Exhibit 10.1





Exhibit 10.1




EXECUTION




SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT




THIS SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is
entered into as of February 25, 2010, among ALLIS-CHALMERS ENERGY INC., a Delaware corporation, as
borrower (the “Borrower”), the undersigned Guarantors (collectively, the “Guarantors”), ROYAL BANK
OF CANADA, as Administrative Agent and Collateral Agent for the Lenders parties to the hereinafter
defined Credit Agreement (in such capacities, the “Administrative Agent” and “Collateral Agent,”
respectively) and the undersigned Required Lenders.



Reference is made to the Second Amended and Restated Credit Agreement dated as of April 26,
2007 among Borrower, the Administrative Agent, the Collateral Agent and the Lenders parties
thereto, as amended by a First Amendment to Second Amended and Restated Credit Agreement dated as
of December 3, 2007, a Second Amendment to Second Amended and Restated Credit Agreement dated as of
December 30, 2008, a Third Amendment to Second Amended and Restated Credit Agreement dated as of
April 9, 2009, a Fourth Amendment to Second Amended and Restated Credit Agreement dated as of May
20, 2009 and a Fifth Amendment to Second Amended and Restated Credit Agreement dated as of October
13, 2009 (as amended, the “Credit Agreement”). Unless otherwise defined in this Amendment,
capitalized terms used herein shall have the meanings set forth in the Credit Agreement; all
section, exhibit and schedule references herein are to sections, exhibits and schedules in the
Credit Agreement; and all paragraph references herein are to paragraphs in this Amendment.



RECITALS




A. The Borrower has requested certain amendments to the Credit Agreement and the Lenders are
willing, on the terms and conditions set forth herein, to amend the Credit Agreement as hereinafter
set forth.




Accordingly, for adequate and sufficient consideration, the parties hereto agree, as follows:



Paragraph 1. Amendments. Effective as of the Sixth Amendment Effective Date, the
Credit Agreement is amended as follows:




1.1 Definitions. Section 1.01 of the Credit Agreement is amended as follows:




(a) The following definitions are amended in their entirety to read as follows:




“Agreement means this Second Amended and Restated Credit Agreement as amended
by the First Amendment to Second Amended and Restated Credit Agreement, Second
Amendment to Second Amended and Restated Credit Agreement, Third Amendment to Second
Amended and Restated Credit Agreement, Fourth Amendment to Second Amended and
Restated Credit Agreement, Fifth Amendment to Second Amended and Restated Credit
Agreement and Sixth Amendment to Second Amended and Restated Credit Agreement.”



Sixth Amendment to Allis-Chalmers

Energy Second Amended and

Restated Credit Agreement





 


 









 








(b) The following definitions are inserted alphabetically into Section 1.01 of the Credit
Agreement:




“Sixth Amendment Effective Date means the date the Sixth Amendment to Second
Amended and Restated Credit Agreement by its terms becomes effective among the
parties thereto.”




“Sixth Amendment to Second Amended and Restated Credit Agreement means that
certain Sixth Amendment to Second Amended and Restated Credit Agreement dated as of
February 25, 2010, among the Borrower, the Guarantors, Royal Bank of Canada, as
Administrative Agent and Collateral Agent, and the Required Lenders.”



1.2 Section 7.01(q). Section 7.01(q) of the Credit Agreement is amended in its
entirety to read as follows:




“(q) Liens on assets of BCH and BCH Brazil after BCH becomes a Subsidiary of
Borrower following the BCH Acquisition, securing Indebtedness of up to $27,000,000
owing by BCH and BCH Brazil to Standard Bank which Indebtedness is permitted under
Section 7.04(k); and”



1.3 Section 7.02(m). Section 7.02(m) of the Credit Agreement is amended in its
entirety to read as follows:




“(m) Investments by Borrower in BCH consisting of (1) Borrower paying
$5,000,000 to BrazAlta Resources Corp. to acquire all of the Equity Interests in BCH
owned by BrazAlta Resources Corp., (2) Borrower providing up to $2,000,000 of
working capital to BCH, and (3) Borrower becoming liable as a guarantor for up to
$27,000,000 of BCH’s and BCH Brazil’s Indebtedness owing to Standard Bank;”



1.4 Section 7.04(c). Section 7.04(c) of the Credit Agreement is amended in its
entirety to read as follows:




“(c) Guaranty Obligations of the Borrower and/or any of its Subsidiaries in
respect of Indebtedness otherwise permitted hereunder of the Borrower; provided,
however, with respect to Indebtedness owing by DLS and/or DLS’ Subsidiaries in
connection with Local Argentina Financing Activities described in Section 7.04(j),
the Borrower will not incur any Guaranty Obligation in connection therewith;
provided further, however, with respect to Indebtedness owing by BCH and BCH Brazil
to Standard Bank described in Section 7.02(m), the amount of the Guaranty Obligation
of Borrower in respect thereof shall not exceed $27,000,000;”



1.5 Section 7.04(k). Section 7.04(k) of the Credit Agreement is amended in its
entirety to read as follows:




“(k) Indebtedness of BCH and BCH Brazil owing to Standard Bank not to exceed
$27,000,000; provided, if any such Indebtedness is guaranteed by Borrower, the
amount of such Guaranty Obligations does not exceed $27,000,000; and provided
further such Indebtedness may not be secured by any assets of Borrower or any of its
Subsidiaries (other than BCH and BCH Brazil) but such Indebtedness may be secured by
Liens on assets of BCH and BCH Brazil;”



Sixth Amendment to Allis-Chalmers

Energy Second Amended and

Restated Credit Agreement




 


2









 









1.6 Section 7.19(a). Section 7.19(a) of the Credit Agreement is amended in its
entirety to read as follows:




“(a) Interest Coverage Ratio. Permit the Interest Coverage Ratio as of the end
of any fiscal quarter to be less than the amount specified below:



	 	 	 
	For the period	 	Interest Coverage Ratio
	From the Second Amended and Restated Closing Date
through the fiscal quarter ending on March 31, 2009
	 	2.75 to 1.00
	 
	 	 
	From the fiscal quarter beginning on April 1, 2009
through the fiscal quarter ending on September 30, 2009
	 	2.00 to 1.00
	 
	 	 
	From the fiscal quarter beginning on October 1, 2009
through the fiscal quarter ending on December 31, 2009
	 	1.85 to 1.00
	 
	 	 
	From the fiscal quarter beginning on January 1, 2010
through the fiscal quarter ending on June 30, 2010
	 	1.75 to 1.00
	 
	 	 
	From the fiscal quarter beginning on July 1, 2010
through the fiscal quarter ending on December 31, 2010
	 	2.00 to 1.00
	 
	 	 
	For fiscal quarters beginning on or after January 1, 2011
	 	2.75 to 1.00






1.7 Section 7.19(c). Section 7.19(c) of the Credit Agreement is amended in its
entirety to read as follows:




“(c) Leverage Ratio. Permit the Leverage Ratio as of the end of any fiscal
quarter to be less than the amount specified below:



	 	 	 
	For the period	 	Leverage Ratio
	From the Second Amended and Restated Closing Date through
the fiscal quarter ending on March 31, 2009
	 	4.00 to 1.00






Sixth Amendment to Allis-Chalmers

Energy Second Amended and

Restated Credit Agreement




 


3









 








	 	 	 
	For the period	 	Interest Coverage Ratio
	From the fiscal quarter beginning on April 1, 2009 through
the fiscal quarter ending on September 30, 2009
	 	4.75 to 1.00
	 
	 	 
	From the fiscal quarter beginning on October 1, 2009
through the fiscal quarter ending on December 31, 2009
	 	5.25 to 1.00
	 
	 	 
	From the fiscal quarter beginning on January 1, 2010
through the fiscal quarter ending on March 31, 2010
	 	5.85 to 1.00
	 
	 	 
	From the fiscal quarter beginning on April 1, 2010 through
the fiscal quarter ending on June 30, 2010
	 	5.75 to 1.00
	 
	 	 
	From the fiscal quarter beginning on July 1, 2010 through
the fiscal quarter ending on September 30, 2010
	 	5.50 to 1.00
	 
	 	 
	From the fiscal quarter beginning on October 1, 2010
through the fiscal quarter ending on December 31, 2010
	 	5.00 to 1.00
	 
	 	 
	For fiscal quarters beginning on or after January 1, 2011
	 	4.00 to 1.00






1.8 Exhibit C. Exhibit C Form of Compliance Certificate to the Credit Agreement is
amended in its entirety to read as set forth on Supplemental Exhibit C attached hereto.



Paragraph 2. Effective Date. This Amendment shall not become effective until the date
(such date, the “Sixth Amendment Effective Date”) the Administrative Agent receives all of the
agreements, documents, certificates, instruments, and other items described below; provided, that
with respect to the amendments to Sections 7.19(a) and (c) of the Credit Agreement, such amendments
shall be deemed effective as of December 31, 2009:




(a) this Amendment, executed by the Borrower, the Guarantors, and the Required Lenders;



(b) payment on the Sixth Amendment Effective Date to the Administrative Agent of a twenty-five
(25) basis point amendment fee calculated on the Aggregate Revolving Commitment in effect



Sixth Amendment to Allis-Chalmers

Energy Second Amended and

Restated Credit Agreement




 


4









 







on the
Sixth Amendment Effective Date which fee will be shared among each Lender timely approving the
Sixth Amendment in accordance with its Pro Rata share of the Aggregate Revolving Commitment, which
fee once paid will be fully earned and nonrefundable;




(c) fees and expenses required to be paid pursuant to Paragraph 5 of this Amendment, to the
extent invoiced prior to the Sixth Amendment Effective Date; and



(d) such other assurances, certificates, documents and consents as the Administrative Agent
may require.



Paragraph 3. Acknowledgment and Ratification. As a material inducement to the
Administrative Agent and the Lenders to execute and deliver this Amendment, each of the Borrower
and the Guarantors (i) consents to the agreements in this Amendment, (ii) agrees and acknowledges
that the execution, delivery, and performance of this Amendment shall in no way release, diminish,
impair, reduce, or otherwise affect the respective obligations of the Borrower or any Guarantor
under the Loan Documents to which it is a party, which Loan Documents shall remain in full force
and effect, and all rights thereunder are hereby ratified and confirmed.



Paragraph 4. Representations. As a material inducement to the Administrative Agent and
the Lenders to execute and deliver this Amendment, each of the Borrower and the Guarantors
represents and warrants to the Administrative Agent and the Lenders that as of the Sixth Amendment
Effective Date and as of the date of execution of this Amendment, (a) all representations and
warranties in the Loan Documents are true and correct in all material respects as though made on
the date hereof, except to the extent that any of them speak to a different specific date, and (b)
no Default or Event of Default exists.



Paragraph 5. Expenses, Funding Losses. The Borrower shall pay on demand all
reasonable costs, fees, and expenses paid or incurred by the Administrative Agent incident to this
Amendment, including, without limitation, Attorney Costs in connection with the negotiation,
preparation, delivery, and execution of this Amendment and any related documents, filing and
recording costs, and the costs of title insurance endorsements, if any.



Paragraph 6. Miscellaneous. This Amendment is a “Loan Document” referred to in the
Credit Agreement. The provisions relating to Loan Documents in Article X of the Credit Agreement
are incorporated in this Amendment by reference. Unless stated otherwise (a) the singular number
includes the plural and vice versa and words of any gender include each other gender, in each case,
as appropriate, (b) headings and captions may not be construed in interpreting provisions, (c) this
Amendment must be construed, and its performance enforced, under Texas law and applicable federal
law, (d) if any part of this Amendment is for any reason found to be unenforceable, all other
portions of it nevertheless remain enforceable.



Paragraph 7. Entire Agreement. This amendment represents the final agreement
between the parties about the subject matter of this amendment and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.



Paragraph 8. Parties. This Amendment binds and inures to the benefit of the Borrower,
the Guarantors, the Administrative Agent, the Collateral Agent, the other Lenders, and their
respective successors and assigns.



Sixth Amendment to Allis-Chalmers

Energy Second Amended and

Restated Credit Agreement




 


5









 








Paragraph 9. Further Assurances. The parties hereto each agree to execute from time to
time such further documents as may be necessary to implement the terms of this Amendment.



Paragraph 10. Release. As additional consideration for the execution, delivery and performance of this Amendment
by the parties hereto and to induce the Administrative Agent, the Collateral Agent and the Lenders
to enter into this Amendment, the Borrower warrants and represents to the Administrative Agent, the
Collateral Agent and the Lenders that to the best of its knowledge no facts, events, statuses or
conditions exist or have existed which, either now or with the passage of time or giving of notice,
or both, constitute or will constitute a basis for any claim or cause of action against the
Administrative Agent, the Collateral Agent or any Lender or any defense to (i) the payment of
Obligations under the Revolver Notes and/or the Loan Documents, or (ii) the performance of any of
its obligations with respect to the Revolver Notes and/or the Loan Documents. In the event any
such facts, events, statuses or conditions exist or have existed, Borrower unconditionally and
irrevocably hereby RELEASES, RELINQUISHES and forever DISCHARGES Administrative Agent, the
Collateral Agent and the Lenders, as well as their predecessors, successors, assigns, agents,
officers, directors, shareholders, employees and representatives, of and from any and all claims,
demands, actions and causes of action of any and every kind or character, past or present, which
Borrower may have against any of them or their predecessors, successors, assigns, agents, officers,
directors, shareholders, employees and representatives arising out of or with respect to (a) any
right or power to bring any claim for usury or to pursue any cause of action based on any claim of
usury, and (b) any and all transactions relating to the Loan Documents occurring prior to the date
hereof, including any loss, cost or damage, of any kind or character, arising out of or in any way
connected with or in any way resulting from the acts, actions or omissions of any of them, and
their predecessors, successors, assigns, agents, officers, directors, shareholders, employees and
representatives, including any breach of fiduciary duty, breach of any duty of fair dealing, breach
of confidence, breach of funding
commitment, undue influence, duress, economic coercion, conflict of interest, negligence, bad
faith, malpractice, intentional or negligent infliction of mental distress, tortious interference
with contractual relations, tortious interference with corporate governance or prospective business
advantage, breach of contract, deceptive trade practices, libel, slander or conspiracy, but in each
case only to the extent permitted by applicable Law.



Paragraph 11. Effectiveness of Facsimile Documents and Signatures. This Sixth
Amendment may be transmitted and/or signed by facsimile. The effectiveness of any such signatures
shall, subject to applicable Law, have the same force and effect as manually-signed originals and
shall be binding on all Loan Parties, the Administrative Agent, the Collateral Agent and the
Lenders. The Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile document or signature.



Paragraph 12. Execution in Counterparts. This Amendment may be executed in any number of
counterparts (and by different parties hereto in different counterparts), each of which when so
executed shall be deemed to be an original and all of which when taken together shall constitute
one and the same agreement.



Remainder of Page Intentionally Blank

Signature Pages to Follow.




Sixth Amendment to Allis-Chalmers

Energy Second Amended and

Restated Credit Agreement





 


6









 








IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the
date first above written.



	 	 	 	 	 
	 	BORROWER:




ALLIS-CHALMERS ENERGY INC.,

a Delaware corporation, as Borrower

 	 
	 	By:  	/s/ Victor M. Perez
 	 
	 	 	Victor M. Perez 	 
	 	 	Chief Financial Officer 	 




Sixth Amendment to Allis-Chalmers

Energy Credit Agreement




 


Signature Page 1









 







The undersigned, as the Guarantors referred to in the Credit Agreement, as amended by this
Amendment, hereby consent to this Amendment and hereby confirm and agree that (i) the Loan
Documents (which specifically includes the Guaranty executed by each Guarantor and each Security
Agreement executed by each Guarantor) in effect on the date hereof to which each are a party are,
and shall continue to be, in full force and effect and are hereby confirmed and ratified in all
respects except that, upon the effectiveness of, and on and after the Sixth Amendment Effective
Date, all references in such Loan Documents to the Credit Agreement shall mean the Credit Agreement
as amended by this Amendment, and (ii) such Loan Documents consisting of Guaranties, Security
Agreements, and assignments and all of the collateral described therein do, and shall continue to,
secure the payment by the Borrower of the Obligations under the Credit Agreement.




	 	 	 	 	 	 	 
	AGREED TO AS OF THE SIXTH	 	 	 	 
	AMENDMENT EFFECTIVE DATE:	 	GUARANTORS:
	 
	 	 	 	 	 	 
	AirComp LLC	 	Allis-Chalmers Drilling LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Victor M. Perez
	 	By:
	 	/s/ Victor M. Perez
	 

	 	 
	 	 	 	 
	 

	 	Victor M. Perez
	 	 	 	Victor M. Perez
	 

	 	Chief Financial Officer
	 	 	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	Allis-Chalmers Holdings Inc.	 	Allis-Chalmers Management LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Victor M. Perez
	 	By:
	 	/s/ Victor M. Perez
	 

	 	 
	 	 	 	 
	 

	 	Victor M. Perez
	 	 	 	Victor M. Perez
	 

	 	Chief Financial Officer
	 	 	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	Allis-Chalmers Production Services LLC	 	 Allis-Chalmers Rental Services LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Victor M. Perez
	 	By:
	 	/s/ Victor M. Perez
	 

	 	 
	 	 	 	 
	 

	 	Victor M. Perez
	 	 	 	Victor M. Perez
	 

	 	Chief Financial Officer
	 	 	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	Allis-Chalmers Tubular Services LLC	 	Rebel Rentals LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Victor M. Perez
	 	By:
	 	/s/ Victor M. Perez
	 

	 	 
	 	 	 	 
	 

	 	Victor M. Perez
	 	 	 	Victor M. Perez
	 

	 	Chief Financial Officer
	 	 	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	Petro-Rentals LLC	 	Strata Directional Technology LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Victor M. Perez	 	By:

	 	/s/ Victor M. Perez
	 

	 	 	 	 	 	 
	 

	 	Victor M. Perez
	 	 
	 	Victor M. Perez
	 

	 	Chief Financial Officer
	 	 	 	Chief Financial Officer








Sixth Amendment to Allis-Chalmers

Energy Credit Agreement




 


Signature Page 2









 








AGREED TO AS OF THE SIXTH

AMENDMENT EFFECTIVE DATE:




	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:




ROYAL BANK OF CANADA,

as Administrative Agent and Collateral Agent

 	 
	 	By:  	/s/ Ann Hurley
 	 
	 	 	Name:  	Ann Hurley 	 
	 	 	Title:  	Manager, Agency 	 




Sixth Amendment to Allis-Chalmers

Energy Credit Agreement











Signature Page 3









 







AGREED TO AS OF THE SIXTH

AMENDMENT EFFECTIVE DATE:




	 	 	 	 	 
	 	L/C ISSUER AND LENDER:

ROYAL BANK OF CANADA, as a Lender

and L/C Issuer

 	 
	 	By:  	/s/ Jason S. York
 	 
	 	 	Name:  	Jason S. York 	 
	 	 	Title:  	Authorized Signatory 	 




Sixth Amendment to Allis-Chalmers


Energy Credit Agreement








Signature Page 4









 







AGREED TO AS OF THE SIXTH

AMENDMENT EFFECTIVE DATE:




	 	 	 	 	 
	 	LENDER:




CATERPILLAR FINANCIAL

SERVICES CORPORATION, as Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




Sixth Amendment to Allis-Chalmers

Energy Credit Agreement





 


Signature Page 5









 







AGREED TO AS OF THE SIXTH

AMENDMENT EFFECTIVE DATE:




	 	 	 	 	 
	 	LENDER:




JPMORGAN CHASE BANK, N.A.

as a Lender

 	 
	 	By:  	/s/ James H. Ramage
 	 
	 	 	Name:  	James H. Ramage 	 
	 	 	Title:  	Managing Director 	 




Sixth Amendment to Allis-Chalmers

Energy Credit Agreement





 


Signature Page 6











 




AGREED TO AS OF THE SIXTH

AMENDMENT EFFECTIVE DATE:




	 	 	 	 	 
	 	LENDER:



WELLS FARGO BANK, N.A.

as a Lender

 	 
	 	By:  	/s/ Donald W. Herrick
 	 
	 	 	Name:  	Donald W. Herrick 	 
	 	 	Title:  	VP & Senior Portfolio Manager 	 



Sixth Amendment to Allis-Chalmers

Energy Credit Agreement




 


Signature Page 7









 







AGREED TO AS OF THE SIXTH

AMENDMENT EFFECTIVE DATE:




	 	 	 	 	 
	 	LENDER:



NATIXIS,

as a Lender

 	 
	 	By:  	/s/ Carlos Quinteros
 	 
	 	 	Name:  	Carlos Quinteros 	 
	 	 	Title:  	Director 	 
	 	 	 
	 	By:  	/s/ Timothy L. Polvado
 	 
	 	 	Name:  	Timothy L. Polvado 	 
	 	 	Title:  	Senior Managing Director 	 


Sixth Amendment to Allis-Chalmers

Energy Credit Agreement




 


Signature Page 8









 





	 	 	 	 	 



AGREED TO AS OF THE SIXTH

AMENDMENT EFFECTIVE DATE:




	 	 	 	 	 
	 	LENDER:




WHITNEY NATIONAL BANK,

as a Lender

 	 
	 	By:  	/s/ Mark McCullough	 
	 	 	Name:  	Mark McCullough	 
	 	 	Title:  	Vice President	 



Sixth Amendment to Allis-Chalmers

Energy Credit Agreement





 


Signature Page 9









 





	 	 	 	 	 



SUPPLEMENTAL EXHIBIT C




FORM OF COMPLIANCE CERTIFICATE

(Pursuant to Section 6.02 of the Agreement)




Financial Statement Date:                     , 200_




Royal Bank of Canada,

as Administrative Agent

Agency Services Group

Royal Bank Plaza, 200 Bay Street

12th Floor, South Tower

Toronto ON M5J 2W7

Facsimile: (416) 842-4023




Ladies and Gentlemen:





Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
April 26, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among Allis-Chalmers Energy Inc., a Delaware corporation (the “Borrower”), the Lenders from time to
time party thereto, and Royal Bank of Canada, as Administrative Agent. Capitalized terms used
herein but not defined herein shall have the meaning set forth in the Agreement.



The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the
                                         of the Borrower, and that, as such, he/she is authorized to execute and
deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:




[Use the following for Fiscal Year-end financial statements]



Attached hereto as Schedule 1 are the year-end audited consolidated financial statements of
the Borrower and its Subsidiaries required by Section 6.01(a) of the Agreement for the Fiscal Year
of the Borrower ended as of the above date, together with the report and opinion of an independent
certified public accountant required by such section; and



[Use the following for fiscal quarter-end financial statements]



Attached hereto as Schedule 1 are the unaudited consolidated financial statements of the
Borrower and its Subsidiaries required by Section 6.01(b) of the Agreement for the first three
fiscal quarters of the Borrower ended as of the above date, together with a certificate of a
Responsible Officer of the Borrower stating that such financial statements fairly present the
financial condition, results of operations and cash flows of the Borrower and its Subsidiaries for
such fiscal quarter in accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.



[Use the following for both Fiscal Year-end and quarter-end financial statements]




Sixth Amendment to Allis-Chalmers

Energy Credit Agreement




 


Supplemental Exhibit C — Page 1









 





1. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of the Borrower during the accounting period covered by the
attached financial statements.



2. A review of the activities of the Borrower during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents, and no Default or
Event of Default has occurred and is continuing except as follows (list of each such Default or
Event of Default and include the information required by Section 6.03 of the Agreement):



3. During such fiscal period no casualty losses have occurred, except as described below:



4. The covenant analyses and information set forth on Schedule 3 attached hereto are true and
accurate on and as of the date of this Certificate.




IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                     , 200_.




	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ALLIS-CHALMERS ENERGY INC.

a Delaware corporation, as Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 





Sixth Amendment to Allis-Chalmers

Energy Credit Agreement




 


Supplemental Exhibit C — Page 2









 





For the
Quarter/Year ended                                          (“Statement Date”)




SCHEDULE 3

to the Compliance Certificate

($ in 000’s)




	 	 	 	 	 
	I. Section 7.04 — Indebtedness
	 	 	 	 
	 
	 	 	 	 
	A. Indebtedness outstanding on Second Amended and Restated
Closing Date and listed on Schedule 5.05 and any
refinancings, etc. permitted by Section 7.04(b)
	 	$	                    	 
	 
	 	 	 	 
	B. Indebtedness in connection with Swap Contracts permitted
by Section 7.04(d)
	 	$	                    	 
	 
	 	 	 	 
	C. Outstanding Principal Amount of Purchase Money
Indebtedness for fixed or capital assets permitted by Section
7.04(e) (may not exceed $31,000,000)
	 	$	                    	 
	 
	 	 	 	 
	D. Outstanding Principal Amount of Indebtedness associated
with Liens on acquired assets permitted by Section 7.04(f)
(may not exceed $2,000,000)
	 	$	                    	 
	 
	 	 	 	 
	E. Outstanding Principal Amount of Indebtedness associated
with Capital Leases and obligations to make equipment
financing lease or rental payments permitted by Section
7.04(g) (may not exceed $15,000,000)
	 	$	                    	 
	 
	 	 	 	 
	F. Indebtedness owing by DLS’ Argentina Branch to US Bank
National Association reflected on Schedule 5.05 (may not
exceed $5,500,000)
	 	$	                    	 
	 
	 	 	 	 
	G. Indebtedness owing by DLS’ or DLS’ Subsidiaries owing in
connection with Local Argentina Financing Activities
permitted by Section 7.04(j) (may not exceed the greater of
(i) 15% of DLS’ consolidated tangible assets and (ii)
$30,000,000)
	 	$	                    	 
	 
	 	 	 	 
	H. Indebtedness owing by BCH and BCH Brazil owing to Standard
Bank permitted by Section 7.04kj) (may not exceed
$27,000,000)
	 	$	                    	 
	 
	 	 	 	 
	II. Section 7.19(a) — Interest Coverage Ratio
	 	 	 	 





Sixth Amendment to Allis-Chalmers

Energy Credit Agreement





 


Supplemental Exhibit C — Page 3









 





	 	 	 	 	 
	A. Consolidated EBITDA (subject to proforma adjustments, if
any, permitted by Section 7.19(e) of the Agreement) for four
consecutive fiscal quarters ending on the Financial Statement
Date (“Subject Period”)(see Credit Agreement definition of
“Consolidated EBITDA”):
	 	$	                    	 
	 
	 	 	 	 
	B. Sum of (i) Consolidated Interest Charges (subject to
proforma adjustments, if any, permitted by Section 7.19(e) of
the Agreement) during Subject Period plus (ii) imputed
interest charges on Synthetic Leases during Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	C. Is ratio of II.A. to II.B. at least 2.75 to 1.0 for fiscal
quarters ending on or before March 31, 2009?
	 	Yes/No
	 
	 	 	 	 
	Is ratio of II.A. to II.B. at least 2.00 to 1.0 for
fiscal quarters beginning on April 1, 2009 through the
fiscal quarter ending on September 30, 2009?
	 	 	 	 
	 
	Is ratio of II.A. to II.B. at least 1.85 to 1.0 for
fiscal quarters beginning on October 1, 2009 through
the fiscal quarter ending on December 31, 2009?
	 	 	 	 
	 
	Is ratio of II.A. to II.B. at least 1.75 to 1.0 for
fiscal quarters beginning on January 1, 2010 through
the fiscal quarter ending on June 30, 2010?
	 	 	 	 
	 
	Is ratio of II.A. to II.B. at least 2.00 to 1.0 for
fiscal quarters beginning on or after July 1, 2010?
	 	 	 	 
	 
	 	 	 	 
	III.
Section 7.19(b) — Fixed Asset Coverage Ratio
	 	 	 	 
	 
	 	 	 	 
	A. Orderly
liquidation value of Borrower’s and its Subsidiaries’ domestic fixed assets (determined as of most
recently delivered asset appraisal delivered pursuant to
Section 6.02(e) or (f) of the Credit Agreement) on which
Administrative Agent holds first priority perfected Lien:
 	 	$	                    	 

	 
	 	 	 	 
	B. Outstanding Amount of Revolver Principal Debt on most
recent Financial Statement Date:
	 	$	                    	 
	 
	 	 	 	 
	C. Is ratio of III.A. to III.B. at least 1.33 to 1.0?
	 	Yes/No
	 
	 	 	 	 
	IV.
Section 7.19(c) — Leverage Ratio
	 	 	 	 





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	A. Consolidated Funded Debt for Subject Period (see Credit
Agreement definition of “Consolidated Funded Debt”):
	 	$	                    	 
	 
	 	 	 	 
	B. Unrestricted cash of the Borrower and its Subsidiaries
deposited in an account with the Administrative Agent or
Collateral Agent (or another financial institution acceptable
to the Administrative Agent) plus (i) unrestricted cash of
the Borrower and its Subsidiaries deposited with a Person
other than a Lender subject to a control agreement in favor
of the Administrative Agent or Collateral Agent plus (ii) at
the Administrative Agent’s discretion, unrestricted cash of
the Borrower and its Subsidiaries reflected on the Borrower’s
consolidated balance sheet and otherwise subjected to a Lien
in favor of the Administrative Agent or Collateral Agent and
not otherwise pledged or subject to any claim or encumbrance
of any third party plus (iii) Cash Equivalents.
	 	$	                    	 
	 
	 	 	 	 
	C. Net Cash Proceeds from Equity Issuances that have not been
expended or invested.
	 	$	                    	 
	 
	 	 	 	 
	D. Line IV.A minus [Line IV.B minus Line IV.C]
	 	$	                    	 
	 
	 	 	 	 
	E. Consolidated EBITDA (subject to proforma adjustments, if
any, permitted by Section 7.19(e) of the Agreement) for
Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	F. Is ratio of IV.D. to IV.E. no more than 4.00 to 1.0 for
fiscal quarters ending on or before March 31, 2009?
	 	 	Yes/No	 
	 
	 	 	 	 
	Is ratio of IV.D. to IV.E. no more than 4.75 to 1.0 for
fiscal quarters beginning on April 1, 2009 through the
fiscal quarter ending on September 30, 2009?
	 	 	 	 
	 
	Is ratio of IV.D. to IV.E. no more than 5.25 to 1.0 for
fiscal quarters beginning on October 1, 2009 through
the fiscal quarter ending on December 31, 2009?
	 	 	 	 
	 
	Is ratio of IV.D. to IV.E. no more than 5.85 to 1.0 for
fiscal quarters beginning on January 1, 2010 through
the fiscal quarter ending on March 31, 2010?
	 	 	 	 
	 
	Is ratio of IV.D. to IV.E. no more than 5.75 to 1.0 for
fiscal quarters beginning on April 1, 2010 through the
fiscal quarter ending on June 30, 2010?
	 	 	 	 
	 
	Is ratio of IV.D. to IV.E. no more than 5.50 to 1.0 for
fiscal quarters beginning on July 1, 2010 through the
fiscal quarter ending on
September 30, 2010?
	 	 	 	 
	 
	Is ratio of IV.D. to IV.E. no more than 5.00 to 1.0 for
fiscal quarters beginning on or after October 1, 2010?
	 	 




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	V.
Section 7.19(d) — Senior Leverage Ratio
	 	 	 	 
	 
	 	 	 	 
	A. Consolidated Senior Debt for Subject Period (see Credit
Agreement definition of “Consolidated Senior Debt”):
	 	$	                    	 
	 
	 	 	 	 
	B. Consolidated EBITDA (subject to proforma adjustments, if
any, permitted by Section 7.19(e) of the Agreement) for
Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	C. Is ratio of V.A. to V. B. no more than 2.50 to 1.0?
	 	Yes/No





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Energy Credit Agreement





 


Supplemental Exhibit C — Page 6