Document:

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                                                                   EXHIBIT 10.49

                           STOCK AND WARRANT PURCHASE
                                    AGREEMENT

                                  BY AND AMONG

                           ALLIS-CHALMERS CORPORATION,

                                  DONALD ENGEL
                      ENGEL INVESTORS DEFINED BENEFIT PLAN
                                CHRISTOPHER ENGEL
                                   RER CORP.,
                                LEONARD TOBOROFF

            --------------------------------------------------------

                               DATED APRIL 2, 2004

            --------------------------------------------------------

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                      STOCK AND WARRANT PURCHASE AGREEMENT

         This STOCK AND WARRANT PURCHASE AGREEMENT (this "Agreement"), dated
April 2, 2004, is made by and among Allis-Chalmers Corporation, a Delaware
corporation ("A-C"), Donald Engel, Engel Purchaser Defined Benefit Plan and
Christopher Engel (collectively "Engel"), RER Corp., a Michigan corporation
("Nederlander"), and Leonard Toboroff ("Toboroff, and, with Engel and
Nederlander, the "Purchasers").

                                    RECITALS

         WHEREAS, A-C proposes to issue and sell to Purchasers, and Purchasers
desire to purchase from A-C, shares of A-C's common stock, par value $0.15 per
share (the "Common Stock"), and warrants to purchase shares of the Common Stock.

         WHEREAS, it is a condition of the consummation of the transactions
contemplated hereby that A-C concurrently obtain an extension of certain of its
loan obligations and that it convert all of the outstanding shares of A-C's
Series A 10% Cumulative Convertible Preferred Stock (the "Preferred Stock") held
by Energy Spectrum Partners LP ("Energy Spectrum") into Common Stock, pursuant
to the terms of a Preferred Stock Conversion Agreement (the "Conversion
Agreement") in the form of Exhibit A hereto;

         WHEREAS, it is a condition of the consummation of the transactions
contemplated hereby that A-C, the Purchasers and Energy Spectrum and others,
simultaneously with the Closing (as defined herein): (1) enter into a
Stockholders Agreement with respect to the governance of the affairs of A-C, and
other matters (the "Stockholders Agreement"), a copy of which is attached to
this Agreement as Exhibit B hereto, and (2) enter into a Registration Rights
Agreement with respect to the Common Stock of A-C (the "Registration Rights
Agreement"), a copy of which is attached to this Agreement as Exhibit C hereto;

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

         1.       PURCHASE

         1.1 PURCHASE AND SALE OF STOCK AND WARRANT. Subject to the terms and
conditions of this Agreement, A-C will issue and sell to each Purchaser the
number of shares of its authorized but unissued Common Stock (the "Shares") set
forth in Schedule 1.1 hereto, at a price per share equal to $0.50, and will
issue and sell to each Purchaser a warrant in the form of Exhibit C hereto

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(each, a "Warrant" and collectively the "Warrants") to acquire the number of
shares set forth on Schedule 1.1 hereto for the Purchase Price set forth as
Schedule 1.1 hereto. The closing (the "Closing") of the sale of the Shares and
the Warrants shall be effected by exchange of electronic documents signature
pages on April 2, 2004, or on such other date as may be agreed upon in writing
by Purchasers and A-C (the "Closing Date"). The purchase price for the Shares
and the Warrants will be wire transferred by each Purchaser to A-C on the
Closing Date in same-day funds. A-C shall deliver original certificates
representing the Shares and Warrants sold to Purchasers within two business days
following the Closing Date.

         1.3 FORM OF CERTIFICATES. The Purchasers (as hereinafter defined) agree
to the imprinting, so long as required by law, of a legend on certificates
representing all of the Warrants and Common Shares to the following effect:

         "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
         SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION
         REQUIREMENTS OF SUCH ACT OR SUCH LAWS."

         2. CONVERSION; DELIVERY OF OTHER AGREEMENTS. At the Closing, (a) A-C
shall execute and deliver (and shall use its best efforts to cause each other
party thereto other than Purchasers to execute and deliver) to each Purchaser
the Registration Rights Agreement and the Stockholders Agreement, executed by
A-C and each party thereto other than the Purchasers and and (b) each Purchaser
shall execute and deliver to A-C and each other party thereto the Registration
Rights Agreement and the Stockholders Agreement. In addition, A-C shall use its
best efforts to consummate the transactions contemplated by the Conversion
Agreement.

         3. REPRESENTATIONS AND WARRANTIES OF A-C. A-C hereby makes the
following representations and warranties to the Purchasers:

         3.1 ORGANIZATION, ETC. A-C is a corporation, duly organized and validly
existing and in good standing under the laws of the State of Delaware, and is
qualified or licensed to do business and is in good standing as a foreign
corporation in each other jurisdictions in which the conduct of its business or
the ownership of property requires such qualification or licensing, except where
failure to be so qualified or licensed would not have a material adverse effect
on the financial condition or operations of A-C and its Subsidiaries (as defined
below), taken as a whole (for A-C and its Subsidiaries, a "Material Adverse
Effect"). Each company (each, a "Subsidiary") listed on SCHEDULE 3.1 hereof is
duly organized and validly existing and in good standing under the laws of the
jurisdiction of its organization, and is qualified or licensed to do business
and is in good standing as a foreign corporation in each other jurisdiction in
which the conduct of its business or the ownership of property requires such

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qualification or licensing, except where failure to be so qualified or licensed
would not have a Material Adverse Effect on A-C. Except for the Subsidiaries,
A-C does not own, of record or beneficially, the securities of any other entity.
True and correct copies of the Certificate of Incorporation and Bylaws of A-C,
as currently in effect, are among the documents (the "Commission Documents")
that have been filed with the Securities and Exchange Commission (the "SEC") and
are available on the SEC's website (WWW.SEC.GOV) (CIK No. 0000003982).

         3.2 AUTHORITY. A-C has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder, and such action
has been duly authorized by all necessary action of A-C's Board of Directors.
The issuance and sale of the Common Stock and the issuance of the Warrants has
been duly authorized and if, as and when delivered to the Purchasers, the Common
Stock issued at the Closing and upon the exercise of the Warrants will be duly
and validly issued and outstanding, fully paid and non-assessable and will be
free of any Encumbrance (as defined below), other than those imposed pursuant to
this Agreement and the Warrants and securities laws of general application. As
used in this Agreement, "Encumbrance" shall mean any claim, lien, pledge,
option, charge, easement, security interest, deed of trust, mortgage, right of
way, encroachment, private building or use restriction, conditional sales
agreement, encumbrance or other right of third parties, whether voluntarily
incurred or arising by operation of law, and includes, without limitation, any
agreement to give any of the foregoing in the future, and any contingent sale or
other title.

         3.3 ENFORCEABILITY. Each of this Agreement, the Warrants, the
Stockholders Agreement and the Registration Rights Agreement (collectively, the
"Transaction Documents") has been duly executed and delivered by A-C and
constitutes a legal, valid and binding agreement and obligation of A-C
enforceable against it in accordance with its terms subject to: (i) judicial
principles respecting election of remedies or limiting the availability of
specific performance, injunctive relief, or other equitable remedies; (ii)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect generally relating to or affecting creditors' rights; and
(iii) public policy concerns (including, without limitation, the ability of a
court to refuse to enforce unconscionable covenants, indemnification provisions
or similar provisions).

         3.4 NO VIOLATION. Except as set forth on SCHEDULE 3.4, the execution
and the delivery by A-C of the Transaction Documents does not and will not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in a violation of, or (iv) require
any authorization, consent or approval not heretofore obtained pursuant to, any
binding written or oral agreement or instrument including, without limitation,
any charter, bylaw, trust instrument, indenture or evidence of indebtedness,
lease, contract or other obligation or commitment (each, a "Contractual
Obligation") binding upon A-C or any Subsidiary or any of their properties or
assets, or any law, rule, regulation, restriction, order, writ, judgment, award,
determination, injunction or decree of any court or government, or any decision
or ruling of any arbitrator (each, a "Requirement of Law") binding upon or
applicable to A-C or any Subsidiary or any of their properties or assets.

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         3.5 LITIGATION. Except as set forth in SCHEDULE 3.5 or the Commission
Documents, there are no pending or overtly threatened actions, claims, orders,
decrees, investigations, suits or proceedings by or before any governmental
authority, arbitrator, court or administrative agency which would have a
Material Adverse Effect.

         3.6 CAPITALIZATION. The authorized capital stock of A-C consists of
100,000,000 shares of Common Stock, par value $0.15 per share, 19,633,340 shares
of which have been validly issued and are outstanding as of the date hereof (and
such issued shares are fully paid and non-assessable), and 10,000,000 shares of
preferred stock, par value $0.01 per share, of which 3,500,000 shares of
Preferred Stock have been issued and are outstanding on the date hereof (and
such issued shares are fully paid and non-assessable). Except as set forth on
SCHEDULE 3.6, A-C owns 100% of the capital stock of each of the Subsidiaries.
Except as set forth on SCHEDULE 3.6 hereto, there do not exist any other
authorized or outstanding securities, options, warrants, calls, commitments,
rights to subscribe or other instruments, agreements or rights of any character,
or any pre-emptive rights, convertible into or exchangeable for, or requiring or
relating to the issuance, transfer or sale of, any shares of capital stock or
other securities of A-C or any Subsidiary.

         3.7 ANNUAL REPORT; FINANCIAL STATEMENTS. A-C's Annual Report on Form
10-K for the years ended December 31, 2001 and December 31, 2002 and Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2003, June 30, 2003 and
September 30, 2003 (the "Reports") have been filed with the SEC and the Reports
complied in all material respects with the rules of the SEC applicable to such
Reports on the date filed with the SEC, and the Reports did not contain, on the
date of filing with the SEC, any untrue statement of a material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not materially misleading. The
Reports have not been amended, nor as of the date hereof has A-C filed any
report on Form 8-K since September 30, 2003 other than a Form 8-K filed November
21, 2003. All of the consolidated financial statements included in the Reports
(the "A-C Financial Statements"): (i) have been prepared from and on the basis
of, and are in accordance with, the books and records of A-C and with generally
accepted accounting principles applied on a basis consistent with prior
accounting periods; (ii) fairly and accurately present in all material respects
the consolidated financial condition of A-C as of the date of each such A-C
Financial Statement and the results of its operations for the periods therein
specified; and (iii), in the case of the annual financial statements, are
accompanied by the audit opinion of A-C's independent public accountants. Except
as set forth in SCHEDULE 3.7 or in the A-C Financial Statements, as of the date
hereof, A-C has no liabilities other than (i) liabilities which are reflected or
reserved against in the A-C Financial Statements and which remain outstanding
and undischarged as of the date hereof, (ii) liabilities arising in the ordinary
course of business of A-C since September 30, 2003, (iii) liabilities incurred
as a result of the transactions contemplated by the Transaction Documents or
(iv) liabilities which were not required by generally accepted accounting
principles to be reflected or reserved on the A-C Financial Statements. Since
September 30, 2003, except as set forth on SCHEDULE 3.7 hereto, there has not
been any event or change which has or will have a Material Adverse Effect and
A-C has no knowledge of any event or circumstance that would reasonably be
expected to result in such a Material Adverse Effect.

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         3.8 [INTENTIONALLY LEFT BLANK]

         3.9 INCOME TAX RETURNS. A-C and the Subsidiaries have filed all federal
and state income tax returns which are required to be filed, and have paid, or
made provision for the payment of, all taxes which have become due pursuant to
said returns or pursuant to any assessment received by A-C or any Subsidiary,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. A-C has no knowledge of any pending
assessments or adjustments of the income tax payable of A-C or its Subsidiaries
with respect to any year.

         3.10 PERMITS, COMPLIANCE WITH LAW. A-C and each Subsidiary possesses,
and will hereafter possess, all permits, consents, approvals, franchises and
licenses required and rights to all trademarks, trade names, patents, and
fictitious names, if any, necessary to enable them to conduct the business in
which it is now engaged in compliance with applicable law, except where failure
to do so would not have a Material Adverse Effect. A-C and each Subsidiary are
in compliance with all Requirements of Law in the conduct of its business and
corporate affairs, except where failure to comply, singly or in the aggregate,
would not have a Material Adverse Effect.

         3.11 ERISA. Except as set forth on SCHEDULE 3.11, A-C and each
Subsidiary is in compliance in all material respects with all applicable
provisions of ERISA; A-C and each Subsidiary has not violated any provision of
any Plan maintained or contributed to by it; no Reportable Event as defined in
ERISA has occurred and is continuing with respect to any Plan initiated by A-C
or any Subsidiary; A-C and each Subsidiary has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles. SCHEDULE 3.11
describes each Plan maintained by A-C and each of its Subsidiaries.

         3.12 CONTRACTS. SCHEDULE 3.12 sets forth a description of each
Contractual Obligation not included in the Commission Documents which provides
for payments to or by A-C or any Subsidiary in excess of $25,000, or is
otherwise material to the operations of A-C or any Subsidiary. Except as set
forth on Schedule 3.4, neither A-C nor any Subsidiary is in default on any
Contractual Obligation, except for such defaults which would not have a Material
Adverse Effect.

         3.13 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE 3.13, since
January 1, 1989, A-C and its subsidiaries (including the Subsidiaries) have at
all times been in compliance in all material respects with all applicable
Environmental Laws. Except as described in the Commission Documents or as set
forth on SCHEDULE 3.13, none of the operations of A-C or any Subsidiary is the
subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of any
toxic or hazardous waste or substance into the environment. To A-C's knowledge,

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except as set forth on SCHEDULE 3.13, neither A-C nor any Subsidiary has
received notice of any actual or threatened claim, investigation, proceeding,
order or decree in connection with any release of any toxic or hazardous waste
or substance into the environment. This Section 3.13 shall be the sole
representation and warranty of A-C concerning environmental matters, and no
other representation and warranty in the Transaction Documents shall apply to
environmental matters.

         3.14 TRADEMARKS, ETC. A-C and the Subsidiaries own, have sufficient
title to, or have the right to use (or can obtain the right to use on reasonable
commercial terms), all patents, trademarks, service marks, trade names,
copyrights, licenses, trade secrets or other proprietary rights (collectively,
the "Proprietary Rights") necessary to their business as now conducted without
infringing upon the right of any person. Except for employee confidentiality
agreements with employees and consultants, there are no outstanding material
options, licenses or agreements relating to intellectual property rights of A-C
or any Subsidiary necessary to their business as now conducted, nor is A-C or
any Subsidiary bound by or a party to any material options, licenses or
agreements with respect to the Proprietary Rights of any other person or entity.
Neither A-C nor any Subsidiary has received any communications alleging that A-C
has violated or, by conducting its business as proposed, would violate, any of
the Proprietary Rights of any other person or entity. A-C and the Subsidiaries
are not aware of any material violation by a third party of any of their
Proprietary Rights necessary to their business as now conducted.

         3.15 REAL PROPERTY. SCHEDULE 3.15 sets forth all of the real property
which is owned and/or leased by each of A-C and the Subsidiaries (collectively,
the "Real Property"). The Real Property constitutes all of the real property now
used in and necessary for the conduct of the business of A-C and the
Subsidiaries as presently conducted. A-C has delivered to Purchasers true and
complete copies of all leases relating to such properties (the "Leases"). The
Leases are in full force and effect and are valid, binding, and enforceable in
accordance with their terms, and no event of default has occurred which (whether
with or without notice, lapse of time or both or the happening or occurrence of
any other event) would constitute a default on the part of any party.

         Except as set forth in SCHEDULE 3.15, all real property, buildings and
structures owned or used by A-C and the Subsidiaries are in good condition and
suitable for the purpose or purposes for which it is being used, reasonable wear
and tear excepted, and is in such condition and repair as to permit the
continued operation of said businesses. None of the Real Property, buildings or
structures is in need of material maintenance or repairs except for ordinary,
routine maintenance and repairs.

         3.16 EMPLOYEES. Except as set forth on SCHEDULE 3.16, all employees of
A-C and each Subsidiary are employed "at will" and may be terminated without
payment of severance or incurrence of any other liability of A-C or the
Subsidiaries; no employee of A-C is in violation of any term of any material
employment contract, confidentiality agreement or any other material Contractual
Obligation relating to the right of any such employee to be employed by A-C or
any Subsidiary; and neither A-C nor any Subsidiary has any employee severance

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agreement covering any of its employees. There are no labor disputes or union
organization activities pending or threatened between A-C or the Subsidiaries
and their employees. A-C and the Subsidiaries require each employee and
consultant to execute an employee inventions and proprietary rights assignment
and confidentiality agreement, and copies of such agreements have been made
available to Purchasers.

         3.17 INSURANCE. A-C and the Subsidiaries currently maintain, in full
force and effect, all insurance policies that are reasonably required to be
maintained for the conduct of its business or the ownership of its properties
(both real and personal) (collectively, the "Insurance Policies"). A-C (a) is
not in default regarding the provisions of any Insurance Policy; (b) has paid
all premiums due thereunder; and (c) has not failed to present any notice or
material claim thereunder in a due and timely fashion. The coverage provided by
the Insurance Policies, with respect to any insured act or event occurring on or
prior the Effective Date, will not in any way be affected by or terminate or
lapse by reason of the transactions contemplated hereby. SCHEDULE 3.17 sets
forth a listing of all policies maintained by A-C and a listing, by policy, of
all outstanding claims and the amount thereof made by A-C under each such
policy.

         3.18 [INTENTIONALLY LEFT BLANK]

         3.19 TITLE TO PROPERTIES. The assets owned or leased by A-C and its
Subsidiaries are all of the assets necessary to conduct the business of A-C and
its Subsidiaries as currently being conducted. A-C and its Subsidiaries have
good and marketable title to substantially all of the assets they own, real and
personal, movable and immovable, tangible and intangible, free and clear of all
Encumbrances, except for: (a) liens for taxes not yet due and payable, (b)
Encumbrances described on SCHEDULE 4.19 hereto, or (c) minor imperfections of
title and encumbrances, if any, which (i) are not substantial in amount, (ii) do
not detract from the value of the property subject thereto, impair the
operations of the business of A-C, or the use or license of certain of the
assets of A-C, and (iii) have arisen in the ordinary course of business
consistent with past practice.

         3.20 RELATED PARTY TRANSACTIONS. Except for those contracts described
in the Commission Documents or on SCHEDULE 3.20 hereto, no existing Contractual
Obligation of A-C or its Subsidiaries is with or for the direct benefit of (i)
any party owning, or formerly owning, beneficially or of record, directly or
indirectly, in excess of five percent (5%) of the outstanding capital stock of
A-C, (ii) any director, officer or similar representative of A-C, (iii) any
natural person related by blood, adoption or marriage to any party described in
(i) or (ii), or (iv) any entity in which any of the foregoing parties has,
directly or indirectly, at least a five percent (5%) beneficial interest (a
"Related Party"). Without limiting the generality of the foregoing, no Related
Party, directly or indirectly, owns or controls any material assets or material
properties which are used in A-C's business and to the knowledge of A-C, no
Related Party, directly or indirectly, engages in or has any significant
interest in or connection with any business which is, or has been within the
last two years, a competitor, customer or supplier of A-C or has done business
with A-C or which currently sells or provides products or services which are
similar or related to the products or services sold or provided in connection
with the Business.

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         3.21 BROKERS. The transactions contemplated hereby have been carried
out by A-C directly with the Purchasers without the intervention of any person
on behalf of A-C in such manner as to give rise to any valid claim against A-C
for a finder's fee, brokerage commission or similar payment.

         3.22 SECURITIES LAW MATTERS. To the best of its knowledge and except
for A-C's failure to hold annual meetings of its stockholders, since January 1,
1999 A-C has filed all reports, registration statements, proxy statements and
other materials, together with any amendments required to be made with respect
thereto, that were required to be filed with (i) the SEC under the Securities
Act of 1933, as amended (the "Securities Act"), or the Exchange Act of 1934, as
amended (the "Exchange Act"), and (ii) any applicable state securities
authorities. To the knowledge of A-C, no such Commission Filing, as of the date
it was filed, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Subject
to the accuracy of the representations and warranties of the Purchasers set
forth in Section 4, the offer, sale and issuance of the Shares and the Warrants
to the Purchasers, and the issuance of Common Stock upon exercise of the
Warrants in accordance with the terms of the Warrants, will be exempt from the
Securities Act.

         3.23 NO ANTI-DILUTION RIGHTS. Except as set forth on Schedule 3.23, the
transactions contemplated hereby will not trigger any anti-dilution provisions
contained in any existing agreements.

         3.24 FULL DISCLOSURE. No representation, warranty, schedule or
certificate of A-C made or delivered pursuant to the Transaction Documents
contains or will contain any untrue statement of fact, or omits or will omit to
state a material fact the absence of which makes such representation, warranty
or other statement misleading.

         4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each Purchaser,
severally and not jointly, hereby makes the following representations and
warranties as to such Purchaser:

         4.1 ORGANIZATION. Purchaser, if not a natural person, is a duly
organized and validly existing and in good standing under the laws of the state
of its organization.

         4.2 AUTHORITY. Purchaser has the corporate or other authority to
execute and deliver the Transaction Documents to which such Purchaser is a party
and to perform its obligations hereunder.

         4.3 NO VIOLATION. The execution and the delivery by Purchaser of the
Transaction Documents to which such Purchaser is a party, and its purchase of
the Shares and the Warrants and the consummation of the transactions
contemplated hereby or to be effected concurrently herewith do not and will not

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(a) conflict with or result in a breach of the terms, conditions or provisions
of, (b) constitute a default under, (c) result in a violation of, or (d) require
any authorization, consent or approval not heretofore obtained pursuant to, any
Contractual Obligation or Requirement of Law to which Purchaser is a party or is
otherwise subject.

         4.4 ENFORCEABILITY. This Agreement constitutes the legal, valid and
binding obligation of Purchaser and is enforceable against Purchaser in
accordance with its terms, subject to: (i) judicial principles respecting
election of remedies or limiting the availability of specific performance,
injunctive relief, or other equitable remedies; (ii) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
generally relating to or affecting creditors' rights; and (iii) public policy
concerns (including, without limitation, the ability of a court to refuse to
enforce unconscionable covenants, indemnification provisions or similar
provisions).

         4.5 INVESTMENT INTENT. Purchaser is acquiring the Shares and/or the
Warrants for its own account for investment and not with a view to, or for
resale in connection with, any "distribution" thereof for purposes of the
Securities Act. Purchaser is an "accredited investor" as such term is defined in
Regulation D under the Securities Act. Purchaser acknowledges that the Shares
and Warrants shall be "restricted securities" within the meaning of Rule 144
("Rule 144") under the Securities Act, will contain a transfer restriction
legend and may only be resold pursuant to an effective registration statement
filed with the SEC under the Securities Act, or pursuant to Rule 144 or another
valid exemption from the registration requirements of the Act as established by
an opinion of counsel reasonably acceptable to A-C.

         4.6 INVESTIGATION. Purchaser is familiar with, and has been given full
access by A-C to all information concerning the business and financial
condition, properties, operations and prospects of A-C that Purchaser has deemed
relevant for purposes of making the investment contemplated by this Agreement.
By reason of Purchaser's knowledge and experience in financial and business
matters in general, the business of A-C and investments of the type contemplated
by this Agreement in particular, Purchaser is capable of evaluating the merits
and risks of making the investment in the Shares and/or the Warrants and is able
to bear the economic risk of the investment (including a complete loss of its
investment in the Shares and/or the Warrants). Subject to the truth and accuracy
of the representations and warranties made by A-C hereunder, Purchaser has
conducted such investigation as it deems relevant in connection with its
consummation of the transactions contemplated by this Agreement.

         5. CONDITIONS TO THE OBLIGATIONS OF A-C. The obligations of A-C to
consummate the transactions contemplated by this Agreement on the Closing Date
shall be subject to the satisfaction of each of the conditions set forth in this
Section 5, unless waived by A-C, on or prior to the Closing Date.

         5.1 REPRESENTATIONS AND WARRANTIES. If this Agreement is not signed on
the Closing Date, the representations and warranties of the Purchasers set forth
in Section 4 shall be true and correct in all material respects as of the
Closing Date as though made on and as of such date; Purchasers shall have
performed all obligations and complied with all covenants required to be

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performed or complied with by Purchasers under this Agreement on or prior to the
Closing Date; and A-C shall have received from each Purchaser a certificate to
such effect with respect to such Purchaser's representations, warranties,
obligations and covenants, dated the Closing Date, signed by an agent duly
authorized to act on its behalf.

         5.2 NO PROCEEDINGS. No order, injunction, decree or other action or
legal, administrative, arbitration or other proceeding by any person other than
A-C or investigation by any governmental agency or authority shall be pending or
threatened, challenging or imposing a material limitation on the execution,
delivery or performance of the Transaction Documents, or the consummation of any
of the transactions contemplated hereby.

         5.3 CONVERSION; EXECUTION AND DELIVERY OF OTHER AGREEMENTS. The
Purchasers and the other parties thereto other than A-C shall execute and
deliver the agreements described in Section 2 that are intended to be executed
and delivered at the Closing.

         5.4 APPROVAL OF DOCUMENTS. All proceedings taken in connection with the
transactions contemplated hereby and all documents incident to such transactions
shall be reasonably satisfactory in form and substance to A-C and its counsel.

         6. CONDITIONS TO THE OBLIGATIONS OF PURCHASERS. The obligations of each
Purchaser to consummate the transactions under this Agreement on the Closing
Date shall be subject to the satisfaction of each of the conditions set forth in
this Section 6, unless waived by each Purchaser, on or prior to the Closing
Date.

         6.1 REPRESENTATIONS AND WARRANTIES. If this Agreement is not signed on
the Closing Date, the representations and warranties of A-C set forth in Section
2 shall be true and correct in all material respects as of the Closing Date as
though made on and as of such date; A-C shall have performed all obligations and
complied with all covenants required to be performed or complied with by A-C
under this Agreement on or prior to the Closing Date; and each Purchaser shall
have received on the Closing Date from A-C a certificate or certificates, dated
the Closing Date, to such effect, which certificate or certificates shall be
signed by an authorized officer of A-C.

         6.2 NO PROCEEDINGS. No order, injunction, decree or other action or
legal, administrative, arbitration or other proceeding by any person or
investigation by any governmental agency or authority shall be pending or, to
the knowledge of A-C, threatened, challenging or imposing a material limitation
on the execution, delivery or performance of this Transaction Documents, the
consummation of any of the transactions contemplated thereby or the operation by
A-C of its businesses as now conducted.

                                      -11-
<PAGE>

         6.3 APPROVAL OF DOCUMENTS. All proceedings taken in connection with the
transactions contemplated hereby and all documents incident to such transactions
shall be reasonably satisfactory in form and substance to each Purchaser and its
counsel.

         6.4 CONVERSION; DELIVERY OF OTHER AGREEMENTS. A-C and the other parties
thereto other than the Purchasers shall execute and deliver the agreements
described in Section 2 that are intended to be executed and delivered at the
Closing.

         6.5 EXTENSION OF MATURITY DATE ON FINANCING. Wells Fargo Business
Credit and Wells Fargo Energy Capital shall have granted an extension of the
maturity date of all senior debt and subordinated debt maturities for a period
of one year.

         6.7 NO MATERIAL ADVERSE CHANGE. Except as described in the Commission
Documents or in SCHEDULE 3.7, there shall have been no material adverse change,
nor shall any such change be threatened, in the Condition of A-C since September
30, 2003.

         6.8 OPERATION IN ORDINARY COURSE. Other than actions related to the
consummation of the transactions contemplated hereby, A-C shall have conducted
its business in the ordinary course from the date hereof to the Closing Date,
and no extraordinary or other material transactions not in the ordinary course
of business shall have occurred without the Purchasers' consent.

         7.       CERTAIN COVENANTS OF A-C.

         7.1 RESERVATION OF SHARES. The Company shall at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue or delivery upon exercise of the Warrants, such number of shares of Common
Stock as shall then be issuable or deliverable upon the exercise of all
Warrants. Such shares of Common Stock shall, when issued or delivered in
accordance with the terms of the Warrants, be duly and validly issued and fully
paid and non-assessable.

         7.2 REGISTRATION AND LISTING. If any shares of Common Stock required to
be reserved for purposes of exercise of the require registration with or
approval of any Governmental Authority under any federal or state or other
applicable law before such Common Stock may be issued or delivered, A-C will in
good faith and as expeditiously as possible endeavor to cause such Common Stock
to be duly registered or approved, as the case may be, unless such registration
or approval is required solely because of a breach of a Purchaser's
representation contained in Article 4. So long as the Common Stock is quoted on
the OTC Bulletin Board, NASDAQ or listed on any national securities exchange,
A-C will, if permitted by the rules of such system or exchange, quote or list
and keep quoted or listed on such system or exchange, upon official notice of
issuance, all Common Stock issuable or deliverable upon exercise of the
Warrants.

         8.       INDEMNIFICATION.

                                      -12-
<PAGE>

         8.1 INDEMNIFICATION BY A-C. In addition to all other sums due hereunder
or provided for in this Agreement, A-C agrees to indemnify and hold harmless the
Purchasers and their respective "Affiliates" (as defined in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act) and their respective
officers, directors, agents, representatives, employees, subsidiaries, partners
and controlling persons (each, an "indemnified party") from and against any and
all losses, claims, damages, expenses (including reasonable fees, disbursements
and other charges of counsel) or other liabilities ("Liabilities") resulting
from any breach of any covenant, agreement, representation or warranty of A-C in
this Agreement; PROVIDED, HOWEVER, that A-C shall not be liable under this
Section 8: (a) for any amount paid in settlement of claims without A-C's consent
(which consent shall not be unreasonably withheld) or (b) to the extent that it
is finally judicially determined that such Liabilities resulted primarily from
the willful misconduct or bad faith of such indemnified party; PROVIDED,
FURTHER, that if and to the extent that such indemnification is held, by final
judicial determination to be unenforceable, in whole or in part, for any reason,
A-C shall make the maximum contribution to the payment and satisfaction of such
indemnified Liability. Notwithstanding the foregoing, with respect to claims
made under this Section 8 for damages not resulting from an actual or threatened
third party claim ("Third Party Claims"), A-C shall not be obligated to provide
indemnity hereunder until the aggregate of all such claims for indemnification
made by the Purchasers (excluding damage for Third Party Claims) exceeds
$200,000, and then shall be obligated to provide indemnity hereunder only to the
extent the damages exceed $200,000. In connection with the obligation of A-C to
indemnify for expenses as set forth above, A-C further agrees to reimburse each
indemnified party for all such expenses (including reasonable fees,
disbursements and other charges of counsel) as they are incurred by such
indemnified party; PROVIDED, HOWEVER, that if an indemnified party is reimbursed
hereunder for any expenses, such reimbursement of expenses shall be refunded to
the extent it is finally judicially determined that the Liabilities in question
resulted primarily from the willful misconduct or bad faith of such indemnified
party.

         8.2 NOTIFICATION; PROCEDURE. Each indemnified party under this Section
8 will, promptly after the receipt of notice of the commencement of any action
or other proceeding against such indemnified party in respect of which indemnity
may be sought from A-C under this Section 8, notify A-C in writing of the
commencement thereof. The omission of any indemnified party so to notify A-C of
any such action shall not relieve A-C from any liability which it may have to
such indemnified party (i) other than pursuant to this Section 8 or (ii) under
this Section 8 unless, and only to the extent that, such omission results in
A-C's forfeiture of substantive rights or defenses. In case any such action or
other proceeding shall be brought against any indemnified party and it shall
notify A-C of the commencement thereof, A-C shall be entitled to participate
therein and, to the extent that it may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER,
that any indemnified party may, at its own expense, retain separate counsel to
participate in such defense. Notwithstanding the foregoing, in any action or
proceeding in which both A-C and an indemnified party is, or is reasonably
likely to become, a party, such indemnified party shall have the right to employ
separate counsel at A-C's expense and to control its own defense of such action
or proceeding if, in the reasonable opinion of counsel to such indemnified
party, (a) there are or may be legal defenses available to such indemnified

                                      -13-
<PAGE>

party or to other indemnified parties that are different from or additional to
those available to A-C or (b) any conflict or potential conflict exists between
A-C and such indemnified party that would make such separate representation
advisable; PROVIDED, HOWEVER, that in no event shall A-C be required to pay fees
and expenses under this sentence of this Section 8 for more than one firm of
attorneys in any jurisdiction in any one legal action or group of related legal
actions. The Company agrees that A-C will not, without the prior written consent
of the Purchasers, settle, compromise or consent to the entry of any judgment in
any pending or threatened claim, action or proceeding relating to the matters
contemplated hereby (if any indemnified party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of the Purchasers and
each other indemnified party from all liability arising or that may arise out of
such claim, action or proceeding. The rights accorded to indemnified parties
hereunder shall be in addition to any rights that any indemnified party may have
at common law, by separate agreement or otherwise.

         8.3 REGISTRATION RIGHTS AGREEMENT. Notwithstanding anything to the
contrary in this Section 8, the indemnification and contribution provisions of
the Registration Rights Agreement shall govern any claim made with respect to
registration statements filed pursuant thereto or sales made thereunder.

         9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties and agreements made by A-C and Purchasers in this Agreement or in any
certificate or other instrument delivered pursuant hereto shall survive the
Closing and any investigation and discovery by A-C or by Purchasers, as the case
may be, made at any time with respect thereto; PROVIDED, HOWEVER, that, other
than with respect to the second sentence of Section 3.2 (for which there shall
be no time limit), neither Purchasers nor A-C shall have any liability to the
other for any misrepresentation, inaccuracy or omission in any representation or
warranty, or any breach of any representation or warranty, unless the party
asserting a claim with respect to any thereof gives to the other written notice
of such claim on or before the date which is two years following the Closing
Date.

         10.      MISCELLANEOUS PROVISIONS.

         10.1 DELIVERIES. A-C and Purchasers hereby covenant and agree to use
their respective best efforts to perform each of their obligations hereunder, to
deliver all certificates and to satisfy all other conditions set forth in this
Agreement and to close the transactions contemplated by this Agreement on the
Closing Date.

         10.2 SUCCESSORS AND ASSIGNS. This Agreement is executed by, and shall
be binding upon and inure to the benefit of, the parties hereto and each of
their respective successors and assigns; PROVIDED, HOWEVER, that neither this
Agreement nor any right pursuant hereto nor interest herein shall be assignable
by (a) A-C without the prior written consent of the Purchasers, except as
expressly permitted herein or (b) an Purchaser without the prior written consent
of A-C, except to an Affiliate of such Purchaser or as otherwise expressly
permitted herein. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any other person.

                                      -14-
<PAGE>

         10.3 NOTICES. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:

                           if to the Purchasers at the following address:

                           RER Corp
                           1450 Broadway
                           20th Floor
                           New York, NY  10022

                           with a copy to:

                           Swidler Berlin Shereff Friedman, LLP
                           405 Lexington Avenue
                           New York, NY  10174
                           Attn: Charles I. Weissman

                           Engel Investors Defined Benefit Plan
                           570 Park Avenue
                           New York, NY  10021

                           with a copy to:

                           Swidler Berlin Shereff Friedman, LLP
                           405 Lexington Avenue
                           New York, NY  10174
                           Attn: Charles I. Weissman

                           Donald Engel
                           570 Park Avenue
                           New York, NY  10021

                           with a copy to:

                           Swidler Berlin Shereff Firedman, LLP
                           405 Lexington Avenue
                           New York, NY  10174
                           Attn: Charles I. Weissman

                           Christopher Engel
                           1075 Park Avenue
                           New York, NY 10128

                                      -15-
<PAGE>

                           with a copy to:

                           Swidler Berlin Shereff Firedman, LLP
                           405 Lexington Avenue
                           New York, NY  10174
                           Attn: Charles I. Weissman

                           Leonard Toboroff
                           39 N. Moore Street
                           New York, NY  10013

                           with a copy to:

                           Swidler Berlin Shereff Friedman, LLP
                           405 Lexington Avenue
                           New York, NY  10174
                           Attn: Charles I. Weissman

                           if to A-C at the following address:

                           Allis-Chalmers Corporation
                           7660 Woodway, Suite 200
                           Houston, Texas  77063
                           Attn:  President
                           Fax: (713) 369-0555

                           with a copy to:

                           Spolin Silverman Cohen & Bartlett LLP
                           1620 26th Street, Suite 2000N
                           Santa Monica, California 90404
                           Attn:  Joseph P. Bartlett
                           Fax:  310 586 2444

All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial overnight courier service; five Business Days after
being deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.

         10.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart will for all purposes be deemed an
original, and all such counterparts shall constitute one and the same
instrument.

         10.5 GOVERNING LAW; FORUM. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
applicable to contracts entered into and to be wholly performed therein. Each
party to this Agreement hereby irrevocably agrees that any legal action or
proceeding arising out of or relating to this Agreement or any agreements or
transactions contemplated hereby shall be brought in the in the courts of the

                                      -16-
<PAGE>

State of New York located in Manhattan or of the United States of America for
the Southern District of New York and hereby expressly submits to the personal
jurisdiction and venue of such courts for the purposes thereof and expressly
waives any claim of improper venue and any claim that such courts are an
inconvenient forum. Each party hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such suit, action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth in Section 10.3, such service to
become effective 10 days after such mailing

         10.6 ATTORNEYS' FEES. If any party should institute any action to
enforce or interpret any term or provision of this Agreement, the party
prevailing in such action, after all appeals have been exhausted, shall be
entitled to its attorneys' fees, out-of-pocket disbursements and all other
expenses from the non-prevailing party in such action.

         10.7 ENTIRE AGREEMENT. This Agreement (together with all Exhibits and
Schedules hereto) constitutes the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous written and oral negotiations, discussions, agreements
and understandings with respect to such subject matter.

         10.8 EXPENSES OF PURCHASERS. The Company shall reimburse the Purchasers
for their reasonable actual legal expenses incurred in connection with the
preparation, negotiation, execution and performance of this Agreement, the
Warrants, the Stockholders Agreement and the Registration Rights Agreement and
the transactions contemplated hereunder and thereunder, such reimbursement to be
paid, in cash, (a) at the Closing, if invoiced within one business day prior to
the Closing Date or (b) within seven days following the written request therefor
by the Purchasers, if invoiced on or after the Closing Date.

         10.9     [INTENTIONALLY LEFT BLANK]

         10.10 INTERPRETATION. Each of the Purchasers and A-C have participated
in the negotiation and drafting of this Agreement. Accordingly, each of the
parties hereby waives any statutory provision, judicial precedent or other rule
of law to the effect that contractual ambiguities are to be construed against
the party who shall have drafted the same.

         10.11 TERMINATION. This Agreement may be terminated by any party if the
Closing does not occur on or before April 25, 2004.

         10.12 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement except
to the extent that any provision would clearly be contemplated by the parties to
be conditioned upon the validity and enforceability of such invalid or
prohibited provision.

                                      -17-
<PAGE>

         10.13 SECTION HEADINGS. The section and subsection headings contained
in this Agreement are included for convenience only and form no part of the
agreement between the parties.

         10.14 PUBLICITY. Except as may be required by applicable law, no party
hereto shall issue a publicity release or announcement or otherwise make any
public disclosure concerning this Agreement or the transactions contemplated
hereby, without prior approval by the other parties hereto. If any announcement
is required by law to be made by any party hereto, prior to making such
announcement such party will deliver a draft of such announcement to the other
parties and shall give the other parties a reasonable opportunity under the
circumstances to comment thereon.

         10.15 BROKERS AND FINDERS. Neither A-C nor any of the Purchasers, nor
any person acting on behalf of any of them, has employed any broker, agent or
finder, or incurred any liability for any brokerage fees, agents' commissions,
finders' fees or advisory fees in connection with the transactions contemplated
hereby; and A-C shall indemnify and hold each Purchaser harmless in respect of
any "Damages" (as defined in Section 8.6 hereof) arising out of any agreements,
arrangements or understandings claimed to have been made by A-C, or any person
acting on its behalf, with any third party; and each Purchaser shall indemnify
and hold A-C and the other Purchasers harmless in respect of any Damages arising
out of any agreements, arrangements or understandings claimed to have been made
by such Purchaser, or any person acting on its behalf, with any third party.

                                      -18-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective representatives hereunto duly authorized as of
the date first above written.

                                            ALLIS-CHALMERS CORPORATION,
                                            a Delaware corporation

                                            /S/ MUNAWAR H. HIDAYATALLAH
                                            ------------------------------------
                                            By: Munawar H. Hidayatallah,
                                                President

                                            /S/ LEONARD TOBOROFF
                                            ------------------------------------
                                            Leonard Toboroff

                                            Engel Investors Defined Benefit Plan

                                            /S/ DONALD ENGEL
                                            ------------------------------------
                                            By: Donald Engel
                                            Title:

                                            RER Corp.

                                            /S/ ROBERT NEDERLANDER
                                            ------------------------------------
                                            By:  Robert Nederlander
                                            Title: President

                                            /S/ DONALD ENGEL
                                            ------------------------------------
                                            Donald Engel

                                            /S/ CHRISTOPHER ENGEL
                                            ------------------------------------
                                            Christopher Engel

                                      -19-
<PAGE>
<TABLE>

                                            SCHEDULE 1.1

          PURCHASER                   PURCHASE                # OF SHARES             # OF SHARES SUBJECT
          ---------                   --------                -----------             -------------------
                                        PRICE                                             TO WARRANT
                                        -----                                             ----------

<S>                                  <C>                        <C>                         <C>
Donald Engel                         $299,850.25                464,768                     599,701

Chris Engel                          $249,875.50                387,307                     499,750

Engel Investors Defined
Benefit Plan                         $116,941.25                181,259                     233,883

RER Corp.                            $666,666.50               1,033,333                   1,333,333

Lenonard Toboroff                    $666,666.50               1,033,333                   1,333,333
                                     -----------               ---------                   ---------

Total                               $2,000,000.00              3,100,000                   4,000,000

</TABLE>

                                                -20-<PAGE>

                                                                   EXHIBIT 10.50

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT. THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
ASSIGNED TO ANY OTHER PERSON OR ENTITY, EXCEPT AS SET FORTH HEREIN.

                                     WARRANT

                  TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
                           ALLIS-CHALMERS CORPORATION

             VOID AFTER 5:00 P.M., CENTRAL TIME, ON APRIL __, 2006,
           OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN. AT 5:00 P.M.,
             CENTRAL TIME ON THE IMMEDIATELY FOLLOWING BUSINESS DAY

Date of Issuance:  April 2, 2004

         THIS CERTIFIES that, for good and valuable consideration,
___________________ (the "PURCHASER"), or registered assigns, is entitled to
subscribe for and purchase from Allis-Chalmers Corporation, a Delaware
corporation (the "COMPANY"), at the price of $0.50 per share (such price, as
from time to time to be adjusted as hereinafter provided, being hereinafter
called the "WARRANT PRICE"), at any time and from time to time after the date
hereof but not later than the Expiration Date (as defined below), up to such
number of fully paid, nonassessable shares of Common Stock, par value $0.15 per
share ("COMMON STOCK"), of the Company as is specified in the following
sentence, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth, including without limitation the provisions of SECTION 3
hereof. This Warrant shall be exercisable for up to ______________ shares of
Common Stock upon issuance, subject to adjustment as provided herein.
"EXPIRATION DATE" shall mean 5:00 P.M., Central time, on April 1, 2006,
PROVIDED, that if such day is not a Business Day, as defined herein, at 5:00
P.M., Central time, on the immediately following Business Day. "BUSINESS DAY"
shall mean a day other than a Saturday, Sunday or other day on which banks in
the State of Texas are authorized by law to remain closed.

SECTION 1.        EXERCISE OF WARRANT

         (a) CASH OR CASHLESS EXERCISE

         This Warrant may be exercised, at any time and from time to time but
not later than the Expiration Date, by the holder hereof (hereinafter referred
to as the "WARRANTHOLDER"), in whole or in part (but not as to a fractional
share of Common Stock), by the completion of the subscription form attached
hereto and by the surrender of this Warrant (properly endorsed) at the Company's

<PAGE>

offices at 7660 Woodway, Suite 200, Houston, Texas 77063 (or at such other
location in the United States as the Company may designate by notice in writing
to the Warrantholder at the address of the Warrantholder appearing on the books
of the Company), and by payment to the Company of the Warrant Price for each
share being purchased, (i) in cash or by certified or official bank check or
(ii) by delivering notice to the Company that the Warrantholder is exercising
this Warrant by authorizing the Company to reduce the number of shares of Common
Stock subject to this Warrant by the number of shares having an aggregate Fair
Market Value equal to the applicable Warrant Price. For purposes of this
Warrant, the term "Fair Market Value" shall mean on any date specified herein,
with respect to Common Stock, the amount per share equal to (a) the average of
the closing prices thereof on the ten (10) trading days prior to such date, in
each case as officially reported on the principal national securities exchange
on which the same are then listed or admitted to trading, or (b) if no shares of
Common Stock are then listed or admitted to trading on any national securities
exchange, the average of the reported closing bid and asked prices thereof on
the ten (10) trading days prior to such date as quoted in the Nasdaq National
Market or, if no shares of Common Stock are then quoted in the Nasdaq National
Market, as published by the National Quotation Bureau, Incorporated or any
similar successor organization, and in either case as reported by any member
firm of the New York Stock Exchange selected by the Company; PROVIDED that with
respect to (b) above, if the average daily trading volume for the subject shares
for the thirty (30) days prior to the date of determination shall be less than
1,000 shares per day, then the subject Market Price shall be the average of the
closing bid price of such shares on the ten (10) trading days prior to the date
of determination, or (c) if not so reported, the fair market value of the Common
Stock, as determined in good faith by the Board of Directors of the Company.

         (b) PROCEDURE FOR EXERCISE

         In the event of any exercise of the rights represented by this Warrant,
a certificate or certificates for the total number of whole shares of Common
Stock so purchased, registered in the name of the Warrantholder, shall be
delivered to the Warrantholder within a reasonable time, not exceeding five
Business Days, after the rights represented by this Warrant shall have been so
exercised; and, unless this Warrant has expired, a new Warrant representing the
number of shares (except a remaining fractional share), if any, with respect to
the unexercised portion of this Warrant shall also be issued to the
Warrantholder within such time. With respect to any such exercise, the
Warrantholder shall for all purposes be deemed to have become the holder of
record of the number of shares of Common Stock evidenced by such certificate or
certificates, from the date on which this Warrant was surrendered and, if
exercise is pursuant to SECTION 1(A), payment of the Warrant Price was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date on which the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open. No fractional shares shall be issued upon
exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends on the Common Stock issued upon such
exercise. If any fractional interest in a share of Common Stock would, except
for the provisions of this SECTION 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
Warrantholder an amount in cash equal to the current Fair Market Value of such
fractional interest, as determined above.

                                      -2-
<PAGE>

SECTION 2.        ADJUSTMENT OF NUMBER OF SHARES

         Upon each adjustment of the Warrant Price for any stock dividend or
distribution or any subdivision or combination of the outstanding shares of the
Common Stock as provided in SECTION 3, the Warrantholder shall thereafter be
entitled to purchase, at the Warrant Price resulting from such adjustment (each
an "ADJUSTED WARRANT PRICE"), the number of shares (calculated to the nearest
hundredth of a share) obtained by multiplying the Warrant Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Adjusted Warrant Price resulting from such adjustment

SECTION 3.        ADJUSTMENT OF WARRANT PRICE AND OTHER MATTERS

         The Warrant Price and the number and kind of shares issuable hereunder
shall be subject to adjustment from time to time upon the happening of certain
events as provided in this SECTION 3.

         (a)      ADJUSTMENTS FOR ISSUE OR SALE OF COMMON STOCK AT LESS THAN
                  CONVERSION RATE

         If the Company shall issue or sell shares of its Common Stock (other
than pursuant to this Warrant) for a consideration per share less than the
Warrant Price (as the same shall be adjusted from time to time, as provided
herein), then in each such case, the Warrant Price shall be reduced to an amount
equal to the price per share received by the Company in such sale.

         (b)      ADJUSTMENT PROVISIONS; OTHER MATTERS

                  (1) If at any time prior to the exercise of this Warrant in
full, the Company shall (A) declare a dividend or make a distribution on the
Common Stock payable in shares of its capital stock (whether shares of Common
Stock or of capital stock of any other class); (B) subdivide, reclassify or
recapitalize its outstanding Common Stock into a greater number of shares; (C)
combine, reclassify or recapitalize its outstanding Common Stock into a smaller
number of shares; or (D) issue any shares of its capital stock by
reclassification of its Common Stock (excluding any such reclassification in
connection with a consolidation or a merger that is subject to SECTION 3(b)(4)),
the Warrant Price in effect at the time of the record date of such dividend,
distribution, subdivision, combination, reclassification or recapitalization
shall be adjusted so that the Warrantholder shall be entitled to receive the
aggregate number and kind of shares which, if this Warrant had been exercised in
full immediately prior to such event, it would have owned upon such exercise and
been entitled to receive by virtue of such dividend, distribution, subdivision,
combination, reclassification or recapitalization. Any adjustment required by
this SECTION 3(B) shall be made immediately after the record date, in the case
of a dividend or distribution, or the effective date, in the case of a
subdivision, combination, reclassification or recapitalization, to allow the
purchase of such aggregate number and kind of shares.

                                      -3-
<PAGE>

                  (2) If at any time prior to the exercise of this Warrant in
full, the Company shall make a distribution to all holders of the Common Stock
of (i) stock of a subsidiary or securities convertible into or exercisable for
such stock, or (ii) evidence of indebtedness of the Company or its subsidiaries
or assets of the Company or its subsidiaries (excluding cash dividends or
distributions out of earned surplus), then in lieu of an adjustment in the
Warrant Price or the number of shares of Common Stock purchasable upon the
exercise of this Warrant (and in addition to the Common Stock or other
securities to be received upon exercise of this Warrant as provided herein),
each Warrantholder, upon the exercise hereof at any time after such
distribution, shall be entitled to receive from the Company, such subsidiary or
both, as the Company shall determine, the stock or other securities to which
such Warrantholder would have been entitled if such Warrantholder had exercised
this Warrant immediately prior thereto, all subject to further adjustment as
provided in this SECTION 3, and the Company shall reserve, for the life of the
Warrant, such securities of such subsidiary or other corporation; PROVIDED,
HOWEVER, that no adjustment in respect of dividends or interest on such stock or
other securities shall be made during the term of this Warrant or upon its
exercise.

                  (3) If at any time prior to the expiration of this Warrant in
full, the Company shall issue rights or warrants entitling persons to subscribe
for or purchase Common Stock in either case at a price per share or exercise
price per share less than the current Warrant Price, then, in each such case the
Warrant Price shall be reduced to the subject issue or exercise price, as
appropriate.

                  (4) In the event of any capital reorganization of the Company
(other than an event referred to in SECTION 3(b)(1)), or in case of the
consolidation of the Company with, the merger of the Company with or into or the
sale of all or substantially all of the properties and assets of the Company to
any other person, if in connection therewith consideration is payable to holders
of Common Stock (or other securities or property purchasable upon exercise of
this Warrant) in exchange therefor, this Warrant shall remain subject to the
terms and conditions set forth in this Warrant and this Warrant shall, after
such capital reorganization, consolidation, merger or sale be exercisable for
the number of shares of stock or other securities or assets to which a holder of
the number of shares of Common Stock purchasable (at the time of such capital
reorganization, reclassification of such Common Stock, consolidation, merger or
sale) upon exercise of this Warrant would have been entitled if this Warrant had
been exercised immediately prior to such capital reorganization,
reclassification of such Common Stock, consolidation, merger or sale; and in any
such case, if necessary, the provisions set forth in this Warrant with respect
to the rights and interests thereafter of the Warrantholder shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any shares of stock or other securities or assets thereafter deliverable on
the exercise of this Warrant. The Company shall not effect any such
consolidation, merger or sale, unless prior to or simultaneously with the

                                      -4-
<PAGE>

consummation thereof, the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such
assets or the appropriate corporation or entity shall assume, by written
instrument, the obligation to deliver to the Warrantholder the shares of stock,
securities or assets to which the Warrantholder may be entitled pursuant to this
SECTION 3(b)(4).

                  (5) Notwithstanding SECTION 3(b)(4), (i) if the Company merges
or consolidates with, or sells all or substantially all of its property and
assets to, any other person and consideration is payable to holders of Common
Stock in exchange for their Common Stock in connection with such merger,
consolidation or sale which consists solely of cash, or (ii) in the event of the
dissolution, liquidation or winding up of the Company, then the Warrantholder
shall be entitled to receive distributions on the date of such event on an equal
basis with holders of Common Stock (or other securities issuable upon exercise
of this Warrant) as if this Warrant had been exercised immediately prior to such
event, less the Warrant Price. Upon receipt of such payment if any, the rights
of the Warrantholder shall terminate and cease and this Warrant shall expire. In
case of any such merger, consolidation or sale of assets, the surviving or
acquiring person and, in the event of any dissolution, liquidation or winding up
of the Company, the Company shall promptly, after receipt of this surrendered
Warrant, make payment by delivering a check in such amount as is appropriate
(or, in the case of consideration other than cash, such other consideration as
is appropriate) to such person as it may be directed in writing by the
Warrantholder surrendering this Warrant.

                  (6) No adjustment in the Warrant Price shall be required
unless such adjustment would require an increase or decrease of at least one
cent ($.0l) in such price; provided, however, that any adjustments which by
reason of this SECTION 3(B)(6) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this SECTION 3 shall be made to the nearest cent or to the nearest
hundredth of a share, as the case may be. Notwithstanding anything in this
SECTION 3 to the contrary, the Warrant Price shall not be reduced to less than
the then existing par value of the Common Stock as a result of any adjustment
made hereunder.

                  (7) In the event that at any time, as the result of any
adjustment made pursuant to this SECTION 3(B), the Warrantholder thereafter
shall become entitled to receive any securities other than Common Stock,
thereafter the number of such other securities so receivable upon exercise of
any Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in SECTION 3(b).

         (c)      NO ADJUSTMENT FOR CASH DIVIDENDS

         Except as provided in SECTION 3(b) of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.

         (d)      FORM OF WARRANT AFTER ADJUSTMENTS

                                      -5-
<PAGE>

         The form of this Warrant need not be changed because of any adjustments
in the Warrant Price or the number or kind of the shares purchasable pursuant to
this Warrant, and Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in this
Warrant, as initially issued, provided, however, that the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof. Any Warrant certificate thereafter issued, whether
upon registration of transfer or, or in exchange or substitution for, an
outstanding Warrant certificate may be in the form so changed.

         (e)      TREATMENT OF WARRANTHOLDER

         Prior to due presentment for registration of transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.

         (f)      NOTICE OF ADJUSTMENT

         Upon any adjustment of the Warrant Price, then and in each such case
the Company shall give written notice thereof, by first-class mail, postage
prepaid, addressed to each Warrantholder at the address of such holder as shown
on the books of the Company, which notice shall state the Warrant Price
resulting from such adjustments setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

         (g)      STOCK TO BE RESERVED

         The Company will at all times reserve and keep available out of its
authorized Common Stock, solely for the purpose of issuance upon the exercise of
this Warrant as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of this Warrant. The Company covenants that
all shares of Common Stock which shall be so issued, upon full payment of the
Warrant Price therefor or as otherwise set forth herein, shall be duly and
validly issued and fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Company covenants that it will from time to
time take all such action as may be required to ensure that the par value per
share, if any, of the Common Stock is at all times equal to or less than the
effective Warrant Price. The Company will take all such action as may be
necessary to ensure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirement of
any national securities exchange or automated quotation system upon which the
Common Stock of the Company may be listed or quoted. The Company will not take
any action which results in any adjustment of the Warrant Price if the total
number of shares of Common Stock issued and issuable after such action upon
exercise of this Warrant would exceed the total number of shares of Common Stock
then authorized by the Company's Certificate of Incorporation. The Company has
not granted and will not grant any right of first refusal with respect to shares
issuable upon exercise of this Warrant, and there are no preemptive rights
associated with such shares.

                                      -6-
<PAGE>

         (h)      ISSUE TAX

         The issuance of certificates for shares of Common Stock upon exercise
of any Warrant shall be made without a charge to the Warrantholder for any
issuance tax in respect thereto provided that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.

         (i)      CLOSING OF BOOKS

         The Company will at no time close its transfer books against the
transfer of the shares of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant.

         (j)      OUTSTANDING WARRANTS; EMPLOYEE OPTIONS

         Notwithstanding the provisions of this SECTION 3, no adjustment in the
exercise price or the number of shares of Common Stock issuable hereunder shall
be made as a result of the issuance of shares of Common Stock upon the exercise
of (1) the Warrants dated February 1, 2002 and February 19, 2003, issued to
Energy Spectrum Partners LP, providing for the issuance of 1,325,000 shares of
Common Stock at an exercise price of $0.15 per share, (2) the Warrants dated
February 1, 2002, issued to Wells Fargo Energy Capital, providing for issuance
of 1,165,000 shares of Common Stock at an exercise price of $0.15, or (3)
options issued pursuant to the Company's 2003 Stock Incentive Plan so long as
such options have an exercise price of at least $0.15 per share (adjusted for
stock splits or similar events).

         (k)      DEFINITION OF COMMON STOCK

         The shares purchasable pursuant to this Warrant shall include only
securities designated as Common Stock of the Company. As used herein the term
"COMMON STOCK" shall mean and include the Common Stock, par value $.15 per
share, of the Company as authorized on the date hereof, or shares of any class
or classes resulting from any recapitalization or reclassification thereof which
are not limited to any fixed sum or percentage and are not subject to redemption
by the Company and in case at any time there shall be more than one such
resulting class, the shares of each class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassification bears to the total number of shares of
all such classes resulting from all such reclassification.

SECTION 4.        NOTICES OF RECORD DATES

         In the event of:

         (a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any right to sell shares of stock of any class or any
other right; or

                                      -7-
<PAGE>

         (b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or

         (c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company; or

         (d) any public offering or any issuance by the Company of additional
shares of capital stock;

then and in each such event the Company will give notice to the Warrantholder
specifying;

                  (i) the date on which any such record is to be taken for the
         purpose of such dividend, distribution or right and stating the amount
         and character of such dividend, distribution or right, and

                  (ii) the date on which any such reorganization,
         reclassification, recapitalization, transfer, consolidation, merger,
         dissolution, liquidation or winding-up is to take place, and the time,
         if any is to be fixed, as of which the holders of record of Common
         Stock will be entitled to exchange their shares of Common Stock for
         securities or other property deliverable upon such reorganization,
         reclassification, recapitalization, transfer, consolidation, merger,
         dissolution, liquidation or winding-up. Such notice shall be given at
         least 20 days and not more than 90 days prior to the date therein
         specified, and such notice shall state that the action in question or
         the record date is subject to the effectiveness of a registration
         statement under the Securities Act of 1933, as amended (the "Securities
         Act"), or to a favorable vote of stockholders, if either is required.

SECTION 5.        STOCKHOLDERS RIGHTS AND LIABILITIES

         No provision hereof, in the absence of affirmative action by the
Warrantholder to purchase shares of Common Stock, and no mere enumeration herein
of the rights or privileges of the Warrantholder shall give rise to any
liability of such Warrantholder for the Warrant Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

SECTION 6.        LOST, STOLEN, MUTILATED OR DESTROYED WARRANT

                                      -8-
<PAGE>

         Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Warrant and, in the case of any such
loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to the Company or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant, the Company will make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
shares of Common Stock as provided for in such lost, stolen, destroyed or
mutilated Warrant.

SECTION 7.        NOTICES

         All notices, requests and other communications required or permitted to
be given or delivered hereunder shall be in writing, and shall be delivered, or
shall be sent by certified or registered mail or overnight courier, postage
prepaid and addressed, or by facsimile, and if to the Warrantholder to such
Warrantholder at such address or facsimile number as shall have been furnished
to the Company by notice from such Warrantholder and if to the Company, at 7660
Woodway, Suite 200, Houston, Texas 77063, facsimile (713) 369-0555 or at such
other address or facsimile number as shall have been furnished to the
Warrantholder by notice from the Company.

SECTION 8.        RESTRICTIONS ON TRANSFER

         This Warrant may not be sold, transferred, hypothecated or assigned to
any other person or entity other than (i) the respective successors to Purchaser
in a merger or consolidation; (ii) the respective purchasers of all or
substantially all of the assets of Purchaser; or (iii) the shareholders and/or
members of Purchaser or their affiliates. Purchaser agrees not to make any sale
or other disposition of either the Warrant or the underlying Common Stock except
pursuant to a registration statement which has become effective under the
Securities Act, setting forth the terms of such offering, the underwriting
discount and the commissions and any other pertinent data with respect thereto,
or in a transaction exempt from registration under the Securities Act, in which
case Purchaser shall, at the Company's request, provide the Company with an
opinion of counsel reasonably acceptable to the Company that such registration
is not required. This Warrant shall bear a legend setting forth the foregoing
restriction.

SECTION 9.        AMENDMENTS AND WAIVERS

         This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by each of (i) a majority in
interest of the holders of this Warrant and (ii) an authorized representative of
the Company.

SECTION 10.       SEVERABILITY

         If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provisions shall be excluded from this Warrant, and
the balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

                                      -9-
<PAGE>

SECTION 11.       GOVERNING LAW

         THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE
STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

SECTION 12.       HEADINGS

         The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect any of the terms hereof.

SECTION 13.       COUNTERPARTS

         This Warrant may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -10-
<PAGE>

         IN WITNESS WHEREOF, the Company and Purchaser have executed this
warrant on and as of the day and year first above written.

                                    COMPANY:

                                    ALLIS-CHALMERS CORPORATION

                                    By:_________________________________
                                           Munawar H. Hidayatallah
                                    Its:  Chief Executive Officer

                                    PURCHASER:

                                    By:     _________________________________
                                    Name:   _________________________________
                                    Title:  _________________________________

                                      -11-

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