EXHIBIT 2
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, 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 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, further, that
if the Investor, its affiliates, limited partners and 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
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, however, that in no event shall the Investor be entitled
under 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
--------------------------------------
Xxxxxxx X. Xxxxxx, General Partner
CMI CORPORATION, an Oklahoma corporation
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx, Chairman of the Board
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