Document:

Exhibit 10.1

Exhibit 10.1

THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is
entered into as of April 9, 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 and a Second Amendment to Second Amended and Restated Credit Agreement dated as
of December 30, 2008 (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 Third 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 and Third Amendment to
Second Amended and Restated Credit Agreement.”

“Applicable Rate means the following percentages per annum set forth in the
table below, on any date of determination, with respect to the Type of Credit
Extension or commitment fee that corresponds to the Leverage Ratio at such date of
determination, as calculated based on the quarterly Compliance Certificate most
recently delivered pursuant to Section 6.02(a):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Commitment	 	 	Letter of Credit and	 	 	 	 
	Pricing	 	 	 	Fee	 	 	Eurodollar Rate	 	 	Base Rate	 
	Level	 	Leverage Ratio	 	+ (basis points)	 	 	+ (basis points)	 	 	+ (basis points)	 
	1	 	Less than 2.50:1.00	 	 	75.0	 	 	 	400.0	 	 	 	300.0	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	2	 	Less than 3.00:1.00 but greater than or equal to 2.50:1.00	 	 	85.0	 	 	 	425.0	 	 	 	325.0	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3	 	Less than 3.50:1.00 but greater than or equal to 3.00:1.00	 	 	95.0	 	 	 	500.0	 	 	 	400.0	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	4	 	Less than 4.00:1.00 but greater than or equal to 3.50:1.00	 	 	105.0	 	 	 	650.0	 	 	 	550.0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5	 	Greater than or equal to 4.00:1.00	 	 	125.0	 	 	 	750.0	 	 	 	650.0	 

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Any increase or decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective as of the first day of the fiscal quarter of
the Borrower immediately following the date of a Compliance Certificate delivered
pursuant to Section 6.02(a); provided, however, that if no Compliance Certificate is
delivered during a fiscal quarter within 10 days after such Compliance Certificate
is due in accordance with such Section, Pricing Level 5 shall apply as of the first
day of such following fiscal quarter.

In the event that any Compliance Certificate delivered hereunder is shown to be
inaccurate (regardless of whether this Agreement or the Aggregate Revolving
Commitment is in effect when such inaccuracy is discovered), and such inaccuracy, if
corrected, would have led to the application of a higher Applicable Rate based upon
the foregoing pricing grid (the “Accurate Applicable Rate”) for any period that such
Compliance Certificate covered, then (i) the Borrower shall immediately deliver to
the Administrative Agent a Compliance Certificate for such period, (ii) the
Applicable Rate shall be adjusted such that after giving effect to the corrected
Compliance Certificate the Applicable Rate shall be reset to the Accurate Applicable
Rate based upon the foregoing pricing grid for such period as set forth in the
foregoing pricing grid and (iii) if the Accurate Applicable Rate is higher than the
Applicable Rate based upon the foregoing pricing grid, the Borrower shall
immediately pay to the Administrative Agent, for the account of the Lenders, the
accrued additional interest owing as a result of such Accurate Applicable Rate for
such period.

“Cash Adjusted Consolidated Funded Debt means, as of any date of determination,
for the Borrower and its Subsidiaries on a consolidated basis, the excess of (a)
Consolidated Funded Debt less (b) the excess of (i) unrestricted cash and Cash
Equivalents as reflected on the balance sheet less (ii) Net Cash Proceeds from
Equity Issuances to the extent such Net Cash Proceeds have not been expended or
invested, as certified by the Borrower in the most recently delivered Compliance
Certificate.”

“Net Cash Proceeds means (i) any Insurance Payment, (ii) cash received in
connection with any Disposition (including any cash received by way of deferred
payment as and when received), in each case received by the Borrower or any of its
Subsidiaries in connection with and as consideration therefor, on or after the date
of consummation of such transaction, after (a) deduction of taxes payable in
connection with or as a result of such transaction, and (b) payment of all usual and
customary brokerage commissions and all other reasonable fees and expenses related
to such transaction (including, without limitation, reasonable attorneys’ fees and
closing costs incurred in connection with such transaction), and (iii) with respect
to any Equity Issuance, proceeds of such Equity Issuance after payment of
underwriting fees and payment of all cash closing costs and transaction costs,
including reasonable attorneys fees.”

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

“Accounts Receivable means and includes all of the Borrower’s and its Domestic
Subsidiaries’ now owned or hereafter acquired or arising accounts, as defined in the
UCC, including any rights to payment for the sale or lease of goods or rendition of
services, whether or not they have been earned by performance.”

“Borrowing Base has the meaning given to such term in Section 2.01A.”

“Borrowing Base Period means the period of time commencing with the Third
Amendment Effective Date until the fiscal quarter beginning July 1, 2010.

“Borrowing Base Report means a report in the form attached hereto as Exhibit E,
appropriately completed, together with the following attachments: (a) a detailed
aged schedule of all Accounts Receivable as of the date specified in such report,
listing face amounts and dates of invoices of each such Accounts Receivable and the
name of each account debtor obligated on such Accounts Receivable (and, upon request
of Administrative Agent, copies of invoices, credit reports, and any other matters
and information relating to the Accounts Receivable), (b) a detailed aged schedule
of all Eligible Accounts Receivable as of the date specified in such report, listing
face amounts and dates of invoices of each such Accounts Receivable and the name of
each account debtor obligated on such Accounts Receivable (and, upon request of
Administrative Agent, copies of invoices, credit reports, and any other matters and
information relating
to the Eligible Accounts Receivable) and (c) an appraisal report dated within
the most recent 12 month period, setting forth the orderly liquidation value of
Borrower’s and Subsidiaries’ domestic fixed assets.”

“Eligible Accounts Receivable means Accounts Receivable of the Borrower and any
Domestic Subsidiary which is a Guarantor, excluding any Accounts Receivable:

(i) with respect to which more than ninety (90) days have elapsed since
the date of the original invoice;

(ii) with respect to which any of the representations, warranties,
covenants, and agreements contained in any Collateral Document are incorrect
or have been breached in any material respect;

(iii) with respect to which, in whole or in part, a check, promissory
note, draft, trade acceptance or other instrument for the payment of money
has been received, presented for payment and returned uncollected for any
reason for such Accounts Receivable (or any other Accounts Receivable due
from such account debtor);

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(iv) which represents a progress billing (as hereinafter defined) or as
to which the Borrower or any of the Domestic Subsidiaries has extended the
time for payment without the consent of the Administrative Agent; for the
purposes hereof, “progress billing” means any invoice for goods sold or
leased or services rendered under a contract or agreement pursuant to which
the account debtor’s obligation to pay such invoice is conditioned upon the
Borrower’s or any of the Domestic Subsidiaries’ completion of any further
performance under the contract or agreement;

(v) with respect to which any one or more of the following events has
occurred to the account debtor on such Accounts Receivable: death or
judicial declaration of incompetency of an account debtor who is an
individual; the filing by or against the account debtor of a request or
petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief under Debtor Relief
Laws of the U.S. or any foreign jurisdiction, now or hereafter in effect;
the making of any general assignment by the account debtor for the benefit
of creditors; the appointment of a receiver or trustee for the account
debtor or for any of the assets of the account debtor including, without
limitation, the appointment of or taking possession by a “custodian,” as
defined in the Bankruptcy Code of the United States; the institution by or
against the account debtor of any other type of insolvency proceeding (under
Debtor Relief Laws of the United States or otherwise) or of any formal or
informal proceeding for the dissolution or liquidation of, settlement of
claims against, or winding up of affairs of, the account debtor; the sale,
assignment, or transfer of all or any material part of the assets of the
account debtor; the nonpayment generally by the account debtor of its debts as
they become due; or the cessation of the business of the account debtor as a
going concern;

(vi) if twenty percent (20%) or more of the aggregate Dollar amount of
outstanding Accounts Receivable owed at such time by the account debtor
thereon is classified as ineligible under clause (i) above;

(vii) owed by an account debtor which: (1) does not maintain its chief
executive office in the United States; or (2) is not organized under the
Laws of the United States or any state thereof; or (3) is the government of
any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof; except to the
extent that such Accounts Receivable is secured or payable by a letter of
credit or guarantee satisfactory to the Administrative Agent in its
reasonable discretion;

(viii) owed by an account debtor which is an Affiliate or employee of
the Borrower or any of its Subsidiaries;

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(ix) except as provided in clause (xi) below, with respect to which
either the perfection, enforceability, or validity of the Administrative
Agent’s Liens in such Accounts Receivable, or the Administrative Agent’s
right or ability to obtain direct payment to the Administrative Agent of the
proceeds of such Accounts Receivable, is governed by any federal, state, or
local statutory requirements other than those of the UCC;

(x) owed by an account debtor to which the Borrower or any of its
Subsidiaries, is indebted in any way, or which is subject to any right of
setoff or recoupment by the account debtor, unless the account debtor has
entered into an agreement acceptable to the Administrative Agent to waive
setoff rights; or if the account debtor thereon has disputed liability or
made any claim with respect to any other Accounts Receivable due from such
account debtor; but in each such case only to the extent of such
indebtedness, setoff, recoupment, dispute, or claim;

(xi) owed by the government of the United States, or any department,
agency, public corporation, or other instrumentality thereof, unless the
Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. §3727 et
seq.), and any other steps necessary to perfect the Administrative Agent’s
Liens therein, have been complied with to the Administrative Agent’s
satisfaction with respect to such Accounts Receivable;

(xii) owed by any state, municipality, or other political subdivision
of the United States, or any department, agency, public corporation or other
instrumentality thereof and as to which the Administrative Agent determines
that its Lien therein is not or cannot be perfected;

(xiii) which represents a sale on a bill-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other repurchase or
return basis;

(xiv) which is evidenced by a promissory note or other instrument or by
chattel paper;

(xv) intentionally deleted;

(xvi) with respect to which the account debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar
report in order to permit the Borrower or any of the Domestic Subsidiaries
to seek judicial enforcement in such state of payment of such Accounts
Receivable, unless such Borrower or Domestic Subsidiary has qualified to do
business in such state, has filed a Notice of Business Activities Report or
equivalent report for the then current year (unless the laws of such state
permit the Notice of Business Activities Report or equivalent report to be
filed immediately prior to such suit) or the failure to file such Notice of
Business Activities Report or equivalent report is not otherwise an
impediment to the collection of such Accounts Receivable;

(xvii) with respect to which the goods giving rise to such Accounts
Receivable have not been shipped and delivered to and accepted by the
account debtor or the services giving rise to such Accounts Receivable have
not been performed by the Borrower or a Domestic Subsidiary, as applicable,
and, if applicable, accepted by the account debtor, or the account debtor
revokes its acceptance of such goods or services;

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(xviii) owed by an account debtor which is obligated to the Borrower or
any of the Domestic Subsidiaries representing Accounts Receivable the
aggregate unpaid balance of which exceeds fifteen percent (15%) of the
aggregate unpaid balance of all Accounts Receivable owed to the Borrower or
any of the Domestic Subsidiaries at such time by all of the Borrower’s and
the Domestic Subsidiaries’ account debtors, but only to the extent of such
excess;

(xx) which is not subject to a first priority and perfected security
interest in favor of the Administrative Agent for the benefit of the
Lenders; or

(xxi) which is owed to any Subsidiary acquired after the Closing Date
unless a field audit of such Person’s Accounts Receivable has been delivered
to the Administrative Agent, in form and substance reasonably satisfactory
to the Administrative Agent.

If any Accounts Receivable at any time ceases to be an Eligible Accounts
Receivable, then such Accounts Receivable shall promptly be excluded from the
calculation of Eligible Accounts Receivable.”

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

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

1.2 Section 2.01. Section 2.01 of the Credit Agreement is amended in its entirety as
follows:

“Section 2.01 Revolving Loans. Subject to and in reliance upon the terms,
conditions, representations, and warranties in the Loan Documents, each Lender
severally, but not jointly, agrees to make revolving loans (each such loan a
“Revolving Loan”) to Borrower from time to time on any Business Day during the
period from the Second Amended and Restated Closing Date to the Maturity Date, in an
aggregate amount not to exceed at any time outstanding the lesser of (i) the amount
of such Lender’s Pro Rata Share of one or more Revolving Loan Borrowings not to
exceed, when aggregated with the Outstanding Amount of the L/C Obligations, such
Lender’s Revolving Commitment and (ii) such Lender’s Pro Rata Share of the Borrowing
Base. Revolving Loan Borrowings may be repaid and reborrowed from time to time in
accordance with the terms and provisions of the Loan Documents; provided that, each
such Revolving Loan Borrowing must occur on a Business Day and no later than the
Business Day immediately preceding the Maturity Date. Revolving Loans may be Base
Rate Loans or Eurodollar Rate Loans, as further provided herein; provided, however,
all Revolving Loan Borrowings made on the Second Amended and Restated Closing Date
shall be made as Base Rate Loans.”

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1.3 Section 2.01A. A new Section 2.01A to the Credit Agreement is hereby added as
follows:

“Section 2.01A Borrowing Base Determinations.

(a) During the Borrowing Base Period, the Borrowing Base (the “Borrowing Base”)
shall be equal to the sum of (i) twenty-five percent (25%) of the
orderly liquidation value of the Borrower’s and its Subsidiaries’ domestic
fixed assets (as determined by the most recently delivered asset appraisals
delivered to the Administrative Agent pursuant to Section 6.02(e) or (f), and (ii)
eighty percent (80%) of Eligible Accounts Receivable. The Borrowing Base shall be
determined each month by reference to the most recent Borrowing Base Report
delivered to the Administrative Agent (absent any error in such Borrowing Base
Report) which shall be effective as of the date such Borrowing Base Report is
required to be delivered pursuant to Section 6.02(j).

(b) During the period from Third Amendment Effective Date to the first
redetermination of the Borrowing Base pursuant to Section 2.01A(a), the Borrowing
Base shall be determined by the Borrowing Base Report delivered on the Third
Amendment Effective Date.”

1.4
Section 2.03(e).
A new Section 2.03(e) to the Credit Agreement is hereby added as
follows:

“(e) Prepayments by Reason of Borrowing Base Deficiency. If on any
date during the Borrowing Base Period the Outstanding Amount of all Revolving Loans
and L/C Obligations shall exceed the Borrowing Base, then the Borrower shall
immediately make a mandatory prepayment of the Revolving Loans equal to such excess,
and if any such excess remains after such prepayments, to the extent of such excess
the Borrower shall immediately Cash Collateralize the L/C Obligations.”

1.5 Section 6.02(e). Section 6.02(e) of the Credit Agreement is amended in its
entirety to read as follows:

“(e) delivery within the prior 12-month period of one or more domestic fixed
asset appraisal(s) by a third party satisfactory to the Administrative Agent;”

1.6 Section 6.02(f). Section 6.02(f) of the Credit Agreement is amended in its
entirety to read as follows:

“(f) at the request of the Required Lenders (to include the Administrative
Agent), the Borrower will deliver updated appraisals, in form and substance
reasonably satisfactory to the Administrative Agent, that cover all domestic fixed
assets within sixty (60) days of such request;”

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1.7 Section 6.02(j). A new Section 6.02(j) to the Credit Agreement is
hereby added as follows:

“(j) within fifteen (15) days after the end of each calendar month, (i) a
completed Borrowing Base Report calculating and certifying the Borrowing Base as of
the last day of such calendar month, certified as complete and correct and
signed on behalf of the Borrower by its chief financial officer, and (ii) such other
supporting documentation and additional reports with respect to the Borrowing Base
as the Administrative Agent shall request; provided, however, after the delivery of
the initial Borrowing Base Report with an attached appraisal report, subsequent
Borrowing Base Reports need not attach the same appraisal report but may merely
state that the prior appraisal report is incorporated by reference or language to
similar effect. The first Borrowing Base Report delivered after delivery of an
updated appraisal pursuant to Section 6.02(e) or (f) shall have attached to it such
updated appraisal report, but subsequent Borrowing Base Reports shall be subject to
the same delivery requirements as are specified in the preceding sentence, until
delivery of a subsequent updated appraisal report.”

1.8 Section 7.14. Section 7.14 of the Credit Agreement is amended by deleting the
figure “$120,000,000” and substituting the figure “$85,000,000”.

1.9 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 June 30, 2010
	 	2.00 to 1.00
	 
	 	 
	For fiscal quarters beginning on or after July 1, 2010
	 	2.75 to 1.00

1.10 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
	 
	 	 
	From the fiscal quarter beginning on April 1, 2009 through
the fiscal quarter ending on June 30, 2010
	 	4.75 to 1.00
	 
	 	 
	For fiscal quarters beginning on or after July 1, 2010
	 	4.00 to 1.00

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1.11 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.

1.12 Exhibit E. Exhibit E Form of Borrowing Base Report attached hereto as
Supplemental Exhibit E shall be added as an exhibit to the Credit Agreement as Exhibit E.

Paragraph 2. Effective Date. This Amendment shall not become effective until the date
(such date, the “Third 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) payment on the Third Amendment Effective Date to the Administrative Agent of a fifty (50)
basis point amendment fee calculated on the Aggregate Revolving Commitment in effect on the Third
Amendment Effective Date which fee will be shared among each Lender timely approving the Third
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 Third Amendment Effective Date;

(d) evidence satisfactory to the Administrative Agent that any necessary consents to the
transactions contemplated in this Amendment from the holders of the Senior Unsecured Notes has been
obtained and is in full force and effect;

(e) a Borrowing Base Report from a Responsible Officer of the Borrower as of the most recent
month end preceding the Third Amendment Effective Date; and

(f) 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.

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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 Third 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.

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.

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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. 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 Third Amendment Effective Date.

Remainder of Page Intentionally Blank

Signature Pages to Follow.

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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 	 

Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature Page 1

 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	GUARANTORS:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	AirComp LLC	 	 	 	Allis-Chalmers Drilling LLC
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Victor M. Perez
 

Victor M. Perez
	 	 
	 	By:
	 	/s/ 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	 	 

Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature Page 2

 

 

 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:

ROYAL BANK OF CANADA,

as Administrative Agent and Collateral Agent

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

Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature Page 3

 

 

 

	 	 	 	 	 
	 	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 	 
	 

			
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature Page 4

 

 

 

	 	 	 	 	 
	 	LENDER:

CATERPILLAR FINANCIAL

SERVICES CORPORATION, as Lender

 	 
	 	By:  	/s/ Michael M. Ward
 	 
	 	 	Name:  	Michael M. Ward 	 
	 	 	Title:  	Credit and Operations Manager—Syndications 	 

	 	 	 
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature Page 5

 

 

 

	 	 	 	 	 
	 	LENDER:

JPMORGAN CHASE BANK, N.A.

as a Lender

 	 
	 	By:  	/s/ Thomas E. Okamoto
 	 
	 	 	Name:  	Thomas E. Okamoto 	 
	 	 	Title:  	Vice President 	 
	 

			
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature Page 6

 

 

 

	 	 	 	 	 
	 	LENDER:

WELLS FARGO BANK, N.A.

as a Lender

 	 
	 	By:  	/s/ Donald W. Herrick, Jr.
 	 
	 	 	Name:  	Donald W. Herrick, Jr. 	 
	 	 	Title:  	Vice President 	 
	 

			
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature 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 	 
	 

			
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Signature Page 8

 

 

 

	 	 	 	 	 
	 	LENDER:

WHITNEY NATIONAL BANK,

as a Lender

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

			
	 
	 	Third 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]

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.

			
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Supplemental Exhibit C Page 1

 

 

 

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:  	 	 
	 

			
	 
	 	Third 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 $2,000,000)
	 	$	                    	 
	 
	 	 	 	 
	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)
	 	 	 	 
	 
	 	 	 	 
	II. Section 7.19(a) — Interest Coverage Ratio
	 	 	 	 
	 
	 	 	 	 
	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”):
	 	$	                    	 

			
	 
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Supplemental Exhibit C Page 3

 

 

 

	 	 	 	 	 
	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?

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 June 30, 2010?

Is ratio of II.A. to II.B. at least 2.75 to 1.0 for
fiscal quarters ending on or after July 31, 2010?
	 	Yes/No	 
	 
	 	 	 	 
	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
	 	 	 	 
	 
	 	 	 	 
	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.
	 	$	                    	 

			

	 
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Supplemental Exhibit C Page 4

 

 

 

	 	 	 	 	 
	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?

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 June 30, 2010?

Is ratio of IV.D. to IV.E. no more than 4.00 to 1.0 for
fiscal quarters ending on or after July 31, 2010?
	 	Yes/No	 
	 
	 	 	 	 
	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	 

			
	 
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Supplemental Exhibit C Page 5

 

 

 

SUPPLEMENTAL EXHIBIT E

FORM OF BORROWING BASE REPORT

(Pursuant to Section 6.02(j) of the Agreement)

Borrowing Base Report

ALLIS-CHALMERS ENERGY INC.

Monthly Borrowing Base Report

For the Month Ending                     

Calculation of Monthly Borrowing Base and Excess Revolver Facility Availability

	 	 	 	 	 	 	 	 	 	 	 	 	 
	A. Orderly liquidation value of Borrower’s and Subsidiaries’ domestic fixed assets (as
determined by the most recently delivered asset appraisals delivered to
Administrative Agent pursuant to Section 6.02(e) or (f) of the Credit Agreement).
	 	$	                    	 	 	X	 25	%	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	B. Eligible Accounts Receivable
	 	$	                    	 	 	X	80	%	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	C. Total of the orderly liquidation value of Borrower’s and Subsidiaries’ domestic
fixed assets (as determined by the most recently delivered asset appraisals delivered
to Administrative Agent pursuant to Section 6.02(e) or (f) of the Credit Agreement)
and Eligible Accounts Receivable (A+B)
	 	 	 	 	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	D. Borrowing Base (lower of (i) C and (ii) Revolving Commitment)
	 	 	 	 	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	E. Outstanding Amount of Revolving Loans
	 	 	 	 	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	F. Outstanding Amount of L/C Obligations
	 	 	 	 	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	G. Revolver Facility Usage (E+F)
	 	 	 	 	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	H. Excess Revolver Facility Availability (D minus G)
	 	 	 	 	 	 	 	 	 	$	                    	 

- BORROWER CERTIFICATION -

Attached hereto as Schedule 1 is (i) a detailed aged schedule of all Accounts Receivable as of
the date specified in this Borrowing Base Report, listing face amounts and dates of invoices of
each such Accounts Receivable and the name and address of each account debtor obligated on such
Accounts Receivable (and, if requested by Administrative Agent, copies of invoices, credit reports,
and any other matters and information relating to the Accounts Receivable) and (ii) a detailed aged
schedule of all Eligible Accounts Receivable as of the date specified in this Borrowing Base
Report, listing face amounts and dates of invoices of each such Accounts Receivable and the name
and address of each account debtor obligated on such Accounts Receivable.

			
	 
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Supplemental Exhibit E – Page 1

 

 

 

Attached hereto as Schedule 2 is an appraisal report dated within the most recent 12 month
period, setting forth the orderly liquidation value of Borrower’s and Subsidiaries’ domestic fixed
assets.

The undersigned hereby warrants to Royal Bank of Canada, as Administrative Agent, that this
Borrowing Base Report is a correct statement regarding the Accounts Receivable of Borrower and its
Domestic Subsidiaries and that the reconciliation figures are fully and correctly set forth.
Capitalized terms used but not defined herein shall have the meanings given such terms in the
Second Amended and Restated Credit Agreement dated April 26, 2007 among Allis-Chalmers Energy Inc.,
the lenders party thereto and Royal Bank of Canada, as Administrative Agent.

	 	 	 	 	 
	 	ALLIS-CHALMERS ENERGY INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

			
	 
	 	Third Amendment to Allis-Chalmers

Energy Credit Agreement

Supplemental Exhibit E – Page 2exhibit101.htm

    INDEPENDENT DIRECTOR
AGREEMENT

     

    THIS INDEPENDENT DIRECTOR
AGREEMENT is made effective as of April 6, 2009 (“Agreement”)
between AMERICAN NANO SILICON
TECHNOLOGIES, INC., a California corporation (“Company”),
and Robert
J. Fanella (“Director”).

     

    WHEREAS, it is essential to
the Company to attract and retain  as directors the most capable
persons available to serve on the board of directors of the Company (the “Board”);
and

     

    WHEREAS, the Company believes
that Director possesses the necessary qualifications and abilities to serve as a
director of the Company and to perform the functions and meet the Company’s
needs related to its Board.

     

    NOW, THEREFORE, the parties
agree as follows:

     

    1.    Service
as Director.
Director will serve as a director of the Company and perform all duties as a
director of the Company, including without limitation (1) attending
meetings of the Board, (2) serving as the Audit Committee Chairperson along
with other committees of the Board (each a “Committee”)
and attending meetings of each Committee of which Director is a member,
(3) using reasonable efforts to promote the business of the Company. The
Company currently intends to meet on the first Wednesday of each quarter except
January, together with additional meetings of the Board and Committees as may be
required by the business and affairs of the Company.

      

    2.    Compensation and
Expenses.

     

    
      (a)    Retainer.    The
Company will pay to Director an annual retainer (the “Retainer”)
of $10,000 cash plus $40,000 in the form of restricted shares of the Company’s
common stock, calculated on the average closing price per share for the five (5)
trading days preceding and including the date stock is issued. The Board
reserves the right to increase the Retainer from time to time, but may not
reduce the Retainer below the amounts stated above. If Director’s service on the
Board or any Committee ends prior to completion of one year, as measured from
the effective date, and each succeeding anniversary of the effective date, the
Retainer for that year will be prorated on a per diem basis as appropriate to
reflect the portion of the year during which services were
rendered.

    

     

    (b)    Expenses.    The
Company will reimburse Director for all reasonable, out-of-pocket expenses,
approved by the Company in advance, incurred in connection with the performance
of Director’s duties under this Agreement (“Expenses”).

    

    (c)    Other
Benefits.    The
Board may from time to time authorize additional compensation and benefits for
Director, including stock options or restricted stock.

     

        (d)  
Payments, The Company will pay the cash portion of the
Retainer in two equal installments following the close of six and twelve months
service of each year, measured from the Effective Date of the Agreement, and so
forth in six month intervals. The Restricted Share portion of the Retainer
shall also be issued in two equal installments, the number of shares for the
entire restricted stock portion of the retainer will be determined as of
the effective date. The "dates of issue" for the restricted stock for the
first installment will be the effective date of this agreement and the second
installment will be the date six months after the effective date, and so forth
in six month intervals.  The Company will pay for Expenses as incurred upon
submission of receipts and a request for payment.  The Company may withhold
from any payment any amount of withholding required by law.3.    Amendments
and Waiver.    No
supplement, modification or amendment of this Agreement will be binding unless
executed in writing by both parties. No waiver of any provision of this
Agreement on a particular occasion will be deemed or will constitute a waiver of
that provision on a subsequent occasion or a waiver of any other provision of
this Agreement.

     

    4.    Binding
Effect.    This
Agreement will be binding upon and inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.

     

    5.    Severability.    The
provisions of this Agreement are severable, and any provision of this Agreement
that is held by a court of competent jurisdiction to be invalid, void, or
otherwise unenforceable in any respect will not affect the validity or
enforceability of any other provision of this Agreement.

     

    6.    Governing
Law.    This
Agreement will be governed by and construed and enforced in accordance with the
laws of the State of  California applicable to contracts made and to
be performed in that state without giving effect to the principles of conflicts
of laws.

     

    IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date shown above.

     

    
    

     

    
      	 AMERICAN NANO SILICON TECHNOLOGIES,
      INC.	 	 DIRECTOR:
	 	 	 
	 By:         
      /s/Pu
      Fachun	 	 By:       
      /s/Robert J.
      Fanella
	 Name:   
      Pu Fachun	 	 Name:  
      Robert J Fanella
	 Title:     
      Chief Executive Officer	 	 
	 Date:     
      April 6, 2009	 	 Date:    
      April 6, 2009

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