Side Letter Agreement Regarding Private Placement of Common Stock – Allis-Chalmers Corporation and Emerson Investments

Summary

Allis-Chalmers Corporation confirms to Emerson Investments that, in connection with Emerson's investment in Allis-Chalmers' common stock, Emerson will not be required to suspend sales due to secondary offerings, and certain obligations under the Stock Purchase Agreement remain unchanged. Additionally, for six months, Allis-Chalmers will not issue rights or agreements for its common stock except as specified, unless both parties agree on adjustments to ensure Emerson receives equal value as future investors. This letter clarifies and supplements terms of the original Stock Purchase Agreement and its amendment.

EX-10.58 5 allis_8kex-4.txt EXHIBIT 10.58 ALLIS-CHALMERS CORPORATION 5075 Westheimer Suite 890 Houston, Texas 77056 September 29, 2004 VIA FAX AND E-MAIL ***@*** - ----------------------------------------- Steve Emerson Emerson Investments RE: PRIVATE PLACEMENT OF COMMON STOCK BY ALLIS-CHALMERS CORPORATION --------------------------------------------------------------- Dear Mr. Emerson: The purpose of this letter is to confirm that, in connection with your investment in the Common Stock of Allis-Chalmers Corporation pursuant to the Stock Purchase Agreement dated August 10, 2004 (the "Stock Purchase Agreement"): (1) you will not be required to suspend sales of shares pursuant to the Registration Statement (as defined in the Stock Purchase Agreement) as a result of any secondary offering of shares by the Allis-Chalmers Corporation; (2) Section 6.4 of the Stock Purchase Agreement shall not be deemed to reduce Allis-Chalmers Corporation's obligations under the last sentence of Section 6.2 of the Stock Purchase Agreement (except with respect to a person eligible to sell all Shares in a single transaction pursuant to Rule 144); and (3) With respect to Section 1 of the Amendment to Stock Purchase Agreement dated August 10, 2004: during the referenced six month period the Company will not issue any rights to acquire, or enter into any agreement involving the issuance of, its Common Stock, unless (a) the transaction is one contemplated by said Section 1, i.e., the issuance of Common Stock or convertible securities for cash (and not the issuance of other types of securities or a bundle of two or more types of securities), or (b) the Company and you mutually agree upon the number of additional shares of Common Stock to be issued to Steve Emerson Emerson Investments September 29, 2004 Page 2 you in order to achieve the objectives of said Section 1, i.e., that you obtain the same value for your investment as any subsequent investor during the six month period. Sincerely, /s/ Todd A. Seward Todd A. Seward, Chief Accounting Officer