Document:

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                                                                    EXHIBIT 10.9

                                PLEDGE AGREEMENT

                  This PLEDGE AGREEMENT, dated as of March 24, 2000 (together
with all amendments, if any, from time to time hereto, this "Agreement") between
BALDWIN PIANO & ORGAN COMPANY, a Delaware corporation (the "Pledgor") and
GENERAL ELECTRIC CAPITAL CORPORATION in its capacity as Agent for Lenders
("Agent").

                              W I T N E S S E T H:
                              - - - - - - - - - -

                  WHEREAS, pursuant to that certain Credit Agreement dated as of
the date hereof by and among Pledgor, the Persons named therein as Credit
Parties, Agent and the Persons signatory thereto from time to time as Lenders
(including all annexes, exhibits and schedules thereto, and as from time to time
amended, restated, supplemented or otherwise modified (the "Credit Agreement")
the Lenders have agreed to make Loans to, and incur Letter of Credit Obligations
for the benefit of, Borrowers;

                  WHEREAS, Pledgor is the record and beneficial owner of the
shares of Stock listed in Part A of Schedule I hereto and the owner of the
promissory notes and instruments listed in Part B of Schedule I hereto;

                  WHEREAS, Pledgor benefits from the credit facilities made
available to Borrowers under the Credit Agreement;

                  WHEREAS, in order to induce Agent and Lenders to make the
Loans and to incur the Letter of Credit Obligations as provided for in the
Credit Agreement, Pledgor has agreed to pledge the Pledged Collateral to Agent
in accordance herewith;

                  NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained and to induce Lenders to make Loans and to incur
Letter of Credit Obligations under the Credit Agreement, it is agreed as
follows:

                  1. Definitions. Unless otherwise defined herein, terms defined
in the Credit Agreement are used herein as therein defined, and the following
shall have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):

                  "Bankruptcy Code" means title 11, United States Code, as
amended from time to time, and any successor statute thereto.

                  "Pledged Collateral" has the meaning assigned to such term in
Section 2 hereof.

                  "Pledged Entity" means an issuer of Pledged Shares or Pledged
Indebtedness.

                  "Pledged Indebtedness" means the Indebtedness evidenced by
promissory notes and instruments listed on Part B of Schedule I hereto;

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                  "Pledged Shares" means those shares listed on Part A of
Schedule I hereto.

                  "Secured Obligations" has the meaning assigned to such term in
Section 3 hereof.

                  2. Pledge. Pledgor hereby pledges to Agent, and grants to
Agent for itself and the benefit of Lenders, a first priority security interest
in all of the following (collectively, the "Pledged Collateral"):

                           (a) the Pledged Shares and the certificates
         representing the Pledged Shares, and all dividends, distributions,
         cash, instruments and other property or proceeds from time to time
         received, receivable or otherwise distributed in respect of or in
         exchange for any or all of the Pledged Shares; provided, to the extent
         the issuer of any of such Pledged Shares is a Person organized under
         the laws of a jurisdiction other than a State of the United States or
         the District of Columbia (each, a "Foreign Subsidiary") (other than
         Baldwin Canada), such Pledgor shall only be required to pledge Pledged
         Shares or certificates representing Pledged Shares of such issuer
         possessing up to but not exceeding 65% of the voting power of all
         classes of capital stock entitled to vote of such issuer, and all
         dividends, cash, warrants, rights, instruments and other property or
         proceeds from time to time received, receivable or otherwise
         distributed in respect of or in exchange for any or all of such Pledged
         Shares; and

                           (b) such portion, as determined by Agent as provided
         in Section 6(d) below, of any additional shares of stock of a Pledged
         Entity from time to time acquired by Pledgor in any manner (which
         shares shall be deemed to be part of the Pledged Shares), and the
         certificates representing such additional shares, and all dividends,
         distributions, cash, instruments and other property or proceeds from
         time to time received, receivable or otherwise distributed in respect
         of or in exchange for any or all of such Stock; and

                           (c) the Pledged Indebtedness and the promissory notes
         or instruments evidencing the Pledged Indebtedness, and all interest,
         cash, instruments and other property and assets from time to time
         received, receivable or otherwise distributed in respect of the Pledged
         Indebtedness; and

                           (d) all additional Indebtedness arising after the
         date hereof and owing to Pledgor and evidenced by promissory notes or
         other instruments, together with such promissory notes and instruments,
         and all interest, cash, instruments and other property and assets from
         time to time received, receivable or otherwise distributed in respect
         of that Pledged Indebtedness.

                  3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the prompt payment in full when due, whether
at stated maturity, by acceleration or otherwise, and performance of all
Obligations of any kind under or in connection with the Credit Agreement and the
other Loan Documents and all obligations of Pledgor now or hereafter existing
under this Agreement including, without limitation, all fees, costs and

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expenses whether in connection with collection actions hereunder or otherwise
(collectively, the "Secured Obligations").

                  4. Delivery of Pledged Collateral. All certificates and all
promissory notes and instruments evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Agent, for itself and the benefit of
Lenders, pursuant hereto. Subject to the immediately following sentence, all
Pledged Shares shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Agent, an
irrevocable proxy substantially in the form of Schedule II hereto and all
promissory notes or other instruments evidencing the Pledged Indebtedness shall
be endorsed by Pledgor. All Pledged Shares of Baldwin Canada shall forthwith be
registered in the name of Agent or, at Agent's option, its nominee, in order to
further perfect Agent's security interest therein, and be delivered to and
remain in the custody of Agent or, at Agent's option, its nominee. Pledgor
hereby directs Baldwin Canada to, and Baldwin Canada agrees that it shall,
forthwith upon the issuance of any Pledged Shares, record on its share register
the Pledged Shares of Baldwin Canada in the name of Agent or its nominee in
order to further perfect the security interest of Agent in the Pledged Shares
and all dividends, distributions, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Stock. Baldwin Canada shall
promptly deliver to Agent following such recordation a photocopy of the
applicable share register evidencing such recordation certified by the Secretary
or Assistant Secretary of Baldwin Canada to be a complete photocopy thereof.

                  5. Representations and Warranties. Pledgor represents and
warrants to Agent that:

                           (a) Pledgor is, and at the time of delivery of the
         Pledged Shares to Agent will be, the sole holder of record (except in
         the case of Pledged Shares of Baldwin Canada in respect of which
         Pledgor was the sole holder of record immediately prior to (i) the
         registration thereof in Agent's or Agent's nominee's name in order to
         further perfect Agent's security interest therein and (ii) the delivery
         of such Pledged Shares to Agent) and the sole beneficial owner of such
         Pledged Collateral pledged by Pledgor free and clear of any Lien
         thereon or affecting the title thereto, except for any Lien created by
         this Agreement; Pledgor is and at the time of delivery of the Pledged
         Indebtedness to Agent will be, the sole owner of such Pledged
         Collateral free and clear of any Lien thereon or affecting title
         thereto, except for any Lien created by this Agreement;

                           (b) All of the Pledged Shares have been duly
         authorized, validly issued and are fully paid and non-assessable; the
         Pledged Indebtedness has been duly authorized, authenticated or issued
         and delivered by, and is the legal, valid and binding obligations of,
         the Pledged Entities, and no such Pledged Entity is in default
         thereunder;

                           (c) Pledgor has the right and requisite authority to
         pledge, assign, transfer, deliver, deposit and set over the Pledged
         Collateral pledged by Pledgor to Agent as provided herein;

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                           (d) None of the Pledged Shares or Pledged
         Indebtedness has been issued or transferred in violation of the
         securities registration, securities disclosure or similar laws of any
         jurisdiction to which such issuance or transfer may be subject;

                           (e) All of the Pledged Shares are presently owned by
         Pledgor, and are presently represented by the certificates listed on
         Part A of Schedule I hereto. As of the date hereof, there are no
         existing options, warrants, calls or commitments of any character
         whatsoever relating to the Pledged Shares;

                           (f) No consent, approval, authorization or other
         order or other action by, and no notice to or filing with, any
         Governmental Authority or any other Person is required (i) for the
         pledge by Pledgor of the Pledged Collateral pursuant to this Agreement
         or for the execution, delivery or performance of this Agreement by
         Pledgor, or (ii) for the exercise by Agent of the voting or other
         rights provided for in this Agreement or the remedies in respect of the
         Pledged Collateral pursuant to this Agreement, except as may be
         required in connection with such disposition by laws affecting the
         offering and sale of securities generally;

                           (g) The pledge, assignment and delivery of the
         Pledged Collateral pursuant to this Agreement will create a valid first
         priority Lien on and a first priority perfected security interest in
         favor of the Agent for the benefit of Agent and Lenders in the Pledged
         Collateral and the proceeds thereof, securing the payment of the
         Secured Obligations, subject to no other Lien;

                           (h) This Agreement has been duly authorized, executed
         and delivered by Pledgor and constitutes a legal, valid and binding
         obligation of Pledgor enforceable against Pledgor in accordance with
         its terms;

                           (i) The Pledged Shares constitute 100% of the issued
         and outstanding shares of Stock of each Pledged Entity or, in the case
         of any Foreign Subsidiary (other than Baldwin Canada) 65%; and

                           (j) Except as disclosed on Part B of Schedule I, none
         of the Pledged Indebtedness is subordinated in right of payment to
         other Indebtedness (except for the Secured Obligations) or subject to
         the terms of an indenture.

                  The representations and warranties set forth in this Section 5
shall survive the execution and delivery of this Agreement.

                  6. Covenants. Pledgor covenants and agrees that until the
Termination Date:

                           (a) Without the prior written consent of Agent,
         Pledgor will not sell, assign, transfer, pledge, or otherwise encumber
         any of its rights in or to the Pledged Collateral, or any unpaid
         dividends, interest or other distributions or payments with respect to
         the Pledged Collateral or grant a Lien in the Pledged Collateral,
         unless otherwise expressly permitted by the Credit Agreement;

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                           (b) Pledgor will, at its expense, promptly execute,
         acknowledge and deliver all such instruments and take all such actions
         as Agent from time to time may request in order to ensure to Agent and
         Lenders the benefits of the Liens in and to the Pledged Collateral
         intended to be created by this Agreement, including the filing of any
         necessary Code financing statements, which may be filed by Agent with
         or (to the extent permitted by law) without the signature of Pledgor,
         and will cooperate with Agent, at Pledgor's expense, in obtaining all
         necessary approvals and making all necessary filings under federal,
         state, local or foreign law in connection with such Liens or any sale
         or transfer of the Pledged Collateral;

                           (c) Pledgor has and will defend the title to the
         Pledged Collateral and the Liens of Agent in the Pledged Collateral
         against the claim of any Person and will maintain and preserve such
         Liens; and

                           (d) Pledgor will, upon obtaining ownership of any
         additional Stock or promissory notes or instruments of a Pledged Entity
         or Stock or promissory notes or instruments otherwise required to be
         pledged to Agent pursuant to any of the Loan Documents, which Stock,
         notes or instruments are not already Pledged Collateral, promptly (and
         in any event within three (3) Business Days) deliver to Agent a Pledge
         Amendment, duly executed by Pledgor, in substantially the form of
         Schedule III hereto (a "Pledge Amendment") in respect of any such
         additional Stock, notes or instruments, pursuant to which Pledgor shall
         pledge to Agent all of such additional Stock, notes and instruments.
         Pledgor hereby authorizes Agent to attach each Pledge Amendment to this
         Agreement and agrees that all Pledged Shares and Pledged Indebtedness
         listed on any Pledge Amendment delivered to Agent shall for all
         purposes hereunder be considered Pledged Collateral.

                  7. Pledgor's Rights. As long as no Default or Event of Default
shall have occurred and be continuing and until written notice shall be given to
Pledgor in accordance with Section 8(a) hereof:

                           (a) Pledgor shall have the right, from time to time,
         to vote and give consents with respect to the Pledged Collateral, or
         any part thereof for all purposes not inconsistent with the provisions
         of this Agreement, the Credit Agreement or any other Loan Document;
         provided, however, that no vote shall be cast, and no consent shall be
         given or action taken, which would have the effect of impairing the
         position or interest of Agent in respect of the Pledged Collateral or
         which would authorize, effect or consent to (unless and to the extent
         expressly permitted by the Credit Agreement):

                                    (i) the dissolution or liquidation, in whole
         or in part, of a Pledged Entity;

                                    (ii) the consolidation or merger of a
         Pledged Entity with any other Person;

                                    (iii) the sale, disposition or encumbrance
         of all or substantially all of the assets of a Pledged Entity, except
         for Liens in favor of Agent;

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                                    (iv) any change in the authorized number of
         shares, the stated capital or the authorized share capital of a Pledged
         Entity or the issuance of any additional shares of its Stock; or

                                    (v) the alteration of the voting rights with
         respect to the Stock of a Pledged Entity; and

                           (b) (i) Pledgor shall be entitled, from time to time,
         to collect and receive for its own use all cash dividends and interest
         paid in respect of the Pledged Shares and Pledged Indebtedness to the
         extent not in violation of the Credit Agreement other than any and all:
         (A) dividends and interest paid or payable other than in cash in
         respect of any Pledged Collateral, and instruments and other property
         received, receivable or otherwise distributed in respect of, or in
         exchange for, any Pledged Collateral; (B) dividends and other
         distributions paid or payable in cash in respect of any Pledged Shares
         in connection with a partial or total liquidation or dissolution or in
         connection with a reduction of capital, capital surplus or paid-in
         capital of a Pledged Entity; and (C) cash paid, payable or otherwise
         distributed, in respect of principal of, or in redemption of, or in
         exchange for, any Pledged Collateral; provided, however, that until
         actually paid all rights to such distributions shall remain subject to
         the Lien created by this Agreement; and

                                    (ii) all dividends and interest (other than
         such cash dividends and interest as are permitted to be paid to Pledgor
         in accordance with clause (i) above) and all other distributions in
         respect of any of the Pledged Shares or Pledged Indebtedness, whenever
         paid or made, shall be delivered to Agent to hold as Pledged Collateral
         and shall, if received by Pledgor, be received in trust for the benefit
         of Agent, be segregated from the other property or funds of Pledgor,
         and be forthwith delivered to Agent as Pledged Collateral in the same
         form as so received (with any necessary endorsement).

                  8. Defaults and Remedies; Proxy.

                           (a) Upon the occurrence of an Event of Default and
         during the continuation of such Event of Default, and concurrently with
         written notice to Pledgor, Agent (personally or through an agent) is
         hereby authorized and empowered to transfer and register in its name or
         in the name of its nominee the whole or any part of the Pledged
         Collateral, to exchange certificates or instruments representing or
         evidencing Pledged Collateral for certificates or instruments of
         smaller or larger denominations, to exercise the voting and all other
         rights as a holder with respect thereto, to collect and receive all
         cash dividends, interest, principal and other distributions made
         thereon, to sell in one or more sales after ten (10) days' notice of
         the time and place of any public sale or of the time at which a private
         sale is to take place (which notice Pledgor agrees is commercially
         reasonable) the whole or any part of the Pledged Collateral and to
         otherwise act with respect to the Pledged Collateral as though Agent
         was the outright owner thereof. Any sale shall be made at a public or
         private sale at Agent's place of business, or at any place to be named
         in the notice of sale, either for cash or upon credit

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         or for future delivery at such price as Agent may deem fair, and Agent
         may be the purchaser of the whole or any part of the Pledged Collateral
         so sold and hold the same thereafter in its own right free from any
         claim of Pledgor or any right of redemption. Each sale shall be made to
         the highest bidder, but Agent reserves the right to reject any and all
         bids at such sale which, in its discretion, it shall deem inadequate.
         Demands of performance, except as otherwise herein specifically
         provided for, notices of sale, advertisements and the presence of
         property at sale are hereby waived and any sale hereunder may be
         conducted by an auctioneer or any officer or agent of Agent.

         In furtherance of the foregoing, (i) Pledgor shall promptly execute and
         deliver (or cause to be executed and delivered) to Agent all such
         proxies, dividend payment orders and other instruments as Agent may
         from time to time reasonably request and (ii) without limiting the
         effect of the immediately preceding clause (i) and to the extent not
         granted pursuant to an irrevocable proxy delivered pursuant to Section
         4, PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS AGENT AS THE
         PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED
         COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED SHARES, WITH FULL
         POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF AGENT AS PROXY AND
         ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE
         UNTIL THE TERMINATION DATE. IN ADDITION TO THE RIGHT TO VOTE THE
         PLEDGED SHARES, THE APPOINTMENT OF AGENT AS PROXY AND ATTORNEY-IN-FACT
         SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS,
         PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD
         BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF
         SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT
         SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND
         WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY
         PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON
         (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER OR AGENT
         THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. NOTWITHSTANDING
         THE FOREGOING, AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT
         OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO
         SO OR FOR ANY DELAY IN DOING SO.

                           (b) If, at the original time or times appointed for
         the sale of the whole or any part of the Pledged Collateral, the
         highest bid, if there be but one sale, shall be inadequate to discharge
         in full all the Secured Obligations, or if the Pledged Collateral be
         offered for sale in lots, if at any of such sales, the highest bid for
         the lot offered for sale would indicate to Agent, in its discretion,
         that the proceeds of the sales of the whole of the Pledged Collateral
         would be unlikely to be sufficient to discharge all the Secured
         Obligations, Agent may, on one or more occasions and in its discretion,
         postpone any of said sales by public announcement at the time of sale
         or the time of previous

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         postponement of sale, and no other notice of such postponement or
         postponements of sale need be given, any other notice being hereby
         waived; provided, however, that any sale or sales made after such
         postponement shall be after ten (10) days' notice to Pledgor.

                           (c) [If, at any time when Agent in its sole
         discretion determines, following the occurrence and during the
         continuance of an Event of Default, that, in connection with any actual
         or contemplated exercise of its rights (when permitted under this
         Section 8) to sell the whole or any part of the Pledged Shares
         hereunder, it is necessary or advisable to effect a public registration
         of all or part of the Pledged Collateral pursuant to the Securities Act
         of 1933, as amended (or any similar statute then in effect) (the
         "Act"), Pledgor shall, in an expeditious manner, cause the Pledged
         Entities to:

                                    (i) Prepare and file with the Securities and
         Exchange Commission (the "Commission") a registration statement with
         respect to the Pledged Shares and in good faith use commercially
         reasonable efforts to cause such registration statement to become and
         remain effective;

                                    (ii) Prepare and file with the Commission
         such amendments and supplements to such registration statement and the
         prospectus used in connection therewith as may be necessary to keep
         such registration statement effective and to comply with the provisions
         of the Act with respect to the sale or other disposition of the Pledged
         Shares covered by such registration statement whenever Agent shall
         desire to sell or otherwise dispose of the Pledged Shares;

                                    (iii) Furnish to Agent such numbers of
         copies of a prospectus and a preliminary prospectus, in conformity with
         the requirements of the Act, and such other documents as Agent may
         request in order to facilitate the public sale or other disposition of
         the Pledged Shares by Agent;

                                    (iv) Use commercially reasonable efforts to
         register or qualify the Pledged Shares covered by such registration
         statement under such other securities or blue sky laws of such
         jurisdictions within the United States and Puerto Rico as Agent shall
         request, and do such other reasonable acts and things as may be
         required of it to enable Agent to consummate the public sale or other
         disposition in such jurisdictions of the Pledged Shares by Agent;

                                    (v) Furnish, at the request of Agent, on the
         date that shares of the Pledged Collateral are delivered to the
         underwriters for sale pursuant to such registration or, if the security
         is not being sold through underwriters, on the date that the
         registration statement with respect to such Pledged Shares becomes
         effective, (A) an opinion, dated such date, of the independent counsel
         representing such registrant for the purposes of such registration,
         addressed to the underwriters, if any, and in the event the Pledged
         Shares are not being sold through underwriters, then to Agent, in
         customary form and covering matters of the type customarily covered in
         such legal opinions; and (B) a comfort letter, dated such date, from
         the independent certified public accountants of such registrant,
         addressed to the underwriters, if any, and in the event the Pledged
         Shares

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         are not being sold through underwriters, then to Agent, in a customary
         form and covering matters of the type customarily covered by such
         comfort letters and as the underwriters or Agent shall reasonably
         request. The opinion of counsel referred to above shall additionally
         cover such other legal matters with respect to the registration in
         respect of which such opinion is being given as Agent may reasonably
         request. The letter referred to above from the independent certified
         public accountants shall additionally cover such other financial
         matters (including information as to the period ending not more than
         five (5) Business Days prior to the date of such letter) with respect
         to the registration in respect of which such letter is being given as
         Agent may reasonably request; and

                                    (vi) Otherwise use commercially reasonable
         efforts to comply with all applicable rules and regulations of the
         Commission, and make available to its security holders, as soon as
         reasonably practicable but not later than 18 months after the effective
         date of the registration statement, an earnings statement covering the
         period of at least 12 months beginning with the first full month after
         the effective date of such registration statement, which earnings
         statement shall satisfy the provisions of Section 11(a) of the Act.

                           (d) All expenses incurred in complying with Section
         8(c) hereof, including, without limitation, all registration and filing
         fees (including all expenses incident to filing with the National
         Association of Securities Dealers, Inc.), printing expenses, fees and
         disbursements of counsel for the registrant, the fees and expenses of
         counsel for Agent, expenses of the independent certified public
         accountants (including any special audits incident to or required by
         any such registration) and expenses of complying with the securities or
         blue sky laws or any jurisdictions, shall be paid by Pledgor.]

                           (e) If, at any time when Agent shall determine to
         exercise its right to sell the whole or any part of the Pledged
         Collateral hereunder, such Pledged Collateral or the part thereof to be
         sold shall not, for any reason whatsoever, be effectively registered
         under [the Securities Act of 1933, as amended (or any similar statute
         then in effect) (the "Act")/the Act], Agent may, in its discretion
         (subject only to applicable requirements of law), sell such Pledged
         Collateral or part thereof by private sale in such manner and under
         such circumstances as Agent may deem necessary or advisable, but
         subject to the other requirements of this Section 8, and shall not be
         required to effect such registration or to cause the same to be
         effected. Without limiting the generality of the foregoing, in any such
         event, Agent in its discretion (x) may, in accordance with applicable
         securities laws, proceed to make such private sale notwithstanding that
         a registration statement for the purpose of registering such Pledged
         Collateral or part thereof could be or shall have been filed under said
         Act (or similar statute), (y) may approach and negotiate with a single
         possible purchaser to effect such sale, and (z) may restrict such sale
         to a purchaser who is an accredited investor under the Act and who will
         represent and agree that such purchaser is purchasing for its own
         account, for investment and not with a view to the distribution or sale
         of such Pledged Collateral or any part thereof. In addition to a
         private sale as provided above in this Section 8, if any of the Pledged
         Collateral shall not be freely distributable to the public without
         registration under the Act (or similar statute) at

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         the time of any proposed sale pursuant to this Section 8, then Agent
         shall not be required to effect such registration or cause the same to
         be effected but, in its discretion (subject only to applicable
         requirements of law), may require that any sale hereunder (including a
         sale at auction) be conducted subject to restrictions:

                                    (i) as to the financial sophistication and
         ability of any Person permitted to bid or purchase at any such sale;

                                    (ii) as to the content of legends to be
         placed upon any certificates representing the Pledged Collateral sold
         in such sale, including restrictions on future transfer thereof;

                                    (iii) as to the representations required to
         be made by each Person bidding or purchasing at such sale relating to
         that Person's access to financial information about Pledgor and such
         Person's intentions as to the holding of the Pledged Collateral so sold
         for investment for its own account and not with a view to the
         distribution thereof; and

                                    (iv) as to such other matters as Agent may,
         in its discretion, deem necessary or appropriate in order that such
         sale (notwithstanding any failure so to register) may be effected in
         compliance with the Bankruptcy Code and other laws affecting the
         enforcement of creditors' rights and the Act and all applicable state
         securities laws.

                           (f) Pledgor recognizes that Agent may be unable to
         effect a public sale of any or all the Pledged Collateral and may be
         compelled to resort to one or more private sales thereof in accordance
         with clause (e) above. Pledgor also acknowledges that any such private
         sale may result in prices and other terms less favorable to the seller
         than if such sale were a public sale and, notwithstanding such
         circumstances, agrees that any such private sale shall not be deemed to
         have been made in a commercially unreasonable manner solely by virtue
         of such sale being private. Agent shall be under no obligation to delay
         a sale of any of the Pledged Collateral for the period of time
         necessary to permit the Pledged Entity to register such securities for
         public sale under the Act, or under applicable state securities laws,
         even if Pledgor and the Pledged Entity would agree to do so.

                           (g) Pledgor agrees to the maximum extent permitted by
         applicable law that following the occurrence and during the continuance
         of an Event of Default it will not at any time plead, claim or take the
         benefit of any appraisal, valuation, stay, extension, moratorium or
         redemption law now or hereafter in force in order to prevent or delay
         the enforcement of this Agreement, or the absolute sale of the whole or
         any part of the Pledged Collateral or the possession thereof by any
         purchaser at any sale hereunder, and Pledgor waives the benefit of all
         such laws to the extent it lawfully may do so. Pledgor agrees that it
         will not interfere with any right, power and remedy of Agent provided
         for in this Agreement or now or hereafter existing at law or in equity
         or by statute or otherwise, or the exercise or beginning of the
         exercise by Agent of any one or

                                       10
<PAGE>   11

         more of such rights, powers or remedies. No failure or delay on the
         part of Agent to exercise any such right, power or remedy and no notice
         or demand which may be given to or made upon Pledgor by Agent with
         respect to any such remedies shall operate as a waiver thereof, or
         limit or impair Agent's right to take any action or to exercise any
         power or remedy hereunder, without notice or demand, or prejudice its
         rights as against Pledgor in any respect.

                           (h) Pledgor further agrees that a breach of any of
         the covenants contained in this Section 8 will cause irreparable injury
         to Agent, that Agent shall have no adequate remedy at law in respect of
         such breach and, as a consequence, agrees that each and every covenant
         contained in this Section 8 shall be specifically enforceable against
         Pledgor, and Pledgor hereby waives and agrees not to assert any
         defenses against an action for specific performance of such covenants
         except for a defense that the Secured Obligations are not then due and
         payable in accordance with the agreements and instruments governing and
         evidencing such obligations.

                  9. Waiver. No delay on Agent's part in exercising any power of
sale, Lien, option or other right hereunder, and no notice or demand which may
be given to or made upon Pledgor by Agent with respect to any power of sale,
Lien, option or other right hereunder, shall constitute a waiver thereof, or
limit or impair Agent's right to take any action or to exercise any power of
sale, Lien, option, or any other right hereunder, without notice or demand, or
prejudice Agent's rights as against Pledgor in any respect.

                  10. Assignment. Agent may assign, indorse or transfer any
instrument evidencing all or any part of the Secured Obligations as provided in,
and in accordance with, the Credit Agreement, and the holder of such instrument
shall be entitled to the benefits of this Agreement.

                  11. Termination. Immediately following the Termination Date,
Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the
time subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the Liens hereof and, except as
otherwise provided herein, all of Pledgor's obligations hereunder shall at such
time terminate.

                  12. Lien Absolute. All rights of Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:

                           (a) any lack of validity or enforceability of the
         Credit Agreement, any other Loan Document or any other agreement or
         instrument governing or evidencing any Secured Obligations;

                           (b) any change in the time, manner or place of
         payment of, or in any other term of, all or any part of the Secured
         Obligations, or any other amendment or waiver of or any consent to any
         departure from the Credit Agreement, any other Loan Document or any
         other agreement or instrument governing or evidencing any Secured
         Obligations;

                                       11
<PAGE>   12

                           (c) any exchange, release or non-perfection of any
         other Collateral, or any release or amendment or waiver of or consent
         to departure from any guaranty, for all or any of the Secured
         Obligations;

                           (d) the insolvency of any Credit Party; or

                           (e) any other circumstance which might otherwise
         constitute a defense available to, or a discharge of, Pledgor.

         13. Release. Pledgor consents and agrees that Agent may at any time, or
from time to time, in its discretion:

                           (a) renew, extend or change the time of payment,
         and/or the manner, place or terms of payment of all or any part of the
         Secured Obligations; and

                           (b) exchange, release and/or surrender all or any of
         the Collateral (including the Pledged Collateral), or any part thereof,
         by whomsoever deposited, which is now or may hereafter be held by Agent
         in connection with all or any of the Secured Obligations; all in such
         manner and upon such terms as Agent may deem proper, and without notice
         to or further assent from Pledgor, it being hereby agreed that Pledgor
         shall be and remain bound upon this Agreement, irrespective of the
         value or condition of any of the Collateral, and notwithstanding any
         such change, exchange, settlement, compromise, surrender, release,
         renewal or extension, and notwithstanding also that the Secured
         Obligations may, at any time, exceed the aggregate principal amount
         thereof set forth in the Credit Agreement, or any other agreement
         governing any Secured Obligations. Pledgor hereby waives notice of
         acceptance of this Agreement, and also presentment, demand, protest and
         notice of dishonor of any and all of the Secured Obligations, and
         promptness in commencing suit against any party hereto or liable
         hereon, and in giving any notice to or of making any claim or demand
         hereunder upon Pledgor. No act or omission of any kind on Agent's part
         shall in any event affect or impair this Agreement.

                  14. Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Pledgor or any Pledged Entity for liquidation or reorganization, should
Pledgor or any Pledged Entity become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor's or a Pledged Entity's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

                                       12
<PAGE>   13

                  15. Miscellaneous.

                           (a) Agent may execute any of its duties hereunder by
         or through agents or employees and shall be entitled to advice of
         counsel concerning all matters pertaining to its duties hereunder.

                           (b) Pledgor agrees to promptly reimburse Agent for
         actual out-of-pocket expenses, including, without limitation,
         reasonable counsel fees, incurred by Agent in connection with the
         administration and enforcement of this Agreement.

                           (c) Neither Agent, nor any of its respective
         officers, directors, employees, agents or counsel shall be liable for
         any action lawfully taken or omitted to be taken by it or them
         hereunder or in connection herewith, except for its or their own gross
         negligence or willful misconduct as finally determined by a court of
         competent jurisdiction.

                           (d) THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND
         ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF
         OF PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY,
         AGENT AND ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED BY, AND
         CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
         YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND NONE
         OF THE TERMS OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED, ALTERED,
         MODIFIED OR AMENDED EXCEPT IN WRITING DULY SIGNED FOR AND ON BEHALF OF
         AGENT AND PLEDGOR.

                  16. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or effect those
portions of this Agreement which are valid.

                  17. Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon any other a communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person or
sent by registered or certified mail, return receipt requested, with proper
postage prepaid, or by facsimile transmission and confirmed by delivery of a
copy by personal delivery or United States Mail as otherwise provided herein:

                           (a)      If to Agent, at:

                                    General Electric Capital Corporation
                                    800 Connecticut Avenue, Two North
                                    Norwalk, Connecticut  06854
                                    Attention:  Account Manager - Baldwin Piano
                                    Telecopier No.: (203) 852-3630
                                    Telephone No.:  (203) 852-3616

                                       13
<PAGE>   14

                                    with copies to:

                                    O'Melveny & Myers LLP
                                    153 East 53rd Street
                                    New York, New York
                                    Attention:  Peter V. Pantaleo
                                    Telecopier No.: (212)326-2061
                                    Telephone No.:  (212) 326-2000

                           (b)      If to Pledgor, at:

                                    Baldwin Piano & Organ Company
                                    4680 Parkway Drive
                                    Mason, OH  45040-5301
                                    Attention:  Chief Financial Officer
                                    Telecopier No.: (513) 754-4579
                                    Telephone No.:  (513) 754-4647

                                    With copies to:

                                    Graydon Head Richey
                                    511 Walnut Street, #1900
                                    Cincinnati, OH  45202
                                    Attention: Thomas W. Kahle
                                    Telecopier No.: (513) 651-3836
                                    Telephone No.:  (513) 629-2804

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly served, given or delivered (a) upon the earlier of actual
receipt and three (3) Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly confirmed by delivery of
a copy by personal delivery or United States Mail as otherwise provided in this
Section 17, (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid, or (d) when delivered, if hand-delivered by
messenger. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.

                                       14
<PAGE>   15

                  18. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

                  19. Counterparts. This Agreement may be executed in any number
of counterparts, which shall, collectively and separately, constitute one
agreement.

                  20. Benefit of Lenders. All security interests granted or
contemplated hereby shall be for the benefit of Agent and Lenders, and all
proceeds or payments realized from the Pledged Collateral in accordance herewith
shall be applied to the Obligations in accordance with the terms of the Credit
Agreement.

                            [signature page follows]

                                       15
<PAGE>   16

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.

                                            "Pledgor"
                                             -------

                                            BALDWIN PIANO & ORGAN COMPANY

                                            By: /s/ DUANE D. KIMBLE
                                               ---------------------------------
                                               Duane D. Kimble
                                               Executive Vice President and
                                               Chief Financial Officer

                                            "Agent"
                                             -----

                                            GENERAL ELECTRIC CAPITAL CORPORATION

                                            By: /s/ CHARLES CHIODO
                                               ---------------------------------
                                               Charles Chiodo
                                               A Duly Authorized Signatory

Acknowledged and Accepted:

THE BALDWIN PIANO COMPANY
  (CANADA) LIMITED

By: /s/ DUANE D. KIMBLE
   -------------------------
     Duane D. Kimble
     Vice President and
     Chief Financial Officer

                                      S-1
<PAGE>   17

                                   SCHEDULE I

                                     PART A

                                 PLEDGED SHARES

<TABLE>
<CAPTION>
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------

Pledged Entity                         Class             Stock Certificate          Number                  Percentage of
--------------                         of Stock              Number(s)              of Shares               Outstanding Shares
                                       --------          -----------------          ---------               ------------------
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
<S>                                    <C>               <C>                        <C>                     <C>
                                                                                                                       100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
                                                                                                                       100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
                                                                                                                       100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
                                                                                                                       100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
</TABLE>

                                     PART B

                              PLEDGED INDEBTEDNESS

<TABLE>
<CAPTION>
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------

Pledged Entity                           Initial                       Issue Date              Maturity Date        Interest Rate
--------------                           Principal Amount              ----------              -------------        -------------
                                         ----------------
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
<S>                                      <C>                           <C>                     <C>                  <C>

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

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

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

---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
</TABLE>

                                    Sch. I-1
<PAGE>   18

                                   SCHEDULE II

                            FORM OF IRREVOCABLE PROXY
                                   ([PLEDGOR])

                  The undersigned, [PLEDGOR],a _________ corporation, being the
holder of all of the Pledged Shares (as defined in the Pledge Agreement referred
to below) of [PLEDGED ENTITY] (the "Company"), does hereby constitute and
appoint General Electric Capital Corporation, in its capacity as agent (together
with its successors in such capacity, the "Agent") for the lenders and their
assigns (the "Lenders"), party from time to time to the Credit Agreement dated
as of March __, 2000 (as the same may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement") among Baldwin Piano &
Organ Company, the other Credit Parties signatory thereto (including the
undersigned), the Agent and the Lenders as its proxy, effective automatically
without the necessity of any action (including any transfer of any shares on the
record books of the Company) by any Person (including the Company or any officer
or agent thereof) upon the occurrence and continuance of an Event of Default (as
defined in the Credit Agreement), to exercise all rights, benefits, and
privileges of the undersigned in respect of the shares, including to act by
consent and to call and attend all meetings of the shareholders of Company to be
held from time to time with full power to vote and act for the undersigned in
the name, place and stead of the undersigned and in the same manner, to the same
extent, and with the same effect that the undersigned would if personally
present at such meetings, giving to Agent full power of substitution and
revocation.

                  Agent is a pledgee under a valid pledge of the shares owned by
the undersigned, pursuant to that certain Pledge Agreement, dated as of March
___, 2000 between the undersigned and Agent (as the same may be amended,
modified, restated or supplemented from time to time, the "Pledge Agreement").

            THIS PROXY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE

                  Any proxy or proxies heretofore given by the undersigned to
any person or persons whatsoever are hereby revoked. This proxy shall continue
in full force and effect until the Termination Date (as defined in the Credit
Agreement).

Dated:   March __, 2000

                                                    [PLEDGOR]

                                                    By: ________________________
                                                    Name:_______________________
                                                    Title:______________________

In presence of:

----------------
Witness

                                   Sch. II-1
<PAGE>   19

                                  SCHEDULE III

                                PLEDGE AMENDMENT

                  This Pledge Amendment, dated ________________, ___ is
delivered pursuant to Section 6(d) of the Pledge Agreement referred to below.
All defined terms herein shall have the meanings ascribed thereto or
incorporated by reference in the Pledge Agreement. The undersigned hereby
certifies that the representations and warranties in Section 5 of the Pledge
Agreement are and continue to be true and correct, both as to the promissory
notes, instruments and shares pledged prior to this Pledge Amendment and as to
the promissory notes, instruments and shares pledged pursuant to this Pledge
Amendment. The undersigned further agrees that this Pledge Amendment may be
attached to that certain Pledge Agreement, dated ____________ __, ____, between
undersigned, as Pledgor, and General Electric Capital Corporation, as Agent,
(the "Pledge Agreement") and that the Pledged Shares and Pledged Indebtedness
listed on this Pledge Amendment shall be and become a part of the Pledged
Collateral referred to in said Pledge Agreement and shall secure all Secured
Obligations referred to in said Pledge Agreement. The undersigned acknowledges
that any promissory notes, instruments or shares not included in the Pledged
Collateral at the discretion of Agent may not otherwise be pledged by Pledgor to
any other Person or otherwise used as security for any obligations other than
the Secured Obligations.

                                                    ____________________________

                                                    By: ________________________
                                                    Name:_______________________
                                                    Title:______________________

<TABLE>
<CAPTION>
-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
Name and                                                              Class            Certificate          Number
Address of Pledgor                           Pledged Entity           of Stock          Number(s)           of Shares
------------------                           --------------           --------         ----------           ---------
-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
<S>                                          <C>                      <C>              <C>                  <C>

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

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

-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------ ---------------------------- ----------------------- -------------------- ----------------

Pledged Entity                       Initial                      Issue Date              Maturity Date        Interest Rate
--------------                       Principal Amount             ----------              -------------        -------------
                                     ----------------
------------------------------------ ---------------------------- ----------------------- -------------------- ----------------
<S>                                          <C>                      <C>              <C>                  <C>

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

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

------------------------------------ ---------------------------- ----------------------- -------------------- ----------------
</TABLE>

                                   Sch. III-1<PAGE>   1

                                                                   EXHIBIT 10.10

                MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
                    AND LEASES AND FIXTURE FILING (ARKANSAS)

                                   BY AND FROM

                   BALDWIN PIANO & ORGAN COMPANY, "MORTGAGOR"

                                       TO

           GENERAL ELECTRIC CAPITAL CORPORATION, AS AGENT, "MORTGAGEE"

                           DATED AS OF MARCH 24, 2000

                     LOCATION:                 900 HIGHWAY 463 SOUTH

                     MUNICIPALITY:             TRUMANN
                     COUNTY:                   POINSETT
                     STATE:                    ARKANSAS

            THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING
            TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE
                                DESCRIBED HEREIN

                      PREPARED BY, RECORDING REQUESTED BY,
                           AND WHEN RECORDED MAIL TO:

                              O'MELVENY & MYERS LLP
                              153 EAST 53RD STREET
                                FIFTY-FIRST FLOOR
                          NEW YORK, NEW YORK 10022-4611
                      ATTENTION: JENNIFER G. GRENERT, ESQ.
                                FILE #301,889-030

<PAGE>   2

                MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
                    AND LEASES AND FIXTURE FILING (ARKANSAS)

                  THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
LEASES AND FIXTURE FILING (ARKANSAS) (this "MORTGAGE") is dated as of March 24,
2000 by and from BALDWIN PIANO & ORGAN COMPANY, a Delaware corporation
("MORTGAGOR"), whose address is 4680 Parkway Drive, Mason, Ohio 45040-5301 to
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, in its capacity as
Agent (the "AGENT") for itself and the lenders from time to time which are party
to the Credit Agreement (defined below), together with its successors and
assigns ("MORTGAGEE"), whose address is 800 Connecticut Avenue, Two North,
Norwalk, Connecticut 06854.

                                    RECITALS

         WHEREAS, Mortgagor is the fee owner of the real property and
improvements described in Exhibit A attached hereto.

         WHEREAS, Mortgagor is concurrently entering into the Credit Agreement
(defined below) and related documents, dated as of the date hereof, providing
for a revolving loan and other extensions of credit in the principal amount of
up to Forty Million Dollars ($40,000,000) (the "LOAN"). Mortgagee and Lenders
are unwilling to enter into the Credit Agreement and make available to Mortgagor
the credit facilities provided for therein unless Mortgagor, among other things,
secures the obligations of Mortgagor under the Credit Agreement and the Loan
Documents (as defined in the Credit Agreement) by delivering this Mortgage.

                                    ARTICLE 1
                                   DEFINITIONS

         SECTION 1.1 DEFINITIONS. All capitalized terms used herein without
definition shall have the respective meanings ascribed to them in that certain
Credit Agreement dated as of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT")
among Mortgagor, as borrower, the other Persons named therein as Credit Parties,
Mortgagee, and the Persons party thereto from time to time as Lenders. As used
herein, the following terms shall have the following meanings:

         (a) "INDEBTEDNESS": (1) All indebtedness of Mortgagor to Mortgagee,
including, without limitation, the sum of all (a) principal, interest and other
amounts evidenced or secured by the Loan Documents, including, without
limitation, reimbursement obligations in respect of Letters of Credit, together
with interest thereon and other amounts payable with respect thereto and (b)
principal, interest and other amounts which may hereafter be loaned by Mortgagee
under or in connection with the Credit Agreement or any of the other Loan
Documents, whether evidenced by a promissory note or other instrument which, by
its terms, is secured hereby, and (2) all other indebtedness, obligations and
liabilities now or hereafter existing of any kind of Mortgagor to Mortgagee
under documents which recite that they are intended to be secured by this
Mortgage. Pursuant to the Credit Agreement, the Lenders have agreed to provide
Mortgagor with a revolving credit facility, which permits Mortgagor to borrow
certain principal amounts, repay all or a portion of such principal amounts, and
reborrow the amounts previously paid to the Lenders, all upon satisfaction of
certain conditions stated in the Credit Agreement. The amount of such revolving
credit facility may increase and decrease from time to time as the Lenders
advance, Mortgagor repays, and the Lenders readvance sums on account of the
revolving credit, all as more fully described in the Credit Agreement. This
Mortgage secures all advances and re-advances under

<PAGE>   3

the revolving credit feature of the Credit Agreement. The final maturity date of
the Indebtedness is March ___, 2003.

         THE INDEBTEDNESS SECURED HEREBY SHALL ALSO CONSIST OF, AND THIS
MORTGAGE SHALL ALSO SECURE, ANY AND ALL EXTENSIONS, RENEWALS, MODIFICATIONS,
REPLACEMENTS, SUBSTITUTIONS OR REARRANGEMENTS OF OR FOR THE LOAN DOCUMENTS, AND
ANY AND ALL OTHER FUTURE, ADDITIONAL, OR OTHER INDEBTEDNESS OF MORTGAGOR TO
MORTGAGEE WHATSOEVER, WHETHER NOW EXISTING OR HEREAFTER ARISING AT ANY TIME
PRIOR TO THE SATISFACTION OF RECORD OF THE LIEN CREATED HEREBY, AND WHETHER OR
NOT REPRESENTED BY ANY NOTE OR NOTES, OR ANY GUARANTY, ENDORSEMENT OR CONTRACT
OF SURETYSHIP, OR SECURED BY ANY OTHER SECURITY, AND WHETHER OR NOT SUCH FUTURE
ADVANCES OR ADDITIONAL OR OTHER INDEBTEDNESS ARE FOR THE PURPOSES RELATED OR
UNRELATED TO THE PURPOSES FOR WHICH THE LOAN EVIDENCED BY THE LOAN DOCUMENTS IS
MADE, AND WHETHER MORTGAGOR'S OBLIGATIONS AND/OR INDEBTEDNESS TO MORTGAGEE BE AS
A MAKER, PRINCIPAL, ENDORSER, SURETY, GUARANTOR, OR OTHERWISE, JOINT OR SEVERAL,
DUE OR TO BECOME DUE, ABSOLUTE OR CONTINGENT, DIRECT OR INDIRECT, LIQUIDATED OR
UNLIQUIDATED, AND WHETHER CREATED OR ARISING BY WAY OF A LOAN, FUTURE ADVANCE,
ACCEPTANCE, OVERDRAFT, OPEN ACCOUNT OR ANY OTHER EXTENSION OF CREDIT OF ANY KIND
OR NATURE WHATSOEVER.

         (b) "MORTGAGED PROPERTY": All of Mortgagor's interest in (1) the fee
interest in the real property described in Exhibit A attached hereto and
incorporated herein by this reference, together with any greater estate therein
as hereafter may be acquired by Mortgagor (the "LAND"), (2) all improvements now
owned or hereafter acquired by Mortgagor, now or at any time situated, placed or
constructed upon the Land (the "IMPROVEMENTS"; the Land and Improvements are
collectively referred to as the "PREMISES"), (3) all materials, supplies,
equipment, apparatus and other items of personal property now owned or hereafter
acquired by Mortgagor and now or hereafter attached to, installed in or used in
connection with any of the Improvements or the Land, and water, gas, electrical,
telephone, storm and sanitary sewer facilities and all other utilities whether
or not situated in easements (the "FIXTURES"), (4) all right, title and interest
of Mortgagor in and to all goods, accounts, general intangibles, instruments,
documents, chattel paper and all other personal property of any kind or
character, including such items of personal property as defined in the UCC
(defined below), now owned or hereafter acquired by Mortgagor and now or
hereafter affixed to, placed upon, used in connection with, arising from or
otherwise related to the Premises (the "PERSONALTY"), (5) all reserves, escrows
or impounds required under the Credit Agreement and all deposit accounts
maintained by Mortgagor with respect to the Mortgaged Property (the "DEPOSIT
ACCOUNTS"), (6) all leases, subleases, underlettings, licenses, concessions,
occupancy agreements or other agreements (written or oral, now or at any time in
effect) which grant to any Person a possessory interest in, or the right to use,
all or any part of the Mortgaged Property, together with all related security
and other deposits (the "LEASES"), (7) all of the rents, revenues, royalties,
income, proceeds, profits, security and other types of deposits, and other
benefits paid or payable by parties to the Leases for using, leasing, licensing
possessing, operating from, residing in, selling or otherwise enjoying the
Mortgaged Property (the "RENTS"), (8) all other agreements, such as construction
contracts, architects' agreements, engineers' contracts, utility contracts,
maintenance agreements, management agreements, service contracts, listing
agreements, guaranties, warranties, permits, licenses, certificates and
entitlements in any way relating to the construction, use, occupancy, operation,
maintenance, enjoyment or ownership of the Mortgaged Property (the "PROPERTY
AGREEMENTS"), (9) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appendages and appurtenances appertaining to the
foregoing, (10) all property tax refunds (the "TAX REFUNDS"), (11) all
accessions, replacements and substitutions for any of the foregoing and all
proceeds thereof (the "PROCEEDS"), (12) all insurance policies, unearned
premiums therefor and proceeds from such policies covering any of the above
property now or hereafter acquired by Mortgagor (the "INSURANCE"), and (13) all
of Mortgagor's right, title and interest in and to any awards, damages,
remunerations, reimbursements, settlements or compensation hereafter to be made
by any governmental authority pertaining to the Land, Improvements, Fixtures or

                                       2
<PAGE>   4

Personalty (the "CONDEMNATION AWARDS"). As used in this Mortgage, the term
"Mortgaged Property" shall mean all or, where the context permit or requires,
any portion of the above or any interest therein.

         (c) "OBLIGATIONS": All of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor (including,
without limitation, the obligation to repay the Indebtedness) under the Credit
Agreement and the other Loan Documents.

         (d) "UCC": The Uniform Commercial Code of Arkansas or, if the creation,
perfection and enforcement of any security interest herein granted is governed
by the laws of a state other than Arkansas, then, as to the matter in question,
the Uniform Commercial Code in effect in that state.

                                    ARTICLE 2
                                      GRANT

         SECTION 2.1 GRANT. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Mortgagor
GRANTS, BARGAINS, ASSIGNS, SELLS and CONVEYS, to Mortgagee the Mortgaged
Property, subject, however, to the Permitted Encumbrances, TO HAVE AND TO HOLD
the Mortgaged Property to Mortgagee, WITH POWER OF SALE, and Mortgagor does
hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the
title to the Mortgaged Property unto Mortgagee.

                                    ARTICLE 3
                    WARRANTIES, REPRESENTATIONS AND COVENANTS

         Mortgagor warrants, represents and covenants to Mortgagee as follows:

         SECTION 3.1 TITLE TO MORTGAGED PROPERTY AND LIEN OF THIS INSTRUMENT.
Mortgagor holds an indefeasible estate in fee simple in, and has good and
marketable title to, the Mortgaged Property, and owns the Mortgaged Property
free and clear of any liens, claims or interests, except the Permitted
Encumbrances. This Mortgage creates valid, enforceable first priority liens and
security interests against the Mortgaged Property.

         SECTION 3.2 FIRST LIEN STATUS. Mortgagor shall preserve and protect the
first lien and security interest status of this Mortgage and the other Loan
Documents. If any lien or security interest other than the Permitted
Encumbrances is asserted against the Mortgaged Property, Mortgagor shall
promptly, and at its expense, (a) give Mortgagee a detailed written notice of
such lien or security interest (including origin, amount and other terms), and
(b) pay the underlying claim in full or take such other action so as to cause it
to be released or contest the same in compliance with the requirements of the
Credit Agreement (including the requirement of providing a bond or other
security satisfactory to Mortgagee).

         SECTION 3.3 NEGATIVE COVENANTS. Mortgagor will not, without the prior
written consent of Mortgagee, (i) initiate or support any zoning
reclassification of the Land or use or permit the use of the Mortgaged Property
in a manner which would result in such use becoming a nonconforming use under
applicable zoning ordinances, (ii) impose or consent to the imposition of any
public or private restrictive covenants upon the Land, (iii) execute, file or
consent to any subdivision plat affecting the Land or consent to the annexation
of the Land to any municipality, or (iv) permit or suffer the Land to be used by
the public or any Person in such manner as might make possible a claim of
adverse usage or possession or of any implied dedication or easement.

                                       3
<PAGE>   5

         SECTION 3.4 STATUS OF PROPERTY. (a) Mortgagor has obtained, and will
maintain in full force and effect, all necessary certificates, licenses, permits
and other approvals necessary for the operation of the Mortgaged Property,
including without limitation all zoning, building code, land use and other
similar permits or approvals, all of which are in full force and effect as of
the date hereof and not subject to revocation, suspension or modification; (b)
the Mortgaged Property and the present and contemplated use and occupancy
thereof are in full compliance with all applicable zoning ordinances, building
codes, land use laws and other similar laws, and none of the Improvements lies
outside of the boundaries of the Land or the applicable building restriction
lines and no improvements on adjoining properties materially encroach upon the
Land; (c) the Mortgaged Property is served by all utilities required for the
current or contemplated use thereof; (d) all public roads and streets necessary
for service of and access to the Mortgaged Property for the current or
contemplated use thereof have been completed, are serviceable and all-weather
and are physically and legally open for use by the public; (e) the Mortgaged
Property is assessed for real estate tax purposes as one or more wholly
independent tax lot or lots and no other land or improvements is assessed and
taxed together with the Mortgaged Property or any portion thereof; and (f) all
liquid and solid waste disposal septic and sewer systems located on the
Mortgaged Property are in a good and safe condition and repair and in compliance
with applicable laws.

         SECTION 3.5 PAYMENT AND PERFORMANCE. Mortgagor shall pay the
Indebtedness when due under the Loan Documents and shall perform the Obligations
in full when they are required to be performed.

         SECTION 3.6 REPLACEMENT OF FIXTURES AND PERSONALTY. Mortgagor shall
not, without the prior written consent of Mortgagee, permit any of the Fixtures
or Personalty to be removed at any time from the Land or Improvements, unless
the removed item is removed temporarily for maintenance and repair or, if
removed permanently, is obsolete and is replaced by an article of equal or
better suitability and value, owned by Mortgagor subject to the liens and
security interests of this Mortgage and the other Loan Documents, and free and
clear of any other lien or security interest except such as may be permitted
under the Credit Agreement or first approved in writing by Mortgagee.

         SECTION 3.7 INSPECTION. Mortgagor shall permit Mortgagee, and
Mortgagee's agents, representatives and employees, upon reasonable prior notice
to Mortgagor, to inspect the Mortgaged Property and all books and records of
Mortgagor located thereon, and to conduct such environmental and engineering
studies as Mortgagee may require, provided that such inspections and studies
shall not materially interfere with the use and operation of the Mortgaged
Property, and provided that such inspections and studies be conducted in a
reasonable and prudent manner.

         SECTION 3.8 OTHER COVENANTS. All of the representations, warranties and
covenants in the Credit Agreement are incorporated herein by reference and,
together with covenants in this Article 3, shall be covenants running with the
land. The covenants set forth in the Credit Agreement include, among other
provisions: (a) the obligation to pay when due all taxes, assessments and
charges on the Mortgaged Property or assessed against Mortgagee with respect to
the Loan; (b) the right of Mortgagee to inspect the books and records of
Mortgagor; (c) the obligation to keep the Mortgaged Property free and clear of
all Hazardous Materials and in compliance with all Environmental Laws; and (d)
the obligation to comply with all legal requirements (including Environmental
Laws).

         SECTION 3.9 FLOOD HAZARD. Mortgagor hereby represents that the Land
does not comprise property identified by the Secretary of Housing and Urban
Development as an area having special flood hazards. If the Land at any time is
so identified by the Secretary of Housing and Urban Development as having
special flood hazards, Mortgagor will keep the Land insured against loss by
flood hazards in an amount at least equal to the maximum limit of coverage made
available with respect to the

                                       4
<PAGE>   6

particular type of property under the National Flood Insurance Act of 1968, as
amended by the Flood Disaster Protection Act of 1973.

         SECTION 3.10 TRANSFER OF THE MORTGAGED PROPERTY. Except as otherwise
permitted under the Credit Agreement, there shall be no sale, conveyance,
transfer, lease, sublease, pledge or further encumbrance or transfer of any
interest in any part of the Mortgaged Property, without the prior written
consent of Mortgagee.

         SECTION 3.11 CONDEMNATION AWARDS AND INSURANCE PROCEEDS.

         (a) Condemnation Awards. As of the date hereof, Mortgagor has not
received any notice of any proceeding for the condemnation or other taking of
the Mortgaged Property or any part thereof and has no knowledge that any such
proceeding is contemplated. Mortgagor shall, promptly upon learning of the
institution of any such proceeding, notify Mortgagee of the pendency of such
proceeding, and agrees that Mortgagee may participate in any such proceeding and
Mortgagor from time to time will deliver to Mortgagee all instruments reasonably
requested by Mortgagee to permit such participation. Subject to the terms of the
Credit Agreement, Mortgagee shall (and is hereby authorized to) collect any and
all awards, payments or other proceeds of any such condemnation or taking
("Condemnation Proceeds") and apply them to the reduction of the Obligations in
the manner set forth in Section 1.3(c) of the Credit Agreement, or, at
Mortgagee's option in its discretion, may permit or require Mortgagor to use
Condemnation Proceeds, or any part thereof, to replace, repair or restore the
Mortgaged Property. All Condemnation Proceeds shall be applied in accordance
with this Section 3.11 without affecting the lien of this Mortgage for the full
amount secured hereby before such payment took place. Mortgagor agrees to
execute such further assignments of any condemnation Proceeds as Mortgagee may
require.

         (b) Insurance Proceeds. Mortgagor shall at its sole expense obtain for,
deliver to, and maintain for the benefit of Mortgagee insurance in accordance
with Section 5.4 of the Credit Agreement insuring the Mortgaged Property. All
proceeds of such insurance shall be applied in accordance with Section 5.4 of
the Credit Agreement without affecting the lien of this Mortgage for the full
amount secured hereby before such payment took place. If any part of the
Mortgaged Property shall be lost, damaged or destroyed by fire or any other
cause, Mortgagor shall restore the Mortgaged Property in accordance with and
subject to the terms hereof and of Section 5.4 of the Credit Agreement.

                                    ARTICLE 4
                             [Intentionally Omitted]

                                    ARTICLE 5
                             DEFAULT AND FORECLOSURE

         SECTION 5.1 REMEDIES. If an Event of Default shall have occurred and be
continuing, Mortgagee may, at Mortgagee's election, exercise any or all of the
following rights, remedies and recourses:

         (a) Acceleration. Declare the Indebtedness to be immediately due and
payable, without further notice, presentment, protest, notice of intent to
accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Mortgagor), whereupon the same
shall become immediately due and payable.

                                       5
<PAGE>   7

         (b) Entry on Mortgaged Property. Enter the Mortgaged Property and take
exclusive possession thereof and of all books, records and accounts relating
thereto or located thereon. If Mortgagor remains in possession of the Mortgaged
Property after an Event of Default and without Mortgagee's prior written
consent, Mortgagee may invoke any legal remedies to dispossess Mortgagor.

         (c) Operation of Mortgaged Property. Hold, lease, develop, manage,
store, operate, control or otherwise use the Mortgaged Property upon such terms
and conditions as Mortgagee may deem reasonable under the circumstances (making
such repairs, alternations, additions and improvements and taking other actions,
from time to time, including insuring the Mortgaged Property, as Mortgagee deems
necessary or desirable), and apply all Rents and other amounts collected by
Mortgagee in connection therewith in accordance with the provisions of the
Credit Agreement. The taking of possession and collection of Rents by Mortgagee
shall not be construed to be an affirmation of any lease or acceptance of
attornment with respect to any lease of all or any portion of the Mortgaged
Property.

         (d) Foreclosure and Sale. Institute proceedings for the complete
foreclosure of this Mortgage, either by judicial action or by power of sale, in
which case the Mortgaged Property may be sold for cash or credit in one or more
parcels as Mortgagee may determine. With respect to any notices required or
permitted under the UCC, Mortgagor agrees that ten (10) days' prior written
notice shall be deemed commercially reasonable. At any such sale by virtue of
any judicial proceedings, power of sale, or any other legal right, remedy or
recourse, the title to and right of possession of any such property shall pass
to the purchaser thereof, and to the fullest extent permitted by law, Mortgagor
shall be completely and irrevocably divested of all of its right, title,
interest, claim, equity, equity of redemption, and demand whatsoever, either at
law or in equity, in and to the property sold and such sale shall be a perpetual
bar both at law and in equity against Mortgagor, and against all other Persons
claiming or to claim the property sold or any part thereof, by, through or under
Mortgagor. Mortgagee may be a purchaser at such sale and if Mortgagee is the
highest bidder, Mortgagee may credit the portion of the purchase price that
would be distributed to Mortgagee against the Indebtedness in lieu of paying
cash. In the event this Mortgage is foreclosed by judicial action, appraisement
and valuation of the Mortgaged Property are waived. Mortgagee may adjourn from
time to time any sale to be made by it under or by virtue of the Mortgage by
announcement at the time and place appointed for such sale or for such adjourned
sale or sales, and except as otherwise provided by any applicable provision of
law, Mortgagee, without further notice or publication, may conduct such sale at
the time and place to which the same shall be so adjourned.

         (e) Receiver. Make application to a court of competent jurisdiction
for, and obtain from such court as a matter of strict right and without notice
to Mortgagor or regard to the adequacy of the Mortgaged Property for the
repayment of the Indebtedness, the appointment of a receiver of the Mortgaged
Property, and Mortgagor irrevocably consents to such appointment. Any such
receiver shall have all the usual powers and duties of receivers in similar
cases, including the full power to rent, maintain and otherwise operate the
Mortgaged Property upon such terms as may be approved by the court, and shall
apply such Rents in accordance with the provisions of the Credit Agreement.
Notwithstanding the appointment of any receiver or other custodian, Mortgagee
shall be entitled as pledgee to the possession and control of any cash,
deposits, or instruments at the time held by, or payable or deliverable under
the terms of this Mortgage to Mortgagee.

         (f) Leases. Mortgagee, at its option, is authorized to foreclose this
Mortgage subject to the rights of any current tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceedings and to foreclose their rights will not be asserted by Mortgagor to
be a defense to any proceedings instituted by Mortgagee to collect the sums
secured hereby or to collect any deficiency remaining unpaid after the
foreclosure sale of the Mortgaged Property. Unless otherwise agreed by Mortgagee
in writing, all leases and tenancies of the Mortgaged Property

                                       6
<PAGE>   8

executed subsequent to the date hereof, or any part thereof, shall be
subordinate and inferior to the lien of this Mortgage, except that from time to
time Mortgagee may execute and record among the Land Records of the jurisdiction
where this Mortgage is recorded, subordination statements with respect to such
leases as Mortgagee may designate in its discretion, whereby the leases so
designated by Mortgagee will be made superior to the lien of this Mortgage. From
and after the recordation of such subordination statements, the leases therein
referred to shall be superior to the lien of this Mortgage and shall not be
affected by any foreclosure hereof. All such leases and tenancies shall contain
a provision to the effect that the tenant recognizes the right of Mortgagee to
effect such subordination of this Mortgage and consents thereto.

         (g) Other. Exercise all other rights, remedies and recourses granted
under the Loan Documents or otherwise available at law or in equity.

         SECTION 5.2 SEPARATE SALES. The Mortgaged Property may be sold in one
or more parcels and in such manner and order as Mortgagee in its sole discretion
may elect; the right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.

         SECTION 5.3 REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE. Mortgagee
shall have all rights, remedies and recourses granted in the Loan Documents and
available at law or equity (including the UCC), which rights (a) shall be
cumulated and concurrent, (b) may be pursued separately, successively or
concurrently against Mortgagor or others obligated under the Loan Documents, or
against the Mortgaged Property, or against any one or more of them, at the sole
discretion of Mortgagee, (c) may be exercised as often as occasion therefor
shall arise, and the exercise or failure to exercise any of them shall not be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive. No action by
Mortgagee in the enforcement of any rights, remedies or recourses under the Loan
Documents or otherwise at law or equity shall be deemed to cure any Event of
Default.

         SECTION 5.4 RELEASE OF AND RESORT TO COLLATERAL. Mortgagee may release,
regardless of consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security interest
created in or evidenced by the Loan Documents or their status as a first and
prior lien and security interest in and to the Mortgaged Property. For payment
of the Indebtedness, Mortgagee may resort to any other security in such order
and manner as Mortgagee may elect.

         SECTION 5.5 WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS. To
the fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to
Mortgagor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment, levy or sale
on execution or providing for any stay of execution, moratorium, exemption from
civil process, redemption (including, without limitation, all rights of
redemption conferred by the Act passed by the General Assembly of Arkansas on
May 8, 1899, and all acts amendatory thereof) or extension of time for payment,
(b) all notices of any Event of Default or of Mortgagee's election to exercise
or the actual exercise of any right, remedy or recourse provided for under the
Loan Documents, (c) any right to a marshalling of assets or a sale in inverse
order of alienation, (d) any requirement of Mortgagee to institute proceedings
in mortgage foreclosure against the Mortgaged Property before exercising any
other remedy afforded Mortgagee hereunder with respect to any Event of Default
(e) the right, if any, to require any sale to be made in parcels, or the right,
if any, to select parcels to be sold, and (f) personal service of process and
consents to service in the manner and to the address of Mortgagor set forth or
referred to in Sections 11.9 and 11.10 of the Credit Agreement.

                                       7
<PAGE>   9

         SECTION 5.6 DISCONTINUANCE OF PROCEEDINGS. If Mortgagee shall have
proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon it for any
reason, Mortgagee shall have the unqualified right to do so and, in such an
event, Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Indebtedness, the Obligations, the Loan Documents, the Mortgaged
Property and otherwise, and the rights, remedies, recourses and powers of
Mortgagee shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Mortgagee thereafter to exercise
any right, remedy or recourse under the Loan Documents for such Event of
Default.

         SECTION 5.7 PROOFS OF CLAIM. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceedings affecting Mortgagor or any guarantor, co-maker or
endorser of any of Mortgagor's obligations, its creditors or its property,
Mortgagee, to the extent permitted by law, shall be entitled to file such proofs
of claim and other documents as may be necessary or advisable in order to have
Mortgagee's claims allowed in such proceedings for the entire amount due and
payable by Mortgagor under this Mortgage and any other Loan Document, at the
date of the institution of such proceedings, and for any additional amounts
which may become due and payable by Mortgagor after such date.

         SECTION 5.8 REINSTATEMENT. This Mortgage shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Mortgagor for liquidation or reorganization, should Mortgagor become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of Mortgagor's
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Obligations or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

         SECTION 5.9 APPLICATION OF PROCEEDS. The proceeds of any sale of, and
the Rents and other amounts generated by the holding, leasing, management,
operation or other use of the Mortgaged Property, shall be applied by Mortgagee
(or the receiver, if one is appointed) in accordance with the Credit Agreement.

         SECTION 5.10 OCCUPANCY AFTER FORECLOSURE. Any sale of the Mortgaged
Property or any part thereof in accordance with Section 5.1(d) will divest all
right, title and interest of Mortgagor in and to the property sold. Subject to
applicable law, any purchaser at a foreclosure sale will receive immediate
possession of the property purchased. If Mortgagor retains possession of such
property or any part thereof subsequent to such sale, Mortgagor will be
considered a tenant at sufferance of the purchaser, and will, if Mortgagor
remains in possession after demand to remove, be subject to eviction and
removal, forcible or otherwise, with process of law; provided, however, that
notwithstanding anything to the contrary in the sentence above, if Mortgagor
retains possession of all or a portion of the Mortgaged Property subsequent to
its sale, Mortgagee shall be permitted to exercise any and all self-help
remedies available under law.

         SECTION 5.11 ADDITIONAL ADVANCES AND DISBURSEMENTS; COSTS OF
ENFORCEMENT.

         (a) If any Event of Default exists, Mortgagee shall have the right, but
not the obligation, to cure such Event of Default in the name and on behalf of
Mortgagor. All sums advanced

                                       8
<PAGE>   10

and expenses incurred (including reasonable attorneys' fees and expenses) at any
time by Mortgagee under this Section 5.11, or otherwise under this Mortgage or
any of the other Loan Documents or applicable law, shall bear interest from the
date that such sum is advanced or expense incurred, to and including the date of
reimbursement, computed at the rate or rates at which interest is then computed
on the Indebtedness, and all such sums, together with interest thereon, shall be
secured by this Mortgage.

         (b) Mortgagor shall pay all expenses (including reasonable attorneys'
fees and expenses) of or incidental to the perfection and enforcement of this
Mortgage and the other Loan Documents, or the enforcement, compromise or
settlement of the Indebtedness or any claim under this Mortgage and the other
Loan Documents, and for the curing thereof, or for defending or asserting the
rights and claims of Mortgagee in respect thereof, by litigation or otherwise.

         SECTION 5.12 NO MORTGAGEE IN POSSESSION. Neither the enforcement of any
of the remedies under this Article 5, the assignment of the Rents and Leases
under Article 6, the security interests under Article 7, nor any other remedies
afforded to Mortgagee under the Loan Documents, at law or in equity shall cause
Mortgagee to be deemed or construed to be a mortgagee in possession of the
Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property or
attempt to do so, or to take any action, incur any expense, or perform or
discharge any obligation, duty or liability whatsoever under any of the Leases
or otherwise.

                                    ARTICLE 6
                         ASSIGNMENT OF RENTS AND LEASES

         SECTION 6.1 ASSIGNMENT. In furtherance of and in addition to the
assignment made by Mortgagor in Section 2.1 of this Mortgage, Mortgagor hereby
absolutely and unconditionally assigns, sells, transfers and conveys to
Mortgagee all of its right, title and interest in and to all Leases, whether now
existing or hereafter entered into, and all of its right, title and interest in
and to all Rents. This assignment is an absolute assignment and not an
assignment for additional security only. So long as no Event of Default shall
have occurred and be continuing, Mortgagor shall have a revocable license from
Mortgagee to exercise all rights extended to the landlord under the Leases,
including the right to receive and collect all Rents and to hold the Rents in
trust for use in the payment and performance of the Obligations and to otherwise
use the same. The foregoing license is granted subject to the conditional
limitation that no Event of Default shall have occurred and be continuing. Upon
the occurrence and during the continuance of an Event of Default, whether or not
legal proceedings have commenced, and without regard to waste, adequacy of
security for the Obligations or solvency of Mortgagor, the license herein
granted shall automatically expire and terminate, without notice by Mortgagee
(any such notice being hereby expressly waived by Mortgagor).

         SECTION 6.2 PERFECTION UPON RECORDATION. Mortgagor acknowledges that
Mortgagee has taken all actions necessary to obtain, and that upon recordation
of this Mortgage Mortgagee shall have, to the extent permitted under applicable
law, a valid and fully perfected, first priority, present assignment of the
Rents arising out of the Leases and all security for such Leases. Mortgagor
acknowledges and agrees that upon recordation of this Mortgage Mortgagee's
interest in the Rents shall be deemed to be fully perfected, "choate" and
enforced as to Mortgagor and all third parties, including, without limitation,
any subsequently appointed trustee in any case under Title 11 of the United
States Code (the "BANKRUPTCY CODE"), without the necessity of commencing a
foreclosure action with respect to this Mortgage, making formal demand for the
Rents, obtaining the appointment of a receiver or taking any other affirmative
action.

         SECTION 6.3 BANKRUPTCY PROVISIONS. Without limitation of the absolute
nature of the assignment of the Rents hereunder, Mortgagor and Mortgagee agree
that (a) this Mortgage shall constitute

                                       9
<PAGE>   11

a "security agreement" for purposes of Section 552(b) of the Bankruptcy Code,
(b) the security interest created by this Mortgage extends to property of
Mortgagor acquired before the commencement of a case in bankruptcy and to all
amounts paid as Rents and (c) such security interest shall extend to all Rents
acquired by the estate after the commencement of any case in bankruptcy.

         SECTION 6.4 NO MERGER OF ESTATES. So long as part of the Indebtedness
and the Obligations secured hereby remain unpaid and undischarged, the fee and
leasehold estates to the Mortgaged Property shall not merge, but shall remain
separate and distinct, notwithstanding the union of such estates either in
Mortgagor, Mortgagee, any tenant or any third party by purchase or otherwise.

                                    ARTICLE 7
                               SECURITY AGREEMENT

         SECTION 7.1 SECURITY INTEREST. This Mortgage constitutes a "security
agreement" on personal property within the meaning of the UCC and other
applicable law and with respect to the Personalty, Fixtures, Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards. To this end, Mortgagor grants to Mortgagee a first and
prior security interest in the Personalty, Fixtures, Leases, Rents, Deposit
Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance, Condemnation
Awards and all other Mortgaged Property which is personal property to secure the
payment of the Indebtedness and performance of the Obligations, and agrees that
Mortgagee shall have all the rights and remedies of a secured party under the
UCC with respect to such property. Any notice of sale, disposition or other
intended action by Mortgagee with respect to the Personalty, Fixtures, Leases,
Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance
and Condemnation Awards sent to Mortgagor at least five (5) days prior to any
action under the UCC shall constitute reasonable notice to Mortgagor.

         SECTION 7.2 FINANCING STATEMENTS. Mortgagor shall execute and deliver
to Mortgagee, in form and substance satisfactory to Mortgagee, such financing
statements and such further assurances as Mortgagee may, from time to time,
reasonably consider necessary to create, perfect and preserve Mortgagee's
security interest hereunder and Mortgagee may cause such statements and
assurances to be recorded and filed, at such times and places as may be required
or permitted by law to so create, perfect and preserve such security interest.
Mortgagor's chief executive office is in the State of Ohio at the address set
forth in the first paragraph of this Mortgage.

         SECTION 7.3 FIXTURE FILING. This Mortgage shall also constitute a
"fixture filing" for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. Information concerning the security
interest herein granted may be obtained at the addresses of Debtor (Mortgagor)
and Secured Party (Mortgagee) as set forth in the first paragraph of this
Mortgage.

                                    ARTICLE 8
                             [INTENTIONALLY OMITTED]

                                    ARTICLE 9
                                  MISCELLANEOUS

         SECTION 9.1 NOTICES. Any notice required or permitted to be given under
this Mortgage shall be given in accordance with Section 11.10 of the Credit
Agreement.

         SECTION 9.2 COVENANTS RUNNING WITH THE LAND. All Obligations contained
in this Mortgage are intended by Mortgagor and Mortgagee to be, and shall be
construed as, covenants running with the Mortgaged Property. As used herein,
"Mortgagor" shall refer to the party named in the first

                                       10
<PAGE>   12

paragraph of this Mortgage and to any subsequent owner of all or any portion of
the Mortgaged Property. All Persons who may have or acquire an interest in the
Mortgaged Property shall be deemed to have notice of, and be bound by, the terms
of the Credit Agreement and the other Loan Documents; however, no such party
shall be entitled to any rights thereunder without the prior written consent of
Mortgagee.

         SECTION 9.3 FURTHER ASSURANCES. At any time and from time to time, upon
Mortgagee's request and at Mortgagor's sole expense, Mortgagor shall make,
execute and deliver, or cause to be made, executed and delivered, to Mortgagee
and where appropriate shall cause to be recorded or filed, and from time to time
thereafter to be re-recorded and refiled at such time and in such offices and
places as shall be reasonably deemed desirable by Mortgagee, any and all such
further deeds of trust, instruments of further assurance, financing statements,
certificates and other documents as Mortgagee may consider necessary or
desirable in order to effectuate, complete, or perfect or to continue and
preserve the obligations of Mortgagor under this Mortgage, and the lien of this
Mortgage, subject only to Permitted Encumbrances.

         SECTION 9.4 ATTORNEY-IN-FACT. Mortgagor hereby irrevocably appoints
Mortgagee and its successors and assigns, as its attorney-in-fact, which agency
is coupled with an interest and with full power of substitution, (a) to execute
and/or record any notices of completion, cessation of labor or any other notices
that Mortgagee deems appropriate to protect Mortgagee's interest, if Mortgagor
shall fail to do so within ten (10) days after written request by Mortgagee, (b)
upon the issuance of a deed pursuant to the foreclosure of this Mortgage or the
delivery of a deed in lieu of foreclosure, to execute all instruments of
assignment, conveyance or further assurance with respect to the Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Mortgagee's security interests and rights in or to any of the Mortgaged
Property, and (d) while any Event of Default exists, to perform any obligation
of Mortgagor hereunder, however: (1) Mortgagee shall not under any circumstances
be obligated to perform any obligation of Mortgagor; (2) any sums advanced by
Mortgagee in such performance shall be added to and included in the Indebtedness
and shall bear interest at the rate or rates at which interest is then computed
on the Indebtedness; (3) Mortgagee as such attorney-in-fact shall only be
accountable for such funds as are actually received by Mortgagee; and (4)
Mortgagee shall not be liable to Mortgagor or any other person or entity for any
failure to take any action which it is empowered to take under this Section 9.4.

         SECTION 9.5 SUITS TO PROTECT THE MORTGAGED PROPERTY. Mortgagee shall
have the power and authority to institute and maintain any suits and proceedings
as Mortgagee may deem advisable (i) to prevent any impairment of the Mortgaged
Property by an acts which may be unlawful or any violation of this Mortgage,
(ii) to preserve or protect Mortgagee's interest in the Mortgaged Property and
(iii) to restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid, if the enforcement of or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to Mortgagee's interest.

         SECTION 9.6 SUCCESSORS AND ASSIGNS. This Mortgage shall be binding upon
and inure to the benefit of Mortgagee and Mortgagor (including any
debtor-in-possession on behalf of Mortgagor) and their respective successors and
assigns. No sales of participations, other sales, assignments, transfers or
other dispositions of any agreement governing or instrument evidencing the
Obligations or any portion thereof or interest therein shall in any manner
affect the Lien granted to Mortgagee and Lenders hereunder. Mortgagor shall not,
without the prior written consent of Mortgagee, assign any rights, duties or
obligations hereunder.

                                       11
<PAGE>   13

         SECTION 9.7 NO WAIVER. Any failure by Mortgagee to insist upon strict
performance of any of the terms, provisions or conditions of the Loan Documents
shall not be deemed to be a waiver of same, and Mortgagee shall have the right
at any time to insist upon strict performance of all of such terms, provisions
and conditions.

         SECTION 9.8 CREDIT AGREEMENT. If any conflict or inconsistency exists
between this Mortgage and the Credit Agreement, the Credit Agreement shall
govern.

         SECTION 9.9 RELEASE OR RECONVEYANCE. Upon payment in full of the
Indebtedness and performance in full of the Obligations, Mortgagee, at
Mortgagor's expense, shall release the liens and security interests created by
this Mortgage or reconvey the Mortgaged Property to Mortgagor.

         SECTION 9.10 WAIVER OF STAY, MORATORIUM AND SIMILAR RIGHTS. Mortgagor
agrees, to the full extent that it may lawfully do so, that it will not at any
time insist upon or plead or in any way take advantage of any stay, marshalling
of assets, extension, redemption or moratorium law now or hereafter in force and
effect so as to prevent or hinder the enforcement of the provisions of this
Mortgage or the Indebtedness secured hereby, or any agreement between Mortgagor
and Mortgagee or any rights or remedies of Mortgagee.

         SECTION 9.11 APPLICABLE LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS MORTGAGE AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA; EXCEPT WITH RESPECT TO THE CREATION AND ENFORCEMENT OF LIENS, WHICH
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF
THE STATE IN WHICH THE PROPERTY IS LOCATED.

         SECTION 9.12 HEADINGS. The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.

         SECTION 9.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG MORTGAGEE, LENDERS AND ANY CREDIT
PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS MORTGAGE, OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.

                                       12
<PAGE>   14

         SECTION 9.14 NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Mortgage. In the
event an ambiguity or question of intent or interpretation arises, this Mortgage
shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions hereof.

         SECTION 9.15 ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Mortgage with its counsel.

         SECTION 9.16 BENEFIT OF LENDERS. All Liens granted or contemplated
hereby shall be for the benefit of Mortgagee and Lenders, and all proceeds or
payments realized from the Mortgaged Property in accordance herewith shall be
applied to the Obligations in accordance with the terms of the Credit Agreement.

         SECTION 9.17 SEVERABILITY. Whenever possible, each provision of this
Mortgage shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision of this Mortgage shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Mortgage. This Mortgage is to be
read, construed and applied together with the Credit Agreement and the other
Loan Documents which, taken together, set forth the complete understanding and
agreement of Mortgagee, Lenders and Mortgagor with respect to the matters
referred to herein and therein.

         SECTION 9.18 ENTIRE AGREEMENT. This Mortgage and the other Loan
Documents embody the entire agreement and understanding between Mortgagor and
Mortgagee and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the Loan
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>   15

         IN WITNESS WHEREOF, Mortgagor has on the date set forth in the
acknowledgement hereto, effective as of the date first above written, caused
this instrument to be duly EXECUTED AND DELIVERED by authority duly given.

                                   MORTGAGOR: BALDWIN PIANO & ORGAN COMPANY

                                             By: /s/ DUANE KIMBLE
                                                 ----------------
                                                 Duane Kimble
                                                 Executive Vice President

                                       S-1

<PAGE>   16

STATE OF NEW YORK     )
                      ) ss.
COUNTY OF NEW YORK    )

                  On this day personally appeared before me the undersigned, a
Notary Public, within and for the County and State aforesaid, duly qualified,
commissioned and acting, DUANE D. KIMBLE, JR. to me personally well known, who
acknowledged that he/she is the EXECUTIVE VICE PRESIDENT of Baldwin Piano &
Organ Company, a Delaware corporation, and that he/she, as such officer, being
authorized so to do, has executed the said foregoing instrument for the purposes
therein contained, by signing the name of the corporation as said officer.

         WITNESS my hand and official seal on this 24th day of March, 2000.

[Notarial Seal]                                 /s/ LAUREN SCHMAUCH
                                                ---------------------
                                                Notary Public

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