<PAGE>

                                                                   EXHIBIT 10.20


                       FIRST AMENDMENT TO CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT (as same may be renewed,
extended, modified, restated amended and/or rearranged, the "First Amendment")
dated as of August 9, 2001, is between MOUNTAIN COMPRESSED AIR, INC., a Texas
corporation (hereinafter referred to as "Borrower") and WELLS FARGO BANK TEXAS,
NATIONAL ASSOCIATION, a national banking association ("Bank").

                                    RECITALS:

         A. Bank and Borrower entered into that certain Credit Agreement dated
as of February 6, 2001 (the "Agreement").

         B. Borrower has requested that Bank increase the Line of Credit from
$500,000.00 to $1,200,000.00. Bank has agreed to do so, subject to the terms and
conditions contained herein.

         C. OilQuip Rentals, Inc., a Delaware corporation (the "Parent")
executed that certain Continuing Guaranty dated as of February 6, 2001 (the
"OilQuip Guaranty"), which guaranteed to the Bank the payment and performance of
the indebtedness and obligations described therein including, without
limitation, payment of the $500,000.00 Line of Credit Note referred to in the
Credit Agreement dated as of February 6, 2001, and Munawar and Jayne
Hidayatallah executed that certain Continuing Guaranty dated as of February 6,
2001 (the "Hidayatallah Guaranty"), which guaranteed to the Bank the payment and
performance of the indebtedness and obligations described therein including,
without limitation, the $500,000.00 Line of Credit Note referred to in the
Credit Agreement dated as of February 6, 2001.

         D. Allis-Chalmers Company, a Delaware corporation ("Allis-Chalmers"),
has acquired 100% of stock of Parent and concurrently herewith is executing a
guaranty of even date herewith (the "Allis-Chalmers Guaranty") which guarantees
the payment and performance of the indebtedness and obligations described
therein of Borrower to Bank.

         E. Houston Dynamic Service, Inc., a Texas corporation ("Houston
Dynamic"), is executing a guaranty of even date herewith (the "Houston Dynamic
Guaranty") which guarantees the payment and performance of the indebtedness and
obligations described therein of Borrower to Bank.

         F. Borrower and Bank now desire to enter into this First Amendment on
the terms set forth herein.

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

<PAGE>

                                    ARTICLE 1

                                  GENERAL TERMS

         Section 1.1 TERMS DEFINED IN AGREEMENT. As used in this First
Amendment, except as may otherwise be provided herein, all capitalized terms
which are defined in the Agreement, as amended, have the same meaning herein as
therein, all of such terms and their definitions being incorporated herein by
reference.

         Section 1.2 CONFIRMATION AND EXTENT OF CHANGES. All terms which are
defined or referred to in the Agreement shall remain unchanged except as
otherwise specifically provided in this First Amendment. It is hereby confirmed
that the term "Agreement" includes the Agreement as amended by this First
Amendment.

                                    ARTICLE 2

                                   AMENDMENTS

         Section 2.1 AMENDMENT TO SECTION 1.1(a). Effective as of the date
hereof, Section 1.1(a) of the Agreement is hereby amended to read in its
entirety as follows:

                  "(a) LINE OF CREDIT. Subject to the terms and conditions of
         this Agreement, Bank hereby agrees to make advances to Borrower from
         time to time up to and including January 31, 2002, not to exceed at any
         time the aggregate principal amount of One Million Two Hundred Thousand
         and 00/100 Dollars ($1,200,000.00) ("Line of Credit"), the proceeds of
         which shall be used to support working capital, issue letters of credit
         (with a $240,000.00 sublimit), and general corporate purposes.
         Borrower's obligation to repay advances under the Line of Credit shall
         be evidenced by a promissory note substantially in the form of EXHIBIT
         A-1 attached hereto ("Line of Credit Note"), all terms of which are
         incorporated herein by this reference."

         Section 2.2 AMENDMENT TO SECTION 1.1(b). Effective as of the date
hereof, Section 1.1(b) of the Agreement is hereby amended to read in its
entirety as follows:

                  "(b) LIMITATION ON BORROWINGS. Outstanding borrowings under
         the Line of Credit, to a maximum of the principal amount set forth
         above, shall not at any time exceed an aggregate of $1,200,000.00 when
         combined with the undrawn Letters of Credit (as hereinafter defined).
         All borrowings under the Line of Credit shall be in amounts of at least
         $10,000. There will be no minimum amount required on borrowings under
         the Line of Credit if borrowed through Bank's credit sweep product."

         Section 2.3 AMENDMENT TO SECTION 1.1(c). Effective as of the date
hereof, Section 1.1(c) of the Agreement is hereby amended to read in its
entirety as follows:

                  "(c) LIMITATION ON BORROWINGS. Outstanding borrowings under
         the Line of Credit, to a maximum of the principal amount set forth
         above, shall not at any time exceed an aggregate of seventy-five
         percent (75%) of Borrower's and Houston Dynamic's eligible accounts
         receivable. All of the foregoing shall be determined by Bank upon
         receipt and review of all collateral reports required hereunder and
         such other documents and collateral information as Bank may from time


                                       2
<PAGE>

         to time require. Borrower acknowledges that said borrowing base was
         established by Bank with the understanding that, among other items, the
         aggregate of all returns, rebates, discounts, credits and allowances
         for the immediately preceding three (3) months at all times shall be
         less than five percent (5%) of Borrower's and Houston Dynamic's gross
         sales for said period. If such dilution of Borrower's and Houston
         Dynamics accounts for the immediately preceding three (3) months at any
         time exceeds five percent (5%) of Borrower's gross sales for said
         period, or if there at any time exists any other matters, events,
         conditions or contingencies which Bank reasonably believes may affect
         payment of any portion of Borrower's and/or Houston Dynamic's accounts,
         Bank, in its sole discretion, may reduce the foregoing advance rate
         against eligible accounts receivable to a percentage appropriate to
         reflect such additional dilution and/or establish additional reserves
         against Borrower's and Houston Dynamic's eligible accounts receivable.

                  As used herein, "eligible accounts receivable" shall consist
         solely of trade accounts created in the ordinary course of Borrower's
         and Houston Dynamic's business, upon which Borrower's and Houston
         Dynamic's right to receive payment is absolute and not contingent upon
         the fulfillment of any condition whatsoever, and in which Bank has a
         perfected security interest of first priority, and shall not include:

                  (i) any account which is more than sixty (60) days past due or
         ninety (90) days from the invoice date;

                  (ii) that portion of any account for which there exists any
         right of setoff, defense or discount (except regular discounts allowed
         in the ordinary course of business to promote prompt payment) or for
         which any defense or counterclaim has been asserted;

                  (iii) any account which represents an obligation of any state
         or municipal government or of the United States government or any
         political subdivision thereof (except accounts which represent
         obligations of the United States government and for which the
         assignment provisions of the Federal Assignment of Claims Act, as
         amended or recodified from time to time, have been complied with to
         Bank's satisfaction);

                  (iv) any account which represents an obligation of an account
         debtor located in a foreign country, except to the extent any such
         account, in Bank's determination, is supported by a letter of credit or
         insured under a policy of foreign credit insurance, in each case in
         form, substance and issued by a party acceptable to Bank;

                  (v) any account which arises from the sale or lease to or
         performance of services for, or represents an obligation of, an
         employee, affiliate, partner, member, parent or subsidiary of Borrower
         and/or Houston Dynamics;

                  (vi) that portion of any account, which represents interim or
         progress billings or retention rights on the part of the account
         debtor;

                                       3
<PAGE>

                  (vii) any account which represents an obligation of any
         account debtor when twenty percent (20%) or more of Borrower's and/or
         Houston Dynamic's accounts from such account debtor are not eligible
         pursuant to (i) above;

                  (viii) that portion of any account from an account debtor
         which represents the amount by which Borrower's and/or Houston
         Dynamic's total accounts from said account debtor exceeds twenty-five
         percent (25%) of Borrower's and/or Houston Dynamic's total accounts;

                  (ix) any account in which services have not been rendered or
         goods have not been shipped; and

                  (x) any account deemed ineligible by Bank when Bank, in its
         sole discretion, deems the creditworthiness or financial condition of
         the account debtor, or the industry in which the account debtor is
         engaged, to be unsatisfactory.

         Section 2.4 Amendment to Section 1.3(a). Effective as of the date
hereof, Section 1.3(a) is hereby amended to read in its entirety as follows:

                  "(a) DELAYED DRAW. Subject to the terms and conditions of this
         Agreement, Bank hereby agrees to make advances to Borrower from time to
         time up to and including the last day of August, 2001 (notwithstanding
         any reference to the contrary contained in the Delayed Draw Term Note
         to January 31, 2004), not to exceed the aggregate principal amount of
         Five Hundred Thousand and 00/100 Dollars ($500,000.00) ("Delayed Draw
         Term Loan"), the proceeds of which shall be used to finance the planned
         upgrade of currently owned equipment, and which shall be converted on
         the last day of August, 2001, to a term loan, as described more fully
         below and in the Delayed Draw Term Note. Advances on the Delayed Draw
         Term Loan are not to exceed one hundred percent (100%) on invoices on
         the planned purchases of Gardener Denver Model MDY Boosters, with CAT
         D353 diesel engines and miscellaneous parts and labor. In addition,
         advances on the combined face value of the Term Loan and the Delayed
         Draw Term Loan shall not exceed seventy-five percent (75%) of the "as
         improved" OLV of the existing fixed assets being purchased from the
         Seller plus the planned upgrades as determined by an independent
         qualified appraiser engaged and approved by Bank at the expense of
         Borrower, whether or not the Delayed Draw Term Loan actually closes or
         any future advances are actually made. Borrower's obligation to repay
         advances under the Delayed Draw Term Loan shall be evidenced by a
         promissory note substantially in the form of EXHIBIT C attached hereto
         ("Delayed Draw Term Note"), all terms of which are incorporated herein
         by this reference."

         Section 2.5 Amendment to Section 1.3(c). Effective as of the date
hereof, Section 1.3(c) is hereby amended to read in its entirety as follows:

                  "(c) BORROWING AND REPAYMENT. Borrower may from time to time
         during the period in which Bank will make advances under the Delayed
         Draw Term Loan borrow and partially or wholly repay (subject to
         prepayment provisions contained herein and in the Delayed Draw Term
         Note) its outstanding borrowings, provided that amounts repaid may not
         be reborrowed, subject to all the limitations, terms and conditions
         contained herein; provided however, that the total outstanding


                                       4
<PAGE>

         borrowings under the Delayed Draw Term Loan shall not at any time
         exceed the maximum principal amount available thereunder, as set forth
         above. All unpaid interest on the Delayed Draw Term Note as of November
         30, 2001 shall be paid on such date. The outstanding principal balance
         and interest of the Delayed Draw Term Loan shall be due and payable in
         full on January 31, 2004; provided, however, that so long as Borrower
         is in compliance on said date with all terms and conditions contained
         herein and in any other documents evidencing the Delayed Draw Term
         Loan, Bank agrees to restructure repayment of said outstanding
         principal balance so that principal and interest shall be due and
         payable in ten (10) installments of principal plus interest each, the
         first nine (9) of which shall be in the principal amount equal to five
         percent (5%) of the outstanding principal balance on the Delayed Draw
         Term Note at the end of the business day on August 31, 2001, plus
         interest each, with the first such installment being due and payable on
         the last day of November, 2001, the next nine such installments being
         paid on the last day of February, May, August, and November thereafter,
         and the tenth (10th) and final installment, if not sooner paid, shall
         be due and payable on January 31, 2004, in amount equal to the entire
         balance of principal and interest then due and owing on said Delayed
         Draw Term Note."

         Section 2.6 ADDITION OF SECTION 2.15. Effective as of the date hereof,
Section 2.15 is hereby added to read in its entirety as follows:

                  "Section 2.15. ALLIS-CHALMERS AND SUBSIDIARIES. Allis-Chalmers
         is a Delaware corporation that owns one hundred percent (100%) of the
         stock of all kinds and classes of Parent which is a Delaware
         corporation that owns one hundred percent (100%) of the stock of all
         kinds and classes of Borrower, which is a Texas corporation that owns
         one hundred percent (100%) of the stock of all kinds and classes of
         Houston Dynamic."

         Section 2.7 ADDITION OF SECTION 2.16. Effective as of the date hereof,
Section 2.16 is hereby added as follows:

                  "Allis-Chalmers, OilQuip, and Houston Dynamic are in
         compliance in all material respects with all applicable provisions of
         ERISA; neither Allis-Chalmers, OilQuip, nor Houston Dynamic has
         violated any provision of any defined employee pension benefit plan (as
         defined in ERISA) maintained or contributed to by any of said parties
         (each, a "Plan") no Reportable Event as defined in ERISA has occurred
         and is continuing with respect to any Plan initiated by any of said
         parties; all of said parties have met their minimum funding
         requirements under ERISA with respect to each Plan, and each Plan will
         be able to fulfill its benefit obligations as they come due in
         accordance with the Plan documents and generally accepted accounting
         principles. All previous problems and matters with the Pension Benefit
         Guaranty Corporation by any of said parties have been fully resolved
         and disclosed to Bank."

         Section 2.8 AMENDMENT TO SECTION 4.3. Effective as of the date hereof,
Section 4.3 is hereby amended to read in its entirety as follows:

                                       5
<PAGE>

                  "4.3 FINANCIAL STATEMENTS. Allis-Chalmers will promptly
         furnish to the Bank from time to time upon request such information
         regarding the business and affairs and financial condition of
         Allis-Chalmers and its Subsidiaries (as used herein, "Subsidiary" shall
         mean any corporation of which more than 50% of the issued and
         outstanding securities having ordinary voting power for the election of
         directors is owned or controlled, directly or indirectly, by
         Allis-Chalmers and/or one or more of its subsidiaries) as the Bank may
         reasonably request, and will furnish to the Bank:

                           (a) Annual Reports - promptly after becoming
         available and in any event within 90 days after the close of each
         fiscal year of Allis-Chalmers, the audited consolidated and
         consolidating balance sheets of Allis-Chalmers and its Subsidiaries as
         at the end of such year, the audited consolidated and consolidating
         statements of profit and loss of Allis-Chalmers and its Subsidiaries
         for such year and the audited consolidated and consolidating statements
         of reconciliation of capital accounts of the Borrower and its
         Subsidiaries for such year, setting forth in each case for fiscal years
         ending after December 31, 2000, in comparative form the corresponding
         figures for the preceding fiscal year, accompanied by the related
         report of independent public accountants acceptable to the Bank which
         report shall be to the effect that such statements have been prepared
         in accordance with generally accepted accounting principles
         consistently followed throughout the period indicated except for such
         changes in such principles with which the independent public
         accountants shall have concurred; and

                           (b) Quarterly Reports - promptly after becoming
         available and in any event within 45 days after the end of each of the
         first three quarterly periods in each fiscal year of Allis-Chalmers,
         the consolidated and consolidating balance sheets of Allis-Chalmers and
         its Subsidiaries as at the end of such period, the consolidated and
         consolidating statements of profit and loss of Allis-Chalmers and its
         Subsidiaries for such quarter and for the period from the beginning of
         the fiscal year to the close of such quarter, and the consolidated and
         consolidating statement of reconciliation of capital accounts of
         Allis-Chalmers and its Subsidiaries for such quarter and for the period
         from the beginning of the fiscal year to the close of such quarter,
         setting forth in each case for fiscal years ending after December 31,
         2000, in comparative form the corresponding figures for the
         corresponding period of the preceding fiscal year, certified by the
         principal financial officer of Allis-Chalmers to have been prepared in
         accordance with generally accepted accounting principles consistently
         followed throughout the period indicated except to the extent stated
         therein, subject to normal changes resulting from year-end adjustment;

                           (c) not later than 25 days after and as of the end of
         each calendar month, a borrowing base certificate in the form attached
         hereto as Schedule I, an aged listing of accounts receivable and
         accounts payable, and a reconciliation of accounts, and not later than
         25 days after and as of each calendar month, a list of the names and
         addresses of all Borrower's and Houston Dynamic's account debtors; all
         of which shall be prepared for Borrower and Houston Dynamic on a
         separate company and combined company basis, and all of which Borrower
         shall deliver to Wells Fargo Wholesale Services, 1740 Broadway St., 3rd
         Floor, MAC C7300-031, Denver, CO 80274;

                                       6
<PAGE>

                           (d) Audit Reports - promptly upon receipt thereof,
         one copy of each other report submitted to Allis-Chalmers or any
         Subsidiary by independent accountants in connection with any annual,
         interim or special audit made by them of the books of Allis-Chalmers or
         any Subsidiary;

                           (e) not later than 90 days after each calendar year,
         the financial statements of Munawar Hidayatallah and Jayne
         Hidayatallah, signed and certified to the Bank on Bank's form and such
         individuals' income tax returns for such year;

                           (f) contemporaneously with each annual and quarterly
         financial statement of Borrower required hereby, a certificate of a
         senior financial officer of Borrower that said financial statements are
         accurate, showing the calculations confirming Borrower's compliance
         with all financial covenants and that there exists no Event of Default
         nor any condition, act or event which with the giving of notice or the
         passage of time or both would constitute an Event of Default;

                           (g) SEC and Other Reports - promptly upon their
         becoming available, one copy of each financial statement, report,
         notice or proxy statement sent by Allis-Chalmers to stockholders
         generally, and of each regular or periodic report and any registration
         statement, prospectus or written communication (other than transmittal
         letters) in respect thereof filed by the Borrower with or received by
         the Borrower in connection therewith from, any securities exchange or
         the Securities and Exchange Commission or any successor agency; and

                           (h) From time to time such other information as Bank
         may reasonably request.

         Section 2.9 AMENDMENT TO SECTION 4.9. Effective as of the date hereof,
Section 4.9 of the Agreement is hereby amended to read in its entirety as
follows:

                  "4.9 FINANCIAL CONDITION. Maintain, or cause to be maintained,
         Allis-Chalmers' financial condition as follows using generally accepted
         accounting principles consistently applied and used consistently with
         prior practices (except to the extent modified by the definitions
         herein):

                  (a) Beginning September 30, 2001, Tangible Net Worth not at
         any time less than eighty-five percent (85%) of Tangible Net Worth as
         of June 30, 2001 (plus seventy-five percent (75%) of cumulative net
         income after June 30, 2001, excluding any fiscal quarters in which net
         income is negative), plus one hundred percent (100%) of equity
         offerings after the date hereof, with "Tangible Net Worth" defined
         herein as the aggregate of total stockholders' equity plus the Seller
         Note less any intangible assets.

                  (b) Fixed Charge Coverage Ratio not less than 1.1 to 1.0 for
         the twelve (12) month period ending on the last day of each fiscal
         quarter, beginning with the fiscal quarter ending March 31, 2001, with
         "EBITDA" defined herein as net income plus interest charges, plus
         taxes, plus depreciation, amortization and non-cash charges on a
         trailing twelve (12) month basis and with "Fixed Charge Coverage Ratio"
         defined herein as (i) EBITDA plus applicable operating lease payments
         less unfinanced capital expenditures divided by (ii) the aggregate of


                                       7
<PAGE>

         total interest charges (excluding any applicable paid-in-kind ("PIK")
         charges), scheduled principal payments, operating lease payments, cash
         dividends paid, and paid taxes for the same period. EBITDA will be
         computed on a trailing twelve (12) months basis. Through September 30,
         2001, fixed charges will be annualized. Thereafter, fixed charges will
         be on a trailing twelve-month basis. .

                  (c) Total Funded Debt to EBITDA Ratio not more than 3.25 to
         1.0 through December 31, 2001; 2.50 to 1.0 through December 31, 2002;
         and 2.0 to 1.0 thereafter, with "Total Funded Debt to EBITDA Ratio"
         defined as Total Funded Debt divided by the twelve (12) trailing months
         EBITDA. "Total Funded Debt" is defined herein as all interest-bearing
         obligations of Borrower, whether secured or unsecured, senior or
         subordinated, [EXCLUDING THE SELLER NOTE].

                                    ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

         In order to induce the Bank to enter into this First Amendment and to
continue to make the loans provided for in the Agreement, the Borrower
represents and warrants (which representations and warranties will survive the
execution and delivery hereof and will be deemed for all purposes to be
additional representations and warranties of the Agreement) that:

         Section 3.1 REPRESENTATIONS AND WARRANTIES OF THE AGREEMENT AND THE
LOAN DOCUMENTS. The representations and warranties of the Borrower contained in
the Agreement and the Loan Documents and otherwise made in writing by or on
behalf of the Borrower pursuant to the Agreement and the Loan Documents were
true and correct when made, and are true and correct in all material respects at
and as of the time of delivery of this First Amendment, except for such changes
in the facts represented and warranted as are not in violation of the Agreement
and the Loan Documents.

         Section 3.2 COMPLIANCE WITH OBLIGATIONS. The Borrower has performed and
complied with all agreements and conditions contained in the Agreement and the
Loan Documents required to be performed or complied with by the Borrower prior
to or at the time of delivery of this First Amendment.

         Section 3.3 DEFAULTS. There exists, and after giving effect to this
First Amendment, will exist, no default or Event of Default, or any condition,
or act which constitutes, or with notice or lapse of time (or both) would
constitute an event of default under any loan agreement, note agreement, or
trust indenture to which the Borrower is a party.

         Section 3.4 NO AMENDMENTS. Nothing in Article 3 of this First Amendment
is intended to amend any of the representations or warranties of the Agreement.

                                       8
<PAGE>

                                    ARTICLE 4

                                   CONDITIONS

         The Bank has relied upon the representations and warranties contained
in this First Amendment in agreeing to the amendments and supplements to the
Agreement set forth herein and the amendments and supplements to the Agreement
set forth herein are conditioned upon and subject to the accuracy of each and
every representation and warranty of the Borrower made or referred to herein, to
the performance by the Borrower of its obligations to be performed under the
Agreement and the Loan Documents on or before the date of this First Amendment
and to the following further conditions:

         Section 4.1 THE NOTE. The Borrower shall have duly and validly issued,
executed and delivered to the Bank the Promissory Note in the form of EXHIBIT
"A-1" to this First Amendment.

         Section 4.2 RATIFICATION OF PREVIOUSLY EXECUTED SECURITY AGREEMENT. The
Borrower shall have duly and validly issued, executed, and delivered to the Bank
a Ratification of Previously Executed Security Agreement and related financing
statements and other documents required to be executed by the Bank in form and
substance satisfactory to the Bank.

         Section 4.3 RATIFICATION OF PREVIOUSLY EXECUTED GENERAL PLEDGE
AGREEMENT. The Parent shall have duly and validly issued, executed, and
delivered to the Bank a Ratification of Previously Executed General Pledge
Agreement and related financing statements and other documents required to be
executed by the Bank in form and substance satisfactory to the Bank.

         Section 4.4 RATIFICATION OF PREVIOUSLY EXECUTED CASH COLLATERAL ACCOUNT
AGREEMENT. The Borrower shall have duly and validly issued, executed, and
delivered to the Bank a Ratification of Previously Executed Cash Collateral
Account Agreement and related financing statements and other documents required
to be executed by the Bank in form and substance satisfactory to the Bank.

         Section 4.5 GUARANTY AGREEMENTS. The Guarantors listed below shall have
duly and validly issued, executed, and delivered to the Bank original
counterparts of this agreement, executed in the spaces provided for below.

         Section 4.6 SUBORDINATION AGREEMENT. The Bank shall have received a
duly and validly issued and executed Subordination Agreement by and among the
Borrower, Mountain Air Drilling Co., Inc., the Bank, Wells Fargo Energy Capital,
Inc., and Wells Fargo Equipment Finance, Inc., in form and substance
satisfactory to the Bank.

         Section 4.7 SUBORDINATION AND INTERCREDITOR AGREEMENT. The Bank shall
have received a duly and validly issued and executed Subordination and
Intercreditor Agreement, entered into by and among the Borrower, the Bank, Wells
Fargo Energy Capital, Inc., and Wells Fargo Equipment Finance, Inc., in form and
substance satisfactory to the Bank.

         Section 4.8 OFFICERS' CERTIFICATE. The Bank shall have received
certificates of the respective officers of the Borrower and Guarantor setting
forth (i) resolutions of their respective boards of directors in form and
substance satisfactory to the Bank authorizing the Borrower and the Guarantor
(and such other parties as may be required by Bank) to execute the Loan
Documents to which they are respective parties, and (ii) specimen signatures of
the officers so authorized.

                                       9
<PAGE>

         Section 4.9 ADDITIONAL DOCUMENTATION. The Borrower shall deliver to the
Bank such additional approvals, opinions or documents as Bank may reasonably
require.

                                    ARTICLE 5

                                  MISCELLANEOUS

         Section 5.1 LOAN DOCUMENTS. All Loan Documents shall secure the
indebtedness and obligations previously secured by such Loan Documents, as such
indebtedness and obligations are affected by this First Amendment (including,
without limitation, the $1,200,000.00 Promissory Note of even date herewith from
the Borrower to the Bank), whether or not such Loan Documents shall be expressly
amended or supplemented in connection with this First Amendment.

         Section 5.2 EXTENT OF AMENDMENTS. Except as otherwise expressly
provided herein, the Agreement, the Loan Documents, the Line of Credit and the
other instruments and agreements referred to therein are not amended, modified
or affected by this First Amendment.

         Section 5.3 EFFECTIVE DATE. Except as otherwise expressly provided
herein, the effective date of all provisions of this First Amendment shall be
the date of execution indicated below.

         Section 5.4 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles or
headings to articles, sections, subsections or other divisions of this First
Amendment are only for the convenience of the parties and shall not be construed
to have any effect or meaning with respect to the other content of such
articles, sections, subsections, or other divisions, such other content being
controlling as to the Agreement among the parties hereto.

         Section 5.5 COUNTERPARTS. This First Amendment may be executed in two
or more counterparts. It will not be necessary that the signatures of all
parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

         Section 5.6 FEES AND EXPENSES. Borrower will pay all fees and expenses
incurred by Bank in connection with this Agreement and the transactions
contemplated herein including, without limitation: (a) filing fees, search fees,
and reasonable attorneys' fees; (b) a non-refundable commitment fee equal to
$7,000.00, which fee shall be due and payable in full when all parties have
executed this document; and (c) a non-refundable amendment fee equal to
$2,500.00, which fee shall be due and payable in full when all parties have
executed this document.

         Section 5.7 ENTIRE AGREEMENT. THIS FIRST AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS FIRST AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER


                                       10
<PAGE>

WRITTEN OR ORAL, RELATING TO THIS FIRST AMENDMENT AND THE OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS FIRST
AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the 9th day of August 2001.

                                        BORROWER:

                                        MOUNTAIN COMPRESSED AIR, INC.


                                        By:   /s/ THEODORE F. POUND, III
                                                  ------------------------------
                                        Name:  THEODORE F. POUND, III
                                               ---------------------------------
                                        Title:  VICE PRESIDENT & SECRETARY
                                                --------------------------------


                                        BANK:

                                        WELLS FARGO BANK TEXAS,
                                        NATIONAL ASSOCIATION


                                        By:   /s/ SCOTT GILDEA
                                                  ------------------------------
                                        Name:  SCOTT GILDEA
                                               ---------------------------------
                                        Title:  ASSISTANT VICE PRESIDENT
                                                --------------------------------

                                       11
<PAGE>

Guaranty shall remain in full force and effect, shall continue to the be legal,
valid, and binding obligations of the Parent, and shall continue to guarantee
the indebtedness and obligations described in the OilQuip Guaranty as such
guaranteed obligations are amended by this First Amendment including, without
limitation, such OilQuip Guaranty shall cover the $1,200,000.00 Line of Credit
Note, together with any and all renewals, extensions, rearrangements,
amendments, modifications, and/or increases of any of the aforesaid, and such
OilQuip Guaranty shall be enforceable against OilQuip in accordance with its
terms.

                                             GUARANTOR:

                                             OilQuip Rentals, Inc.,
                                             a Delaware corporation


                                             By:  /s/THEODORE F. POUND, III
                                                     --------------------------
                                             Name:  THEODORE F. POUND, III
                                                    ---------------------------
                                             Title:  VICE PRESIDENT & SECRETARY
                                                     --------------------------


Munawar and Jayne Hidayatallah hereby jointly and severally consent and agree to
this First Amendment and agree that the Hidayatallah Guaranty shall remain in
full force and effect, shall continue to the be legal, valid, and binding
obligations of Munawar and Jayne Hidayatallah, and shall continue to guaranty
the indebtedness and obligations described in the Hidayatallah Guaranty as such
guaranteed obligations are amended by this First Amendment including, without
limitation, such Hidayatallah Guaranty shall cover the $1,200,000.00 Line of
Credit Note, together with any and all renewals, extensions, rearrangements,
amendments, modifications, and/or increases of any of the aforesaid, and such
Hidayatallah Guaranty shall be enforceable against Munawar and Jayne
Hidayatallah in accordance with its terms.

                                                     GUARANTOR:



                                                     /S/ MUNAWAR HIDAYATALLAH
                                                     ---------------------------
                                                     Munawar Hidayatallah



                                                     /S/ JAYNE HIDAYATALLAH
                                                     ---------------------------
                                                     Jayne Hidayatallah

                                       12
<PAGE>


Allis-Chalmers hereby consents and agrees to this First Amendment and agrees to
comply with and be bound by all the terms hereof.


                                            GUARANTOR:
                                            GUARANTOR

                                            Allis-Chalmers Company,
                                            a Delaware corporation


                                            By:  /s/ MUNAWAR H. HIDAYATALLAH
                                                 -------------------------------
                                            Name:  MUNAWAR H. HIDAYATALLAH
                                                   -----------------------------
                                            Title:  CHAIRMAN & CEO
                                                    ----------------------------


Houston Dynamic hereby consents and agrees to this First Amendment and agrees to
comply with and be bound by all the terms hereof.


                                           GUARANTOR


                                           Houston Dynamic Service, Inc.,
                                           a Texas corporation

                                           By:  /s/ BONI WITT
                                                --------------------------------
                                           Name:  BONI WITT
                                                  ------------------------------
                                           Title:  VP/CONTROLLER
                                                   -----------------------------

                                       13