Document:

NATURAL GAS SALES AGREEMENT
                           ---------------------------

         THIS  AGREEMENT  is made and  entered  into this the 30th day of March,
("Contract  Date") by and between BAE SYSTEMS ORDNANCE  SYSTEMS INC.  ("Buyer"),
and TENGASCO, INC. ("Seller").

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

         WHEREAS,  Seller has  substantial  natural  gas  reserves  in  Hawkins,
Hancock, Claiborne, and surrounding counties in Tennessee, and Tengasco Pipeline
Corporation,  a wholly owned subsidiary of Tengasco, Inc. desires to construct a
pipeline to deliver such natural gas to customers that will purchase natural gas
for customer's use, and for other purposes; and

         WHEREAS, Seller has developed natural gas reserves and plans to produce
Natural Gas from its properties in Hawkins, Hancock,  Claiborne, and surrounding
Counties in Tennessee  and transport  that Natural Gas through  facilities to be
constructed and owned by Tengasco Pipeline Corporation; and,

         WHEREAS,  Buyer requires natural gas for its plant facilities ("Plant")
located in Kingsport, Sullivan County, Tennessee; and

         WHEREAS,  Seller desires to sell and Buyer desires to purchase  Natural
Gas;

         NOW,  THEREFORE,  in consideration of the mutual covenants  hereinafter
set forth, Buyer and Seller agree as follows:

                                    ARTICLE 1
                                    QUANTITY
                                    --------

         1.1 VOLUME. Subject to the other provisions of this Agreement, each Day
Seller  shall make  available  a Maximum  Volume of Natural  Gas.  Seller is not
obligated to provide more than the Maximum Volume available on any Day. "Maximum
Volume" will be 5,000 MMBtu's per day. Buyer agrees to purchase a Minimum Volume
of gas per day. "Minimum Volume" means with respect to any Day, the lesser of i)
5,000 MMBtu's or ii) Buyer's actual  requirements  on such Day. Buyer and Seller
agree that the Minimum  Volume and  Maximum  Volume to be  delivered  under this
Agreement are subject to  availability  of Seller's  Natural Gas after sales are
made by Seller to Eastman  Chemical  Company at the maximum volume stated in the
existing  contract with Eastman  Chemical Company at the date of this Agreement,
which is 15,000 MMBtu's per day. Buyer and Seller further agree,  subject to the
preceding sentence, that the

<PAGE>

Maximum  Volume of gas shall be  delivered  under  this  Agreement  prior to the
delivery by Seller of all other volumes, if any, that may be contracted for sale
by Seller to any customer other than Eastman Chemical Company at any time during
the term of this agreement.

         1.2 Buyer does not have the ability to predict its exact total  Natural
Gas fuel purchase  requirement on a daily basis,  and, as a result,  may fail to
purchase the Minimum Volume on a given Day; provided,  however, Buyer shall make
a reasonable effort to purchase and receive the Minimum Volume on each Day.

         1.3 Seller's reserves in Hancock,  Hawkins,  Claiborne, and surrounding
Counties  are being  developed  by Seller  and  Seller's  capability  to produce
additional volumes may increase over time. Buyer may from time to time, consider
additional  projects at its Plant that would utilize Natural Gas. Should Buyer's
need for  Natural  Gas from  Seller be greater  than the  Maximum  Volume and if
Seller has additional Natural Gas available from its Tennessee  property,  Buyer
and Seller may agree to increase the Maximum  Volume in accordance  with Buyer's
increased needs.

                                   ARTICLE II
                                     PRICE
                                     -----

         2.1 For the purpose of  calculating  the delivered  price to be paid in
any Month pursuant to Section 2.2 of this Article, "Index Price" means the price
per MMBtu published in McGraw-Hill's INSIDE F.E.R.C'S GAS MARKET REPORT ("INSIDE
FERC"), equal to the Henry Hub price index as shown in the table labeled "Market
Center Spot Gas Prices.  The  published  price used to determine the Index Price
for  Natural  Gas  purchased  in any  Month is the  first  published  price  for
deliveries in that Month.

         2.2 If the Index Price is not published for any Month, then the parties
shall  negotiate,  in good faith,  in an attempt to agree to a substitute  index
which most closely  approximates the Index Price in order to calculate the price
under  Section  2.3 for that Month and any  succeeding  Month in which the Index
Price is not published.  If the parties fail to agree upon a substitute index on
or before the date  payment is due for the first Month for which the Index Price
is not published, the parties shall determine a substitute index by arbitration.
The arbitration shall be by a single impartial arbitrator in accordance with the
Federal  Arbitration  Act and the Commercial  Arbitration  Rules of the American
Arbitration  Association  to the  extent  not in  conflict  with such  Act.  The
arbitrator  shall be selected by the  American  Arbitration  Association  if the
parties are unable to agree on an arbitrator.  If the parties fail to agree upon
substitute  index on or before  the date  payment is due for any Month for which
the Index Price is not published and a substitute index has not been established
by  arbitration,  then Buyer shall pay Seller for all Natural Gas  purchased  in
that Month the price per MMBtu in effect or paid  subject to  adjustment  during
the immediately preceding Month subject to adjustment as

                                       2

<PAGE>

hereinafter  provided.  Once the substitute  index is determined by arbitration,
adjustment shall be made in the prices  previously paid for any Month, for which
the Index Price was not published, to implement the substitute index.

         2.3  Subject to Section  2.2 and 2.5,  Buyer shall pay Seller the Index
Price plus $0.05 per MMBtu for all Natural Gas  delivered  by Seller  under this
Agreement.

         2.4  Either  party  may  propose  that new  pricing  provisions  become
effective  ("Proposal  Effective  Date") on the  commencement of the sixth (6th)
Contract Year (or the  commencement  of any succeeding  Contract Year) by giving
written  notice to the other  party at least  twelve  (12)  Months  prior to the
Proposal  Effective Date. If either party proposes a new pricing  methodology in
the  manner  provided  above but the  parties  do not agree in  writing on a new
pricing  methodology  at least seven (7) Months  before the  Proposal  Effective
Date, the existing pricing  methodology will continue in effect but either party
may terminate this Agreement  effective on the Proposal Effective Date by giving
the other party written  notice of  termination at least (6) Months prior to the
Proposal  Effective Date. If either party proposes a new pricing  methodology in
the manner  provided  above,  and the parties  agree in writing on a new pricing
methodology  by  the  Proposal  Effective  Date,  that  pricing  methodology  is
effective on the  Proposal  Effective  Date and  continues in effect until a new
price becomes effective under this Agreement.

         2.5 If Buyer has a competitive  offer for similar volumes under similar
terms and  conditions  as  hereunder,  but at a better  price,  Buyer may notify
Seller of the competitive offer ("Market Price Notice"). If Buyer gives a Market
Price Notice in  accordance  with its rights under the  foregoing  provisions of
this Section,  Seller will provide  written notice that it either agrees to meet
such competitive offer or to release Buyer from its purchase obligations herein.

         2.6  Should  Seller  offer to sell  Natural  Gas to  another  Buyer for
similar  volumes under similar terms and  conditions as hereunder but at a price
lower than the price  determined  by 2.3, 2.4 or 2.5,  Seller shall  immediately
extend such lower price to Buyer.

                                  ARTICLE III
                                 DELIVERY POINT
                                 --------------

         3.1 Seller shall  deliver all Natural Gas  quantities at the inlet side
of Buyer's meter station located at Buyer's Plant site as specified by Buyer, so
long as such site  location  does not  unduly  burden  Seller,  near  Kingsport,
Tennessee  ("Delivery  Point").  Title shall  transfer to Buyer at such Delivery
Point.

         3.2 Buyer  shall,  at  Buyer's  sole cost and  expense,  install at the
Delivery Point all necessary meters,  valves,  fittings,  controllers,  pressure
control valve,  knock-out

                                       3
<PAGE>

tanks, and telemetry as required to effect and monitor deliveries hereunder.  In
addition,  to provide  Buyer  with  requested  signals  and  real-time  delivery
quantity parameters,  certain check metering and electronic monitoring abilities
shall also be installed  by Buyer at Buyer's  expense.  Buyer shall  provide any
necessary  surface  site,  easement and rights of ingress and egress that may be
required for the  installation  and operation of such measurement and regulation
station,  as well as any and all necessary  electrical  power,  connections  and
junction boxes at a mutually  agreeable  location within such site. Seller shall
have the right to review and  approve the  station  design and site  preparation
scope,  specifications and all construction  drawings prior to initiation of any
work hereunder.

                                   ARTICLE IV
                                     TERM
                                     ----

         4.1  Unless  terminated  earlier  in  accordance  with one of the other
provisions  of this  Agreement,  this  Agreement  shall become  effective on the
earlier  of the  30th day of  March,  2001 or the  date  the  physical  pipeline
facilities and metering  facilities are  constructed and installed by Seller and
Buyer,  and  commences  and  continues  in effect  for twenty  (20)  consecutive
Contract Years ("Primary  Term").  This Agreement is automatically  extended for
successive terms of one (1) Contract Year each unless and until it is terminated
by either  party at the end of the  Primary  Term or then end of any  successive
Contract Year by giving written notice at least twelve (12) Months prior to such
termination.

                                    ARTICLE V
                                     NOTICES
                                     -------

         5.1 Any notice,  request,  demand,  or  statement  provided for in this
Agreement  must be in writing and is deemed given when  actually  delivered to a
party at the address  indicated below for such party or, if mailed, it is deemed
given three (3)  business  Days after it is mailed by first class mail,  postage
paid,  to a party at the address  indicated  below for such party or, if sent by
facsimile transmission, when receipt of a legible facsimile is confirmed by such
party.

                                       4

<PAGE>

--------------------------------------------------------------------------------
 BUYER:                                   SELLER:
 ------                                   -------
--------------------------------------------------------------------------------
 ALL NOTICES                              NOTICES AND NOMINATIONS
 -----------                              -----------------------
--------------------------------------------------------------------------------
 BAE SYSTEMS ORDNANCE SYSTEMS INC.        Tengasco Inc.
--------------------------------------------------------------------------------
 Holston Army Ammunition Plant            Medical Arts Bldg.
 4509 West Stone Drive                    603 Main Ave., Suite 500
--------------------------------------------------------------------------------
 Kingsport, Tennessee 37660               Knoxville, Tennessee 37902
--------------------------------------------------------------------------------
 Attention:   Gary W. Taylor              Attention: Harold G. Morris
--------------------------------------------------------------------------------
 Facsimile:  423-247-2261                 Facsimile:  (423) 523-9894
--------------------------------------------------------------------------------

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

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

--------------------------------------------------------------------------------
 For confirmation of facsimile receipt:   For confirmation of facsimile receipt:
--------------------------------------------------------------------------------
 (423) 578-6508                           (423) 523-1124
--------------------------------------------------------------------------------

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

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

--------------------------------------------------------------------------------
 STATEMENT AND PAYMENTS:                  STATEMENT AND PAYMENTS:
 -----------------------                  -----------------------
--------------------------------------------------------------------------------
 BAE Systems Ordnance Systems Inc.        Tengasco, Inc.
--------------------------------------------------------------------------------
 Holston Army Ammunition Plant            Medical Arts Bldg.
 4509 West Stone Drive
--------------------------------------------------------------------------------
 Kingsport, Tennessee 37660               603 Main Ave., Suite 500
--------------------------------------------------------------------------------
 Attention:  Accounts Payable             Knoxville, Tennessee 37902
--------------------------------------------------------------------------------

Either party may, from time to time,  designate a new address as its address for
such  purposes by  registered  or  certified  letter or  facsimile  transmission
addressed to the other party.

                                   ARTICLE VI
                               FAILURE TO DELIVER
                               ------------------

         6.1 If Seller fails to fulfill its delivery quota,  both on time and as
to quality  or  quantity,  ("Seller's  Deficiency")  of  Natural  Gas that it is
obligated  to make  available  under  this  Agreement,  and such  failure is not
excused by this Agreement or law,  Buyer may, as its sole and exclusive  remedy,
except  for  remedies  under  4.3  of the  General  Conditions,  cover  Seller's
Deficiency  and recover from Seller (a) any  positive  remainder of i) the costs
that Buyer actually and reasonably incurred to purchase Seller's Deficiency from
a third  party  less ii) the costs  that  Buyer  would  have  paid for  Seller's
Deficiency  if  delivered  hereunder,  plus  (b) any  reasonable  and  necessary
attorney's  fees and court  costs,  incurred  by Buyer in order to recover  such
damages from Seller.  However,  in no event may Buyer  recover a total amount in
excess of $0.40 for each MMBtu of Seller's Deficiency.

                                       5

<PAGE>

                                   ARTICLE VII
                          GENERAL TERMS AND CONDITIONS
                          ----------------------------

         7.1 All the General Terms and Conditions  attached as Appendix A hereto
are incorporated by this reference and made a part of this Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

                                           BUYER:
ATTEST:                                    BAE SYSTEMS ORDNANCE SYSTEMS INC.

By: Gary Taylor                        By:     Anthony B. Hewitt
   ------------------------------             ----------------------------------
                                       Title:  Commercial Development Director
                                              ----------------------------------

                                       SELLER:
ATTEST:                                TENGASCO, INC.

By: Linda Parton                       By:     Robert Carter
   ------------------------------             ----------------------------------
                                       Title:  President
                                              ----------------------------------

                                       6

<PAGE>

                                   APPENDIX A
                          GENERAL TERMS AND CONDITIONS

         Attached hereto and made a part of, by mutual agreement of the parties,
that  certain  Natural Gas Sales  Agreement  ("Agreement")  dated March 30, 2001
between  TENGASCO,  INC.  ("Seller")  and  BAE  SYSTEMS  ORDNANCE  SYSTEMS  INC.
("Buyer").

                                   ARTICLE A-1
                                   DEFINITIONS
                                   -----------

         Except in those certain  instances where the context  requires  another
meaning,  the  following  terms  when  used in this  Agreement  shall  have  the
following meanings:

         1.1 "NATURAL GAS" MEANS natural gas produced from natural gas wells and
natural gas produced in association with oil (casinghead gas) and/or the residue
natural gas resulting from processing  both casinghead gas and Natural  Gas-well
gas. Natural Gas shall mean only such Natural Gas as is being or may be produced
from wells of Seller in Hawkins,  Hancock,  Claiborne and surrounding  counties,
Tennessee.

         1.2  "DAY"  means the  period of  twenty-four  (24)  consecutive  hours
beginning at 7:00 a.m. Eastern Standard or Daylight Time on any calendar Day and
ending  at 7:00 a.m.  Eastern  Standard  Time on the  calendar  Day  immediately
following.

         1.3 "MONTH" means a period  beginning at 7:00 a.m.  Eastern Standard or
Daylight  Time on the first  Day of a  calendar  Month  and  ending at 7:00 a.m.
Eastern  Standard  or  Daylight  Time on the  first  Day of the  calendar  Month
immediately  following,  except  that the first Month shall begin on the date of
initial  deliveries of Natural Gas hereunder and shall end at 7:00 a.m.  Eastern
Standard or Daylight  Time on the first Day of the  calendar  Month  immediately
following.

         1.4 "CONTRACT YEAR" means a period of (12) consecutive  calendar Months
beginning  on  the  Contract  Date,  PROVIDED  that  upon  termination  of  this
Agreement, the Contract Year then in progress shall end.

         1.5  "PSIA" means pounds per square inch absolute.

         1.6  "PSIG" means pounds per square inch gauge.

         1.7  "MCF"  means one  thousand  (1000)  cubic  feet at a  pressure  of
fourteen and  sixty-five  hundredths  (14.65) psia and at a temperature of sixty
degrees (60) Fahrenheit.

         1.8      "BTU" means a British thermal unit.

                                       7

<PAGE>

         1.9   "MMBTU" means one million (1,000,000) Btu.

         1.10  "HEATING  VALUE" means the gross number of British  Thermal Units
which would be contained in the volume of one (1) cubic foot of Natural Gas at a
temperature  of sixty degrees (60)  Fahrenheit,  when saturated with water vapor
and under a pressure of fourteen and  sixty-five  hundredths  (14.65) pounds per
square inch  absolute and adjusted to reflect the actual water vapor  content of
the Natural Gas delivered provided, however, if the water vapor content is seven
(7) pounds per million cubic feet or less, the Natural Gas shall be deemed dry.

         1.11 "SELLER'S  TRANSPORTER" means, with respect to any Delivery Point,
any entity other than Seller that  delivers the Natural Gas sold  hereunder  for
Seller at such Delivery Point.

         1.12 "BUYER'S  TRANSPORTER"  means, with respect to any Delivery Point,
any entity other than Buyer that  receives the Natural Gas  delivered  hereunder
for Buyer at said Delivery Point.

         1.13 "METER  OPERATOR" means Seller or Seller's  Transporter and Seller
shall perform or cause Seller's Transporter to perform in any duties ascribed to
the "Meter Operator".

                                  ARTICLE A-II
                              MEASUREMENT AND TESTS
                              ---------------------

         2.1    The Meter Operator shall measure the quantities  delivered.  The
measuring equipment shall be constructed, installed and operated as follows:

         2.1.1  Orifice Meters - in accordance with ANSI/API 2530,  American Gas
                Association  Report  No.  3,  and  any  subsequent   amendments,
                revisions or modifications thereof.

         2.1.2  Positive  Meters - in accordance  with American Gas  Association
                Measurement   Committee   Report  No.  6,  and  any   subsequent
                amendments, revisions or modifications thereof.

         2.1.3  Turbine  Meters - in accordance  with  American Gas  Association
                Measurement   Committee   Report  No.  7,  and  any   subsequent
                amendments, revisions or modifications thereof.

         2.1.4  Electronic  Transducers  and Flow Computers - in accordance with
                the applicable American Gas Association Standards including, but
                not limited to American Gas  Association  Measurement  Committee
                Report  Nos.  3,  5, 6 and 7,  and  any  subsequent  amendments,
                revisions or modifications thereof.

                                       8

<PAGE>

         2.2 The unit of volume for  purposes  of  measurement  shall be one (1)
cubic foot of Natural Gas at a temperature  base of sixty  degrees  (60(degree))
Fahrenheit and at a pressure base of fourteen and sixty-five  hundredths (14.65)
psia.

         2.3 The  Meter  Operator  shall  use the  arithmetical  average  of the
temperatures   recorded  during  each  Day,  the  factor  for  specific  gravity
determined by a recording  gravitometer or chromatographic  device installed and
located at a suitable  point to record  representative  specific  gravity of the
Natural Gas being metered,  and adjustments to measured  Natural Gas volumes for
the effects of  supercompressibility,  made in accordance with accepted American
Gas Association standards, to make computations of quantity delivered under this
Agreement.  Seller shall obtain  appropriate  carbon  dioxide and nitrogen  mole
fraction values for the Natural Gas delivered as may be required to compute such
supercompressibility adjustments in accordance with standard testing procedures.

         2.4 The Meter  Operator  shall  determine  temperature  by a  recording
thermometer  continuously  used  and  installed  so as to  record  properly  the
temperature of the Natural Gas flowing through the meter.

         2.5 The Meter Operator shall determine  specific  gravity with accuracy
to the nearest  one-thousandth by taking samples of the Natural Gas at the point
of measurement at such times as may be determined to be necessary in practice by
the use of chromatographic  analysis or other methods commonly used and accepted
in the industry.

         2.6 The assumed  atmospheric  (barometric)  pressure  for the  Delivery
Point is 14.5 PSIA.

         2.7 The Meter Operator shall calculate the deviation of the Natural Gas
from Ideal Gas Laws, at the pressures,  temperatures  and specific gravity under
which said Natural Gas is delivered to Buyer,  shall be calculated in accordance
with API 2530.

         2.8 The Meter Operator shall determine the Heating Value of the Natural
Gas at the Delivery  Point(s) by using a  Cutler-Hammer  or other  standard type
calorimeter or by calculating the heating value from an online  chromatograph or
a Natural Gas  analysis  of a  continuous  Natural  Gas sample.  A Party to this
Agreement  that is not the Meter  Operator  may, at such time or times as it may
desire,  determine  the  Heating  Value of the  Natural  Gas  using an  industry
accepted  method.  In the event of any  material  variance  between such test by
Meter Operator and the last or next  succeeding  test made by the  non-operating
party,  a joint test, the cost of which shall be shared equally by both parties,
will be run employing the method utilized by the Meter Operator,  and the result
thereof  will be  controlling,  effective  the first day of the  calendar  Month
preceding such joint test. The Btu content of any volume of Natural Gas shall be
determined  for  all  purposes,  including  payment,  under  this  Agreement  by
multiplying  the Heating Value of the Natural Gas as determined by the last test
in  accordance  with this

                                       9

<PAGE>

Section 2.8 by the number of cubic feet  contained in such volume, as determined
in accordance with Sections 2.2 and 2.3.

         2.9 Except as provided in Section  2.8, the Meter  Operator  shall test
the quality of the Natural Gas delivered  hereunder by approved standard methods
from time to time as requested by any party hereto.

         2.10 The Meter Operator shall  install,  and maintain,  at its expense,
measuring equipment, housing devices, and materials of standard manufacture. Any
party that is not the Meter Operator at a Delivery Point may install and operate
check-measuring  equipment  that  does  not  interfere  with  the  use of  meter
Operator's equipment. The Meter Operator shall maintain, operate and furnish, at
its expense, testing equipment of standard manufacture.

         2.11 The Meter  Operator  shall test the accuracy of its  measuring and
testing  equipment  at necessary  intervals,  and at least  approximately  every
thirty (30) Days. The Meter Operator shall give notice of the time and nature of
each test to the other party  sufficiently  in advance to permit the other party
to have a  representative  present.  The Meter Operator shall test measuring and
testing   equipment  by  reasonable   means  and  methods  in  the  presence  of
representatives of both Seller and Buyer, if present. If the non-operating party
fails to have a representative  present after proper notice,  the Meter Operator
shall provide the results of such tests of equipment  and/or Natural Gas quality
to the non-operating  party but the results of such tests shall  nevertheless be
considered  accurate  until the next test.  All tests shall be made at the Meter
Operator's  expense,  except that the non-operating party shall bear the expense
of tests made at its  request if the  inaccuracy  found is one  percent  (1%) or
less.

         2.12 If at any time any of the measuring or testing  equipment is found
to be out of service, or registering  inaccurately in any percentage,  the Meter
Operator shall adjust it at once to read accurately within the limits prescribed
by the  manufacturer.  If such equipment is out of service,  or inaccurate by an
amount exceeding one percent (1%) at a reading corresponding to the average rate
of flow for the period since the last preceding  test,  the previous  reading of
such equipment is disregarded for any period definitely known or agreed upon, or
if not so known or agreed  upon,  for a period of sixteen  (16) Days or one-half
(1/2) of the  elapsed  time  since the last  test,  whichever  is  shorter.  The
quantity of Natural Gas delivered during such period shall be estimated by:

                a) Using the data recorded by any  check-measuring  equipment if
                   installed and accurately registering; or

                b) if not installed or registering accurately, by correcting the
                   error  if  the  percentage  of  error  is   ascertainable  by
                   calibration, test or mathematical calculation; or

                                       10

<PAGE>

                c) If  neither  such  method  is  feasible,  by  estimating  the
                   quantity,  or quality,  delivered based upon deliveries under
                   similar  conditions  during a period when the  equipment  was
                   registering accurately.

No corrections  shall be made for recorded  inaccuracies  of one percent (1%) or
less.

         2.13  Each  party  has the  right to  inspect  equipment  installed  or
furnished by the other, and the charts and other  measurement or testing data of
the other, at all times during business hours, but the reading,  calibration and
adjustment  of such  equipment  and changing of charts shall be done only by the
party  furnishing  such  equipment.  Each party shall preserve all original test
data,  charts and other similar records in such party's  possession for a period
of at least two (2) years.

                                  ARTICLE A-III
                                DELIVERY PRESSURE
                                -----------------

         3.1  Seller  shall  deliver  the  Natural  Gas to Buyer  at a  pressure
sufficient to effect  delivery into the facilities of Buyer,  up to five hundred
(500) psig,  with a minimum  pressure of two hundred  (200) psig,  controlled to
plus or minus 10 psig of that  pressure.  Buyer will take the Natural Gas at the
pressure of delivery and thereafter regulate and control such pressure as may be
required for its own usage.

                                  ARTICLE A-IV
                                    QUALITY
                                    -------

         4.1 Seller  shall cause the Natural Gas  quantities  to be delivered to
Buyer under this Agreement at the Delivery Point to be free of gum,  gum-forming
constituents,  and other liquid or solid matter that may become  separated  from
the  Natural  Gas  during  transportation,  and  to  conform  to  the  following
specifications:

--------------------------------------------------------------------------------
         a) Dust, rust and other solids  None
--------------------------------------------------------------------------------
         b) Carbon Dioxide               Not more than 2.0% by volume
--------------------------------------------------------------------------------
         c) Oxygen                       Not more than 0.5% by volume
--------------------------------------------------------------------------------
         d) Hydrogen Sulfide             Not more than 0.25 grains per 100 cubic
                                            feet
--------------------------------------------------------------------------------
         e) Total Sulfur                 Not more than 2.0 grains per 100  cubic
                                            feet
--------------------------------------------------------------------------------
         f) Free Water                   None
--------------------------------------------------------------------------------
         g) Heating Value                Not  less  than  970 Btu per cubic foot
                                         and less than one (1) percent variation
                                         within any 30 minute period
--------------------------------------------------------------------------------
         h) Temperature                  Not less than 40 F nor more than 120 F.
--------------------------------------------------------------------------------
         i) Water Vapor                  Not  more than 7 lbs. Per million cubic
                                             feet
--------------------------------------------------------------------------------
         j) Nitrogen                     Not  more  than 5% by volume, and to be
                                            reduced as  provided in  Section 4.2
                                            below
--------------------------------------------------------------------------------
         k) Isopentane and heavier       Not more than 4/10 of 1 gallon per Mcf
--------------------------------------------------------------------------------

                                       11

<PAGE>

--------------------------------------------------------------------------------
                                                       Hydrocarbon
--------------------------------------------------------------------------------
         l) Total Nonhydrocarbons        Not    more    than   5%   by    volume
                                         (Nonhydrocarbons shall include, but not
                                         be  limited   to,   hydrogen   sulfide,
                                         sulfur,  carbon  dioxide,  oxygen,  and
                                         nitrogen)
--------------------------------------------------------------------------------

In the event Seller is unable to meet these quality specifications, Seller shall
notify Buyer and if Buyer refuses to accept such off quality Natural Gas, Seller
shall  immediately  stop delivery of off quality  Natural Gas into the pipeline,
and take whatever steps are necessary to resume  delivery of Natural Gas meeting
these quality specifications.

         4.2      [omitted]

         4.3 If any Natural Gas tendered under this Agreement  fails to meet the
applicable  quality  specifications as provided above in Sections 4.1, Buyer may
refuse to accept such Natural Gas. If Buyer refuses any such Natural Gas because
it fails to meet the  applicable  quality  specifications  set forth in Sections
4.1, Buyer must give Seller written notice  ("Quality  Notice")  within five (5)
Days of such refusal of the  particular  specifications  that Seller or Seller's
Transporter  has  failed to meet.  If Seller or  Seller's  Transporter  fails to
correct the cause of any failure to meet the applicable  quality  specifications
within the thirty (30) Days ("Correction Period") immediately following Seller's
receipt of any  Quality  Notice,  and such  failure is not excused by law or the
provisions of the Agreement,  Buyer may by additional notice immediately suspend
purchase of any volume of Natural Gas  hereunder  for an  additional  period not
less than 90 days ("Suspension Period") during which time Seller may continue to
correct the cause of any failure to meet the applicable quality  specifications.
If the  correction is not made by the end of the  Suspension  Period,  Buyer may
terminate  this  Agreement,  at any time in the  thirty  (30)  Days  immediately
following the end of the Suspension Period, upon written notice to Seller.

         4.4 If any  Natural Gas  tendered  under this  Agreement  fails to meet
applicable  quality  specifications  as provided  above in Sections  4.1 on five
separate occasions within any six (6) month period,  Buyer may, upon thirty (30)
days written notice, terminate this Agreement.

                                   ARTICLE A-V
                                    PAYMENTS
                                    --------

         5.1 After  delivery of Natural Gas has commenced,  Seller shall,  on or
before the  twentieth  (20th) Day of each Month,  ("Invoice  Month"),  render to
Buyer a statement showing the quantity of Natural Gas sold at the Delivery Point
in the  immediately  preceding  Month  ("Production  Month") and the amount owed
Seller.  Buyer shall provide or cause to be provided any information that may be
necessary in order to permit Seller to render statements in accordance with this
Section  5.1.  Buyer  shall pay  Seller on or before  the 15th Day of each Month
following the Invoice Month, for all Natural Gas

                                       12
<PAGE>

delivered  hereunder  during  the  preceding  Production  Month,   PROVIDED,  if
presentation  of said  statement is delayed  after the  twentieth  (20th) of the
Month, then the time for payment shall be extended until (25) Days after receipt
of such statement by Buyer. Should Buyer question, in good faith, any portion of
Seller's  statement,  then Buyer may withhold  payment,  if applicable,  for the
amount in  question  if Buyer  gives  Seller  written  notice  of the  reason it
questions  that amount on or before the date it would  otherwise  be due.  Buyer
shall,  however, make timely payment of the portion of the invoice amount not in
question. The parties agree to meet, if necessary, to resolve any questions and,
upon  resolution,  any  additional  amounts  owned by Buyer to  Seller  shall be
promptly paid.

         5.2 Each party is entitled, at any and all reasonable times, to examine
the books and  records  of the  other,  to the  extent  necessary  to verify the
accuracy  of any  statement,  charge,  computation  or demand  made  under  this
Agreement.

                                  ARTICLE A-VI
                                      TAXES
                                      -----

         6.1  Seller  shall  pay or  cause to be paid the  royalties  and  taxes
lawfully  levied  on  Seller,  and  applicable  to  the  Natural  Gas  produced,
transported  and delivered  hereunder  prior to its delivery to Buyer or Buyer's
designee.  Buyer shall pay all taxes lawfully levied on Buyer applicable to such
Natural  Gas after  delivery  to Buyer or Buyer's  designee.  Each  Party  shall
indemnify, defend and hold harmless the other Party for any Claims for Taxes for
which such Party is responsible hereunder. Upon request, a Party shall provide a
certificate  of exemption or other  evidence of exemption  from any Tax and each
Party  agrees  to  cooperate  with  the  other in  obtaining  an  exemption  and
minimizing Taxes payable in respect of all Transactions.

                                  ARTICLE A-VII
                      WARRANTIES, LIABILITIES AND REMEDIES
                      ------------------------------------

         7.1 Seller  warrants  title to all Natural Gas delivered by it, that it
has the right to sell the same,  and that such  Natural  Gas is free from  valid
liens and valid adverse claims of every kind.

         7.2 Title to the Natural Gas sold and delivered hereunder shall pass to
Buyer at the Delivery Point.  As between the parties hereto,  Seller shall be in
control and possession of the Natural Gas and  responsible  for any cost,  loss,
liability,  damage and/or injury to or death of any persons (including,  without
limitation,  reasonable  attorney  fees)  occurring  until  same shall have been
delivered at the Delivery  Point,  after which delivery Buyer shall be deemed to
be in exclusive control and possession  thereof and shall be responsible for any
cost,  loss,  liability,  damage  and/or  injury  to or  death  of  any  persons
(including,  without  limitation,  reasonable  attorney's  fees) caused thereby,

                                       13

<PAGE>

except for unknown or unknowable defects in the Natural Gas which cause in whole
or in part damage, injury, or loss.

SELLER SHALL INDEMNIFY,  DEFEND,  AND HOLD HARMLESS BUYER,  ITS SUCCESSORS,  AND
ASSIGNS  AS  WELL AS ITS  OFFICERS,  EMPLOYEES,  AND  AGENTS  (COLLECTIVELY  THE
"INDEMNITIES") FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES,  DAMAGES,  CAUSES OF
ACTION, FINES, PENALTIES,  SUITS, LIABILITIES,  AND JUDGEMENTS OF EVERY KIND AND
CHARACTER,  INCLUDING ALL EXPENSES OF  LITIGATION,  COURT COSTS,  AND REASONABLE
ATTORNEY'S FEES, FOR ANY INJURY TO OR DEATH OF ANY PERSON, AND FOR ANY DAMAGE TO
ANY PROPERTY,  WHICH  RESULTS FROM OR IN CONNECTION  WITH THE NATURAL GAS BEFORE
ITS RECEIPT AT THE  DELIVERY  POINT  REGARDLESS  OF WHETHER  ANY SUCH  INJURIES,
DEATH,  OR DAMAGES ARE CAUSED OR ALLEGEDLY  CAUSED BY THE JOINT,  CONCURRING  OR
SOLE NEGLIGENCE, OR STRICT LIABILITY OF (i) BUYER AND SELLER, (ii) BUYER AND ANY
OTHER  PERSON OR ENTITY,  OR (iii) BUYER OR ANY OTHER ENTITY OR  COMBINATION  OF
ENTITIES.

BUYER SHALL INDEMNIFY,  DEFEND,  AND HOLD HARMLESS SELLER,  ITS SUCCESSORS,  AND
ASSIGNS  AS  WELL AS ITS  OFFICERS,  EMPLOYEES,  AND  AGENTS  (COLLECTIVELY  THE
"INDEMNITIES") FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES,  DAMAGES,  CAUSES OF
ACTION, FINES, PENALTIES,  SUITS, LIABILITIES,  AND JUDGEMENTS OF EVERY KIND AND
CHARACTER,  INCLUDING ALL EXPENSES OF  LITIGATION,  COURT COSTS,  AND REASONABLE
ATTORNEY'S FEES, FOR ANY INJURY TO OR DEATH OF ANY PERSON, AND FOR ANY DAMAGE TO
ANY PROPERTY, WHICH RESULTS FROM OR IN CONNECTION WITH THE NATURAL GAS AFTER ITS
RECEIPT AT THE DELIVERY POINT,  REGARDLESS OF WHETHER ANY SUCH INJURIES,  DEATH,
OR DAMAGES  ARE CAUSED OR  ALLEGEDLY  CAUSED BY THE  JOINT,  CONCURRING  OR SOLE
NEGLIGENCE,  OR STRICT  LIABILITY  OF (i) SELLER AND BUYER,  (ii) SELLER AND ANY
OTHER PERSON OR ENTITY,  OR (iii) SELLER OR ANY OTHER ENTITY OR  COMBINATION  OF
ENTITIES.

         7.3 Unless  either Party is limited to a different  sole and  exclusive
remedy  by the other  provisions  of this  Agreement,  either  Party's  sole and
exclusive remedy for any breach by the other Party of any obligation,  covenant,
representation,  or  warranty  is only the  recovery  of actual  damages for any
direct  economic  losses  to  the  extent   recoverable  under  applicable  law.
Notwithstanding  any  other  provision  to the  contrary  or the  invalidity  or
unenforceability  of any sole and  exclusive  remedy or other  provision of this
Agreement,  neither Party is entitled to recover (in contract,  tort, equity, or
otherwise) any  incidental,  special,  punitive or  consequential  damages which
arise out of or relate to this Agreement or in connection  with the  performance
or breach thereof, and any right to recover any of said damages is hereby waived
and released.

                                       14

<PAGE>

                                 ARTICLE A-VIII
                                 FORCE MAJEURE
                                 -------------

         8.1 In the event either Party is rendered unable, wholly or in part, by
Force Majeure to carry out its obligations under this Agreement,  except for the
obligations  to make  payments  hereunder,  it is agreed  that,  on such Party's
giving notice and reasonably full  particulars of such Force Majeure,  orally as
soon as practical and followed in writing or by electronic transmission,  to the
other Party within a reasonable  time after the  occurrence of the Force Majeure
relied on, the  obligations of the Party giving such notice,  so far as they are
affected by such Force Majeure, shall be suspended during the continuance of any
inability so caused,  but for no longer period, and such Force Majeure shall, so
far as  possible,  be remedied  with all  reasonable  dispatch.  The term "Force
Majeure"  shall mean,  for  purposes of this  Agreement,  acts of God,  strikes,
lockouts,  or industrial disputes,  interruptions by government or court orders,
present and future  valid  orders of any  governmental  authority,  inability to
secure or delay in securing easements, rights-of-way, materials (including those
occasioned  by reason of  allocations  promulgated  by  authorized  governmental
agencies),  washouts,  explosions,  breakage,  accident, repairs, alterations or
freezing of pipelines,  or other  equipment,  the termination or interruption by
others of Natural Gas  supplies or any other  cause,  whether of the kind herein
enumerated or otherwise, which is not reasonably within the control of the party
claiming  Force  Majeure.  The  foregoing  enumerated  and other causes of Force
Majeure shall constitute  "Force Majeure"  regardless of whether or not they are
foreseeable.  The Force Majeure shall, so far as possible,  be remedied with all
reasonable  dispatch.  The  settlement  of strikes  or  lockouts  or  industrial
disputes or  disturbances  shall be entirely  within the discretion of the party
having the difficulty, and the above requirement that any Force Majeure shall be
remedied  with all  reasonable  dispatch  shall not  require the  settlement  of
strikes, lockouts, or industrial disputes or disturbances,  or the settlement or
negotiation by Seller of purchase or  transportation  contracts,  by acceding to
the demands of any opposing party therein when such course is inadvisable in the
discretion of the party having the difficulty. In no event shall any curtailment
of obligations hereunder due to these Force Majeure conditions exceed the extent
of the shortages caused by the Force Majeure condition.

                                  ARTICLE A-IX
               GOVERNMENTAL RULES, REGULATIONS AND AUTHORIZATIONS
               --------------------------------------------------

         9.1 This Agreement is subject to all valid applicable State, Local, and
Federal laws,  orders,  directives,  rules and  regulations of any  governmental
authority having jurisdiction. Each party has the right to question the validity
and applicability of any such laws,  orders,  directives,  rules and regulations
and the  jurisdiction of any  governmental  authority.  Neither Buyer nor Seller
shall  institute any proceeding  before any  governmental  authority  seeking to
obtain  sales or service  from Seller  except as  expressly  provided  under the
provisions of this  Agreement.  If the sums due Seller under this  Agreement are
now or become subject to rate regulation by any

                                       15
<PAGE>

governmental  authority, it is stipulated and agreed (i) that any price, rate or
fee that Seller is or hereafter  becomes  entitled to collect in accordance with
this Agreement, is just and reasonable,  fair and equitable and not preferential
or  discriminatory,  and  (ii)  that no  price,  rate or fee that  Seller  is or
hereafter  becomes entitled to collect in accordance with this Agreement,  shall
constitute an increase or change in rates.

         9.2 If at any time while this Agreement is in effect,  any governmental
authority  takes  any  action  as to  either  party  ("Affected  Party")  or any
transporter  of the Affected  Party  whereby the sale or purchase of Natural Gas
under this Agreement,  or transportation or other handling  (including,  without
limitation,  compression  or  treating),  of the  Natural  Gas sold  under  this
Agreement  is  proscribed  or  subjected  to  terms,  conditions,   regulations,
restraints, taxes, price or rate controls that are, in the Affected Party's good
faith opinion,  unduly  burdensome to the Affected Party, the Affected Party may
thereafter  terminate  this  Agreement by giving at least ninety (90) Days prior
written notice to the other party, provided the Affected Party terminates all of
the  Affected  Party's  other  contracts,  which are  similarly  affected by the
government  action,  to the extent the Affected Party has the right to terminate
such other contracts under a clause that is similar to this clause.

         9.3 Buyer shall, upon Seller's request,  consent to the granting of any
governmental  approval  that may be required,  in order for Seller a) to abandon
any and all  facilities and services  arising out of or in connection  with this
Agreement, if this Agreement is terminated in accordance with its provisions, or
b) to charge and collect any price, rate, charge, or fee that Seller is entitled
to receive under this Agreement.

         9.4 Seller  warrants  that it complies  with  governmental  acquisition
rules, natural gas exploration and transport rules, and Public Service Authority
rules and Buyer is  entitled  to rely fully on  Seller's  compliance  with these
rules.

                                   ARTICLE A-X
                                   ASSIGNMENT
                                   ----------

         10.1 The provisions of this Agreement are binding upon and inure to the
benefit of the successors,  assigns,  and legal  representatives  of the parties
hereto.  Subject to the other provisions of this Section, this Agreement may not
be assigned, in whole or in part, without the prior written consent of the other
party, which consent can not be unreasonably withheld.

                                  ARTICLE A-XI
                           OTHER TERMS AND CONDITIONS
                           --------------------------

         11.1 WAIVER.  No waiver,  by either Seller or Buyer,  of any default of
the other  under  this  Agreement  operates  as a waiver  of any other  default,
whether of like or different character or nature.

                                       16

<PAGE>

         11.2 HEADINGS. The headings used throughout this Agreement are inserted
for reference  purposes  only, and are not to be construed or taken into account
in  interpreting  the provisions of any Article,  nor to be deemed in any way to
supplement, modify or explain the effects of any provision.

         11.3 MODIFICATION.  No amendment, release, waiver or other modification
of this  Agreement  is  effective  unless made in writing  and  executed by duly
authorized representatives of both parties.

         11.4 INTEGRATION.  This Agreement is the final, complete, and exclusive
statement of the agreement between the parties.

         11.5 NO THIRD PARTY BENEFICIARIES.  Nothing contained in this Agreement
shall confer any rights,  as a third party  beneficiary  or otherwise,  upon any
entity other than Buyer, Seller and their successors and assigns.

         11.6 SEVERABILITY.  The invalidity or unenforceability of any provision
of this  Agreement  does not  invalidate  or affect  the  enforceability  of any
provision of this Agreement.

         11.7 PREPARATION.  This Agreement was prepared by all parties to it and
not by any party to the exclusion of the other parties. Neither Seller nor Buyer
had an unfair advantage during the negotiation of this Agreement.

         11.8   APPLICABLE   LAW.  AS  TO  ALL  MATTERS  OF   CONSTRUCTION   AND
INTERPRETATION,  THIS  AGREEMENT  AND THE RIGHTS  AND  DUTIES OF THE  PARTIES IS
GOVERNED BY THE LAWS OF THE STATE OF TENNESSEE.  VENUE AND SOLE JURISDICTION FOR
ANY LITIGATION UNDER THIS AGREEMENT SHALL BE IN SULLIVAN COUNTY, TENNESSEE.

         11.9  CONFIDENTIALITY.  Neither party shall  disclose the provisions of
this Agreement to any person except to the extent  disclosure is required by any
governmental  authority,  financing  entity,  or  reasonably  necessary  for the
performance and enforcement of this Agreement  without the prior written consent
of the other  party.  Seller  agrees to have its  employees  execute  individual
secrecy  agreements  that,  at a  minimum,  include  the  terms  found  in  this
Agreement.

         11.10   RELATIONSHIP  OF  PARTIES.   Neither  this  Agreement  nor  the
performance  of this Agreement  creates,  expressly,  impliedly or otherwise,  a
fiduciary  relationship  or any other  special  relationship  between  Buyer and
Seller.  All the duties owed by one party to the other in  connection  with this
Agreement are solely contractual in nature and these duties do not arise in tort
or sound in tort.

                                       17<PAGE>

                                                                     Exhibit 4.4

                                     THIRD
                  LOAN MODIFICATION AND FORBEARANCE AGREEMENT

         THIS THIRD LOAN MODIFICATION AND FORBEARANCE AGREEMENT, effective as of
this 15/th/ day of January, 2001 (the "Agreement"), is by and among CMI
CORPORATION, an Oklahoma corporation ("Borrower"), MACHINERY INVESTMENT
CORPORATION, an Oklahoma corporation ("Machinery"), CMI LIMITED PARTNERSHIP, an
Oklahoma limited partnership ("CMILP"), CMI CEDAR FALLS, INC., an Iowa
corporation ("Cedar"), CMI JOHNSON CORPORATION, an Illinois corporation
("Johnson"), BROWNWOOD ROSS COMPANY, a Texas corporation ("Brownwood"), R M
BARTON CO., INC., an Oklahoma corporation ("Barton"), CMI INTERNATIONAL (U.K.),
LTD., a corporation organized pursuant to the laws of the United Kingdom
("International") (each individually a collateral grantor and/or a guarantor and
hereinafter referred to as "grantor" and/or "guarantor"), CMI SALES CO., L.L.C.,
an Oklahoma limited liability company (another "guarantor") and BANK OF
OKLAHOMA, N.A., a national banking association ("BOK"), and each of the
financial institutions which is a party hereto (hereinafter collectively
referred to as "Banks", and individually, "Bank") and BOK as "Agent".

                                   RECITALS
                                   --------

         A.  By a Restated Credit Agreement dated effective February 3, 2000 as
amended by that certain First Amendment to Restated Credit Agreement dated June
15, 2000 (the "Credit Agreement"), the Banks established a revolving line of
credit in an amount not to exceed One Hundred Million Dollars ($100,000,000.00)
as evidenced by revolving promissory notes in the aggregate principal amount of
$100,000,000.00 (the "Notes").

         B.  Pursuant to the Credit Agreement and that certain Intercreditor
Agreement dated June 15, 2000 by and between Bank, Borrower and Principal Life
Insurance Company ("Principal"), Borrower and certain of its affiliated entities
granted the Banks and Principal a security interest in its accounts receivable,
inventory, machinery, and equipment, and mortgaged to the Banks and Principal
its real estate located in the states of Oklahoma, Texas and South Dakota (the
"Intercreditor Agreement").

         C.  The obligations of Borrower pursuant to the Credit Agreement are
also secured by certain Guaranty Agreements executed contemporaneously with the
Credit Agreement by certain Guarantors.

         D.  Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Credit Agreement.

         E.  The Notes and all obligations set forth in the Agreement are
secured by the collateral described in the Agreement and Recital "B" above.

                                       1
<PAGE>

         F.   Borrower has failed to comply with certain of its obligations set
forth in the Credit Agreement including, but not limited to, certain financial
covenants, and as a result, is in default under the terms of the Agreement.

         G.   By a Loan Modification and Forbearance Agreement dated as of
September 26, 2000, the Banks agreed to forbear from the exercise of their
rights and remedies under the Agreement until November 15, 2000 ("the Original
Forbearance Agreement").

         H.   By a Second Loan Modification and Forbearance Agreement dated as
of November 15, 2000, the Banks agreed to forbear from the exercise of their
rights and remedies under the Agreement until January 15, 2001 (the "Second
Forbearance Agreement" and the Original Forbearance Agreement together with the
Second Forbearance Agreement shall be referred to herein as the "Former
Forbearance Agreements").

         I.   The parties have agreed to enter into this Agreement to forbear
for an additional period or periods for the purpose of enabling Borrower to
refinance its obligations to the Banks with another lender or to otherwise
obtain funds to satisfy such obligations in full.

         NOW THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                   SECTION 1
                                  DEFINITIONS
                                  -----------

         1.1  Except as otherwise set forth herein, all terms capitalized but
not otherwise defined shall be defined as set forth in the Credit Agreement.

         1.2  Additional Defined Terms. As used in this Agreement, each of the
              ------------------------
following terms shall have the meaning assigned thereto in this Section, unless
the context otherwise requires:

              "Available Commitment" shall mean that amount available to
               --------------------
         Borrower at any point in time equal to the difference between the
         Revolving Commitment and the Revolving Balance.

              "Base Revolving Notes" shall mean those revolving promissory notes
               --------------------
         from Borrower in favor of each Bank in the combined principal amount of
         $32,448,601.20 together with and any and all replacements,
         modifications and renewals thereof, which such notes shall be in
         substantially the form of Exhibit A attached hereto.

              "Borrowing Base" shall mean, at any time, the amount as derived by
               --------------
         the formula (a + b + c + d + e + f) as detailed below:

                                       2
<PAGE>

               a)  57.5701% (or 71.9626% multiplied by 80%) of Eligible Accounts
                   Receivable which are those accounts receivable resulting from
                   a bona fide outright sale of goods by the Borrower (for the
                   purposes of this definition, the term "Borrower" shall also
                   refer to Borrower's Affiliates) or from the fully completed
                   performance of services by the Borrower which have been
                   invoiced by Borrower and are due from an account debtor. The
                   term "Eligible Accounts Receivable" specifically does not
                   include the following ineligible accounts:

               .   an account receivable on regular terms which is due and
                   payable within 30 days of the date of invoice and is greater
                   than 60 days past due (the "Accounts *60 days past due")

               .   an account receivable on extended terms which is due and
                   payable from 31 days past the date of invoice but no more
                   than 120 days past the date of invoice and is greater than 10
                   days past due (the "Extended terms *10 days past due")

               .   all of the accounts receivable of a single account debtor if
                   more than 20% of the total accounts receivable due are 60
                   days past due for accounts receivable on regular terms or 30
                   days past due for accounts receivable on extended terms due
                   (the "20% past due rule")

               .   accounts receivable owing by a account debtor that alone or
                   with its affiliates, constitute in excess of 15% of the total
                   accounts receivable of the Borrower; provided, however, only
                   the amount of such receivables over 15% will be excluded as
                   ineligible (the "15% concentration rule")

               .   an account receivable due from an account debtor which is a
                   subsidiary of, related to or affiliated with the Borrower; or
                   where the account debtor and the Borrower have common
                   shareholders, officers, or directors; or where the account
                   debtor is an officer, employee, director or agent of the
                   Borrower (the "Affiliated accounts")

               .   the portion of the account receivable which is subject to,
                   could be subject to, or the Borrower has received notice of,
                   a claim, set-off, allowance or adjustment by the account
                   debtor, including, but not limited to, as ineligible, the
                   portion of the account receivable equal to the amount owed to
                   an account debtor which or who is also a creditor of the
                   Borrower (the "Contra accounts")

* Denotes greater than

                                       3
<PAGE>

               .   the aggregate amount of accounts receivable due from account
                   debtors located outside of the United States which exceed
                   $500,000 but not including for purposes of determining that
                   $500,000 threshold amount those accounts receivable resulting
                   from goods shipped or services provided after receipt by
                   Borrower from the account debtor of an irrevocable letter of
                   credit that (i) has been issued or confirmed by a financial
                   institution acceptable to Agent, (ii) is in form and
                   substance acceptable to Agent, and (iii) is payable in the
                   full face amount of the face value of the account receivable
                   in United States Dollars at a place of payment located within
                   the United States (the "Foreign accounts *$500,000 with no
                   L/C")

               .   accounts receivable due to foreign subsidiaries of Borrower
                   (the "Foreign subsidiaries' accounts receivable")

               .   an account receivable wherein the account debtor is the
                   United States or any department agency, instrumentality of
                   the United States, or any state, county, city, town,
                   municipality, or division thereof (the "Government accounts
                   receivable")

               .   an account receivable due from an account debtor which has
                   filed (or had filed against it), any petition or other
                   application for relief under federal or state bankruptcy or
                   insolvency laws (the "Bankruptcy / insolvency accounts")

               .   an account receivable due from an account debtor which has
                   placed the order for the good or service from which the
                   account receivable arose on a cash-on-delivery basis (the "C-
                   O-D accounts")

               .   an account receivable resulting from a progress billing for
                   goods not completed or services not fully performed (the
                   "Progress billings")

               .   an account receivable resulting from goods not shipped and
                   where title has not passed (the "Bill and holds where title
                   has not passed")

               .   an account receivable which Agent has determined is
                   unsatisfactory (any such determination must be reasonably
                   made) (hereinafter referred to as (the "Other ineligible
                   accounts receivable")

               .   additionally, there shall be deducted from Eligible Accounts
                   Receivable any credit balances in the Borrower's accounts
                   receivable aging which are 60 days past due date for accounts
                   on regular terms (the "Credit balances *60 days past due
                   date")

* Denotes greater than

                                       4
<PAGE>

               .   additionally, there shall be deducted from Eligible Accounts
                   Receivable any credit balances in the Borrower's accounts
                   receivable aging which are 10 days past due date for accounts
                   on extended terms (the "Credit balances *10 days past due
                   date")

               .   additionally, there shall be deducted from Eligible Accounts
                   Receivable any unapplied cash collections on accounts
                   receivable (the" Unapplied cash collections")

               .   additionally, there shall be deducted from Eligible Accounts
                   Receivable any deposits (the "Deposits") on those specific
                   Accounts Receivable.

               .   additionally, there shall be deducted from Eligible Accounts
                   Receivable any reconciling items among the Borrower's general
                   ledger, accounts receivable aging and financial statement
                   (the "Reconciling accounts receivable items")

               b)  57.5701% (or 71.9626% multiplied by 80%) of Eligible
                   Installment Contracts. Eligible Installment Contracts shall
                   be those installment contracts resulting from a bona fide
                   outright sale of goods by the Borrower or from the fully
                   completed performance of services by the Borrower which have
                   been invoiced by Borrower and temporarily financed by
                   Borrower and are due from an installment debtor on terms
                   which require monthly installment payments. The term Eligible
                   Installment Contracts specifically does not include the
                   following ineligible contracts:

               .   installment contracts which are two or more payments past due
                   (the "Installment contracts 2 payments past due")

               .   installment contracts not endorsed and held by Agent (the
                   "Installment contracts not endorsed and held by Agent")

               .   any installment contract which Agent has determined is
                   unsatisfactory (any such determination must be reasonably
                   made) (the "Other ineligible installment contracts ")

               .   additionally, there shall be deducted from Eligible
                   Installment Contracts any deferred or unearned items (the
                   "Deferred or unearned items ")

               .   additionally, there shall be deducted from Eligible
                   Installment Contracts

* Denotes greater than

                                       5
<PAGE>

                   any reconciling items among the Borrower's general ledger,
                   installment contracts aging and financial statement (the "
                   reconciling installment contract items")

               c)  57.5701% (or 71.9626% multiplied by 80%) of Eligible Finished
                   Goods Inventory. The term "Eligible Finished Goods" shall
                   include all finished goods inventory but shall specifically
                   not include the following ineligible finished goods:

               .   there shall be deducted from Eligible Finished Goods
                   Inventory such reserves as reflected in the Borrower's most
                   recent financial statement (the "Reserves - finished goods")

               .   there shall be deducted from the Eligible Finished Goods
                   Inventory such used inventory reserves as reflected in the
                   Borrower's most recent financial statement (the "Used
                   inventory reserves")

               .   there shall be deducted from the Eligible Finished Goods
                   Inventory such rental inventory reserves as reflected in the
                   Borrower's most recent financial statement (the "Rental
                   inventory reserves")

               .   consigned finished goods inventory and demonstrators not
                   located on Borrower's owned or leased real estate which are
                   not subject to a perfected security interest in favor of
                   Agent (the "Consigned / demos not subject to perfected
                   security interest")

               .   a CMI Model 80/120 Type "C" Thermal Soil Remediation System
                   formerly leased to Laguna Construction Company, Inc. so long
                   as The CIT Group / Equipment Financing, Inc. holds a security
                   interest in this inventory (the "Laguna plant")

               .   such other illegible finished goods inventory as listed in
                   "Other Inventory Ineligibles" below

               d)  35.9813% (or 71.9626% multiplied by 50%) of Eligible
                   Fabricated Parts Inventory. The term "Eligible Fabricated
                   Parts Inventory" shall include all fabricated parts inventory
                   but shall specifically not include the following ineligible
                   fabricated parts inventory:

               .   there shall be deducted from Eligible Fabricated Parts
                   Inventory such reserves as reflected in the Borrower's most
                   recent financial statement (the "Reserves -fabricated parts")

                                       6
<PAGE>

          .    any fabricated part which is not a service part or a finished
               component (the "fabricated parts not service parts or finished
               components")

          .    such other illegible fabricated parts inventory as listed in
               "Other Inventory Ineligibles" below

          e)   35.9813% (or 71.9626% multiplied by 50%) of Eligible Work In
               Process Inventory. The term "Eligible Work in Process Inventory"
               shall include all work in process inventory but shall
               specifically not include the following ineligible work in process
               inventory:

          .    there shall be deducted from Eligible Work In Process Inventory
               such reserves as reflected in the Borrower's most recent
               financial statement (the "Reserves - WIP")

          .    work in process inventory more than four weeks from completion
               (the "WIP over 4 weeks from completion")

          .    such other illegible work in process inventory as listed in
               "Other Inventory Ineligibles" below

          f)   35.9813% (or 71.9626% multiplied by 50%) of Eligible Raw
               Materials Inventory. The term "Eligible Raw Materials" shall
               include raw materials inventory but shall specifically not
               include the following ineligible raw materials inventory:

          .    there shall be deducted from Eligible Raw Materials Inventory
               such reserves as reflected in the Borrower's most recent
               financial statement (the "Reserves - raw materials")

          .    such other illegible work in process inventory as listed in
               "Other Inventory Ineligibles" below

          Other Inventory Ineligibles:

          .    there shall be deducted as ineligible from the appropriate
               inventory component such inventory that is not located on
               Borrower's owned or leased real estate and which is not subject
               to a perfected security interest in favor of Agent (the "Off-site
               inventory not subject to perfected security interest"

          .    there shall be deducted as ineligible from the appropriate
               inventory component all packaging and supplies (the "Packaging /
               supplies")

                                       7
<PAGE>

          .    there shall be deducted as ineligible from the appropriate
               inventory component all new inventory older than two years and
               all used inventory held by Borrower for more than two years (the
               "Slow-moving greater than two years")

          .    there shall be deducted as ineligible from the appropriate
               inventory component any reconciling items among the Borrower's
               general ledger, perpetual inventory count and physical inventory
               counts (the "Reconciling inventory items")

          .    any inventory owned by a foreign subsidiary of Borrower (the
               "Foreign subsidiary inventory")

          .    any inventory which Agent has determined is unsatisfactory (any
               such determination must be reasonably made) (hereinafter referred
               to as (the "Other ineligible inventory")

          "Event(s) of Default" shall be defined as set forth in Section 7
           -------------------
     below.

          "Face Commitment" shall mean the maximum amount of credit extended to
           ---------------
     Borrower pursuant to the Forbearance Revolving Notes, which such amount
     shall reduce over time. The Face Commitment shall be (i) $49,448,601.20
     from the date hereof through March 31, 2001; (ii) $46,470,947.75 from April
     1, 2001 through April 30, 2001; (iii) $46,280,248.55 from May 1, 2001
     through May 31, 2001; (iv) $44,902,446.19 from June 1, 2001 through June
     30, 2001; (v) $44,312,767.36 from July 1, 2001 through July 31, 2001; (vi)
     $42,981,646.85 from August 1, 2001 through August 31, 2001; (vii)
     $42,259,185.97 from September 1, 2001 through September 30, 2001; (viii)
     42,259,185.97 from October 1, 2001 through October 31, 2001; (ix)
     $41,956,621.76 from November 1, 2001 through November 30, 2001; and (x)
     $41,525,457.19 from December 1, 2001 through January 31, 2002.

          "First Extended Forbearance Period" shall be defined as set forth in
           ---------------------------------
     Section 2.2 below.

          "Forbearance Notes" shall collectively refer to each of the
           -----------------
     Forbearance Revolving Notes, the Gap Notes, and the Term Notes and any and
     all replacements, modifications and renewals thereof.

          "Forbearance Period" shall collectively refer to the Initial
           ------------------
     Forbearance Period, the First Extended Forbearance Period, and all Future
     Forbearance Periods.

                                       8
<PAGE>

                  "Forbearance Revolving Notes" shall collectively refer to the
                   ---------------------------
         Base Revolving Notes and the Swingline Note together with any and all
         replacements, modifications and renewals thereof.

                  "Future Forbearance Dates" shall be defined as set forth in
                   ------------------------
         Section 2.3.1 below.

                  "Future Forbearance Period(s)" shall be defined as set forth
                   ----------------------------
         in Section 2.3 below.

                  "Gap Notes" shall collectively refer to each of the term
                   ---------
         promissory notes from Borrower in favor of each Bank in the combined
         principal amount of $9,200,935.00 together with and any and all
         replacements, modifications and renewals thereof, which such notes
         shall be in substantially the form of Exhibit B attached hereto.

                  "Initial Forbearance Fee" shall mean that certain fee in the
                   -----------------------
         aggregate amount of $1,000,000.00 payable to Agent for the ratable
         distribution to all Banks as partial consideration for each Bank's
         agreement to forbear as set forth herein.

                  "Initial Forbearance Period" shall be defined as set forth in
                   --------------------------
         Section 2.1 below.

                  "Revolving Balance" shall mean the principal amount
                   -----------------
         outstanding on all of the Forbearance Revolving Notes at any given
         point in time.

                  "Revolving Commitment" shall mean, for all Banks, (A) the
                   --------------------
         lesser of (i) the Face Commitment in effect at such time or (ii) the
         Borrowing Base in effect from time to time and (B) as to any Bank, its
         obligation to make Advances pursuant to Section 3.1 below in amounts
         not exceeding, in the aggregate, an amount equal to such Bank's
         Revolving Loan Commitment Percentage multiplied by the total Revolving
         Commitment as of any date.

                  "Swingline Note" shall mean that certain $17,000,000.00
                   --------------
         revolving promissory note from Borrower jointly in favor of the Banks
         together with and any and all replacements, modifications and renewals
         thereof, which such notes shall be in substantially the form of Exhibit
         C attached hereto.

                  "Term Notes" shall collectively refer to each of the term
                   ----------
         promissory notes from Borrower in favor of each Bank in the combined
         principal amount of $15,328,033.80 together with and any and all
         replacements, modifications and renewals thereof, which such notes
         shall be in substantially the form of Exhibit D attached hereto.

                                       9
<PAGE>

                                   SECTION 2
                                  FORBEARANCE
                                  -----------

         Subject to the terms, covenants and conditions contained herein, the
Banks agree to forbear from exercising certain of their rights under the Loan
Documents.

         2.1   The Initial Forbearance Period ("Initial Forbearance Period")
will run from January 15, 2001 through 5:00 p.m. CST on June 30, 2001.

         2.2   Subject to the terms of this Section 2.2, the Borrower shall have
the opportunity to extend the Initial Forbearance Period for an additional three
(3) months from June 30, 2001 to September 30, 2001 ("the First Extended
Forbearance Period") in order to facilitate a refinancing of Borrower's
obligations owed to the Banks. In order to receive the First Extended
Forbearance Period, Borrower shall have satisfied the following conditions:

                  2.2.1  On or before June 30, 2001, Borrower shall have
         provided Banks with evidence that Principal has agreed to forbear, to
         an extent substantially the same as provided in this Agreement, from
         the exercise of its remedies pursuant to its loan to Borrower, and that
         the last day of its forbearance shall not be prior to the last day of
         the Forbearance Period set forth herein.

                  2.2.2  All other terms of this Agreement shall remain in full
         force and effect, including note payments and interest rates, during
         the First Extended Forbearance Period.

                  2.2.3  The Banks shall have no obligation to extend the
         Initial Forbearance Period in the event and during the continuance of
         an event of default hereunder.

                  2.3    Subject to the terms of this Section 2.3, the Borrower
shall have further opportunities to extend the First Extended Forbearance Period
as set forth in Section 2.3.1 below in order to facilitate the refinancing of
Borrower's obligations to the Banks (collectively, the "Future Forbearance
Periods" and each individually, a "Future Forbearance Period"). In order to
receive the Future Forbearance Periods, Borrower shall have satisfied the
following conditions:

                  2.3.1  Borrower shall have remitted to Agent for distribution
         to all Banks an extension fee of $100,000.00 on or before September 30,
         2001 in order to obtain an extension from September 30, 2001 to October
         31, 2001; an extension fee of $200,000.00 on or before October 31, 2001
         in order to obtain an extension from October 31, 2001 to November 30,
         2001; an extension fee of $300,000.00 in order to obtain an extension
         from November 30, 2001 to December 31, 2001; an extension fee of
         $400,000.00 in order to obtain an extension from December 31, 2001 to
         January 31, 2002 (each of the forgoing dates represents a "Future
         Forbearance

                                       10
<PAGE>

         Date"). In no event shall the Forbearance Periods continue beyond
         January 31, 2002. In order to be entitled to each successive extension
         detailed in this Section 2.3.1, Borrower shall have satisfied each of
         the provisions of this Section 2.3.

                  2.3.2  On or before each of the Future Forbearance Dates,
         Borrower shall have provided Banks with evidence that Principal has
         agreed to forbear to an extent substantially the same as provided in
         this Agreement from the exercise of its remedies pursuant to its loan
         to Borrower, and that the last day of its forbearance shall not be
         prior to the last day of the Future Forbearance Period set forth above.

                  2.3.3  All other terms of this Agreement shall remain in full
         force and effect, including note payments and interest rates, during
         the Future Forbearance Periods.

                  2.3.4  The Banks shall have no obligation to extend the First
         Extended Forbearance Period or any of the Future Forbearance Periods in
         the event and during the continuance of an event of default hereunder.

        2.4       Subject to the terms hereof and during each of the Forbearance
Periods, the Banks agree to refrain from exercising the following rights granted
to them under the Loan Documents and applicable law: (i) immediately realize
upon or otherwise foreclose its security interests and mortgage liens in and on
the Collateral or any portion thereof; (ii) immediately demand, call upon or
otherwise enforce the Banks' rights against any Guarantor pursuant to the
Guaranty Agreement executed by each Guarantor, and (iii) take any other actions
to collect the indebtedness described therein.

         2.5      Except as may be amended herein, the parties hereby
acknowledge that all terms and conditions set forth in the Loan Documents and
Guaranty Agreements shall continue in full force and effect, and all mortgages,
security agreements, collateral documents and other instruments securing payment
of Borrower's indebtedness to the Banks under the Loan Documents shall continue
in full force and effect as security for payment of such obligations.

         2.6      Nothing contained in this Section 2 shall be construed as
imposing any affirmative obligations on the Agent or Banks to renew, extend, or
rearrange in any way the obligations of Borrower or Guarantors under the Loan
Documents, the Guaranty Agreements or this Agreement.

         2.7      Nothing contained in this Section 2 shall constitute any
course of dealing on the part of Agent or the Banks that has the effect of
changing or modifying any terms of the Loan Documents, the Guaranty Agreements
or this Agreement.

         2.8      With the exception of the Banks' forbearance from the
immediate exercise of their remedies under the Credit Agreement as such
forbearance is described herein, nothing contained in this Section 2 shall
constitute a waiver of any of the Bank's rights under the Loan Documents or this
Agreement.

                                       11
<PAGE>

                                   SECTION 3
                        OTHER AGREEMENTS AND AMENDMENTS
                        -------------------------------

     3.1  Notwithstanding anything contained in this Forbearance Agreement or,
more specifically, this Section 3 to the contrary, Borrower's obligations
arising from the Credit Agreement, Notes, and other Loan Documents have been
accelerated and are due and owing. This amount is currently $73,977,570. During
the Forbearance Periods, this obligation shall be restructured into (i) a
revolving facility; (ii) a term facility and (iii) a "Gap" facility as follows:

     3    AMOUNT AND TERMS OF FORBEARANCE FACILITY
          ----------------------------------------

          3.1  Revolving Line of Credit. On the terms and conditions hereinafter
               ------------------------
     set forth, each Bank agrees, severally, to make Advances to the Borrower
     from time to time during the Forbearance Periods in such amounts as the
     Borrower may request up to an amount not to exceed, in the aggregate
     principal amount outstanding at any time, the Revolving Commitment. The
     obligation of the Borrower pursuant to this Section 3.1 shall be evidenced
     by (i) this Agreement, (ii) the Base Revolving Notes and (iii) the Swing
     Line Note. Notwithstanding any other provision of this Agreement to the
     contrary, no Advance shall be required to be made hereunder if any Event of
     Default has occurred and is continuing or if any event or condition has
     occurred or failed to occur which with the passage of time or service of
     notice, or both, would constitute an Event of Default. Each Advance under
     the Revolving Commitment shall be in an amount sufficient to pay checks
     issued and presented for payment on the Borrower's accounts. Irrespective
     of the face amount of the Forbearance Revolving Notes, the Banks shall
     never have the obligation to Advance any amount or amounts in excess of the
     Available Commitment. Within the limit of each Bank's Revolving Commitment,
     the Borrowers may borrow, repay and reborrow under this Section 3.1 prior
     to the last day of the applicable Forbearance Period; provided, however,
     the sum of all Advances shall not exceed, at any one time outstanding, the
     Revolving Commitment.

               3.1.1     Procedures for Paying Down and Advancing. Paydowns
                         ----------------------------------------
          and advances shall be governed by Agent's "Loan Manager" product.
          During the Forbearance Periods, Borrower (for the purposes of this
          Section 3.1.1, the term "Borrower" shall include all grantors and
          Borrower's Affiliates) shall direct the collection of all its
          receivables which are collectable in the United States to lockbox
          deposit accounts at Agent which deposit accounts shall be used to
          facilitate the daily sweep of the collected funds portion of the
          collected receivables to apply against the outstanding principal
          balances on the Forbearance Revolving Notes, and Borrower shall
          continue to utilize the

                                       12
<PAGE>

          "Loan Manager" product to ensure the automated means of managing its
          cash position and line of credit.

               3.1.2     Notes Evidencing Forbearance Revolving Loans. The
                         --------------------------------------------
          revolving portion of Borrower's outstanding indebtedness shall be
          evidenced by the Base Revolving Notes and the Swingline Note in the
          aggregate face amount of $49,448,601.20. Notwithstanding the face
          amount of the Forbearance Revolving Notes, the actual principal amount
          due from the Borrower to Banks on account of the Forbearance Revolving
          Notes, as of any date of computation, shall be the sum of Advances
          then and theretofore made on account thereof, less all principal
          payments actually received by Banks in collected funds with respect
          thereto. Although the Forbearance Revolving Notes may be dated as of
          the Effective Date, interest in respect thereof shall be payable only
          for the period during which the loans evidenced thereby are
          outstanding and, although the stated amount of the Forbearance
          Revolving Notes may be higher, the Forbearance Revolving Notes shall
          be enforceable, with respect to Borrower's obligation to pay the
          principal amount thereof, only to the extent of the unpaid principal
          amount of the loans. Irrespective of the face amount of the
          Forbearance Revolving Notes, no Bank shall ever be obligated to
          advance on the Revolving Commitment any amount in excess of its
          Revolving Commitment then in effect.

               3.1.3     Payment of Interest. Interest on the Revolving Notes
                         -------------------
          shall be payable on the last day of each month during the Forbearance
          Periods.

               3.1.4     Payment of Principal. Collected funds shall be applied
                         --------------------
          against principal on a daily basis. The entire outstanding principal
          indebtedness evidenced by the Forbearance Revolving Notes shall be due
          and payable to the Agent for the ratable benefit of the Banks on the
          last day of the applicable Forbearance Period unless earlier due in
          whole or in part as a result of an acceleration of the amount due.

               3.1.5     Borrowing Base Determinations.
                         -----------------------------

               (a)       Borrowing Base. The lesser of the Borrowing Base or the
                         --------------
          Face Commitment then in effect shall represent the maximum amount of
          credit that the Banks are willing to loan against Borrower's (for the
          purposes of this Section 3.1.5(a), the term "Borrower" shall include
          all grantors and Borrower's Affiliates) Eligible Accounts Receivables,
          Eligible Installment Contracts; Eligible Finished Goods Inventory,
          Eligible Fabricated Parts Inventory; Eligible Work In Process
          Inventory, and Eligible Raw Materials Inventory. Until February __,
          2001, the Borrowing Base shall be ___________________________________
          and 00/100 Dollars

                                       13
<PAGE>

          ($_______________________). The Borrowing Base shall be recalculated
          by Banks on a weekly basis and in accordance with the procedures set
          forth in paragraph (b) below and such Borrowing Base could increase,
          decrease or remain the same accordingly; however, no increase shall
          exceed the Revolving Commitment.

               (b)  Calculation of Borrowing Base. Using the methodology and
                    -----------------------------
          calculations as specified in 1.2 Borrowing Base above, the Borrower
          shall prepare a weekly and a month-end Borrowing Base Certificate in
          substantially the form of form of Exhibit E attached hereto. Such
          weekly Borrowing Base Certificate shall be delivered to the Agent
          along with appropriate supporting documentation by Monday afternoon of
          each week and shall, subject to the limitations specified below,
          indicate an amount as the Borrowing Base to govern until the following
          Monday morning. The schedule may be adjusted to reflect Banks' and
          Borrower's holidays. The month-end Borrowing Base Certificate shall be
          delivered to the Agent along with appropriate supporting documentation
          within 15 days of the reported month-end. The Agent shall have the
          right to redetermine the amount of the Borrowing Base if it objects to
          the accuracy of said amount or compliance by the Borrower with the
          methodology for calculating said amount as described herein, such
          right to be reasonably exercised In making its redetermination, Agent
          may conduct, or give directions to a third party to conduct, field
          examinations, reviews, appraisals and inspections of Borrower's (the
          term "Borrower's" shall include all grantors and Borrower's
          Affiliates) books, records, collateral and other information as Agent
          deems necessary and Agent shall, without hindrance or delay, have full
          access to all Borrower's books, records and other information.
          Borrower agrees to pay Agent's customary fees and disbursements
          related to reasonable field examinations. The amount of the Borrowing
          Base indicated on the Borrowing Base Certificate shall be effective
          during the period as specified above unless such amount is
          redetermined by the Agent as described above and in that case the
          redetermined Borrowing Base amount shall be effective from the date of
          redetermination through the Monday morning of the following week.
          Agent will notify the Borrower in writing of the amount of any
          redetermined Borrowing Base.

               (c)  Automatic Prepayments. If the Revolving Loan Balance as of
                    ---------------------
          the date of the Borrowing Base Certificate exceeds the Borrowing Base
          (such excess amount being referred to in this paragraph 3.1.5 (c) as
          the "Overage Amount"), the Banks shall cease making advances to pay
          checks issued and presented for payment on the Borrower's accounts
          until sufficient amounts, in the aggregate, of the collected funds
          portion of the collected receivables equal to the Overage Amount have
          been swept and applied

                                       14
<PAGE>

          against the outstanding principal balances on the Forbearance
          Revolving Notes. If the Revolving Loan Balance as of the date of
          Agent's redetermination of the Borrowing Base exceeds the redetermined
          Borrowing Base, the Banks shall cease making advances to pay checks
          issued and presented for payment on the Borrower's accounts until
          sufficient amounts, in the aggregate, of the collected funds portion
          of the collected receivables equal to the Overage Amount have been
          swept and applied against the outstanding principal balances on the
          Forbearance Revolving Notes. If the Revolving Loan Balance exceeds the
          Face Commitment, (such excess amount being referred to in this
          paragraph 3.1.5 (c) as the "Excess Amount"), the Banks shall cease
          making advances to pay checks issued and presented for payment on the
          Borrower's accounts until sufficient amounts, in the aggregate, of the
          collected funds portion of the collected receivables equal to the
          Excess Amount have been swept and applied against the outstanding
          principal balances on the Forbearance Revolving Notes.

               3.2  Term Loan Facility. Another portion of the indebtedness
                    ------------------
evidenced by the Original Note in the amount of $15,328,033.80 shall begin to
amortize. This portion shall be evidenced by the Term Notes. Once Borrower
repays amounts on this Term Notes such amounts cannot be reborrowed.

                    3.2.1     Term Notes. The Term Notes will be in the form of
                              ----------
               an amortizing or term credit upon which the Banks shall have no
               obligation to make additional advances.

                    3.2.2     Repayment. On or before the last day of each month
                              ---------
               during the Forbearance Periods, Borrower shall make a monthly
               principal payment together with a payment of all accrued but
               unpaid interest pursuant to the schedule attached hereto to the
               Term Notes. All principal together with all accrued but unpaid
               interest shall be payable in full on the last day of the
               applicable Forbearance Period.

          3.3  Gap Loan Facility. The remaining portion of the indebtedness
               -----------------
evidenced by the Original Note shall also begin to amortize. This portion shall
be in the amount of $9,200,935.00 and shall be evidenced by the Gap Notes. Once
Borrower repays amounts on the Gap Notes such amounts cannot be reborrowed.

                    3.3.1     Gap Notes.  The Gap Notes will be in the form of
                              ---------
               an amortizing or term credit upon which the Bank shall have no
               obligation to make additional advances.

                    3.3.2     Repayment. On or before the last day of each month
                              ---------
               during the Forbearance Periods, Borrower shall make a monthly
               principal payment

                                       15
<PAGE>

          together with a payment of all accrued but unpaid interest pursuant to
          the schedule attached to the Gap Notes. All principal together with
          all accrued but unpaid interest shall be payable in full on the last
          day of the applicable Forbearance Period.

     3.4  The Interest Options set forth at Section 2.6 of the Credit Agreement,
Interest Rate Options, remain terminated. Accordingly, Borrower does not have
---------------------
the ability to have portions of the Loan accruing interest based upon LIBOR.
Further, the Loan Balance shall, unless and until the occurrence of an event of
default hereunder, accrue interest at the Base Rate plus two and one-half of one
                                                    ----
percent (2.5%) per annum. Upon the occurrence of an event of default pursuant to
the terms of this Agreement, the Loan Balance shall accrue interest at the Base
Rate plus eight and percent (8%) per annum such interest rate not to exceed the
     ----
highest interest rate permitted by law..

     3.3  In light of Borrower's default and the restructure of the due and
owing obligations as described above, Sections 2.1, 2.2, 2.3,
2.4(a),(b),(c),(d), and (e), 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, and 2.13 are
no longer applicable. Sections 2.4(f),(g), and (h) shall be governed by a
separate supplemental intercreditor agreement by and among the Banks. The
capital adequacy provisions set forth at Section 2.4(i) and 2.7(ii),(iii), (iv),
and (v) shall continue to be applicable and enforceable. Finally, the fees due
for letters of credit at Section 2.12, the cash collateral provisions of Section
2.14 and the interest provision of Section 2.15 shall also continue to
applicable and enforceable.

     3.4  Section 5.17 of the Credit Agreement, Agreement to Pledge Collateral,
                                                ------------------------------
is hereby revised and amended to reflect that the security interest and lien
held by the Banks against the Borrower's assets, real and personal, shall remain
in place until all of Borrower's obligations to Banks are paid in full. All
provisions to the contrary in such Section 5.17 of the Credit Agreement or in
any other provision of the Credit Agreement or any other Loan Document are
hereby deemed to be inoperative.

                                   SECTION 4
                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

     The Borrower and each Guarantor (as applicable) hereby represent and
warrant as follows:

     4.1  Borrower's execution and delivery of this Agreement and the
performance of its obligations hereunder and thereunder (i) are and will be
within its corporate powers; (ii) are duly authorized by Borrower's board of
directors; (iii) are not and will not be in contravention of any law, statute,
rule or regulation, the terms of Borrower's Certificate of Incorporation or its
Bylaws; (iv) do not require any consent or approval (including governmental)
which has not been given; and (v) will not result in the imposition of liens,
charges or encumbrances on any of Borrower's properties or assets, except those
in favor of Banks hereunder or under any of the Loan Documents.

                                       16
<PAGE>

     4.2  This Agreement when duly executed and delivered, will constitute the
legal, valid and binding obligations of Borrower and each Guarantor, enforceable
in accordance with their respective terms.

     4.3  All of Borrower's and Guarantors' other representations and warranties
set forth in the Loan Documents and the Guaranty Agreement are true and correct
on and as of the date hereof with the same effect as though made and repeated on
and as of the effective date of this Agreement.

                                       17
<PAGE>

     4.4  The Notes currently have an outstanding principal balance of
$73,977,570.

     4.5  Borrower and each Guarantor hereby acknowledge that Borrower is in
default of its obligations under the Loan Documents based on, among other
things, its failure to comply with Sections 6.1, 6.2, 6.3 and 6.5 of the Credit
Agreement for the first and second quarters of the term of the Credit Agreement
and pursuant to Section 8.1(e). Borrower and each Guarantor further acknowledge
that Borrower is in default for failure to remit all sums due and owing pursuant
to the original Forbearance Agreement and the Second Forbearance Agreement.

     4.6  Borrower and Guarantors hereby acknowledge and agree that: (i) the
Banks and Agent have fulfilled their obligations to Borrower and Guarantors
arising under the Loan Documents, the Guaranty Agreements and the Former
Forbearance Agreements through the date hereof; (ii) neither Borrower nor either
Guarantor has any claims or defenses with respect to their respective
obligations under the Loan Documents, the Guaranty Agreement or the Former
Forbearance Agreements or Banks' enforcement of their remedies under the Loan
Documents, the Guaranty Agreement or the Former Forbearance Agreements; (iii)
Borrower and Guarantors hereby expressly waive any and all defenses,
counterclaims, setoffs or other rights they might hold, individually or
collectively, which could result in a reduction of the indebtedness owing by
Borrower or Guarantors to the Banks (except for the payment thereof); and (iv)
Borrower and each Guarantor acknowledge and agree that the Banks have no
obligation to advance any additional funds to Borrower under the Agreement or
otherwise except as set forth in Section 6 hereof.

     4.7  The Loan Documents and the Guaranty Agreements are enforceable
pursuant to their terms, subject to the terms of this Agreement.

     4.8  All of Borrower's subsidiaries existing as of the date hereof are CMI
Cifali Equipamentos, Ltda., Metra Metaalwerken B.V.B.A. and those Subsidiaries
listed on Exhibit "F" to the Original Agreement.

                                   SECTION 5
                             COVENANTS OF BORROWER
                             ---------------------

     In addition to any and all covenants set forth in the Loan Documents and
the Guaranty Agreement, Borrower and each Guarantor, as applicable, hereby
covenant and agree to the following:

     5.1  Borrower shall make payments to the Banks as set forth herein and in
the Forbearance Notes.

     5.2  Borrower shall provide Agent, upon request, information concerning
Borrower's efforts to refinance any of Borrower's obligations under the Loan
Documents.

     5.3  Borrower will continue to provide to the Agent within thirty (30) days
of the end of each month a consolidated and consolidating Financial Statement.

                                       18
<PAGE>

     5.4  Borrower will provide to the Agent copies of any filing Borrower makes
          with the Securities Exchange Commission on the filing date.

     5.5  Borrower will provide to the Agent copies of any management letter
          from the Borrower's auditor as soon as such letter is available.

     5.6  Borrower will provide to the Agent such other information as the Agent
          may, from time to time, reasonably request.

     5.7  Contemporaneously with the closing of this Agreement, the Borrower
shall provide the Banks with evidence of its agreement with Principal wherein
Principal has agreed to forbear from exercising its remedies until a date on or
after the end of the Forbearance Periods set forth herein and Principal has
agreed to a schedule of principal reductions at a rate acceptable to Banks.

     5.8  Neither Borrower nor Guarantors shall enter into any sale, loan, lease
or exchange of property with an Affiliate which is not a Guarantor domiciled in
the United States.

                                   SECTION 6
                      CONDITIONS PRECEDENT TO FORBEARANCE
                      -----------------------------------

     The Banks shall have no obligation under Section 1 of this Agreement unless
and until all the following conditions precedent have been satisfied or waived
by the Banks:

     6.1  Borrower has consented and agreed to the terms and conditions of the
engagement of E&Y Capital Advisors LLC ("EYCA"), by Hall Estill Hardwick Gable
Golden & Nelson, PC, as counsel to Agent and Manion McDonough and Lucas, P. C.
as counsel to Principal to perform financial advisory services in connection
with their rendering legal advice with respect to the loan agreements between
Borrower and Banks and Borrower and Principal. Borrower shall pay for the cost
associated with the engagement of EYCA. It is contemplated that EYCA will
produce a report which may include recommendations for modifying and amending
the terms and conditions of this Agreement. Banks reserve the right to modify
this Agreement based upon the recommendations of EYCA and Borrower and
Guarantors hereby consent to any request by Banks to so modify this Agreement.

     6.2  Agent shall have received an original security agreement from
Machinery together with any and all financing statements necessary, in Banks'
discretion, to perfect a security interest under the Uniform Commercial Code in
all jurisdictions applicable, which such security agreement shall be in
substantially the form of Exhibit F attached hereto. In addition to such
security agreements and financing statements, Machinery shall have provided
uniform commercial code searches of all applicable jurisdictions revealing the
existence of no competing liens other than such liens as are acceptable to
Banks.

                                       19
<PAGE>

     6.3  Agent shall have received an original guaranty agreement from
Machinery, Cedar, Johnson, Brownwood , International and Barton which guaranty
agreement shall be in substantially the form of Exhibit G attached hereto.

     6.4  Agent shall have received an original mortgage from Cedar which
mortgage shall be in substantially the form of Exhibit H attached hereto.

     6.5  Agent shall have received originals of this Agreement executed by
Borrower and each Guarantor.

     6.6  Banks shall have received executed originals of each of the
Forbearance Notes other than the Swingline Note.

     6.7  Agent shall have received the executed original Swingline Note.

     6.8  Borrower and each Guarantor shall have taken all other actions
reasonably requested by Agent and the Banks to fulfill the purposes of this
Agreement including, but not limited to, the execution and delivery by Borrower
and Guarantors of any additional documents including, if deemed necessary by
Banks, replacement promissory notes, mortgages, security agreements and/or
financing statements.

     6.9  Borrower shall have paid Agent, for the benefit of all Banks, the
Initial Forbearance Fee.

     6.10 Resolutions, consents and/or other authorizations (the "Resolutions")
of Borrower approving the execution, delivery, and performance of this
Agreement, any documents or instruments required herein, and the transactions
contemplated herein, duly adopted by the board of directors, general partner,
and/or members of Borrower and each Guarantor, as the case may be, accompanied
by a certificate of Borrower's secretary and each Guarantor's general partner,
and/or members or manager, as the case may be, stating that the Resolutions are
true and correct, have not been altered or repealed and are in full force and
effect and shall have been received by Agent.

     6.11 Borrower's and each Guarantor's representations and warranties set
forth in Section 2 hereof shall be true and correct on and as of the date
hereof, except as modified herein.

     6.2  Borrower shall have satisfied all conditions set forth in the Loan
Documents, except as modified herein.

     6.13 As of the date hereof, no Event of Default (except for those defaults
set forth at Section 4.5 above) nor any event which, with the giving of notice
or lapse of time, would constitute an Event of Default hereunder shall have
occurred and be continuing.

                                       20
<PAGE>

                                   SECTION 7
                               EVENTS OF DEFAULT
                               -----------------

         The occurrence of any of the following shall constitute an Event of
Default under this Agreement (an "Event of Default"):

         7.1   Borrower fails to make any payment as and when due pursuant to
the terms of: (i) this Agreement, (ii) the Forbearance Notes, and (iii) the
Credit Agreement.

         7.2   Borrower or any Guarantor fails to perform any obligation imposed
upon it, them or any one of them under this Agreement.

         7.3   The occurrence of any default or Event of Default under the Loan
Documents, other than the payment default referenced in Section 7.1 above and
except to the extent this Agreement expressly recognizes and permits the
existence of such a default or Event of Default and such default is not cured or
remedied to the satisfaction of the Banks within five (5) days after notice of
such default is sent by Agent to Borrower and/or Guarantors. For the purpose
hereof, notice is deemed sent two (2) days after such notice is deposited with
the United States Postal Service. It is recognized and agreed that Borrower's
failure to comply with the financial covenants set forth in the Credit Agreement
as of will not create an Event of Default hereunder.

         7.4   The filing of a voluntary or involuntary petition for relief
under the United States Bankruptcy Code by or against Borrower.

         7.5   Principal shall have initiated efforts to exercise its remedies
pursuant to its loan to Borrower. In conjunction herewith, any demand by
Principal to Agent to initiate collection efforts pursuant to Section 4.1 of the
Intercreditor Agreement shall constitute the exercise of its remedies.

                                   SECTION 8
                                   REMEDIES
                                   --------

         Notwithstanding anything to the contrary contained in this Agreement,
upon the occurrence of an Event of Default as described in Section 7 hereof: (i)
all obligations of the Banks under this Agreement shall terminate without notice
to Borrower, Guarantors or any other person; and (ii) the Banks shall have the
right, at their sole discretion and without notice, to exercise any rights and
remedies which are provided under this Agreement, the Loan Documents, the
Guaranty Agreements or under applicable law without notice and without the
opportunity to cure.

                                   SECTION 9
                                 MISCELLANEOUS
                                 -------------

                                       21
<PAGE>

         9.1   All recitals are incorporated herein by reference, and are
binding upon Borrower and each Guarantor.

         9.2   Notwithstanding any contrary or inconsistent provision contained
in any of the provisions of any of the Loan Documents or the Guaranty
Agreements, the provisions of this Agreement will control. Except as expressly
amended, supplemented or modified by the terms hereof, the provisions of the
Loan Documents, the Guaranty Agreements and all other documents held by the
Agent or Banks will remain in full force and effect and are hereby ratified and
affirmed in all respects unless otherwise terminated.

         9.3   Borrower and each Guarantor waive any and all rights of set-off,
including any statutory right of set-off which may be applicable, that they may
have against the Banks or any other holder of the Loan Documents, whether such
liabilities owed to Borrower by the Banks or any other holder of the Loan
Documents are direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising.

         9.4   Borrower and each Guarantor acknowledge and agree that the Banks
may sell, transfer and/or assign any or all of the Loan Documents and Guaranty
Agreements at any time and to any third party; and upon written notice by the
Banks or any one of them and such third party, Borrower and/or each Guarantor
will render performance of their obligations under the Loan Documents and the
Guaranty Agreements to such third party.

         9.5   Borrower and each Guarantor acknowledge and agree that, pursuant
to the terms of the Loan Documents and the Guaranty Agreements, all of Agent's
and Banks' expenses incurred in connection with the preparation and negotiation
of this Agreement, and in enforcement of the Banks' rights under this Agreement,
the Loan Documents and the Guaranty Agreements, including Agent's and Banks'
reasonable attorneys' fees and expenses, constitute additional obligations owing
under the Loan Documents and the Guaranty Agreements and are secured in the same
manner as the obligations of Borrower and Guarantors thereunder.

         9.6   The relationship between the Banks and Borrower is that of a
lender and its borrower. Borrower, Guarantors and Banks agree and acknowledge
that Borrower and such Banks are not partners or joint venturers, and there is
no relationship or circumstances existing that would impose a fiduciary duty
upon the Banks or Agent with respect to Borrower or Guarantors.

         9.7   No third party beneficiary relationship is intended nor shall any
such relationship be created by the execution, delivery or performance of this
Agreement.

         9.8   This Agreement may be executed and delivered in two or more
counterparts each of which will constitute an original instrument, but all of
which taken together will constitute one agreement.

                                       22
<PAGE>

         9.9   In any event any one or more of the provisions in this Agreement,
the Loan Documents, the Guaranty Agreements, or in any other instrument or
document referred to herein or executed in connection with or as security for
the Agreement, shall, for any reason, be held to be invalid, illegal or
unenforceable, such provision(s) shall not affect any other provision of this
Agreement, the Loan Documents, or the Guaranty Agreements, or any other
instrument or document referred to herein or executed in connection therewith.
Furthermore, in lieu of such invalid, illegal or unenforceable provision, there
shall automatically be added a provision as similar in terms to such invalid,
illegal, or unenforceable provision as may be possible and as may be valid,
legal and enforceable.

         9.10  Borrower and Guarantors have had the opportunity to fully review
the form and content of this Agreement with counsel of their choice; understand
the nature of and quality of the releases, covenants and agreements made by
Borrower and Guarantors herein; acknowledge that the Banks are forbearing from
exercising their lawful rights under the Loan Documents and Guaranty Agreements
in consideration of the Borrower's and Guarantors' releases, covenants and
agreements herein, and enter into this Agreement freely and without duress, in
their respective best interests.

         9.11  This Agreement may be amended or extended only by a written
instrument executed by all the parties hereto. No waiver of any term or
provision hereof shall be effective unless reduced to writing and signed by the
party to be charged with such waiver. The Banks have no obligation to further
extend the forbearance period or make any similar concessions to Borrower and
Guarantors regarding performance of their obligations under the Loan Documents
and the Guaranty Agreements beyond what is otherwise set forth herein. Any
decision by the Banks to grant one or more such extensions or similar
concessions (i) shall be made by the Banks in their sole discretion, and (ii)
shall not create an express or implied obligation on the part of such Banks to
grant further extensions or concessions.

         9.12  Borrower, Guarantors and Banks have jointly negotiated and
prepared this Agreement. Accordingly, any rule of construction pursuant to which
an ambiguity herein would be construed against the drafter of this Agreement
shall not apply to this Agreement.

         9.13  This Agreement shall be construed in accordance with and governed
by the laws of the State of Oklahoma, and shall be binding on and inure to the
benefit of Borrower, Guarantors and Banks, their respective successors and
assigns. All obligations of Borrower and Guarantors and all rights of the Banks
under this Agreement, the Loan Documents, and the Guaranty Agreements, shall be
in addition to and not in limitation of those provided by applicable law.
Borrower and Guarantors irrevocably agree that, subject to Banks' sole election,
all suits or proceedings arising from or related to this Agreement, the Loan
Documents, or the Guaranty Agreements may be litigated in courts (whether State
or Federal) sitting in Oklahoma City, Oklahoma and Borrower and Guarantors
hereby irrevocably waive any objection to such jurisdiction and venue. Borrower
and Guarantors hereby waive their right to trial by jury in any legal action or
proceeding with respect to this Agreement, the Loan Documents, and the Guaranty
Agreements and the rights and obligations of the parties hereto.

                                       23
<PAGE>

         9.14  THIS AGREEMENT AND ALL INSTRUMENTS, AGREEMENTS AND DOCUMENTS
ATTACHED HERETO, REFERRED TO HEREIN OR EXECUTED IN CONNECTION HEREWITH,
INTEGRATE ALL THE TERMS AND CONDITIONS BETWEEN THE PARTIES AND CONSTITUTE THE
ENTIRE AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER THEREOF,
AND SUPERSEDE ALL PRIOR DISCUSSIONS, NEGOTIATIONS AND COMMUNICATIONS WHETHER
ORAL OR WRITTEN. NONE OF THE PARTIES HERETO SHALL BE BOUND BY ANY PROMISES,
REPRESENTATIONS, WARRANTIES OR AFFIRMATIONS NOT CONTAINED IN THIS AGREEMENT, IN
AN AGREEMENT, INSTRUMENT, OR DOCUMENT ATTACHED HERETO OR REFERRED TO HEREIN OR
EXECUTED IN CONNECTION HEREWITH.

         9.15  THE BORROWER, THE AGENT AND THE BANKS (BY THEIR ACCEPTANCE
HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE BORROWER, THE AGENT AND THE
BANKS, ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT, ANY OTHER RELATED
DOCUMENT, OR ANY RELATIONSHIP BETWEEN THE AGENT, THE BANKS AND THE BORROWER.
THIS PROVISION IS A MATERIAL INDUCEMENT TO THE AGENT AND THE BANK TO FORBEAR AS
DESCRIBED HEREIN.

         9.16  This Agreement may be executed in a number of identical separate
counterparts, each of which for all purposes is to be deemed an original, but
all of which shall constitute, collectively, one agreement. No party to this
Agreement shall be bound hereby until a counterpart of this Agreement has been
executed by all parties hereto.

         9.17  THE BORROWER (IN ITS OWN RIGHT AND ON BEHALF OF ITS RESPECTIVE
DIRECTOR, OFFICERS, EMPLOYEES. INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS)
AND GUARANTORS (IN THEIR OWN RIGHT AND ON BEHALF OF THEIR RESPECTIVE ATTORNEYS
AND AGENTS) (THE "RELEASING PARTIES") JOINTLY AND SEVERALLY RELEASE, ACQUIT, AND
FOREVER DISCHARGE EACH BANK AND ITS DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT
CONTRACTORS, ATTORNEYS AND AGENTS, AND ATTORNEYS (THE "RELEASED PARTIES"), TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, FROM ANY AND
ALL ACTS AND OMISSIONS OF THE RELEASED PARTIES, AND FROM ANY AND ALL CLAIMS ,
CAUSES OF ACTION, COUNTERCLAIMS, DEMANDS, CONTROVERSIES, COSTS, DEBTS, SUMS OF
MONEY, ACCOUNTS, RECKONINGS, BONDS, BILLS, DAMAGES, OBLIGATIONS, LIABILITIES,
OBJECTIONS, AND EXECUTIONS OF ANY NATURE , TYPE, OR DESCRIPTION WHICH THE
RELEASING PARTIES HAVE AGAINST THE RELEASED PARTIES, INCLUDING, BUT NOT LIMITED

                                       24
<PAGE>

TO, NEGLIGENCE, GROSS NEGLIGENCE, USURY, FRAUD, DECEIT, MISREPRESENTATION,
CONSPIRACY, UNCONSCIONABILITY, DURESS, ECONOMIC DURESS, DEFAMATION, CONTROL,
INTERFERENCE WITH CONTRACTUAL AND BUSINESS RELATIONSHIPS, CONFLICTS OF INTEREST,
MISUSE OF INSIDER INFORMATION, CONCEALMENT, DISCLOSURE, SECRECY, MISUSE OF
COLLATERAL, WRONGFUL RELEASE OF COLLATERAL, FAILURE TO INSPECT, ENVIRONMENTAL
DUE DILIGENCE, NEGLIGENT LOAN PROCESSING AND ADMINISTRATION, WRONGFUL SETOFF,
VIOLATIONS OF STATUTES AND REGULATIONS OF GOVERNMENTAL ENTITIES,
INSTRUMENTALITIES AND AGENCIES (BOTH CIVIL AND CRIMINAL), RACKETEERING
ACTIVITIES, SECURITIES AND ANTITRUST LAWS VIOLATIONS, TYING ARRANGEMENTS,
DECEPTIVE TRADE PRACTICES, BREACH OR ABUSE OF ANY ALLEGED FIDUCIARY DUTY, BREACH
OF ANY ALLEGED SPECIAL RELATIONSHIP, COURSE OF CONDUCT OR DEALING, ALLEGED
OBLIGATION OF FAIR DEALING, ALLEGED OBLIGATION OF GOOD FAITH, AND ALLEGED
OBLIGATION OF GOOD FAITH AND FAIR DEALING, WHETHER OR NOT IN CONNECTION WITH OR
RELATED TO THE LOAN DOCUMENTS AND THIS AGREEMENT, AT LAW OR IN EQUITY, IN
CONTRACT IN TORT, OR OTHERWISE, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED UP TO
AND INCLUDING THE DATE OF THIS AGREEMENT (THE "RELEASED CLAIMS"). THE RELEASING
PARTIES FURTHER AGREE TO LIMIT ANY DAMAGES THEY MAY SEEK IN CONNECTION WITH ANY
CLAIM OR CAUSE OF ACTION, IF ANY, TO EXCLUDE ALL PUNITIVE AND EXEMPLARY DAMAGES,
DAMAGES ATTRIBUTABLE TO LOST PROFITS OR OPPORTUNITY, DAMAGES ATTRIBUTABLE TO
MENTAL ANGUISH, AND DAMAGES ATTRIBUTABLE TO PAIN AND SUFFERING INSOFAR AS SAME
ARISE UP TO AND THROUGH THE DATE OF EXECUTION OF THIS AGREEMENT. THE RELEASING
PARTIES REPRESENT AND WARRANT THAT TO THEIR KNOWLEDGE NO FACTS EXIST WHICH COULD
PRESENTLY OR IN THE FUTURE COULD SUPPORT THE ASSERTION OF ANY OF THE RELEASED
CLAIMS AGAINST THE RELEASED PARTIES. THE RELEASING PARTIES FURTHER COVENANT NOT
TO SUE THE RELEASED PARTIES ON ACCOUNT OF ANY OF THE RELEASED CLAIMS, AND
EXPRESSLY WAIVE ANY AND ALL DEFENSES THEY MAY HAVE IN CONNECTION WITH THEIR
DEBTS AND OBLIGATIONS UNDER THE LOAN PAPERS AND THIS AGREEMENT WITH THE
EXCEPTION OF PAYMENT. THIS PARAGRAPH IS IN ADDITION TO AND SHALL NOT IN ANY WAY
LIMIT ANY OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY THE RELEASING PARTIES
IN FAVOR OF THE RELEASED PARTIES.

         This Agreement has been executed and delivered to be effective on the
date first above written.

            The remainder of this page is intentionally left blank.

                                       25
<PAGE>

         BORROWER:                           CMI CORPORATION

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Senior Vice President
                                                    and Chief Financial Officer

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

         GUARANTORS:                    CMI SALES CO., L.L.C., an
                                        Oklahoma limited liability company

                                        By:  CMI Corporation,
                                             an Oklahoma corporation
                                        Its: Manager

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Senior Vice President
                                                    and Chief Financial

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                        CMI Limited Partnership, an
                                        Oklahoma limited partnership

                                        By:  CMI Corporation,
                                             an Oklahoma corporation
                                        Its: General Partner

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Senior Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

GUARANTORS / GRANTORS:

                                        MACHINERY INVESTMENT CORPORATION

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                        CMI CEDAR FALLS, INC.

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                        CMI JOHNSON CORPORATION

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                        BROWNWOOD ROSS COMPANY

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                        R.M. BARTON CO., INC.

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                             CMI International (U.K.), Ltd.

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title:  Director

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

BANKS:                                  BANK OF OKLAHOMA, N.A.

                                        ________________________________________
                                        By: Paul D. Mesmer
                                        Title: Senior Vice President

                                        Notice Address:
                                        P.O. Box 2300
                                        Tulsa, Oklahoma 74192
                                        Fax: 918/588-8251
<PAGE>

                                        BANK OF AMERICA, N.A.

                                        ________________________________________
                                        By: Cathy Barlow
                                        Title: Senior Vice President

                                        Notice Address:

                                        TX14921105
                                        901 Main Street
                                        Dallas, TX
                                        Fax: 214/209-2577

                                        ABA Routing Number: 111000025
<PAGE>

                                        COMERICA BANK - TEXAS

                                        ________________________________________
                                        By: Aamir Shah
                                        Title: Vice President

                                        Notice Address:
                                        MC
                                        910 Louisiana, Suite 300
                                        Houston, TX 77002
                                        Fax: 713/220-5552
                                        ABA Routing Number: 111000753
<PAGE>

                                        FIRSTAR BANK, N.A.

                                        ________________________________________
                                        By: Douglas S. Dunbar
                                        Title: Vice President

                                        Notice Address:
                                        7/th/ & Washington SL -TW-07CP
                                        St. Louis, Missouri 63101
                                        Fax: 314/418-2135
                                        ABA Routing Number: 81000210
<PAGE>

                                        UMB BANK, N.A

                                        ________________________________________
                                        By: Richard J. Lehrter
                                        Title:  Community Bank President

                                        Notice Address:
                                        P.O. Box 82427
                                        Oklahoma City, Oklahoma 73148-0427
                                        Fax: 405/236-1971
                                        ABA Routing Number: 101000695
<PAGE>

AGENT:                                  BANK OF OKLAHOMA, N.A.

                                        ________________________________________
                                        By: Paul D. Mesmer
                                        Title: Senior Vice President

                                        Notice Address:
                                        P.O. Box 2300
                                        Tulsa, Oklahoma 74192
                                        Fax: 918/588-8251
<PAGE>

                                   Exhibit A

                                REVOLVING NOTE

$______________.00                                       Oklahoma City, Oklahoma
                                                      Effective January 15, 2001

         FOR VALUE RECEIVED, the undersigned CMI CORPORATION, an Oklahoma
corporation (hereinafter referred to as the "Borrower") hereby unconditionally,
jointly and severally, promises to pay to the order of BANK OF OKLAHOMA, N.A.
(the "Bank") at the offices of BANK OF OKLAHOMA, N.A. (the "Agent") in Oklahoma
City, Oklahoma, the principal sum of ____________________AND NO/100 DOLLARS
($__________.00) or so much thereof as shall be advanced under the provisions of
the Third Loan Modification and Forbearance Agreement dated as of the date
hereof by and among the undersigned, each affiliate of the undersigned executing
the agreement as a party thereto, the Bank, UMB Bank, N.A., formerly known as
UMB Oklahoma Bank, Comerica Bank --Texas, Bank of America, N.A., and Firstar
Bank, N.A., formerly known as Firstar Bank Missouri, N.A. (the "Forbearance
Agreement"), in lawful money of the United States of America together with
interest from the date hereof until paid at the rates specified in the
Forbearance Agreement. All payments of principal and interest due hereunder are
payable at the offices of Agent at 201 Robert S. Kerr Avenue, Oklahoma City,
Oklahoma 73102, or at such other address as Bank shall designate in writing to
Borrowers.

         The principal amount of this Note, or so much thereof as shall be
disbursed thereunder and be unpaid and outstanding shall bear interest at the
per annum rate of rates of interest set forth in the Forbearance Agreement. The
rate of interest shall be calculated on the basis of the actual number of days
elapsed, but computed as if each calendar year consisted of a 360-day year.

         Beginning January 31, 2001 and continuing on the last day of each month
thereafter through the expiration and/or termination of the Forbearance
Agreement, Borrower shall make a payment of all accrued interest on this Note .
Any and all payments of principal shall be due and payable in full as set forth
in the Forbearance Agreement.

         This Note is executed pursuant to the Forbearance Agreement, and is one
of the "Base Revolving Notes" referred to therein. Reference is made to the
Forbearance Agreement for reductions to the Face Commitment (as such term is
defined in the Forbearance Agreement), for a statement of prepayment rights and
obligations of Borrower, for a statement of the terms and conditions under which
the due date of this Note may be accelerated and for statements regarding other
matters affecting this Note (including without limitation the obligations of the
holder hereof to advance funds hereunder, principal and interest payment due
dates, voluntary and mandatory prepayments, exercise of rights and remedies,
payment of attorneys' fees, court costs and other costs of collection and
certain waivers by Borrower and others now or hereafter obligated for payment of
any sums due hereunder). Upon the occurrence of an Event of Default, as that
term is defined in the

                                       41
<PAGE>

Forbearance Agreement, the holder hereof (i) may declare forthwith to be
entirely and immediately due and payable the principal balance hereof and the
interest accrued hereon, and (ii) shall have the immediate right to pursue all
rights and remedies allowed it by law and by the Loan Documents (as such term is
defined in the Forbearance Agreement).

         Regardless of any provision contained in this Note, the holder hereof
shall never be entitled to receive, collect or apply, as interest on this Note,
any amount in excess of the maximum rate of interest permitted by law (the
"Maximum Rate"), and, if the holder hereof ever receives, collects, or applies
as interest, any such amount which would be excessive interest, it shall be
deemed a partial prepayment of principal and treated hereunder as such; and, if
the indebtedness evidenced hereby is paid in full, any remaining excess shall
forthwith be paid to Borrower. In determining whether or not the interest paid
or payable, under any specific contingency, exceeds the Maximum Rate, Borrower
and the holder hereof shall, to the maximum extent permitted under applicable
law (i) characterize any non-principal payment as an expense, fee or premium
rather than as interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) spread the total amount of interest throughout the entire
contemplated term of the obligations evidenced by this Note and/or referred to
in the Forbearance Agreement so that the interest rate is uniform throughout the
entire term of this Note; provided that, if this Note is paid and performed in
full prior to the end of the full contemplated term thereof; and if the interest
received for the actual period of existence thereof exceeds the Maximum Rate,
the holder hereof shall refund to Borrower the amount of such excess or credit
the amount of such excess against the indebtedness evidenced hereby, and, in
such event, the holder hereof shall not be subject to any penalties provided by
any laws for contracting for, charging, taking, reserving or receiving interest
in excess of the Maximum Rate.

         If any payment of principal or interest on this Note shall become due
on a day other than a Business Day (as such term is defined in the Forbearance
Agreement), such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in computing interest in
connection with such payment.

         If this Note is placed in the hands of an attorney for collection, or
if it is collected through any legal proceeding at law or in equity or in
bankruptcy, receivership or other court proceedings, Borrower agrees to pay all
costs of collection, including, but not limited to, court costs and reasonable
attorneys' fees.

         Borrower and each surety, endorser, guarantor and other party ever
liable for payment of any sums of money payable on this Note, jointly and
severally waive presentment and demand for payment, notice of intention to
accelerate the maturity, protest, notice of protest and nonpayment, as to this
Note and as to each and all installments hereof, and agree that their liability
under this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes.

         This Note shall be governed by and construed in accordance with the
applicable laws of the

                                       42
<PAGE>

United States of America and the laws of the State of Oklahoma.

         THIS WRITTEN NOTE, THE FORBEARANCE AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND 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.

         This Note is one of a series of notes given to restate the accelerated
indebtedness (but not in extinguishment of) evidenced by those certain
promissory notes dated as of February 3, 2000, in the face amount of
$100,000,000.00 executed by Borrower and payable to the order of the Banks in
conjunction with that certain Restated Credit Agreement dated as of February 3,
2001.

         EXECUTED as of the date and year first above written.

                                    BORROWER:

                                    CMI CORPORATION,
                                    an Oklahoma corporation

                                    ____________________________________________
                                    By: Jim D. Holland
                                    Title: Senior Vice President
                                           and Chief Financial Officer

                                                                              43
<PAGE>

--------------------------------------------------------------------------------
                            ADDENDUM REVOLVING NOTE
--------------------------------------------------------------------------------
                         (Base Revolving Note)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
The Revolving Note on which this Addendum is attached is one of a series
--------------------------------------------------------------------------------
of five Base Revolving Notes, the principal amounts of which are as follows:
--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------
Bank                      Percentage      Principal Amounts
----                      ----------      -----------------
--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------
Bank of Oklahoma, N.A.       25%           $     8,112,150.30
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Bank of America, N.A.        25%           $     8,112,115.30
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
UMB Bank, N.A.               20%           $     6,489,720.24
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Firstar Bank, N.A.           15%           $     4,867,290.18
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Comerica Bank - Texas        15%           $     4,867,290.18
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
TOTAL                                      $    32,448,601.20
--------------------------------------------------------------------------------
<PAGE>

                                   Exhibit B

                                PROMISSORY NOTE

$_________________.00                                 Effective January 15, 2001

         FOR VALUE RECEIVED, the undersigned CMI CORPORATION, an Oklahoma
corporation (hereinafter referred to as the "Borrower") hereby unconditionally,
jointly and severally, promises to pay to the order of BANK OF OKLAHOMA, N.A.
(the "Bank") at the offices of BANK OF OKLAHOMA, N.A. (the "Agent") in Oklahoma
City, Oklahoma, the principal sum of ____________________AND NO/100 DOLLARS
($__________.00) or so much thereof as shall be advanced under the provisions of
the Third Loan Modification and Forbearance Agreement dated as of the date
hereof by and among the undersigned, each affiliate of the undersigned executing
the agreement as a party thereto, the Bank, UMB Bank, N.A., formerly known as
UMB Oklahoma Bank, Comerica Bank --Texas, Bank of America, N.A., and Firstar
Bank, N.A., formerly known as Firstar Bank Missouri, N.A. (the "Forbearance
Agreement"), in lawful money of the United States of America together with
interest from the date hereof until paid at the rates specified in the
Forbearance Agreement. All payments of principal and interest due hereunder are
payable at the offices of Agent at 201 Robert S. Kerr Avenue, Oklahoma City,
Oklahoma 73102, or at such other address as Bank shall designate in writing to
Borrowers. This promissory note ("Note") is expressly not a revolving note; once
sums advanced hereunder have been repaid they cannot be reborrowed.

         The principal amount of this Note, or so much thereof as shall be
disbursed thereunder and be unpaid and outstanding shall bear interest at the
per annum rate of rates of interest set forth in the Forbearance Agreement. The
rate of interest shall be calculated on the basis of the actual number of days
elapsed, but computed as if each calendar year consisted of a 360-day year.

         Beginning January 31, 2001 and continuing on the last day of each month
thereafter through the expiration and/or termination of the Forbearance
Agreement, Borrower shall make a payment of all accrued interest on this Note .
Borrower shall make principal payments based upon the schedule attached hereto
as ADDENDUM TO PROMISSORY NOTE.

         This Note is one of the "Gap Notes" referred to in the Forbearance
Agreement. Capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Forbearance Agreement.

         Except as otherwise set forth in the Forbearance Agreement, Maker and
each surety, endorser, guarantor and every other party liable for payment of any
sums of money payable on this Note, jointly and severally, waive demand for
payment, presentment, protest, notice of protest and nonpayment, or other notice
of default, notice of acceleration and intention to accelerate, and agree that
their liability under this Note shall not be affected by any renewal or
extension in the time of
<PAGE>

payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes, regardless of the number
of such renewals, extensions, indulgences, releases or changes.

         No waiver by Bank of any of its rights or remedies hereunder or under
any other document evidencing or securing this Note or otherwise shall be
considered a waiver of any other subsequent right or remedy of Bank; no delay or
omission in the exercise or enforcement by Bank of any rights or remedies shall
ever be construed as a waiver of any right or remedy of Bank; and no exercise or
enforcement of any such rights or remedies shall ever be held to exhaust any
right or remedy of Bank.

         Notwithstanding anything contained in this Note to the contrary, Bank
shall never be deemed to have contracted for or be entitled to receive, collect
or apply as interest on this Note, any amount in excess of the amount permitted
and calculated as the maximum interest rate allowed by law, and, in the event
Bank ever receives, collects or applies as interest any amounts in excess of the
amount permitted and calculated as the maximum interest rate allowed by law,
such amount which would be excessive interest shall be applied to the reduction
of the unpaid principal balance of this Note, and, if the principal balance of
this Note is paid in full, any remaining excess shall forthwith be paid to
Maker. In determining whether or not the interest paid or payable under any
specific contingency exceeds the maximum interest rate allowed by law, Maker and
Bank shall, to the extent permitted under applicable law, (i) characterize any
non-principal payment (other than payments which are expressly designated as
interest payments hereunder) as an expense, fee, or premium, rather than as
interest, (ii) exclude voluntary prepayments and the effect thereof, and (iii)
spread the total amount of interest throughout the entire contemplated term of
this Note.

         This Note is being executed and delivered, and is intended to be
performed in the State of Oklahoma. Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the State
of Oklahoma shall govern the validity, construction, enforcement and
interpretation of this Note. In the event of a dispute involving this Note or
any other instruments executed in connection herewith, the undersigned
irrevocably agrees that venue for such disputes shall lie in any court of
competent jurisdiction in Oklahoma County, Oklahoma.

         If this Note is placed in the hands of an attorney for collection, or
if it is collected through any legal proceedings at law or in equity or in
bankruptcy, receivership or other court proceedings, Maker promises to pay all
costs and expenses of collection including, but not limited to, court costs and
the reasonable attorneys' fees of the holder hereof.

         THIS WRITTEN NOTE, THE FORBEARANCE AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND 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.
<PAGE>

         This Note is one of a series of notes given to restate the accelerated
indebtedness (but not in extinguishment of) evidenced by those certain
promissory notes dated as of February 3, 2000, in the face amount of
$100,000,000.00 executed by Borrower and payable to the order of the Banks in
conjunction with that certain Restated Credit Agreement dated as of February 3,
2001.

         EXECUTED as of the date and year first above written.

                                        BORROWER:

                                        CMI CORPORATION,
                                        an Oklahoma corporation

                                        ________________________________________
                                        By: Jim D. Holland
                                        Title: Senior Vice President
                                               and Chief Financial Officer

                                       47
<PAGE>

     ADDENDUM TO PROMISSORY NOTE

The Promissory Note on which this Addendum is attached is one of a series of
five Gap Notes, the original principal amounts of which and the required monthly
principal payments on which are as follows:

<TABLE>
<CAPTION>
                                                               Principal    Principal      Principal      Pricipal       Pricipal
                                              Original            Due          Due            Due           Due            Due
Bank                          Percentage  Principal Amounts    02/28/01     03/31/01       04/30/01       05/31/01       06/30/01
-------------------------     ----------  -----------------    --------     --------       --------       --------       --------
<S>                           <C>         <C>                <C>           <C>          <C>           <C>            <C>
Bank of Oklahoma, N.A.           25%      $   2,300,233.75   $  305,841.05 $ 305,841.05  $ 305,841.05  $  305,841.05  $  305,841.05

Bank of America, N.A.            25%      $   2,300,233.75   $  305,841.05 $ 305,841.05  $ 305,841.05  $  305,841.05  $  305,841.05

UMB Bank, N.A                    20%      $   1,840,187.00   $  244,672.84 $ 244,672.84  $ 244,672.84  $  244,672.84  $  244,672.84

Firstar Bank, N.A.               15%      $   1,380,140.25   $  183,504.63 $ 183,504.63  $ 183,504.63  $  183,504.63  $  183,504.63

Comerica Bank -- Texas           15%      $   1,380,140.25   $  183,504.63 $ 183,504.63  $ 183,504.63  $  183,504.63  $  183,504.63

TOTAL                                     $   9,200,935.00   $1,223,364.20 $1,223,364.20 $1,223,364.20 $1,223,364.20  $1,223,364.20

<CAPTION>
                                Principal       Pricipal        Pricipal
                                   Due             Due             Due
Bank                             07/31/01       08/31/01        09/30/01
-------------------------        --------       --------        --------
<S>                            <C>             <C>            <C>
Bank of Oklahoma, N.A.        $  305,841.05   $  305,841.05   $  159,346.40

Bank of America, N.A.         $  305,841.05   $  305,841.05   $  159,346.40

UMB Bank, N.A                 $  244,672.84   $  244,672.84   $  127,477.12

Firstar Bank, N.A.            $  183,504.63   $  183,504.63   $   95,607.84

Comerica Bank -- Texas        $  183,504.63   $  183,504.63   $   95,607.84

TOTAL                         $1,223,364.20   $1,223,364.20   $  637,385.60
</TABLE>

                                      48
<PAGE>

                                   Exhibit C

                                REVOLVING NOTE

$17,000,000.00                                           Oklahoma City, Oklahoma
                                                      Effective January 15, 2001

         FOR VALUE RECEIVED, the undersigned CMI CORPORATION, an Oklahoma
corporation (hereinafter referred to as the "Borrower") hereby unconditionally
promises to pay to the order of BANK OF OKLAHOMA, N.A. (the "BOK"), UMB BANK,
N.A., formerly known as UMB OKLAHOMA BANK ("UMB"), COMERICA BANK -- TEXAS
("COMERICA"), BANK OF AMERICA, N.A. ("BOA"), AND FIRSTAR BANK, N.A., formerly
known as Firstar Bank Missouri, N.A. ("FIRSTAR"), at the offices of BANK OF
OKLAHOMA, N.A. (the "Agent") in Oklahoma City, Oklahoma, for the ratable
distribution to each of the referenced financial institutions, the principal sum
of SEVENTEEN MILLION AND NO/100 DOLLARS ($17,000,000.00) or so much thereof as
shall be advanced under the provisions of the Third Loan Modification and
Forbearance Agreement dated as of the date hereof by and among the undersigned,
each affiliate of the undersigned executing the agreement as a party thereto,
the BOK, UMB,, Comerica, BOA, and Firstar (the "Forbearance Agreement"), in
lawful money of the United States of America together with interest from the
date hereof until paid at the rates specified in the Forbearance Agreement. All
payments of principal and interest due hereunder are payable at the offices of
Agent at 201 Robert S. Kerr Avenue, Oklahoma City, Oklahoma 73102, or at such
other address as Bank shall designate in writing to Borrowers.

         The principal amount of this Note, or so much thereof as shall be
disbursed thereunder and be unpaid and outstanding shall bear interest at the
per annum rate of rates of interest set forth in the Forbearance Agreement. The
rate of interest shall be calculated on the basis of the actual number of days
elapsed, but computed as if each calendar year consisted of a 360-day year.

         Beginning January 31, 2001 and continuing on the last day of each month
thereafter through the expiration and/or termination of the Forbearance
Agreement, Borrower shall make a payment of all accrued interest on this Note .
Any and all payments of principal shall be due and payable in full as set forth
in the Forbearance Agreement.

         This Note is executed pursuant to the Forbearance Agreement, and is the
"Swingline Note" referred to therein. Reference is made to the Forbearance
Agreement for reductions to the Face Commitment (as such term is defined in the
Forbearance Agreement), for a statement of prepayment rights and obligations of
Borrower, for a statement of the terms and conditions under which the due date
of this Note may be accelerated and for statements regarding other matters
affecting this Note (including without limitation the obligations of the holder
hereof to advance funds hereunder, principal and interest payment due dates,
voluntary and mandatory prepayments, exercise of rights and remedies, payment of
attorneys' fees, court costs and other costs of collection and certain
<PAGE>

waivers by Borrower and others now or hereafter obligated for payment of any
sums due hereunder). Upon the occurrence of an Event of Default, as that term is
defined in the Forbearance Agreement, the holder hereof (i) may declare
forthwith to be entirely and immediately due and payable the principal balance
hereof and the interest accrued hereon, and (ii) shall have the immediate right
to pursue all rights and remedies allowed it by law and by the Loan Documents
(as such term is defined in the Forbearance Agreement.

         Regardless of any provision contained in this Note, the holder hereof
shall never be entitled to receive, collect or apply, as interest on this Note,
any amount in excess of the maximum rate of interest permitted by law (the
"Maximum Rate"), and, if the holder hereof ever receives, collects, or applies
as interest, any such amount which would be excessive interest, it shall be
deemed a partial prepayment of principal and treated hereunder as such; and, if
the indebtedness evidenced hereby is paid in full, any remaining excess shall
forthwith be paid to Borrower. In determining whether or not the interest paid
or payable, under any specific contingency, exceeds the Maximum Rate, Borrower
and the holder hereof shall, to the maximum extent permitted under applicable
law (i) characterize any non-principal payment as an expense, fee or premium
rather than as interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) spread the total amount of interest throughout the entire
contemplated term of the obligations evidenced by this Note and/or referred to
in the Forbearance Agreement so that the interest rate is uniform throughout the
entire term of this Note; provided that, if this Note is paid and performed in
full prior to the end of the full contemplated term thereof; and if the interest
received for the actual period of existence thereof exceeds the Maximum Rate,
the holder hereof shall refund to Borrower the amount of such excess or credit
the amount of such excess against the indebtedness evidenced hereby, and, in
such event, the holder hereof shall not be subject to any penalties provided by
any laws for contracting for, charging, taking, reserving or receiving interest
in excess of the Maximum Rate.

         If any payment of principal or interest on this Note shall become due
on a day other than a Business Day (as such term is defined in the Forbearance
Agreement), such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in computing interest in
connection with such payment.

         If this Note is placed in the hands of an attorney for collection, or
if it is collected through any legal proceeding at law or in equity or in
bankruptcy, receivership or other court proceedings, Borrower agrees to pay all
costs of collection, including, but not limited to, court costs and reasonable
attorneys' fees.

         Borrower and each surety, endorser, guarantor and other party ever
liable for payment of any sums of money payable on this Note, jointly and
severally waive presentment and demand for payment, notice of intention to
accelerate the maturity, protest, notice of protest and nonpayment, as to this
Note and as to each and all installments hereof, and agree that their liability
under this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes.
<PAGE>

         This Note shall be governed by and construed in accordance with the
applicable laws of the United States of America and the laws of the State of
Oklahoma.

         THIS WRITTEN NOTE, THE FORBEARANCE AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND 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.

         This Note is one of a series of notes given to restate the accelerated
indebtedness (but not in extinguishment of) evidenced by those certain
promissory notes dated as of February 3, 2000, in the face amount of
$100,000,000.00 executed by Borrower and payable to the order of the Banks in
conjunction with that certain Restated Credit Agreement dated as of February 3,
2001.

         EXECUTED as of the date and year first above written.

                                    BORROWER:

                                    CMI CORPORATION,
                                    an Oklahoma corporation

                                    --------------------------------
                                    By: Jim D. Holland
                                    Title: Senior Vice President
                                           and Chief Financial Officer

                                      51
<PAGE>

               -----------------------------------------------------------
                               ADDENDUM TO REVOLVING NOTE
               -----------------------------------------------------------
                               (Swingline Revolving Note)
               -----------------------------------------------------------

               -----------------------------------------------------------
               The Revolving Note on which this Addendum is attached
               -----------------------------------------------------------
               is shared among the Banks as follows:
               -----------------------------------------------------------

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

               -----------------------------------------------------------
               Bank                      Percentage    Principal Amounts
               ----                      ----------    -----------------
               -----------------------------------------------------------

               -----------------------------------------------------------
               Bank of Oklahoma, N. A.       25%       $ 4,250,000.00
               -----------------------------------------------------------

               -----------------------------------------------------------
               Bank of America, N. A.        25%       $ 4,250,000.00
               -----------------------------------------------------------

               -----------------------------------------------------------
               UMB Bank, N. A.               20%       $ 3,400,000.00
               -----------------------------------------------------------

               -----------------------------------------------------------
               Firstar Bank, N. A.           15%       $ 2,550,000.00
               -----------------------------------------------------------

               -----------------------------------------------------------
               Comerica Bank -- Texas        15%       $ 2,550,000.00
               -----------------------------------------------------------

               -----------------------------------------------------------
               TOTAL                                   $17,000,000.00
               -----------------------------------------------------------

                                      52
<PAGE>

                                   Exhibit B

                                PROMISSORY NOTE

$_________________.00                                           January 15, 2001

          FOR VALUE RECEIVED, the undersigned CMI CORPORATION, an Oklahoma
corporation (hereinafter referred to as the "Borrower") hereby unconditionally,
jointly and severally, promises to pay to the order of BANK OF OKLAHOMA, N.A.
(the "Bank") at the offices of BANK OF OKLAHOMA, N.A. (the "Agent") in Oklahoma
City, Oklahoma, the principal sum of ____________________AND NO/100 DOLLARS
($__________.00) or so much thereof as shall be advanced under the provisions of
the Third Loan Modification and Forbearance Agreement dated as of the date
hereof by and among the undersigned, each affiliate of the undersigned executing
the agreement as a party thereto, the Bank, UMB Bank, N.A., formerly known as
UMB Oklahoma Bank, Comerica Bank --Texas, Bank of America, N.A., and Firstar
Bank, N.A., formerly known as Firstar Bank Missouri, N.A. (the "Forbearance
Agreement"), in lawful money of the United States of America together with
interest from the date hereof until paid at the rates specified in the
Forbearance Agreement. All payments of principal and interest due hereunder are
payable at the offices of Agent at 201 Robert S. Kerr Avenue, Oklahoma City,
Oklahoma 73102, or at such other address as Bank shall designate in writing to
Borrowers. This promissory note ("Note") is expressly not a revolving note; once
sums advanced hereunder have been repaid they cannot be reborrowed.

          The principal amount of this Note, or so much thereof as shall be
disbursed thereunder and be unpaid and outstanding shall bear interest at the
per annum rate of rates of interest set forth in the Forbearance Agreement. The
rate of interest shall be calculated on the basis of the actual number of days
elapsed, but computed as if each calendar year consisted of a 360-day year.

          Beginning January 31, 2001 and continuing on the last day of each
month thereafter through the expiration and/or termination of the Forbearance
Agreement, Borrower shall make a payment of all accrued interest on this Note .
Borrower shall make principal payments based upon the schedule attached hereto
as ADDENDUM TO PROMISSORY NOTE.

          This Note is one of the "Gap Notes" referred to in the Forbearance
Agreement. Capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Forbearance Agreement.

          Except as otherwise set forth in the Forbearance Agreement, Maker and
each surety, endorser, guarantor and every other party liable for payment of any
sums of money payable on this Note, jointly and severally, waive demand for
payment, presentment, protest, notice of protest and nonpayment, or other notice
of default, notice of acceleration and intention to accelerate, and agree
<PAGE>

that their liability under this Note shall not be affected by any renewal or
extension in the time of payment hereof, or in any indulgences, or by any
release or change in any security for the payment of this Note, and hereby
consent to any and all renewals, extensions, indulgences, releases or changes,
regardless of the number of such renewals, extensions, indulgences, releases or
changes.

         No waiver by Bank of any of its rights or remedies hereunder or under
any other document evidencing or securing this Note or otherwise shall be
considered a waiver of any other subsequent right or remedy of Bank; no delay or
omission in the exercise or enforcement by Bank of any rights or remedies shall
ever be construed as a waiver of any right or remedy of Bank; and no exercise or
enforcement of any such rights or remedies shall ever be held to exhaust any
right or remedy of Bank.

         Notwithstanding anything contained in this Note to the contrary, Bank
shall never be deemed to have contracted for or be entitled to receive, collect
or apply as interest on this Note, any amount in excess of the amount permitted
and calculated as the maximum interest rate allowed by law, and, in the event
Bank ever receives, collects or applies as interest any amounts in excess of the
amount permitted and calculated as the maximum interest rate allowed by law,
such amount which would be excessive interest shall be applied to the reduction
of the unpaid principal balance of this Note, and, if the principal balance of
this Note is paid in full, any remaining excess shall forthwith be paid to
Maker. In determining whether or not the interest paid or payable under any
specific contingency exceeds the maximum interest rate allowed by law, Maker and
Bank shall, to the extent permitted under applicable law, (i) characterize any
non-principal payment (other than payments which are expressly designated as
interest payments hereunder) as an expense, fee, or premium, rather than as
interest, (ii) exclude voluntary prepayments and the effect thereof, and (iii)
spread the total amount of interest throughout the entire contemplated term of
this Note.

         This Note is being executed and delivered, and is intended to be
performed in the State of Oklahoma. Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the State
of Oklahoma shall govern the validity, construction, enforcement and
interpretation of this Note. In the event of a dispute involving this Note or
any other instruments executed in connection herewith, the undersigned
irrevocably agrees that venue for such disputes shall lie in any court of
competent jurisdiction in Oklahoma County, Oklahoma.

         If this Note is placed in the hands of an attorney for collection, or
if it is collected through any legal proceedings at law or in equity or in
bankruptcy, receivership or other court proceedings, Maker promises to pay all
costs and expenses of collection including, but not limited to, court costs and
the reasonable attorneys' fees of the holder hereof.

         THIS WRITTEN NOTE, THE FORBEARANCE AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND 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.
<PAGE>

         This Note is one of a series of notes given to restate the accelerated
indebtedness (but not in extinguishment of) evidenced by those certain
promissory notes dated as of February 3, 2000, in the face amount of
$100,000,000.00 executed by Borrower and payable to the order of the Banks in
conjunction with that certain Restated Credit Agreement dated as of February 3,
2001.

         EXECUTED as of the date and year first above written.

                                    BORROWER:

                                    CMI CORPORATION,
                                    an Oklahoma corporation

                                    ---------------------------------
                                    By: Jim D. Holland
                                    Title: Senior Vice President
                                           and Chief Financial Officer

                                      55
<PAGE>

    ADDENDUM TO PROMISSORY NOTE

The Promissory Note on which this Addendum is attached is one of a series
of five Term Notes, the original principal amounts of which and the required
monthly principal payments on which are as follows:

<TABLE>
<CAPTION>
                                                               Principal      Principal     Principal     Pricipal        Pricipal
                                               Original           Due            Due           Due           Due            Due
Bank                          Percentage  Principal Amounts    02/28/01        03/31/01      04/30/01     05/31/01        06/30/01
-------------------------     ----------  -----------------    --------        --------      --------     --------        --------
<S>                           <C>         <C>                 <C>            <C>           <C>           <C>          <C>
Bank of Oklahoma, N.A.           25%      $    3,832,008.45   $  45,619.15   $  45,619.15  $  45,619.15  $ 45,619.15  $    45,619.15
Bank of America, N.A.            25%      $    3,832,008.45   $  45,619.15   $  45,619.15  $  45,619.15  $ 45,619.15  $    45,619.15
UMB Bank, N.A                    20%      $    3,065,606.76   $  36,495.32   $  36,495.32  $  36,495.32  $ 36,495.32  $    36,495.32
Firstar Bank, N.A.               15%      $    2,299,205.07   $  27,371.49   $  27,371.49  $  27,371.49  $ 27,371.49  $    27,371.49
Comerica Bank -- Texas           15%      $    2,299,205.07   $  27,371.49   $  27,371.49  $  27,371.49  $ 27,371.49  $    27,371.49

TOTAL                                     $   15,328,033.80   $ 182,476.59   $ 182,476.59  $ 182,476.59  $182,476.59  $   182,476.59

<CAPTION>
                             Principal        Principal        Principal       Principal    Principal     Pricipal       Pricipal
                                Due              Due              Due             Due          Due           Due           Due
Bank                         07/31/01         08/31/01          09/30/01       10/31/01      11/30/01     12/31/01       01/31/02
-------------------------    --------         --------         ---------       ---------     --------     --------       --------
<S>                        <C>            <C>                 <C>            <C>           <C>           <C>          <C>
Bank of Oklahoma, N.A.     $ 45,619.15    $       45,619.15   $ 170,474.26   $ 170,474.26  $ 170,474.26  $170,474.26  $ 2,830,777.38
Bank of America, N.A.      $ 45,619.15    $       45,619.15   $ 170,474.26   $ 170,474.26  $ 170,474.26  $170,474.26  $ 2,830,777.38
UMB Bank, N.A              $ 36,495.32    $       36,495.32   $ 136,379.41   $ 136,379.41  $ 136,379.41  $136,379.41  $ 2,264,621.90
Firstar Bank, N.A.         $ 27,371.49    $       27,371.49   $ 102,284.56   $ 102,284.56  $ 102,284.56  $102,284.56  $ 1,698,466.43
Comerica Bank -- Texas     $ 27,371.49    $       27,371.49   $ 102,284.56   $ 102,284.56  $ 102,284.56  $102,284.56  $ 1,698,466.43

TOTAL                      $182,476.59    $      182,476.59   $ 681,897.04   $ 681,897.04  $ 681,897.04  $681,897.04  $11,323,109.50
</TABLE>

                                      56

<PAGE>

                                   Exhibit E

                          Borrowing Base Certificate
                                CMI Corporation

Report # _________
For Period from _______________________ to _______________________

<TABLE>
<S>                                                                                       <C>              <C>             <C>
Account Receivables:
-------------------

1)   a.    Beginning of Period Accounts Receivable (Line 1a from previous Report)                          $         -
                                                                                                           --------------
     b.    Gross sales                                                                    $         -
                                                                                          --------------
     c.    Returns and allowances                                                         $         -
                                                                                          --------------
     d.    Plus net sales (line 1b minus line 1c)                                                          $         -
                                                                                                           --------------
     e.    Less: cash collections                                                                          $         -
                                                                                                           --------------
     f.    Less: write-offs                                                                                $         -
                                                                                                           --------------
     g.    Less: misc credits                                                                              $         -
                                                                                                           --------------
     h.    Plus: misc debits                                                                               $         -
                                                                                                           --------------
     i.    End of Period Accounts Receivable per Aging dated ___________                                   $         -
                                                                                                           --------------

2)   Less: Accounts Receivable Ineligibles (per attached Ineligibles Worksheet):                           $         -
                                                                                                           --------------

3)   Eligible Accounts Receivable (line 1 less line 2)                                                     $         -
                                                                                                           --------------
4)   Accounts Receivable Advance Rate                                                                            57.5701%
                                                                                                                           ---------
5)         Total Accounts Receivable Availability (line 3 multiplied by line 4)                                            $     -
                                                                                                                           ---------

Installment Contracts:
---------------------

6)   End of Period Installment Contracts per Aging dated ______________                                    $         -
                                                                                                           --------------

7)   Less: Installment Contracts Ineligibles (per attached Ineligibles Worksheet):                         $         -
                                                                                                           --------------

8)   Eligible Installment Contracts (line 6 less line 7)                                                   $         -
                                                                                                           --------------
9)   Installment Contracts Advance Rate                                                                          57.5701%
                                                                                                                           ---------
10)        Total Installment Contracts Availability (line 8 multiplied by line 9)                                          $     -
                                                                                                                           ---------

Finished Good Inventory:
-----------------------

11)  End of Period Finished Goods Inventory per Schedule dated ______________                              $         -
                                                                                                           --------------

12)  Less: Finished Goods Inventory Ineligibles (per attached Ineligibles Worksheet):                      $         -
                                                                                                           --------------

13)  Eligible Finished Goods Inventory (line 11 less line 12)                                              $         -
                                                                                                           --------------
14)  Finished Goods Inventory Advance Rate                                                                       57.5701%
                                                                                                                           ---------
15)        Total Finished Goods Inventory Availability (line 13 multiplied by line 14)                                     $     -
                                                                                                                           ---------

Fabricated Parts Inventory:
--------------------------

16)  End of Period Fabricated Parts Inventory per Schedule dated _____________                             $         -
                                                                                                           --------------

17)  Less: Fabricated Parts Inventory Ineligibles (per attached Ineligibles Worksheet):                    $         -
                                                                                                           --------------

18)  Eligible Fabricated Parts Inventory (line 16 less line 17)                                            $         -
                                                                                                           --------------
19)  Fabricated Parts Inventory Advance Rate                                                                     35.9813%
                                                                                                                           ---------
20)        Total Work In Fabricated Parts Availability (line 19 multiplied by line 19)                                     $     -
                                                                                                                           ---------

Work in Process Inventory:
-------------------------

21)  End of Period Work in Process Inventory per Schedule dated _____________                              $         -
                                                                                                           --------------

22)  Less: Work In Process Inventory Ineligibles (per attached Ineligibles Worksheet):                     $         -
                                                                                                           --------------

23)  Eligible Work in Process Inventory (line 21 less line 22)                                             $         -
                                                                                                           --------------
24)  Work In Process Inventory Advance Rate                                                                      35.9813%
                                                                                                                           ---------
25)        Total Work in Process Inventory Availability (line 23 multiplied by line 24)                                    $     -
                                                                                                                           ---------

Raw Materials Inventory:
-----------------------

26)  End of Period Raw Materials Inventory per Schedule dated _____________                                $         -
                                                                                                           --------------

27)  Less: Raw Materials Inventory Ineligibles (per attached Ineligibles Worksheet):                       $         -
                                                                                                           --------------

28)  Eligible Raw Materials Inventory (line 26 less line 27)                                               $         -
                                                                                                           --------------
29)  Raw Materials Inventory Advance Rate                                                                        35,9813%
                                                                                                                           ---------
30)        Total Raw Materials Inventory Availability (line 28 multiplied by line 29)                                      $     -
                                                                                                                           ---------

31)  Borrowing Base (add lines 5, 10, 15, 20, 25 and 30):                                 $         -
                                                                                          --------------
32)  Current Face Commitment                                                              $         -
                                                                                          --------------
                                                                                                                           ---------
33)        Revolving Commitment (Lesser of lines 31 or 32)                                                                 $     -
                                                                                                                           ---------

                                                                                                                           ---------
34)  Revolving Balance                                                                                                     $     -
                                                                                                                           ---------

                                                                                                                           ---------
35)                                         Available Commitment, if line 33 minus line 34 is positive, indicated here:    $     -
                                                                                                                           ---------

                                                                                                                           ---------
36)                                         Overage Amount, if line 33 minus line 34 is negative, indicated here:          $     -
                                                                                                                           ---------
</TABLE>

     This Borrowing Base Certificate is delivered to Bank of Oklahoma, N. A. as
     Agent for Banks pursuant to that Third Loan Modification and Forbearance
     Agreement dated as of January 15, 2001. The undersigned hereby certifies,
     represents and warrants to Banks that he (or she) is an authorized officer
     of Borrower and in such capacity is authorized to execute and deliver this
     Borrowing Base Certificate on behalf of Borrower and that the information
     contained in this Borrowing Base Certificate is complete and accurate as of
     the date set forth below.

     Borrower: CMI Corporation

     By: ________________________________
     Name:
     Title:
     Date:

<PAGE>

                                CMI Corporation
                     Borrowing Base Ineligibles Worksheet

<TABLE>
<CAPTION>
    Accounts Receivable Ineligible Detail:                         Amount
    -------------------------------------                          ------
    <S>                                                           <C>              <C>
    Accounts * 60 days past due                                   $      -
                                                                  ----------
    Extended terms * 10 days past due                             $      -
                                                                  ----------
    20% past due rule                                             $      -
                                                                  ----------
    15% Concentration rule                                        $      -
                                                                  ----------
    Affiliated accounts                                           $      -
                                                                  ----------
    Contra accounts                                               $      -
                                                                  ----------
    Foreign accounts * $500,000 with no L/C                       $      -
                                                                  ----------
    Foreign subsidiaries accounts receivable                      $      -
                                                                  ----------
    Government accounts receivable                                $      -
                                                                  ----------
    Bankruptcy / insolvency accounts                              $      -
                                                                  ----------
    C-O-D accounts                                                $      -
                                                                  ----------
    Progress billings                                             $      -
                                                                  ----------
    Bill and holds where title has not passed                     $      -
                                                                  ----------
    Other ineligible accounts receivable                          $      -
                                                                  ----------
    Credit balances * 60 days past due date                       $      -
                                                                  ----------
    Credit balances * 10 days past due date                       $      -
                                                                  ----------
    Unapplied cash collections                                    $      -
                                                                  ----------
    Deposits                                                      $      -
                                                                  ----------
    Reconciling accounts receivable items                         $      -
                                                                  ----------
                Total Accounts Receivable Ineligibles:                             $        -
                                                                                   ==============
    Installment Contracts Ineligible Detail:                         Amount
    ---------------------------------------                          ------

    Installment contracts 2 payments past due                     $      -
                                                                  ----------
    Installment contracts not endorsed and held by Agent          $      -
                                                                  ----------
    Other ineligible installment contracts                        $      -
                                                                  ----------
    Deferred or unearned items                                    $      -
                                                                  ----------
    Reconciling installment contract items                        $      -
                                                                  ----------
                Total Installment Contract Ineligibles:                            $        -
                                                                                   ==============
    Finished Goods Inventory Ineligible Detail:
    ------------------------------------------

    Reserves - finished goods                                     $      -
                                                                  ----------
    Used inventory reserves                                       $      -
                                                                  ----------
    Rental inventory reserves                                     $      -
                                                                  ----------
    Consigned / demos not subject to perfected security interest  $      -
                                                                  ----------
    Laguna plant                                                  $      -
                                                                  ----------
    Off-site inventory not subject to perfected security interest $      -
                                                                  ----------
    Packaging/supplies                                            $      -
                                                                  ----------
    Slow-moving greater than two years                            $      -
                                                                  ----------
    Reconciling inventory items                                   $      -
                                                                  ----------
    Foreign subsidiary iventory                                   $      -
                                                                  ----------
    Other ineligible inventory                                    $      -
                                                                  ----------
                Total Finish Goods Inventory Ineligibles:                          $        -
                                                                                   ==============
    Fabricated Parts Inventory Ineligible Detail:
    --------------------------------------------

    Reserves-fabricated parts                                     $      -
                                                                  ----------
    Fabricated parts not service parts or finished components     $      -
                                                                  ----------
    Off-site inventory not subject to perfected security interest $      -
                                                                  ----------
    Packaging / supplies                                          $      -
                                                                  ----------
    Slow-moving greater than two years                            $      -
                                                                  ----------
    Reconciling inventory items                                   $      -
                                                                  ----------
    Foreign subsidiary inventory                                  $      -
                                                                  ----------
    Other ineligible inventory                                    $      -
                                                                  ----------
                Total Fabricated Parts Inventory Ineligibles:                      $        -
                                                                                   ==============
    Work In Process Inventory Ineligible Detail:
    --------------------------------------------

    Reserves - WIP                                                $      -
                                                                  ----------
    WIP over 4 weeks from completion                              $      -
                                                                  ----------
    Off-site inventory not subject to perfected security interest $      -
                                                                  ----------
    Packaging / supplies                                          $      -
                                                                  ----------
    Slow-moving greater than two years                            $      -
                                                                  ----------
    Reconciling inventory items                                   $      -
                                                                  ----------
    Foreign subsidiary inventory                                  $      -
                                                                  ----------
    Other ineligible inventory                                    $      -
                                                                  ----------
               Total Work in Process Inventory Ineligibles:                        $        -
                                                                                   ==============
    Raw Materials Inventory Ineligible Detail:
    ------------------------------------------

    Reserves-Raw materials                                        $      -
                                                                  ----------

    Off-site inventory not subject to perfected security interest $      -

                                                                  ----------
    Packaging / supplies                                          $      -
                                                                  ----------
    Slow-moving greater than two years                            $      -
                                                                  ----------
    Reconciling inventory items                                   $      -
                                                                  ----------
    Foreign subsidiary inventory                                  $      -
                                                                  ----------
    Other ineligible inventory                                    $      -
                                                                  ----------
               Total Raw Materials Inventory Ineligibles:                          $        -
                                                                                   ==============
</TABLE>

* Denotes greater than
                                      58
<PAGE>

                                   Exhibit F

                               SECURITY AGREEMENT
                           (and Assignment of Rights)

     THIS SECURITY AGREEMENT ("this Security Agreement") is executed effective
as of January 15, 2001, by MACHINERY INVESTMENT CORPORATION, an Oklahoma
corporation ("machinery") in favor of BANK OF OKLAHOMA, N.A., a national banking
association on its own behalf ("BOK") and as agent on behalf of BANK OF AMERICA,
N.A., COMERICA BANK - TEXAS, Firstar Bank N.A., and UMB BANK, N.A.
(collectively, the "Line of Credit Banks"), and BOK as Collateral Agent (the
"Collateral Agent") on behalf of the Line of Credit Banks and PRINCIPAL LIFE
INSURANCE COMPANY ("Principal") under and pursuant to that certain Intercreditor
Agreement by and among the Line of Credit Banks (by and through BOK, as Agent),
Principal, and CMI CORPORATION, an Oklahoma corporation ("Borrower") dated in
June 2000 as amended by that certain First Amendment to Intercreditor Agreement
of even date herewith (the "Intercreditor Agreement"). BOK in its representative
capacities is hereinafter referred to as the "Secured Party".

     Section 1. Defined Terms. Unless the context otherwise requires,
                -------------
capitalized terms used in this Security Agreement and not otherwise defined
herein shall have the meanings assigned to such terms in the Forbearance
Agreements and/or the UCC, and the following terms shall have the following
meanings:

          "Accounts" shall have the meaning assigned to such term in the UCC.

          "Chattel Paper" shall have the meaning assigned to such term in the
     UCC.

          "Collateral" shall have the meaning assigned to such term in Section 2
     hereof.

          "Event of Default" shall mean the occurrence of any of the "Events of
     Default" as defined in the Forbearance Agreements.

          "Forbearance Agreements" shall mean that certain Third Loan
     Modification and Forbearance Agreement by and between the Line of Credit
     Banks, Borrower and certain of Borrower's Affiliates (the "Line of Credit
     Forbearance Agreement") and that certain Third Forbearance Agreement by and
     between Principal, Borrower and certain of Borrower's affiliates, both
     dated as of the date hereof (the "Principal Forbearance Agreement").

          "General Intangibles" shall have the meaning assigned to such term in
     the UCC.

          "Instruments" shall have the meaning assigned to such term in the UCC.
<PAGE>

          "Loan Documents" shall mean the Forbearance Agreements, the Notes
     executed in conjunction therewith, this Security Agreement and all
     documents and instruments representing, evidencing or securing the Note.

          "Notes" shall mean (i) those certain promissory notes executed by
     Borrower and payable to the order of the Line of Credit Banks in
     conjunction with the Line of Credit Forbearance, and any and all renewals,
     modifications and extensions of such note, and any and all notes executed
     in substitution for such notes, and (ii) that (those) certain promissory
     note(s) executed by Borrower and payable to the order of Principal in
     conjunction with the Principal Forbearance Agreement, and any and all
     renewals, modifications and extensions of such note(s), and any and all
     notes executed in substitution for such note(s) .

          "Person" includes any individual, corporation, joint venture, general
     or limited partnership, trust, organization, association or other entity.

          "Sales Proceeds" means, as to any sale of any Collateral, the gross
     proceeds paid or to be paid to or received by Machinery, whether paid or
     payable in cash or to be paid pursuant to the terms of an agreement or debt
     instrument, less the reasonable and necessary expenses of such sale as
     approved by Bank.

          "Secured Indebtedness" shall have the meaning assigned to such term in
     Section 3 hereof.

          "UCC" shall mean Oklahoma's version of the Uniform Commercial Code
     found at 12A Okla. Stat. Section 9.101 et. seq..

          Section 2. Assignment and Grant of Security Interest. As collateral
security for the prompt and complete payment of the Secured Indebtedness, and in
order to induce the Lenders to enter into the Forbearance Agreements and to
forbear as set forth therein, Machinery hereby assigns, mortgages, pledges and
hypothecates to the Lenders, and hereby grants to the Lenders (or the Collateral
Agent on behalf of all Lenders) a continuing security interest in, the assets
and property of Machinery of the types described below, whether now owned or
hereafter acquired, wherever located, howsoever arising or created, and whether
now existing or hereafter arising, existing or created:

          (a)    all Chattel Paper, Instruments, promissory notes in the actual
     or constructive possession of any Lender or of Machinery in trust for the
     Lenders, or in the possession of a third party on behalf of the Lenders, or
     in transit to or from the Collateral Agent, or designated by Machinery as
     collateral for the Secured Indebtedness (as defined in Section 3 hereof)
     (whether or not such collateral shall have been delivered to Collateral
     Agent on behalf of the Lenders), including, without limitation, all rights,
     titles and interests Machinery may now or hereafter have in and to any and
     all promissory notes, guaranties, deeds of trust, security agreements,
     insurance policies, title insurance policies, take-out commitments,

                                       60
<PAGE>

     commitments to purchase promissory notes secured by real property,
     equipment and / or inventory, other commitments, and other instruments,
     documents, or agreements relating thereto, delivered or to be delivered, to
     the Collateral Agent or to be held by Machinery in trust for the Lenders;

          (b)    all money or other property of Machinery in the possession of
     any Lender including, without limitation, (i) Machinery's deposits with any
     Lender and (ii) the obligations of such Lender, as the case may be, to
     Machinery arising out of such deposits;

          (c)    all Accounts and General Intangibles, relating to the
     foregoing;

          (d)    All Sales Proceeds;

          (e)    All personal property, contract rights, accounts receivable,
     accounts and general intangibles of whatsoever kind relating to the
     Collateral, including, without limitation, the right to receive all hazard,
     private mortgage and title insurance proceeds and condemnation awards which
     may be payable in respect of the premises encumbered by any Collateral;

          (f)    all of Machinery's property insurance maintained upon and
     protecting the assets and property described above;

          (g)    all payments and prepayments of principal, interest, penalties
     and other income of payments due or to become due with respect to any and
     all promissory notes and related loan documents constituting the
     Collateral, including but not limited to, such payments deposited with
     Collateral Agent;

          (h)    all files, documents, instruments, surveys, certificates,
     correspondence, appraisals, computer programs, tapes, disks, cards,
     accounting records and other records, information and data of Machinery
     relating to any of the foregoing; and

          (i)    all products and proceeds (including, without limitation,
     insurance proceeds) of, and additions, improvements and accessions to all
     and any of the property described above.

     All of the property described in clauses (a) through (i) above is
hereinafter collectively called the "Collateral."

     Section 3. Secured Indebtedness.
                --------------------

     This security interest and assignment of rights is granted to secure the
payment of:

          (i)    All amounts owed to the Line of Credit Banks, Principal and the
     Collateral Agent pursuant to the respective Credit Agreements, Note
     Agreements or Security

                                       61
<PAGE>

     Agreements with Borrower and all obligations evidenced by the Forbearance
     Agreements and the Notes (the "Obligations");

          (ii)   All costs reasonably incurred by the Collateral Agent (a) to
     obtain, preserve, perfect and enforce the security interest granted hereby
     and all other liens and security interests securing payment of the
     Obligations, (b) to collect the Obligations, and (c) to maintain, preserve
     and collect the Collateral, including, but not limited to, taxes,
     assessments, insurance premiums, repairs, reasonable attorneys' fees and
     legal expenses (including, without limitation, allocated costs for in-house
     legal services), rent, storage charges, advertising costs, brokerage fees
     and expenses of sale; and

          (iii)  All renewals, extensions and modifications of the indebtedness
     referred to in the foregoing clauses, or any part thereof.

The loans, advances, indebtedness, obligations, liabilities and costs mentioned
in this Section 3 are hereafter collectively referred to as the "Secured
Indebtedness." All proceeds hereof shall be applied by the Collateral Agent to
the Secured Indebtedness in accordance with the Forbearance Agreements.

     Section 4. Machinery's Warranties, Representations, Covenants and
                ------------------------------------------------------
Agreements. Machinery represents, warrants, covenants and agrees as follows:
----------
          (a)    Machinery has the authority to execute, deliver and perform
     this Security Agreement and the execution and performance hereof has been
     authorized by all necessary action of Machinery.

          (b)    There are no liens on any of the Collateral and there is no
     financing statement or other document creating or evidencing a lien now on
     file in any public office covering any of the Collateral, or any lien or
     encumbrance on any of the Collateral, whether such Collateral be real or
     personal, tangible or intangible, or whether Machinery is named or signed
     as "Borrower", "Debtor" or "Pledgor", and until the termination of this
     Security Agreement, Machinery shall not execute and there shall not be on
     file in any public office any such financing statement or statements,
     except as may have been or may hereafter be granted to the Lenders, and
     Machinery further agrees that it will not grant, permit or suffer to exist
     any security interest, lien or encumbrance upon any of the Collateral.

          (c)    The chief executive office and principal place of business of
     Machinery is P.O. Box 1985, Oklahoma City, Oklahoma 73101-1985. Machinery's
     mailing address is the same. Machinery's Tax I.D. Number is 73-0788917.

          (d)    Machinery shall, at its expense, make, procure, execute and
     deliver such financing statement or statements, or amendments thereof or
     supplements thereto, or other instruments, certificates and supplemental
     writings, and do and deliver all acts, things, writings and assurances as
     Collateral Agent may from time to time require in order to

                                       62
<PAGE>

     comply with the UCC, or any other applicable law, and to grant, defend,
     enforce, preserve and perfect the security interest hereby granted and the
     priority of such security interest.

          (e)    In the event, for any reason, that the law of any jurisdiction
     other than the State of Oklahoma becomes or is applicable to the
     Collateral, or any part thereof, or to any of the Secured Indebtedness,
     Machinery agrees to execute and deliver all such instruments and to do all
     such other things as may be necessary or appropriate to preserve, protect
     and enforce the security interest or lien of the Lenders, under the law of
     such other jurisdiction, to at least the same extent as such security
     interest would be protected under the UCC.

          (f)    If any amount payable under or in connection with any of the
     Collateral shall be or become evidenced by any promissory note or other
     Instrument, such Instrument shall be immediately pledged to the Collateral
     Agent on behalf of the Lenders hereunder and Machinery shall deliver to
     Collateral Agent such Instrument, duly endorsed in a manner satisfactory to
     the Collateral Agent.

          (g)    Machinery covenants and warrants that when any of the
     Collateral becomes subject to this Security Agreement, Machinery is the
     100% owner of said Collateral free and clear of claims or encumbrances by
     others and that Machinery has good right, title and authority to pledge,
     sell, transfer and assign the same.

          (h)    Machinery warrants to Lenders that Machinery has granted to the
     Lenders a first priority security interest in and to the Collateral.

          (i)    Unless otherwise approved in writing by the Lender, Machinery
     shall keep the Collateral free from any lien, attachment, security
     interest, sequestration, encumbrance, or any other legal or equitable
     process, or any encumbrance of any kind or character except as may be
     granted to the Lender.

          (j)    Machinery shall promptly notify Collateral Agent of any change
     in any fact or circumstance warranted or represented by Machinery in this
     Security Agreement or in any other writing furnished by Machinery to
     Collateral Agent in connection with the Collateral or the Secured
     Indebtedness, and promptly notify Collateral Agent of any claim, action or
     proceeding affecting title to the Collateral, or any part thereof, or the
     security interests herein granted, and, at the request of Collateral Agent
     appear in and defend, at Machinery's expense, any such action or
     proceeding.

          (k)    Unless and until notified to the contrary by the Collateral
     Agent and except to the extent otherwise required under the Forbearance
     Agreements, Machinery shall promptly, at its expense deliver to the
     Collateral Agent, with appropriate endorsement or assignment, all
     instruments, Chattel Paper, monies, checks, notes, drafts and other
     evidence of indebtedness, or other property in the nature of items of
     payment representing proceeds of any of the Collateral which are then in,
     or may thereafter come into, Machinery's possession.

                                       63
<PAGE>

          (l)    Machinery shall perform, at their sole cost and expense, any
     and all steps, and shall pay the amount of all reasonable expenses
     necessary to obtain, preserve, perfect, defend and enforce the security
     interest in any of the Collateral, collect the Secured Indebtedness, and
     preserve, defend, enforce and collect the Collateral.

          (m)    Machinery shall punctually and properly perform all of
     Machinery's covenants and duties under any other security agreement, deed
     of trust, mortgage, collateral pledge agreement or contract of any kind,
     now or hereafter existing as security for or in connection with payment of
     the Secured Indebtedness, or any part thereof, and will pay the Secured
     Indebtedness in accordance with the terms thereof and in accordance with
     the terms of the promissory notes or other writings evidencing the Secured
     indebtedness, or any part thereof, and will promptly furnish the Collateral
     Agent with any information or writings which such Person may reasonably
     request concerning the Collateral.

          (n)    Machinery shall promptly notify the Collateral Agent of any
     change in any fact or circumstance warranted or represented by Borrower in
     this Security Agreement or in any other writing furnished by Machinery to
     the Collateral Agent in connection with the Collateral or the Secured
     Indebtedness, and shall promptly notify the Collateral Agent of any claim,
     action or proceeding affecting title to the Collateral, or any part
     thereof, or the security interests herein granted, and, at the request of
     the Bank appear in and defend, at Machinery's expense, any such action or
     proceeding.

          (o)    Should the Collateral, or any part thereof, ever be in any
     manner converted into another type of property or any money or other
     proceeds ever be paid or delivered to Machinery as a result of Machinery's
     rights in the Collateral, then, in any such event, all such property, money
     or other proceeds shall become part of the Collateral, and Machinery
     covenants to forthwith pay and deliver to Collateral Agent all of the same
     which are susceptible of delivery, and, at the same time, if Collateral
     Agent deems it necessary and so requests, Machinery will properly endorse
     or assign the same.

          (p)    Machinery shall comply with all of its covenants and agreements
     contained in all instruments and documents evidencing and securing the
     Secured Indebtedness or any part thereof.

          (q)    All of the representations and warranties made by Machinery in
     all instruments and documents evidencing and securing the Secured
     Indebtedness or any part thereof are true and correct.

          (r)    All agreements constituting any of the Collateral are
     enforceable against the parties thereto and are in full force and effect
     and, except as otherwise expressly permitted under the Loan Documents,
     Machinery has delivered true and correct copies of all such agreements to
     the Collateral Agent.

                                       64
<PAGE>

          (s)    Machinery shall promptly pay or cause to be paid, when due, all
     lawful claims, whether for labor, materials or otherwise, which might, or
     could if unpaid, become a lien or charge on the Collateral, unless and to
     the extent only that the same are being contested in good faith by
     appropriate proceedings, and notice thereof has been delivered to the
     Collateral Agent setting forth the nature and amount of the contested
     claim, and reserves adequate under GAAP have been established therefor.

          (t)    Collateral Agent does not assume and shall never have any
     liability for the performance of any of the obligations of Machinery under
     the Collateral or any transaction, agreement or contract out of which the
     Collateral, or any portion thereof, arises.

     Section 5. Rights and Remedies of the Lenders and/or Collateral Agent.
                ----------------------------------------------------------

          (a)    Subject to any cure periods provided in the Forbearance
Agreements, the Collateral Agent, at any time, either before or after the
occurrence of an Event of Default:

                    (i)     May examine and inspect the Collateral at any time,
          wherever located; and

                    (ii)    Shall have the right, together with such accountants
          and other agents as they may from time to time designate, to visit and
          inspect Machinery's properties, assets and books relating to the
          Collateral, and to discuss Machinery's affairs, finances and accounts
          relating to the Collateral with Machinery's employees, officers,
          directors and accountants, at such reasonable times as Collateral
          Agent may designate, and to make and take away copies of Machinery's
          records relating to the Collateral.

          (b)    In the event of the occurrence of any Event of Default, the
Lender's may, at their option, in addition to the rights and remedies provided
in Section 5(a) hereof and in any of the other Loan Documents, without demand,
presentment, protest, notice of protest and nonpayment, notice of intention to
accelerate, notice of acceleration, or other notice of any kind (which are fully
waived):

                    (i)     Declare the entire unpaid balance of the principal
          of the Secured Indebtedness to be in default and immediately due and
          payable, together with all accrued and unpaid interest thereon,
          reasonable attorneys' fees and all other collection charges.

                    (ii)    In addition to the rights and remedies provided in
          this Security Agreement, Forbearance Agreements or in any other Loan
          Document, invoke the rights and remedies of a secured party under the
          UCC and any and all other laws.

                                       65
<PAGE>

                    (iii)   Take possession and dispose of all or any portion of
          the Collateral, at public or private sale, as a unit or in parcels,
          upon any terms and prices and in any order, free from any claim or
          right of any kind; and for such purpose the Lenders may maintain all
          or any part of the Collateral on Machinery's premises for such period
          of time as may be reasonably necessary without any charge whatsoever.
          Upon Collateral Agent's demand, Machinery will take all steps
          necessary to prepare the Collateral for and otherwise assist in any
          proposed disposition of the Collateral; and assemble the Collateral
          with respect to the Collateral and make it available to the Collateral
          Agent at a reasonably convenient location. Any disposition of the
          Collateral may be made by way of one or more contracts and at any such
          disposition it shall not be necessary to exhibit the Collateral. To
          enforce the rights granted to the Lenders pursuant to the terms of
          this Security Agreement, the Collateral Agent may take all actions
          reasonably necessary to take possession of the Collateral, and shall
          not be liable for damages to, or destruction of, persons or property
          in connection therewith and shall in no way be liable for any
          consequential damages (whatsoever be the proximate cause thereof) of
          any kind. In addition, in order to dispose of the Collateral and
          otherwise enforce the rights granted to it hereunder, the Lenders, by
          and through the Collateral Agent, may use, and advertise the
          Collateral for sale under, any and all trade names or service names
          attached to, fixed upon or made part of any of the Collateral.

                    (iv)    After the occurrence of an Event of Default, the
          costs and expenses incurred by Lenders relative to the collection of
          any of the Secured Indebtedness and the exercise by the Lenders of
          their rights and remedies hereunder shall be added to and become part
          of the Secured Indebtedness.

                    (v)     The rights, titles, interests, liens and securities
          of the Lenders hereunder shall be cumulative of all of the securities,
          rights, titles, interests or liens which the Lenders may now or at any
          time hereafter hold securing the payment of the Secured Indebtedness,
          or any part thereof.

                    (vi)    The Collateral Agent is hereby expressly authorized
          to apply by appropriate judicial proceedings for appointment of a
          receiver for the Collateral, or any part thereof, and Machinery hereby
          expressly consents to any such appointment.

                    (vii)   The Lenders shall be entitled to apply the proceeds
          of any sale or other disposition of the Collateral, and the payments
          received by Collateral Agent on behalf of the Lenders with respect to
          any of the Collateral, first, to the payment of all its reasonable
          expenses, including attorneys' fees and legal expenses, incurred in
          holding and preparing the Collateral, or any part thereof, for sale or
          other disposition, in arranging for such sale or other disposition,
          and in actually selling the same, and next toward payment in full of
          the balance of the Secured Indebtedness in accordance with the
          Forbearance Agreements. The Collateral Agent shall account

                                       66
<PAGE>

          to Machinery for any surplus. If the proceeds are not sufficient to
          pay the Secured Indebtedness in full, such proceeds shall be applied
          to the Secured Indebtedness owing to the Lenders in accordance with
          the provisions of the Forbearance Agreements, and Machinery shall
          remain liable for any deficiency.

                    (viii)  The Collateral Agent is hereby authorized, in its
          own name or the name of Machinery, at any time during the continuation
          of an Event of Default, to notify any or all parties obligated on any
          of the Collateral to make all payments due or to become due thereon
          directly to the Collateral Agent, or such other person or officer as
          the Collateral Agent may require, whereupon the power and authority of
          Machinery to collect the same in the ordinary course of its business
          shall be deemed to be immediately revoked and terminated. With or
          without such general notification, the Collateral Agent may take or
          bring in Machinery's name or that of the Lenders all steps, actions,
          suits or proceedings deemed by the Collateral Agent necessary or
          desirable to effect possession or collection of the Collateral,
          including sums due or paid thereon, may complete any contract or
          agreement of Machinery in any way related to any of the Collateral,
          may make allowances or adjustments related to the Collateral, may
          compromise any claims related to the Collateral, may issue credit in
          its own name or the name of Machinery, and Collateral Agent may remove
          from Machinery's premises all documents, instruments, records, files
          or other items relating to the Collateral, and the Collateral Agent
          may, without cost or expense to the Collateral Agent, use Machinery's
          personnel, supplies and space to take possession of, administer,
          collect and dispose of the Collateral. Regardless of any provision
          hereof, however, the Lenders shall never be liable to Machinery for
          the failure of Lenders to collect or for their failure to exercise
          diligence in the collection, possession, or any transaction
          concerning, all or part of the Collateral or sums due or paid thereon,
          nor shall Collateral Agent or any of the Lenders be under any
          obligation whatsoever to anyone by virtue of this Security Agreement,
          except to account for the funds that the Lenders shall actually
          receive hereunder.

          (c)    Issuance by the Collateral Agent of a receipt to any person,
firm, corporation or other entity obligated to pay any amounts to Machinery
shall be a full and complete release, discharge and acquittance to such person,
firm, corporation or other entity to the extent of any amount so paid to the
Collateral Agent. The Collateral Agent is hereby authorized and empowered on
behalf of Machinery to endorse the names of Machinery upon any check, draft,
instrument, receipt, instruction or other document or items, including, but not
limited to, all items evidencing payment upon any indebtedness of any person,
firm, corporation or other entity to Borrower coming into the Collateral Agent's
possession, and to receive and apply the proceeds therefrom in accordance with
the provisions of the Forbearance Agreements. The Collateral Agent is hereby
granted an irrevocable power of attorney, which is coupled with an interest, to
execute all checks, drafts, receipts, instruments, instructions or other
documents, agreements or items on behalf of the Collateral Agent, at any time
after the occurrence of an Event of Default, as shall be deemed by the
Collateral Agent to be necessary or advisable, in the sole discretion of the
Collateral Agent,

                                       67
<PAGE>

to protect the security interest of the Lenders in the Collateral or the
repayment of the indebtedness secured hereby, and the Collateral and the Lenders
shall not incur any liability to Machinery in connection with or arising from
the exercise by the Collateral Agent's exercise of such power of attorney.

Section 6. Miscellaneous.
           -------------

     (a)    THIS SECURITY AGREEMENT IS EXECUTED AND DELIVERED IN, AND THE
VALIDITY, ENFORCEABILITY AND INTERPRETATION OF THIS SECURITY AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA
AND THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA.

     (b)    Notices. All notices to be given or delivered hereunder shall be in
            -------
writing and shall be delivered either personally, by overnight courier, or by
United States mail (postage prepaid), addressed to the intended recipient at the
address given below:

If to Debtor:

     MACHINERY INVESTMENT CORPORATION.
     P.O. Box 1985
     Oklahoma City, OK 73108
     Attn: Jim D. Holland, Vice President

If to Secured Parties:  c/o Collateral Agent:

     Bank of Oklahoma, N.A.
     P.O. Box 2300
     Tulsa, Oklahoma 74192
     Attn: Paul Mesmer, Sr. Vice President

All notices given or delivered in accordance with this Section shall be
effective on the date of actual delivery.

     (c)    Regardless of any provision contained herein, or in any note, notes
or other evidences of the Secured Indebtedness, or other instruments executed or
delivered in connection therewith, the Lenders shall not be entitled to receive,
collect or apply as interest on the Secured Indebtedness an amount which would
be usurious and, to this end, in the event of the acceleration of the maturity
of the Secured Indebtedness, or any item hereof, a proper credit shall be given
for unearned interest and such unearned interest shall be immediately refunded
to Machinery.

     (d)    It is agreed that any custom or usage to the contrary
notwithstanding, the Lenders shall have the right at all times to enforce the
covenants and provisions of this

                                       68
<PAGE>

Security Agreement in strict accordance with the terms hereof, notwithstanding
any conduct or custom on the part of the Lenders in refraining from so doing at
any time, or any acceptance by the Lenders of partial performance by Machinery.
All rights and remedies of Lenders hereunder are cumulative of each other and of
every other right or remedy which Lenders may have at law or in equity, or in
any other contract or other writing for the enforcement of any security interest
or the collection of the Secured Indebtedness, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.

     (e)    This Security Agreement is binding upon Machinery and Machinery's
receivers, trustees, successors and assigns, and shall inure to the benefit of
the Lenders and their respective successors and assigns. Lenders may assign
their interest in this Security Agreement or any of their rights and powers
hereunder, with all or any interest in the Secured Indebtedness hereby secured,
and may assign and/or deliver to any such assignee any of the Collateral
therefor and, may instruct the Lenders to hold for the benefit of such assignee
any of the Collateral therefor.

     (f)    The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any of the Collateral in its possession
if it exercises the same diligence in the care thereof which it exercises in the
care of its own property.

     (g)    Any notice of sale, disposition or other action by the Lenders
required by the UCC and sent to Machinery at Machinery's address shown above, or
at such other address as Borrower may have furnished the Collateral Agent in
writing, at least ten (10) days prior to such action, shall constitute
reasonable notice to Machinery. Any such notice shall be deemed to have been
given on the day it is mailed by first class or express mail, postage prepaid,
or sent by telex, telegram, telecopy or other similar form of rapid transmission
confirmed by mailing (by first class or express mail, postage prepaid) written
confirmation at substantially the same time as such rapid transmission, or
personally delivered to an officer of Machinery.

     (h)    No failure on the part of the Collateral Agent on behalf of the
Lenders to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Collateral Agent on behalf of the Lenders of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein provided are cumulative
and are not exclusive of any remedies provided by law.

     (i)    This is a security agreement and assignment of rights and is not a
delegation of duties. The Lenders shall not assume any of, and the Lenders shall
not at any time ever be liable for, any of the obligations, duties, covenants,
warranties, representations or other liabilities of Machinery in or under the
Collateral or any transaction, agreement or contract out of which the
Collateral, or any of it, arises.

                                       69
<PAGE>

     (j)    All representations and warranties shall survive the date hereof and
shall be deemed to have been made continuously.

     (k)    Any provision of this Security Agreement found to be prohibited by
law shall be ineffective to the extent of such prohibition without invalidating
any other provision of this Security Agreement.

     (l)    If the Secured Indebtedness, or any part thereof, is given in
renewal or extension, or applied toward the payment of indebtedness secured by
mortgage, deed of trust, pledge, security agreement or other lien, the Lenders
shall be, and hereby are, subrogated to all of the rights, titles, security
interests and other liens securing the indebtedness so renewed, extended or
paid.

     (m)    This Security Agreement shall, after being executed by Machinery, be
a valid and binding obligation of Machinery, whether or not the Collateral Agent
or any Lender thereafter executes this Security Agreement.

     (n)    This Security Agreement (either an original or copy) may be
presented to filing officers for recordation as a financing statement or other
document evidencing the security interest created hereunder.

     (o)    In the event of a conflict between the provisions hereof and the
provisions of the Forbearance Agreements, the provisions of such Forbearance
Agreements shall be deemed to govern and control.

     (p)    CONSENT TO JURISDICTION. MACHINERY HEREBY AGREES THAT THE
OBLIGATIONS CONTAINED HEREIN ARE PERFORMABLE IN OKLAHOMA COUNTY, OKLAHOMA. ALL
PARTIES HERETO AGREE THAT (I) ANY ACTION ARISING OUT OF THIS TRANSACTION MAY BE
FILED IN OKLAHOMA COUNTY, OKLAHOMA, (II) VENUE FOR ENFORCEMENT OF ANY OF THE
OBLIGATIONS CONTAINED IN THE LOAN DOCUMENTS SHALL BE IN OKLAHOMA COUNTY,
OKLAHOMA, (III) PERSONAL JURISDICTION SHALL BE IN OKLAHOMA COUNTY, OKLAHOMA,
(IV) ANY ACTION OR PROCEEDING UNDER THIS SECURITY AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE COMMENCED AGAINST Machinery IN OKLAHOMA COUNTY, (V) SUCH ACTION
MAY BE INSTITUTED IN THE COURTS OF THE STATE OF OKLAHOMA LOCATED IN OKLAHOMA
COUNTY, OKLAHOMA OR IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT
OF OKLAHOMA LOCATED IN OKLAHOMA COUNTY, OKLAHOMA, AT THE OPTION OF THE BANK AND
(VI) MACHINERY HEREBY WAIVES ANY OBJECTION TO THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING AND ADDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO BE SUED
ELSEWHERE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BANK TO ACCOMPLISH
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

                                       70
<PAGE>

     (q)  THE FORBEARANCE AGREEMENTS AND THE DOCUMENTS EXECUTED IN CONNECTION
THEREWITH (INCLUDING THIS SECURITY AGREEMENT) REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND 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.

EXECUTED as of the day and year first set forth above.

MACHINERY:                                   MACHINERY INVESTMENT CORPORATION

                                             ___________________________________
                                             By: Jim D. Holland
                                             Title: Vice President

SECURED PARTY:                               BANK OF OKLAHOMA, N.A.,
                                             as Agent on behalf of the Line of
                                             Credit Banks

                                             ___________________________________
                                             By: Paul D. Mesmer
                                             Title: Senior Vice President

                                       71
<PAGE>

                                             PRINCIPAL LIFE INSURANCE COMPANY,
                                             an Iowa corporation

                                             By:  Principal Capital Management,
                                                  LLC a Delaware limited
                                                  liability company, its
                                                  authorized signatory

                                                  By:  _________________________
                                                  Its: _________________________
                                                  By:  _________________________
                                                  Its: _________________________

                                             PRINCIPAL LIFE INSURANCE COMPANY,
                                             ON BEHALF OF ONE OR MORE SEPARATE
                                             ACCOUNTS

                                             By: Principal Capital Management,
                                                 LLC a Delaware limited
                                                 liability company, its
                                                 authorized signatory

                                                 By:  _________________________
                                                 Its: _________________________
                                                 By:  _________________________
                                                 Its: _________________________

                                       72
<PAGE>

                                   Exhibit G

                              GUARANTY AGREEMENT

<TABLE>
<CAPTION>
===================================================================================================================

                                                            EFFECTIVE DATE OF AGREEMENT:
                                                            January 15, 2001
-------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
DEBTOR NAME AND ADDRESS:                                    LENDER NAME AND ADDRESS:

CMI Corporation, an Oklahoma corporation                    Bank of Oklahoma, N.A. for itself and as "Agent" on
P.O. Box 1985                                               behalf of all Banks which are signatory parties to the
Oklahoma City, Oklahoma 73101-1985                          Restated Credit Agreement
                                                            201 Robert S. Kerr
                                                            P.O. Box 24128
                                                            Oklahoma City, Oklahoma 73124
-------------------------------------------------------------------------------------------------------------------

GUARANTORS:

Machinery Investment Corporation, an Oklahoma corporation
("Machinery"), CMI Cedar Falls, Inc., an Iowa corporation
("Cedar"), CMI Johnson Corporation, an Illinois corporation
("Johnson"), Brownwood Ross Company, a Texas corporation
("Brownwood"), R M Barton Co., Inc., an Oklahoma
corporation ("Barton"), and CMI International (U.K.), Ltd.,
a corporation organized pursuant to the laws of the United
Kingdom ("International")

===================================================================================================================
</TABLE>

                                    RECITALS

     A.   Simultaneously herewith, Debtor entered into that certain Third Loan
Modification and Forbearance Agreement (the "Forbearance Agreement"), whereby
the lending institution signatories hereto, as Banks, agreed to forbear from
exercising remedies provided for in that certain Restated Credit Agreement dated
as of February 3, 2000 as amended from time to time thereafter wherein the
lending institutions extended credit to Debtor in the maximum aggregate
principal amount at any time outstanding not to exceed the sum of One Hundred
Million Dollars ($100,000,000.00) as evidenced by the promissory notes executed
in conjunction therewith.
<PAGE>

Capitalized terms used and not otherwise defined in this Restated Credit
Agreement shall have the meanings given to them in the Credit Agreement.
<PAGE>

     B.   In connection with the Forbearance Agreement, Debtor has executed and
delivered to the Banks the certain Base Revolving Notes, Swingline Note, Term
Notes and Gap Notes (as defined in the Forbearance Agreement) in favor of each
of such Banks aggregating the accelerated amount of the indebtedness due from
Debtor in favor of Banks.

     FOR VALUE RECEIVED, and in consideration of any loan and in consideration
of the matters described in the foregoing Recitals, which Recitals are
incorporated herein and made a part hereof and for other financial
accommodations made or given to Debtor by Lender, Machinery, Cedar, Johnson,
Brownwood, Barton (collectively referred to herein as the "Guarantor") hereby
guarantees absolutely and unconditionally, jointly and severally, the full and
prompt payment when due, whether at maturity, by acceleration or otherwise, and
at any and all times thereafter, of all indebtedness, liabilities and
obligations evidenced by those certain promissory notes executed by Debtor
pursuant to the terms of the Forbearance Agreement in favor of each Bank which
is a party to the Credit Agreement, plus all accrued and unpaid interest thereon
and all costs and expenses, including, but not limited to attorneys' fees, court
costs and other legal expenses, paid or incurred by lender in collecting or
endeavoring to collect such indebtedness or any part thereof and in enforcing
this guaranty (all such indebtedness, liabilities and obligations including the
debt evidenced by such promissory note, together with all extensions, renewals,
replacements, rearrangements, changes in form and modifications thereof, being
hereinafter collectively called the "Indebtedness"). Guarantor's obligation
hereunder is an absolute, unconditional and continuing guaranty of payment of
the Indebtedness.

(a)  Amount.  This guaranty is unlimited in amount. It is expressly agreed and
     ------
understood that all amounts recovered from Guarantor shall be over, above and in
addition to any amounts recovered from any other source and applied to the
Indebtedness.

(b)  Statement of Consideration.  Guarantor stipulates that Guarantor will
     --------------------------
receive substantial and valuable and direct consideration and benefits from the
extension of credit by the Banks to Debtor and that it is in the Guarantor's
best interest to enter into this guaranty.

(c)  Banks' Remedies.  In the event of (i) a default with respect to any portion
     ---------------
of the Indebtedness or under any promissory note executed by Debtor, or (ii) a
breach of any of the covenants or agreements of Guarantor contained herein, or
(iii) a default or events of default under any loan agreement, credit agreement,
pledge agreement, guaranty, mortgage or security agreement between or among the
Debtor, the Guarantor and/or any Bank, or (iv) the sale, exchange or transfer of
any of the interest of Guarantor in the Debtor, or (v) the business failure of
Debtor or Guarantor or (vi) the appointment of a receiver, trustee, custodian or
liquidator of any part of the property or assets of Debtor or Guarantor or (vii)
the commencement of any proceedings under any bankruptcy or insolvency laws by
or against Debtor or Guarantor if not dismissed within 90 days, and even if such
event shall occur at a time when any of the Indebtedness may not be due and
payable, Guarantor agrees to pay the Banks forthwith the full amount which would
be payable hereunder by Guarantor if all of the Indebtedness were then due and
payable.
<PAGE>

(d)  Continuing Nature of Guaranty.  Guarantor further agrees that this guaranty
     -----------------------------
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of the Indebtedness to the Banks is rescinded
or must otherwise be returned by any Bank upon the insolvency, bankruptcy or
reorganization of the Debtor or otherwise, all as though such payment to such
Bank had not been made.

(e)  Guarantor's Authorization to Lender.  All Banks may at any time and from
     -----------------------------------
time to time, without notice to Guarantor, take any or all of the following
actions without affecting or impairing the liability of Guarantor on this
guaranty: (i) renew, extend, restructure, modify, rearrange or change the form
of the Indebtedness or the time of payment of all or any portion of the
Indebtedness, (ii) sell, exchange, accept, substitute, impair ,release,
surrender or realize upon or otherwise deal in any manner and in any order with
any security or collateral for the Indebtedness, (iii) accept other guarantors
or endorsers, (iv) release, compromise or settle with any person primarily or
secondarily liable on the Indebtedness (including any maker, co-maker, endorser
or guarantor), and (v) change, whether decrease or increase, the rate of
interest due on the Indebtedness or the manner or place of payment. The
liability of Guarantor under this guaranty shall in no way be affected or
impaired by any failure, delay or omission in enforcing payment of the
Indebtedness or this guaranty or any security to either the Indebtedness or for
this guaranty. In order to hold Guarantor liable hereunder, there shall be no
obligation on the part of the Banks, at any time, to resort for payment to the
Debtor or any other guarantor, to seek or obtain a deficiency judgment against
Debtor or to proceed against any security or collateral for the Indebtedness or
this guaranty, and the Banks shall have the absolute, unconditional and
continuing right to enforce this guaranty irrespective of whether or not other
proceedings or steps are being taken against any property securing the
Indebtedness or any other guarantor or any other party primarily or secondarily
liable on any of the Indebtedness. Guarantor waives and relinquishes any right
to set off or offset the fair market value of any collateral or security for the
Indebtedness against Guarantor's liability hereunder should the Banks exercise
their right to proceed directly against the Guarantor prior to proceeding
against such collateral or security.

(f)  Relinquishment of Right of Offset. If the Banks elect to foreclose any lien
     ---------------------------------
in their favor, (i) the Banks are authorized to purchase all or any portion of
collateral covered by such lien, and (ii) the amount of the sale proceeds
received by the Banks to be applied against the Indebtedness shall be the actual
net proceeds received from sale of any such collateral.

(g)  Application of Payments on Indebtedness. Any and all payments upon the
     ---------------------------------------
Indebtedness made by the Debtor, or by Guarantor, or by any other person, and
the proceeds of any and all security for any of the Indebtedness may be applied
by the Banks upon such of the items of the Indebtedness, and in such order, as
the Banks may determine.

(h)  Guarantor Waivers. Until the Indebtedness is paid in full, Guarantor waives
     -----------------
notice of acceptance hereof by the Banks and further waives presentment,
protest, demand, notice of dishonor or default, notice of acceptance of this
guaranty, notice of any loans made, extensions or renewals granted or other
action taken in reliance hereon and all demands and notices of any kind in
connection with this guaranty or the Indebtedness. GUARANTOR FURTHER WAIVES AND
<PAGE>

RELINQUISHES ANY RIGHT OF REIMBURSEMENT, SUBROGATION, INDEMNIFICATION OR OTHER
RECOURSE OR CLAIM, WHETHER CONTINGENT OR MATURED, WHICH GUARANTOR MAY HAVE
AGAINST THE DEBTOR. IT IS THE EXPRESS INTENT OF GUARANTOR AND LENDER TO
ELIMINATE ANY DEBTOR/CREDITOR RELATIONSHIP BETWEEN THE DEBTOR AND GUARANTOR.
UNTIL THE INDEBTEDNESS IS PAID IN FULL, GUARANTOR HEREBY EXPRESSLY RELEASES AND
WAIVES ANY AND ALL PRESENT AND FUTURE RIGHTS AS A CREDITOR OF DEBTOR IN ALL
RESPECTS.

(i)  Guarantor's Representations and Warranties.  This guaranty shall bind the
     ------------------------------------------
heirs, successors and assigns of Guarantor and inure to the benefit of the Banks
and their successors and assigns. This guaranty is deemed executed and delivered
in the State of Oklahoma and shall be governed by and construed in accordance
with the laws of the State of Oklahoma. It is agreed that this guaranty was
contracted for in the city set forth above as part of Agent's address, and this
guaranty is hereby deemed to have been given when received and accepted by the
Agent in such city. Guarantor hereby waives all objections to venue and consents
and submits to the jurisdiction of any state or federal court sitting in such
city or the county in which such city is located, or in any state or county in
which real property securing any promissory note executed by Debtor is located
in connection with any action instituted by the Banks by reason of or arising
out of the execution, delivery or performance of any promissory note executed by
Debtor or the collection of any of the Indebtedness or this guaranty. Wherever
possible each provision of this guaranty shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of this
guaranty shall be prohibited by or invalid under such 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
guaranty. If Guarantor is a corporation, this guaranty has been duly authorized
to be executed, delivered and performed by the undersigned corporate officers
pursuant to all necessary corporate action of the board of directors of the
Guarantor.

(j)  Waivers and Settlements.  All rights of the Banks are cumulative and not
     -----------------------
alternative to other rights and may be selectively and successively enforced by
the Banks as they may elect or determine in the sole discretion of the Banks and
such action(s) shall not be deemed a waiver or relinquishment of any other right
or remedy held by the Banks. The Banks may settle with any one or more of the
other parties for such sum or sums as it may see fit and release any of such
other parties from all further liability to the Banks for such Indebtedness
without impairing the right of the Banks to demand and collect the balance of
such Indebtedness from others not so expressly released.

(k)  Further Representations.  Guarantor expressly represents and warrants to
     -----------------------
the Banks that at the time of the execution and delivery hereof to the Banks
nothing exists to impair the effectiveness and the immediate taking effect of
this guaranty as the sole and only agreement between Guarantor and the Banks
with respect to guaranteeing payment of the Indebtedness.
<PAGE>

(l)  Entire Agreement.  THE WHOLE OF THIS GUARANTY IS FULLY SET FORTH HEREIN AND
     ----------------
CONSTITUTES THE ENTIRE AGREEMENT OF THE GUARANTOR AND LENDER WITH RESPECT TO
THIS GUARANTY, ALL DISCUSSIONS AND NEGOTIATIONS ARE MERGED INTO THIS AGREEMENT.
BANK HAS NOT MADE ANY ORAL AGREEMENTS, PROMISES, OR "SIDE DEALS". This guaranty
may only be modified by a written agreement by Bank and Guarantor. No officer,
agent or employee of Bank has authority to modify this guaranty orally or to
waive the provisions of this paragraph.

(m)  Successors and Assigns.  This guaranty shall inure to the benefit of the
     ----------------------
Bank's successors and assigns and shall be binding upon the personal
representatives, heirs, successors and assigns of Guarantor. This guaranty is
effective immediately upon execution. Guarantor hereby waives and irrevocably
releases any claim that the delivery or effectiveness of this guaranty is
conditional in any manner whatsoever.

(n)  Headings.  The headings of the sections of this Guaranty Agreement are
     --------
inserted for convenience only and shall not be deemed to constitute a part
hereof.

(o)  Date.  This guaranty is made and entered into effective as of the date
     ----
first set forth above.

GUARANTOR SIGNATURE:

                                             MACHINERY INVESTMENT CORPORATION

                                             -----------------------------------
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                       CMI CEDAR FALLS, INC.

                                             -----------------------------------
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                        CMI JOHNSON CORPORATION

                                             -----------------------------------
                                             By: Jim D. Holland
                                             Title: Vice President

                                             Notice Address:
                                             P.O. Box 1985
                                             Oklahoma City, Oklahoma 73101-1985
                                             Fax: 405/787-6020
<PAGE>

                                BROWNWOOD ROSS COMPANY

                                        -----------------------------------
                                        By: Jim D. Holland
                                        Title: Vice President

                                        Notice Address:
                                        P.O. Box 1985
                                        Oklahoma City, Oklahoma 73101-1985
                                        Fax: 405/787-6020
<PAGE>

                                        CMI International (U.K.), Ltd.

                                        -----------------------------------
                                        By: Jim D. Holland
                                        Title:  Director

                                        Notice Address:
                                        P.O. Box 1985
                                        Oklahoma City, Oklahoma 73101-1985
                                        Fax: 405/787-6020
<PAGE>

                                R.M. BARTON CO., INC.

                                        -----------------------------------
                                        By: Jim D. Holland
                                        Title: Vice President

                                        Notice Address:
                                        P.O. Box 1985
                                        Oklahoma City, Oklahoma 73101-1985
                                        Fax: 405/787-6020
<PAGE>

                                    Exhibit H

Record and return to:

Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C.
Bank One Tower
100 North Broadway, Suite 2900
Oklahoma City, Oklahoma  73102
ATTN: Daniel J. Glover

                         MORTGAGE AND SECURITY AGREEMENT

A.   THIS MORTGAGE AND SECURITY AGREEMENT made effective on January 15, 2001, by
CMI CEDAR FALLS, INC., P.O. Box 1985, Oklahoma City, Oklahoma 73101-1985,
(herein called "Mortgagor" and sometimes "Borrower"), to BANK OF OKLAHOMA, N.A.,
a national banking association (i) on its own behalf ("BOK" and in its
representative capacities as hereafter described, the "Mortgagee") and as agent
on behalf of BANK OF AMERICA, N.A., COMERICA BANK - TEXAS, FIRSTAR BANK, and UMB
BANK, N.A. (collectively, the "Line of Credit Banks"), and (ii) as Collateral
Agent (the "Collateral Agent") on behalf of the Line of Credit Banks and
Principal Life Insurance Company ("Principal" and collectively with the Line of
Credit Banks, the "Lenders") under and pursuant to that certain Intercreditor
Agreement by and among the Line of Credit Banks, Principal, and Mortgagor dated
in June 2000 as amended by that certain First Amendment to Intercreditor
Agreement dated as of the date hereof (the "Intercreditor Agreement")and each of
their successors and assigns.

     Notice: This Mortgage secures credit in the amount of $660,000.00. Loans
and advances up to this amount, together with interest are senior to
indebtedness to other creditors under subsequently recorded or filed mortgages
and liens.

                                  WITNESSETH:

B.   Borrower is justly indebted to the Line of Credit Banks and Principal as
     follows:

              1. all principal and interest due and owing pursuant to the those
     certain notes in favor of each of the Line of Credit Banks (the "Line of
     Credit Notes") executed in conjunction with or pursuant to that certain
     Third Loan Modification and Forbearance Agreement by and between CMI
     Corporation and each of the Line of Credit Banks dated as of the date
     hereof (the "Line of Credit Forbearance Agreement"); (ii) all principal and
     interest due and owing pursuant to that certain promissory note in favor of
     Principal (the "Principal Note") the repayment of which are currently
     governed by that certain Third Forbearance Agreement by and between
     Borrower and Principal (the "Principal Forbearance Agreement" and together
     with the Line of Credit Forbearance Agreement, the "Forbearance

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<PAGE>

     Agreements"), (iii) all fees, expenses, and charges (including but not
     limited to indemnification and reimbursement obligations and attorneys'
     fees) payable under the Forbearance Documents (hereafter defined), (iv) all
     amounts now existing or hereafter advanced by either the Line of Credit
     Banks or Principal, matured or unmatured, direct or contingent, to or for
     the benefit of Mortgagor, and (v) all other Obligations including, but not
     limited to, "Make Whole Premiums", as defined in the Forbearance Documents,
     and any renewals, extensions, or substitutions for any of the above. For
     the purposes hereof, the term "Forbearance Documents" shall mean the
     Forbearance Agreements, any loan or credit agreements, promissory notes,
     guaranty agreements, security agreements, mortgages, deeds of trust and all
     other instruments and documents executed and delivered in connection with,
     or to secure Mortgagor's obligations to the Line of Credit Banks and/or
     Principal, as the case may be, and as the same may be amended from time to
     time

     2.    Any and all sums which may be expended by Mortgagee or which
     Mortgagee may be obligated to expend in order to cure any default of
     Mortgagor under this Mortgage or any other document evidencing or securing
     the Indebtedness, together with interest at the default rate (as set forth
     in the Forbearance Documents) on all such sums from the dates upon which
     Mortgagee may expend or become obligated to expend such.

     3.    The covenants and obligations of Mortgagor contained in this
Mortgage.

     4.    The Line of Credit Notes in the combined principal amount of Seventy
Three Million Nine Hundred Seventy Seven Thousand Five Hundred Seventy and
No/100 Dollars ($73,977,570.00) from CMI to the Line of Credit Banks, which such
Line of Credit Notes consist of the following (as such terms are defined in the
Line of Credit Forbearance Agreement): (i) the Base Revolving Notes in the
combined principal amount of $32,448,601.20; (ii) the Swingline Note in the
principal amount of $17,000,000.00; (iii) the Term Notes in the combined
principal amount of $15,328,033.80; and (iv) the Gap Notes in the combined
principal amount of $9,200,935.00, which Line of Credit Notes are due and
payable in full pursuant to the terms of the Line of Credit Forbearance
Agreement and the payment by CMI to the Line of Credit Banks of all sums of
money advanced or paid by the Line of Credit Banks to cure or correct or in
consequence of any default by CMI or failure of CMI to comply with the terms,
conditions, covenants, agreements and obligations of CMI contained in the Line
of Credit Notes.

     5.    The Principal Note in the principal amount of $28,822,429.37 from CMI
to the Principal and the payment by CMI to Principal of all sums of money
advanced or paid by Principal to cure or correct or in consequence of any
default by CMI or failure of CMI to comply with the terms, conditions,
covenants, agreements and obligations of CMI contained in the Principal Note.

     6.    This Mortgage is also security for the payment of all other
indebtedness of CMI to the Line of Credit Banks and Principal of whatever kind
or character, now owing,

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<PAGE>

         or that hereafter become owing by CMI to the Line of Credit Banks and
         Principal, whether such indebtedness is evidenced by note, open
         account, overdraft, endorsement, surety, agreement, guaranty or
         otherwise, and all sums which may be advanced from time to time by the
         Line of Credit Banks and/or Principal to CMI and for the payment of all
         other extensions, renewals, substitutions and changes in form of the
         indebtedness represented by said Line of Credit Notes or Principal Note
         (the "Promissory Notes"), which extensions or renewals of said
         Promissory Notes, and this Mortgage may be made from time to time and
         for any term or terms with or without notice to Mortgagor.

         Collectively, the obligations referred to in Paragraphs 1-6 above are
referred to herein as the "Indebtedness". Capitalized terms used herein and not
otherwise defined shall have those meanings given to them in the other
Forbearance Documents.

C.        NOW, THEREFORE, to secure the payment of the Indebtedness in
accordance with the terms and conditions of the Forbearance Documents, and all
extensions, modifications and renewals thereof and the performance of the
covenants and agreements contained therein, and also to secure the payment of
any and all other Indebtedness, direct or contingent, that may now or hereafter
become owing from Borrower to Lenders in connection with the Forbearance
Documents, and in consideration of the Loan Amount in hand paid, receipt of
which is hereby acknowledged, Borrower does by these presents sell mortgage and
convey unto Lenders, their successors and assigns forever, that certain real
estate and all of Borrower's estate, right, title and interest therein, located
in the county of Black Hawk County, State of Iowa, more particularly described
in Exhibit A attached hereto and made a part hereof (the "Land"), which Land,
   ---------                                              ----
together with the following described property, rights and interests, is
collectively referred to herein as the "Premises".
                                        --------

D.        Together with Borrower's interest as lessor in and to all Leases and
all Rents, which are pledged primarily and on a parity with the Land and not
secondarily.

E.        Together with all and singular the tenements, hereditaments,
easements, appurtenances, passages, waters, water courses, riparian rights,
sewer rights, rights in trade names, licenses, permits and contracts, and all
other rights, liberties and privileges of any kind or character in any way now
or hereafter appertaining to the Land, including but not limited to, homestead
and any other claim at law or in equity as well as any after-acquired title,
franchise or license and the reversion and reversions and remainder and
remainders thereof.

F.         Together with the right in the case of foreclosure hereunder of the
encumbered property for Lenders to take and use the name by which the buildings
and all other improvements situated on the Premises are commonly known and the
right to manage and operate the said buildings under any such name and variants
thereof

G.         Together with all right, title and interest of Borrower in any and
all buildings and improvements of every kind and description now or hereafter
erected or placed on the said Land and all materials intended for construction,
reconstruction, alteration and repairs of such buildings and

                                       86
<PAGE>

improvements now or hereafter erected thereon, all of which materials shall be
deemed to be included within the Premises immediately upon the delivery thereof
to the Premises, and all fixtures now or hereafter owned by Borrower and
attached to or contained in and used in connection with the Premises including,
but not limited to, all machinery, motors, elevators, fittings, radiators,
awnings, shades, screens, and all plumbing, heating, lighting, ventilating,
refrigerating, incinerating, air-conditioning and sprinkler equipment and
fixtures and appurtenances thereto; and all items of furniture, furnishings,
equipment and personal property owned by Borrower used or useful in the
operation of the Premises; and all renewals or replacements of all of the
aforesaid property owned by Borrower or articles in substitution therefor,
whether or not the same are or shall be attached to said buildings or
improvements in any manner (collectively, the "Improvements"); it being mutually
                                               ------------
agreed, intended and declared that all the aforesaid property owned by Borrower
and placed by it on the Land or used in connection with the operation or
maintenance of the Premises shall, so far as permitted by law, be deemed to form
a part and parcel of the Land and for the purpose of this Mortgage to be Land
and covered by this Mortgage, and as to any of the property aforesaid which does
not form a part and parcel of the Land or does not constitute a "fixture" (as
such term is defined in the Uniform Commercial Code) this Mortgage is hereby
deemed to be, as well, a security agreement under the Uniform Commercial Code
for the purpose of creating hereby a security interest in such property which
Borrower hereby grants to Lenders as secured parties.

H.   Together with all right, title and interest of Borrower, now or hereafter
acquired, in and to any and all strips and gores of land adjacent to and used in
connection with the Premises and all right, title and interest of Borrower, now
owned or hereafter acquired, in, to, over and under the ways, streets, sidewalks
and alleys adjoining the Premises.

I.   Together with all funds now or hereafter held by Lenders under any escrow
security agreement or under any of the terms hereof, including but not limited
to insurance proceeds from all insurance policies required to be maintained by
Borrower under the Forbearance Documents, and all awards, decrees, proceeds,
settlements or claims for damage now or hereafter made to or for the benefit of
Borrower by reason of any damage to, destruction of or taking of the Premises or
any part thereof, whether the same shall be made by reason of the exercise of
the right of eminent domain or by condemnation or otherwise (a "Taking").
                                                                ------
J.   TO HAVE AND TO HOLD the same unto the Lenders, their successors and
assigns forever, for the purposes and uses herein expressed.

K.   Borrower represents that it is the absolute owner in fee simple of the
Premises described in Exhibit A, which Premises are free and clear of any liens
or encumbrances except as set out in Exhibit B attached hereto, and except for
taxes which are not yet due or delinquent. Borrower shall forever warrant and
defend the title to the Premises against all claims and demands of all persons
whomsoever and will on demand execute any additional instrument which may be
required to give Lenders a valid first lien on all of the Premises, subject to
the "Permitted Encumbrances" set forth in Exhibit B.
     ----------------------

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<PAGE>

L.   Borrower further represents that (i) the Premises is not subject to any
casualty damage; (ii) Borrower has not received any written notice of any
eminent domain or condemnation proceeding affecting the Premises; and (iii) to
the best of Borrower's knowledge, following due and diligent inquiry, there are
no actions, suits or proceedings pending, completed or threatened against or
affecting Borrower or any person or entity owning an interest (directly or
indirectly) in Borrower ("Interest Owner(s)") or any property of Borrower or any
                          -----------------
Interest Owner in any court or before any arbitrator of any kind or before or by
any governmental authority (whether local, state, federal or foreign) that,
individually or in the aggregate, could reasonably be expected by Lenders to be
material to the transaction contemplated hereby.

         BORROWER COVENANTS AND AGREES AS FOLLOWS:

1.       Borrower shall

         (a)      pay each item of Indebtedness secured by this Mortgage when
                  due according to the terms of the Forbearance Documents;

         (b)      pay a late charge on any payment of principal, interest, Make
                  Whole Premium or Indebtedness which is not paid on or before
                  the due date thereof to cover the expense involved in handling
                  such late payment;

         (c)      pay on or before the due date thereof any Indebtedness
                  permitted to be incurred by Borrower pursuant to the
                  Forbearance Documents and any other claims which could become
                  a lien on the Premises (unless otherwise specifically
                  addressed in paragraph 1(e) hereof), and upon request of
                  Lenders exhibit satisfactory evidence of the discharge
                  thereof;

         (d)      complete within a reasonable time, the construction of any
                  Improvements now or at any time in process of construction
                  upon the Land;

         (e)      manage, operate and maintain the Premises and keep the
                  Premises, including but not limited to, the Improvements, in
                  good condition and repair and free from mechanics' liens or
                  other liens or claims for liens, provided however, that
                  Borrower may in good faith, with reasonable diligence and upon
                  written Notice to Lenders within ten (10) days after Borrower
                  has knowledge of such lien or claim, contest the validity or
                  amount of any such lien or claim and defer payment and
                  discharge thereof during the pendency of such contest in the
                  manner provided by law, provided that (i) such contest may be
                  made without the payment thereof; (ii) such contest shall
                  prevent the sale or forfeiture of the Premises or any part
                  thereof, or any interest therein, to satisfy such lien or
                  claim; (iii) Borrower shall have obtained a bond over such
                  lien or claim from a bonding company acceptable to Lenders
                  which has the effect of removing such lien or collection of
                  the claim or lien so contested; and (iv) Borrower shall pay
                  all costs and expenses incidental to such contest; and further
                  provided, that in the

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<PAGE>

                  event of a ruling or adjudication adverse to Borrower,
                  Borrower shall promptly pay such claim or lien, shall
                  indemnify and hold Lenders and the Premises harmless from any
                  loss for damage arising from such contest and shall take
                  whatever action necessary to prevent sale, forfeiture or any
                  other loss or damage to the Premises or to the Lenders;

         (f)      comply, and cause each lessee or other user of the Premises to
                  comply, with all requirements of law and ordinance, and all
                  rules and regulations, now or hereafter enacted, by
                  authorities having jurisdiction of the Premises and the use
                  thereof, including but not limited to all covenants,
                  conditions and restrictions of record pertaining to the
                  Premises, the Improvements, and the use thereof (collectively,
                  "Legal Requirements");
                   ------------------

         (g)      subject to the provisions of paragraph 6. hereof, promptly
                  repair, restore or rebuild any Improvements now or hereafter a
                  part of the Premises which may become damaged or be destroyed
                  by any cause whatsoever, so that upon completion of the
                  repair, restoration and rebuilding of such Improvements there
                  will be no liens of any nature arising out of the construction
                  and the Premises will be of substantially the same character
                  and quality as it was prior to the damage or destruction;

         (h)      if other than a natural person, do all things necessary to
                  preserve and keep in full force and effect its existence,
                  franchises, rights and privileges under the laws of the state
                  of its formation and, if other than its state of formation,
                  the state where the Premises is located;

         (i)      do all things necessary to preserve and keep in full force and
                  effect Lender's title insurance coverage insuring the lien of
                  this Mortgage as a first and prior lien, subject only to the
                  Permitted Encumbrances stated in Exhibit B and any other
                  exceptions after the date of this Mortgage approved in writing
                  by Lenders, including without limitation, delivering to
                  Lenders not less than 30 days prior to the effective date of
                  any rate adjustment, modification or extension of the Note or
                  any other Loan Document, any new policy or endorsement which
                  may be required to assure Lenders of such continuing coverage;
                  and

         (j)      execute any and all documents which may be required to perfect
                  the security interest granted by this Mortgage.

2.       Borrower shall not:

         (a)      make any alteration or addition (other than normal repair and
                  maintenance) to (i) the roof or any structural component of
                  any Improvements on the Premises, or (ii) the building
                  operating systems, including but not limited to the
                  mechanical, electrical,

                                       89
<PAGE>

                  heating, cooling or ventilation systems (other than
                  replacement with equal or better quality and capacity),
                  without the prior written consent of Lenders, except such as
                  are required by applicable Legal Requirements;

         (b)      remove or demolish any material Improvements, or any portion
                  thereof, which at any time constitutes a part of the Premises;

         (c)      cause or permit any change to be made in the general use of
                  the Premises without Lender's prior written consent;

         (d)      initiate any or acquiesce to a zoning reclassification or
                  material change in zoning without Lender's prior written
                  consent. Borrower shall use all reasonable efforts to contest
                  any such zoning reclassification or change;

         (e)      make or permit any use of the Premises that could with the
                  passage of time result in the creation of any right of use, or
                  any claim of adverse possession or easement on, to or against
                  any part of the Premises in favor of any person or entity or
                  the public;

         (f)      allow any of the following to occur:

                  (i)      a transfer of all or any portion of the Premises or
                           any interest in the Premises; or

                  (ii)     a transfer of any ownership interest in Borrower or
                           any entity which owns, directly or indirectly, an
                           interest in Borrower at any level of the ownership
                           structure.

                  If any of such events occur, it shall be null and void and
                  shall constitute an Event of Default under the Forbearance
                  Documents.

                  It is understood and agreed that the Indebtedness evidenced by
                  the Line of Credit Notes and the Principal Note is personal to
                  Borrower and in accepting the same Lenders has relied upon
                  what it perceived as the willingness and ability of Borrower
                  to perform its obligations under the Forbearance Documents and
                  the Environmental Indemnity and as lessor under the Leases of
                  the Premises. Furthermore, Lenders may consent to a transfer
                  and expressly waive Borrower's covenants contained in this
                  paragraph 2.(f), in writing to Borrower; however any such
                  consent and waiver shall not constitute any consent or waiver
                  of such covenants as to any Transfer other than that for which
                  the consent and waiver was expressly granted. Furthermore,
                  Lender's willingness to consent to any Transfer and waive
                  Borrower's covenants contained in this paragraph 2.(f),
                  implies no standard of reasonableness in determining whether
                  or not such consent shall be granted and the same may be based
                  upon what Lenders solely deem to be in its best interest.

                                       90
<PAGE>

                  For purposes of this Mortgage, the following terms shall have
                  the respective meanings set forth below:

                  "Transfer" or "Transferred" shall mean with respect to the
                  Premises, an interest in the Premises, or an ownership
                  interest or interest therein:

                  (i)      a sale, assignment, transfer, conveyance or other
                           disposition (whether voluntary, involuntary or by
                           operation of law);

                  (ii)     the creation, sufferance or granting of any lien,
                           encumbrance, security interest or collateral
                           assignment (whether voluntarily, involuntarily or by
                           operation of law), other than the lien hereof, the
                           leases of the Premises assigned to Lenders, the
                           Permitted Encumbrances and those liens which Borrower
                           is contesting in accordance with the provisions of
                           paragraph 1(e);
                  (iii)    the issuance or other creation of ownership interests
                           in an entity;
                  (iv)     the reconstitution or conversion from one entity to
                           another type of entity; or
                  (v)      a merger, consolidation, reorganization or any other
                           business combination.

           3. (a) Borrower shall pay or cause to be paid when due and before any
                  penalty attaches or interest accrues all general taxes,
                  special taxes, assessments (including assessments for benefits
                  from public works or improvements whenever begun or
                  completed), utility charges, water charges, sewer service
                  charges, common area maintenance charges, if any, vault or
                  space charges and all other like charges against or affecting
                  the Premises or against any property or equipment located on
                  the Premises, or which might become a lien on the Premises,
                  and shall, within 10 days following Lender's request, furnish
                  to Lenders a duplicate receipt of such payment. If any such
                  tax, assessment or charge may legally be paid in installments,
                  Borrower may, at its option, pay such tax, assessment or
                  charge in installments.

              (b) If Borrower desires to contest any tax, assessment or charge
                  relating to the Premises, Borrower may do so by paying the
                  same in full, under protest, in the manner provided by law;
                  provided, however, that

                  (i)  if contest of any tax, assessment or charge may be made
                       without the payment thereof, and

                  (ii) such contest shall have the effect of preventing the
                       collection of the tax, assessment or charge so contested
                       and the sale or forfeiture of the Premises or any part
                       thereof or any interest therein to satisfy the same,

                  then Borrower may in its discretion and upon the giving of
                  written notice to Lenders of its intended action and upon the
                  furnishing to Lenders of such security or bond as Lenders may
                  require, contest any such tax, assessment or charge in good
                  faith and

                                       91
<PAGE>

                  in the manner provided by law. All costs and expenses
                  incidental to such contest shall be paid by Borrower. In the
                  event of a ruling or adjudication adverse to Borrower,
                  Borrower shall promptly pay such tax, assessment or charge.
                  Borrower shall indemnify and save harmless the Lenders and the
                  Premises from any loss or damage arising from any such contest
                  and shall, if necessary to prevent sale, forfeiture or any
                  other loss or damage to the Premises or to Lenders, pay such
                  tax, assessment or charge or take whatever action is necessary
                  to prevent any sale, forfeiture or loss.

           4. (a) Borrower shall at all times keep in force (i) property
                  insurance insuring all Improvements which now are or hereafter
                  become a part of the Premises for perils covered by a causes
                  of loss-special form insurance policy with an ordinance or law
                  coverage endorsement containing both replacement cost and
                  agreed amount endorsements or options; (ii) commercial general
                  liability insurance naming Lenders as an additional insured
                  protecting Borrower and Lenders against liability for bodily
                  injury or property damage occurring in, on or adjacent to the
                  Premises in commercially reasonable amounts, with a combined
                  single limit of not less than One Million Dollars
                  ($500,000.00) per occurrence with not less than a Two Million
                  Dollar ($1,000,000.00) aggregate limit and excess umbrella
                  liability insurance of not less than Twenty-five Million
                  Dollars ($25,000,000.00); (iii) boiler and machinery insurance
                  if the property has a boiler or is an office building; (iv)
                  rental value insurance for the perils specified herein for one
                  hundred percent (100%) of the Rents (including operating
                  expenses, real estate taxes, assessments and insurance costs
                  which are lessee's liability) for a period of twelve (12)
                  months; (v) builders risk insurance during all periods of
                  construction; and (vi) insurance against all other hazards as
                  may be reasonably required by Lenders, including, without
                  limitation, insurance against loss or damage by flood and
                  earthquake.

              (b) All insurance shall be in form, content and amounts approved
                  by Lenders and written by an insurance company or companies
                  rated A, class size X/A, class size VIII or better in the most
                  current issue of Best's Insurance Reports and which is
                  licensed to do business in the state in which the Premises are
                  located and domiciled in the United States or a governmental
                  agency or instrumentality approved by Lenders. The policies
                  for such insurance shall have attached thereto standard
                  mortgagee clauses in favor of and permitting Lenders to
                  collect any and all proceeds payable thereunder and shall
                  include a 30 day (except for nonpayment of premium, in which
                  case, a 10 day) notice of cancellation clause in favor of
                  Lenders. All policies or certificates of insurance shall be
                  delivered to and held by Lenders as further security for the
                  payment of the Note and any other obligations arising under
                  the Forbearance Documents, with evidence of renewal coverage
                  delivered to Lenders at least 30 days before the expiration
                  date of any policy. Borrower shall not carry separate
                  insurance, concurrent in kind or form and contributing in the
                  event of loss, with any insurance required in the Forbearance
                  Documents.

                                       92
<PAGE>

           5. (a) Upon request of Lenders, Borrower shall deposit with and pay
                  to Lenders, on the Closing Date and/or on each payment date
                  specified in the Note, sums calculated by Lenders for payment
                  of the following as they become due and payable: (i) the
                  estimated taxes and assessments assessed or levied against the
                  Premises, and (ii) the estimated premiums for insurance
                  required by the Forbearance Documents, excluding commercial
                  general liability insurance. Lenders shall use such deposits
                  to pay the taxes, assessments and premiums when the same
                  become due. Borrower shall procure and deliver to Lenders, in
                  advance, statements for such charges. If the total payments
                  made by Borrower under this paragraph plus interest, if any,
                  accrued thereon exceed the amount of payments actually made by
                  Lenders for taxes, assessments and insurance premiums, such
                  excess shall be credited by Lenders on subsequent deposits to
                  be made by Borrower. If, however, the deposits are
                  insufficient to pay the taxes, assessments and insurance
                  premiums when the same shall be due and payable, Borrower will
                  pay to Lenders any amount necessary to make up the deficiency,
                  five (5) business days before the date when payment of such
                  taxes, assessments and insurance premiums shall be due. If at
                  any time Borrower shall tender to Lenders, in accordance with
                  the provisions of the Note secured by this Mortgage, full
                  payment of the entire Indebtedness represented thereby,
                  Lenders shall, in computing the amount of such Indebtedness,
                  credit to the account of Borrower any balance remaining in the
                  funds accumulated and held by Lenders under the provisions of
                  this paragraph. If there is an Event of Default resulting in a
                  public sale of the Premises, or if Lenders otherwise acquires
                  the Premises after an Event of Default, Lenders shall apply,
                  at the time of commencement of such proceedings, or at the
                  time the Premises is otherwise acquired, the balance then
                  remaining in the funds accumulated under this paragraph as a
                  credit toward any delinquent or accrued taxes and then in such
                  priority as Lenders elects to the other Indebtedness.

              (b) Any funds held under this paragraph shall not constitute any
                  deposit or account of the Borrower or moneys to which the
                  Borrower is entitled upon demand, or upon the mere passage of
                  time, or sums to which Borrower is entitled to any interest or
                  crediting of interest by virtue of Lender's mere possession of
                  such deposits. Lenders shall not be required to segregate such
                  deposits and may hold such deposits in its general account or
                  any other account and may commingle such deposits with any
                  other moneys of Lenders or moneys which Lenders are holding on
                  behalf of any other person or entity.

           6. In the event of any damage to or destruction of the Premises, or
              any part thereof:

              (a) Borrower will immediately notify Lenders thereof in the manner
                  provided in this Mortgage for the giving of notices. Lenders
                  shall have the right (which may be waived by Lenders in
                  writing) to settle and adjust any claim under such insurance
                  policies required to be maintained by Borrower. In all
                  circumstances, the proceeds

                                       93
<PAGE>

               thereof shall be paid to Lenders and Lenders are authorized to
               collect and to give receipts therefor. Borrower agrees and
               acknowledges that such proceeds shall be held by Lenders without
               any allowance of interest and that in any bankruptcy proceeding
               of Borrower, all such proceeds shall be deemed to be "Cash
               Collateral" as that term is defined in Section 363 of the
               Bankruptcy Code. Provided that no Event of Default exists,
               Borrower shall have the right to participate in any settlement or
               adjustment; provided, however, that any settlement or adjustment
               shall be subject to the written approval of Lenders, not to be
               unreasonably withheld.

           (b) Such proceeds, after deducting therefrom any expenses incurred by
               Lenders in the collection thereof (including but not limited to
               reasonable attorneys' fees and costs), shall be applied by
               Lenders to pay the Indebtedness secured hereby including, but not
               limited to the Make Whole Premium, whether or not then due and
               payable, provided, however, that if no Event of Default exists at
               the time of such application, no Make Whole Premium shall be due.

               Notwithstanding anything hereinabove to the contrary,

               (i)    in the event a casualty occurs and no Event of Default
                      exists, Lenders shall apply such proceeds as follows:

                      (A)  If the aggregate amount of such proceeds is less than
                           $50,000, Collateral Agent shall pay such proceeds
                           directly to Borrower, to be held in trust for Lenders
                           and applied to the cost of rebuilding and restoring
                           the Premises.

                      (B)  If the aggregate amount of such proceeds equals or
                           exceeds $50,000 the Collateral Agent shall disburse
                           such amounts of the proceeds as it reasonably deems
                           necessary for the repair or replacement of the
                           Premises, subject to the conditions set forth in
                           paragraph 6(c) below.

               (ii)   in the event an Event of Default exists or the conditions
                      set forth in paragraph 6(c) are not met, then Lenders, in
                      their sole and absolute discretion may either:

                      (A)  declare the entire Indebtedness to be immediately due
                           and payable and apply all such proceeds to pay the
                           Indebtedness in such priority as Lenders elect,
                           provided, however, that if no Event of Default exists
                           at the time of such application, no Make Whole
                           Premium shall be due; or

                      (B)  disburse such proceeds as Lenders reasonably deem
                           necessary for the repair or replacement of the
                           Premises subject to those conditions set

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                              forth in paragraph 6(c) which Lenders in their
                              sole and absolute discretion may require.

             (c) (i)  In the event that Borrower is to be reimbursed out of the
                      insurance proceeds or out of any award or payment received
                      with respect to a Taking, Lenders shall from time to time
                      make available such proceeds, subject to the following
                      conditions: (a) there continues to exist no Event of
                      Default; (b) the delivery to the Lenders of satisfactory
                      evidence of the estimated cost of completion of such
                      repair and restoration work and any architect's
                      certificates, waivers of lien, contractor's sworn
                      statements, and other evidence of cost and of payment and
                      of the continued priority of the lien hereof over any
                      potential liens of mechanics and materialmen (including,
                      without limitation, title policy endorsements) as Lenders
                      may require and approve; (c) the time required to complete
                      the repair and restoration work and for the income from
                      the Premises to return to the level it was prior to the
                      loss will not exceed the coverage period of the rental
                      value insurance required hereunder; (d) Lenders approve
                      the plans and specifications of such work before such work
                      is commenced if the estimated cost of rebuilding and
                      restoration exceeds 25% of the Indebtedness or involves
                      any structural changes or modifications. If said plans and
                      specifications substantially comply with those previously
                      approved by Lenders, Lender's approval shall not be
                      unreasonably withheld; (e) if the amount of any insurance
                      proceeds, award or other payment is insufficient to cover
                      the cost of restoring and rebuilding the Premises,
                      Borrower shall pay such cost in excess of such proceeds,
                      award or other payment before being entitled to
                      reimbursement out of such funds; and (f) such other
                      conditions to such disbursements, in Lender's discretion,
                      as would be customarily required by a construction lender
                      doing business in the area where the Premises is located
                      or which are otherwise required by any rating agency
                      rating a securitization transaction with respect to the
                      Loan.

                 (ii) No payment made by Lenders prior to the final completion
                      of the repair or restoration work shall, together with all
                      payments theretofore made, exceed 90% of the cost of such
                      work performed to the time of payment, and at all times
                      the undisbursed balance of said proceeds shall be at least
                      sufficient to pay for the cost of completion of such work
                      free and clear of all liens. Any proceeds remaining after
                      payment of the cost of rebuilding and restoration shall,
                      at the option of Lenders, either be (a) applied in
                      reduction of the Indebtedness secured hereby, provided,
                      however, that if no Event of Default exists at the time of
                      such application, no Make Whole Premium shall be due, or
                      (b) paid to Borrower.

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                (iii) Repair and restoration of the Premises shall be commenced
                      promptly after the occurrence of the loss and shall be
                      prosecuted to completion diligently, and the Premises
                      shall be so restored and rebuilt to substantially the same
                      character and quality as prior to such damage and
                      destruction and shall comply with all building codes and
                      zoning requirements.

            (d) Should such damage or destruction occur after foreclosure or
                sale proceedings have been instituted, the proceeds of any such
                insurance policy or policies, if not applied in rebuilding or
                restoration of the Improvements, shall be used to pay (i) the
                Indebtedness then due and owing in the event of a non-judicial
                sale in such priority as Lenders elect, or (ii) the amount due
                in accordance with any decree of foreclosure or deficiency
                judgment that may be entered in connection with such
                proceedings, and the balance, if any, shall be paid to the owner
                of the equity of redemption if he shall then be entitled to the
                same, or otherwise as any court having jurisdiction may direct.

         7. In the event of the commencement of a Taking affecting the Premises:

            (a) Borrower shall notify the Collateral Agent thereof in the manner
                provided in this Mortgage for the giving of notices. Lenders may
                participate in such proceeding, and Borrower shall deliver to
                the Collateral Agent all documents requested by it to permit
                such participation.

            (b) Borrower shall cause the proceeds of any award or other payment
                made relating to a Taking, to be paid directly to the Collateral
                Agent. Lenders, in their sole and absolute discretion: (i) may
                apply all such proceeds to pay the Indebtedness in such priority
                as Lenders elect, provided however, that if no Event of Default
                exists at the time of such application no Make Whole Premium
                shall be due; or (ii) subject to and in accordance with the
                provisions set forth in paragraph 6.(c) above, may disburse such
                amounts of the proceeds as Lenders reasonably deem necessary for
                the repair or replacement of the Premises.

         8. If by the laws of the United States of America or of any state or
            governmental subdivision having jurisdiction over Borrower or of the
            Premises or of the Forbearance Agreements or any amendments or
            modifications thereof, any tax or fee is due or becomes due or is
            imposed upon Lenders in respect of the Indebtedness hereby secured
            or the making, recording and registration of this Mortgage or
            otherwise in connection with the Forbearance Documents, the
            Environmental Indemnity or the Forbearance Agreements, except for
            Lender's income or franchise taxes, Borrower covenants and agrees to
            pay such tax or fee in the manner required by such law, and to hold
            harmless and indemnify Lenders, their successors and assigns,
            against any liability incurred by reason of the imposition of any
            such tax or fee.

        9. (a) Upon the occurrence of any Event of Default, Lenders may, but
               need not, make any payment or perform any act herein required of
               Borrower, in any form and manner

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               deemed expedient and may, but need not, make full or partial
               payments of principal or interest on prior encumbrances, if any,
               and purchase, discharge, compromise or settle any tax lien or
               other prior lien or title or claim thereof, or redeem from any
               tax sale or forfeiture affecting said Premises, or contest any
               tax or assessment. All moneys paid for any of the purposes herein
               authorized and all reasonable expenses paid or incurred in
               connection therewith, including but not limited to, reasonable
               attorneys' fees and costs and reasonable attorneys' fees and
               costs on appeal, and any other money advanced by Lenders to
               protect the Premises and the lien hereof, shall be so much
               additional Indebtedness secured hereby and shall become
               immediately due and payable without notice and with interest
               thereon at the Default Rate from the date of expenditure or
               advance until paid.

           (b) In making any payment hereby authorized relating to taxes or
               assessments or for the purchase, discharge, compromise or
               settlement of any prior lien, Lenders may make such payment
               according to any bill, statement or estimate secured from the
               appropriate public office without inquiry into the accuracy
               thereof or into the validity of any tax, assessment, sale,
               forfeiture, tax lien or title or claim thereof or without inquiry
               as to the validity or amount of any claim for lien which may be
               asserted.

       10. If one or more of the following events (herein called "Event(s) of
           Default") shall have occurred:

           (a) failure to pay when due any principal, interest, Make Whole
               Premium or other Indebtedness, utilities, taxes or assessments or
               insurance premiums required pursuant to the Forbearance Documents
               or the Environmental Indemnity, and such failure shall have
               continued for 10 days; or

           (b) Borrower or any guarantor voluntarily brings or acquiesces to any
               of the following: (A) any action for dissolution, act of
               dissolution or dissolution or the like of Borrower, Interest
               Owner or any guarantor under the Federal Bankruptcy Code as now
               or hereafter constituted; (B) the filing of a petition or answer
               proposing the adjudication of Borrower or any guarantor as a
               bankrupt or its reorganization or arrangement, or any
               composition, readjustment, liquidation, dissolution or similar
               relief with respect to it pursuant to any present or future
               federal or state bankruptcy or similar law; or (C) the
               appointment by order of a court of competent jurisdiction of a
               receiver, trustee or liquidator of the Premises or any part
               thereof or of Borrower or any guarantor or of substantially all
               of the assets of Borrower or any guarantor; or

           (c) one or more of the items set forth in paragraph 10.(b) above
               occur which were either not (i) voluntarily brought by Borrower
               or any guarantor or (ii) acquiesced in by Borrower or any
               guarantor, and which are not discharged or dismissed within 90
               days after the action, filing or appointment, as the case may be;
               or

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<PAGE>

           (d) with respect to the matters not described in the other
               subparagraphs of this paragraph 10., failure to duly observe or
               perform any covenant, condition or agreement of the Borrower or
               any guarantor contained in this Mortgage, the Forbearance
               Agreements or any of the Notes from Borrower to Lenders or in any
               other instrument or agreement which evidences or secures the Loan
               (the "Forbearance Documents"), or in the Environmental Indemnity;
               or

           (e) the failure of Borrower to duly observe or perform any of the
               covenants, conditions and agreements of the Borrower contained in
               paragraph 2.(f) of this Mortgage; or

           (f) any representation made by or on behalf of Borrower or any
               guarantor regarding the Premises, the making or delivery of any
               of the Forbearance Documents or the Environmental Indemnity or in
               any material written information provided by or on behalf of
               Borrower or any guarantor in connection with the Loan shall prove
               to be untrue or inaccurate in any material respect; or

           then, in each and every such case, the whole of said principal sum
           hereby secured shall, at the option of the Lenders and without
           further notice to Borrower, become immediately due and payable
           together with accrued interest thereon, a Make Whole Premium
           calculated in accordance with the provisions of the Forbearance
           Documents and all other Indebtedness, and whether or not Lenders have
           exercised said option, interest shall accrue on the entire principal
           balance and any interest or Make Whole Premium or other Indebtedness
           then due, at the Default Rate until fully paid or if Lenders have not
           exercised said option, for the duration of any Event of Default.

       11. Borrower agrees that if Lenders accelerate the whole or any part of
           the principal sum hereby secured, or apply any proceeds pursuant to
           the provisions hereof, Borrower waives any right to prepay the
           principal sum hereby secured in whole or in part without premium and
           agrees to pay, as yield maintenance protection and not as a penalty,
           a "Make Whole Premium". However, in the event any proceeds from a
           casualty or Taking of the Premises are applied to reduce the
           principal balance under the Notes, no Make Whole Premium shall be due
           so long as no Event of Default exists at the time of such
           application.

       12. Upon the occurrence of any Event of Default, in addition to any other
           rights or remedies provided in the Forbearance Documents, at law, in
           equity or otherwise, Lenders shall have the right to foreclose the
           lien hereof, and to the extent permitted herein and by applicable law
           to sell the Premises by sale independent of the foreclosure
           proceedings. In any suit to foreclose the lien hereof, and in any
           sale of the Premises, there shall be allowed and included as
           additional Indebtedness payable by Borrower to Lenders and secured
           hereby all expenditures and expenses which may be paid or incurred by
           or on behalf of Lenders for attorneys' fees and costs, including
           attorneys' fees and costs on appeal, appraisers' fees, expenditures
           for documentary and expert evidence, stenographer's charges,
           publication and advertising costs, survey costs, environmental audits
           and costs (which may be estimated as

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<PAGE>

           to items to be expended after the entry of any decree) of procuring
           all such abstracts of title, title searches and examinations, title
           insurance policies, torrens certificates and similar data and
           assurances with respect to title as Lenders deem reasonably necessary
           either to prosecute such suit or to consummate such sale or to
           evidence to bidders at any sale the true condition of the title to or
           the value of the Premises.

       13. The proceeds of any foreclosure sale, or other sale of the Premises
           in accordance with the terms hereof or as permitted by law, shall be
           distributed and applied in the following order of priority: first, to
           the payment of all costs and expenses incident to the foreclosure
           and/or sale proceedings, including all items as are mentioned in any
           preceding or succeeding paragraph hereof and second, as set forth in
           that certain Intercreditor Agreement, as amended, between the
           Borrower, the Line of Credit Banks and Principal.

       14. Following the occurrence of an Event of Default, unless the same has
           been specifically waived in writing, Borrower shall forthwith upon
           demand of Lenders surrender to the Collateral Agent for the ratable
           benefit of the Lenders possession of the Premises, and Lenders shall
           be entitled to take actual possession of the Premises or any part
           thereof personally or by its agents or attorneys, and Lenders in
           their discretion may, with or without force and with or without
           process of law, enter upon and take and maintain possession of all or
           any part of the Premises together with all documents, books, records,
           papers and accounts of the Borrower or the then owner of the Premises
           relating thereto, and may exclude Borrower, its agents or assigns
           wholly therefrom, and may as attorney-in-fact or agent of the
           Borrower, or in the name of Collateral Agent, for the ratable benefit
           of Lenders, and under the powers herein granted:

           (a) hold, operate, maintain, repair, rebuild, replace, alter,
               improve, manage or control the Premises as they deem judicious,
               insure and reinsure the same and any risks related to Lender's
               possession, operation and management thereof and receive all
               Rents, either personally or by its agents, and with full power to
               use such measures, legal or equitable, as in its discretion it
               deems proper or necessary to enforce the payment or security of
               the Rents, including actions for the recovery of Rent, actions in
               forcible detainer and actions in distress for Rents, hereby
               granting full power and authority to exercise each and every of
               the rights, privileges and powers herein granted at any and all
               times hereafter, without notice to Borrower; and

           (b) conduct leasing activity pursuant to the provisions of the
               Assignment of Leases.

           Lenders shall not be obligated to perform or discharge, nor do they
           hereby undertake to perform or discharge, any obligation, duty or
           liability under any Lease. Should Lenders incur any liability, loss
           or damage under any Leases, or under or by reason of the Assignment
           of Leases, or in the defense of any claims or demands whatsoever
           which may be asserted against Lenders or any one of them by reason of
           any alleged obligations or undertakings on its part to perform or
           discharge any of the terms, covenants or agreements in any Lease, the

                                       99
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           amount thereof, including costs, expenses and reasonable attorneys'
           fees and costs, including reasonable attorneys' fees and costs on
           appeal, shall be added to the Indebtedness and secured hereby.

       15. Lenders in the exercise of the rights and powers conferred upon them
           shall have the full power to use and apply the Rents, less costs and
           expenses of collection to the payment of or on account of the items
           listed in (a) - (c) below, at the election of Lenders and in such
           order as Lenders may determine. The manner of the application of
           Rents, the reasonableness of the costs and charges to which such
           Rents are applied and the item or items which shall be credited
           thereby shall be within the sole and unlimited discretion of Lenders.

           (a) to the payment of (i) the expenses of operating and maintaining
               the Premises, including, but not limited to the cost of
               management, leasing (which shall include reasonable compensation
               to Lenders and their agent or agents if management and/or leasing
               is delegated to an agent or agents), repairing, rebuilding,
               replacing, altering and improving the Premises, (ii) premiums on
               insurance as hereinabove authorized, (iii) taxes and special
               assessments now due or which may hereafter become due on the
               Premises and (iv) expenses of placing the Premises in such
               condition as will, in the sole judgment of Lenders, make it
               readily rentable;

           (b) to the payment of any principal, interest or any other
               Indebtedness secured hereby or any deficiency which may result
               from any foreclosure sale;

           (c) to the payment of established claims for damages, if any,
               reasonable attorneys' fees and costs and reasonable attorneys'
               fees and costs on appeal.

           To the extent that the costs and expenses in (a) - (c) above exceed
           the amounts collected, the excess shall be added to the Indebtedness
           and secured hereby.

       16. It is agreed that if this Mortgage covers less than ten (10) acres of
           land, and in the event of foreclosure of this Mortgage and sale of
           the property by sheriff's sale in such foreclosure proceedings, the
           time of one year for redemption from said sale provided by the State
           of Iowa may, in Lender's sole discretion, be reduced to six (6)
           months provided the Lenders, in such action files an election to
           waive any deficiency judgment against Borrower which may arise out of
           the foreclosure proceedings; all to be consistent with the provisions
           of Chapter 628 of the Iowa Code. If the redemption period is so
           reduced, for the first three (3) months after sale such right of
           redemption shall be exclusive to the Borrower, and the time periods
           in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be
           reduced to four (4) months. It is further agreed that the period of
           redemption after a foreclosure of this Mortgage may, in Lender's sole
           discretion, be reduced to sixty (60) days if all of the three
           following contingencies develop: (1) the real estate is less than ten
           (10) acres in size; (2) the Court finds affirmatively that the said
           real estate has been abandoned by the owners and those persons
           personally liable under this Mortgage at the time of such
           foreclosure; and (3) Lenders in such

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<PAGE>

         action file an election to waive any deficiency judgment against
         Borrower or its successors in interest in such action. If the
         redemption period is so reduced, Borrower or their successors in
         interest or the owner shall have the exclusive right to redeem for the
         first thirty (30) days after such sale, and the time provided for
         redemption by creditors as provided in Sections 628.5, 628.15 and
         628.16 of the Iowa code shall be reduced to forty (40) days. Entry of
         appearance by pleading or docket entry by or on behalf of Borrower
         shall be a presumption that the property is not abandoned. Any such
         redemption period shall be consistent with all of the provisions of
         Chapter 628 of the Iowa Code. This paragraph shall not be construed to
         limit or otherwise affect any other redemption provisions contained in
         Chapter 628 of the Iowa Code.

         Borrower represents that the Premises are not now and are not intended
         to be used for agricultural purposes as defined in Section 535.13 of
         the Iowa Code, nor are the Premises the residence of the Borrower, and
         that the period of redemption may be reduced as provided in Section
         628.28 of the Iowa Code.

17.      Upon the occurrence of any Event of Default, unless the same has been
         specifically waived in writing, Lenders may apply to any court having
         jurisdiction for the appointment of a receiver of the Premises. Such
         appointment may be made either before or after sale, without notice,
         without regard to the solvency or insolvency of Borrower at the time of
         application for such receiver and without regard to the then value of
         the Premises or the adequacy of Lender's security. Any one of the
         Lenders may be appointed as such receiver. The receiver shall have
         power to collect the Rents during the pendency of any foreclosure
         proceedings and, in case of a sale, during the full statutory period of
         redemption, if any, as well as during any further times when Borrower,
         except for the intervention of such receiver, would be entitled to
         collect such Rents. In addition, the receiver shall have all other
         powers which shall be necessary or are usual in such cases for the
         protection, possession, control, management and operation of the
         Premises during the whole of said period. The court from time to time
         may authorize the receiver to apply the net income in its possession at
         Lender's election and in such order as Lenders may determine in payment
         in full or in part of those items listed in paragraph 15.

18.      (a)      Borrower agrees that all reasonable costs, charges and
                  expenses, including but not limited to, reasonable attorneys'
                  fees and costs, incurred or expended by Lenders arising out of
                  or in connection with any action, proceeding or hearing,
                  legal, equitable or quasi-legal, including the preparation
                  therefor and any appeal therefrom, in any way affecting or
                  pertaining to the Forbearance Documents, the Environmental
                  Indemnity or the Premises, shall be promptly paid by Borrower.
                  All such sums not promptly paid by Borrower shall be added to
                  the Indebtedness secured hereby and shall bear interest at the
                  Default Rate from the date of such advance and shall be due
                  and payable on demand.

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         (b)      Borrower hereby agrees that upon the occurrence of an Event of
                  Default and the acceleration of the principal sum secured
                  hereby pursuant to this Mortgage, to the full extent that such
                  rights can be lawfully waived, Borrower hereby waives and
                  agrees not to insist upon, plead, or in any manner take
                  advantage of, any notice of acceleration, any stay, extension,
                  exemption, homestead, marshaling or moratorium law or any law
                  providing for the valuation or appraisement of all or any part
                  of the Premises prior to any sale or sales thereof under any
                  provision of this Mortgage or before or after any decree,
                  judgment or order of any court or confirmation thereof, or
                  claim or exercise any right to redeem all or any part of the
                  Premises so sold and hereby expressly waives to the full
                  extent permitted by applicable law on behalf of itself and
                  each and every person or entity acquiring any right, title or
                  interest in or to all or any part of the Premises, all benefit
                  and advantage of any such laws which would otherwise be
                  available to Borrower or any such person or entity, and agrees
                  that neither Borrower nor any such person or entity will
                  invoke or utilize any such law to otherwise hinder, delay or
                  impede the exercise of any remedy granted or delegated to
                  Lenders herein but will permit the exercise of such remedy as
                  though any such laws had not been enacted. Borrower hereby
                  further expressly waives to the full extent permitted by
                  applicable law on behalf of itself and each and every person
                  or entity acquiring any right, title or interest in or to all
                  or any part of the Premises any and all rights of redemption
                  from any sale or any order or decree of foreclosure obtained
                  pursuant to provisions of this Mortgage.

19.      Borrower hereby assigns to Lenders directly and absolutely, and not
         merely collaterally, the interest of Borrower as lessor under the
         Leases of the Premises, and the Rents payable under any Lease and/or
         with respect to the use of the Premises, or portion thereof, including
         any oil, gas or mineral lease, or any installments of money payable
         pursuant to any agreement or any sale of the Premises or any part
         thereof, subject only to a license, if any, granted by Lenders to
         Borrower with respect thereto prior to the occurrence of an Event of
         Default. Borrower has executed and delivered the Assignment of Leases
         which grants to Lenders specific rights and remedies in respect of said
         Leases and governs the collection of Rents thereunder and from the use
         of the Premises, and such rights and remedies so granted shall be
         cumulative of those granted herein.

         The collection of such Rents and the application thereof as aforesaid
         shall not cure or waive any Event of Default or notice of default
         hereunder or invalidate any act done pursuant to such notice, except to
         the extent any such Event of Default is fully cured. Failure or
         discontinuance of Lenders at any time, or from time to time, to collect
         any such moneys shall not impair in any manner the subsequent
         enforcement by Lenders of the right, power and authority herein
         conferred on Lenders. Nothing contained herein, including the exercise
         of any right, power or authority herein granted to Lenders, shall be,
         or be construed to be, an affirmation by Lenders of any tenancy, Lease
         or option, or an assumption of liability under, or the subordination of
         the lien or charge of this Mortgage to any such tenancy, Lease or
         option. Borrower hereby agrees that, in the event Lenders exercise
         their rights as provided

                                      102
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         for in this paragraph or in the Assignment of Leases, Borrower waives
         any right to compensation for the use of Borrower's furniture,
         furnishings or equipment in the Premises for the period such assignment
         of rents or receivership is in effect, it being understood that the
         Rents derived from the use of any such items shall be applied to
         Borrower's obligations hereunder as above provided.

20.      All rights and remedies granted to Lenders in the Forbearance Documents
         shall be in addition to and not in limitation of any rights and
         remedies to which it is entitled in equity, at law or by statute, and
         the invalidity of any right or remedy herein provided by reason of its
         conflict with applicable law or statute shall not affect any other
         valid right or remedy afforded to Lenders. No waiver of any default or
         Event of Default under any of the Forbearance Documents shall at any
         time thereafter be held to be a waiver of any rights of the Lenders
         hereunder, nor shall any waiver of a prior Event of Default or default
         operate to waive any subsequent Event of Default or default. All
         remedies provided for in the Forbearance Documents are cumulative and
         may, at the election of Lenders, be exercised alternatively,
         successively, or concurrently. No act of Lenders shall be construed as
         an election to proceed under any one provision herein to the exclusion
         of any other provision or to proceed against one portion of the
         Premises to the exclusion of any other portion. Time is of the essence
         under this Mortgage and the Forbearance Documents.

21.      By accepting payment of any sum secured hereby after its due date,
         Lenders do not waive its right either to require prompt payment when
         due of all other sums or installments so secured or to declare a
         default for failure to pay such other sums or installments.

22.      The usury provisions of the Notes and the limitation of recourse
         liability provisions of the Notes are fully incorporated herein by
         reference as if the same were specifically stated here.

23.      In the event one or more provisions of the Forbearance Documents shall
         be held to be invalid, illegal or unenforceable in any respect, such
         invalidity, illegality or unenforceability shall not affect any other
         provision hereof, and the Forbearance Documents shall be construed as
         if any such provision had never been contained herein.

24.      If the payment of the Indebtedness secured hereby or of any part
         thereof shall be extended or varied, or if any part of the security be
         released, all persons now or at any time hereafter liable therefor, or
         interested in said Premises, shall be held to assent to such extension,
         variation or release, and their liability and the lien and all
         provisions hereof shall continue in full force, the right of recourse
         against all such persons being expressly reserved by Lenders
         notwithstanding such variation or release.

25.      Upon payment in full of the principal sum, interest and other
         Indebtedness secured by the Forbearance Documents, these presents shall
         be null and void, and Lenders shall release this Mortgage and the lien
         hereof by proper instrument executed in recordable form.

                                      103
<PAGE>

26.  (a)  Borrower hereby grants to the Collateral Agent and its respective
          agents, attorneys, employees, consultants, contractors and assigns an
          irrevocable license and authorization to enter upon and inspect the
          Premises and all facilities located thereon at reasonable times. The
          Collateral Agent shall make reasonable efforts to ensure that the
          operations of the tenants are not disrupted.

     (b)  In connection with any sale or conveyance of this Mortgage, Borrower
          grants to Lenders and their respective agents, attorneys, employees,
          consultants, contractors and assigns an irrevocable license and
          authorization to conduct a Phase I environmental audit of the
          Premises.

     (c)  In the event there has been an Event of Default or in the event
          Lenders have formed a reasonable belief, based on its inspection of
          the Premises or other factors known to it, that Hazardous Materials
          may be present on the Premises, then Borrower grants to Lenders and
          their respective agents, attorneys, employees, consultants,
          contractors and assigns an irrevocable license and authorization to
          conduct, at Borrower's expense, environmental tests of the Premises,
          including without limitation, a Phase I environmental audit,
          subsurface testing, soil and ground water testing, and other tests
          which may physically invade the Premises or facilities (the "Tests").
                                                                       -----
          The scope of the Tests shall be such as Lenders, in their sole
          discretion, determines is necessary to (i) investigate the condition
          of the Premises, (ii) protect the security interests created under
          this Mortgage, or (iii) determine compliance with Environmental Laws,
          the provisions of the Forbearance Documents and the Environmental
          Indemnity and other matters relating thereto.

     (d)  The foregoing licenses and authorizations are intended to be a means
          of protection of Lender's security interest in the Premises and not as
          participation in the management of the Premises.

27.  Within 15 days after any written request by either party to this Mortgage,
     the requested party shall certify, by a written statement duly
     acknowledged, the amount of principal, interest and other Indebtedness then
     owing on the Notes, the terms of payment, due dates and the date to which
     interest has been paid. Borrower shall further certify whether any
     defaults, offsets or defenses exist against the Indebtedness secured
     hereby. Borrower shall also furnish to Lenders, within 30 days of its
     request therefor, tenant estoppel letters from such tenants of the Premises
     as Lenders may require.

28.  Each notice, consent, request, report or other communication under this
     Mortgage or any other Forbearance Document (each a "Notice") which any
                                                         ------
     party hereto may desire or be required to give to the other shall be deemed
     to be an adequate and sufficient notice if given in writing and service is
     made by either (i) registered or certified mail, postage prepaid, in which
     case notice shall be deemed to have been received three (3) business days
     following deposit to U.S. mail; or (ii) nationally recognized overnight air
     courier, next day delivery,

                                      104
<PAGE>

         prepaid, in which case such notice shall be deemed to have been
         received one (1) business day following delivery to such nationally
         recognized overnight air courier. All Notices shall be addressed to
         Borrower at its address given on the first page hereof or to Lenders at
         Bank of Oklahoma, N.A., Collateral Agent, 201 Robert S. Kerr Avenue,
         Oklahoma City, Oklahoma 73102, Attn: Paul Mesmer, or to such other
         place as either party may by written notice to the other hereafter
         designate as a place for service of notice.

29.      This Mortgage and all provisions hereof shall inure to the benefit of
         the heirs, successors and assigns of Lenders and shall bind the heirs
         and permitted successors and assigns of Borrower.

30.      Borrower has had the opportunity to fully negotiate the terms hereof
         and modify the draftsmanship of this Mortgage. Therefore, the terms of
         this Mortgage shall be construed and interpreted without any
         presumption, inference, or rule requiring construction or
         interpretation of any provision of this Mortgage against the interest
         of the party causing this Mortgage or any portion of it to be drafted.
         Borrower is entering into this Mortgage freely and voluntarily without
         any duress, economic or otherwise.

31,      This Mortgage shall be governed by, and construed in accordance with
         the laws of the State of Iowa, without regard to its conflicts of law
         principles.

32.      As used herein, the term "Default Rate" means a rate equal to those
         rates set forth in the Forbearance Documents as the default rate or the
         maximum rate allowed by applicable law.

33.      BORROWER AND EACH LENDER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTIONS BROUGHT BY
BORROWER OR ANY LENDER IN CONNECTION WITH THIS MORTGAGE, ANY OF THE FORBEARANCE
DOCUMENTS, THE INDEBTEDNESS SECURED HEREBY, OR ANY OTHER STATEMENTS OR ACTIONS
OF LENDERS.

34.      This Mortgage and the Indebtedness secured hereby is for the sole
         purpose of conducting or acquiring a lawful business, professional or
         commercial activity or for the acquisition or management of real or
         personal property as a commercial investment, and all proceeds of such
         Indebtedness shall be used for said business or commercial investment
         purpose. Such proceeds will not be used for the purchase of any
         security within the meaning of the Securities Exchange Act of 1934, as
         amended, or any regulation issued pursuant thereto, including without
         limitation, Regulations U, T and X of the Board of Governors of the
         Federal Reserve System. This is not a purchase money mortgage where a
         seller is providing financing to a buyer for the payment of all or any
         portion of the purchase price, and the Premises secured hereby is not a
         residence or homestead or used for mining, grazing, agriculture, timber
         or farming purposes.

                                      105
<PAGE>

35.      Unless Lenders shall otherwise direct in writing, Borrower shall appear
         in and defend all actions or proceedings purporting to affect the
         security hereunder, or any right or power of the Lenders. The Lenders
         shall have the right to appear in such actions or proceedings. Borrower
         shall save Lenders harmless from all costs and expenses, including but
         not limited to, reasonable attorneys' fees and costs, and costs of a
         title search, continuation of abstract and preparation of survey
         incurred by reason of any action, suit, proceeding, hearing, motion or
         application before any court or administrative body in and to which
         Lenders may be or become a party by reason hereof. Such proceedings
         shall include but not be limited to condemnation, bankruptcy, probate
         and administration proceedings, as well as any other action, suit,
         proceeding, right, motion or application wherein proof of claim is by
         law required to be filed or in which it becomes necessary to defend or
         uphold the terms of this Mortgage or the Forbearance Documents or
         otherwise purporting to affect the security hereof or the rights or
         powers of Lenders. All money paid or expended by Lenders in that
         regard, together with interest thereon from date of such payment at the
         Default Rate shall be additional Indebtedness secured hereby and shall
         be immediately due and payable by Borrower without notice.

36.      Upon the occurrence of an Event of Default, unless the same has been
         specifically waived in writing, all Rents collected or received by
         Borrower shall be accepted and held for Lenders in trust and shall not
         be commingled with the funds and property of Borrower, but shall be
         promptly paid over to the Collateral Agent for the ratable benefit of
         the Lenders.

37.      This Mortgage may be executed in counterparts, each of which shall be
         deemed an original; and such counterparts when taken together shall
         constitute but one agreement.

(Signature on next page)

                                      106
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Mortgage to be duly
executed and delivered as of the date first above written.

                                        CMI Cedar Falls, Inc:

                                        ______________________________________
                                        By: Jim D. Holland
                                        Title: Vice President

STATE OF OKLAHOMA   )
                    )    SS:
COUNTY OF OKLAHOMA  )

         The foregoing instrument was acknowledged before me the ___ day of
February , 2001 by Jim D. Holland, Vice President of CMI Cedar Falls, Inc, on
behalf of the corporation.

My Commission Expires:

                                                     ___________________
                                                        Notary Public
_________________

                                      107
<PAGE>

                                   EXHIBIT A

File No.: C 002470877

PARCEL 1:

All that part of Block 25 and the vacated alley in said Block 25, lying East of
the right of way of the Chicago, Great Western Railroad, all in Taylor 2/nd/
Addition to the Town of Cedear Falls.

PARCEL 2:

That part of Lot 8, Block 25, Taylor 2/nd/ Addition to the Town of Cedar Falls,
described as follows:

Commencing at a point on the South line of vacated 19/th/ Street, 50 feet
Southeasterly, measured At right angles, from the centerline of the main track
of the Chicago and North Western Transportation Company, as said main track
centerline was originally located and established; thence South 13 degrees 30
minutes 25 seconds West, parallel with said main track, 30.00 feet to the point
of beginning; thence North 83 degrees 28 minutes 42 seconds West, 3.00 feet;
thence South 6 degrees 31 minutes 18 seconds West, 24.48 feet; thence North 13
degrees 30 minutes 25 seconds East, parallel with said main track, 24.67 feet to
the point of beginning.

PARCEL 3:

That part of vacated 19/th/ Street, City of Cedar Falls, Black Hawk County,
Iowa, lying Southeasterly of the Southeasterly right of way line of Chicago and
North Western Railway Company and West of the West line of State Street,
described as follows:

Commencing at the intersection of the Southerly right of way line of vacated
19/th/ Street and the Westerly right of way line of State Street; thence South
89 degrees 44 minutes 14 seconds West, along said Southerly right of way line of
vacated 19th Street, 100.00 feet to the point of beginning; thence Sousth 89
degrees 44 minutes 14 seconds West, along said Southerly right of way line,
84.04 feet to the Southeasterly right of way line of the Chicago and North
Western Railway Company, which line is 50.00 feet normally distance from the
center of the main track; thence North 13 degrees 30 minutes 25 seconds East,
along said Southeasterly line, 10.00 feet; thence South 83

                                      108
<PAGE>

                             EXHIBIT A (Continued)

degrees 28 minutes 42 seconds East, 82.21 feet to the point of beginning. The
Westerly right of way line of State Street isassumed to bear South 00 degrees 00
minutes 00 seconds West.

Abstract.

                                      109
<PAGE>

                                   EXHIBIT B

Terms and conditions of and easement created in Easement Agreement dated March
11, 1988 filed March 24, 1988 in Book 10 of Easements, Page 66 as amended by
Amendment to Easement Agreement dated February 7, 1997, filed in February 7,
1997 in Book 14 of Easements, Page 82

                                      110

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