Document:

FMO

      Finance
for Development

       

      Exhibit
10.2

      

      
        
          
            
              
                
                  
                    
                      	
                              Netherlands
      Development

                            
	
                              Finance
      Company

                            
	 
	
                              Anna
      Van Saksenlaan 71

                            
	
                              2593HW
      The Hague

                            
	
                              The
      Netherlands

                            
	
                              Telephone
      +31 (0)70 314 96 96

                            
	
                              Website
      www.fmo.nl

                            
	 
	
                              Direct
      +31(0)70 314 9878

                            
	
                              Fax
      +31(0)70 314 9762

                            
	
                              E-Mail
      ftw@fmo.nl

                            

                    

                  

                

              

            

          

        

      

       

      By
DHL

      Pypo
Holdings (HK) Company Limited

      Attn:  Mr.
Jackie Leong

      48th Floor,
Bank of China Tower

      1 Garden
Road

      Central

      Hong
Kong

      Tel:  +13
91 113 9083

       

      Subject:  
Consent, Waiver and Amendment Letter no. 2

       

      Dear Mr.
Leong,

       

      Reference
is made to:

       

      
        	
                 
      

              	
                1.

              	
                the
      Term Facility Agreement (the “Facility Agreement”), dated 30 January 2009
      between Pypo Holdings (HK) Company Limited (the “Borrower”) and
      Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.
      (“FMO”); and to

              

      

       

      
        	
                 
      

              	
                2.

              	
                the
      Borrower’s letter to FMO dated 30 July 2009 by which the Borrower informed
      FMO of a merger (the “Merger”) between Middle Kingdom Alliance Ltd., a
      company organized and existing under the laws of the Cayman Islands
      (“Middle Kingdom Alliance”) and the Borrower’s holding company Pypo
      Digital Company Limited by which Pypo Digital Company Limited will merge
      with, and into, Middle Kingdom Alliance by way of accession, all under the
      laws of the Cayman Islands.

              

      

       

      Unless
expressly defined herein, all capitalized terms herein shall have the meanings
ascribed to them in the Facility Agreement.

       

      The
purpose of this letter (the “Consent Letter”) is to provide certain consents and
waivers under, and to agree to certain amendments of the Facility Agreement and
the Equity Pledge Agreement, all as set forth here below.

       

      Consents
and Waivers

       

      Subject
to the conditions set forth here below, and in response to the Borrower’s
request thereto, FMO hereby:

       

      Commercial
Register        

      The Hague
nr 270 78 545

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

        FMO

        Finance
for Development

         

      

      
        	
                 
      

              	
                (i)

              	
                gives
      its consent to the Merger (as required by Sub-clauses 17.17 (Legal and beneficial
      ownership), 21.3 (Acquisitions) and 21.7
      (Merger) of the
      Facility Agreement (hereinafter jointly, the “Relevant Clauses”));
      and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                temporarily
      waives and defers, during the period starting retroactively on 31 March
      2009 and ending on 1 April 2010, the obligation of the Borrower to comply
      with the following financial covenants as contained Clause 19 (Financial Covenants) of
      the Facility Agreement:

              

      

       

      
        	
                 
      

              	
                -

              	
                Sub-clause
      19.1.1, 3rd bullet point, reading:  “Solvency Ratio >
      65%”;

              

      

       

      
        	
                 
      

              	
                -

              	
                Sub-clause
      19.1.1, 4th bullet point, reading:  “Adjusted Net Income c 20 million
      Euros for the financial year of
2009”;

              

      

       

      
        	
                 
      

              	
                -

              	
                Sub-clause
      19.1.2, 2nd bullet point, reading:  “Solvency Ratio c
      60%”;

              

      

       

      
        	
                 
      

              	
                -

              	
                Sub-clause
      19.1.2, 3rd bullet point, reading:  “Current Ratio c
      2”;

              

      

       

      
        	
                 
      

              	
                -

              	
                Sub-clause
      19.1.2, 4th bullet point, reading:  “Net Margin c 5%”;
      and

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                gives
      its consent to a release of the Pledge under the Equity Pledge Agreement,
      in the manner as described under the heading “Amendment of the Equity
      Pledge Agreement” here below.

              

      

       

      The above
consents and waivers are given subject to the following conditions which must be
satisfied before 1 April 2010:

       

      
        	
                 
      

              	
                (i)

              	
                the
      Merger shall have been completed before 1 October 2009 and shall be deemed
      a Qualified IPO as per the Term Facility Agreement entered into between
      the Borrower and FMO;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                FMO
      shall have received a legal opinion from the Borrower’s Cayman Islands
      external counsel confirming that the Merger has been completed in
      accordance with Cayman Islands law;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                Middle
      Kingdom Alliance and FMO shall have entered into a Corporate Guarantee
      Agreement on terms and conditions similar to the terms and conditions of
      Corporate Guarantee Agreement between Pypo Digital Company Limited and FMO
      dated 30 January 2009; and

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                Middle
      Kingdom Alliance shall have confirmed to FMO in writing that on the IPO
      Premium Date, it shall pay to FMO the Additional IPO Premium (as defined
      here below).

              

      

       

      Amendments
to the Facility Agreement

       

      Subject
to the satisfaction of the conditions set forth under the heading “Consents and
Waivers” here above, the parties hereto agree to the following amendments of the
Facility Agreement.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      FMO

      Finance
for Development

       

      Amendment to Sub-clause 1.1
(Definitions)

       

      The
following definitions are hereby inserted in alphabetical order:

       

      “Additional
IPO Premium” means such number of bonus shares (credited as fully paid-up and
free from any encumbrance) in the share capital of Middle Kingdom Alliance after
the Merger to be issued at a price per share equal to the opening price per
share as will be quoted on the day of commencement of the trading of its shares
on the NASDAQ with a total value in Dollars equal to EUR 1.5 million on such day
of commencement of trading.

       

      “Additional
IPO Premium Date” means the same date as the IPO Premium Date.

       

      The
definition of “Repayment Date” is hereby amended to read as
follows:

       

      “Repayment
Date” means 15 August 2014, being the date on which the Loans shall be repaid in
accordance with Sub-clause 6.1 (Repayment of Loans); but if
any of that date is not a Business Day, then that Repayment date shall be deemed
to be the immediately succeeding Business Day.”

       

      Amendment to Sub-clause
8.3.1 (Schedule
of interest and additional interest payments where a Qualified IPO occurs prior
to the Termination Date)

       

      A new
Paragraph (e) is hereby added, immediately following Paragraph (d) of Clause
8.3.1 reading as follows:

       

      
        	
                 
      

              	
                (d)

              	
                the
      Borrower shall procure that FMO receives, on the IPO Premium Date, the
      Additional IPO Premium.

              

      

       

      Amendment to Sub-clause
8.3.2 (Schedule
of interest and additional interest payments where a Qualified IPO occurs prior
to the Termination Date)

       

      A new
Paragraph (d) is hereby added, immediately following Paragraph (c) of Clause
8.3.1 reading as follows:

       

      
        	
                 
      

              	
                (d)

              	
                the
      Borrower shall procure that FMO receives, on the IPO Premium Date, the
      Additional IPO Premium.

              

      

       

      Amendment to Schedule 19.1.1
(Financial
Covenants),
3rd bullet
point

       

      The
Solvency Ratio is hereby amended to read as follows:

       

      
        	
                 
      

              	
                ·

              	
                Solvency
      Ratio > 40%.

              

      

       

      Amendment
of the Equity Pledge Agreement

       

      FMO’s
consent to a release of the Pledge under the Equity Pledge Agreement as
described here below shall be subject to the condition that the Borrower has
been in compliance with each of the financial covenants under Clause 19 (Financial Covenants) of the
Facility Agreement during the period from 1 April 2010 until 1 October
2010.

       

      Subject
to the Borrower’s compliance with the financial covenants during the period from
1 April 2010 until 1 October 2010, FMO shall release the Pledge to the effect
that the following amendment be made to the Equity Pledge
Agreement.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

        FMO

        Finance
for Development

         

      

      In the
column “Registered Capital” of Schedule A (Equity Interests) of the
Equity Pledge Agreement, the amount of RMB 700,000,000 (100%) as mentioned in
that column shall be amended to read “RMB 210,000,000 (30%)”.

       

      General

       

      The
Borrower hereby acknowledges and agrees that the above consents and waivers will
be set aside and will cease to be effective, if the aforesaid conditions would
not have not been satisfied to FMO’s entire satisfaction before 1 January 2010
or, solely in respect of the Equity Pledge Agreement, if the Borrower would have
failed to comply with the financial covenants during the period from 1 April
2010 until 1 October 2010.

       

      In such
case, FMO shall notify the Borrower of the revocation of its consents and
waivers given hereby and the Borrower hereby acknowledges and agrees that FMO’s
revocation shall be binding.

       

      Please be
advised that the consents and waivers granted above are given exclusively and
for the express purpose set out herein, on the terms and conditions as set out
in this Consent Letter.

       

      Please be
further advised that no other consent or waiver is hereby given or intended, and
the consents and waivers set out above do not constitute, and shall not be
construed or implied as a consent or modification of any other term or condition
of the Facility Agreement or, as applicable, the Equity Pledge Agreement, except
as expressly set out above.

       

      This
Consent Letter is governed by, and shall be construed in accordance with, the
laws of the Territory.

       

      Please
indicate your acceptance of, and agreement with, the terms and conditions of
this Consent Letter by signing two (2) originals of this letter where indicated
below and returning to FMO (Attention:  Legal Department), one (1)
such original.

       

      Yours
faithfully,

       

      NEDERLANDSE
FINANCIERINGS-MAATSCHAPPIJ

      VOOR
ONTWIKKELINGSLANDEN N.V.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                T.F.
      Bakels

                                              	 
      	 
      
	
                                                Manager
      Private Equity

                                              	 
      	
                                                J.
      Franken

                                              
	 
      	 
      	
                                                Director
      Legal Affairs

                                              
	 	 	 
	
                                                /s/ 

                                              	 
      	
                                                /s/

                                              

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      FMO

      Finance
for Development

       

      ACCEPTED AND
AGREED:

       

      
        
          
            
              
                	
                        PYPO
      HOLDINGS (HK) COMPANY LIMITED

                      
	 
      
	
                        /s/ Fei Dongping

                      
	 
	
                        Name:     
      Fei Dongping

                      
	
                        Title:       
      Director

                      
	
                        Date:       
      17 August
2009

                      

              

            

          

        

      

      
        
           

        

        
          5EXECUTION

     

    FIFTH
AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

    

    THIS
FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”)
is entered into as of October 13, 2009, 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 and a Fourth Amendment to Second Amended and Restated Credit
Agreement dated as of May 20, 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 Fifth 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 and Fifth Amendment to Second Amended and Restated Credit
Agreement.”

     

    “Threshold
Amount at any time means an amount equal to ten (10%) of the Borrower's
domestic consolidated assets measured as of the close of the then most recent
fiscal quarter end.”

    
       

      Fifth
Amendment to Allis-Chalmers

      Energy
Second Amended and

      Restated
Credit Agreement

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

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

     

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

     

    “Fifth Amendment
to Second Amended and Restated Credit Agreement means that certain Fifth
Amendment to Second Amended and Restated Credit Agreement dated as of October
__, 2009, among the Borrower, the Guarantors, Royal Bank of Canada, as
Administrative Agent and Collateral Agent, and the Required
Lenders.”

     

    “Foreign Joint
Venture means
Rawabi Allis-Chalmers Ltd., a Saudi Arabia joint venture 50% owned by Borrower
and 50% owned by Rawabi Holding Limited, and each other corporation,
partnership, joint venture, limited liability company or other business entity
of which 50% or less of the Voting Stock is beneficially owned by Borrower or
any of its Subsidiaries.”

     

    “Foreign Rental
Arrangement means a lease or rental agreement (however designated)
between the Borrower or any of its Domestic Subsidiaries and a Foreign Person
relating to equipment or inventory to be leased to such Foreign Person, which
equipment or inventory was moved from the U.S. to a foreign jurisdiction and
“Foreign
Rental Arrangements” means collectively all such lease or rental
agreements.”

     

    1.2           Section
6.06(b).  Section
6.06(b) of
the Credit Agreement is amended in its entirety as follows:

     

    “(b)  Keep
all Collateral other than Collateral located outside the United States on the
Second Amended and Restated Closing Date within the United States unless either
(i) prior written notice is given to the Administrative Agent of the intent to
move such Collateral outside the United States and the Administrative Agent
consents in writing to the movement of such Collateral outside the United States
or (ii) such Collateral is moved outside the United States in connection with an
Investment permitted pursuant to Section
7.02(n).”

    

    1.3           Section
6.14(c).  Section
6.14(c) of the Credit Agreement is hereby amended by deleting the first
sentence thereof and substituting therefore the following:

     

    “(c)           The
Liens required by this Section
6.14 shall be first priority perfected Liens in favor of the
Administrative Agent or Collateral Agent for the benefit of the Lenders, subject
to no other Liens except Permitted Liens of the type described in Section 7.01;
provided with
respect to any equipment or inventory invested in Foreign Subsidiaries or
Foreign Joint Ventures pursuant to Section 7.02(n)
or leased pursuant to a Foreign Rental Arrangement pursuant to Section
7.07(f), the Lien on such equipment or inventory is not required to be
maintained as a first priority perfected Lien under the law of the jurisdiction
where such equipment or inventory is located.”

     

    Fifth
Amendment to Allis-Chalmers

    Energy
Second Amended and

    Restated
Credit Agreement

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

     

    1.4           Section
7.02.  Section
7.02 of the Credit Agreement is amended by deleting the word “and” at the
end of Section
7.02(l), deleting the period at the end of Section
7.02(m) and inserting a semicolon therefor and adding a new Subsection
7.02(n) to read in its entirety as follows:

     

    “(n)           Investments,
including the Investments set forth on Schedule
7.02, of up to $30,000,000 in the aggregate at any one time (less the
amount of any Dispositions associated with Foreign Rental Arrangements permitted
pursuant to Section
7.07(f)) in Foreign Subsidiaries and Foreign Joint Ventures, of which no
more than $5,000,000 in the aggregate at any one time shall consist of cash
Investments and the remainder of which will consist of the transfer (by sale,
lease, contribution or any other form of Disposition) of equipment and
inventory; provided,
any such equipment and inventory shall continue to be subject to a Lien in favor
of the Administrative Agent and/or Collateral Agent for the benefit of the
Lenders (although such Lien shall not be required to be perfected under the
local law of the jurisdiction where such equipment and inventory is located);
provided further if
there is a breach of the Fixed Asset Coverage Ratio in Section 7.19(b)
which has not been cured or waived, the Required Lenders may require that
Borrower cause equipment and/or inventory held by Foreign Subsidiaries outside
the U.S. to be moved to the U.S. and subjected to a first priority, perfected
Lien (subject to Permitted Liens) in favor of the Administrative Agent or
Collateral Agent for the benefit of the Lenders in an amount sufficient to cure
such breach.”

     

    1.5           Section
7.07.  Section
7.07 of the Credit Agreement is amended by deleting the word “or” at the
end of Section
7.07(d), deleting the period at the end of Section
7.07(e) and inserting “; or” therefor and adding a new Section
7.07(f) to read in its entirety as follows:

     

    “(f)           Dispositions
of equipment and inventory to Foreign Subsidiaries and Foreign Joint Ventures as
permitted by Section
7.02(n) and Dispositions pursuant to Foreign Rental Arrangements not to
exceed in the aggregate the dollar limitation set forth in Section
7.02(n).”

     

    1.6           Section
8.01(m).  Section
8.01(m) of the Credit Agreement is amended in its entirety as
follows:

     

    “(m)           Collateral; Impairment of
Security, etc.  (i) Any provision of any Loan Document shall
for any reason cease to be valid and binding on or enforceable against a Loan
Party or any Loan Party shall so state in writing or bring an action to limit
its obligations or liabilities thereunder; or (ii) any Collateral Document shall
for any reason (other than pursuant to the terms thereof) cease to create a
valid security interest in the Collateral purported to be covered thereby or
such security interest shall for any reason cease to be a perfected and first
priority security interest subject to Permitted Liens; provided with respect to the
security interest in any Collateral consisting of equipment or inventory
invested in Foreign Subsidiaries or Foreign Joint Ventures pursuant to Section 7.02(n)
or leased pursuant to a Foreign Rental Arrangement pursuant to Section
7.02(n), the security interest in such Collateral is not required to be
maintained as a perfected and first priority security interest under the law of
the foreign jurisdiction where such Collateral is located; or”

     

    1.7           Schedule
7.02.  Schedule
7.02 (Investments in Foreign Subsidiaries and Foreign Joint Ventures) is
hereby added to the Credit Agreement by Schedule
7.02 attached to this Amendment.

     

    Fifth
Amendment to Allis-Chalmers

    Energy
Second Amended and

    Restated
Credit Agreement

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

     

    Paragraph
2.        Effective
Date. This Amendment shall not become effective until the date (such
date, the “Fifth Amendment
Effective Date”) the Administrative Agent receives all of the agreements,
documents, certificates, instruments, and other items described
below:

     

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

     

    (b)           an
executed copy of the Joint Venture Agreement (in English) between Rawabi Holding
Company Ltd. and Borrower dated January 28, 2009;

     

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

     

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

     

    Paragraph
3.        Waivers.

    

    (a)           The
Lenders hereby waive any non-compliance for all periods ending prior to the
Fifth Amendment Effective Date with the following affirmative covenants and
agree that the Borrower shall not be deemed in Default solely by reason of such
non-compliance:

    

    (i)           Section 6.06(c) –
Maintenance of Assets and Business; Movement of Collateral — insofar as a
result of or related to the movement of up to $3,408,025 of Collateral
identified on Schedule
7.02 consisting of equipment and inventory from within the United States
to Rawabi Allis-Chalmers Ltd., a Saudi Arabia joint venture 50% owned by
Borrower and 50% owned by Rawabi Holding Limited, such Collateral was not kept
within the United States; and

    

    (ii)           Section 6.14(c) –
Further Assurances; Additional Collateral — insofar as a result of or
related to the movement of up to $3,408,025 of Collateral identified on Schedule
7.02 consisting of equipment and inventory from within the United States
to Rawabi Allis-Chalmers  Ltd., a Saudi Arabia joint venture 50% owned
by Borrower and 50% owned by Rawabi Holding Limited, the Lien in favor of the
Administrative Agent or Collateral Agent for the benefit of the Lenders would
not be maintained as a first priority perfected Lien under the law of the
jurisdiction where such equipment or inventory is located.

    

    (b)           The
Lenders hereby waive any non-compliance with the following negative covenants
and agree that the Borrower shall not be deemed in Default solely by reason of
such non-compliance:

    

    (i)           Section 7.02 —
Investments — insofar as a result of the cash investment of $531,915 in
Rawabi Allis-Chalmers  Ltd., a Saudi Arabia joint venture 50% owned by
Borrower and 50% owned by Rawabi Holding Limited, or related to the movement of
up to $3,408,025 of Collateral identified on Schedule
7.02 consisting of equipment and inventory from within the United States
to Rawabi Allis-Chalmers  Ltd., an Investment was made;
and

    

    (ii)           Section 7.07 —
Dispositions — insofar as a result of or related to the movement of up to
$3,408,025 of Collateral identified on Schedule
7.02 consisting of equipment and inventory from within the United States
to Rawabi Allis-Chalmers  Ltd., a Saudi Arabia joint venture 50% owned
by Borrower and 50% owned by Rawabi Holding Limited, a Disposition
occurred.

     

    
      Fifth
Amendment to Allis-Chalmers

      Energy
Second Amended and

      Restated
Credit Agreement

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    (c)           For the avoidance of doubt, the Lenders confirm that if the Borrower’s representations are as
set out in Article
V of the Credit Agreement, as amended and
waived herein, and the Borrower complies with the requirements of Section
4.03, Article
VI and Article
VII of the Credit Agreement, as amended and waived herein,
the Borrower may borrow under the Credit Agreement on the terms and subject to
the limitations set forth in the Credit Agreement.

    

    (d)           The
foregoing waivers shall not be deemed to be a waiver by the Lenders of any other
covenant, condition or obligation on the part of the Borrower under the Credit
Agreement or any other Loan Document, except as set forth in Paragraph
3 of this Fifth Amendment.  In addition, the foregoing waivers
shall in no respect evidence any commitment by the Lenders to grant any future
consents or waivers of any covenant, condition or obligation on the part of the
Borrower under the Credit Agreement or any other Loan Document whether related
to or arising out of the movement of certain Collateral identified on Schedule
7.02 consisting of equipment and inventory from within the United States
to outside the United States or otherwise.  Any further waivers or
consents must be specifically agreed to in writing in accordance with Section
10.01 of the Credit Agreement.

     

    Paragraph
4.        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
5.        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 Fifth
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, (b) no Default or Event of
Default exists and no Borrowing Base Deficiency exists.

     

    Paragraph
6.        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
7.        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
8.        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.

     

    
      Fifth
Amendment to Allis-Chalmers

      Energy
Second Amended and

      Restated
Credit Agreement

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Paragraph
9.        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.

     

    Paragraph
10.      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
11.      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
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. Delivery of an
executed counterpart of a signature page of this Amendment by telecopier or
other electronic means shall be effective as delivery of a manually executed
counterpart of this Amendment.

     

     The
parties hereto have executed this Amendment in multiple counterparts to be
effective as of the Fifth Amendment Effective Date.

     

    Remainder
of Page Intentionally Blank

    Signature
Pages to Follow.

     

    Fifth
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

                          

                  

                

              

            

          

        

      

    

     

    Fifth Amendment
to Allis-Chalmers

      Energy
Credit Agreement

       

      
        
          
             

          

          
            Signature
Page- Page 1

            
              

            

          

          
             

          

        

      

       

    

    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

                                      	 	 
      	 
      
	 
      	
                                        Victor
      M. Perez

                                      	 	
                                        By:

                                      	
                                        /s/ Victor M. Perez

                                      
	 
      	
                                        Chief
      Financial Officer

                                      	 	 
      	
                                        Victor
      M. Perez

                                      
	 
      	 
      	 	 
      	
                                        Chief
      Financial
Officer

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Fifth Amendment to Allis-Chalmers

      Energy
Credit Agreement

    

     

    
      
         

      

      
        Signature
Page- Page 2

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                	
                        ADMINISTRATIVE
      AGENT:

                      
	 
      
	
                        ROYAL
      BANK OF CANADA,

                      
	
                        as
      Administrative Agent and Collateral Agent

                      
	 	 
	
                        By:

                      	
                        /s/ Ann Hurley

                      
	
                        Name:  Ann
      Hurley

                      
	
                        Title:  Manager,
      Agency

                      

              

            

          

        

      

    

     

    Fifth Amendment
to Allis-Chalmers

      Energy
Credit Agreement

       

      
        
          
             

          

          
            Signature
Page- Page 3

            
              

            

          

          
             

          

        

      

    

    

    
      
        
          
            
              	
                      L/C
      ISSUER AND LENDER:

                    
	 
      
	
                      ROYAL BANK OF CANADA, as
      a Lender

                    
	
                      and
      L/C Issuer

                    
	 	 
	
                      By:

                    	
                      /s/ Jason York

                    
	
                      Name:  Jason
      York

                    
	
                      Title:  Authorized
      Signatory

                    

            

          

        

      

    

     

    Fifth Amendment
to Allis-Chalmers

      Energy
Credit Agreement

       

      
        
          
             

          

          
            Signature
Page- Page 4

            
              

            

          

          
             

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  LENDER:

                                
	 
      
	
                                  CATERPILLAR
      FINANCIAL

                                
	
                                  SERVICES CORPORATION, as
      Lender

                                
	 
      	 
      
	 
      	 
      
	
                                  By:

                                	
                                  /s/ Michael M. Ward

                                
	
                                  Name:  Michael
      M. Ward

                                
	
                                  Title:  Credit
      & Operations
Manager

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Fifth Amendment
to Allis-Chalmers 

    Energy
Credit Agreement

     

    
      
        
           

        

        
          Signature
Page- Page 5

          
            

          

        

        
           

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  LENDER:

                                
	 
      	 
      
	
                                  JPMORGAN
      CHASE BANK, N.A.

                                
	
                                  as
      a Lender

                                
	 	 
	
                                  By:

                                	 
      
	
                                  Name:

                                
	
                                  Title:

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Fifth Amendment
to Allis-Chalmers

      Energy
Credit Agreement

       

      
        
           

        

        
          Signature
Page- Page 6

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              LENDER:

                            
	 
      	 
      
	
                              WELLS
      FARGO BANK, N.A.

                            
	
                              as
      a Lender

                            
	 
	
                              By:

                            	
                              /s/ Donald W. Herrick

                            
	
                              Name:  Donald
      W. Herrick

                            
	
                              Title:  Vice
      President and Senior Portfolio
Manager

                            

                    

                  

                

              

            

          

        

      

    

     

    Fifth Amendment
to Allis-Chalmers

      Energy
Credit Agreement

       

      
        
           

        

        
          Signature
Page- Page 7

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  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

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Fifth Amendment
to Allis-Chalmers

      Energy
Credit Agreement

       

      
        
           

        

        
          Signature
Page- Page 8

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              LENDER:

                            
	 
      	 
      
	
                              WHITNEY
      NATIONAL BANK,

                            
	
                              as
      a Lender

                            
	 
	
                              By:

                            	
                                /s/ Mark
    McCullough

                            
	
                              Name:  Mark
      McCullough

                            
	
                              Title:  Vice
      President

                            

                    

                  

                

              

            

          

        

      

    

    
       

      Fifth Amendment
to Allis-Chalmers

        Energy
Credit Agreement

         

        
          
            
               

            

            
              Signature
Page- Page 9

              
                

              

            

            
               

            

          

        

        

      

    

    Schedule
7.02

    

    INVESTMENTS
IN FOREIGN SUBSIDIARIES AND FOREIGN JOINT VENTURES

    
      

      Allis
Chalmers – International Asset Transfers/Investments

      (in
US$)

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              Rawabi
      JV

                                            	 	 	 	 	 
	 
      	 	 	 	 	 
	
                                              Pipe
      Orders & Other (Allis’ share)

                                            	 	 	1,759,754	 	 	 
	
                                              Pipe
      from Allis inventory

                                            	 	 	1,648,271	 	 	 
	
                                              Cash
      contribution

                                            	 	 	531,915	 	 	 
	
                                              Sub-total

                                            	 	 	3,939,940	 	 	 
	 
      	 	 	 	 	 	 
	
                                              Other
      potential Rewabi JV Capex (5 1⁄2 ” drill pipe)

                                            	 	
                                              1,467,000

                                            	 	(50%
      share)	 
	
                                              Other
      anticipated equipment

                                            	 	 	365,000	 	 	 
	 
      	 	 	 	 	 	 
	
                                              Rawabi-Allis
      JV - 2009

                                            	 	 	5,771,940	 	 	 
	
                                              Estimated
      2010 Capex (various drill pipe and misc equipment)

                                            	 	
                                              3,315,000

                                            	 	(50%
      share)	 
	 
      	 	 	 	 	 	 
	
                                              Total
      Rawabi-Allis (2009 & 2010)

                                            	 	 	9,086,940	 	 	 
	 
      	 	 	 	 	 	 
	
                                              DLS
      Bolivia

                                            	 	 	 	 	 	 
	 
      	 	 	 	 	 	 
	
                                              Intercompany
      sale of 5 1⁄2 ” pipe

                                            	 	
                                              1,178,765

                                            	 	(Allis to receive promissory note 	 
	
                                              (For
      TOTAL drilling contact)

                                            	 	 	 	 	 	 
	 
      	 	 	 	 	 	 
	
                                              BCH
      Brazil

                                            	 	 	 	 	 	 
	 
      	 	 	 	 	 	 
	
                                              Contribution
      of BOPs to BCH

                                            	 	 	490,000	 	 	 
	
                                              (For
      Petrobras contracts)

                                            	 	 	 	 	 	 
	 
      	 	 	 	 	 	 
	
                                              Contribution
      of misc. casing & tubing assets to BCH

                                            	 	 	477,038	 	 	 
	
                                              (For
      Petrobras contracts)

                                            	 	 	 	 	 	 
	 
      	 	 	 	 	 	 
	 
      	 	 	11,232,743	 	 	 

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      Allis-Chalmers
Energy Compiled

      Second
Amended and Restated Credit Agreement

       

    

    
      
         

      

      
        Schedule
7.02

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}]]