Unassociated Document


    FIFTH
AMENDMENT TO INVESTMENT AGREEMENT

     

    FIFTH
AMENDMENT TO INVESTMENT AGREEMENT dated as of September 27, 2010 (this “Amendment”) between
Allis-Chalmers Energy Inc., a Delaware corporation (the “Company”), and Lime
Rock Partners V, L.P., a Cayman Islands exempted limited partnership (the “Investor”).

     

    BACKGROUND

    


    WHEREAS,
the Company and the Investor (each a “Party,” and together,
the “Parties”)
previously entered into an Investment Agreement, dated May 20, 2009, as amended
by the First Amendment thereto, dated June 25, 2009, the Second Amendment
thereto, dated September 1, 2009, the Third Amendment thereto, dated January 5,
2010 and the Fourth Amendment thereto, dated July 14, 2010 (the “Investment
Agreement”); and

     

    WHEREAS,
the Parties wish to further amend the Investment Agreement in order to effect
certain modifications deemed desirable by each of the Parties;

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in
the Investment Agreement and this Fifth Amendment, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereby agree to amend the
Investment Agreement as follows:

     

    1.           Capitalized
terms used but not defined in this Amendment shall have the respective meanings
given to such terms in the Investment Agreement.  Each reference to
“hereof,” “hereunder,” “hereby” and “this Agreement” in the Investment Agreement
shall, from and after the date of this Amendment, refer to the Investment
Agreement as amended by this Amendment.

     

    2.           Section 8.1 of the
Investment Agreement is hereby amended by amending and restating subsection
8.1(d) as
follows:  “(d)  In the event that the Closings occur
simultaneously, if the Investor shall be entitled to designate four Initial
Investor Nominees pursuant to Section 8.2(a) based on the Common Stock of the
Company (counting any shares of Preferred Stock on an as converted basis) to be
owned by the Investor 13(d) Group after the Closings, then prior to such
Closings, the Investor shall provide to the Company the names of two Initial
Investor Designees, each of whom shall be reviewed promptly by the Nominating
Committee, and on the date of such Closings, the Company shall cause to be
elected or appointed to the Board such Initial Investor Designees, subject to
the satisfaction of all legal and governance requirements regarding service as a
director of the Company and, if not already received, the reasonable approval of
the Nominating Committee.  The Company shall take all actions
necessary to ensure that on the date of such Closings the Board shall have at
least two vacancies.  By March 25, 2011, the Investor shall provide to
the Company the names of two additional Initial Investor Designees, each of whom
shall be reviewed promptly by the Nominating Committee, and as soon as
reasonably practicable thereafter, the Company shall cause to be elected or
appointed to the Board such additional Initial Investor Designees, subject to
the satisfaction of all legal and governance requirements regarding service as a
director of the Company and, if not already received, the reasonable approval of
the Nominating Committee.  The Company shall take all actions
necessary to ensure that on March 25, 2011 the Board shall have at least two
additional vacancies.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
Amendment may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures were on the same
instrument.

     

    [Signature page
follows]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the date first written
above.

    


    
      
        
          	 
      	
                  ALLIS-CHALMERS
      ENERGY INC.

                
	 
      	 
      
	 
      	
                  By:      
      /s/ Theodore F. Pound
      III               

                
	 
      	
                  Name:  Theodore
      F. Pound III

                
	 
      	
                  Title:  General
      Counsel and Secretary

                
	 
      	 
      
	 
      	
                  LIME
      ROCK PARTNERS V, L.P.

                
	 
      	 
      
	 
      	
                  By:  Lime
      Rock Partners GP V, L.P., its

                
	 
      	
                  general
      partner

                
	 
      	 
      
	 
      	
                  By:  LRP
      GP V, Inc., its general partner

                
	 
      	 
      
	 
      	
                  By:      /s/
      Kris
      Agarwal                                

                
	 
      	
                  Name: Kris
      Agarwal

                
	 
      	
                  Title:
      Authorized Signatory