EXHIBIT 10.3

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November 20, 2006,
between Halliburton Company, a Delaware corporation (“Halliburton”), and KBR,
Inc., a Delaware corporation (the “Company”).

WHEREAS, Kellogg Energy Services, Inc., a Delaware corporation and a wholly
owned subsidiary of Halliburton (“KESI”), owns all of the capital stock of the
Company outstanding as of the execution of this Agreement; and

WHEREAS, as provided in a Master Separation Agreement dated the date hereof
between Halliburton and the Company (the “Separation Agreement”), the Company
has determined to offer to the public (the “Public Offering”) shares of the
Company’s Common Stock (as defined below); and

WHEREAS, in connection with the Public Offering, the Company has, among other
things, agreed to grant to Halliburton and any of its Affiliates (other than the
Company or any of its Subsidiaries) who from time to time own Registrable
Securities (including without limitation KESI) certain registration rights
applicable to Registrable Securities (as defined below) held by Halliburton and
such Affiliates, and the parties hereto desire to enter into this Agreement to
set forth the terms of such registration rights; and

WHEREAS, the execution and delivery of this Agreement by the parties hereto is a
condition to the obligations of each of Halliburton and the Company under the
Separation Agreement; and

NOW, THEREFORE, upon the premises and based on the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

1. Certain Definitions. As used in this Agreement, the following initially
capitalized terms shall have the following meanings:

(a) “Affiliate” means, with respect to any person, any other person who,
directly or indirectly, is in control of, is controlled by or is under common
control with the former person; and “control” (including the terms
“controlling,” “controlled by,” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise.

(b) “Common Stock” means the Company’s common stock, par value $0.001 per share.

(c) “Company Securities” has the meaning set forth in Section 3 hereof.

(d) “Exchangeable Securities” has the meaning set forth in Section 6 hereof.

 

-1-

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

(e) “Fair Market Value” means, with respect to any security, (i) if the security
is listed on a national securities exchange or authorized for quotation on a
national market quotation system, the closing price, regular way, of the
security on such exchange or quotation system, as the case may be, or if no such
reported sale of the security shall have occurred on such date, on the next
preceding date on which there was such a reported sale, or (ii) if the security
is not listed for trading on a national securities exchange or authorized for
quotation on a national market quotation system, the average of the closing bid
and asked prices as reported by the National Association of Securities Dealers
Automated Quotation System or such other reputable entity or system engaged in
the regular reporting of securities prices and on which such prices for such
security are reported or, if no such prices shall have been reported for such
date, on the next preceding date for which such prices were so reported, or
(iii) if the security is not publicly traded, the fair market value of such
security as determined by a nationally recognized investment banking or
appraisal firm mutually acceptable to the Company and the Holders, the fair
market value of whose Registrable Securities is to be determined.

(f) “Holder” means (i) Halliburton and any Affiliate of Halliburton (other than
the Company or any of its Subsidiaries) who from time to time owns Registrable
Securities (including without limitation KESI) or (ii) any Permitted Transferee
and any Affiliate of such Permitted Transferee who from time to time owns
Registrable Securities.

(g) “Initiating Holders” has the meaning set forth in Section 3(b) hereof.

(h) “Initiating Holder Securities” has the meaning set forth in Section 3(b)
hereof.

(i) “Maximum Marketable Amount” means, when used in connection with an
underwritten offering, the aggregate number or principal amount of securities
which, in the opinion of the managing underwriter for such offering, can be sold
in such offering without materially and adversely affecting the offering.

(j) “Other Holders” has the meaning set forth in Section 3(b) hereof.

(k) “Other Securities” has the meaning set forth in Section 3 hereof.

(l) “Permitted Transferee” has the meaning set forth in Section 11 hereof.

(m) “Person” means any individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, or other entity of whatever nature.

(n) “Registrable After-Acquired Securities” means any securities of the Company
acquired by a Holder after the execution of this Agreement.

(o) “Registrable Securities” means any of the following held by a Holder (i) the
shares of Common Stock owned as of the execution of this Agreement by KESI,
(ii) all Registrable After-Acquired Securities, (iii) any stock or other
securities into which or for which such Common Stock or Registrable
After-Acquired Securities may hereafter be changed, converted or exchanged, and
(iv) any other securities issued to holders of such Common Stock or

 

-2-

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

Registrable After-Acquired Securities (or such stock or other securities into
which or for which such Common Stock or Registrable After-Acquired Securities
are so changed, converted or exchanged) upon any reclassification, share
combination, share subdivision, share dividend, merger, consolidation or similar
transaction or event, provided that any such securities shall cease to be
Registrable Securities when such securities are sold in any manner to a person
who is not a Permitted Transferee or after the registration rights with respect
to the Holder thereof has expired pursuant to Section 12(g).

(p) “Registration Expenses” means all out-of-pocket expenses incurred in
connection with any registration of Registrable Securities pursuant to this
Agreement (other than Selling Expenses), including, without limitation, the
following; (i) SEC filing fees; (ii) all fees, disbursements and expenses of the
Company’s counsel(s) and accountants in connection with the registration of the
Registrable Securities to be disposed of and the reasonable fees, disbursements
and expenses of counsel, other than the Company’s counsel, selected by the
Holders of the Registrable Securities to be disposed of; (iii) all expenses in
connection with the preparation, printing and filing of the registration
statement, any preliminary prospectus or final prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to any
Holders, underwriters and dealers and all expenses incidental to delivery of the
Registrable Securities; (iv) the cost of printing or producing any underwriting
agreement, agreement among underwriters, agreement between syndicates, selling
agreement, blue sky or legal investment memorandum or other document in
connection with the offering, sale or delivery of the Registrable Securities to
be disposed of; (v) all expenses in connection with the qualification of the
Registrable Securities to be disposed of for offering and sale under state
securities laws, including the fees and disbursements of counsel for the
underwriters in connection with such qualification and the preparation of any
blue sky and legal investments surveys; (vi) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Registrable Securities to be disposed of;
(vii) transfer agents’, depositaries’ and registrars’ fees and the fees of any
other agent appointed in connection with such offering; (viii) all security
engraving and security printing expenses, (ix) all fees and expenses payable in
connection with the listing of the Registrable Securities on any securities
exchange or inter-dealer quotation system; (x) all expenses incurred in
connection with “roadshow” presentations and holding meetings with potential
investors to facilitate the distribution and sale of Registrable Securities; and
(xi) any one-time payment for directors and officers insurance directly related
to such offering, provided the insurer provides a separate statement for such
payment.

(q) “Rule 144” means Rule 144 promulgated under the Securities Act, or any
successor rule to similar effect.

(r) “SEC” means the United States Securities and Exchange Commission.

(s) “Securities Act” means the Securities Act of 1933, as amended, or any
successor statute.

(t) “Selling Expenses” means all underwriting discounts and commissions, selling
concessions and stock transfer taxes applicable to the sale by the Holders of
Registrable Securities pursuant to this Agreement.

 

-3-

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

(u) “Selling Holder” has the meaning set forth in Section 5(e) hereof.

2. Demand Registration.

(a) At any time prior to such time as the rights under this Section 2 terminate
with respect to a Holder as provided in Section 2(a)(iii) hereof, upon written
notice from such Holder in the manner set forth in Section 12(i) hereof
requesting that the Company effect the registration under the Securities Act of
any or all of the Registrable Securities held by such Holder or any of its
Affiliates, which notice shall specify the intended method or methods of
disposition of such Registrable Securities, the Company shall use its best
efforts to effect, in the manner set forth in Section 5, the registration under
the Securities Act of such Registrable Securities for disposition in accordance
with the intended method or methods of disposition stated in such request
(including (1) in an offering on a delayed or continuous basis under Rule 415
(or any successor rule of similar effect) promulgated under the Securities Act
and accordingly requiring the filing of a “shelf” registration statement and/or
(2) sales for cash or dispositions upon exchange or conversion of securities or
dispositions for any form of consideration or no consideration), provided that:

(i) if, while a registration request is pending pursuant to this Section 2(a),
the Company determines, following consultation with and receiving advice from
its legal counsel, that the filing of a registration statement would require the
disclosure of material information that the Company has a bona fide business
purpose for preserving as confidential and the disclosure of which the Company
determines reasonably and in good faith would have a material adverse effect on
the Company, the Company shall not be required to effect a registration pursuant
to this Section 2(a) until the earlier of (A) the date upon which such material
information is otherwise disclosed to the public or ceases to be material and
(B) 30 days after the Company makes such determination, provided, however, that
the Company shall not be permitted to delay a requested registration in reliance
on this clause (i) more than twice in any 12-month period;

(ii) the Company shall not be obligated to file a registration statement
relating to a registration request pursuant to this Section 2: (A) prior to 180
days following the closing of the Public Offering, or (B) within a period of 60
days after the effective date of any other registration statement of the Company
demanded pursuant to this Section 2(a); and

(iii) the Company shall not be obligated to file a registration statement
relating to a registration request pursuant to this Section 2: (A) in the case
of a registration request by Halliburton or any of its Affiliates, on more than
three occasions after such time as Halliburton and its Affiliates collectively
own less than a majority of the voting power of the then outstanding shares of
Common Stock (it being acknowledged that so long as Halliburton and its
Affiliates collectively own a majority of the voting power of the then
outstanding shares of Common Stock, there shall be no limit to the number of
occasions on which Halliburton or its Affiliates may exercise their rights under
this Section 2), or (B) in the case of a registration request by a Permitted
Transferee or any of its

 

-4-

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

Affiliates, on more than the number of occasions permitted such Holder in
accordance with Section 11 hereof (it being acknowledged that (1) the exercise
by such Permitted Transferee and its Affiliates of such rights shall not limit
the number of occasions on which Halliburton and its Affiliates may exercise
their rights under this Section 2 and (2) so long as such Permitted Transferee
and its Affiliates collectively own a majority of the then outstanding shares of
Common Stock, there shall be no limit to the number of occasions on which such
Permitted Transferee or its Affiliates may exercise their rights under this
Section 2).

(b) Notwithstanding any other provision of this Agreement to the contrary, a
registration requested by a Holder pursuant to this Section 2 shall not be
deemed to have been effected (and, therefore, not requested for purposes of
Section 2(a)), (i) unless the registration statement filed in connection
therewith has become effective, (ii) if after such registration statement has
become effective, it becomes subject to any stop order, or there is issued an
injunction or other order or decree of the SEC or other governmental agency or
court for any reason other than a misrepresentation or an omission by such
Holder, which injunction, order or decree prohibits or otherwise materially and
adversely affects the offer and sale of the Registrable Securities so registered
prior to the completion of the distribution thereof in accordance with the plan
of distribution set forth in the registration statement or (iii) if the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied
other than by reason of some act, misrepresentation or omission by a Holder and
are not waived by the purchasers or underwriters.

(c) In the event that any registration pursuant to this Section 2 shall involve,
in whole or in part, an underwritten offering, Holders owning at least 50.1% of
the Fair Market Value of the Registrable Securities to be registered in
connection with such offering shall have the right to designate an underwriter
reasonably satisfactory to the Company as the lead managing underwriter of such
underwritten offering.

(d) The Company shall have the right to cause the registration of additional
securities for sale for the account of any person (including the Company) in any
registration of Registrable Securities requested by any Holder pursuant to
Section 2(a); provided, however, that if the managing underwriter or other
independent marketing agent for such offering (if any) determines that, in its
opinion, the additional securities proposed to be sold will materially and
adversely affect the offering and sale of the Registrable Securities to be
registered in accordance with the intended method or methods of disposition then
contemplated by such Holder, only the number or principal amount of such
additional securities, if any (in excess of the number or principal amount of
Registrable Securities), which, in the opinion of such underwriter or agent, can
be so sold without materially and adversely affecting such offering shall be
included in such registration. The rights of a Holder to cause the registration
of additional Registrable Securities held by such Holder in any registration of
Registrable Securities requested by another Holder pursuant to Section 2(a)
shall be governed by the agreement of the Holders with respect thereto as
provided in Section 11(a).

(e) The Company shall not be obligated to file a registration statement relating
to a registration request by a Holder pursuant to this Section 2 from and after
such time as such Holder (together with any Affiliates of such Holder) first
owns Registrable Securities

 

-5-

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

representing (assuming for this purpose the conversion, exchange or exercise of
all Registrable Securities then owned by such Holder that are convertible into
or exercisable or exchangeable for Common Stock of the Company) less than 10% of
the then issued and outstanding Common Stock of the Company.

3. Piggyback Registration. If the Company at any time proposes to register any
of its Common Stock or any of its other securities (such Common Stock and other
securities collectively, “Other Securities”) under the Securities Act, whether
or not for sale for its own account, in a manner which would permit registration
of Registrable Securities under the Securities Act, it will at such time give
prompt written notice to each Holder of its intention to do so at least 20
business days prior to the anticipated filing date of the registration statement
relating to such registration. Such notice shall offer each such Holder the
opportunity to include in such registration statement such number of Registrable
Securities as each such Holder may request. Upon the written request of any such
Holder made within 15 business days after the receipt of the Company’s notice
(which request shall specify the number of Registrable Securities intended to be
disposed of and the intended method of disposition thereof), the Company shall
effect, in the manner set forth in Section 5, in connection with the
registration of the Other Securities, the registration under the Securities Act
of all Registrable Securities which the Company has been so requested to
register, to the extent required to permit the disposition (in accordance with
such intended methods thereof) of the Registrable Securities so requested to be
registered, provided that:

(a) if at any time after giving written notice of its intention to register any
securities and prior to the effective date of such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to the Holders and, thereupon, (A) in the case of a determination
not to register, the Company shall be relieved of its obligation to register any
Registrable Securities in connection with such registration and (B) in the case
of a determination to delay such registration, the Company shall be permitted to
delay registration of any Registrable Securities requested to be included in
such registration for the same period as the delay in registering such Other
Securities, but, in either such case, without prejudice to the rights of the
Holders under Section 2;

(b) (i) if the registration referred to in the first sentence of this Section 3
is to be a registration in connection with an underwritten offering on behalf of
any of the Company, holders of securities (other than Registrable Securities) of
the Company (“Other Holders”) or Holders of Registrable Securities, and the
managing underwriter for such offering advises the Company in writing that, in
such firm’s opinion, such offering would be materially and adversely affected by
the inclusion therein of Registrable Securities requested to be included therein
pursuant to this Section 3 because such Registrable Securities are not of the
same type, class or series as the securities to be offered and sold in such
offering on behalf of the Company, the Other Holders and/or the Holders of
Registrable Securities, the Company may exclude all such Registrable Securities
requested to be included therein pursuant to this Section 3 from such offering.

(ii) if the registration referred to in the first sentence of this Section 3 is
to be a registration in connection with an underwritten primary offering on
behalf of the Company, and

 

-6-

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

the managing underwriter for such offering advises the Company in writing that,
in such firm’s opinion, such offering would be materially and adversely affected
by the inclusion therein of the Holder’s Registrable Securities requested to be
included therein pursuant to this Section 3 because the number or principal
amount of such Registrable Securities, considered together with the number or
principal amount of securities proposed to be offered by the Company, exceeds
the Maximum Marketable Amount, the Company shall include in such registration
(1) first, the lesser of (A) all securities the Company proposes to sell for its
own account (“Company Securities”) and (B) the number or principal amount of
Company Securities that represents 80% of the total number or principal amount
of the Maximum Marketable Amount (or the fair market value of the Maximum
Marketable Amount if such Registrable Securities are not of the same type, class
or series as the Company Securities) included in such registration; (2) second,
the lesser of (A) the number or principal amount of Registrable Securities
requested to be included therein pursuant to this Section 3 and (B) the number
or principal amount of such Registrable Securities that represents 20% of the
total number or principal amount of the Maximum Marketable Amount (or the fair
market value of the Maximum Marketable Amount if such Registrable Securities are
not of the same type, class or series as the Company Securities) included in
such registration (in either case, allocated among the Holders in accordance
with the agreement of the Holders with respect thereto as provided in
Section 11(a)) ; and (3) third, the number or principal amount of securities, if
any, requested to be included therein by Other Holders (in excess of the number
or principal amount of Company Securities and such Registrable Securities)
which, in the opinion of such underwriter, can be so sold without materially and
adversely affecting such offering (allocated among such Other Holders on the
basis of the number or principal amount (or the fair market value of such
securities if the securities are not of the same type, class or series) of the
securities requested to be included therein by each such Other Holder); and

(iii) if the registration referred to in the first sentence of this Section 3 is
to be a registration in connection with an underwritten secondary offering on
behalf of Other Holders made pursuant to demand registration rights granted by
the Company to such Other Holders or on behalf of a Holder of Registrable
Securities made pursuant to Section 2 of this Agreement (the “Initiating
Holders”), and the managing underwriter for such offering advises the Company in
writing that, in such firm’s opinion, such offering would be materially and
adversely affected by the inclusion therein of the Holder’s Registrable
Securities requested to be included therein pursuant to this Section 3 because
the number or principal amount of such Registrable Securities, considered
together with the number or principal amount of securities proposed to be
offered by the Initiating Holders, exceeds the Maximum Marketable Amount, the
Company shall include in such registration; (1) first, all securities any such
Initiating Holder proposes to sell for its own account (the “Initiating Holder
Securities”); (2) second, the number or principal amount of such Registrable
Securities (in excess of the number or principal amount of Initiating Holder
Securities) which, in the opinion of such underwriter, can be sold without
materially and adversely affecting such offering (allocated among the Holders in
accordance with the agreement of the Holders with respect thereto as provided in
Section 11(a)); and (3) third, the number or principal amount of securities, if
any, requested to be included therein by Other Holders to which clause (1) does
not apply or the Company (in excess of the number or principal amount of
Initiating Holder Securities and such Registrable Securities) which, in the
opinion of such underwriter, can be so sold without materially and adversely
affecting such offering (allocated among such Other Holders and the Company on
the basis of the number or principal amount (or

 

-7-

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

the fair market value of such securities if the securities are not of the same
type, class or series) of the securities requested to be included therein by
each such Other Holder or the Company; and

(c) the Company shall not be required to effect any registration of Registrable
Securities under this Section 3 incidental to (i) the registration of any of its
securities in connection with stock option or other executive or employee
benefit or compensation plans of the Company, or (ii) the registration of any of
its equity securities to be issued solely in connection with the Company’s
acquisition of an entity or business in a transaction governed by Rule 145
promulgated under the Securities Act; and

(d) no registration of Registrable Securities effected under this Section 3
shall relieve the Company of its obligation to effect any registration of
Registrable Securities required of the Company pursuant to Section 2 hereof.

4. Expenses. The Company agrees to pay all Registration Expenses with respect to
a registration pursuant to this Agreement. All internal expenses of the Company
or a Holder in connection with any offering pursuant to this Agreement,
including, without limitation, the salaries and expenses of officers and
employees, including in-house attorneys, shall be borne by the party incurring
them. All Selling Expenses of the Holders participating in any registration
pursuant to this Agreement shall be borne by such Holders pro rata based on each
Holder’s number of Registrable Securities included in such registration.

5. Registration and Qualification. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 2 or 3 hereof, the Company,
shall:

(a) prepare and file a registration statement under the Securities Act relating
to the Registrable Securities to be offered as soon as practicable, but in no
event later than 30 days (45 days if the applicable registration form is other
than Form S-3) after the date notice is given, and use its best efforts to cause
the same to become effective as soon as practicable thereafter, but in no event
later than 75 days after the date notice is given (90 days if the applicable
registration form is other than Form S-3); provided that, a reasonable time
before filing a registration statement or prospectus, or any amendments or
supplements thereto (other than reports required to be filed by it under the
Exchange Act and the rules and regulations adopted by the SEC thereunder), the
Company will furnish to the Holders and their counsel and other representatives
(including underwriters) for review and comment, copies of all documents
proposed to be filed and provided further, that if Halliburton so requests
(i) it and its counsel and other representatives (including underwriters) may
participate in the drafting and preparation of such registration statement and
prospectus and (ii) such information as it believes may be beneficial to be
included in the registration statement and prospectus for marketing purposes
shall be included therein so long as disclosure of such information (A) is in
compliance with applicable law and (B) does not competitively harm the Company;

(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective with respect to the
disposition of all Registrable Securities included therein and to otherwise
comply with the provisions of the Securities Act

 

-8-

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

with respect to the disposition of all Registrable Securities included therein
until the earlier of (i) such time as all of such Registrable Securities have
been disposed of in accordance with the intended methods of disposition set
forth in such registration statement and (ii) the expiration of nine months
after such registration statement becomes effective; provided, that such
nine-month period shall be extended for such number of days that equals the
number of days elapsing from (A) the date the written notice contemplated by
paragraph (f) below is given by the Company to (B) the date on which the Company
delivers to the Holders the supplement or amendment contemplated by paragraph
(f) below; and provided further, that in the case of a registration to permit
the exercise or exchange of Exchangeable Securities for, or the conversion of
Exchangeable Securities into, Registrable Securities, the time limitation
contained in clause (ii) above shall be disregarded to the extent that, in the
written opinion of Halliburton’s counsel delivered to the Company, such
Registrable Securities are required to be covered by an effective registration
statement under the Securities Act at the time such Registrable Securities are
issued upon exercise, exchange or conversion of Registrable Securities in order
for such Registrable Securities to be freely tradeable by any person who is not
an Affiliate of the Company or Halliburton;

(c) furnish to the Holders and to any underwriter of such Registrable Securities
such number of conformed copies of such registration statement and of each
amendment thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) and of each supplement
thereto, in conformity with the requirements of the Securities Act, and such
other documents, as the Holders or such underwriter may reasonably request in
order to facilitate the public sale of the Registrable Securities, and a copy of
any and all transmittal letters or other correspondence to, or received from,
the SEC or any other governmental agency or self-regulatory body or other body
having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering;

(d) use its best efforts to register or qualify all Registrable Securities
covered by such registration statement under the securities or blue sky laws of
such jurisdictions (domestic or foreign) as the Holders or any underwriter of
such Registrable Securities shall request, and use its best efforts to obtain
all appropriate registrations, permits and consents required in connection
therewith, and do any and all other acts and things which may be necessary or
advisable to enable the Holders or any such underwriter to consummate the
disposition in such jurisdictions of its Registrable Securities covered by such
registration statement; provided that the Company shall not for any such purpose
be required to register or qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, or to subject
itself to taxation in any such jurisdiction, or to consent to general service of
process in any such jurisdiction;

(e) (i) use its best efforts to furnish an opinion of counsel for the Company
addressed to the underwriters dated the date of the closing under the
underwriting agreement (if any) (or if such offering is not underwritten, dated
the effective date of the registration statement), and (ii) use its best efforts
to furnish a “cold comfort” letter addressed to the underwriters and each Holder
of Registrable Securities included in such registration (each a “Selling
Holder”), if permissible under applicable accounting practices, and signed by
the independent public accountants who have audited the Company’s financial
statements included

 

-9-

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

in such registration statement, in each such case covering substantially the
same matters with respect to such registration statement (and the prospectus
included therein) as are customarily covered in opinions of issuer’s counsel and
in accountants’ letters delivered to underwriters in underwritten public
offerings of securities and such other matters as the Selling Holders may
reasonably request and, in the case of such accountants’ letter, with respect to
events subsequent to the date of such financial statements;

(f) immediately notify the Selling Holders in writing (i) at any time when a
prospectus relating to a registration pursuant to Section 2 or 3 hereof is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, (ii) of any request by the SEC or any other regulatory body or
other body having jurisdiction for any amendment of or supplement to any
registration statement or other document relating to such offering, and (iii) of
the issuance by the SEC of any stop order suspending the effectiveness of any
registration statement relating to such offering or the initiation of
proceedings for that purpose and in any such case (i), (ii) or (iii) at the
request of the Selling Holders, promptly prepare and furnish to the Selling
Holders a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading or to remove such stop
order;

(g) use its best efforts to list all such Registrable Securities covered by such
registration on each securities exchange and inter-dealer quotation system on
which the Common Stock is then listed;

(h) use its best efforts to list all Registrable Securities covered by such
registration statement on any securities exchange or inter-dealer quotation
system (in each case, domestic or foreign) not described in paragraph (g) above
as the Selling Holders or any underwriter of such Registrable Securities shall
reasonably request, and use its best efforts to obtain all appropriate
registrations, permits and consents required in connection therewith, and to do
any and all other acts and things which may be necessary or advisable to effect
such listing;

(i) to the extent reasonably requested by the lead or managing underwriters in
connection with any underwritten offering, send appropriate officers of the
Company to attend any “road shows” scheduled in connection with any such
registration;

(j) furnish for delivery in connection with the closing of any offering of
Registrable Securities unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
the Selling Holders or the underwriters; and

(k) use its best efforts to make available to its security holders, as soon as
reasonably practicable (but not more than eighteen months) after the effective
date of the

 

-10-

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

registration statement, an earnings statement which shall satisfy the provisions
of Section 11(a) of the Securities Act and the rules and regulations promulgated
thereunder.

The Company may require each Selling Holder to furnish the Company with such
information regarding such Selling Holder and pertinent to the disclosure
requirements relating to the registration and the distribution of such
securities as the Company may from time to time reasonably request.

6. Exchangeable Securities; Spin-off or Exchange Offer. Halliburton shall be
entitled, if it intends to offer any options, rights, warrants, debt securities,
preference shares or other securities issued or to be issued by it or any other
person that are exercisable or exchangeable for or convertible into any
Registrable Securities (“Exchangeable Securities”), to register the Registrable
Securities underlying such options, rights, warrants, debt securities,
preference shares or other securities pursuant to (and subject to the
limitations contained in) Section 2 of this Agreement. Halliburton shall also be
entitled, if it intends to distribute Registrable Securities to the holders of
its common stock or other securities (including any distribution in exchange for
Halliburton common stock or other securities), by means of a distribution or
exchange offer, to register such Registrable Securities pursuant to (and subject
to the limitations contained in) Section 2 of this Agreement.

7. Underwriting; Due Diligence.

(a) If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration requested under this
Agreement, the Company shall enter into an underwriting agreement, with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution
substantially to the effect and to the extent provided in Section 8 hereof and
the provision of opinions of counsel and accountants’ letters to the effect and
to the extent provided in Section 5(e) hereof. The Selling Holders on whose
behalf the Registrable Securities are to be distributed by such underwriters
shall be parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, shall also be made to and for the benefit of
such Selling Holders. Such underwriting agreement shall also contain such
representations and warranties by the Selling Holders on whose behalf the
Registrable Securities are to be distributed as are customarily contained in
underwriting agreements with respect to secondary distributions. The Selling
Holders may require that any additional securities included in an offering
proposed by a Holder be included on the same terms and conditions as the
Registrable Securities that are included therein.

(b) In the event that any registration pursuant to Section 3 shall involve, in
whole or in part, an underwritten offering, the Company may require the
Registrable Securities requested to be registered pursuant to Section 3 to be
included in such underwritten offering on the same terms and conditions as shall
be applicable to the other securities being sold through underwriters under such
registration. If requested by the underwriters for such underwritten offering,
the Selling Holders on whose behalf the Registrable Securities are to be
distributed

 

-11-

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

shall enter into an underwriting agreement with such underwriters, such
agreement to contain such representations and warranties by the Selling Holders
and such other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnities and contribution substantially to the effect and to the
extent provided in Section 8 hereof. Such underwriting agreement shall also
contain such representations and warranties by the Company and such other person
or entity for whose account securities are being sold in such offering as are
customarily contained in underwriting agreements with respect to secondary
distributions.

(c) In connection with the preparation and filing of each registration statement
registering Registrable Securities under the Securities Act, the Company shall
give the Holders of such Registrable Securities and the Underwriters, if any,
and their respective counsel and accountants, such reasonable and customary
access to its books and records and such opportunities to discuss the business
of the Company with its officers and the independent public accountants who have
certified the Company’s financial statements as shall be necessary, in the
opinion of such Holders and such underwriters or their respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.

8. Indemnification and Contribution.

(a) In the case of each offering of Registrable Securities made pursuant to this
Agreement, the Company agrees to indemnify and hold harmless each Holder, its
officers and directors, each underwriter of Registrable Securities so offered
and each person, if any, who controls any of the foregoing persons within the
meaning of the Securities Act, from and against any and all claims, liabilities,
losses, damages, expenses and judgments, joint or several, to which they or any
of them may become subject, under the Securities Act or otherwise, including any
amount paid in settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable legal or other
expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as such losses, claims, damages, liabilities or
actions shall arise out of, or shall be based upon, any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement (or in any preliminary or final prospectus included therein) or any
amendment or supplement thereto, or in any document incorporated by reference
therein, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company shall not be liable to a
particular Holder in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity with
information relating to such Holder furnished to the Company in writing by or on
behalf of such Holder and identified in such writing as being specifically for
use in the preparation of the registration statement (or in any preliminary or
final prospectus included therein) or any amendment or supplement thereto. Such
indemnity shall remain in full force and affect regardless of any investigation
made by or on behalf of a Holder and shall survive the transfer of such
securities. The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have to each Holder, any of such Holder’s
directors or officers, underwriters of the Registrable Securities or any
controlling person of the foregoing; provided, further, that this indemnity does
not apply in favor of any underwriter or person controlling an

 

-12-

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

underwriter (or if a Selling Holder offers Registrable Securities directly
without an underwriter, the Selling Holder) with respect to any loss, liability,
claim, damage or expense arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission in any preliminary
prospectus if a copy of a final prospectus was not sent or given by or on behalf
of an underwriter (or the Selling Holder, if the Selling Holder offered the
Registrable Securities directly without an underwriter) to the person asserting
such loss, claim, damage, liability or action at or prior to the written
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in such
final prospectus.

(b) In the case of each offering made pursuant to this Agreement, each Holder of
Registrable Securities included in such offering, by exercising its registration
rights hereunder, agrees to indemnify and hold harmless the Company, its
officers and directors and each person, if any, who controls any of the
foregoing within the meaning of the Securities Act (and if requested by the
underwriters, each underwriter who participates in the offering and each person,
if any, who controls any such underwriter within the meaning of the Securities
Act), from and against any and all claims, liabilities, losses, damages,
expenses and judgments, joint or several, to which they or any of them may
become subject, under the Securities Act or otherwise, including any amount paid
in settlement of any litigation commenced or threatened, and shall promptly
reimburse them, as and when incurred, for any legal or other expenses incurred
by them in connection with investigating any claim and defending any actions,
insofar as any such losses, claims, damages, liabilities or actions shall arise
out of, or shall be based upon, any untrue statement or alleged untrue statement
of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or any amendment or supplement
thereto, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement of a
material fact is contained in, or such material fact is omitted from,
information relating to such Holder furnished in writing to the Company by or on
behalf of such Holder and identified in such writing as being specifically for
use in the preparation of such registration statement (or in any preliminary or
final prospectus included therein). The foregoing indemnity is in addition to
any liability which such Holder may otherwise have to the Company, any of its
directors or officers, underwriters who participates in the offering or any
controlling person of the foregoing; provided, however, that this indemnity does
not apply in favor of any underwriter or person controlling an underwriter (or
if the Company offers securities directly without an underwriter, the Company)
with respect to any loss, liability, claim, damage or expense arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus if a copy of a final prospectus
was not sent or given by or on behalf of an underwriter (or the Company, if the
Company offered the securities directly without an underwriter) to the person
asserting such loss, claim, damage, liability or action at or prior to the
written confirmation of the sale of the securities as required by the Securities
Act and such untrue statement or omission had been corrected in such final
prospectus.

(c) Each party indemnified under Paragraph (a) or (b) of this Section 8 shall,
promptly after receipt of notice of any claim or the commencement of any action
against such indemnified party in respect of which indemnity may be sought,
notify the indemnifying party in writing of the claim or the commencement
thereof; provided that the failure to notify the

 

-13-

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

indemnifying party shall not relieve it from any liability which it may have to
an indemnified party on account of the indemnity agreement contained in
paragraph (a) or (b) of this Section 8, except to the extent the indemnifying
party was materially prejudiced by such failure, and in no event shall relieve
the indemnifying party from any other liability which it may have to such
indemnified party. If any such claim or action shall be brought against an
indemnified party, and such indemnified party notifies the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided that each indemnified party, its
officers and directors, if any, and each person, if any, who controls such
indemnified party within the meaning of the Securities Act, shall have the right
to employ separate counsel reasonably approved by the indemnifying party to
represent them if the named parties to any action (including any impleaded
parties) include both such indemnified party and an indemnifying party or an
Affiliate of an indemnifying party, and such indemnified party shall have been
advised by counsel a conflict may exist between such indemnified party and such
indemnifying party or such Affiliate that makes representation by the same
counsel inadvisable, and in that event the fees and expenses of one such
separate counsel for all such indemnified parties shall be paid by the
indemnifying party. An indemnified party will not enter into any settlement
agreement which is not approved by the indemnifying party, such approval not to
be unreasonably withheld. The indemnifying party may not agree to any settlement
of any such claim or action which provides for any remedy or relief other than
monetary damages for which the indemnifying party shall be responsible
hereunder, without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld. In any action hereunder as to which
the indemnifying party has assumed the defense thereof with counsel reasonably
satisfactory to the indemnified party, the indemnified party shall continue to
be entitled to participate in the defense thereof, with counsel of its own
choice, but, except as set forth above, the indemnifying party shall not be
obligated hereunder to reimburse the indemnified party for the costs thereof. In
all instances, the indemnified party shall cooperate fully with the indemnifying
party or its counsel in the defense of such claim or action.

(d) If the indemnification provided for in this Section 8 shall for any reason
be unavailable to or insufficient to hold harmless an indemnified party in
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to herein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be appropriate to reflect
the relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information related to and supplied by the indemnifying party on the one hand
or the indemnified party on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent

 

-14-

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

such statement or omission, but not by reference to any indemnified party’s
stock ownership in the Company. In no event, however, shall a Holder be required
to contribute in excess of the amount of the net proceeds received by such
Holder in connection with the sale of Registrable Securities in the offering
which is the subject of such loss, claim, damage or liability. The amount paid
or payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this paragraph
shall be deemed to include, for purposes of this paragraph, any legal or other
expenses reasonably incurred by such indemnifying party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

9. Rule 144. The Company shall take such measures and file such information,
documents and reports as shall be required by the SEC as a condition to the
availability of Rule 144 (or any successor provision). The Company shall use its
best efforts to cause all conditions to the availability of Form S-3 (or any
successor form thereto) under the Securities Act for the filing of registration
statements under this Agreement to be met as soon as possible after the
completion of the Public Offering.

10. Holdback.

(a) Each Holder agrees, if so required by the managing underwriter of any
offering of equity securities by the Company and provided that the Company and
each of its executive officers and directors enter into similar agreements, not
to sell, make any short sale of, loan, grant any option for the purchase of,
effect any public sale or distribution of or otherwise dispose of any
Registrable Securities owned by such Holder, during the 7 days prior to and the
90 days after the registration statement relating to such offering has become
effective (or such shorter period as may be required by the underwriter), except
as part of such underwritten offering. Notwithstanding the foregoing sentence,
each Holder subject to the foregoing sentence shall be entitled at any time to
(i) issue shares of Common Stock or other securities upon the exercise of an
option or warrant or the conversion or exchange of a security outstanding on
such date, (ii) sell any Registrable Securities acquired in open market
transactions after the completion of such underwritten offering, (iii) sell any
Registrable Securities in a transaction in which the purchaser agrees to be
bound by the restrictions contained in the foregoing sentence and (iv) in the
case of Halliburton, effect any distribution of shares of Common Stock to the
holders of its common stock by means of a distribution or exchange offer in a
transaction intended to qualify as a tax-free distribution under Section 355 of
the Internal Revenue Code, as amended, or any corresponding provision of any
successor statute. The Company may legend and may impose stop transfer
instructions on any certificate evidencing Registrable Securities relating to
the restrictions provided for in this Section 10. The Holders shall not be
subject to the restrictions set forth in this Section 10(a) for longer than 97
days during any 12-month period and a Holder shall no longer be subject to such
restrictions at such time as such Holder together with its Affiliates shall own
less than 10% of the then outstanding shares of Common Stock on a fully-diluted
basis.

(b) The Company agrees, if so required by the managing underwriter of any
offering of Registrable Securities, not to sell, make any short sale of, loan,
grant any option for

 

-15-

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

the purchase of, effect any public sale or distribution of or otherwise dispose
of any of its equity securities during the 30 days prior to and the 90 days
after any underwritten registration pursuant to Section 2 or 3 hereof has become
effective, except as part of such underwritten registration. Notwithstanding the
foregoing sentence, the Company shall be entitled at any time to (i) issue
shares of Common Stock or other securities upon the exercise of an option or
warrant or the conversion or exchange of a security outstanding on such date,
(ii) grant options to purchase shares of Common Stock or issue restricted shares
of Common Stock or other securities pursuant to employee benefit plans in effect
on such date and (iii) sell shares of Common Stock or other securities in a
transaction in which the purchaser agrees to be bound by the restrictions
contained in the preceding paragraph. The Company shall use its best efforts to
obtain and enforce similar agreements from any other Persons if requested by the
managing underwriter of such offering. Neither the Company nor such Persons
shall be subject to the restrictions set forth in this Section 10(b) for longer
than 120 days during any 12-month period.

11. Transfer of Registration Rights.

(a) A Holder may transfer all or any portion of its rights under this Agreement
to any transferee of Registrable Securities that represent (assuming the
conversion, exchange or exercise of all Registrable Securities so transferred
that are convertible into or exercisable or exchangeable for the Company’s
Common Stock) at least 10% of the then issued and outstanding Common Stock of
the Company (each, a “Permitted Transferee”); provided, however, that (i) with
respect to any transferee of a majority of the then outstanding shares of Common
Stock, the Company shall not be obligated to file a registration statement
pursuant to a registration request made by such transferee pursuant to Section 2
hereof on more than two occasions after such time as such transferee owns less
than a majority of the then outstanding shares of Common Stock, (ii) with
respect to any transferee of less than a majority but more than 25% of the then
outstanding shares of Common Stock, the Company shall not be obligated to file a
registration statement pursuant to a registration request made by such
transferee pursuant to Section 2 hereof on more than two occasions, and
(iii) with respect to any transferee of 25% or less of the then issued and
outstanding Common Stock, the Company shall not be obligated to file a
registration statement pursuant to a registration request made by such
transferee pursuant to Section 2 hereof on more than one occasion. Any Holder
electing to transfer registration rights pursuant to this Section shall provide
the Company with written notice promptly following such Holder’s execution of a
binding agreement to transfer Registrable Securities. Such notice shall state
the name and address of any Permitted Transferee and identify the number and/or
aggregate principal amount of Registrable Securities with respect to which the
rights under this Agreement are being transferred and the scope of the rights so
transferred. In connection with any such transfer, the term Halliburton as used
in this Agreement (other than in Sections 2(a)(iii) and 5(a)) shall, where
appropriate to assign the rights and obligations hereunder to such Permitted
Transferee, be deemed to refer to the Permitted Transferee of such Registrable
Securities. Halliburton and any Permitted Transferees may exercise the
registration rights hereunder in such priority, as among themselves, as they
shall agree among themselves, and the Company shall observe any such agreements
of which it shall have notice as provided above.

(b) After any such transfer, the transferring Holder shall retain its rights
under this Agreement with respect to all other Registrable Securities owned by
such transferring Holder.

 

-16-

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

(c) Upon the request of the transferring Holder, the Company shall execute an
agreement with a Permitted Transferee substantially similar to this Agreement.

12. Miscellaneous.

(a) Injunctions. Each party acknowledges and agrees that irreparable damage
would occur in the event that any of the provisions of this Agreement was not
performed in accordance with its specific terms or was otherwise breached.
Therefore, each party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof in any court having jurisdiction, such remedy
being in addition to any other remedy to which such party may be entitled at law
or in equity.

(b) Severability. If any term or provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms and provisions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and each of the
parties shall use its best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term or provision.

(c) Further Assurances. Subject to the specific terms of this Agreement, each of
the parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as may be reasonably
required in order to effectuate the purposes of this Agreement and to consummate
the transactions contemplated hereby.

(d) Waivers, etc. Except as otherwise expressly set forth in this Agreement, no
failure or delay on the part of either party in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. Except as otherwise
expressly set forth in this Agreement, no modification or waiver of any
provision of this Agreement nor consent to any departure therefrom shall in any
event be effective unless the same shall be in writing and signed by an
authorized officer of each of the parties, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.

(e) Entire Agreement. This Agreement contains the final and complete
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties, whether
written or oral, with respect to the subject matter hereof.

(f) Counterparts. For the convenience of the parties, this Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original but all of which together shall be one and the same instrument.

(g) Termination. The right of any Holder to request registration or inclusion in
any registration pursuant to this Agreement shall terminate on such date as all
Registrable

 

-17-

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

Securities held or entitled to be held upon conversion by such Holder and its
Affiliates may immediately be sold under Rule 144 during any ninety (90) day
period.

(h) Amendment. This Agreement may be amended only by a written instrument duly
executed by an authorized officer of each of the parties.

(i) Notices. Unless expressly provided herein, all notices, claims,
certificates, requests, demands and other communications hereunder shall be in
writing and shall be deemed to be duly given (i) when personally delivered or
(ii) if sent by registered or certified mail, postage prepaid, return receipt
requested, on the date the return receipt is executed or the letter refused by
the addressee or its agent or (iii) if sent by overnight courier which delivers
only upon the signed receipt of the addressee, on the date the receipt
acknowledgment is executed or refused by the addressee or its agent or (iv) if
sent by facsimile or other generally accepted means of electronic transmission,
on the date confirmation of transmission is received (provided that a copy of
any notice delivered pursuant to this clause (iv) shall also be sent pursuant to
clause (ii) or (iii)), addressed as follows or sent by facsimile to the
following number (or to such other address or facsimile number for a party as it
shall have specified by like notice):

 

  (i) if to Halliburton, to:

Halliburton Company

5 Houston Center

1401 McKinney, Suite 2400

Houston, Texas 77010

Attention: General Counsel

 

  (ii) if to the Company, to

KBR, Inc.

4100 Clinton Drive

Houston, Texas 77020-6237

Attention: General Counsel

 

  (iii) if to a Holder, to the name and address as the same appear in the
security transfer books of the Company,

or to such other address as either party (or other Holders) may, from time to
time, designate in a written notice in a like manner.

(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.

(k) Assignment. Except as specifically provided herein, the parties may not
assign their rights under this Agreement. The Company may not delegate its
obligations under this Agreement.

 

-18-

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

(l) Conflicting Agreements. The Company shall not hereafter grant any rights to
any person to register securities of the Company, the exercise of which would
conflict with the rights granted to the Holders under this Agreement. The
Company shall not hereafter grant to any person demand registration rights
permitting it to exclude the Holders from including Registrable Securities in a
registration on behalf of such person on a basis more favorable than that set
forth in Section 2(d) hereof with respect to the Holders.

(m) Resolution of Disputes. If a dispute, claim or controversy results from or
arises out of or in connection with this Agreement, the parties agree to use the
procedures set forth in Article VII of the Separation Agreement, in lieu of
other available remedies, to resolve the same.

(n) Construction. This Agreement shall be construed as if jointly drafted by the
Company and Halliburton and no rule of construction or strict interpretation
shall be applied against either party. The paragraph headings contained in this
Agreement are for reference purposes only, and shall not affect in any manner
the meaning or interpretation of this Agreement.

 

-19-

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

IN WITNESS WHEREOF, Halliburton and the Company have caused this Agreement to be
duly executed by their authorized representative as of the date first above
written.

 

HALLIBURTON COMPANY By:   /s/ C. Christopher Gaut Name:   C. Christopher Gaut
Title:   Executive Vice President and Chief Financial Officer KBR, INC. By:  
/s/ William P. Utt Name:   William P. Utt Title:   President & CEO

 

-20-