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                                                                   EXHIBIT 10.47



                         EXECUTIVE EMPLOYMENT AGREEMENT


         This Executive Employment Agreement dated as of April 1, 2004, is
between Allis-Chalmers Corporation and Munawar H. Hidayatallah. Certain
capitalized terms used herein are defined in Section 1 below.

                                R E C I T A L S:

         A. Executive is employed by Company pursuant to an Employment Agreement
(the "2001 Employment Agreement") dated February 7, 2001, which terminates
February 7, 2004;

         B. Company wishes to continue to employ Executive, and Executive
desires to continue employment with Company by entering into a written agreement
to specify the terms and conditions of Executive's continued employment with
Company;

         C. Executive is to be employed as Chairman and Chief Executive Officer
of Company, and as an integral member of its management team;

         D. Company considers the maintenance of a sound management team,
including Executive, essential to protecting and enhancing its best interests
and those of its stockholders;

         E. Company recognizes that the possibility of a change in control of
Company may result in the departure or distraction of management to the
detriment of Company and its stockholders; and

         F. Company has determined that appropriate steps should be taken to
obtain and retain the continued attention and dedication of selected members of
Company's management team to their assigned duties without the distraction
arising from the possibility of a change in control of Company.

         NOW, THEREFORE, in consideration of Executive's past and future
employment with Company and other good and valuable consideration, the parties
agree as follows:

         SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
will have the following meanings:

                  (a) AGREEMENT refers to the Executive Employment Agreement
         represented by this document.

                  (b) CAUSE has the meaning ascribed to it in Section 7(a)(ii).

                  (c) CHANGE IN CONTROL:

                            (i) The acquisition by any individual, entity or
                   group, or a Person (within the meaning of Section 13(d)(3) or
                   14(d)(2) of the Exchange Act) other than an Excluded Person,
                   of ownership of more than 50% of either: (i) the then

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                   outstanding shares of Common Stock ("Outstanding Common
                   Stock"); or (ii) the combined voting power of the then
                   outstanding voting securities of the Company entitled to vote
                   generally in the election of directors ("Outstanding Voting
                   Securities");

                             (ii) Individuals who, as of the date hereof,
                   constitute the Board of Directors of the Company ("Incumbent
                   Board") cease for any reason to constitute at least a
                   majority of the Board; provided, however, that any individual
                   becoming a director subsequent to the date hereof whose
                   election, or nomination for election by the Company's
                   stockholders, was approved by a vote of at least a majority
                   of the directors then comprising the Incumbent Board shall be
                   considered as though such individual were a member of the
                   Incumbent Board, but excluding, as a member of the Incumbent
                   Board, any such individual whose initial assumption of office
                   occurs as a result of either an actual or threatened election
                   contest (as such terms are used in Rule 14a-11 of Regulation
                   14A promulgated under the Securities Exchange Act of 1934) or
                   other actual or threatened solicitation of proxies or
                   consents by or on behalf of a Person other than the Board; or

                             (iii) Approval by the stockholders of the Company
                   of a reorganization, merger or consolidation, in each case,
                   unless, following such reorganization, merger or
                   consolidation, (i) more than 50% of, respectively, the then
                   outstanding shares of common stock of the corporation
                   resulting from such reorganization, merger or consolidation
                   and the combined voting power of the then outstanding voting
                   securities of such corporation entitled to vote generally in
                   the election of directors is then beneficially owned,
                   directly or indirectly, by all or substantially all of the
                   individuals and entities who were the beneficial owners,
                   respectively, of the Outstanding Common Stock and Outstanding
                   Voting Securities immediately prior to such reorganization,
                   merger or consolidation, in substantially the same
                   proportions as their ownership, immediately prior to such
                   reorganization, merger or consolidation of the Outstanding
                   Common Stock and Outstanding Voting Securities, as the case
                   may be, or at least a majority of the members of the board of
                   directors of the corporation resulting from such
                   reorganization, merger or consolidation were members of the
                   Incumbent Board at the time of the execution of the initial
                   agreement providing for such reorganization, merger or
                   consolidation; or

                            (iv) Approval by the stockholders of the Company of
                   (i) a complete liquidation or dissolution of the Company or
                   (ii) the sale or other disposition of all or substantially
                   all of the assets of the Company, other than to a
                   corporation, with respect to which following such sale or
                   other disposition, (1) more than 50% of, respectively, the
                   then outstanding shares of common stock of such corporation
                   and the combined voting power of the then outstanding voting
                   securities of such corporation entitled to vote generally in
                   the election for directors is then beneficially owned,


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                   directly or indirectly, by all or substantially all of the
                   individuals and entities who were the beneficial owners,
                   respectively, of the Outstanding Common Stock and Outstanding
                   Voting Securities immediately prior to such sale or other
                   disposition in substantially the same proportion as their
                   ownership, immediately prior to such sale or other
                   disposition, of the Outstanding Common Stock and Outstanding
                   Voting Securities, as the case may be; or (2) at least a
                   majority of the members of the board of directors of such
                   corporation were members of the Incumbent Board at the time
                   of the execution of the initial agreement or action of the
                   Board providing for such sale or other disposition of assets
                   of the Company.

                  (d) CODE means the Internal Revenue Code of 1986, as amended.

                  (e) COMMENCEMENT DATE has the meaning ascribed to it in
         Section 4.

                  (f) COMPANY means Allis-Chalmers Corporation.

                  (g) CONFIDENTIAL INFORMATION has the meaning ascribed to it in
         Section 9(b).

                  (h) CONSTRUCTIVELY TERMINATED with respect to an Executive's
         employment with Company will be deemed to have occurred if Executive
         terminates his employment within six months following the date on which
         Company:

                           (i) demotes Executive to a lesser position, either in
                  title or responsibility, than the highest position held by
                  Executive with Company at any time during Executive's
                  employment with Company after the date hereof;

                           (ii) decreases Executive's salary below the highest
                  level in effect at any time during Executive's employment with
                  Company or reduces Executive's benefits and perquisites below
                  the highest levels in effect at any time during Executive's
                  employment with Company (other than as a result of any
                  amendment or termination of any Executive or group or other
                  executive benefit plan, which amendment or termination is
                  applicable to all executives of Company or any inadvertent
                  reduction in benefits that Company cures within 30 days after
                  receiving written notice of such reduction);

                           (iii) requires Executive to relocate to a principal
                  place of business more than 50 miles from the principal place
                  of business occupied by Company on the first day of an
                  Applicable Period;

                           (iv) is subject to a Change In Control, unless
                  Executive accepts employment with a successor to Company; or

                           (v) breaches any other material term of this
                  Agreement which is not cured by Company within 30 days after
                  receiving notice of such breach.

                  (i) DESIGNATED INDUSTRY has the meaning ascribed to it in
         Section 10(a)(i)(1).

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                  (j) DETERMINATION has the meaning ascribed to such term in
         Section 1313(a) of the Code.

                  (k) DISABILITY with respect to Executive shall be deemed to
         exist if he meets the definition of disability under the terms of the
         Company's current long-term disability policy (or any replacement
         long-term disability policy). Any refusal by Executive to submit to a
         reasonable medical examination to determine whether Executive is so
         disabled shall be deemed conclusively to constitute evidence of
         Executive's disability.

                  (l) EXECUTIVE refers to Munawar H. Hidayatallah.

                  (m) EXCLUDED person means any Person who beneficially owns
         more than 10% of the outstanding shares of the Corporation at any time
         prior to the date hereof.

                  (n) COMPANY refers collectively to the Company and its
         subsidiaries and other affiliates. In Section 10, the term "Company"
         shall be deemed to refer to the Company, and for purposes of Section
         10, Executive shall be deemed to be employed by the Company and all
         compensation and benefits paid or provided to Executive by any Company
         under this Agreement at any time shall be deemed to have been paid or
         provided to Executive by the Company.

                  (o) INCENTIVE PLAN means the Allis-Chalmers Corporation 2003
         Incentive Stock Plan, as amended from time to time.

                  (p) INVENTIONS has the meaning ascribed to it in Section 8(a).

                  (q) SALARY has the meaning ascribed to it in Section 5(a).

                  (r) SEPARATION PAYMENT PERIOD has the meaning ascribed to it
         in Section 7(b)(ii).

                  (s) SEPARATION PAYMENTS has the meaning ascribed to it in
         Section 7(b)(ii).

         SECTION 2. EMPLOYMENT. Company hereby employs Executive, and Executive
hereby accepts employment by Company, upon the terms and subject to the
conditions hereinafter set forth. The 2001 Employment Agreement is hereby
terminated and superceded by this Agreement, effective the date hereof.

         SECTION 3. DUTIES. Executive shall be employed as Chief Executive
Officer of Company and shall serve as Chairman of the Board of Directors of
Company. Executive agrees to devote such time as is necessary to perform his
duties attendant to his executive position with Company, in a manner consistent
with Executive's employment prior to the date hereof. Company shall use its best
efforts (including by nominating Executive to be a director at each meeting of
the stockholders of the Company at which directors are elected, and including in
any proxy statement relating to such a meeting information comparable to that
included with respect to other nominees) to cause Executive to be maintained as
a director of the Company and while a director Executive shall serve as Chairman
of the Board of Directors. Executive shall be allowed to engage in other


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activities as an investor as well as participate in activities of charitable
organizations of his choice so long as they do not materially interfere with his
duties for Company. Company acknowledges and agrees that Executive shall have
the right to maintain his current residence in Santa Monica, California and that
Company shall pay Executive's travel and other expenses in a manner consistent
with past practices pursuant to Section 6 hereof.

         SECTION 4. TERM. The term of employment of Executive hereunder shall
commence on the date of this Agreement and terminate three years hence, provided
that if Executive at the end of such three year period remains liable for any
guarantees of obligations of the Company, then the term hereof shall extend for
one additional year.

         SECTION 5. COMPENSATION AND BENEFITS. In consideration for the services
of Executive hereunder, Company shall compensate Executive as follows (except as
set forth herein, Executive acknowledges payment in full of all amounts due to
him for services rendered prior to the date hereof):

                  (a) SALARY. Company shall pay Executive, semi-monthly in
         arrears with its normal payroll procedures, a salary which is
         equivalent to an annual rate of $350,000 (the "Salary"). The Salary may
         not be decreased at any time during the term of Executive's employment
         hereunder and shall be reviewed no less than annually by Company. Any
         increase in the Salary shall be in the sole discretion of the
         Compensation Committee of the Board of Directors of the Company.

                  (b) MANAGEMENT INCENTIVE BONUS; STOCK OPTIONS. Executive shall
         be eligible to receive an annual bonus equal to 100% of Executive's
         salary if the Company's Compensation Committee determines that the
         Company has met its strategic objectives, as set forth on Schedule A,
         and shall be entitled to an annual bonus of a lesser amount, as
         determined by the Compensation Committee of the Board of Directors, if
         Executive meets some but not all of such strategic objectives. Such
         bonus shall be paid, at the option of Executive, in cash or in shares
         of the Company's Common Stock (for such purpose the shares shall be
         valued by the Board of Directors). In addition, Executive shall be
         entitled to receive such other incentive bonuses as may be provided in
         management incentive bonus plans adopted from time to time by Company.
         On December 16, 2003, the Board of Directors approved the grant to
         Executive of options to purchase 2,000,000 shares of Common Stock of
         the Company pursuant to the Incentive Plan.

                  (c) VACATION. Executive shall be entitled to four (4) weeks
         paid vacation per year. Unless otherwise approved by the Compensation
         Committee of the Board of Directors of the Company, a maximum of ten
         days accrued vacation not taken in any calendar year shall be carried
         forward and may be used in the next subsequent calendar year. Executive
         shall schedule his paid vacation to be taken at times which are
         reasonably and mutually convenient to both Company and Executive.

                  (d) INSURANCE BENEFITS. Company shall provide accident,
         health, dental, disability and life insurance for Executive under the
         group accident, health, dental, disability and life insurance plans as
         may be maintained by Company for its full-time, salaried Executives.

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                  (e) OFFICE SPACE AND EXPENSES. Company shall provide and pay
         the expenses of maintaining an office for Executive during the term of
         this Agreement. Additional office space for the staff of the Executive
         shall be obtained at the expense of the Company.

                  (f) ASSISTANT EXPENSES. Company shall assume and pay all
         salary and benefits of an Assistant to Executive.

                  (g) SIGNING BONUS. As an incentive for Executive to execute
         this Agreement, Company agrees to pay $230,000 to Executive
         concurrently with the execution and delivery of this Agreement as a
         signing bonus; provided that in the event Executive's employment is
         terminated for any reason prior to April 1, 2007, Executive shall be
         required to repay to the Company (and such amount may be offset against
         any amount due to Executive) a portion of such amount equal to a
         fraction, the numerator of which is the number of complete months
         during the period beginning April 1, 2004 and ending on the date of
         termination of employment, and the denominator of which is 36.

                   (h) GUARANTEE FEE. Company agrees to pay to Executive an
          annual guarantee fee equal to 0.25% of the total of all loans
          guaranteed by Executive from time to time. The fee shall be paid
          quarterly, in arrears, commencing March 31, 2004, based upon the
          average amount of guaranteed debt outstanding during the prior
          quarter.

                   (i) REGISTRATION RIGHTS AGREEMENT. The Company shall use its
          best efforts to enter into a Registration Rights Agreement relating to
          Common Stock owned by Executive containing the terms set forth in the
          draft Registration Rights Agreement previously delivered to Executive.

                   (j) LIFE INSURANCE. Company shall pay for and maintain a term
          life insurance policy on the life of Executive in the amount of
          $2,500,000.00. The beneficiary of the life insurance policy shall be
          the Company, however, Company and Executive agree that the proceeds
          from such policy, in the event of Executive's death, shall be used
          exclusively by Company to purchase shares of common stock, $.15 par
          value ("Common Stock"), of the Company from Executive's estate at the
          time of death. The value of the shares of Common Stock of Executive
          shall be made by an independent third party experienced in valuations
          of this type appointed by the Company. Following the valuation, the
          Company shall utilize the $2,500,000.00 to purchase the Common Stock
          or portion of such shares of Common Stock depending on the valuation
          of the Common Stock of Executive. In the event the valuation of
          Executive's Common Stock is more than $2,500,000.00, then the Company
          shall purchase for $2,500,000.00 only such portion of Common Stock as
          shall be equal to such amount, and Executive's estate may retain the
          shares of Common Stock not purchased. In the event the valuation of
          Executive's Common Stock is less than $2,500,000.00, then Company
          shall utilize such amount of the insurance proceeds equal to the
          valuation to purchase Executive's Common Stock. The purchase of
          Executive's Common Stock from his estate, following his death, shall
          be consummated within thirty (30) days following Company's receipt of
          the valuation.

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                   (k) INDEMNIFICATION FOR GUARANTEES. In addition to all other
          indemnification rights available to Executive under the Company's
          charter documents, contractual obligations or by law, Company agrees
          to indemnify, defend and hold harmless the Executive, Executive's
          spouse and their successors (the "Indemnified Parties") from and
          against any and all claims, losses, liabilities, costs, penalties,
          fines and expenses (including reasonable expenses for attorneys,
          accountants, consultants and experts), damages, obligations to third
          parties, expenditures, proceedings, taxes, judgments, awards or
          demands, whether or not arising from claims of third parties
          (collectively, "Losses"), which any of them may suffer, incur or
          sustain arising out of, attributable to, or resulting from any
          guarantee executed by Executive or his spouse with respect to
          obligations of Company or its subsidiaries.

         SECTION 6. EXPENSES. The parties anticipate that in connection with the
services to be performed by Executive pursuant to the terms of this Agreement,
Executive will be required to make payments for travel, entertainment of
business associates and similar expenses. Company shall reimburse Executive for
all reasonable expenses of types authorized by Company and incurred by Executive
in the performance of his duties hereunder, including travel from Executive's
residence to Company's principal place of business consistent with past
practices. Executive shall comply with such reporting requirements with respect
to expenses as Company may establish from time to time.

         SECTION 7. TERMINATION.

                  (a) GENERAL. Executive's employment hereunder shall commence
         on the Commencement Date and continue until the end of the term
         specified in Section 4, except that the employment of Executive
         hereunder shall terminate prior to such time in accordance with the
         following:

                           (i) DEATH OR DISABILITY. Upon the death of Executive
                  during the term of his employment hereunder or, at the option
                  of Company, in the event of Executive's Disability, upon 30
                  days' notice to Executive.

                           (ii) FOR CAUSE. For "Cause" immediately upon written
                  notice by Company to Executive. A termination shall be for
                  Cause if:

                                    (1) Executive commits a criminal act
                           involving dishonesty or moral turpitude; or

                                    (2) Executive commits a material breach of
                           any of the covenants, terms and provisions hereof or
                           fails to obey written directions delivered to
                           Executive by the Company's Board of Directors which
                           are not inconsistent with Executive's rights under
                           this Agreement.

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                                    (iii) WITHOUT CAUSE. Without Cause upon
                           notice by the Board of Directors to Executive or upon
                           notice by Executive to the Board if Executive has
                           been Constructively Terminated.

                           (b) SEVERANCE PAY.

                                    (i) TERMINATION UPON DEATH OR DISABILITY OR
                           FOR CAUSE. Executive shall not be entitled to any
                           severance pay or other compensation upon termination
                           of his employment pursuant to Section 7(a)(i) or (ii)
                           except for his Salary earned but unpaid as of the
                           date of termination, unpaid expense reimbursements
                           under Section 6 for expenses incurred in accordance
                           with the terms hereof prior to termination, and
                           compensation for accrued, unused vacation as of the
                           date of termination.

                                    (ii) TERMINATION WITHOUT CAUSE. In the event
                           Executive's employment hereunder is terminated
                           pursuant to Section 7(a)(iii), Company shall pay
                           Executive Separation Payments as Executive's sole
                           remedy in connection with such termination.
                           "Separation Payments" are payments made at the
                           semi-monthly rate of Executive's then current salary
                           in effect immediately preceding the date of
                           termination. Separation Payments shall be made for
                           the entire term of this Agreement (the "Separation
                           Payment Period") and shall be paid by Company in
                           equal semi-monthly payments in arrears or in
                           accordance with its then-current normal payroll
                           procedure, provided that Employer's obligation to
                           make Separation Payments shall be reduced by any
                           amounts earned by Executive for services during the
                           Separation Payment Period. Company shall also pay
                           Executive his Salary earned but unpaid as of the date
                           of termination, unpaid expense reimbursements under
                           Section 6 for expenses incurred in accordance with
                           the terms hereof prior to termination, and
                           compensation for accrued, unused vacation as of the
                           date of termination.

         SECTION 8. INVENTIONS; ASSIGNMENT.

                  (a) INVENTIONS DEFINED. All rights to discoveries, inventions,
         improvements, designs and innovations (including all data and records
         pertaining thereto) that relate to the business of Company, whether or
         not patentable, copyrightable or reduced to writing, that Executive may
         discover, invent or originate during the term of his employment
         hereunder, and for a period of six months thereafter, either alone or
         with others and whether or not during working hours or by the use of
         the facilities of Company ("Inventions"), shall be the exclusive
         property of Company. Executive shall promptly disclose all Inventions
         to Company, shall execute at the request of Company any assignments or
         other documents Company may deem necessary to protect or perfect its
         rights therein, and shall assist Company, at Company's expense, in
         obtaining, defending and enforcing Company's rights therein. Executive
         hereby appoints Company as his attorney-in-fact to execute on his
         behalf any assignments or other documents deemed necessary by Company
         to protect or perfect its rights to any Inventions.

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                  (b) COVENANT TO ASSIGN AND COOPERATE. Without limiting the
         generality of the foregoing, Executive hereby assigns and transfers to
         Company the world-wide right, title and interest of Executive in the
         Inventions. Executive agrees that Company may apply for and receive
         patent rights (including Letters Patent in the United States) for the
         Inventions in Company's name in such countries as may be determined
         solely by Company. Executive shall communicate to Company all facts
         known to Executive relating to the Inventions and shall cooperate with
         Company's reasonable requests in connection with vesting title to the
         Inventions and related patents exclusively in Company and in connection
         with obtaining, maintaining and protecting Company's exclusive patent
         rights in the Inventions.

                  (c) SUCCESSORS AND ASSIGNS. Executive's obligations under this
         Section 8 shall inure to the benefit of Company and its successors and
         assigns and shall survive the expiration of the term of this Agreement
         for such time as may be necessary to protect the proprietary rights of
         Company in the Inventions.

         SECTION 9. CONFIDENTIAL INFORMATION.

                  (a) ACKNOWLEDGMENT OF PROPRIETARY INTEREST. Executive
         acknowledges the proprietary interest of Company in all Confidential
         Information. Executive agrees that all Confidential Information learned
         by Executive during his employment with Company or otherwise, whether
         developed by Executive alone or in conjunction with others or
         otherwise, is and shall remain the exclusive property of Company.
         Executive further acknowledges and agrees that his disclosure of any
         Confidential Information will result in irreparable injury and damage
         to Company.

                  (b) CONFIDENTIAL INFORMATION DEFINED. "Confidential
         Information" means all confidential and proprietary information of
         Company, including without limitation (i) information derived from
         reports, investigations, experiments, research and work in progress,
         (ii) methods of operation, (iii) market data, (iv) proprietary computer
         programs and codes, (v) drawings, designs, plans and proposals, (vi)
         marketing and sales programs, (vii) client lists, (viii) historical
         financial information and financial projections, (ix) pricing formulae
         and policies, (x) all other concepts, ideas, materials and information
         prepared or performed for or by Company and (xi) all information
         related to the business, products, purchases or sales of Company or any
         of its suppliers and customers, other than information that is publicly
         available.

                  (c) COVENANT NOT TO DIVULGE CONFIDENTIAL INFORMATION. Company
         is entitled to prevent the disclosure of Confidential Information. As a
         portion of the consideration for the employment of Executive and for
         the compensation being paid to Executive by Company, Executive agrees
         at all times during the term of his employment hereunder and thereafter
         to hold in strict confidence and not to disclose or allow to be
         disclosed to any person, firm or corporation, other than to his
         professional advisors (who have the obligation to maintain the
         confidentiality of such information) and to persons engaged by Company
         to further the business of Company, and not to use except in the
         pursuit of the business of Company, the Confidential Information,
         without the prior written consent of Company.

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                  (d) RETURN OF MATERIALS AT TERMINATION. In the event of any
         termination or cessation of his employment with Company for any reason,
         Executive shall promptly deliver to Company all documents, data and
         other information derived from or otherwise pertaining to Confidential
         Information. Executive shall not take or retain any documents or other
         information, or any reproduction or excerpt thereof, containing or
         pertaining to any Confidential Information.

         SECTION 10. NONCOMPETITION.

                  (a) Until termination of Executive's employment hereunder,
         Executive shall not do any of the following:

                           (i) engage directly or indirectly, alone or as a
                  shareholder, partner, director, officer, Executive of or
                  consultant to any other business organization, in any business
                  activities that:

                                    (1) relate to the oil and gas drilling
                           services industry (the "Designated Industry"); or

                                    (2) were either conducted by Company prior
                           to the termination of Executive's employment
                           hereunder or proposed to be conducted by Company at
                           the time of such termination;

                           (ii) approach any customer or supplier of Company in
                  an attempt to divert it to any competitor of Company in the
                  Designated Industry; or

                           (iii) solicit or encourage any employee or Executive
                  of Company to end his relationship with Company or commence
                  any such relationship with any competitor of Company.

                  (b) Executive's noncompetition obligations hereunder shall not
         preclude Executive from owning less than five percent of the common
         stock of any publicly traded corporation conducting business activities
         in the Designated Industry. If at any time the provisions of this
         Section 10 are determined to be invalid or unenforceable by reason of
         being vague or unreasonable as to area, duration or scope of activity,
         this Section 10 shall be considered divisible and shall be immediately
         amended to only such area, duration and scope of activity as shall be
         determined to be reasonable and enforceable by the court or other body
         having jurisdiction over the matter, and Executive agrees that this
         Section 10 as so amended shall be valid and binding as though any
         invalid or unenforceable provision had not been included herein.

         SECTION 11. GENERAL.

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                  (a) NOTICES. All notices and other communications hereunder
         shall be in writing or by written telecommunication, and shall be
         deemed to have been duly given upon delivery if delivered personally or
         via written telecommunication, or five days after mailing if mailed by
         certified mail, return receipt requested or by written
         telecommunication, to the relevant address set forth below, or to such
         other address as the recipient of such notice or communication shall
         have specified to the other party in accordance with this Section
         11(a):

         If to Company, to:              with a copy to:

         Allis-Chalmers Corporation      Joseph P. Bartlett
         7660 Woodway, Suite 200         Spolin Silverman Cohen & Bartlett LLP
         Houston, Texas  77063           1620 26th Street, Suite 2000 North
                                         Santa Monica, CA  90404
         If to Executive, to:

         Munawar H. Hidayatallah
         338 Entrada Drive
         Santa Monica, CA  90402


                  (b) WITHHOLDING. All payments required to be made to Executive
         by Company under this Agreement shall be subject to the withholding of
         such amounts, if any, relating to federal, state and local taxes as may
         be required by law.

                  (c) EQUITABLE REMEDIES. Each of the parties hereto
         acknowledges and agrees that upon any breach by Executive or Company of
         his or its obligations hereunder, Company and Executive shall have no
         adequate remedy at law and accordingly shall be entitled to specific
         performance and other appropriate injunctive and equitable relief.

                  (d) SEVERABILITY. If any provision of this Agreement is held
         to be illegal, invalid or unenforceable, such provision shall be fully
         severable, and this Agreement shall be construed and enforced as if
         such illegal, invalid or unenforceable provision never comprised a part
         hereof, and the remaining provisions hereof shall remain in full force
         and effect and shall not be affected by the illegal, invalid or
         unenforceable provision or by its severance herefrom. Furthermore, in
         lieu of such illegal, invalid or unenforceable provision, there shall
         be added automatically as part of this Agreement a provision as similar
         in its terms to such illegal, invalid or unenforceable provision as may
         be possible and be legal, valid and enforceable.

                  (e) WAIVERS. No delay or omission by either party in
         exercising any right, power or privilege hereunder shall impair such
         right, power or privilege, nor shall any single or partial exercise of
         any such right, power or privilege preclude any further exercise
         thereof or the exercise of any other right, power or privilege.

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                  (f) COUNTERPARTS. This Agreement may be executed in multiple
         counterparts, each of which shall be deemed an original, and all of
         which together shall constitute one and the same instrument.

                  (g) CAPTIONS. The captions in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         any of the terms or provisions hereof.

                  (h) REFERENCE TO AGREEMENT. Use of the words "herein,"
         "hereof," "hereto," "hereunder" and the like in this Agreement refer to
         this Agreement only as a whole and not to any particular section or
         subsection of this Agreement, unless otherwise noted.

                  (i) BINDING AGREEMENT. This Agreement shall be binding upon
         and inure to the benefit of the parties and shall be enforceable by the
         personal representatives and heirs of Executive and the successors and
         assigns of Company. This Agreement may be assigned by the Company or
         any Company to any Company or, subject to Section 7(b)(iii), to any
         successor to all or substantially all of the Company's business as a
         result of a merger, consolidation, sale of stock or assets, or similar
         transaction; provided that in the event of any such assignment, the
         Company shall remain liable for all of its obligations hereunder and
         shall be liable for all obligations of all such assignees hereunder. If
         Executive dies while any amounts would still be payable to him
         hereunder, such amounts shall be paid to Executive's estate. This
         Agreement is not otherwise assignable by Executive.

                  (j) ENTIRE AGREEMENT. This Agreement contains the entire
         understanding of the parties, supersedes all prior agreements and
         understandings relating to the subject matter hereof and may not be
         amended except by a written instrument hereafter signed by each of the
         parties hereto.

                  (k) GOVERNING LAW. This Agreement and the performance hereof
         shall be construed and governed in accordance with the laws of the
         State of Texas, without regard to its choice of law principles.

                  (l) GENDER AND NUMBER. The masculine gender shall be deemed to
         denote the feminine or neuter genders, the singular to denote the
         plural, and the plural to denote the singular, where the context so
         permits.

         EXECUTED as of the date and year first above written.

                                              ALLIS-CHALMERS CORPORATION


                                              By /S/ JENS MORTENSEN
                                                 ----------------------------
                                                  Jens Mortensen, President


                                                 /S/ MUNAWAR H. HIDAYATALLAH
                                                 ----------------------------
                                                  Munawar H. Hidayatallah


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<PAGE>


                                   SCHEDULE A

                                BONUS CALCULAITON



During 2004, the Company's strategic objectives are as follows:

1. Achieving a Liquidity Event, defined as either a public offering of the
Company's shares resulting in gross sales proceeds (to the Company and to
selling shareholders) in excess of $20 million, or a Change in Control as such
term is defined in the Company's 2003 Stock Incentive Plan, as currently in
effect.

2. Listing on a national stock exchange or the NASDAQ NMS.

3. Achieving earnings before taxes, interest and depreciation ("EBITDA") of
$9,000,000. EBITDA shall be calculated by the Compensation Committee (the
"Compensation Committee") of the Board of Directors of the Company.

4. Achieving net income, calculated in accordance with GAAP in a manner
consistent with the Company's past practices, of $3,000,000.



During 2005 and subsequent years, the Company's strategic objectives shall be
established by the Compensation Committee during the first month of each year.


                                      -13-