EXHIBIT 10.5
AMENDMENT NO. 1 TO INVESTMENT AGREEMENT
This Amendment No. 1 to Investment Agreement (the "Amendment No. 1") is
made and entered into effective as of the 6th day of November, 1998, between
Recovery Equity Investors, L.P., a Delaware limited partnership (the
"Investor"), and CMI Corporation, an Oklahoma corporation (the "Company").
WHEREAS, effective as of August 19, 1991, the Investor and the Company
entered into that certain Investment Agreement (the "Investment Agreement")
pursuant to which, among other things, the Investor purchased from the Company
6,666,667 shares of the Company's Common Stock;
WHEREAS, the parties desire to amend the Investment Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, the parties agree as follows:
1. Capitalized terms used herein and not otherwise defined herein shall
have their respective meanings as set forth in the Investment Agreement.
2. Section 4.1 of the Investment Agreement is hereby amended to read in
its entirety as follows:
"SECTION 4.1. Board Representation. From and after November 6, 1998,
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the Investor shall be entitled to designate for election to the
Company's Board of Directors one-half (1/2) of the total number of
directors then constituting the entire Board, as such number of
directors shall be fixed from time to time pursuant to resolution
adopted by the Company's Board of Directors; provided, however, that
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if, after the date hereof, the Investor, its affiliates, limited
partners and associates cease to beneficially own an aggregate of at
least 1,700,000 shares of Voting Class A Common Stock, par value $0.10
per share ("Class A Common Stock"), of the Company, the Investor
thereafter shall be entitled to designate for election to the
Company's Board of Directors only one-third (1/3) of the total number
of directors then constituting the entire Board; and, provided,
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further, that if the Investor, its affiliates, limited partners and
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associates cease to beneficially own an aggregate of at least
1,000,000 shares of Class A Common Stock, the Investor thereafter
shall be entitled to designate only one (1) person for election to the
Company's Board of Directors (it being understood that such
entitlement to designate one director shall terminate at such time as
the Investor, its affiliates, limited partners and associates cease to
beneficially own any shares of Class A Common Stock). Any person
designated by the Investor for election to the Company's Board of
Directors in accordance with the provisions of this Section 4.1 shall
be included in the slate of nominees
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recommended by such Board of Directors to the Company's
shareholders for election as directors at each applicable annual
meeting of the shareholders of the Company, and the Company shall
use its best efforts to cause the election of each such person
designated by the Investor. In the event that any designee of the
Investor for election to the Company's Board of Directors
pursuant to the foregoing provisions shall cease to serve as a
director for any reason, the vacancy resulting therefrom shall be
filled as soon as practicable with a person designated by the
Investor. Provided that he continues to beneficially own (with
his wife, children and grandchildren) at least 1,500,000 shares
of Class A Common Stock, Xxxx Xxxxxxx shall be entitled to
designate himself for election to the Company's Board of
Directors. If so designated, Xx. Xxxxxxx shall be included in the
slate of nominees recommended by the Board of Directors to the
Company's shareholders for election as directors at each
applicable annual meeting of the shareholders of the Company, and
the Company shall use its best efforts to cause the election of
Xx. Xxxxxxx. Xx. Xxxxxxx is specifically made a third party
beneficiary of the two sentences immediately preceding this
sentence. In the event that (i) at any time the designee(s) of
the Investor are not elected to the Company's Board of Directors
as provided herein, or (ii) the Department of Labor through
formal or informal rules, regulations, or interpretations
provides, or it is otherwise provided through governmental or
court action, that such Board representation does not constitute
the exercise of management rights of the kind necessary to allow
the Investor to continue to qualify as a venture capital
operating company under Department of Labor Regulation 2510.3-101
promulgated under ERISA, then the Investor and the Company shall
use their best efforts, upon the advice of counsel to the
Investor, to ensure that the Investor has and is permitted to
exercise the minimum amount of such management rights to continue
to qualify as a venture capital operating company; provided,
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however, that in no event shall the Investor be entitled under
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this Section 4.1 to designate for election to the Board of
Directors a number of persons greater than that set forth in the
first sentence of this Section 4.1. The number and type of
securities which the Investor, its affiliates, limited partners
and associates (or Xxxx Xxxxxxx, his wife, children and
grandchildren, as the case may be) are required to beneficially
own to be afforded the right to designate persons for election to
the Company's Board of Directors shall be appropriately adjusted
to reflect any stock split, reverse stock split, stock dividend,
recapitalization or similar action. The parties acknowledge and
agree that, for purposes of determining the number of shares of
Class A Common Stock or other securities of the Company
beneficially owned by the Investor's limited partners, only those
shares distributed by the Investor to the limited partners shall
be considered."
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3. The parties acknowledge and agree that, for purposes of Section 4.1,
Xxx Xxxxxxxxx shall be deemed to be a designee of the Investor.
4. Except as specifically provided herein, the terms and provisions of
the Investment Agreement shall remain unchanged and in full force and effect.
This Amendment No. 1 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument. This
Amendment No. 1 shall be governed by and construed in accordance with the
internal laws of the State of New York without regard to the principles of
conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed below.
RECOVERY EQUITY INVESTORS, L.P., a
Delaware limited partnership
By: Recovery Equity Partners, L.P., its
General Partner
By: /s/ Xxxxxx X. Xxxx-Xxxx
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Xxxxxx X. Xxxx-Xxxx, General Partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, General Partner
CMI CORPORATION, an Oklahoma corporati
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Chairman of the
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