”) is entered into as of [ ⚫ ], 2022 by and among (a) Steinway Musical Instruments Holdings, Inc., a Delaware corporation (the “Company”) and (b) Xxxx Xxxxxxx, Xxxxxxx Advantage Master Ltd. and Xxxxxxx Advantage Plus Master Ltd. (collectively, “Xxxxxxx”).

RECITALS

A. The Company and Xxxxxxx are proposing to consummate an initial public offering (the “Initial Public Offering”) of the Company’s Class A Common Stock (as defined herein), pursuant to an Underwriting Agreement, dated [ ⚫ ], 2022 (the “Underwriting Agreement”).

B. In connection with the consummation of the Initial Public Offering, Xxxxxxx Pianissimo LLC, a Delaware limited liability company, the parent company of the Company (“Parent”), will be liquidated and its members will receive Common Stock of the Company (the “Distribution”).

C. The Xxxxxxx Stockholders (as defined herein) and the Company desire to enter into this Agreement effective upon the Effective Time (as defined herein).

D. The Board of Directors of the Company (the “Board of Directors”) has approved this Agreement.

AGREEMENT

Now therefore, in consideration of the foregoing, and the mutual agreements and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

SECTION I. DEFINITIONS

1.1 Drafting Conventions; No Construction Against Drafter.

(a) The headings in this Agreement are provided for convenience and do not affect its meaning. The words “include,” “includes” and “including” are to be read as if they were followed by the phrase “without limitation.” Unless specified otherwise, any reference to an agreement means that agreement as amended or supplemented, subject to any restrictions on amendment contained in such agreement. Unless specified otherwise, any reference to a statute or regulation means that statute or regulation as amended or supplemented from time to time and any corresponding provisions of successor statutes or regulations. If any date specified in this Agreement as a date for taking action falls on a day that is not a business day, then that action may be taken on the next business day. Unless specified otherwise, the words “party” and “parties” refer only to a party named in this Agreement or one who joins this Agreement as a party pursuant to the terms hereof.

(b) 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, this Agreement is to be construed as if drafted jointly by the parties and there is to be no presumption or burden of proof or rule of strict construction favoring or disfavoring any party because of the authorship of any provision of this Agreement.

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1.2 Defined Terms. The following capitalized terms, as used in this Agreement, have the meanings set forth below.

“Affiliate” means with respect to any specified Person, any other Person which, directly or indirectly, controls, is controlled by or is under common control with the specified Person, including any partner, officer, director or member of the specified Person and, if the specified Person is a private equity fund, any investment fund now or hereafter managed by, or which is controlled by or is under common control with, one or more general partners of the specified Person. For the purposes of this definition, “control” (including, with its correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct, or cause the direction of the management and policies of such Person, whether through the ownership of securities, by contract or otherwise.

“Board of Directors” or “Board” has the meaning set forth in the recitals.

“Class A Common Stock” means the Class A common stock, par value $0.0001 per share, of the Company.

“Class B Common Stock” means the Class B common stock, par value $0.0001 per share, of the Company (including any shares of Class A common stock into which such Class B common stock converts).

“Closing” means the closing of the Initial Public Offering.

“Common Stock” means, collectively, the shares of Class A Common Stock and Class B Common Stock, and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation or similar transaction.

“Company” has the meaning set forth in the preamble and shall include any successor thereto.

“Director” means a member of the Board of Directors.

“Distribution” has the meaning set forth in the recitals.

“Effective Time” has the meaning set forth in Section 4.16.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Initial Public Offering” has the meaning set forth in the recitals.

“Necessary Action” means, with respect to a specified result, all commercially reasonable actions required to cause such result that are within the power of a specified Person, including (i) voting or providing a written consent or proxy with respect to the Shares, (ii) causing the adoption of stockholders’ resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments, (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result and (v) causing members of the Board of Directors, subject to any fiduciary duties that such members may have as directors of the Company (including pursuant to Section 3.1(d)), to act in a certain manner, including causing members of the Board of Directors or any nominating or similar committee of the Board of Directors to recommend the appointment of any Xxxxxxx Stockholders’ Designees as provided by this Agreement.

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“Nominating Committee” has the meaning set forth in Section 3.1(c).

“Parent” has the meaning set forth in the recitals.

“Xxxxxxx” has the meaning set forth in the preamble.

“Xxxxxxx Director” has the meaning set forth in Section 3.1(a).

“Xxxxxxx Stockholders” means Xxxx Xxxxxxx, Xxxxxxx Advantage Master Ltd., Xxxxxxx Advantage Plus Master Ltd. and any trust, general partnership, limited partnership, limited liability company, corporation or other entity over which Xxxx Xxxxxxx exercises beneficial ownership in accordance with Rule 13d-3 under the Exchange Act; provided that “Xxxxxxx Stockholders” shall not include any portfolio company of a Xxxxxxx Stockholder.

“Xxxxxxx Stockholders’ Designee” has the meaning set forth in Section 3.1(b).

“Xxxxxxx Majority Interest” means, at any given time, the Xxxxxxx Stockholders holding a majority of the outstanding Shares held at that specified time by all Xxxxxxx Stockholders.

“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government (or agency or political subdivision thereof) or any other entity or group (as defined in Section 13(d) of the Exchange Act).

“Shares” means, at any time, (i) shares of Common Stock, including any and all shares of Common Stock issued by the Company in connection with the Distribution and (ii) any other equity securities now or hereafter issued by the Company, together with any options thereon and any other shares of stock or other equity securities issued or issuable with respect thereto (whether by way of a stock dividend, stock split or in exchange for or in replacement or upon conversion of such shares or otherwise in connection with a combination of shares, recapitalization, merger, consolidation or other corporate reorganization).

“Underwriting Agreement” has the meaning set forth in the recitals.

SECTION II. REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of the Xxxxxxx Stockholders. Each Xxxxxxx Stockholder has the power and authority to enter into this Agreement and carry out its obligations hereunder. Each of the Xxxxxxx Stockholders hereby represents, warrants and covenants to the Company as follows: (a) if such Xxxxxxx Stockholder is an entity, this Agreement has been duly authorized, executed and delivered by such Xxxxxxx Stockholder; (b) this Agreement constitutes the valid and binding obligation of such Xxxxxxx Stockholder enforceable against it in accordance with its terms; and (c) if such Xxxxxxx Stockholder is an entity, the execution, delivery and performance by such Xxxxxxx Stockholder of this Agreement: (i) does not and will not violate any laws, rules or regulations of the United States or any state or other jurisdiction applicable to such Xxxxxxx Stockholder, or require such Xxxxxxx Stockholder to obtain any approval, consent or waiver of, or to make any filing with, any Person that has not been obtained or made; and (ii) does not constitute a breach of or default under any material agreement to which such Xxxxxxx Stockholder is a party. If such Xxxxxxx Stockholder is a natural person, such person has full capacity to contract.

2.2 Representations and Warranties of the Company. The Company hereby represents, warrants and covenants to the Xxxxxxx Stockholders as follows: (a) the Company has full corporate power and authority to enter into this Agreement and perform its obligations hereunder; (b) this Agreement constitutes the valid and binding obligation of the Company enforceable against it in accordance with its

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terms; and (c) the execution, delivery and performance by the Company of this Agreement: (i) does not and will not violate any laws, rules or regulations of the United States or any state or other jurisdiction applicable to the Company, or require the Company to obtain any approval, consent or waiver of, or to make any filing with, any Person that has not been obtained or made; and (ii) does not and will not result in a breach of, constitute a default under, accelerate any obligation under or give rise to a right of termination of any indenture or loan or credit agreement or any other material agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award to which the Company is a party or by which the property of the Company is bound or affected, or result in the creation or imposition of any mortgage, pledge, lien, security interest or other charge or encumbrance on any of the assets or properties of the Company.

SECTION III. CORPORATE GOVERNANCE

3.1 Board of Directors.

(a) Composition of Initial Board. As of the Closing, the Board of Directors shall be comprised of six (6) directors, the following four (4) of whom shall be deemed to have been designated by the Xxxxxxx Stockholders (each, a “Xxxxxxx Director”): Xxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxx, and Xxxxxxxx Xxxxxx. The foregoing directors shall be divided into three classes of directors, each of whose members shall serve for staggered three-year terms as follows:

(i) the class I directors shall initially include Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx;

(ii) the class II directors shall initially include Xxxxxxxx Xxxxxxx and Xxx Xxx; and

(iii) the class III directors shall initially include Xxxxxx Xxxxxxxx and Xxxxxxxx Xxxxxx.

The initial term of the class I directors shall expire immediately upon the Company’s first annual meeting of stockholders at which directors are elected. The initial term of the class II directors shall expire immediately upon the Company’s second annual meeting of stockholders at which directors are elected. The initial term of the class III directors shall expire immediately upon the Company’s third annual meeting at which directors are elected.

(b) Xxxxxxx Stockholders’ Representation. For so long as the Xxxxxxx Stockholders hold, in the aggregate, a number of shares of Common Stock representing at least the percentages shown below of shares of Common Stock following the consummation of all sales of Class A Common Stock contemplated by the Underwriting Agreement, the Company shall take all Necessary Action to include in the slate of nominees recommended by the Board of Directors for election as directors at each applicable annual or special meeting of stockholders at which directors are to be elected that number of individuals designated by the Xxxxxxx Stockholders (each, a “Xxxxxxx Stockholders’ Designee”) that, if elected, will result in the number of Xxxxxxx Directors serving on the Board of Directors that is shown below.

Percentage		Number of Directors
35% or greater		4
Less than 35% but greater than or equal to 25%		3
Less than 25% but greater than or equal to 15%		2
Less than 15% but greater than or equal to 5%		1
Less than 5%		0

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Upon any decrease in the number of directors that the Xxxxxxx Stockholders are entitled to designate for election to the Board of Directors, one or more Xxxxxxx Stockholders’ Designees will immediately tender his or her resignation for consideration by the Board of Directors and, if such resignation is requested by the Board of Directors, such Xxxxxxx Stockholders’ Designee(s) shall resign within thirty (30) days of the date on which the Xxxxxxx Stockholders’ right to designate individuals for election as Directors was decreased. If such resignation is accepted by the Board of Directors, the Company shall cause the size of the Board of Directors to be reduced accordingly unless the Company, with the approval of a majority of the remaining Directors, determines not to reduce the authorized size of the Board of Directors, in which case the Board of Directors shall act in accordance with the bylaws of the Company then in effect to appoint or nominate a new director to the Board of Directors.

(c) Additional Obligations. An individual designated by the Xxxxxxx Stockholders for election (including pursuant to Section 3.1(b)) as a director shall comply with any applicable requirements of the charter for, and related guidelines of, any committee of the Board of Directors responsible for nominating directors (such committee, a “Nominating Committee”). Notwithstanding anything to the contrary in this Section 3, in the event that the Board of Directors determines in good faith, after consultation with outside legal counsel, that its nomination, appointment or election of a particular Xxxxxxx Stockholders’ Designee pursuant to this Section 3.1 would constitute a breach of its fiduciary duties to the Company’s stockholders or does not otherwise comply with any requirements of the charter for, or related guidelines of, the Nominating Committee, then the Board of Directors shall inform the Xxxxxxx Stockholders of such determination in writing and explain in reasonable detail the basis for such determination, the Xxxxxxx Stockholders shall designate another individual designated for nomination, election or appointment to the Board of Directors (subject in each case to this Section 3.1(c)), and the Board of Directors and the Company shall take all of the actions required by this Section 3 with respect to the election of such substitute Xxxxxxx Stockholders’ Designee. It is hereby acknowledged and agreed that the fact that a particular Xxxxxxx Stockholders’ Designee is an Affiliate, director, professional, partner, member, manager, employee or agent of the Xxxxxxx Stockholders or is not an independent director (as determined under applicable stock exchange regulations) shall not in and of itself constitute an acceptable basis for such determination by the Board of Directors.

(d) Vacancies. Except as provided in Section 3.1(b), with respect to decreases in ownership of the Xxxxxxx Stockholders, (i) the Xxxxxxx Stockholders shall have the exclusive right to request the removal of Xxxxxxx Stockholders’ Designees from the Board of Directors in accordance with the certificate of incorporation and bylaws of the Company then in effect, and the Company shall take all Necessary Action to cause the removal (whether for or without cause) of any such Xxxxxxx Stockholders’ Designee at the request of the Xxxxxxx Stockholders and (ii) the Xxxxxxx Stockholders shall have the exclusive right to designate directors for election to the Board of Directors to fill vacancies (for the remainder of the then current term) created by reason of death, disability, removal or resignation of Xxxxxxx Stockholders’ Designees to the Board of Directors, and the Company shall take all Necessary Action to cause any such vacancies to be filled by replacement directors designated by the Xxxxxxx Stockholders as promptly as reasonably practicable.

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(e) Committees. In accordance with the Company’s certificate of incorporation and bylaws, (i) the Board shall establish and maintain an audit committee of the Board, as well as all other committees of the Board required in accordance with applicable laws and stock exchange regulations, and (ii) the Board may from time to time by resolution establish and maintain other committees of the Board. Subject to applicable laws and stock exchange regulations, and subject to requisite independence requirements applicable to such committee, the Xxxxxxx Stockholders shall have the right to have one (1) Xxxxxxx Director appointed to serve on each committee of the Board for so long as the Xxxxxxx Stockholders has the right to designate at least one (1) director for nomination to the Board. In furtherance of the foregoing, the Company agrees to take all Necessary Action to have at least one (1) Xxxxxxx Director appointed to serve on each committee of the Board (to the extent not prohibited by applicable law or applicable stock exchange regulations).

3.2 Agreement of Company. The Company hereby agrees that it will take all Necessary Actions to cause the matters addressed by this Section 3 to be carried out in accordance with the provisions thereof. Without limiting the foregoing, the Secretary of the Company or such other officer or employee of the Company who may be fulfilling the duties of the Secretary, shall not record any vote or consent or other action contrary to the terms of this Section 3.

SECTION IV. MISCELLANEOUS PROVISIONS

4.1 Access Rights. The Company shall, and shall cause its subsidiaries, officers, directors, employees, auditors and other agents to (a) afford the Xxxxxxx Stockholders and their officers, employees, auditors and other agents, during normal business hours and upon reasonable notice, at all reasonable times access to the Company’s and its subsidiaries’ officers, employees, auditors, legal counsel, properties, offices, plants and other facilities and to all books and records, and (b) afford the Xxxxxxx Stockholders and their officers, employees, auditors and other agents the opportunity to discuss the affairs, finances and accounts of the Company and its subsidiaries with their respective officers from time to time as each such Xxxxxxx Stockholder may reasonably request, in each case, until such time as such Xxxxxxx Stockholder shall cease to own any Shares. Notwithstanding the foregoing, the Company may reasonably withhold information that is subject to attorney-client privilege.

4.2 Confidentiality. Each Xxxxxxx Stockholder agrees that it will keep confidential and will not disclose, divulge or use for any purpose, other than to monitor its investment in the Company and its subsidiaries, any confidential information obtained from the Company pursuant to Section 4.1, unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of any confidentiality obligation by such Xxxxxxx Stockholder or its affiliates), (b) is or has been independently developed or conceived by such Xxxxxxx Stockholder without use of or reliance on the Company’s confidential information or (c) is or has been made known or disclosed to such Xxxxxxx Stockholder by a third party (other than an Affiliate of such Xxxxxxx Stockholder) without a breach of any confidentiality obligations such third party may have to the Company that is known to such Xxxxxxx Stockholder; provided, that, a Xxxxxxx Stockholder may disclose confidential information (i) to its attorneys, accountants, consultants and other professional advisors to the extent necessary to obtain their services in connection with monitoring its investment in the Company, (ii) to any prospective purchaser of any Shares from such Xxxxxxx Stockholder as long as such prospective purchaser executes a confidentiality agreement with the Company, in form and substance satisfactory to the Company, (iii) to any Affiliate, partner, member, limited partners, prospective partners or related investment fund of such Xxxxxxx Stockholder and their respective directors, employees, consultants and representatives, in each case in the ordinary course of business (provided that the recipients of such confidential information are subject to a customary confidentiality and non-disclosure obligation, and provided further that Xxxxxxx Stockholder will remain liable to the Company for any breaches of confidentiality and nondisclosure obligations by such persons), or (iv) as may otherwise be required by law or legal, judicial or regulatory process.

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4.3 Reliance. Each covenant and agreement made by a party in this Agreement or in any certificate, instrument or other document delivered pursuant to this Agreement is material, shall be deemed to have been relied upon by the other parties and shall remain operative and in full force and effect after the Effective Time regardless of any investigation. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties hereto and their respective successors and permitted assigns.

4.4 Access to Agreement; Amendment and Waiver; Actions of the Board. For so long as this Agreement shall be in effect, this Agreement shall be made available for inspection by any Xxxxxxx Stockholder at the principal executive offices of the Company. Any party may waive in writing any provision hereof intended for its benefit, provided, that, in the case of any waiver by the Company, such waiver is consented to in writing by the Xxxxxxx Majority Interest, and in the case of any waiver by the Xxxxxxx Stockholders, the Xxxxxxx Majority Interest may waive such provision on behalf of all the Xxxxxxx Stockholders. No failure or delay on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to any party at law or in equity or otherwise. This Agreement may be amended only with the prior written consent of the Xxxxxxx Majority Interest and the Company. Any consent given as provided in the preceding sentence shall be binding on all parties (subject to the proviso in the preceding sentence).

4.5 Notices. All notices, requests, demands and other communications provided for hereunder shall be in writing and mailed (by first class registered or certified mail, electronic mail, facsimile or postage prepaid), sent by express overnight courier service, or delivered to the applicable party at the respective address indicated below:

If to the Company:

Steinway Musical Instruments Holdings, Inc.

0 Xxxxxxxx Xxxxx

Xxxxxxx, Xxx Xxxx 00000

Attn: Chief Legal Officer (xxxxx@xxxxxxxx.xxx)

With a copy (which shall not constitute notice):

Xxxxxx & Xxxxxxx LLP

0000 Xxxxxx xx xxx Xxxxxxxx

Xxx Xxxx, Xxx Xxxx 00000

Attention:

Xxxx Xxxxx (Xxxx.Xxxxx@xx.xxx)

Xxx Xxxxx (Xxxxxxxx.Xxxxx@xx.xxx)

Facsimile: (000) 000-0000

If to the Xxxxxxx Stockholders:

c/o Paulson & Co. Inc.

0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx

Xxx Xxxx, XX 00000

Attention: Xxxxxxx Xxxxxxx (Xxxxxxx.Xxxxxxx@xxxxxxxxx.xxx)

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or at such Person’s address for notice as set forth in the books and records of the Company, or, as to each of the foregoing, at such other address as shall be designated by a party in a written notice to other parties complying as to delivery with the terms of this Section 4.5. All such notices, requests, demands and other communications shall, when mailed, telegraphed or sent, respectively, be effective (i) two days after being deposited in the mail or (ii) one day after being deposited with the express overnight courier service, respectively, addressed as aforesaid.

4.6 Counterparts; Electronic Delivery. This Agreement may be executed in two or more counterparts, and delivered via facsimile, .pdf or other electronic transmission, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent executed and delivered by means of a photographic, photostatic, facsimile or similar reproduction of such signed writing using a facsimile machine or electronic mail shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

4.7 Remedies; Severability. It is specifically understood and agreed that any breach of the provisions of this Agreement by any party will result in irreparable injury to the other parties, that the remedy at law alone will be an inadequate remedy for such breach, and that, in addition to any other legal or equitable remedies which they may have, such other parties may enforce their respective rights by actions for specific performance or injunctive relief (to the extent permitted at law or in equity). If any one or more of the provisions of this Agreement, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein are not to be in any way impaired thereby, it being intended that all of the rights and privileges of the parties be enforceable to the fullest extent permitted by law.

4.8 Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

4.9 Termination. This Agreement shall terminate on such date as the Xxxxxxx Stockholders cease to hold any Shares.

4.10 Governing Law. This Agreement is to be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules are not mandatorily applicable by statute and would require or permit the application of the laws of another jurisdiction.

4.11 Successors and Assigns; Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the parties and the respective successors and assigns of the parties as contemplated herein. Any successor to the Company by way of merger or otherwise must specifically agree to be bound by the terms hereof as a condition of such succession.

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4.12 Consent to Jurisdiction; Specific Performance; WAIVER OF JURY TRIAL.

(a) Each of the parties hereto irrevocably and unconditionally consents to the sole and exclusive jurisdiction of the state and federal courts located in Delaware to resolve all disputes, claims or controversies arising out of or relating to this Agreement or any other agreement executed and delivered pursuant to or in connection with this Agreement or the negotiation, breach, validity, termination or performance hereof and thereof or the transactions contemplated hereby and thereby and agrees that it will not bring any such action in any court other than the federal or state courts located in Delaware. Each party further irrevocably waives any objection to proceeding in such courts based upon lack of personal jurisdiction or to the laying of venue in such courts and further irrevocably and unconditionally waives and agrees not to make a claim that such courts are an inconvenient forum. Each of the parties hereto hereby consents to service of process by registered mail at the address to which notices are to be given as provided in Section 4.5. Each of the parties hereto agrees that its or his submission to jurisdiction and its or his consent to service of process by mail is made for the express benefit of the other parties hereto. The choice of forum set forth in this Section shall not be deemed to preclude the enforcement of any judgment of a Delaware federal or state court, or the taking of any action under this Agreement to enforce such a judgment, in any other appropriate jurisdiction.

(b) The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which such party is entitled at law or in equity.

(c) EACH PARTY TO THIS AGREEMENT WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED AND DELIVERED PURSUANT TO OR IN CONNECTION HEREWITH OR THE NEGOTIATION, BREACH, VALIDITY, TERMINATION OR PERFORMANCE HEREOF AND THEREOF OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. FURTHER, (I) NO PARTY TO THIS AGREEMENT SHALL SEEK A JURY TRIAL IN ANY SUCH ACTION AND (II) NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH PARTY TO THIS AGREEMENT CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT OR INSTRUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH ABOVE IN THIS SECTION 4.12. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

4.13 Further Assurances; Company Logo. At any time or from time to time after the Effective Time, the parties hereto agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as any other party may reasonably request in order to evidence or effectuate the provisions of this Agreement and to otherwise carry out the intent of the parties hereunder. The Company hereby grants the Xxxxxxx Stockholders and their respective Affiliates permission to use the Company’s and its subsidiaries’ name and logo in marketing materials.

4.14 Regulatory Matters. The Company shall and shall cause its subsidiaries to keep the Xxxxxxx Stockholders informed, on a current basis, of any events, discussions, notices or changes with respect to any criminal or regulatory investigation or action involving the Company or any of its subsidiaries, so that the Xxxxxxx Stockholders and their respective Affiliates will have the opportunity to take appropriate steps to avoid or mitigate any regulatory consequences to them that might arise from such investigation or action.

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4.15 No Third Party Liability. This Agreement may only be enforced against the named parties hereto. All claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), may be made only against the entities that are expressly identified as parties hereto.

4.16 Effectiveness of Agreement. This Agreement shall become effective (such time, the “Effective Time”) immediately prior to the effectiveness of the Company’s registration statement on Form S-1 related to the Initial Public Offering. However, to the extent the Closing does not occur, the provisions of this Agreement shall be without any force or effect.

4.17 Removal of Legends. The Company shall remove any restrictive legends on any Shares held by any Xxxxxxx Stockholder promptly upon request by such Xxxxxxx Stockholder if such legend is not, in the reasonable determination of the Company upon the advice of legal counsel, required to comply with applicable securities laws; provided that the Company may require an opinion of legal counsel reasonably acceptable to the Company prior to any such removal other than in connection with a transfer made pursuant to an effective registration statement.

4.18 Inconsistent Agreements. Neither the Company nor any Xxxxxxx Stockholder shall enter into any agreement or side letter with, or grant any proxy to, any stockholder, the Company or any other Person (whether or not such proxy, agreements or side letters are with other Xxxxxxx Stockholders, holders of Shares that are not parties to this Agreement or otherwise) that conflicts with the provisions of this Agreement or which would obligate such Person to breach any provision of this Agreement.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties are signing this Stockholders Agreement as of the date first set forth above.

STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.

By:

Name: Xxxx Xxxxxxxxxxx

Title: Chief Financial Officer

[Signature Page to Stockholders Agreement]

XXXX XXXXXXX

By:

Name: Xxxx Xxxxxxx

XXXXXXX ADVANTAGE MASTER LTD.

By:

Name:

Title:

XXXXXXX ADVANTAGE PLUS MASTER LTD.

By:

Name:

Title:

[Signature Page to Stockholders Agreement]