INVESTMENT AGREEMENT

Exhibit 4.1

Execution Copy

INVESTMENT AGREEMENT

by and between

ALLIS-CHALMERS ENERGY INC.

and

LIME ROCK PARTNERS V, L.P.

Dated as of May 20, 2009

TABLE OF CONTENTS

TABLE OF CONTENTS
(continued)

Annexes

Annex I — Certificate of Designation
Annex II — Registration Rights Agreement
Annex III — Finance Committee Charter
Annex IV — Form of Legal Opinion

INVESTMENT AGREEMENT dated as of May 20, 2009 (this “ Agreement ”) 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 has proposed to offer and sell certain shares of Common Stock (as defined below) pursuant to a Rights Offering (as defined below), on the terms and subject to the conditions set forth herein;

WHEREAS, the Company desires that the Investor provide, and the Investor has agreed to provide, a Backstop Commitment (as defined below) to the Rights Offering, on the terms and subject to the conditions set forth herein;

WHEREAS, the Company desires that the Investor provide, and the Investor has agreed to provide, a Preferred Stock Purchase Commitment (as defined below) pursuant to which the Investor will purchase shares of Preferred Stock (as defined below), on the terms and subject to the conditions set forth herein; and

WHEREAS, in connection with its purchase of Common Stock pursuant to the Backstop Commitment and/or its purchase of Preferred Stock pursuant to the Preferred Stock Purchase Commitment, the Investor wishes to receive certain additional rights relating to its Common Stock and Preferred Stock, and the Company desires to grant such rights on the terms and subject to the conditions set forth herein;

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

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1 Definitions . As used in this Agreement, the following terms have the respective meanings set forth below:

“ 10b-5 Representation ” shall have the meaning set forth in Section 2.1(c).

“ Acquired Shares ” shall have the meaning set forth in Section 3.1(a).

“ Acquisition Transaction ” means (a) a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction involving the Company or (b) any other direct or indirect acquisition involving 50% or more of the Total Voting Power of the Company, or all or substantially all of the consolidated total assets (including equity securities of its Subsidiaries) of the Company.

“ Additional Shares ” shall have the meaning set forth in Section 8.4(b).

“ Adjustments ” shall have the meaning set forth in Section 7.1.

“ Affiliate ” of any Person means any other Person directly or indirectly Controlling, Controlled by or under direct or indirect common Control with such Person, provided that for purposes of this Agreement, the Company and its subsidiaries shall not be deemed to be Affiliates of the Investor.

“ Aggregate Offered Shares ” shall have the meaning set forth in Section 2.1(d).

“ Agreement ” shall have the meaning set forth in the Preamble.

“ Alternate Acquisition Transaction ” shall have the meaning set forth in Section 8.4(d).

“ Ancillary Agreements ” means the Registration Rights Agreement, the Certificate of Designation and the officer’s certificates to be delivered pursuant to Section 6.2(c) or Section 6.3(e), as applicable.

“ Audit Committee ” means the Audit Committee of the Board.

“ Backstop Shares ” shall have the meaning set forth in Section 2.2(a).

“ Backstop Closing ” shall have the meaning set forth in Section 2.2(c).

“ Backstop Closing Date ” shall have the meaning set forth in Section 2.2(c).

“ Backstop Commitment ” shall have the meaning set forth in Section 2.2(a).

“ Basic Subscription Privilege ” shall have the meaning set forth in Section 2.1(d).

“ Beneficially Own ,” “ Beneficially Owned ,” “ Beneficial Ownership ” and “ Beneficial Owner ” with respect to any securities means a holder who is deemed to be the beneficial owner, or ownership that is deemed to be beneficial ownership, of such securities under Rule 13d-3 or Rule 13d-5 of the Exchange Act, and shall include such securities Beneficially Owned by all other persons with whom a holder would constitute a “group” within the meaning of Section 13(d) of the Exchange Act with respect to such securities, provided, however , that the shares of Common Stock issuable upon conversion of the Preferred Stock shall not be deemed to be Beneficially Owned by the holders of the Preferred Stock until such conversion.

“ Board ” means the board of directors of the Company.

“ Business Day ” means any day other than a Saturday, Sunday or one on which banks are authorized to close in Houston, Texas.

“ Capital Stock ” of any Person means any and all shares, interests, participations or other equivalents however designated of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to acquire an equity interest in such Person.

“ Certificate of Designations ” means the Company’s Certificate of Designations governing the terms of the Preferred Stock, substantially in the form attached as Annex I hereto.

“ Certified Ownership Percentage ” shall have the meaning set forth in Section 6.2(d).

“ Closings ” means the Backstop Closing and the Preferred Stock Closing.

“ Common Stock ” means the common stock, par value $0.01 per share, of the Company.

“ Company ” shall have the meaning set forth in the Preamble.

“ Company Financial Statements ” shall have the meaning set forth in Section 4.8(b).

“ Company Indemnified Parties ” shall have the meaning set forth in Section 10.2(b).

“ Company Marks ” shall have the meaning set forth in Section 7.8.

“ Company SEC Documents ” shall have the meaning set forth in Section 4.8(a).

“ Compensation Committee ” means the Compensation Committee of the Board.

“ Confidentiality Agreement ” means the Confidentiality Agreement between the Company and the Investor dated March 30, 2009.

“ Control ” has the meaning specified in Rule 12b-2 under the Exchange Act.

“ Default ” shall have the meaning set forth in Section 4.5.

“ DGCL ” means the General Corporation Law of the State of Delaware.

“ Dilutive Issuance ” shall have the meaning set forth in Section 8.4(b).

“ Effect ” shall have the meaning set forth in the definition of “Material Adverse Effect.”

“ Employee ” means each current, former, or retired employee, director or officer of the Company or any of its Subsidiaries.

“ Environmental Claims ” shall have the meaning set forth in Section 4.15.

“ Environmental Laws ” shall have the meaning set forth in Section 4.15.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Event Notice ” shall have the meaning set forth in Section 6.3(a).

“ Exchange Act ” shall have the meaning set forth in Section 4.8(a).

“ Excluded Issuance ” means any issuances of Voting Stock of the Company (a) upon conversion of any convertible securities which are outstanding on the date hereof (including issuances of securities upon any payment of dividends on or redemption of, or otherwise payable with respect to, Common Stock) or (b) pursuant to employee or director stock option or incentive compensation or similar plans outstanding as of the date hereof or, subsequent to the date hereof, approved by the Board or a duly authorized committee of the Board.

“ Existing Instrument ” has the meaning set forth in Section 4.5.

“ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time.

“ Governmental Entity ” means any national, state, local, county, parish or municipal government, domestic or foreign, any agency, board, bureau, commission, court, tribunal, subdivision, department or other governmental or regulatory authority or instrumentality that has jurisdiction over any of the Company or any of its properties or assets or any matter relating to the transactions contemplated by this Agreement.

“ Group ” has the meaning set forth in Section 13(d) of the Exchange Act as in effect on the date of this Agreement.

“ HSR Act ” shall have the meaning set forth in Section 7.3.

“ Indemnified Party ” means an Investor Indemnified Party or a Company Indemnified Party, as the case may be.

“ Indemnifying Party ” means the Company or the Investor, as the case may be.

“ Information ” shall have the meaning set forth in Section 7.7(b).

“ Initial Investor Designees ” means each Investor Nominee that the Investor would be entitled to nominate for election to the Board in accordance with Section 8.2(a) had an election of directors taken place on the Backstop Closing Date or Preferred Stock Closing, as the case may be, after giving effect to such Closing, provided that under no circumstances shall there be more than four (4) Initial Investor Designees.

“ Internal Revenue Code ” means the United States Internal Revenue Code of 1986, as amended.

“ Investor ” shall have the meaning set forth in the Preamble.

“ Investor 13(d) Group ” means the Investor and such Affiliates of the Investor who are deemed to Beneficially Own the Common Stock or Preferred Stock Beneficially Owned by the Investor and any person with whom the Investor or any such Affiliates would constitute a “group” within the meaning of Section 13(d) of the Exchange Act with respect to Common Stock or Preferred Stock. For the avoidance of doubt, the Investor 13(d) Group shall include any Investor Directors.

“ Investor Directors ” means Investor Nominees who are elected or appointed to serve as members of the Board in accordance with this Agreement.

“ Investor Indemnified Parties ” shall have the meaning set forth in Section 10.2(a).

“ Investor Nominees ” means such Persons as are designated by the Investor, as such designations may change from time to time in accordance with this Agreement, to serve as members of the Board pursuant to Section 8.2(a) hereof.

“ Law ” means any federal, state, local or foreign law, statute or ordinance, common law, or any rule, regulation, judgment, order, writ, injunction, decree, arbitration award, license or permit of any Governmental Entity.

“ Losses ” shall have the meaning set forth in Section 10.2(a).

“ Material Adverse Effect ” means any fact, circumstance, event, change, effect or occurrence (an “ Effect ”) that, individually or in the aggregate with all other Effects, (x) with respect to either party, would reasonably be expected to prevent, materially delay or materially impair the ability of such party to consummate the transactions contemplated hereby in the timeframe contemplated hereby or (y) has had or caused, or would reasonably be expected to have or cause, a material adverse effect on the assets, properties, business, results of operations, or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, but, in the case of this clause (y) shall not include (a) Effects generally affecting (i) the industry in which the Company and its Subsidiaries operate or (ii) the economy or the financial, securities or credit markets in the U.S. or elsewhere in the world, including natural disasters, any regulatory or political conditions or developments, or any outbreak or escalation of hostilities or declared or undeclared acts of war, terrorism or insurrection, whether occurring before or after the date hereof, unless any such Effects disproportionately affect the assets, properties, business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, relative to other industry participants; (b) Effects to the extent resulting from the announcement of the execution of this Agreement or the pendency of the transactions contemplated hereby (including, without limitation, and solely by way of example of such Effects, the direct and substantiated effect of the public announcement of this Agreement or the transactions contemplated hereby on the relationships of the Company or any of its Subsidiaries with customers, suppliers, distributors or employees), provided that this clause (b) shall not diminish the effect of, and shall be disregarded for purposes of, any representations or warranties herein; (c) declines in the price or trading volume of shares of any Capital Stock of the Company, provided that the exception in this clause (c) shall not prevent or otherwise affect a determination that any Effect underlying such decline has resulted in, or contributed to, a Material Adverse Effect with respect to the Company; (d) Effects to the extent resulting from any changes in Law or in GAAP (or the interpretation thereof) after the date hereof, unless any such Effects disproportionately affect the assets, properties, business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, relative to other industry participants; or (e) any failure by the Company to meet any published analyst estimates or expectations regarding the Company’s revenue, earnings or other financial performance or results of operations for any period, or any failure by the Company to meet its internal budgets, plans or forecasts regarding its revenues, earnings or other financial performance or results of operations, provided that the exception in this clause (e) shall not prevent or otherwise affect a determination that any Effect underlying such failure has resulted in, or contributed to, a Material Adverse Effect.

“ Materials of Environmental Concern ” shall have the meaning set forth in Section 4.15.

“ Nominating Committee ” shall have the meaning set forth in Section 8.1(a).

“ Non-Investor Director ” means any member of the Board that is not an Investor Director.

“ NYSE ” means the New York Stock Exchange.

“ Oversubscription Privilege ” shall have the meaning set forth in Section 2.1(d).

“ Permits ” shall have the meaning set forth in Section 4.7(b).

“ Person ” means an individual, a corporation, a partnership, a limited liability company, limited partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“ Pre-Closing Period ” shall have the meaning set forth in Section 7.1.

“ Preferred Shares ” shall have the meaning set forth in Section 3.1(a).

“ Preferred Stock ” means the 7.0% Convertible Perpetual Preferred Stock, having the terms set forth in the Certificate of Designations.

“ Preferred Stock Closing ” shall have the meaning set forth in Section 3.1(c).

“ Preferred Stock Closing Date ” shall have the meaning set forth in Section 3.1(c).

“ Preferred Stock Purchase Commitment ” shall have the meaning set forth in Section 3.1(a).

“ Previously Disclosed ” means (a) information set forth in or incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 or its other reports and forms filed with the SEC under Sections 13(a), 14(a) or 15(d) of the Exchange Act on or after January 1, 2009 (except for risks and forward looking information set forth in the “Risk Factors” section of such annual report or in any forward looking statement disclaimers or similar statements that are similarly non-specific and are predictive or forward looking in nature) and (b) the information set forth in the Schedules corresponding to the provision of this Agreement to which such information relates ( provided that any disclosure with respect to a particular paragraph or section of this Agreement or the Schedules shall be deemed to be disclosed for other paragraphs and sections of this Agreement and the Schedules to the extent that the relevance of such disclosure would be reasonably apparent to a reader of such disclosure).

“ Prospectus Supplement ” shall have the meaning set forth in Section 2.1(a).

“ Record Date ” means the date as of which each holder of Common Stock shall be offered one (1) Warrant for each share of Common Stock held as of such date, which date shall be selected by the Board in accordance with the DGCL and the requirements of the NYSE.

“ Registration Rights Agreement ” shall have the meaning set forth in Section 6.3(i).

“ Registration Statement ” shall have the meaning set forth in Section 2.1(a).

“ Representatives ” means, with respect to a Person, such Person’s directors, officers, investment bankers, attorneys, accountants and other advisors or representatives.

“ Reservation Notice ” shall have the meaning set forth in Section 6.3(a).

“ Rights Offering ” shall have the meaning set forth in Section 2.1(d).

“ Schedules ” means the disclosure schedules delivered by the Company to the Investor concurrently with the execution of this Agreement.

“ SEC ” means the Securities and Exchange Commission.

“ Securities Act ” shall have the meaning set forth in Section 4.8(a).

“ Standstill Expiration Date ” shall have the meaning set forth in Section 8.4.

“ Stock Plans ” means the Company’s 2003 Incentive Stock Plan, as amended prior to the date hereof, and the Company’s 2006 Incentive Plan, as amended and restated prior to the date hereof.

“ Subscription Notice ” shall have the meaning set forth in Section 2.2(a).

“ Subscription Period ” shall have the meaning set forth in Section 2.1(d).

“ Subscription Price ” means $2.50 per share of Common Stock.

“ Subsidiary ” means, with respect to any specified Person, (a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); (b) any partnership a general partner or a managing general partner of which is such Person or a Subsidiary of such Person; and (c) any limited liability company a managing member or manager of which is such Person or a Subsidiary of such Person.

“ Termination Fee ” means $1,500,000.00.

“ Tender Offer ” shall have the meaning set forth in Section 2.2(b)(iv).

“ Total Voting Power of the Company ” means the total number of votes that may be cast in the election of directors of the Company if all Voting Stock of the Company treated as outstanding pursuant to the final two sentences of this definition were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power of the Company Beneficially Owned by any Person is the percentage of the Total Voting Power of the Company that is represented by the total number of votes that may be cast in the election of directors of the Company with respect to Voting Stock of the Company Beneficially Owned by such Person. In calculating such percentage, the Voting Stock of the Company Beneficially Owned by any Person that is not outstanding but is subject to issuance upon exercise or exchange of rights of conversion or any options, warrants or other rights Beneficially Owned by such Person shall be deemed to be outstanding for the purpose of computing the percentage of the Total Voting Power of the Company represented by Voting Stock of the Company Beneficially Owned by such Person, but shall not be deemed to be outstanding for the purpose of computing the percentage of the Total Voting Power of the Company represented by Voting Stock of the Company Beneficially Owned by any other Person.

“ Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“ Waived Fact ” shall have the meaning set forth in Section 6.3(a).

“ Warrants ” means the warrants to be issued by the Company to the holders of shares of its Common Stock in the Rights Offering.

Section 1.2 Interpretation . When a reference is made in this Agreement to “Preamble,” “Articles,” “Sections” or “Annexes,” such reference shall be to a Preamble, Article or Section of, or Annex to, this Agreement, unless otherwise indicated. The terms defined in the singular have a comparable meaning when used in the plural, and vice versa. The table of contents and headings contained in this Agreement are for reference purposes only and are not part of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed followed by the words “without limitation.” No rule of construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement, as this Agreement is the product of negotiation between sophisticated parties advised by counsel. All references to “$” or “dollars” mean the lawful currency of the United States of America. Except as expressly stated in this Agreement, all references to any statute, rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under the statute) and all references to any section of any statute, rule or regulation include any successor to the section. References to “words of similar import” with respect to Material Adverse Effect or materiality, does not include knowledge qualifiers.

ARTICLE II

THE RIGHTS OFFERING AND BACKSTOP COMMITMENT

Section 2.1 The Rights Offering .

(a) As promptly as practicable after the date of this Agreement, the Company shall prepare and file with the SEC a prospectus supplement (including each amendment thereto, the “ Prospectus Supplement ”) to its existing registration statement on Form S-3 (File No. 333-139058) (including each amendment and supplement thereto, including the Prospectus Supplement, the “ Registration Statement ”), which shall register under the Securities Act the issuance of the Warrants and the shares of Common Stock to be issued upon exercise of the Warrants. The Company shall not permit any other securities to be included in the Prospectus Supplement. The Prospectus Supplement (and any amendments thereto) and any amendments to the Registration Statement proposed to be filed with the SEC after the date hereof shall be provided to the Investor and its counsel prior to their filing with the SEC, and the Investor and its counsel shall be given a reasonable opportunity to review and comment thereon.

(b) The Investor shall provide to the Company such information as the Company may reasonably require in connection with the preparation and filing of the Prospectus Supplement. At the time such information is provided and at the time the Prospectus Supplement is filed, no such information provided by the Investor shall include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(c) At the time the Prospectus Supplement is filed, the Registration Statement shall comply in all material respects with the requirements as to the use and form of Form S-3, and the Registration Statement and any Company SEC Documents incorporated by reference therein shall not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, provided that the Company makes no such representation with respect to information provided to it by the Investor pursuant to Section 2.1(b). The Prospectus Supplement, as of its date, shall not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, provided that the Company makes no such representation with respect to information provided to it by the Investor pursuant to Section 2.1(b). The previous two sentences are referred to as the “ 10b-5 Representation .”

(d) Promptly following the filing of the Prospectus Supplement, the Company shall distribute copies of the Prospectus Supplement to the holders of record of Common Stock as of the Record Date, and thereafter promptly commence a rights offering on the following terms: (i) the Company shall distribute, at no charge, one (1) Warrant to each holder of record of Common Stock for each share of Common Stock held by such holder as of the Record Date; (ii) each whole Warrant shall entitle the holder thereof to purchase, at the election of such holder, one share of Common Stock at the Subscription Price (the “ Basic Subscription Privilege ”), thereby entitling such holders to subscribe for, in the aggregate, approximately 35.7 million (35,700,000) shares of Common Stock (the actual aggregate number, the “ Aggregate Offered Shares ”), provided that no fractional Warrants and no fractional shares of Common Stock shall be issued and the Subscription Price multiplied by the aggregate number of shares of Common Stock offered shall not exceed the aggregate offering amount described in the Prospectus Supplement; (iii) the offering shall remain open for at least thirteen (13) days, but no more than twenty (20) days (or such longer period as may be required by Law) (the “ Subscription Period ”); and (iv) each holder who fully exercises his Basic Subscription Privilege shall be entitled to subscribe for additional shares of Common Stock that were not subscribed for in the offering in an amount equal to up to 32% of the shares of Common Stock for which he was entitled to subscribe through his Basic Subscription Privilege (the “ Oversubscription Privilege ”), provided that if insufficient shares of Common Stock are available to satisfy all oversubscription requests, such requests shall be honored on a pro rata basis (such rights offering, the “ Rights Offering ”).

(e) The Company shall not amend any of the terms of the Rights Offering described in clauses (i) through (iv) of Section 2.1(d) or waive any material conditions to the closing of the Rights Offering without the prior written consent of the Investor. Subject to the terms and conditions of the Rights Offering, the Company shall effect the closing of the Rights Offering as promptly as practicable following the end of the Subscription Period.

(f) Notwithstanding anything in this Agreement to the contrary, the Company may terminate the Rights Offering, and fail to file or withdraw the Prospectus, at any time for any reason; provided that the failure to take commercially reasonable efforts to initiate or continue the Rights Offering shall be deemed to be a termination thereof for purposes of Section 9.1(a).

(g) The Company shall pay all of its expenses associated with the Registration Statement, the Prospectus Supplement, the Rights Offering and the other transactions contemplated hereby, including filing and printing fees, the fees and expenses of any subscription and information agents, the fees and expenses of its counsel, accounting fees and expenses and costs associated with clearing the Common Stock offered for sale under applicable state securities Laws.

Section 2.2 Backstop Commitment .

(a) The Investor shall purchase from the Company, and the Company shall issue and sell to the Investor, at a price per share equal to the Subscription Price, a number of shares of Common Stock (the “ Backstop Commitment ”) equal to the lesser of (i) the number of shares of Common Stock that will constitute 34.055% of the total number of outstanding shares of Common Stock immediately following the consummation of the Rights Offering and the issuance of shares of Common Stock pursuant to the Backstop Commitment and (ii) the number of shares of Common Stock equal to (x) the Aggregate Offered Shares minus (y) the number of shares of Common Stock subscribed for and purchased by the holders of record of Common Stock as of the Record Date pursuant to the Rights Offering. For the avoidance of doubt, the intention of the parties hereto (as is otherwise set forth in this Section 2.2(a) and in Section 3.1(a) hereof) is that the Investor will acquire a number of shares of Preferred Stock that upon conversion would result in the issuance of a number of shares of Common Stock equal to 19.9% of the total number of shares of Common Stock that will be outstanding immediately after the Backstop Closing, and will acquire a number of shares of Common Stock pursuant to the Backstop Commitment that will not exceed 34.055% of the total number of outstanding shares of Common Stock immediately after the Backstop Closing, and any reduction in the number of Acquired Shares to be purchased by the Investor pursuant to the terms hereof will be made to the number of shares of Common Stock to be purchased pursuant to the Backstop Commitment, and not to the number of shares of Preferred Stock to be purchased pursuant to the Preferred Stock Purchase Commitment. As soon as practicable (but not more than four Business Days) after the expiration of the Rights Offering, the Company shall deliver to the Investor a notice (the “ Subscription Notice ”) setting forth the number of shares of Common Stock subscribed for in the Rights Offering and, accordingly, the number of shares of Common Stock to be acquired by the Investor pursuant to the Backstop Commitment. The shares of Common Stock acquired by the Investor pursuant to the Backstop Commitment are collectively referred to as the “ Backstop Shares .”

(b) The Backstop Commitment shall be subject to the terms and conditions of this Agreement and the completion of the following events; provided, however , that each of the following conditions shall be subject to waiver by the Investor in its sole discretion, as provided in Section 6.3:

(i) the consummation of the Rights Offering by the Company;

(ii) the purchase by the holders of record of Common Stock as of the Record Date pursuant to the Rights Offering of at least the number of shares of Common Stock that is equal to 25% of the Aggregate Offered Shares;

(iii) the instruments governing the Company’s principal bank credit facility shall have been amended (or an effective waiver thereunder shall have been obtained), and the effect of such amendment or waiver shall be that such instruments shall not prohibit the consummation of the transactions contemplated hereby, including without limitation the Tender Offer, the issuance of the Preferred Stock and the conversion of the Preferred Stock on the terms set forth in the Certificate of Designations;

(iv) at least $100 million aggregate principal amount of the Company’s senior debt securities shall have been tendered (and not be subject to withdrawal) by the holders thereof for purchase by the Company pursuant to the Company’s tender offer (the “ Tender Offer ”) for such debt securities, at an average price of not more than $650.00 per $1000.00 of principal amount of the senior debt securities of the Company.

(c) On the terms and subject to the conditions set forth in this Agreement, the closing of the Backstop Commitment (the “ Backstop Closing ”) shall occur on the later of (i) the next Business Day following the closing of the Rights Offering and (ii) the date that all of the conditions to the Backstop Closing set forth in Article VI of this Agreement have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Backstop Closing), at 9:30 a.m. (Houston time) at the offices of Andrews Kurth LLP, 600 Travis, 42nd Floor, Houston, Texas 77002 or such other place, time and date as shall be agreed between the Company and the Investor (the date on which the Backstop Closing occurs, the “ Backstop Closing Date ”).

(d) At the Backstop Closing (i) the Company shall deliver to the Investor evidence of the issuance of the Backstop Shares, in book-entry form, in the name of the Investor against payment by or on behalf of the Investor of the purchase price therefor by wire transfer of immediately available funds to the account designated by the Company in writing, (ii) the Company shall deliver all other documents and certificates required to be delivered to the Investor pursuant to Section 6.3, and (iii) the Investor shall deliver all documents and certificates required to be delivered to the Company pursuant to Section 6.2.

ARTICLE III

PREFERRED STOCK PURCHASE COMMITMENT

Section 3.1 Preferred Stock Purchase Commitment .

(a) Subject to Section 3.1(b), the Investor shall purchase from the Company, and the Company shall issue and sell to the Investor, at a price of $1000.00 per share, a number of shares of Preferred Stock equal to the quotient of (a) the product of 0.199 times the number of issued and outstanding shares of Common Stock immediately after the Backstop Closing times the exercise price of the Warrants issued in the rights offering times 1.025, divided by (b) $1,000. Such shares of Preferred Stock are referred to herein as the “ Preferred Shares ,” and together with the Backstop Shares, are referred to herein as the “ Acquired Shares .” The Investor’s commitment to purchase the Preferred Shares as set forth herein is referred to herein as the “ Preferred Stock Purchase Commitment .”

(b) The Preferred Stock Purchase Commitment shall be subject to the terms and conditions of this Agreement and each of the conditions set forth in Section 2.2(b); provided, however , that each of such conditions shall be subject to waiver by the Investor in its sole discretion.

(c) On the terms and subject to the conditions set forth in this Agreement, the closing of the Preferred Stock Purchase Commitment (the “ Preferred Stock Closing ”) shall occur simultaneously with the Backstop Closing, provided that all of the conditions to the Preferred Stock Closing set forth in Article VI of this Agreement have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Preferred Stock Closing), or if such conditions have not been so satisfied or waived at the time of the Backstop Closing, on the date that all of the conditions to the Preferred Stock Closing set forth in Article VI of this Agreement have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Preferred Stock Closing), at 9:30 a.m. (Houston time) at the offices of Andrews Kurth LLP, 600 Travis, 42nd Floor, Houston, Texas 77002 or such other place, time and date as shall be agreed between the Company and the Investor (the date on which the Preferred Stock Closing occurs, the “ Preferred Stock Closing Date ”).

(d) At the Preferred Stock Closing (i) the Company shall deliver to the Investor evidence of the issuance of the Preferred Shares in the name of the Investor against payment by or on behalf of the Investor of the purchase price therefor by wire transfer of immediately available funds to the account designated by the Company in writing, (ii) the Company shall deliver all other documents and certificates required to be delivered to the Investor pursuant to Section 6.3, (iii) the Company shall pay to the Investor or its designee, by wire transfer of immediately available funds to the account designated by the Investor in writing, a funding fee equal to 1.25% of the aggregate purchase price for the shares of Preferred Stock being purchased at the Preferred Stock Closing and (iv) the Investor shall deliver all documents and certificates required to be delivered to the Company pursuant to Section 6.2.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as Previously Disclosed, the Company represents and warrants to the Investor that:

Section 4.1 Organization . The Company and each of its Subsidiaries is duly incorporated and validly existing as a corporation or other entity in good standing under the Laws of its jurisdiction of organization and has all corporate power and authority to own its property and assets and conduct its business in all material respects as currently conducted, and, except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, is duly qualified as a foreign corporation for the transaction of business and is in good standing under the Laws of each other jurisdiction in which it owns or leases properties, or conducts any business so as to require such qualification.

Section 4.2 Authorization .

(a) The Company has all corporate power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is a party and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Company of this Agreement and each Ancillary Agreement to which it is a party and the consummation of the transactions contemplated hereby and thereby have been (or will be when delivered) duly authorized by all necessary corporate action on the part of the Company, and no further approval or authorization is required on the part of the Company. This Agreement and each Ancillary Agreement to which it is a party constitute (or will constitute when delivered) the valid and binding obligation of the Company, enforceable against the Company in accordance with their terms, except as such may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar Laws affecting creditors’ rights generally and by general equitable principles, and except as may be limited by applicable Law and public policy. No vote or consent of stockholders of the Company is required in connection with any of the transactions contemplated by this Agreement under the Company’s certificate of incorporation, the DGCL, the rules of the NYSE (as administered by the representatives thereof) or, to the Company’s knowledge, otherwise; provided, however that Stockholder Approval (as defined in the Certificate of Designations) may be required pursuant to the terms set forth in the Certificate of Designations.

(b) The Board has taken all necessary action to approve the Investor becoming an “interested stockholder,” such that the Investor shall not be prohibited or restricted from entering into or consummating a “business combination” with the Company (in each case as the term is used in Section 203 of the DGCL) without obtaining any stockholder vote otherwise required by such Section 203 of the DGCL as a result of the Backstop Commitment, the Preferred Stock Purchase Commitment or any of the other transactions contemplated by this Agreement (including conversion of the Preferred Stock and any acquisition of Additional Shares contemplated by Section 8.4(b)). The execution, delivery and performance of this Agreement will not cause to be applicable to the Company any “fair price,” “moratorium,” “control share acquisition” or other similar anti-takeover statute or regulation enacted under the DGCL, or, to the Company’s knowledge, any other Law.

Section 4.3 Capitalization .

(a) As of the date hereof, (i) the Company is authorized to issue up to 100,000,000 shares of Common Stock and has 35,683,688 shares of Common Stock (which includes 476,096 shares of unvested non-performance based restricted stock and excludes 481,666 shares of unvested performance based restricted stock) outstanding and (ii) the Company is authorized to issue up to 25,000,000 shares of preferred stock that may be issued in one or more series and has no shares of preferred stock outstanding. As of the date hereof there are outstanding options to purchase an aggregate of not more than 815,732 shares of Common Stock, all of which options are outstanding under the Stock Plans. The authorized and outstanding Common Stock shall be set forth in the Prospectus Supplement, which shall be true and correct as of the dates noted therein and as of the Closing, except with respect to any Common Stock issued pursuant to employee or director stock options or incentive compensation or similar plans outstanding as of the date hereof. All of the outstanding shares of Capital Stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and were not issued in violation of any pre-emptive rights, resale rights, rights of first refusal or similar rights.

(b) Schedule 4.3(b) sets forth a complete and correct list of all of the Company’s Subsidiaries. Except as set forth on Schedule 4.3(b), all of the outstanding shares of Capital Stock of each of the Company’s Subsidiaries have been duly and validly authorized and issued, are fully paid and non-assessable, were not issued in violation of any pre-emptive rights, resale rights, rights of first refusal or similar rights, and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims. Except as set forth on Schedule 4.3(b), the Company does not Beneficially Own, directly or indirectly, any material equity interests of any Person that is not a Subsidiary, and is not, directly or indirectly, a partner in any partnership or party to any joint venture.

Section 4.4 Valid Issuance of Shares . The Acquired Shares will be, as of the date or dates of their issuance, duly authorized by all necessary corporate action on the part of the Company and, when issued and delivered by the Company against payment therefor as provided in this Agreement, (a) will be validly issued, fully paid and nonassessable, (b) will not be subject to any statutory or contractual preemptive rights or other similar rights of stockholders and (c) with respect to the shares of Preferred Shares, will have the rights set forth in the Certificate of Designations.

Section 4.5 Non-Contravention; Authorizations . Neither the Company nor any of its Subsidiaries is in violation of its charter, by laws or equivalent organizational documents, or is in default (or, with the giving of notice or lapse of time, would be in default) (“ Default ”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its Subsidiaries is subject (each, an “ Existing Instrument ”), except for such Defaults as would not, individually or in the aggregate, have a Material Adverse Effect. Except for the consent of the lenders under the Company’s credit facility, the Company’s execution, delivery and performance of this Agreement and the Ancillary Agreements, issuance and delivery of the Acquired Shares, and consummation of the transactions contemplated hereby and thereby (i) will not result in any violation of the provisions of the charter, by laws or equivalent organizational documents of the Company or any Subsidiary, (ii) will not conflict with or constitute a breach of or a Default under, result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or in the aggregate, have a Material Adverse Effect and (iii) will not result in any violation of any Law applicable to the Company or any Subsidiary, except for such violations as would not, individually or in the aggregate, have a Material Adverse Effect. Except for any clearance pursuant to the HSR Act, the Supplemental Listing Application to be filed with the NYSE and the filing of the Certificate of Designations with the Secretary of State of the State of Delaware, no consent, approval, authorization or other order of, or registration or filing with, any Governmental Entity or the NYSE is required for the Company’s execution, delivery and performance of this Agreement and the Ancillary Agreements, issuance and delivery of the Acquired Shares, or consummation of the transactions contemplated hereby and thereby, except such as have been obtained or made by the Company.

Section 4.6 Litigation . There are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, except actions, suits or proceedings which would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in violation of any order, statute, rule or regulation of any Governmental Entity, except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

Section 4.7 Compliance with Laws; Permits .

(a) The Company and each of its Subsidiaries conduct their businesses in compliance with all applicable Laws and NYSE rules and regulations, except for any noncompliance that would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

(b) The Company and its Subsidiaries possess such valid and current certificates, governmental or other authorizations, licenses, consents, notices, registrations, exemptions, variances, filings, approvals, other forms of permissions or permits (“ Permits ”) issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses as currently conducted, except with respect to any such Permits the absence of which would not have a Material Adverse Effect; and neither the Company nor any of its Subsidiaries has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could have a Material Adverse Effect.

(c) Neither the Company nor any of its Subsidiaries, or, to the knowledge of the Company, any other Person acting on their behalf has, in connection with the operation of their respective businesses, (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of Section 104 of the Foreign Corrupt Practices Act of 1977, as amended, or any other similar applicable Law, (ii) paid, accepted or received any unlawful contributions, payments, expenditures or gifts or (iii) violated or operated in noncompliance with any export restrictions, anti-boycott regulations or embargo regulations.

Section 4.8 Periodic Filings; Financial Statements; Undisclosed Liabilities .

(a) Since January 1, 2008, the Company has timely filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto (collectively the “ Company SEC Documents ”), that were required to be filed with the SEC under the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder (collectively, the “ Securities Act ”) and the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder (collectively, the “ Exchange Act ”). As of their respective filing dates, the Company SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.

(b) The Company’s consolidated financial statements, including the notes thereto, included or incorporated by reference in the Company SEC Documents (the “ Company Financial Statements ”) have been prepared in accordance with GAAP consistently applied (except as may be indicated in the notes and schedules thereto) during the periods involved and present fairly in all material respects the Company’s consolidated financial position at the dates thereof and of its operations and cash flows for the periods specified therein (subject to the absence of notes and year-end adjustments in the case of unaudited statements).

(c) Neither the Company nor any of its Subsidiaries has any liabilities or obligations (accrued, absolute, contingent or otherwise) of a nature that would be required to be accrued or reflected in a consolidated balance sheet prepared in accordance with GAAP, other than liabilities or obligations (A) reflected on, reserved against, or disclosed in the notes to, the consolidated balance sheets of the most recent Company Financial Statements, (B) incurred in the ordinary course of business consistent with past practice since the date of the consolidated balance sheet in the most recent Company Financial Statements or (C) that would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

(d) The Company (A) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (B) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the audit committee of the Board (1) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. As of the date hereof, the Company has no knowledge of any reason that its outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due.

Section 4.9 Absence of Certain Changes . Since December 31, 2008, the Company and its Subsidiaries, taken as a whole, have conducted their business in all material respects in the ordinary course of business, consistent with past practice. From December 31, 2008 to the date hereof, there has not been any Material Adverse Effect or any Effects that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

Section 4.10 Brokers and Finders . Except for RBC Capital Markets Corporation, the fees of which will be paid by the Company, neither the Company nor any of its Subsidiaries has employed any broker or finder or incurred any liability for any financial advisory fee, brokerage fee, commission or finder’s fee, and no broker or finder has acted directly or indirectly for the Company or any of its Subsidiaries in connection with this Agreement or the transactions contemplated hereby.

Section 4.11 Contracts . As of the date hereof, neither the Company nor any of its Subsidiaries is a party to or bound by any Contract which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed in full or in part after the date of this Agreement that has not been filed or incorporated by reference in the Company SEC Documents. To the Company’s knowledge, neither the Company nor any of its Subsidiaries is a party to or bound by any Contract which contains any provision that would prevent the Investor or any of its Affiliates in their capacity as such from operating in a particular line or lines of business after consummation of the transactions contemplated hereby.

Section 4.12 Employee Benefits .

(a) Except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, no material payment (whether of severance pay, bonus or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee will occur solely as a result of either the execution of or the performance of the transactions contemplated in this Agreement. Except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, no payment or benefit that will be made by the Company or any of its subsidiaries with respect to any Employee, solely as a result of either the execution of or the performance of the transactions contemplated in this Agreement, will be characterized as an “excess parachute payment,” within the meaning of Section 280G(b)(1) of the Internal Revenue Code.

(b) The Company represents and warrants that neither the execution of, nor the performance of the transactions contemplated in, this Agreement will result in a violation, in any material respect, of any Law (including ERISA and the regulations promulgated thereunder) with respect to the Stock Plans.

Section 4.13 Title to Properties . The Company and each of its Subsidiaries have good and marketable title to all the properties and assets reflected as owned in the most recent Company Financial Statements, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except (a) such as do not materially and adversely affect the value of such properties or assets or (b) such as do not materially interfere with the current or currently proposed use of such properties or assets by the Company or such Subsidiary. The real property, improvements, equipment and personal property held under lease by the Company and each Subsidiary are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the current or currently proposed use of such real property, improvements, equipment or personal property by the Company or such Subsidiary.

Section 4.14 Insurance . The Company and each of its Subsidiaries are insured by recognized, financially sound institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their businesses including, but not limited to, policies covering real and personal property owned or leased by the Company and its Subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes. The Company has no reason to believe that it or any Subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not have a Material Adverse Effect.

Section 4.15 Environmental Compliance . Except as disclosed in the Registration Statement or Prospectus and as would not, individually or in the aggregate, have a Material Adverse Effect: (i) neither the Company nor any of its Subsidiaries is in violation of any Law relating to pollution or the protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, employee health or safety including without limitation laws and regulations relating to emissions, discharges, disposal, spills, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, “ Materials of Environmental Concern ”), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “ Environmental Laws ”), which violation includes, but is not limited to, the failure to obtain or noncompliance with any Permits required for the operation of the business of the Company or its Subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its Subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its Subsidiaries is in violation of or is responsible for any liability under or pursuant to any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which the Company has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now or in the past (collectively, “ Environmental Claims ”), pending or, to the best of the Company’s knowledge, threatened against the Company or any of its Subsidiaries or any person or entity whose liability for any Environmental Claim the Company or any of its Subsidiaries has retained or assumed either contractually or by operation of law; (iii) to the best of the Company’s knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of or liability under any Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its Subsidiaries or against any person or entity whose liability for any Environmental Claim the Company or any of its Subsidiaries has retained or assumed either contractually or by operation of law; (iv) the Company and its subsidiaries have provided or made available to the Investor all material studies, reports, communications, data or other analysis that relate to any liability, potential liability, claim, action, cause of action, violation, Permit or any other matter relating to or arising in connection with any Environmental Law; and (v) to the knowledge of the Company and its subsidiaries, no underground storage tanks are or were located on any property where the Company or its subsidiaries are conducting or have conducted business, except for such underground storage tanks maintained or removed in accordance with all Environmental Laws.

Section 4.16 No Further Reliance . The Company acknowledges that it is not relying upon any representation or warranty made by the Investor not set forth in this Agreement or in an Ancillary Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF INVESTOR

The Investor represents and warrants to the Company that:

Section 5.1 Organization and Authority . The Investor is duly established and registered and is validly existing and in good standing as an exempted limited partnership under the laws of the Cayman Islands and, acting through its general partner, has all limited partnership power and authority to own its property and assets and conduct its business in all material respects as currently conducted, and has been duly qualified as a foreign limited partnership for the transaction of business in, and is in good standing under the laws of, each other jurisdiction in which it owns or leases properties, or conducts any business so as to require such qualification.

Section 5.2 Authorization . The Investor has all limited partnership power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance by the Investor of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by the Investor’s general partner, and no further approval or authorization by any of its partners or other equity owners is required. This Agreement constitutes the valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms, except as such may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar Laws affecting creditors’ rights generally and by general equitable principles and except as may be limited by applicable Law and public policy.

Section 5.3 Non-Contravention; Governmental Authorization .

(a) The execution, delivery and performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby will not: (i) conflict with or violate any provision of its certificate of limited partnership, partnership agreement or similar governing documents; or (ii) assuming compliance with the statutes and regulations referred to in Section 5.3(b), (A) conflict with or result in any breach of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right to termination, acceleration or cancellation under, any agreement, lease, mortgage, license, indenture or any other contract to which the Investor is a party or by which its properties may be bound or affected; or (B) conflict with or violate any Law applicable to the Investor, except, in the case of clauses (ii)(A) and (ii)(B), as would not, individually or in the aggregate, reasonably be expected to materially and adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(b) Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other Governmental Entity necessary in connection with the execution and delivery by the Investor of this Agreement and the consummation of the transactions contemplated herein (except for (i) such additional steps as may be required by the NYSE or such additional steps as may be necessary to qualify the Acquired Shares under federal securities, state securities or blue sky Laws, (ii) receipt of all approvals and authorizations of, filings with, and notifications to, or expiration or termination of any applicable waiting period, under the HSR Act and (iii) the filing of the Certificate of Designations with the Secretary of State of the State of Delaware) has been obtained or made and is in full force and effect, except as would not, individually or in the aggregate, reasonably be expected to materially and adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c) Neither the Investor nor, to the best of the Investor’s knowledge, any employee or agent of the Investor, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any applicable law.

Section 5.4 Securities Act Compliance . The Acquired Shares being acquired by the Investor hereunder are being acquired for its own account, for the purpose of investment and not with a view to or for sale in connection with any public resale or distribution thereof in violation of applicable securities Laws. The Investor is an “accredited investor” within the meaning of Rule 501(a) promulgated under the Securities Act and is knowledgeable, sophisticated and experienced in business and financial matters, and it fully understands the limitations on the ownership and sale, transfer or other disposition of the Acquired Shares. The Investor is able to bear the financial risk of its investment in the Acquired Shares and is able to afford the complete loss of such investment. The Investor has been afforded access to information about the Company and its financial condition and business, sufficient to enable the Investor to evaluate its investment in the Acquired Shares. The Investor understands that the Acquired Shares may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by Law.

Section 5.5 Ownership . As of the date of this Agreement, Investor and its Affiliates own no Capital Stock of the Company.

Section 5.6 Financial Capability . At the Closing the Investor will have available funds necessary to consummate the Closing on the terms and conditions contemplated by this Agreement.

Section 5.7 Brokers and Finders . Neither the Investor nor any of its Affiliates or any of their respective officers or directors has employed any broker or finder or incurred any liability for any financial advisory fee, brokerage fee, commission or finder’s fee, and no broker or finder has acted directly or indirectly for the Investor or any of its Affiliates or any of their respective officers or directors in connection with this Agreement or the transactions contemplated hereby.

Section 5.8 No Further Reliance . The Investor acknowledges that it is not relying upon any representation or warranty made by the Company not set forth in this Agreement or in an Ancillary Agreement. The Investor acknowledges that it has conducted such review and analysis of the business, assets, condition, operations and prospects of the Company and its Subsidiaries that the Investor considers sufficient for purposes of the purchase of the Acquired Shares.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.1 Conditions to the Obligations of the Company and the Investor . The obligations of the Company and the Investor to effect the Backstop Closing and the Preferred Stock Closing shall be subject to the following conditions:

(a) all approvals and authorizations pursuant to, and all filings with and notifications to, the applicable Governmental Entity under the HSR Act shall have been obtained or made, and any applicable waiting period under any such laws shall have expired or terminated;

(b) no provision of any applicable Law and no judgment, injunction, order or decree shall prohibit the consummation of any of the transactions contemplated hereby; and

(c) the Rights Offering shall have been consummated in accordance in all material respects with the terms set forth in Section 2.1(d) hereof and in accordance with the Securities Act.

Section 6.2 Conditions to the Obligations of the Company . The obligations of the Company to effect the Backstop Closing and the Preferred Stock Closing shall be subject to the following conditions:

(a) all representations and warranties of the Investor in this Agreement shall be true and correct as of the date hereof and as of the Backstop Closing Date or Preferred Stock Closing Date, as the case may be (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date);

(b) the Investor shall have performed in all material respects all of its obligations required to be performed by it hereunder at or prior to the Backstop Closing or Preferred Stock Closing, as the case may be;

(c) the Company shall have received a certificate, signed by an officer of the Investor, certifying as to the matters set forth in Section 6.2(a) and Section 6.2(b); and

(d) the Company shall have received a certificate, signed by an officer of the Investor, certifying the percentage of Voting Stock of the Company Beneficially Owned as of the close of business on the Business Day immediately prior to the Backstop Closing Date or Preferred Stock Closing Date, as the case may be, by the Investor and its Affiliates (such amount the “ Certified Ownership Percentage ”).

Section 6.3 Conditions to the Obligations of the Investor . The obligations of the Investor to effect the Backstop Closing and the Preferred Stock Closing shall be subject to the following conditions:

(a) The 10b-5 Representation shall be true and correct in all respects as of the Backstop Closing Date or Preferred Stock Closing Date, as the case may be, with all references to any time or date referred to in Section 2.1(c) being deemed to be references to the Backstop Closing Date or Preferred Stock Closing Date, as the case may be. All other representations and warranties of the Company contained in this Agreement (i) that are qualified by materiality, Material Adverse Effect or words of similar import shall be true and correct as of the date hereof and as of the Backstop Closing Date or Preferred Stock Closing Date, as the case may be (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date) and (ii) that are not qualified by materiality, Material Adverse Effect or words of similar import, shall be true and correct in all material respects as of the date hereof and as of the Backstop Closing Date or Preferred Stock Closing Date, as the case may be (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date). Notwithstanding the foregoing, the Investor shall not be permitted to invoke the condition set forth in this Section 6.3(a) with respect to any fact or event if prior to such time the Company has given written notice (the “ Event Notice ”) to the Investor that such event or fact would reasonably be expected to cause the condition set forth in this Section 6.3(a) to not be satisfied, and the Investor has failed to reserve its rights with respect to such fact or event by giving written notice to the Company (the “ Reservation Notice ”) within ten (10) Business Days after receipt of the Event Notice (such fact or event, a “ Waived Fact ”), provided, however , that the Investor shall be permitted to invoke any of the conditions set forth in this Section 6.3(a) with respect to facts or events not contained in any Event Notice or with respect to the aggregate effect of any Waived Facts and any unrelated subsequent non-Waived Facts;

(b) the Company shall have performed in all material respects all of its obligations required to be performed by it hereunder at or prior to the Backstop Closing or Preferred Stock Closing, as the case may be;

(c) with respect to the Backstop Closing only, the conditions set forth in Section 2.2(b) shall have been satisfied; and

(d) with respect to the Preferred Stock Closing only, the conditions referenced in Section 3.1(b) shall have been satisfied;

(e) the Investor shall have received a certificate, signed by an officer of the Company, certifying as to the matters set forth in Section 6.3(a) and Section 6.3(b);

(f) since the date of this Agreement, there shall not have been any Material Adverse Effect or any Effects that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(g) the shares of Common Stock to be issued in the Rights Offering (including pursuant to the Backstop Commitment) and to be issued upon conversion of the Preferred Stock shall have been approved for listing on the NYSE, subject to official notice of issuance;

(h) with respect to the Preferred Stock Closing only, the Company shall have filed with the Delaware Secretary of State the Certificate of Designations and the Certificate of Designations shall be effective;

(i) the Investor shall have received a registration rights agreement substantially in the form of Annex II hereto, duly executed by the Company (the “ Registration Rights Agreement ”);

(j) with respect to each of the Backstop Closing and the Preferred Stock Closing, such number of Initial Investor Designees as the Investor is entitled to designate pursuant to Section 8.2 based upon 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 Backstop Closing or Preferred Stock Closing, as applicable, shall have been appointed to the Board, and the Company shall have entered into customary indemnification agreements with such Initial Investor Designees at or prior to their appointment;

(k) The Company’s auditors shall have delivered to the Board a comfort letter (addressed to the Board) in the form customarily delivered to dealer managers of registered rights offerings, with respect to the Registration Statement and the Prospectus Supplement; and

(l) the Investor shall have received a legal opinion of Andrews Kurth LLP, special counsel for the Company, substantially in the form set forth in Annex IV.

ARTICLE VII

COVENANTS

Section 7.1 Conduct of the Business . Prior to the earlier of the Preferred Stock Closing and the termination of this Agreement pursuant to Section 9.1 (the “ Pre-Closing Period ”), the Company shall not, and shall cause each of its Subsidiaries not to, take any actions outside of the ordinary course of business consistent with past practice that are material to the Company and its Subsidiaries, taken as a whole, without the prior written consent of the Investor (such consent not to be unreasonably withheld, conditioned or delayed). During the Pre-Closing Period, (a) except as contemplated by this Agreement or the Ancillary Agreements, as required by Law or as set forth on Schedule 7.1, the Company shall not, and shall cause each of its Subsidiaries not to (i) declare or pay any dividend or distribution on its Capital Stock (except for the Warrants and any dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company); (ii) adjust, split, combine or reclassify or otherwise amend the terms of the Capital Stock of the Company or any debt securities convertible or exchangeable into Capital Stock of the Company; (iii) repurchase, redeem, purchase, acquire, encumber, pledge, dispose of or otherwise transfer, directly or indirectly, any of the Capital Stock of it or any of its Subsidiaries or any debt securities convertible or exchangeable into Capital Stock of it or any of its Subsidiaries, other than repurchases, redemptions, purchases or acquisitions of any such Capital Stock by, or transfers or dispositions of any such Capital Stock to, the Company or any of its wholly owned Subsidiaries; (iv) issue, grant, deliver or sell any Capital Stock of it or any of its Subsidiaries (other than the Warrants, the Common Stock issuable upon exercise thereof and the Preferred Shares or issuances pursuant to Excluded Issuances) or any debt securities convertible or exchangeable into Capital Stock of it or any of its Subsidiaries, other than issuances, grants, deliveries or sales of such Capital Stock to the Company or any of its wholly owned Subsidiaries; (v) make any amendments to their organizational documents (other than the filing of the Certificate of Designations with the Secretary of State of the State of Delaware); (vi) sell, lease or otherwise dispose of a material amount of assets or securities, including by merger, consolidation, asset sale or other business combination, other than sales of assets in the ordinary course of business consistent with past practice; (vii) make any material acquisitions of any property or assets by purchase or other acquisition of shares or other equity interests, or by merger, consolidation or other business combination, from or with any Person (except for acquisitions made by the Company or any direct or indirect wholly owned Subsidiary of the Company from the Company or any other direct or indirect wholly owned Subsidiary of the Company); (viii) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; or (ix) agree or commit to do any of the foregoing and (b) if the Company takes any action (other than with respect to the issuance of the Warrants, the Common Stock issuable upon the exercise thereof and the Preferred Shares) that would require any anti-dilution adjustments to be made under the Certificate of Designations as if it were in effect at the time of such action, the Company shall make such appropriate adjustments (the “ Adjustments ”).

Section 7.2 Securities to be Issued . The Acquired Shares to be issued to the Investor pursuant to this Agreement shall be subject to the terms and provisions of the Company’s certificate of incorporation, including in the case of the Preferred Shares, the Certificate of Designations.

Section 7.3 Efforts . From the date hereof until the earlier of the Preferred Stock Closing and the date that this Agreement is terminated pursuant to Section 9.1, the Investor and the Company shall (a) promptly file any and all Notification and Report Forms required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), with respect to the transactions contemplated hereby, and use commercially reasonable efforts to cause the expiration or termination of any applicable waiting periods under the HSR Act; (b) use commercially reasonable efforts to cooperate with each other in (i) determining whether any filings are required to be made with, or consents, permits, authorizations, waivers, clearances, approvals, or expirations or terminations of waiting periods are required to be obtained from, any other Governmental Entities in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and (ii) timely making all such filings and timely obtaining all such consents, permits, authorizations, waivers, clearances, approvals, expirations or terminations; (c) use commercially reasonable efforts to supply to any Governmental Entity as promptly as practicable any additional information or documents that may be requested pursuant to any Law or by such Governmental Entity; (d) promptly inform the other party of any substantive meeting, discussion, or communication with any Governmental Entity (and supply to the other party any written communication or other written correspondence or memoranda prepared for such purpose, subject to applicable Laws relating to the exchange of information) in respect of any filing, investigation or inquiry concerning the transactions contemplated hereby, and consult with the other party in advance of, and to the extent permitted by such Governmental Entity, give the other party the opportunity to attend and participate in, such meeting, discussion or communication; and (e) use commercially reasonable efforts to take, or cause to be taken, all other actions and do, or cause to be done, all other things necessary, proper or advisable to consummate the Closings and the transactions contemplated hereby, including taking all such further action as may be necessary to resolve such objections, if any, as the United States Federal Trade Commission, the Antitrust Division of the United States Department of Justice, state antitrust enforcement authorities or competition authorities of any other nation or other jurisdiction or any other person may assert under Law with respect to the transactions contemplated hereby. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to require the Investor or any of its Affiliates to enter into any agreement with any Governmental Entity, or to consent to any authorization, consent or approval of any Governmental Entity, requiring the Investor or any of its Affiliates to hold separate or divest, or to restrict the dominion or control of, any of its assets or businesses or any of the stock, assets or business of the Investor, the Company or any of their Affiliates.

Section 7.4 Publicity . On the date hereof, the Company shall issue a press release in the form agreed to by the Company and Investor. No other public release or announcement concerning the transactions contemplated hereby shall be issued by either party without the prior consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except for any such release or announcement that may be required by Law or the rules and regulations of the NYSE, in which case the party required to make the release or announcement shall, to the extent reasonably practicable, allow the other party reasonable time to comment on such release or announcement in advance of its issuance. The provisions of this Section 7.4 shall not restrict the ability of either party to summarize or describe the transactions contemplated by this Agreement in any prospectus or similar offering document or other report required by Law or the rules and regulations of the NYSE so long as the other party is provided a reasonable opportunity to comment on such disclosure in advance.

Section 7.5 Share Listing . The Company shall as promptly as practicable after the date of this Agreement use its reasonable best efforts to cause the Common Stock to be issued in the Rights Offering (including pursuant to the Backstop Commitment) and the Common Stock issuable upon conversion of the Preferred Stock to be approved for listing on the NYSE, subject to official notice of issuance.

Section 7.6 Access . From the date hereof until the earlier of the Preferred Stock Closing and the date that this Agreement is terminated pursuant to Section 9.1, subject to applicable Law, the Company shall grant the Investor, upon reasonable advance notice, such access to its books, records, properties and such other information as the Investor may reasonably request, provided that any investigation of such information shall be conducted during normal business hours and in such manner as not to interfere with the conduct of the business of the Company, and provided, further , that the Company shall not be required to disclose any information to the extent (a) prohibited by applicable Law or NYSE rule or regulation or (b) such disclosure could reasonably be expected to cause a violation of any agreement to which the Company or any of its Subsidiaries is a party or could reasonably be expected to cause a risk of a loss of privilege to the Company or any of its Subsidiaries.

Section 7.7 Termination of Confidentiality Agreement; Confidentiality .

(a) The Company and the Investor acknowledge and agree that as of the date hereof the Confidentiality Agreement, and all provisions thereof, shall be terminated and be of no further force or effect.

(b) Notwithstanding the foregoing, from the date hereof until the first anniversary of the date hereof, the Investor will, and will cause its Representatives, to keep all information regarding the Company (whether prepared by the Company, its Representatives or otherwise, whether in oral, written, electronic or other form) received under the terms of the Confidentiality Agreement or pursuant to this Agreement (collectively, the “ Information ”) confidential, except (i) Information disclosed by the Investor to its Representatives, (ii) Information that becomes generally available to the public other than as a result of a disclosure in violation of this Agreement by the Investor or its Representatives, (iii) Information that was available to the Investor on a nonconfidential basis prior to its disclosure, directly or indirectly, by the Company or its Representatives, (iv) Information that becomes available to the Investor on a nonconfidential basis from a person other than the Company who, to the knowledge of the Investor, is not bound by a confidentiality obligation to the Company or otherwise prohibited from transferring such information to the Investor, (v) Information that the Company agrees may be disclosed, (vi) information that the Investor can demonstrate has been independently developed or derived without reliance on the Information, (vii) Information which the Investor is required by Law, legal process or regulatory authority to disclose, (viii) the disclosure of Information as part of the Investor’s or any of its Affiliate’s normal reporting or review procedure, or in connection with the Investor’s or any of its Affiliate’s normal fund raising, marketing, informational or reporting activities, and (ix) Information disclosed to any bona fide prospective purchaser of the equity or assets of the Investor or its Affiliates or the Capital Stock of the Company held by the Investor, or prospective merger partner of the Investor or its Affiliates, provided that such purchaser or merger partner agrees to be bound by the provisions of this Section 7.7(b).

Section 7.8 Right to Use Names and Logos . From and after the earlier of the Backstop Closing Date or Preferred Stock Closing Date and until the date on which the Investor 13(d) Group ceases to Beneficially Own 10% or more of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis), the Company hereby grants to the Investor the right to use the Company’s name and logo (collectively, the “ Company Marks ”) in the Investor’s and its Affiliates’ marketing materials, solely for the purpose of indicating in a factual manner the Investor’s ownership interest in the Company, provided, however , that (a) the Investor shall not use the Company Marks in a manner that is likely to confuse the public to believe that the Company is providing or sponsoring any offering, securities, product or service provided by Investor; (b) the Investor shall include a prominent trademark attribution notice giving notice of the Company’s or its Subsidiary’s ownership of its trademarks in any such marketing materials in which the name and/or logo appear; (c) in order to preserve the inherent value of such name and logo, the Investor agrees to use reasonable efforts to ensure that it maintains the quality of the Investor’s business and the operation thereof; (d) the Investor shall at all times use such name and logos in accordance with any style guidelines established by the Company and communicated to the Investor from time to time in writing; (e) the Investor shall, upon the request of Company, provide copies of such marketing materials to Company; and (f) notwithstanding anything to the contrary herein, the Company shall at all times have the right to direct the Investor to cease any use of the Company Marks which violates any requirement under this Section or which is otherwise likely to disparage, dilute or impair the value of the Company Marks or the Company’s goodwill associated therewith.

Section 7.9 Finder’s Fees . If a claim shall be made against either party for any financial advisory fee, brokerage fee, commission or finder’s fee for which the other party is responsible, such responsible party shall indemnify the non-responsible party in full from and against such claim.

Section 7.10 Proceeds; Application to Tender Offer . The Company shall apply the net proceeds of the Rights Offering (including the Backstop Commitment) and the sale of the Preferred Shares, to the retirement of indebtedness of the Company, including indebtedness under its principal bank credit facility and indebtedness represented by its senior debt securities pursuant to the Tender Offer.

Section 7.11 Conduct of Tender Offer . The Company shall not amend or modify any of the terms and conditions of the Tender Offer, or waive any of the conditions of the Tender Offer, without the prior written consent of the Investor, except for any amendments, modifications or waivers that do not result in the payment of an average price of more than $650.00 per $1000.00 of principal amount of the senior debt securities of the Company. The Company will in all respects conduct the Tender Offer in compliance with applicable Federal and state Laws and regulations.

Section 7.12 Filing of Certificate of Designations . The Company shall file, on or before the Preferred Stock Closing Date, the Certificate of Designations with the Secretary of State of the State of Delaware.

Section 7.13 Consent to Conversion . The Company agrees that it will not unreasonably withhold or delay its consent to the conversion of any shares of the Preferred Stock pursuant to Section 6(a) of the Certificate of Designations, if prior to the Standstill Expiration Date, (a) a tender offer for the Common Stock of the Company has been made (unless the Company has recommended that its stockholders not accept such tender offer), (b) the Company has entered into a merger agreement which requires holders of Common Stock to make an election as to the form of consideration to be received in the merger or (c) any similar circumstances arise in which the holders of Preferred Stock could be disadvantaged as a result of their inability to convert the shares of Preferred Stock into shares of Common Stock pursuant to Section 6(a) of the Certificate of Designations.

ARTICLE VIII

GOVERNANCE AND OTHER RIGHTS

Section 8.1 Initial Investor Nominees . The Company and the Investor agree as follows:

(a) Prior to the Backstop Closing, the Investor shall provide to the Company a list of initial Investor Nominees (including details as to which shall be nominated in each circumstance set forth in Section 8.2(a)), each of whom shall be reviewed promptly by the Nominating and Corporate Governance Committee of the Board (the “ Nominating Committee ”).

(b) On the Backstop Closing Date, the Company shall cause to be elected or appointed to the Board such number of Initial Investor Designees as the Investor 13(d) Group is entitled to designate 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 Backstop Closing, subject to 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 Backstop Closing Date the Board shall have at least the number of vacancies necessary to allow such election or appointment.

(c) On the Preferred Stock Closing Date, the Company will cause to be elected or appointed to the Board any Initial Investor Designees that have not been previously elected or appointed to the Board pursuant to Section 8.1(b), subject to 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 Preferred Stock Closing Date the Board shall have at least the number of vacancies necessary to allow such election or appointment.

Section 8.2 Governance Matters . The Company and the Investor agree that effective as of the Backstop Closing Date and terminating automatically upon the date on which the Investor 13(d) Group ceases to Beneficially Own 10% or more of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis):

(a) Investor’s Board Representation .

(i) For so long as the Investor 13(d) Group Beneficially Owns 40.0% or more of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis), the Investor shall be entitled to designate four (4) Investor Nominees, and the parties hereto shall exercise all authority under applicable Law to cause any slate of directors presented to stockholders for election to the Board to include all of such Investor Nominees.

(ii) For so long as the Investor 13(d) Group Beneficially Owns less than 40.0% but at least 30.0% of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis), the Investor shall be entitled to designate three (3) Investor Nominees, and the parties hereto shall exercise all authority under applicable Law to cause any slate of directors presented to stockholders for election to the Board to include all of such Investor Nominees.

(iii) For so long as the Investor 13(d) Group Beneficially Owns less than 30.0% but at least 20.0% of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis), the Investor shall be entitled to designate two (2) Investor Nominees, and the parties hereto shall exercise all authority under applicable Law to cause any slate of directors presented to stockholders for election to the Board to include both of such Investor Nominees.

(iv) For so long as the Investor 13(d) Group Beneficially Owns less than 20.0% but at least 10.0% of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis), the Investor shall be entitled to designate one (1) Investor Nominee, and the parties hereto shall exercise all authority under applicable Law to cause any slate of directors presented to stockholders for election to the Board to include such Investor Nominee.

(b) Board Committees .

(i) The Company shall cause the Board to create and maintain, for so long as the Investor is entitled to designate at least one (1) Investor Nominee for election to the Board pursuant to this Section 8.2, a Finance Committee, with a charter substantially in the form of Annex IV hereto. The Finance Committee shall consist of five (5) members, of which (A) two (2) shall be Investor Directors for so long as the Investor is entitled to designate two (2) or more Investor Nominees for election to the Board pursuant to this Section 8.2 and (B) one (1) shall be an Investor Director for so long as the Investor is entitled to designate one (1) Investor Nominee for election to the Board pursuant to this Section 8.2. The remaining members of the Finance Committee shall be selected by the Non-Investor Directors from among the Non-Investor Directors.

(ii) For so long as the Investor is entitled to designate one (1) or more Investor Nominees for election to the Board pursuant to this Section 8.2, one member of each of the Audit Committee and Compensation Committee shall be an Investor Director, provided that such Investor Director meets the applicable independence criteria of the SEC and NYSE. The remaining members of the Audit Committee and Compensation Committee shall be selected by the Non-Investor Directors from among the Non-Investor Directors who meet the applicable independence criteria of the SEC and NYSE.

Section 8.3 Procedural Matters . The Company and the Investor agree that effective as of the Backstop Closing Date and terminating automatically upon the date on which the Investor 13(d) Group ceases to Beneficially Own 10% or more of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis):

(a) Independence . At all times, a majority of the Board shall be comprised of individuals who satisfy the independence criteria of the NYSE and are independent of the Investor and its Affiliates. In addition, at all times, the Audit Committee, Compensation Committee and Nominating Committee shall be comprised only of individuals who satisfy the applicable independence criteria of the SEC and NYSE.

(b) Designation of Slate .

(i) Any Investor Nominees that are to be included in a slate of directors pursuant to Section 8.2(a) shall be designated by the Investor by prior written notice to the Company, subject to the reasonable approval of the Nominating Committee and further subject to applicable Law and the Nominating Committee’s fiduciary duties.

(ii) If, for any reason, an Investor Nominee is not elected to the Board by the stockholders, then the Company shall exercise all authority under applicable Law to cause such person to be elected to the Board.

(iii) The Company shall exercise all authority under applicable Law to cause the number of directors which shall constitute the Board to be sufficient to allow the election or appointment of the number of Investor Nominees entitled to be nominated to the Board in accordance with Section 8.2(a).

(c) Resignations and Replacements .

(i) Subject to paragraph (ii) below, if at any time an Investor Director resigns or is removed in accordance with applicable Law or the Company’s by-laws, a new Investor Director shall be designated by the Investor and appointed by the Board pursuant to the procedures set forth in this Section 8.3, subject to the reasonable approval of the Nominating Committee and further subject to applicable Law and the Nominating Committee’s fiduciary duties.

(ii) Subject to paragraph (iii) below, if at any time the number of Investor Nominees entitled to be nominated to the Board in accordance with Section 8.2(a) in an election of directors presented to stockholders decreases, within 10 days thereafter the Investor shall cause a sufficient number of Investor Directors to resign from the Board so that the number of Investor Directors on the Board after such resignation(s) equals the number of Investor Nominees that the Investor would have been entitled to designate had an election of directors taken place at such time. Any vacancies created by the resignations required by this Section 8.3(c)(ii) shall be filled with Non-Investor Directors as designated by the Nominating Committee.

(iii) If at any time the percentage of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis) Beneficially Owned by the Investor 13(d) Group decreases as a result of an issuance of Common Stock by the Company (other than any Excluded Issuance), the Investor may, in good faith, notify the Company within 90 days that the Investor 13(d) Group intends to acquire a sufficient amount of additional Common Stock in accordance with and to the extent permitted by Section 8.4(b) necessary to maintain its then current level of Board representation. In such event, until the end of such 90-day period (and thereafter if the Investor 13(d) Group in fact restores its percentage to the extent necessary to maintain its then current level of Board representation and provided that the Investor 13(d) Group continues to maintain the requisite level of Beneficial Ownership of Common Stock in accordance with Section 8.2(a)) the Board shall continue to have the number of Investor Directors that corresponds to the percentage of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis) Beneficially Owned by the Investor 13(d) Group prior to such issuance of Common Stock by the Company.

(d) Solicitation and Voting of Shares .

(i) The Company shall recommend that its stockholders vote in favor of the slate of director nominees nominated in accordance with Section 8.2(a) and Section 8.3(b) and use its commercially reasonable efforts to solicit from the stockholders of the Company eligible to vote for the election of directors proxies in favor of the director nominees nominated in accordance with Section 8.2 and Section 8.3(b).

(ii) In any election of directors or at any meeting of the stockholders of the Company called expressly for the purpose of removing any director(s), the Investor shall be present for purposes of establishing a quorum.

(iii) Except as provided in this Section 8.3 or in Section 8.4, the Investor shall be free to vote in its sole discretion all of its Voting Stock of the Company entitled to vote on any matter submitted to or acted upon by stockholders.

(iv) Notwithstanding anything in this Agreement to the contrary, no member of the Investor 13(d) Group shall (A) “solicit,” or become a “participant” in any “solicitation” of, any “proxy” (as such terms are defined in Regulation 14A under the Exchange Act) from any holder of Voting Stock of the Company in connection with any vote for the election of directors, or agree or announce its intention to vote with any Person undertaking any such “solicitation,” or (B) grant any irrevocable proxies with respect to any Voting Stock of the Company to any Person (other than another member of the Investor 13(d) Group or as recommended by the Board) or deposit any Voting Stock of the Company in a voting trust, or enter into any other arrangement or agreement, with any Person (other than another member of the Investor 13(d) Group) with respect to the voting thereof, in each case in connection with any vote for the election of directors.

(e) Director Expenses; Insurance . The Company agrees that the Investor Directors shall be entitled to the same rights, privileges and compensation as the other members of the Board in their capacity as such, including with respect to insurance coverage and reimbursement for Board participation and related expenses. The Company shall maintain, at its own expense, directors’ and officers’ liability insurance with coverage no less favorable to the directors than the policies that are in effect on the date hereof.

Section 8.4 Standstill; Transferability . From the date hereof until the earliest of (i) the date on which the Investor 13(d) Group ceases to Beneficially Own 10.0% or more of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis), (ii) the date on which the Common Stock ceases to be registered under Section 12 of the Exchange Act, (iii) the third anniversary of the Preferred Stock Closing Date, or if the Preferred Stock Closing does not occur, the Backstop Closing Date, (iv) the termination of the Rights Offering by the Company without any sale of equity securities pursuant to the Backstop Commitment or the Preferred Stock Purchase Commitment, (v) the termination of this Agreement in accordance with the terms hereof, (vi) a proposal relating to an Acquisition Transaction is made by any Person or Group other than a member of the Investor 13(d) Group and accepted by the Board, and the members of the Investor 13(d) Group execute an irrevocable proxy granting representatives of the Company the authority to vote all shares of Voting Stock held by the Investor 13(d) Group in favor of such Acquisition Transaction or (vii) the announcement by the Company of a “going private” transaction with respect to the Company in which the Investor 13(d) Group agrees with the Company, in writing, to participate (such earliest date, the “ Standstill Expiration Date ”):

(a) Without the prior written consent of the Company (which consent may be granted or withheld in its sole discretion), the Investor 13(d) Group shall not, directly or indirectly, by purchase or otherwise, acquire, agree to acquire or offer to acquire Voting Stock of the Company or direct or indirect rights or options to acquire Voting Stock of the Company, provided that the Investor 13(d) Group (i) may acquire the Acquired Shares, any Additional Shares pursuant to Section 8.4(b) and any shares of Common Stock received upon conversion of Preferred Stock (including in each case any distributions in respect thereof to the extent permitted by the applicable terms of this Agreement and the Certificate of Designations), (ii) may acquire Voting Stock of the Company as otherwise permitted pursuant to this Section 8.4, (iii) may acquire Voting Stock of the Company, so long as the Voting Stock acquired, when aggregated with all the other Voting Stock of the Company Beneficially Owned by the Investor 13(d) Group, does not constitute in excess of 35.0% of the Total Voting Power of the Company or 45.0% of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis) and (iv) may acquire Voting Stock of the Company issued by the Company to any member of the Investor 13(d) Group in a transaction approved by the Board (including any issuance of Voting Stock of the Company as compensation to Affiliates of the Investor who are serving as directors of the Company).

(b) Notwithstanding Section 8.4(a), if at any time the percentage of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis) Beneficially Owned by the Investor 13(d) Group decreases as a result of an issuance of Common Stock by the Company (other than any Excluded Issuance) (a “ Dilutive Issuance ”), the Investor 13(d) Group may acquire in the secondary market additional shares of Common Stock, but only to the extent necessary to maintain the percentage of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis) that the Investor 13(d) Group Beneficially Owned prior to such Dilutive Issuance (such additional shares acquired, the “ Additional Shares ”).

(c) The Investor 13(d) Group shall not, directly or indirectly, sell, transfer or otherwise dispose of any of its Voting Stock of the Company, other than (i) to any Affiliates of a member of the Investor 13(d) Group, provided that any such transferee shall execute an agreement in form and substance reasonably satisfactory to the Company, pursuant to which such proposed transferee agrees to be bound by the terms and conditions of this Agreement, (ii) in an underwritten registered offering, (iii) sales, transfers, or other dispositions (not including pledges) in a transaction (or series of transactions) that, to the knowledge of the Investor, do not result in the acquisition of Voting Stock of the Company by any Person or Group that, after giving effect to such acquisition, will Beneficially Own 10% or more of the Total Voting Power of the Company, provided that prior to any such sale, transfer or other disposition of Voting Stock of the Company by the Investor pursuant to this clause (iii), the Investor shall deliver to the Company a certificate executed by an officer of the Investor representing that, to its knowledge after reasonable inquiry (including review of any SEC filings made by the transferee, if applicable), after the proposed sale, transfer or other disposition of such Voting Stock the transferee shall not Beneficially Own 10% or more of the Total Voting Power of the Company, (iv) in transactions exempt from registration under Rule 144 under the Securities Act, (v) pursuant to any tender offer by the Company or any tender offer by a third party (unless the Company has recommended that its stockholders not accept such tender offer) or (vi) in connection with a merger or consolidation in which Voting Stock of the Company is exchanged for cash, securities, other property or a combination thereof. Any purported transfer of Voting Stock of the Company that is inconsistent with the provisions of this Section 8.4(c) shall be null and void and of no force or effect.

(d) Notwithstanding the foregoing, nothing in this Section 8.4 shall (i) prohibit or restrict any member of the Investor 13(d) Group from responding to any inquiries from any stockholders of the Company as to such member’s intention with respect to the voting of any Voting Stock of the Company Beneficially Owned by it so long as such response is consistent with the terms of this Agreement; (ii) restrict the right of each Investor Director on the Board or any committee thereof to vote on any matter as such individual believes appropriate in light of his or her duties as a director or committee member or restrict the manner in which an Investor Director may participate in his or her capacity as a director in deliberations or discussions at meetings of the Board or as a member of any committee thereof; (iii) prohibit the Investor 13(d) Group from Beneficially Owning Voting Stock of the Company issued as dividends or distributions in respect of, or issued upon conversion, exchange or exercise of, securities which the Investor 13(d) Group is permitted to Beneficially Own under this Agreement; (iv) prohibit or restrict any member of the Investor 13(d) Group from making a written proposal regarding an Acquisition Transaction directly to the Board, provided that (x) unless required by applicable Law, in no event may any member of the Investor 13(d) Group or any of its Representatives make such proposal public, (y) if, following its receipt of such written proposal, the Board determines to commence a process with respect to a potential Acquisition Transaction, the Company shall permit the Investor 13(d) Group to participate in such process and (z) if, pursuant to actions taken by the Board following its receipt of such written proposal, the Board determines to accept and recommend to the Company’s stockholders an Acquisition Transaction from another party (the “ Alternate Acquisition Transaction ”) that the Board believes to be superior to the Investor 13(d) Group’s proposed Acquisition Transaction, then the Investor 13(d) Group shall vote its Voting Stock of the Company in the same proportion as all other Voting Stock of the Company is voted with respect to such Alternate Acquisition Transaction or, in the case of a tender offer, tender its shares of Company stock in the same proportion as is tendered by all other holders of Company stock; or (v) prohibit any member of the Investor 13(d) Group from disclosing, in accordance with its obligations (if any) under the federal securities Laws or other applicable Law, its desire (if any) that the Company become the subject of an Acquisition Transaction. Notwithstanding anything to the contrary set forth in this Section 8.4, if, at any time following the consummation of a bankruptcy proceeding involving the Company, any Person (other than the Company) is permitted by Law or the bankruptcy court in which the proceeding is pending to propose a plan of reorganization for the Company, the Investor shall be permitted to propose a plan of reorganization for the Company, provided that no plan of reorganization shall be proposed by the Investor prior to the expiration or termination of the exclusivity period for the Company’s filing of a plan of reorganization, as such exclusivity period may be extended from time to time (it being understood and agreed that the Investor shall not object to any extension of the Company’s exclusivity period and shall not initiate or otherwise support any proceeding to terminate or shorten the length of the Company’s exclusivity period). The Investor hereby appoints the Company, its designees, and each of them individually, as the sole and exclusive attorneys and proxies of the Investor, with full power of substitution and re-substitution, to the full extent of the Investor’s right, with respect to any Voting Stock of the Company to be voted in accordance with the foregoing voting requirements related to Alternate Acquisition Transactions, and empowers such attorneys and proxies to exercise all voting rights of the Investor in accordance with the provisions of Section 8.4(d)(iv)(z) (including the power to execute and deliver written consents with respect to such Voting Stock) at any time prior to termination of this Section 8.4 at every annual, special or adjourned meeting of the stockholders of the Company and in every written consent in lieu of such meeting. The Investor confirms that this proxy is irrevocable, is coupled with an interest, and is granted in consideration of the Company entering into this Agreement.

Section 8.5 Notice Rights . From the Backstop Closing Date (or if the Backstop Closing does not occur, the Preferred Stock Closing Date) until the date on which the Investor 13(d) Group ceases to Beneficially Own 10% or more of the Common Stock of the Company (notwithstanding the definition of “Beneficially Own,” counting any shares of Preferred Stock on an as converted basis), the Company shall keep the Investor 13(d) Group informed, on a current basis, of any events, discussions, notices or changes with respect to any tax, criminal or regulatory investigation or action involving the Company or any of its Subsidiaries (in the case of tax or regulatory investigations or actions, other than ordinary course communications which could not reasonably be expected to be material to the Company, its Subsidiaries or the Investor), and shall reasonably cooperate with the Investor and its partners, Affiliates and Representatives in an effort to avoid or mitigate (with no adverse effect to the Company) any cost or regulatory consequences to the Investor and its partners and Affiliates that might arise from such investigation or action (including by allowing the Investor to review written submissions in advance and attend meetings with authorities and coordinating and providing assistance in connection with any meetings with authorities).

Section 8.6 Corporate Opportunities . In accordance with and as contemplated by Section 122, paragraph (17) of the DGCL (or any successor statute thereto), the Company hereby renounces, to the fullest extent permitted by law, any interest or expectancy in any business opportunity, transaction or other matter in which any of the Investor, its Affiliates, any Investor Director or any portfolio company in which the Investor or any of its Affiliates has an equity investment (the “ Investor Group ”) participates or desires or seeks to participate in and that involves any aspect of the energy business or industry, including without limitation, the midstream energy business (each, a “ Business Opportunity ”) other than a Business Opportunity that (i) is presented to an Investor Nominee solely in such person’s capacity as a director of the Company and with respect to which no member of the Investor Group (other than an Investor Director) independently receives notice or otherwise identifies such Business Opportunity or (ii) is identified by the Investor Group solely through the disclosure of information by or on behalf of the Company (each Business Opportunity other than those referred to in clauses (i) or (ii) are referred to as a “ Renounced Business Opportunity ”). No member of the Investor Group shall have any obligation to communicate or offer any Renounced Business Opportunity to the Company, and any member of the Investor Group may pursue a Renounced Business Opportunity. For the avoidance of doubt, the Company shall not be prohibited or restricted in any manner from pursuing or consummating any Business Opportunity with respect to which it has renounced any interest or expectancy as a result of this Section 8.6.

ARTICLE IX

TERMINATION

Section 9.1 Termination . This Agreement may be terminated at any time prior to the occurrence of either the Backstop Closing or the Preferred Stock Closing:

(a) by either party, upon written notice to the other, following the termination of the Rights Offering;

(b) by either party, upon written notice to the other, in the event that neither the Backstop Closing nor the Preferred Stock Closing occurs on or before August 15, 2009, provided, however , that if all conditions to the Backstop Closing and Preferred Stock Closing shall have been met or waived, and the Rights Offering shall have closed prior to such date, such date shall be extended to the extent necessary to permit the Backstop Closing and Preferred Stock Closing to occur, and provided, further , that the right to terminate this Agreement pursuant to this Section 9.1(b) shall not be available to a party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Backstop Closing and Preferred Stock Closing to occur on or prior to such date;

(c) by either party, upon written notice to the other, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and nonappealable;

(d) by either party, upon written notice to the other, if such other party is in breach or default of, or has failed to comply with, any material representation, warranty, term, condition or covenant of this Agreement, and such breach, default or failure to comply has not been cured within thirty (30) days of such other party receiving written notice thereof;

(e) by either party, upon written notice to the other, if a Material Adverse Effect has occurred with respect to such other party, and such Material Adverse Effect is not curable or, if curable, has not been cured within thirty (30) days of such other party receiving written notice thereof;

(f) by the Company, upon written notice to the Investor, within ten (10) Business Days after the Company has received a Reservation Notice from the Investor.

Section 9.2 Effects of Termination . In the event of the termination of this Agreement as provided in Section 9.1, this Agreement (other than Article X, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect, provided that nothing herein shall relieve any party from liability for any intentional breach of this Agreement.

ARTICLE X

MISCELLANEOUS

Section 10.1 Survival . Each of the representations and warranties in this Agreement (or any certificate delivered pursuant hereto) shall survive the execution and delivery of this Agreement and the applicable Closing, but only for a period of twelve (12) months following the later of the Backstop Closing Date or the Preferred Stock Closing Date, provided that the representations and warranties set forth in Section 4.1, Section 4.2, Section 4.3, Section 4.4, Section 4.5, Section 5.1, Section 5.2, Section 5.3 and Section 5.4 and the 10b-5 Representation, and corresponding representations and warranties in the officer’s certificate to be delivered pursuant to Section 6.2(c) and Section 6.3(e), shall survive indefinitely (or, in each case, until final resolution of any claim or actions arising from the breach of any s