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    EXHIBIT
      10.29

    

    

    

    

    

    

    

    

    

    

    HALLIBURTON
      COMPANY

    

    SUPPLEMENTAL
      EXECUTIVE 

    RETIREMENT
      PLAN

    

    AS
      AMENDED AND RESTATED

    

    EFFECTIVE
      DECEMBER 7, 2005

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

    

    
      	
              ARTICLE

            	 	
              PAGE

            
	 	 	 
	
              ARTICLE
                I:

            	
              PURPOSE
                OF THE
                PLAN...........................................................................................................................

            	
                  1

            
	 	 	 
	
              ARTICLE
                II:

            	
              DEFINITIONS................................................................................................................................................

            	
                  1

            
	 	 	 
	
              ARTICLE
                III:

            	
              ADMINISTRATION
                OF THE
                PLAN.........................................................................................................

            	
                  2

            
	 	 	 
	
              ARTICLE
                IV:

            	
              ALLOCATIONS
                UNDER THE PLAN, PARTICIPATION

            	 
	 	
              IN
                THE PLAN AND SELECTION FOR
                AWARDS.................................................................................

            	
                  4

            
	 	 	 
	
              ARTICLE
                V:

            	
              NON-ASSIGNABILITYOF
                AWARDS......................................................................................................

            	
                  5

            
	 	 	 
	
              ARTICLE
                VI:

            	
              VESTING........................................................................................................................................................

            	
                  5

            
	 	 	 
	
              ARTICLE
                VII:

            	
              DISTRIBUTION
                OF
                AWARDS..................................................................................................................

            	
                  5

            
	 	 	 
	
              ARTICLE
                VIII:

            	
              NATURE
                OF
                PLAN.......................................................................................................................................

            	
                  6

            
	 	 	 
	
              ARTICLE
                IX:

            	
              FUNDING
                OF
                OBLIGATION......................................................................................................................

            	
                  7

            
	 	 	 
	
              ARTICLE
                X:

            	
              AMENDMENT
                OR TERMINATION OF
                PLAN.......................................................................................

            	
                  7

            
	 	 	 
	
              ARTICLE
                XI:

            	
              GENERAL
                PROVISIONS............................................................................................................................

            	
                  7

            
	 	 	 
	
              ARTICLE
                XII:

            	
              EFFECTIVE
                DATE.........................................................................................................................................

            	
                  8

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

     

    

    

    

    
      
        
        

      

      
        (i)

        
          

        

      

      
        
        

      

    

    HALLIBURTON
      COMPANY

    

    SUPPLEMENTAL

    

    EXECUTIVE
      RETIREMENT PLAN

    

    

    Halliburton
      Company, having heretofore established the Halliburton Company Senior
      Executives' Deferred Compensation Plan, pursuant to the provisions of Article
      X
      of said Plan, hereby splits said Plan into the Halliburton Company Supplemental
      Executive Retirement Plan and the Halliburton Company Benefit Restoration Plan
      and amends and restates the Halliburton Company Supplemental Executive
      Retirement Plan to read as follows and to be effective in accordance with the
      provisions of Article XII hereof. The Plan was further amended, effective
      December 7, 2005, to add a vesting requirement of five consecutive years of
      participation in the Plan for awards made in the 2005 and subsequent Allocation
      Years. Each current Participant shall get credit for years of participation
      in
      the Plan prior to this amendment for vesting purposes under the Plan.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

     

    

    
      
        
        

      

      
        (ii)

        
          

        

      

      
        
        

      

    

    ARTICLE
      I

    

    Purpose
      of the Plan

    

    The
      purpose of the Halliburton Company Supplemental Executive Retirement Plan is
      to
      provide supplemental retirement benefits to Participants in order to promote
      growth of the Company and provide additional means of attracting and holding
      qualified competent executives.

    

    ARTICLE
      II

    Definitions

    

    Where
      the
      following words and phrases appear in the Plan, they shall have the respective
      meanings set forth below, unless their context clearly indicates to the
      contrary.

    

    (A) Account:
      An
      individual account for each Participant on the books of such Participant’s
      Employer to which is credited amounts allocated for the benefit of such
      Participant pursuant to the provisions of Article IV, Paragraph (D) and interest
      credited pursuant to the provisions of Article IV, Paragraph (G).

    

       
      (B) Administrative
      Committee:
      The
      administrative committee appointed by the Compensation Committee to administer
      the Plan.

    

       
      (C) Allocation
      Year:
      The
      calendar year for which an allocation is made to a Participant’s Account
      pursuant to Article IV.

    

       
      (D) Board:
      The
      Board
      of Directors of the Company.

    

       
      (E) Code:
      The
      Internal Revenue Code of 1986, as amended.

    

       
      (F) Compensation
      Committee:
      The
      Compensation Committee of the Board.

    

       
      (G) Company:
      Halliburton
      Company.

    

       
      (H) Employee:
      Any
      employee of an Employer. The term does not include independent contractors
      or
      persons who are retained by an Employer as consultants only.

    

       
      (I) Employer:
      The
      Company and any Subsidiary designated as an Employer in accordance with the
      provisions of Article III of the Plan.

    

       
      (J) ERISA:
      The
      Employee Retirement Income Security Act of 1974, as amended.

    

       
      (K) Participant:
      A
      Senior
      Executive who is selected as a Participant for an Allocation Year. The
      Compensation Committee shall be the sole judge of who shall be eligible to
      be a
      Participant for any Allocation Year. The selection of a Senior Executive to
      be a
      Participant for a particular Allocation Year shall not constitute him or her
      a
      Participant for another Allocation Year unless he or she is selected to be
      a
      Participant for such other Allocation Year by the Compensation Committee.

    
      
         

        
        

      

      
        1

        
          

        

      

      
        
        

      

    

       
      (L) Plan:
      The
      Halliburton Company Supplemental Executive Retirement Plan, as amended and
      restated December 7, 2005. The prior version of the Plan was the amendment
      and
      restatement effective January 1, 2001.

    

       
      (M) Senior
      Executive:
      An
      Employee who is a senior executive, including an officer, of an Employer
      (whether or not he or she is also a director thereto), who is employed by an
      Employer on a full-time basis, who is compensated for such employment by a
      regular salary and who, in the opinion of the Compensation Committee, is one
      of
      the key personnel of an Employer in a position to contribute materially to
      its
      continued growth and development and to its future financial
      success.

    

    (N) Subsidiary:
      At
      any
      given time, a company (whether a corporation, partnership, llimited liability
      company or other form of entity) in which the Company or any other of the
      Subsidiaries or both owns, directly or indirectly, an aggregate equity interest
      of 80% or more. 

    

    (O) Termination
      of Service:
      Severance
      from employment with an Employer for any reason other than a transfer between
      Employers.

    

       
      (P) Trust:
      Any
      trust
      created pursuant to the provisions of Article IX. 

    

       
      (Q) Trust
      Agreement:
      The
      agreement establishing the Trust.

    

       
      (R) Trustee:
      The
      trustee of the Trust.

    

       
      (S) Trust
      Fund:
      Assets
      under the Trust as may exist from time to time. 

    

    ARTICLE
      III

    

    Administration
      of the Plan

    

      
      (A) The
      Compensation Committee shall appoint an Administrative Committee to administer,
      construe and interpret the Plan. Such Administrative Committee, or such
      successor Administrative Committee as may be duly appointed by the Compensation
      Committee, shall serve at the pleasure of the Compensation Committee. Decisions
      of the Administrative Committee, with respect to any matter involving the Plan,
      shall be final and binding on the Company, its shareholders, each Employer
      and
      all officers and other executives of the Employers. For purposes of the Employee
      Retirement Income Security Act of 1974, the Administrative Committee shall
      be
      the Plan "administrator" and shall be the "named fiduciary" with respect to
      the
      general administration of the Plan.

    

      
      (B) The
      Administrative Committee shall maintain complete and adequate records pertaining
      to the Plan, including but not limited to Participants' Accounts, amounts
      transferred to the Trust, reports from the Trustee and all other records which
      shall be necessary or desirable in the proper administration of the Plan. The
      Administrative Committee shall furnish the Trustee such information as is
      required to be furnished by the Administrative Committee or the Company pursuant
      to the Trust Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

       
      (C) The
      Company (the "Indemnifying Party") hereby agrees to indemnify and hold harmless
      the members of the Administrative Committee (the "Indemnified Parties") against
      any losses, claims, damages or liabilities to which any of the Indemnified
      Parties may become subject to the extent that such losses, claims, damages
      or
      liabilities or actions in respect thereof arise out of or are based upon any
      act
      or omission of the Indemnified Party in connection with the administration
      of
      this Plan (including any act or omission of such Indemnified Party constituting
      negligence, but excluding any act or omission of such Indemnified Party
      constituting gross negligence or willful misconduct), and will reimburse the
      Indemnified Party for any legal or other expenses reasonably incurred by him
      or
      her in connection with investigating or defending against any such loss, claim,
      damage, liability or action.

    

       
      (D) Promptly
      after receipt by the Indemnified Party under the preceding paragraph of notice
      of the commencement of any action or proceeding with respect to any loss, claim,
      damage or liability against which the Indemnified Party believes he or she
      is
      indemnified under the preceding paragraph, the Indemnified Party shall, if
      a
      claim with respect thereto is to be made against the Indemnifying Party under
      such paragraph, notify the Indemnifying Party in writing of the commencement
      thereof, provided, however, that the omission so to notify the Indemnifying
      Party shall not relieve it from any liability which it may have to the
      Indemnified Party to the extent the Indemnifying Party is not prejudiced by
      such
      omission. If any such action or proceeding shall be brought against the
      Indemnified Party, and it shall notify the Indemnifying Party of the
      commencement thereof, the Indemnifying Party shall be entitled to participate
      therein, and, to the extent that it shall wish, to assume the defense thereof,
      with counsel reasonably satisfactory to the Indemnified Party, and, after notice
      from the Indemnifying Party to the Indemnified Party of its election to assume
      the defense thereof, the Indemnifying Party shall not be liable to such
      Indemnified Party under the preceding paragraph for any legal or other expenses
      subsequently incurred by the Indemnified Party in connection with the defense
      thereof other than reasonable costs of investigation or reasonable expenses
      of
      actions taken at the written request of the Indemnifying Party. The Indemnifying
      Party shall not be liable for any compromise or settlement of any such action
      or
      proceeding effected without its consent, which consent will not be unreasonably
      withheld.

    

       
      (E) The
      Administrative Committee may designate any Subsidiary as an Employer by written
      instrument delivered to the Secretary of the Company and the designated
      Employer. Such written instrument shall specify the effective date of such
      designated participation, may incorporate specific provisions relating to the
      operation of the Plan which apply to the designated Employer only and shall
      become, as to such designated Employer and its employees, a part of the Plan.
      Each designated Employer shall be conclusively presumed to have consented to
      its
      designation and to have agreed to be bound by the terms of the Plan and any
      and
      all amendments thereto upon its submission of information to the Administrative
      Committee required by the terms of or with respect to the Plan; provided,
      however, that the terms of the Plan may be modified so as to increase the
      obligations of an Employer only with the consent of such Employer, which consent
      shall be conclusively presumed to have been given by such Employer upon its
      submission of any information to the Administrative Committee required by the
      terms of or with respect to the Plan. Except as modified by the Administrative
      Committee in its written instrument, the provisions of this Plan shall be
      applicable with respect to each Employer separately, and amounts payable
      hereunder shall be paid by the Employer which employs the particular
      Participant, if not paid from the Trust Fund.

    

       
      (F) No
      member
      of the Administrative Committee shall have any right to vote or decide upon
      any
      matter relating solely to himself or herself under the Plan or to vote in any
      case in which his or her individual right to claim any benefit under the Plan
      is
      particularly involved. In any case in which an Administrative Committee member
      is so disqualified to act and the remaining members cannot agree, the
      Compensation Committee shall appoint a temporary substitute member to exercise
      all the powers of the disqualified member concerning the matter in which he
      or
      she is disqualified.

    
      
         

        
        

      

      
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    ARTICLE
      IV

    

    Allocations
      Under the Plan,

    Participation
      in the Plan and Selection for Awards

    

       
      (A) Each
      Allocation Year the Compensation Committee shall, in its sole discretion,
      determine what amounts shall be available for allocation to the Accounts of
      the
      Participants pursuant to Paragraph (D) below.

    

       
      (B) No
      award
      shall be made to any person while he or she is a voting member of the
      Compensation Committee.

    

       
      (C) The
      Compensation Committee from time to time may adopt, amend or revoke such
      regulations and rules as it may deem advisable for its own purposes to guide
      in
      determining which of the Senior Executives it shall deem to be Participants
      for
      a particular Allocation Year and the method and manner of payment thereof to
      the
      Participants.

    

       
      (D) The
      Compensation Committee, during the Allocation Year involved or during the next
      succeeding Allocation Year, shall determine which Senior Executives it shall
      designate as Participants for such Allocation Year and the amounts allocated
      to
      each Participant for such Allocation Year. In making its determination, the
      Compensation Committee shall consider such factors as the Compensation Committee
      may in its sole discretion deem material. The Compensation Committee, in its
      sole discretion, may notify a Senior Executive at any time during a particular
      Allocation Year or in the Allocation Year following the Allocation Year for
      which the award is made that he or she has been selected as a Participant for
      all or part of such Allocation Year, and may determine and notify him or her
      of
      the amount which shall be allocated to such Participant for such Allocation
      Year. The decision of the Compensation Committee in selecting a Senior Executive
      to be a Participant or in making any allocation to him or her shall be final
      and
      conclusive, and nothing herein shall be deemed to give any Senior Executive
      or
      his or her legal representatives or assigns any right to be a Participant for
      such Allocation Year or to be allocated any amount except to the extent of
      the
      amount, if any, allocated to a Participant for a particular Allocation Year,
      but
      at all times subject to the provisions of the Plan.

    

       
      (E) A
      Senior
      Executive whose service is terminated during the Allocation Year may be selected
      as a Participant for such part of the Allocation Year prior to his or her
      Termination of Service and be granted such award with respect to his or her
      services during such part of the Allocation Year as the Compensation Committee,
      in its sole discretion and under any rules it may promulgate, may
      determine.

    

       
      (F) Allocations
      to Participants under the Plan shall be made by crediting their respective
      Accounts on the books of their Employers as of the last day of the Allocation
      Year. Accounts of Participants shall also be credited with interest as of the
      last day of each Allocation Year, at the rate set forth in Paragraph (G) below,
      on the average monthly credit balance of the Account being calculated by using
      the balance of each Account on the first day of each month. Prior to Termination
      of Service, the annual interest shall accumulate as a part of the Account
      balance. After Termination of Service, the annual interest for such Allocation
      Year may be paid as more particularly set forth hereinafter in Article VII,
      Paragraph (C).

    

       
      (G) Interest
      shall be credited on amounts allocated to Participants' Accounts at the rate
      of
      5% per annum for periods prior to Termination of Service and at the rate of
      10%
      per annum for periods subsequent to Termination of Service. 

    
      
         

        
        

      

      
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    ARTICLE
      V

    

    Non-Assignability
      of Awards

    

    No
      Participant shall have any right to commute, encumber, pledge, transfer or
      otherwise dispose of or alienate any present or future right or expectancy
      which
      he or she may have at any time to receive payments of any allocations made
      to
      such Participant, all such allocations being expressly hereby made
      non-assignable and non-transferable; provided, however, that nothing in this
      Article shall prevent transfer (A) by will, (B) by the applicable laws of
      descent and distribution or (C) pursuant to an order that satisfies the
      requirements for a "qualified domestic relations order" as such term is defined
      in section 206(d)(3)(B) of the ERISA and section 414(p)(1)(A) of the Code,
      including an order that requires distributions to an alternate payee prior
      to a
      Participant's "earliest retirement age" as such term is defined in section
      206(d)(3)(E)(ii) of the ERISA and section 414(p)(4)(B) of the Code. Attempts
      to
      transfer or assign by a Participant (other than in accordance with the preceding
      sentence) shall, in the sole discretion of the Compensation Committee after
      consideration of such facts as it deems pertinent, be grounds for terminating
      any rights of such Participant to any awards allocated to but not previously
      paid over to such Participant.

    

    ARTICLE
      VI

    Vesting

    

    All
      amounts, including interest, credited to a Participant’s Account prior to the
      2005 Allocation Year shall be fully vested and not subject to forfeiture for
      any
      reason, except as provided in Article V, regardless of the number of years
      of
      participation in the Plan by such Participant. All amounts, including interest,
      credited to a Participant’s Account, which are attributable to the 2005
      Allocation Year and any subsequent Allocation Years in which such Participant
      may receive an award, shall be fully vested and not subject to forfeiture for
      any reason, except as provided in Article V, when such Participant has five
      consecutive years of participation in the Plan as measured from the date such
      Participant first became a Participant in the Plan. 

    

    ARTICLE
      VII

    

    Distribution
      of Awards

    

    (A) Upon
      Termination of Service of a Participant the Administrative Committee (i) shall
      certify to the Trustee or the treasurer of the Employer, as applicable, the
      vested amount credited to the Participant's Account on the books of each
      Employer for which the Participant was employed at a time when he or she earned
      an award hereunder, (ii) shall determine whether the payment of the vested
      amount credited to the Participant's Account under the Plan is to be paid
      directly by the applicable Employer, from the Trust Fund, if any, or by a
      combination of such sources (except to the extent the provisions of the Trust
      Agreement if any, specify payment from the Trust Fund) and (iii) shall determine
      and certify to the Trustee or the treasurer of the Employer, as applicable,
      the
      method of payment of the vested amount credited to a Participant's Account,
      selected by the Administrative Committee from among the following
      alternatives:

    

    (1)  A
      single
      lump sum payment upon Termination of Service;

    
      
         

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

          
      (2) A
      payment
      of one-half of the Participant's balance upon Termination of Service, with
      payment of the additional one-half to be made on or before the last day of
      a
      period of one year following Termination of Service; or

    

          
      (3) Payment
      in monthly installments over a period not to exceed ten years with such payments
      to commence upon Termination of Service.

    

    The
      above
      notwithstanding, if the total vested amount credited to the Participant's
      Account upon Termination of Service is less than $50,000, such amount shall
      always be paid in a single lump sum payment upon Termination of
      Service.

    

      
      (B) The
      Trustee or the treasurer of the Employer, as applicable, shall thereafter make
      payments of awards in the manner and at the times so designated, subject,
      however, to all of the other terms and conditions of this Plan and the Trust
      Agreement if any. This Plan shall be deemed to authorize the payment of all
      or
      any portion of a Participant's award from the Trust Fund to the extent such
      payment is required by the provisions of the Trust Agreement, if
      any.

    

      
      (C) Interest
      on the second half of a payment under Paragraph (A)(2) above shall be paid
      with
      the final payment, while interest on payments under Paragraph (A)(3) above
      may
      be paid at each year end or may be paid as a part of a level monthly payment
      computed by the Administrative Committee through the use of such methodologies
      as the Administrative Committee shall select from time to time for such
      purpose.

    

      
      (D) If
      a
      Participant shall die while in the service of an Employer the vesting provision
      in Article VI shall not apply to such Participant’s Account. If a Participant
      shall die after Termination of Service and prior to the time when all amounts
      payable to him or her under the Plan have been paid to such Participant, any
      remaining amounts payable to the Participant hereunder shall be payable to
      the
      estate of the Participant. The Administrative Committee shall cause the Trustee
      or the treasurer of the Employer, as applicable, to pay to the estate of the
      Participant all of the awards then standing to his or her credit in a lump
      sum
      or in such other form of payment consistent with the alternative methods of
      payment set forth above as the Administrative Committee shall determine after
      considering such facts and circumstances relating to the Participant and his
      or
      her estate as it deems pertinent.

    

      
      (E) If
      the
      Plan is terminated pursuant to the provisions of Article X, the Compensation
      Committee may, at its election and in its sole discretion, cause the Trustee
      or
      the treasurer of the Employer, as applicable, to pay to all Participants all
      of
      the awards then standing to their credit in the form of lump sum
      payments.

    

    ARTICLE
      VIII

    

    Nature
      of Plan

    

    This
      Plan
      constitutes a mere promise by the Employers to make benefit payments in the
      future and Participants have the status of general unsecured creditors of the
      Employers. Further, the adoption of this Plan and any setting aside of amounts
      by the Employers with which to discharge their obligations hereunder shall
      not
      be deemed to create a trust; legal and equitable title to any funds so set
      aside
      shall remain in the Employers, and any recipient of benefits hereunder shall
      have no security or other interest in such funds. Any and all funds so set
      aside
      shall remain subject to the claims of the general creditors of the Employers,
      present and future. This provision shall not require the Employers to set aside
      any funds, but the Employers may set aside such funds if they choose to do
      so.

    
      
         

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    ARTICLE
      IX

    

    Funding
      of Obligation

    

    Article
      VIII above to the contrary notwithstanding, the Employers may fund all or part
      of their obligations hereunder by transferring assets to a trust if the
      provisions of the trust agreement creating the Trust require the use of the
      Trust's assets to satisfy claims of an Employer's general unsecured creditors
      in
      the event of such Employer's insolvency and provide that no Participant shall
      at
      any time have a prior claim to such assets. Any transfers of assets to a trust
      may be made by each Employer individually or by the Company on behalf of all
      Employers. The assets of the Trust shall not be deemed to be assets of this
      Plan.

    

    ARTICLE
      X

    

    Amendment
      or Termination of Plan

    

    The
      Compensation Committee shall have the power and right from time to time to
      modify, amend, supplement, suspend or terminate the Plan as it applies to each
      Employer, provided that no such change in the Plan may deprive a Participant
      of
      the amounts allocated to his or her Account or be retroactive in effect to
      the
      prejudice of any Participant and the interest rate applicable to amounts
      credited to Participants' Accounts for periods subsequent to Termination of
      Service shall not be reduced below 6% per annum. Any such modification,
      amendment, supplement suspension or termination shall be in writing and signed
      by a member of the Compensation Committee.

    

    ARTICLE
      XI

    General
      Provisions

    

      
      (A) No
      Participant shall have any preference over the general creditors of an Employer
      in the event of such Employer’s insolvency.

    

      
      (B) Nothing contained
      herein shall be construed to give any person the right to be retained in the
      employ of an Employer or to interfere with the right of an Employer to terminate
      the employment of any person at any time.

    

      
      (C) If
      the
      Administrative Committee receives evidence satisfactory to it that any person
      entitled to receive a payment hereunder is, at the time the benefit is payable,
      physically, mentally or legally incompetent to receive such payment and to
      give
      a valid receipt therefor, and that an individual or institution is then
      maintaining or has custody of such person and that no guardian, committee or
      other representative of the estate of such person has been duly appointed,
      the
      Administrative Committee may direct that such payment thereof be paid to such
      individual or institution maintaining or having custody of such person, and
      the
      receipt of such individual or institution shall be valid and a complete
      discharge for the payment of such benefit.

    

      
      (D) Payments
      to be made hereunder may, at the written request of the Participant, be made
      to
      a bank account designated by such Participant, provided that deposits to the
      credit of such Participant in any bank or trust company shall be deemed payment
      into his or her hands.

    
      
         

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

      
      (E) Wherever
      any words are used herein in the masculine, feminine or neuter gender, they
      shall be construed as though they were also used in another gender in all cases
      where they would so apply, and whenever any words are used herein in the
      singular or plural form, they shall be construed as though they were also used
      in the other form in all cases where they would so apply.

    

      
      (F) THIS
      PLAN
      SHALL BE CONSTRUED AND ENFORCED UNDER THE LAWS OF THE STATE OF TEXAS EXCEPT
      TO
      THE EXTENT PREEMPTED BY FEDERAL LAW.

    
 

    ARTICLE
      XII

     

    Effective
      Date

    

    This
      amendment and restatement of the Plan shall be effective from and after December
      7, 2005, and shall continue in force during subsequent years unless amended
      or
      revoked by action of the Compensation Committee.

     

     

    
      
        	 	 	 
	 	HALLIBURTON
                COMPANY
	 
 	 
 	 
 
	 	By:  	/s/ David
                J. Lesar
	 	
                
David
                J. Lesar
	 	
                Chairman,
                  President and Chief

                Executive
                  Officer

              

      

    

    
      
        
        

      

      
        8Unassociated Document

    EXHIBIT
      10.30

     

    U.S.$
      850,000,000

     

    FIVE
      YEAR
      REVOLVING CREDIT AGREEMENT

     

    Dated
      as
      of December 16, 2005

     

    Among

     

    KBR
      HOLDINGS, LLC

     

    as
      Borrower,

     

    THE
      ISSUING BANKS NAMED HEREIN

     

    as
      Issuing Banks,

     

    THE
      BANKS
      NAMED HEREIN

     

    as
      Banks,

     

    CITIBANK,
      N.A.

     

    as
      Paying
      Agent and Co-Administrative Agent,

     

    HSBC
      BANK
      USA, NATIONAL ASSOCIATION

     

    as
      Co-Administrative Agent,

     

    UBS
      SECURITIES LLC

     

    as
      Syndication Agent,

     

    and

     

    THE
      ROYAL
      BANK OF SCOTLAND PLC, 

     

    SUMITOMO
      MITSUI BANKING CORPORATION

     

    as
      Co-Documentation Agents

     

    Co-Lead
      Arrangers:

     

    CITIGROUP
      GLOBAL MARKETS INC.,

     

    HSBC
      SECURITIES (USA) INC.

     

    and

     

    UBS
      SECURITIES LLC

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF
      CONTENTS

     

    

     

    
      	 	
              Page

            
	
              Article
                I

            	 
	
              DEFINITIONS
                AND ACCOUNTING TERMS

            	 
	 	 
	
              Section
                1.01 Certain
                Defined
                Terms.............................................................................................................................................................

            	
              1

            
	
              Section
                1.02 Computation
                of Time
                Periods.................................................................................................................................................

            	
              18

            
	
              Section
                1.03 Accounting
                Terms;
                GAAP.....................................................................................................................................................

            	
              18

            
	
              Section
                1.04 Miscellaneous...........................................................................................................................................................................

            	
              19

            
	
              Section
                1.05 Ratings.......................................................................................................................................................................................

            	
              19

            
	 	 
	
              Article
                II

            	 
	
              AMOUNTS
                AND TERMS OF THE REVOLVING CREDIT ADVANCES

            	 
	 	 
	
              Section
                2.01 The
                Revolving Credit
                Advances...........................................................................................................................................

            	
              19

            
	
              Section
                2.02 Making
                the Revolving Credit
                Advances..............................................................................................................................

            	
              20

            
	
              Section
                2.03 Issuance
                of and Drawings and Reimbursement Under Letters of
                Credit.........................................................................

            	
              21

            
	
              Section
                2.04 Fees............................................................................................................................................................................................

            	
              23

            
	
              Section
                2.05 Reduction
                of
                Commitments.....................................................................................................................................................

            	
              23

            
	
              Section
                2.06 Repayment
                of Advances; Required Cash
                Collateral...........................................................................................................

            	
              23

            
	
              Section
                2.07 Interest.......................................................................................................................................................................................

            	
              25

            
	
              Section
                2.08 Additional
                Interest on Eurodollar Rate
                Advances..............................................................................................................

            	
              26

            
	
              Section
                2.09 Interest
                Rate
                Determination....................................................................................................................................................

            	
              26

            
	
              Section
                2.10 Optional
                Prepayments.............................................................................................................................................................

            	
              27

            
	
              Section
                2.11 Payments
                and
                Computations..................................................................................................................................................

            	
              28

            
	
              Section
                2.12 Increased
                Costs and Capital
                Requirements..........................................................................................................................

            	
              29

            
	
              Section
                2.13 Taxes..........................................................................................................................................................................................

            	
              30

            
	
              Section
                2.14 Sharing
                of Payments,
                Etc........................................................................................................................................................

            	
              33

            
	
              Section
                2.15 Illegality.....................................................................................................................................................................................

            	
              33

            
	
              Section
                2.16 Conversion
                of
                Advances........................................................................................................................................................

            	
              34

            
	
              Section
                2.17 Replacement
                or Removal of
                Bank..........................................................................................................................................

            	
              35

            
	
              Section
                2.18 Evidence
                of
                Indebtedness......................................................................................................................................................

            	
              35

            
	
              Section
                2.19 Increase
                in the Aggregate Revolving Credit Commitments; Increase in

            	 
	
                                    
                Letter of Credit
                Commitment...................................................................................................................................................

            	
              36

            
	 	 
	
              Article
                III

            	 
	
              CONDITIONS
                OF LENDING

            	 
	 	 
	
              Section
                3.01 Conditions
                Precedent to
                Effectiveness................................................................................................................................

            	
              37

            
	
              Section
                3.02 Conditions
                Precedent to Each Revolving Credit Advance, Each

            	 
	
                                    
                Commitment Increase and Each Issuance, Renewal, Amendment,
                Increase

            	 
	
                                    
                and Extension of Each Letter of
                Credit.................................................................................................................................

            	
              40

            
	
              Section
                3.03 Determinations
                Under Section
                3.01.......................................................................................................................................

            	
              40

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              Article
                IV

            	 
	
              REPRESENTATIONS
                AND WARRANTIES

            	 
	 	 
	
              Section
                4.01 Representations
                and Warranties of the
                Borrower..............................................................................................................

            	
              41

            
	 	 
	
              Article
                V

            	 
	
              COVENANTS
                OF THE BORROWER

            	 
	 	 
	
              Section
                5.01 Affirmative
                Covenants............................................................................................................................................................

            	
              45

            
	
              Section
                5.02 Negative
                Covenants................................................................................................................................................................

            	
              50

            
	
              Section
                5.03 Financial
                Covenants................................................................................................................................................................

            	
              58

            
	
              Section
                5.04 Pre-IPO
                Repositioning
                Exclusion...........................................................................................................................................

            	
              59

            
	 	 
	
              Article
                VI

            	 
	
              EVENTS
                OF DEFAULT

            	 
	 	 
	
              Section
                6.01 Events
                of
                Default......................................................................................................................................................................

            	
              59

            
	
              Section
                6.02 Actions
                in Respect of the Letters of Credit upon
                Default.................................................................................................

            	
              62

            
	 	 
	
              Article
                VII

            	 
	
              THE
                AGENT

            	 
	 	 
	
              Section
                7.01 Authorization
                and
                Action.......................................................................................................................................................

            	
              62

            
	
              Section
                7.02 Agent’s
                Reliance,
                Etc..............................................................................................................................................................

            	
              62

            
	
              Section
                7.03 The
                Agent and its
                Affiliates...................................................................................................................................................

            	
              63

            
	
              Section
                7.04 Bank
                Credit
                Decision...............................................................................................................................................................

            	
              63

            
	
              Section
                7.05 Indemnification.........................................................................................................................................................................

            	
              63

            
	
              Section
                7.06 Successor
                Agent......................................................................................................................................................................

            	
              64

            
	
              Section
                7.07 Co-Lead
                Arrangers, Co-Administrative Agents, Syndication Agent,

            	 
	
                                    
                Co-Documentation
                Agents....................................................................................................................................................

            	
              64

            
	 	 
	
              Article
                VIII

            	 
	
              MISCELLANEOUS

            	 
	 	 
	
              Section
                8.01 Amendments,
                Etc.....................................................................................................................................................................

            	
              64

            
	
              Section
                8.02 Notices,
                Etc...............................................................................................................................................................................

            	
              65

            
	
              Section
                8.03 No
                Waiver;
                Remedies..............................................................................................................................................................

            	
              67

            
	
              Section
                8.04 Expenses
                and Taxes;
                Compensation.....................................................................................................................................

            	
              67

            
	
              Section
                8.05 Right
                of
                Set-Off.........................................................................................................................................................................

            	
              68

            
	
              Section
                8.06 Limitation
                and Adjustment of
                Interest..................................................................................................................................

            	
              69

            
	
              Section
                8.07 Binding
                Effect...........................................................................................................................................................................

            	
              69

            
	
              Section
                8.08 Assignments
                and
                Participations............................................................................................................................................

            	
              70

            
	
              Section
                8.09 No
                Liability of Issuing
                Banks.................................................................................................................................................

            	
              72

            
	
              Section
                8.10 Execution
                in
                Counterparts.......................................................................................................................................................

            	
              72

            
	
              Section
                8.11 Judgment...................................................................................................................................................................................

            	
              72

            
	
              Section
                8.12 Governing
                Law..........................................................................................................................................................................

            	
              73

            
	
              Section
                8.13 Jurisdiction;
                Damages.............................................................................................................................................................

            	
              73

            
	
              Section
                8.14 Confidentiality..........................................................................................................................................................................

            	
              74

            
	
              Section
                8.15 Patriot
                Act
                Notice.....................................................................................................................................................................

            	
              74

            
	
              Section
                8.16 Waiver
                of Jury
                Trial.................................................................................................................................................................

            	
              74

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              SCHEDULES

            	 
	 	 
	
              Schedule
                I - Commitments

            	 
	
              Schedule
                II - Bank
                Information

            	 
	
              Schedule
                III - Subsidiary
                Guarantors

            	 
	
              Schedule
                4.01(b) - Loan
                Parties

            	 
	
              Schedule
                4.01(i) - Disclosed
                Litigation

            	 
	
              Schedule5.02(a)(i) - Existing
                Liens

            	 
	
              Schedule
                5.02(b)(ii) - Existing
                Debt

            	 
	 	 
	
              EXHIBITS

            	 
	 	 
	
              Exhibit
                A - Form
                of Note

            	 
	
              Exhibit
                B-1 - Form
                of Notice of Revolving Credit Borrowing

            	 
	
              Exhibit
                B-2 - Form
                of Notice of Issuance and Application for Letter of Credit

            	 
	
              Exhibit
                C-1 - Form
                of Opinion of James H. Lehmann

            	 
	
              Exhibit
                C-2 - Form
                of Opinion of Bruce A. Metzinger

            	 
	
              Exhibit
                C-3 - Form
                of Opinion of Baker Botts, LLP as Counsel to the Borrower

            	 
	
              Exhibit
                D - Form
                of Guarantee

            	 
	
              Exhibit
                E - Form
                of Assignment and Acceptance

            	 
	
              Exhibit
                F - Form
                of Subordination Agreement

            	 
	
              Exhibit
                G - Form
                of Halliburton Cash Management Note

            	 
	
              Exhibit
                H - Form
                of Indemnity Agreement

            	 
	
              Exhibit
                I - Form
                of KBR Cash Management Note

            	 

    

    

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    FIVE
      YEAR
      REVOLVING CREDIT AGREEMENT

     

    Dated
      as
      of December 16, 2005

     

    KBR
      Holdings, LLC, a Delaware limited liability company (the “Borrower”),
      the
      lenders party hereto and Citibank, N.A., a national banking association
      (“Citibank”),
      as
      Paying Agent hereunder, agree as follows:

     

    ARTICLE
      I

    DEFINITIONS
      AND ACCOUNTING TERMS

     

    Section
      1.01   Certain
      Defined Terms.
      As used
      in this Agreement, the terms “Borrower” and “Citibank” shall have the meanings
      set forth above and the following terms shall have the following meanings (such
      meanings to be equally applicable to both the singular and plural forms of
      the
      terms defined):

     

    “Advance”
means
      a
      Revolving Credit Advance under Section 2.01 or a Letter of Credit Advance under
      Section 2.03 and refers to a Base Rate Advance or a Eurodollar Rate Advance
      (each, a “Type”
of
      Advance).

     

    “Affected
      Bank”
has
      the
      meaning specified in Section 2.15.

     

    “Affiliate”
means,
      as to any Person, any other Person that, directly or indirectly, controls,
      is
      controlled by or is under common control with such Person or any Subsidiary
      of
      such Person.

     

    “Agent”
means
      Citibank in its capacity as Paying Agent pursuant to Article VII and any
      successor in such capacity pursuant to Section 7.06.

     

    “Agent’s
      Account”
means
      the account of the Agent maintained by the Agent with Citibank at its office
      at
      2 Penns Way, Suite 200, New Castle, Delaware 19720, Account No. 36852248,
      Attention: Halliburton Account Officer, or such other account as the Agent
      shall
      specify in writing to the Banks.

     

    “Agent
      Parties”
has
      the
      meaning specified in Section 8.02(b).

     

    “Agreement”
means
      this Five Year Revolving Credit Agreement dated as of the date hereof among
      the
      Borrower, the Banks and the Agent, as amended from time to time in accordance
      with the terms hereof.

     

    “Applicable
      Commitment Fee Rate”
has
      the
      meaning specified in Annex A hereto. 

     

    “Applicable
      Lending Office”
means,
      with respect to each Bank, (i) in the case of a Base Rate Advance, such Bank’s
      Domestic Lending Office, and (ii) in the case of a Eurodollar Rate Advance,
      such
      Bank’s Eurodollar Lending Office.

     

    “Applicable
      Margin”
has
      the
      meaning specified in Annex A hereto.

     

    “Assignment
      and Acceptance”
means
      an assignment and acceptance entered into by a Bank and an Eligible Assignee,
      and accepted by the Agent, in substantially the form of Exhibit E.

     

    “Assuming
      Lender”
has
      the
      meaning specified in Section 2.19.

     

    “Assumption
      Agreement”
has
      the
      meaning specified in Section 2.19.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Available
      Amount”
of
      any
      Letter of Credit means, at any time, the Dollar Equivalent of the maximum amount
      available to be drawn under such Letter of Credit at such time as set forth
      in
      Section 2.01(b) (assuming compliance at such time with all conditions to
      drawing).

     

    “Banks”
means
      the Issuing Banks and the other banks and other financial institutions party
      hereto from time to time as lenders, including each Eligible Assignee that
      becomes a party hereto pursuant to Section 8.08(a), (b) and (d).

     

    “Barracuda-Caratinga
      Guaranteed Debt”
has
      the
      meaning specified in the Subordination Agreement. 

     

    “Barracuda-Caratinga
      L/C”
means
      each of the following: Standby Letters of Credit No. B2483 in a principal amount
      of $1,139,303.70, No. 96143/80085 in a principal amount of $3,128,674.90, No.
      S842511 in a principal amount of $11,826,120.00, No. S825023 in a principal
      amount of $259,400,000.00, No. 96130/80085 in a principal amount of
      $5,877,227.50 and No. S331669 in a principal amount of $107,341,282.35, which
      Standby Letters of Credit have an aggregate principal amount of $388,712,608.45
      (as each of the same may be amended, restated, modified, supplemented or
      replaced from time to time) issued by ABN AMRO Bank NV, Bank of Nova Scotia,
      Lloyds TSB Bank Plc, The Royal Bank of Scotland Plc and HSBC Bank USA (or any
      of
      their respective assigns or successors) for the account of the Borrower or
      a
      Subsidiary of the Borrower in respect of the Barracuda-Caratinga Project and
      irrevocably and unconditionally guaranteed by, or the direct obligation of,
      the
      Parent.

     

    “Barracuda-Caratinga
      Losses”
means
      any cash losses in respect of the Barracuda-Caratinga Project relating to or
      arising from any accounting charges arising from, or in connection with, the
      disclosure regarding bolts made in Note 2 of the Notes to Condensed Consolidated
      Financial Statements in Form 10-Q of the Parent for the quarterly period ended
      September 30, 2005 filed with the Securities and Exchange
      Commission.

     

    “Barracuda-Caratinga
      Project”
means
      the development, engineering, procurement, construction, operation and
      maintenance of an offshore oil field FPSO project in Brazil by certain of the
      Parent’s Subsidiaries and Petrobras S.A.

     

    “Base
      Rate”
means,
      for any period, a fluctuating interest rate per annum as shall be in effect
      from
      time to time which rate per annum shall at all times be equal to the highest
      of:

     

    (a)  the
      rate
      of interest announced publicly by Citibank in New York, New York, from time
      to
      time, as Citibank’s base rate; and

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b)  the
      sum
      (adjusted to the nearest 1/8 of 1% or, if there is no nearest 1/8 of 1%, to
      the
      next higher 1/8 of 1%) of (i) 1⁄2 of one percent per annum plus (ii) the rate
      obtained by dividing (A) the latest three-week moving average of secondary
      market morning offering rates in the United States for three-month certificates
      of deposit of major United States money market banks, such three-week moving
      average (adjusted to the basis of a year of 360 days) being determined weekly
      on
      each Monday (or, if such day is not a Business Day, on the next succeeding
      Business Day) for the three-week period ending on the previous Friday by
      Citibank on the basis of such rates reported by certificate of deposit dealers
      to and published by the Federal Reserve Bank of New York or, if such publication
      shall be suspended or terminated, on the basis of quotations for such rates
      received by Citibank from three New York certificate of deposit dealers of
      recognized standing selected by Citibank, by (B) a percentage equal to 100%
      minus the average of the daily percentages specified during such three-week
      period by the Federal Reserve Board for determining the maximum reserve
      requirement (including, but not limited to, any emergency, supplemental or
      other
      marginal reserve requirement) for Citibank with respect to liabilities
      consisting of or including (among other liabilities) three-month Dollar
      non-personal time deposits in the United States, plus (iii) the average during
      such three-week period of the annual assessment rates estimated by Citibank
      for
      determining the then current annual assessment payable by Citibank to the
      Federal Deposit Insurance Corporation (or any successor) for insuring Dollar
      deposits of Citibank in the United States; and

     

    (c)  the
      sum
      of 1⁄2 of one percent per annum plus the Federal Funds Rate in effect from time to
      time.

     

    “Base
      Rate Advance”
means
      an Advance which bears interest as provided in Section 2.07(a).

     

    “Borrowing”
means
      a
      borrowing consisting of Advances of the same Type made on the same day by the
      Banks pursuant to Section 2.01 and, if such Advances are Eurodollar Rate
      Advances, having Interest Periods of the same duration.

     

    “Borrowing
      Sublimit”
means
      an amount equal to $850,000,000 available to the Borrower for Revolving Credit
      Advances, as the same may be reduced pursuant to Section 2.05(b); provided
      that the
      Borrowing Sublimit shall not be applicable to any Revolving Credit Advances
      with
      respect to which the proceeds therefrom are used to repay any Letter of Credit
      Advance pursuant to Section 2.06(c).
      The
      Borrowing Sublimit is part of, and not in addition to, the Revolving Credit
      Facility. 

     

    “Business
      Day”
means
      a
      day of the year on which banks are not required or authorized to close in New
      York City and, if the applicable Business Day relates to any Eurodollar Rate
      Advance, on which dealings in Dollar deposits are carried on in the London
      interbank market

     

    “Capital
      Expenditures”
means,
      for any period, all expenditures made, directly or indirectly, by the Borrower
      or any of its consolidated Subsidiaries during such period for equipment, fixed
      assets, real property or improvements, or for replacements or substitutions
      therefore or additions thereto, that have been or should be, in accordance
      with
      GAAP, reflected as additions to property, plant or equipment on a consolidated
      balance sheet of the Borrower or have a useful life of more than one
      year.

     

    “Cash
      Equivalents”
      means

     

                
      (a) direct
      obligations of, or obligations the principal of and interest on which are
      unconditionally guaranteed by, the United States of America (or by any agency
      thereof to the extent such obligations are backed by the full faith and credit
      of the United States of America), in each case maturing within one year from
      the
      date of acquisition thereof;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

                  
      (b) marketable
      direct obligations issued by any state of the United States or any political
      subdivision of any such state or any public instrumentality thereof, in each
      case maturing within one year after such date and having, at the time of the
      acquisition thereof, the highest rating obtainable from either S&P or
      Moody’s;

     

                 
       (c) commercial
      paper maturing no more than one year from the date of creation thereof and
      having, at the time of the acquisition thereof, a rating of at least A-1 from
      S&P or at least P-1 from Moody’s;

     

                 
       (d) certificates
      of deposit or bankers’ acceptances maturing within one year after such date and
      issued or accepted by any Bank or by any commercial bank organized under the
      laws of the United States, any state thereof, the District of Columbia or any
      foreign country recognized by the United States that (a) is at least “adequately
      capitalized” (as defined in the regulations of its primary Federal banking
      regulator), (b) has Tier 1 capital (as defined in such regulations) of not
      less
      than $100,000,000 (or the foreign currency equivalent thereof) and (c) has
      outstanding debt which is rated “A” (or such similar equivalent rating) or
      higher by at least one nationally recognized statistical rating organization
      (as
      defined in Rule 436 under the Securities Act);

     

                  
      (e) fully
      collateralized repurchase agreements with a term of not more than 30 days for
      securities described in clause (a) above and entered into with a financial
      institution satisfying the criteria described in clause (d) above;
      and

     

                 
      (f) money
      market funds that (i) comply with the criteria set forth in Securities and
      Exchange Commission Rule 2a 7 under the Investment Company Act of 1940, (ii)
      are
      rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at
      least $5,000,000,000; and

     

                  (g) substantially
      similar investments denominated in foreign currencies (including similarly
      capitalized foreign banks).

     

    “CERCLIS”
means
      the Comprehensive Environmental Response, Compensation and Liability Information
      System maintained by the U.S. Environmental Protection Agency. 

     

    “Co-Administrative
      Agents”
means
      Citibank and HSBC Bank, solely in their capacities as co-administrative agents
      under the Agreement.

     

    “Co-Documentation
      Agents”
means
      The Royal Bank of Scotland Plc and Sumitomo Mitsui Banking Corporation, solely
      in their capacities as co-documentation agents under the Agreement.

     

    “Co-Lead
      Arrangers”
means
      Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and UBS Securities
      LLC.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended, or any successor Federal tax
      code, and the regulations promulgated and rulings issued thereunder, in each
      case as now or hereafter in effect, and any reference to any statutory provision
      shall be deemed to be a reference to any successor provision or
      provisions.

     

    “Commercial
      Letter of Credit”
means
      a
      letter of credit qualifying as a “commercial letter of credit” under 12 C.F.R.
      Part 3, Appendix A, Section 3(b)(3)(i) or any successor U.S. Comptroller of
      the
      Currency regulation.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Commitment”
means
      a
      Revolving Credit Commitment or a Letter of Credit Commitment.

     

    “Commitment
      Date”
has
      the
      meaning specified in Section 2.19.

     

    “Commitment
      Fee”
has
      the
      meaning specified in Section 2.04(a).

     

    “Commitment
      Increase”
has
      the
      meaning specified in Section 2.19.

     

    “Communications”
has
      the
      meaning specified in Section 8.02(b).

     

    “Consolidated
      Debt”
means
      at any time (i) the Indebtedness of the Borrower and its consolidated
      Subsidiaries calculated on a consolidated basis as of such time, determined
      in
      accordance with GAAP (excluding (x) Project Financing and Permitted Non-Recourse
      Indebtedness and (y) at the time of determination, the aggregate outstanding
      principal amount of any Subordinated Debt to the extent of the aggregate
      outstanding principal amount of any Halliburton Cash Management Note)
minus
      (ii)
      Unrestricted Cash.

     

    “Consolidated
      Debt to Total Consolidated Capitalization Ratio”
means,
      as of any date of calculation, the ratio of the Borrower’s Consolidated Debt
      outstanding on such date to the sum of (i) Consolidated Debt and (ii)
      Consolidated Net Worth outstanding on such date; provided,
      however,
      no
      amounts attributable to Project Finance Subsidiaries shall be included in the
      calculation of Consolidated Debt to Total Consolidated Capitalization
      Ratio.

     

    “Consolidated
      Net Worth”
means
      at any time the consolidated stockholders’ equity of the Borrower and its
      consolidated Subsidiaries calculated on a consolidated basis as of such time
      (excluding treasury stock but including minority interests), determined in
      accordance with GAAP (excluding from such calculation (i) charges to the extent
      indemnified or required to be indemnified pursuant to the Indemnity Agreement
      or
      in respect of which a subordinated loan or a capital contribution is or will
      be
      required to be made pursuant to the Subordination Agreement and (ii) any such
      indemnification, subordinated loan or capital contribution).

     

    “Convert”,
      “Conversion”
and
      “Converted”
each
      refers to a conversion of Revolving Credit Advances of one Type into Revolving
      Credit Advances of the other Type pursuant to Section 2.09, 2.15 or
      2.16.

     

    “Default”
means
      any event or condition which with notice or lapse of time or both would, unless
      cured or waived, become an Event of Default.

     

    “Disclosed
      Litigation”
has
      the
      meaning specified in Section 4.01(i).

     

    “Dollar
      Equivalent”
means,
      on any date, (i) in relation to an amount denominated in a currency other than
      Dollars, the equivalent in Dollars determined by using the quoted spot rate
      at
      which the Agent’s principal office in London offers to exchange Dollars for such
      currency in London prior to 4:00 P.M. (London time) on such date and (ii) in
      relation to an amount denominated in Dollars, such amount.

     

    “Dollars”
and
      “$”
means
      lawful money of the United States of America.

     

    “Domestic
      Lending Office”
means,
      with respect to any Bank, the office of such Bank specified as its “Domestic
      Lending Office” opposite its name on Schedule I hereto, in the Assignment and
      Acceptance pursuant to which it became a Bank, or such other office of such
      Bank
      as such Bank may from time to time specify to the Borrower and the
      Agent.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Domestic
      Subsidiary”
means
      any Subsidiary incorporated or organized under the laws of a state of the United
      States or the District of Columbia.

     

    “EBITDA”
means,
      for any period, (a) the sum, determined on a consolidated basis, of (i) net
      income (or net loss), (ii) interest expense, including commissions and fees
      incurred in respect of letters of credit, (iii) income tax expense,
      (iv) depreciation expense, (v) amortization expense, (vi) minority
      interest in income of Subsidiaries, (vii) charges related to restructuring,
      asset impairment or other extraordinary items, (viii) charges indemnified
      or required to be indemnified pursuant to the Indemnity Agreement or in respect
      of which a subordinated loan or a capital contribution is or will be required
      to
      be made pursuant to the Subordination Agreement, minus
      (b) cash payments related to restructuring, asset impairment or other
      extraordinary items to the extent previously included in the computation of
      EBITDA pursuant to clause (a)(vii) of this definition (except to the extent
      indemnified or required to be indemnified pursuant to the Indemnity Agreement
      or
      in respect of which a subordinated loan or a capital contribution is or will
      be
      required to be made pursuant to the Subordination Agreement), in each case
      of
      the Borrower and its Subsidiaries, determined in accordance with GAAP for such
      period (excluding any Project Finance Subsidiary); provided however
      that
      with respect to any Project Finance Subsidiary, any cash distribution made
      by
      such Project Finance Subsidiary to the Borrower or any Subsidiary of the
      Borrower (other than any Project Finance Subsidiary) to the extent not
      previously included in the equity and earnings of such Person shall be included
      for purposes of calculation of EBITDA.

     

    “Effective
      Date”
means
      has the meaning specified in Section 3.01.

     

    “Eligible
      Assignee”
means
      (i) any Bank, (ii) any Affiliate of any Bank and (iii) with the consent of
      the
      Agent (which consent shall not be unreasonably withheld) and, so long as no
      Event of Default under Section 6.01(a) or 6.01(e) shall have occurred and be
      continuing, the Borrower (which consent shall not be unreasonably withheld),
      any
      other Person not covered by clause (i) or (ii) of this definition; provided,
      however,
      that
      neither any Relevant Party nor any Affiliate of any Relevant Party shall be
      an
      Eligible Assignee.

     

    “Environmental
      Action”
means
      any action, suit, demand, demand letter, claim, notice of non compliance or
      violation, notice of liability or potential liability, investigation,
      proceeding, consent order or consent agreement relating in any way to any
      Environmental Law, any Environmental Permit or Hazardous Material or arising
      from alleged injury or threat to health, safety or the environment, including,
      without limitation, (a) by any Governmental Authority for enforcement, cleanup,
      removal, response, remedial or other actions or damages and (b) by any
      Governmental Authority or third party for damages, contribution,
      indemnification, cost recovery, compensation or injunctive relief.

     

    “Environmental
      Law”
means
      any Federal, state, local or foreign statute, law, ordinance, rule, regulation,
      code, order, writ, judgment, injunction, decree or judicial or agency
      interpretation, policy or guidance relating to pollution or protection of the
      environment, health, safety or natural resources, including, without limitation,
      those relating to the use, handling, transportation, treatment, storage,
      disposal, release or discharge of Hazardous Materials.

     

    “Environmental
      Permit”
means
      any permit, approval, identification number, license or other authorization
      required under any Environmental Law.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Equity
      Interests”
means,
      with respect to any Person, shares of capital stock of (or other ownership
      or
      profit interests in) such Person, warrants, options or other rights for the
      purchase or other acquisition from such Person of shares of capital stock of
      (or
      other ownership or profit interests in) such Person, securities convertible
      into
      or exchangeable for shares of capital stock of (or other ownership or profit
      interests in) such Person or warrants, rights or options for the purchase or
      other acquisition from such Person of such shares (or such other interests),
      and
      other ownership or profit interests in such Person (including, without
      limitation, partnership, member or trust interests therein), whether voting
      or
      nonvoting, and whether or not such shares, warrants, options, rights or other
      interests are authorized or otherwise existing on any date of
      determination.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and the regulations promulgated and rulings issued
      thereunder.

     

    “ERISA
      Affiliate”
means
      any Person that for purposes of Title IV of ERISA is a member of the Borrower’s
      controlled group, or under common control with the Borrower, within the meaning
      of Section 414(a) or (b) of the Code, and, for purposes of Section 412 of the
      Code, Section 414(m) of the Code.

     

    “ERISA
      Event”
means
      (a) (i) the occurrence of a reportable event, within the meaning of Section
      4043
      of ERISA, with respect to any Plan unless the 30-day notice requirement with
      respect to such event has been waived by the PBGC, or (ii) the requirements
      of
      subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2)
      of
      such Section) are met with respect to a contributing sponsor, as defined in
      Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph
      (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected
      to occur with respect to such Plan within the following 30 days; (b) the
      application for a minimum funding waiver with respect to a Plan; (c) the
      provision by the administrator of any Plan of a notice of intent to terminate
      such Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice
      with respect to a plan amendment referred to in Section 4041(e) of ERISA);
      (d)
      the cessation of operations at a facility of the Borrower or any ERISA Affiliate
      in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
      by the Borrower or any ERISA Affiliate from a Multiple Employer Plan during
      a
      plan year for which it was a substantial employer, as defined in Section
      4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien under
      Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
      adoption of an amendment to a Plan requiring the provision of security to such
      Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
      proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
      occurrence of any event or condition described in Section 4042 of ERISA that
      constitutes grounds for the termination of, or the appointment of a trustee
      to
      administer, a Plan.

     

    “Eurocurrency
      Liabilities”
has
      the
      meaning assigned to that term in Regulation D of the Federal Reserve Board,
      as
      in effect from time to time.

     

    “Eurodollar
      Lending Office”
means,
      with respect to any Bank, the office of such Bank specified as its “Eurodollar
      Lending Office” opposite its name on Schedule I hereto, in the Assignment and
      Acceptance pursuant to which it became a Bank (or, if no such office is
      specified, its Domestic Lending Office), or such other office of such Bank
      as
      such Bank may from time to time specify to the Borrower and the
      Agent.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “Eurodollar
      Rate”
means,
      for any Interest Period for each Eurodollar Rate Advance comprising part of
      the
      same Borrowing, the rate per annum (rounded upwards, if necessary, to the
      nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page)
      as
      the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
      (London time) two Business Days before the first day of such Interest Period
      for
      a period equal to such Interest period (provided
      that, if
      for any reason such rate is not available, the term “Eurodollar Rate” shall
      mean, for any Interest Period for all Eurodollar Rate Advances comprising part
      of the same Borrowing, an interest rate per annum (rounded upward to the nearest
      whole multiple of 1/100 of 1% per annum, if such rate per annum is not such
      a
      multiple) equal to the rate per annum at which deposits in Dollars are offered
      by the principal office of Citibank in London, England to prime banks in the
      London interbank market at 11:00 A.M. (London time) two Business Days before
      the
      first day of such Interest Period in an amount substantially equal to Citibank’s
      Eurodollar Rate Advance comprising part of such Borrowing and for a period
      equal
      to such Interest Period).

     

    “Eurodollar
      Rate Advance”
means
      an Advance which bears interest as provided in Section 2.07(b).

     

    “Eurodollar
      Rate Reserve Percentage”
of
      any
      Bank for any Interest Period for all Eurodollar Rate Advances comprising part
      of
      the same borrowing means the reserve percentage applicable during such Interest
      Period (or if more than one such percentage shall be so applicable, the daily
      average of such percentages for those days in such Interest Period during which
      any such percentage shall be so applicable) under regulations issued from time
      to time by the Federal Reserve Board for determining the maximum reserve
      requirement (including, without limitation, any emergency, supplemental or
      other
      marginal reserve requirement) for such Bank with respect to liabilities or
      assets consisting of or including Eurocurrency Liabilities having a term equal
      to such Interest Period.

     

    “Events
      of Default”
has
      the
      meaning specified in Section 6.01.

     

    “Existing
      Debt”
has
      the
      meaning specified in Section 5.02(b)(ii).

     

    “Federal
      Funds Rate”
means,
      for any day, a fluctuating interest rate per annum equal for such day to the
      weighted average of the rates on overnight Federal funds transactions with
      members of the Federal Reserve System arranged by Federal funds brokers, as
      published for such day (or, if such day is not a Business Day, for the next
      preceding Business Day) by the Federal Reserve Bank of New York, or, if such
      rate is not so published for any day that is a Business Day, the average of
      the
      quotations for such day on such transactions received by the Agent from three
      Federal funds brokers of recognized standing selected by it.

     

    “Federal
      Reserve Board”
means
      the Board of Governors of the Federal Reserve System or any successor
      thereof.

     

    “FIN
      46”
means
      FASB Interpretation No. 46 “Consolidation
      of Variable Interest Entities”
      published January 2003 by the Financial Accounting Standards Board, as the
      same
      may be amended from time to time.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    “Fixed
      Charge Coverage Ratio”
means,
      for any period, the ratio of (a) EBITDA minus
      Capital
      Expenditures plus
      the net
      cash proceeds of any fixed assets sold in the ordinary course of business during
      such period to (b) the sum of (i) interest payable on, and
      amortization of debt discount in respect of, all Indebtedness, plus
      (ii)
      principal amounts of all Indebtedness due and payable, if any, plus
      (iii) commissions and fees incurred in respect of letters of credit, in
      each case, of or by the Borrower and its Subsidiaries for or during such period;
      provided,
      however,
      no
      amounts attributable to Project Finance Subsidiaries and Permitted Non-Recourse
      Indebtedness shall be included in the calculation of Fixed Charge Coverage
      Ratio. 

     

    “Foreign
      Currency”
means
      any lawful currency (other than Dollars) that is freely transferable or
      convertible into Dollars.

     

    “G&I
      Business Unit”
means
      the Government & Infrastructure Business Unit of the Borrower.

     

    “GAAP”
means
      generally accepted accounting principles in the United States of
      America.

     

    “Governing
      Body”
means
      the board of directors or other body having the power to direct or cause the
      direction of the management and policies of a Person that is a corporation,
      partnership, trust, joint venture, joint stock company, or limited liability
      company.

     

    “Government
      Working Capital Reduction”
means
      any amount by which any working capital of the Borrower and the Subsidiaries
      of
      the Borrower pursuant to the GWC Contracts is less than the level certified
      pursuant to Section 3.01(b)(viii), which working capital shall be determined
      using the same methodology as used in the officer’s certificate delivered
      pursuant to Section 3.01(b)(viii).

     

    “Governmental
      Authority”
means
      any nation or government, any state, province, city, municipal entity or other
      political subdivision thereof, and any governmental, executive, legislative,
      judicial, administrative or regulatory agency, department, authority,
      instrumentality, commission, board, bureau or similar body, whether federal,
      state, provincial, territorial, local or foreign.

     

    “Guarantee”
means
      the guarantee of the Subsidiary Guarantors substantially in the form of Exhibit
      D, together with each other guarantee and guarantee supplement delivered
      pursuant to Section 5.01(j), in each case as amended, amended and restated,
      modified or otherwise supplemented.

     

    “GWC
      Contracts”
means
      Restore Iraqi Oil Contract No. DACA63-03-D-C005, Project and Contracting Office
      Contract No. W9126G-04-D-0001 and Logistics Civil Augmentation Program (Logcap)
      Support Contract No. DAAA09-02-D-0007, including any related
      subcontracts.

     

    “Halliburton
      Cash Management Note”
shall
      mean the demand promissory note made by the Parent or, to the extent that HESI,
      at the time such demand promissory note is made and during the term thereof,
      continues to engage in substantially the same or similar business activities
      as
      of the date hereof, HESI, in favor of Borrower, substantially in the form of
      Exhibit G.

     

    “Hazardous
      Materials”
means
      (a) petroleum or petroleum products, by-products or breakdown products,
      radioactive materials, asbestos-containing materials, polychlorinated biphenyls
      and radon gas and (b) any other chemicals, materials or substances designated,
      classified or regulated as hazardous or toxic or as a pollutant or contaminant
      under any Environmental Law. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    “Hedging
      Obligation”
means
      an Obligation of the Borrower or a Subsidiary entered into in the ordinary
      course of business pursuant to an interest rate swap, cap or collar agreement,
      interest rate future or option contract, currency swap agreement, currency
      future or option contract or other hedging agreement.

     

    “HESI”
means
      Halliburton Energy Services, Inc., a Delaware corporation.

     

    “HSBC
      Bank”
means
      HSBC Bank USA, National Association, a national banking
      association.

     

    “Increase
      Date”
has
      the
      meaning specified in Section 2.19.

     

    “Increasing
      Lender”
has
      the
      meaning specified in Section 2.19.

     

    “Indebtedness”
means,
      for any Person, (a) its liabilities for borrowed money including, with respect
      to the Borrower, the Intercompany Note and the KBR Cash Management Note, or
      the
      deferred purchase price of property or services (other than current accounts
      and
      salaries payable or accrued in the ordinary course of business), (b) Obligations
      of such Person for borrowed money evidenced by bonds, debentures, notes or
      other
      similar instruments, (c) all Obligations of such Person under acceptance, letter
      of credit or similar facilities including, with respect to the Borrower and
      its
      Subsidiaries, Other Guaranteed L/C Debt, (d) all Indebtedness of others the
      payment, purchase or other acquisition or Obligation of which such Person has
      assumed, or the payment, purchase or other acquisition or Obligation of which
      such Person has otherwise become directly or contingently liable for, (e) leases
      required to be capitalized, each determined in accordance with GAAP,
      (f) all indebtedness referred to in clauses (a) through (e) above of
      another Person secured by (or for which the holder of such Indebtedness has
      an
      existing right, contingent or otherwise, to be secured by) any Lien on property
      (including, without limitation, accounts and contract rights) owned by such
      Person, even though such Person has not assumed or become liable for the payment
      of such indebtedness (other than a pledge by the Borrower or any Subsidiary
      permitted by Section 5.02(a)(vii) and (viii)) (provided
      that,
      for purposes of determining the amount of Indebtedness of the type described
      in
      this clause, the amount of such Indebtedness shall be limited to the lesser
      of
      the fair market value of such asset or the amount of such
      Indebtedness); provided
      that for
      the avoidance of doubt, Indebtedness shall not include (i) the Obligations
      under
      letter of credit reimbursement agreements with respect to (x) fifty percent
      (50%) of the face amount of any Performance Letters of Credit and (y) one
      hundred percent (100%) of the face amount of any Commercial Letters of Credit,
      in each case, so long as such letters of credit remain undrawn, (ii) the
      Obligations of the Borrower and the Subsidiaries of the Borrower under letters
      of credit, acceptances and bank guarantees issued on account of the Borrower
      and
      such Subsidiaries to the extent that the Obligations of the Borrower or such
      Subsidiary thereunder are irrevocably and unconditionally guaranteed or
      collateralized with cash or cash equivalents by the Parent, (iii) Hedging
      Obligations, and (iv) letters of credit, acceptances and bank guarantees to
      the
      extent collateralized with cash and/or cash equivalents. For the avoidance
      of
      doubt, where one letter of credit, acceptance or bank guarantee is issued for
      the account of the Borrower or one of its Subsidiaries and which supports
      another letter of credit, acceptance or bank guarantee of the Borrower or such
      Subsidiary, the related Indebtedness shall only be included once.

     

    “Indemnity
      Agreement”
means
      the indemnity agreement among the Parent and the Banks, substantially in the
      form of Exhibit H.

     

    “Indemnified
      Costs”
has
      the
      meaning specified in Section 7.05.

     

    “Indemnified
      Party”
has
      the
      meaning specified in Section 8.04(c).

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    “Initial
      Extension of Credit”
means
      the earlier to occur of the initial Revolving Credit Borrowing and the initial
      issuance of a Letter of Credit hereunder.

     

    “Intercompany
      Note”
means
      that certain existing intercompany note made by the Borrower to HESI in an
      amount not to exceed $774,000,000.

     

    “Interest
      Period”
means,
      for each Eurodollar Rate Advance comprising part of the same Borrowing, the
      period commencing on the date of such Eurodollar Rate Advance or the date of
      the
      Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending
      on the last day of the period selected by the Borrower pursuant to the
      provisions below and, thereafter, with respect to Eurodollar Rate Advances,
      each
      subsequent period commencing on the last day of the immediately preceding
      Interest Period and ending on the last day of the period selected by the
      Borrower pursuant to the provisions below. The duration of each such Interest
      Period shall be one, two, three or six months (or, as to any Interest Period,
      such other period as the Borrower and each of the Banks may agree to for such
      Interest Period), in each case as the Borrower may, upon notice received by
      the
      Agent not later than 11:00 A.M. (New York City time) on the third Business
      Day
      prior to the first day of such Interest Period (or, as to any Interest Period,
      at such other time as the Borrower and the Banks may agree to for such Interest
      Period), select; provided,
      however,
      that:

     

    (i)  Interest
      Periods commencing on the same date for Advances comprising part of the same
      Borrowing shall be of the same duration;

     

    (ii)  whenever
      the last day of any Interest Period would otherwise occur on a day other than
      a
      Business Day, the last day of such Interest Period shall be extended to occur
      on
      the next succeeding Business Day, provided
      that if
      such extension would cause the last day of such Interest Period to occur in
      the
      next following calendar month, the last day of such Interest Period shall occur
      on the next preceding Business Day;

     

    (iii)  any
      Interest Period which begins on the last Business Day of the calendar month
      (or
      on a day for which there is no numerically corresponding day in the calendar
      month at the end of such Interest Period) shall end on the last Business Day
      of
      the calendar month in which it would have ended if there were a numerically
      corresponding day in such calendar month; and

     

    (iv)  the
      Borrower may not select an Interest Period for any Advance if the last day
      of
      such Interest Period would be later than the date on which the Advances are
      then
      payable in full or if any Event of Default under Section 6.01(a) shall have
      occurred and be continuing at the time of selection.

     

    “Investment”
in
      any
      Person means any loan or advance to such Person, any purchase or other
      acquisition of any Equity Interests or Indebtedness or the assets comprising
      a
      division or business unit or a substantial part or all of the business of such
      Person, any capital contribution to such Person or any other direct or indirect
      investment in such Person, including, without limitation, any acquisition by
      way
      of a merger or consolidation (or similar transaction) and any arrangement
      pursuant to which the investor incurs Indebtedness of the type referred to
      in
      clause (c) or (d) of the definition of “Indebtedness” in respect of such
      Person.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    “Issuing
      Bank”
means
      each of (a) Citibank, HSBC Bank, Sumitomo Mitsui Banking Corporation, The
      Royal Bank of Scotland Plc, Standard Chartered Bank and Lloyds TSB Bank Plc,
      in
      their capacities as initial issuing banks, (b) any other Bank that, by written
      agreement with the Borrower (and with the consent of the Agent not to be
      unreasonably withheld), agrees to be an Issuing Bank, and (c) any Eligible
      Assignee to which a Letter of Credit Commitment has been assigned pursuant
      to
      Section 8.08 so long as each such Eligible Assignee expressly agrees to
      perform in accordance with their terms all the obligations that by the terms
      of
      the Agreement are required to be performed by it as an Issuing Bank and notifies
      the Agent of its Applicable Lending Office and the amount of its Letter of
      Credit Commitment (which information shall be recorded by the Agent in the
      Register), for so long as such initial Issuing Bank or Eligible Assignee, as
      the
      case may be, shall have a Letter of Credit Commitment. An Issuing Bank may,
      with
      the prior consent of the Borrower (not to be unreasonably withheld), arrange
      for
      one or more Letters of Credit to be issued by an Affiliate of such Issuing
      Bank,
      in which case the term “Issuing Bank” shall include any such Affiliate solely
      with respect to such Letters of Credit issued by such Affiliate; provided
      that
      such designation shall not result in or grant to such Affiliate the status
      or
      rights of a Bank pursuant to this Agreement.

     

    “Joint
      Venture Debt”
has
      the
      meaning specified in Section 5.02(a)(viii).

     

    “JV
      Subsidiary”
means
      each Subsidiary of the Borrower (a) that, at any time, directly holds an Equity
      Interest in any joint venture (not a Subsidiary) and (b) that has no other
      material assets.

     

    “KBR
      Cash Management Note”
shall
      mean the demand promissory note made by the Borrower in favor of the Parent
      or
      HESI, substantially in the form of Exhibit I, and which is Subordinated
      Debt.

     

    “L/C
      Cash Collateral Account”
means
      the l/c cash collateral deposit account, Account No. 30618602, with Citibank,
      as
      securities intermediary and depository bank, at its office at One Penns Way,
      2nd
      Floor, New Castle, Delaware 19720, in the name of the Borrower but under the
      sole control and dominion of the Agent and subject to the terms of this
      Agreement.

     

    “L/C
      Related Documents”
has
      the
      meaning specified in Section 2.06(b)(iii)(A).

     

    “Letter
      of Credit”
has
      the
      meaning set forth in Section 2.01(b).

     

    “Letter
      of Credit Advance”
means
      an Advance made by any Issuing Bank or any Bank pursuant to Section
      2.03(c).

     

    “Letter
      of Credit Commitment”
of
      any
      Issuing Bank means, at any time, the amount set opposite such Issuing Bank’s
      name on Schedule I under the heading “Letter of Credit Commitments” or as
      reflected for such Issuing Bank in the relevant Assignment and Acceptance to
      which it is a party, as such amount may be terminated, reduced or increased
      pursuant to Section 2.05, Section 2.19, Section 6.01 or Section 8.08.

     

    “Leverage
      Ratio”
means,
      at any date of determination, the ratio of Consolidated Debt of the Borrower
      and
      its Subsidiaries at such date to EBITDA; provided,
      however,
      no
      amounts attributable to Project Finance Subsidiaries shall be included in the
      calculation of Leverage Ratio.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    “Lien”
means
      any lien, security interest or other charge or encumbrance of any kind, or
      any
      other type of preferential arrangement, including, without limitation, the
      lien
      or retained security title of a conditional vendor, a statutory deemed trust
      and
      any easement, right of way or other encumbrance on title to real property;
      provided,
      however,
      that
      for the avoidance of doubt, the interest of a Person as owner or lessor under
      charters or leases of property and the rights of setoff of banks shall not
      constitute a “Lien” on or in respect of the relevant property.

     

    “Loan
      Documents”
means
      this Agreement, the Guarantee, the Notes, the Indemnity Agreement and the
      Subordination Agreement.

     

    “Loan
      Parties”
means
      the Borrower and the Subsidiary Guarantors. 

     

    “Material
      Adverse Change”
means
      a
      material adverse change in the business, condition (financial or otherwise),
      operations, performance, properties, contingent liabilities, material agreements
      or prospects of the Borrower, the Subsidiary Guarantors and their respective
      Subsidiaries, taken as a whole.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the business, condition (financial or otherwise),
      operations, performance, properties, contingent liabilities, material agreements
      or prospects of the Borrower, the Subsidiary Guarantors and their respective
      Subsidiaries, taken as a whole, (b) the rights and remedies of the Agent or
      any Bank under any Loan Document or (c) the ability of each of the Borrower
      or
      any Subsidiary Guarantor to perform its Obligations under any Loan Document
      to
      which it is or is to be a party.

     

    “Material
      Domestic Subsidiary”
means,
      at any date, any wholly-owned Domestic Subsidiary of the Borrower which is
      a
      Material Subsidiary of the Borrower.

     

    “Material
      Subsidiary”
means,
      as at any date of determination, each first-tier Subsidiary now existing or
      hereafter acquired or formed by the Borrower generating more than $30,000,000
      of
      revenues for the most recently ended four quarters.

     

    “Maturity
      Date”
means
      December 16, 2010.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. or any successor to its debt ratings
      business.

     

    “MMM”
means
      a
      joint venture formed under a Partners Agreement dated July 3, 2000, which was
      later amended and restated on August 22, 2000 and March 29, 2002, as the same
      may be amended from time to time, including its associated joint
      ventures.

     

    “Multiple
      Employer Plan”
means
      a
      single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a)
      is
      maintained for employees of the Borrower or any ERISA Affiliate and at least
      one
      Person other than the Borrower and the ERISA Affiliates or (b) was so maintained
      and in respect of which the Borrower or any ERISA Affiliate could have liability
      under Section 4064 or 4069 of ERISA in the event such plan has been or were
      to
      be terminated.

     

    “NPL”
means
      the National Priorities List under CERCLA.

     

    “Note”
means
      a
      promissory note of the Borrower payable to the order of any Bank, in
      substantially the form of Exhibit A hereto, evidencing the aggregate
      indebtedness of the Borrower to such Bank resulting from the Advances owing
      to
      such Bank.

     

    “Notice”
has
      the
      meaning specified in Section 8.02(c).

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    “Notice
      of Issuance and Application for Letter of Credit”
has
      the
      meaning specified in Section 2.03(a).

     

    “Notice
      of Revolving Credit Borrowing”
has
      the
      meaning specified in Section 2.02(a).

     

    “Obligation”
means,
      with respect to any Person, any payment, performance or other obligation of
      such
      Person of any kind, including, without limitation, any liability of such Person
      on any claim, whether or not the right of any creditor to payment in respect
      of
      such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
      matured, disputed, undisputed, legal, equitable, secured or unsecured, and
      whether or not such claim is discharged, stayed or otherwise affected by any
      proceeding referred to in Section 6.01(f). Without limiting the generality
      of
      the foregoing, the Obligations of the Borrower under the Loan Documents include
      (a) the obligation to pay principal, interest, Letter of Credit commissions,
      charges, expenses, fees, attorneys’ fees and disbursements, indemnities and
      other amounts payable by the Borrower under any Loan Document and (b) the
      obligation of the Borrower to reimburse any amount in respect of any of the
      foregoing that any Bank, in its sole discretion, may elect to pay or advance
      on
      behalf of the Borrower.

     

    “Other
      Guaranteed Debt”
has
      the
      meaning specified in the Subordination Agreement.

     

    “Other
      Guaranteed L/C Debt”
has
      the
      meaning specified in the Subordination Agreement.

     

    “Other
      L/C Guarantees”
has
      the
      meaning specified in the Subordination Agreement.

     

    “Other
      Taxes”
has
      the
      meaning specified in Section 2.13(b).

     

    “Parent”
means
      Halliburton Company, a Delaware corporation.

     

    “Patriot
      Act”
shall
      mean the Uniting and Strengthening America by Providing Appropriate Tools
      Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed
      into law October 26, 2001.

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation (or any successor). 

     

    “Performance
      Letter of Credit”
means
      a
      letter of credit qualifying as a “performance based standby letter of credit”
under 12 C.F.R. Part 3, Appendix A, Section 3(b)(2)(i) or any successor U.S.
      Comptroller of the Currency regulation.

     

    “Permitted
      Non-Recourse Indebtedness”
means
      Indebtedness and other Obligations of the Borrower or any Subsidiary or Project
      Finance Subsidiary of the Borrower incurred in connection with the acquisition
      or construction by the Borrower or such Subsidiary of any property with respect
      to which:

     

    (a) the
      holders of such Indebtedness and other Obligations agree that they will look
      solely to the property so acquired or constructed and securing such Indebtedness
      and other Obligations, and neither the Borrower nor any such Subsidiary (i)
      provides any direct or indirect credit support, including any undertaking,
      agreement or instrument that would constitute Indebtedness or (ii) is otherwise
      directly or indirectly liable for such Indebtedness; and

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (b) no
      default with respect to such Indebtedness or Obligations would cause, or permit
      (after notice or passage of time or otherwise), according to the terms thereof,
      any holder (or any representative of any such holder) of any other Indebtedness
      of the Borrower or such Subsidiary (other than a Project Finance Subsidiary
      and
      Subsidiaries thereof) to declare a default on such Indebtedness or cause the
      payment, repurchase, redemption, defeasance or other acquisition or retirement
      for value thereof to be accelerated or payable prior to any scheduled principal
      payment, scheduled sinking fund or maturity.

     

    “Person”
means
      an individual, partnership, corporation (including a business trust), joint
      stock company, trust, unincorporated association, joint venture or other entity,
      or a government or any political subdivision or agency thereof or any trustee,
      receiver, custodian or similar official.

     

    “Plan”
means
      a
      Single Employer Plan, a Multiple Employer Plan or a Welfare Plan.

     

    “Platform”
has
      the
      meaning specified in Section 8.02(b).

     

    “Pre-IPO
      Repositioning”
means
      an internal repositioning of the corporate structure of the Borrower and direct
      and indirect Subsidiaries of the Parent and the Borrower that would result
      in a
      corporate structure for the Borrower, the Subsidiaries of the Borrower, the
      interest holders in the Borrower and the Parent as follows: The Borrower will
      initially continue to be a 100% indirect Subsidiary of the Parent if and until
      such time as an entity that is a Subsidiary of the Parent and of which the
      Borrower is a direct or indirect Subsidiary has shares of common equity sold
      to
      third parties unrelated to the Parent or the Borrower in an underwritten public
      offering or otherwise. Prior to any such sale of common equity, the corporate
      positioning of the Subsidiaries of the Parent directly or indirectly holding
      interests of the Borrower may be changed. The corporate structure within the
      Parent group of the Borrower and Subsidiaries of the Borrower may also be
      repositioned in advance of any sale of such common equity.

     

    “Primary
      Currency”
has
      the
      meaning specified in Section 8.11(c).

     

    “Pro
      Rata Share”
of
      any
      amount means, with respect to any Bank at any time, such amount times a fraction
      the numerator of which is the amount of such Bank’s Revolving Credit Commitment
      at such time (or, if the Commitments shall have been terminated pursuant to
      Section 2.05 or 6.01, such Revolving Credit Commitment as in effect immediately
      prior to such termination) and the denominator of which is the Revolving Credit
      Facility at such time (or, if the Commitments shall have been terminated
      pursuant to Section 2.05 or 6.01, the Revolving Credit Facility as in effect
      immediately prior to such termination).

     

    “Project
      Finance Subsidiary”
means
      (a) a Subsidiary of the Borrower and (b) any Person which is not a Subsidiary
      of
      the Borrower or any of its Subsidiaries in which the Borrower or any of its
      Subsidiaries holds a minority interest with respect to which the earnings of
      such Person are included in the consolidated financial statements of the
      Borrower and its consolidated subsidiaries, in each case, that is a
      special-purpose entity created solely to (i) construct or acquire any asset
      or
      project that will be or is financed solely with Project Financing for such
      asset
      or project and related equity investments in, loans to, or capital contributions
      in, such Person that are not prohibited hereby and/or (ii) own an interest
      in
      any such asset or project.

     

    “Project
      Financing”
means
      Indebtedness and other Obligations that (a) are incurred by a Project Finance
      Subsidiary, (b) are secured by a Lien of the type permitted under Section
      5.02(a)(vii) and (c) constitute Permitted Non-Recourse Indebtedness (other
      than recourse to the assets of, and Equity Interests in, any Project Finance
      Subsidiary).

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    “Project
      L/C Guarantee”
has
      the
      meaning specified in the Subordination Agreement.

     

    “Projections”
has
      the
      meaning specified in Section 4.01(m).

     

    “Property”
or
      “asset”
(in
      each case, whether or not capitalized) means any interest in any kind of
      property or asset, whether real, personal or mixed, or tangible or
      intangible.

     

    “Register”
has
      the
      meaning specified in Section 8.08(c).

     

    “Regulation
      U”
means
      Regulation U of the Federal Reserve Board, as the same is from time to time
      in
      effect, and all official rulings and interpretations thereunder or
      thereof.

     

    “Relevant
      Parties”
means
      the Parent, HESI and the Loan Parties.

     

    “Required
      Banks”
means
      at any time Banks owed or holding at least a majority in interest of the sum
      of
      (i) the aggregate principal amount of the Advances outstanding at such
      time; (ii) the Available Amount of all Letters of Credit outstanding at
      such time (calculated by reference to each Bank’s Pro Rata Share) and
      (iii) the aggregate Unused Revolving Credit Commitments at such
      time.

     

    “Responsible
      Officer”
means
      each of the chairman and chief executive officer, the president, the chief
      financial officer, the treasurer, the secretary or any vice president (whether
      or not further described by other terms, such as, for example, senior vice
      president or vice president-operations) of the Borrower or, if any such office
      is vacant, any Person performing any of the functions of such
      office.

     

    “Revolving
      Credit Advance”
means
      an Advance by a Bank to the Borrower pursuant to Section 2.01 and refers to
      a
      Base Rate Advance or a Eurodollar Rate Advance.

     

    “Revolving
      Credit Borrowing”
means
      a
      borrowing consisting of simultaneous Revolving Credit Advances of the same
      Type
      made by the Banks.

     

    “Revolving
      Credit Commitment”
means,
      with respect to any Bank at any time, the amount set forth opposite such Bank’s
      name on Schedule I hereto under the caption “Revolving Credit Commitment” or, if
      such Bank has entered into one or more Assignment and Acceptances, set forth
      for
      such Bank in the Register maintained by the Agent pursuant to Section 8.08(c)
      as
      such Bank’s “Revolving Credit Commitment”, as such amount may be reduced at or
      prior to such time pursuant to Section 2.05 or increased pursuant to Section
      2.19.

     

    “Revolving
      Credit Facility”
means,
      at any time, the aggregate amount of the Banks’ Revolving Credit Commitments at
      such time.

     

    “S&P”
means
      Standard & Poor’s Ratings Service Group, a division of The McGraw-Hill
      Companies, Inc. on the date hereof, or any successor to its debt ratings
      business.

     

    “SEC”
means
      the Securities and Exchange Commission or any successor thereof.

     

    “Single
      Employer Plan”
means
      a
      single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a)
      is
      maintained for employees of the Borrower or any ERISA Affiliate and no Person
      other than the Borrower and the ERISA Affiliates or (b) was so maintained and
      in
      respect of which the Borrower or any ERISA Affiliate could have liability under
      Section 4069 of ERISA in the event such plan has been or were to be
      terminated.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    “Solvent”
and
      “Solvency”
mean,
      with respect to any Person on a particular date, that on such date (a) the
      fair
      value of the property of such Person is greater than the total amount of
      liabilities, including, without limitation, contingent liabilities, of such
      Person, (b) the present fair salable value of the assets of such Person is
      not
      less than the amount that will be required to pay the probable liability of
      such
      Person on its debts as they become absolute and matured, (c) such Person does
      not intend to, and does not believe that it will, incur debts or liabilities
      beyond such Person’s ability to pay such debts and liabilities as they mature
      and (d) such Person is not engaged in business or a transaction, and is not
      about to engage in business or a transaction, for which such Person’s property
      would constitute an unreasonably small capital. The amount of contingent
      liabilities at any time shall be computed as the amount that, in the light
      of
      all the facts and circumstances existing at such time, represents the amount
      that can reasonably be expected to become an actual or matured
      liability.

     

    “Subordinated
      Debt”
has
      the
      meaning specified in the Subordination Agreement.

     

    “Subordination
      Agreement”
means
      the subordination and undertaking agreement among the Parent, the Borrower
      and
      the Agent, substantially in the form of Exhibit F.

     

    “Subsidiary”
of
      any
      Person means any corporation (including a business trust), partnership, joint
      stock company, trust, unincorporated association, joint venture or other entity
      of which more than 50% of the outstanding capital stock, securities or other
      ownership interests having ordinary voting power to elect directors of such
      corporation or, in the case of any other entity, others performing similar
      functions (irrespective of whether or not at the time capital stock, securities
      or other ownership interests of any other class or classes of such corporation
      or such other entity shall or might have voting power upon the occurrence of
      any
      contingency) is at the time directly or indirectly owned by such Person, by
      such
      Person and one or more other Subsidiaries of such Person or by one or more
      other
      Subsidiaries of such Person.

     

    “Subsidiary
      Guarantors”
means
      the Subsidiaries of the Borrower listed on Schedule III hereto and each other
      Material Domestic Subsidiary of the Borrower that shall be required to execute
      and deliver a guarantee supplement pursuant to Section 5.01(j) and each other
      Subsidiary which shall execute and deliver a guarantee supplement in accordance
      with the procedures set forth for Material Domestic Subsidiaries in Section
      5.01(j); provided
      that (i)
      within 10 Business Days after the date financial statements are delivered
      pursuant to Section 5.01(d)(i) or (ii), as the case may be, the Borrower shall
      cause additional Subsidiaries, if any are required, to each duly execute and
      deliver to the Agent a guarantee supplement, in form and substance reasonably
      satisfactory to the Agent, guaranteeing the other Loan Parties’ Obligations
      under the Loan Documents such that the aggregate revenues of the Borrower and
      all Subsidiary Guarantors shall not be less than 95% of the aggregate revenues
      of the Borrower and the wholly-owned Domestic Subsidiaries of the Borrower
      for
      the four-quarter period ending on the date of such financial statements and
      (ii)
      within 60 days thereafter, deliver to the Agent, upon the request of the Agent
      in its sole discretion, a signed copy of a favorable opinion, addressed to
      the
      Agent and the Banks, of counsel for the Loan Parties reasonably acceptable
      to
      the Agent as to (A) such guarantee supplement being the legal, valid and binding
      obligations of each additional Subsidiary Guarantor party thereto enforceable
      in
      accordance with its terms and (B) such other matters as the Agent may reasonably
      request.

     

    “Surety
      Guarantees”
has
      the
      meaning specified in the Subordination Agreement.

     

    “Syndication
      Agent”
means
      UBS Securities LLC, solely in its capacity as syndication agent under the
      Agreement.

     

    “Taxes”
has
      the
      meaning specified in Section 2.13(a).

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    “Termination
      Date”
means
      December 16, 2010, or the earlier date of termination in whole of the
      Commitments pursuant to Section 2.05 or Section 6.01.

     

    “Type”
has
      the
      meaning specified in the definition of Advance.

     

    “Unrestricted
      Cash”
means
      cash available to the Borrower and its Subsidiaries to pay any indebtedness
      or
      other Obligations of the Borrower and its Subsidiaries without need of third
      party approval or consent and net of any tax that would be imposed in order
      to
      repatriate such cash to the Borrower.

     

    “Unused
      Revolving Credit Commitment”
means,
      with respect to any Bank at any time, (a) such Bank’s Revolving Credit
      Commitment at such time minus
      (b)
      without duplication, the sum of (i) the aggregate principal amount of all
      Revolving Credit Advances and Letter of Credit Advances made by such Bank and
      outstanding at such time plus
      (ii) such Bank’s Pro Rata Share of (A) the aggregate Available Amount
      of all Letters of Credit outstanding at such time and (B) the aggregate
      principal amount of all Letter of Credit Advances made by the Issuing Banks
      pursuant to Section 2.03(c) and outstanding at such time.

     

    “Utilization
      Spread”
means,
      on any date of determination, (a) the aggregate principal amount of all
      Advances and Available Amount of all Letters of Credit outstanding at such
      time
divided
      by
      (b) the Revolving Credit Facility.

     

    “Welfare
      Plan”
means
      a
      welfare plan, as defined in Section 3(1) of ERISA, that is maintained for
      employees of any Loan Party or in respect of which any Loan Party could have
      liability.

     

    “Withdrawal
      Liability”
has
      the
      meaning specified in Part I of Subtitle E of Title IV of ERISA.

     

    Section
      1.02   Computation
      of Time Periods.
       In this Agreement in the computation of periods of time from a specified
      date to a later specified date, the word “from” means “from and including” and
      the words “to” and “until” each means “to but excluding”.

     

    Section
      1.03   Accounting
      Terms;
      GAAP.
       (a)
      Except
      as otherwise expressly provided herein, all terms of an accounting or financial
      nature shall be construed in accordance with GAAP, as in effect from time to
      time; provided
      that, if
      the Borrower notifies the Agent that the Borrower requests an amendment to
      any
      provision hereof to eliminate the effect of any change occurring after the
      date
      hereof in GAAP or in the application thereof on the operation of such provision
      (or if the Agent notifies the Borrower that the Required Banks request an
      amendment to any provision hereof for such purpose), regardless of whether
      any
      such notice is given before or after such change in GAAP or in the application
      thereof, then such provision shall be interpreted on the basis of GAAP as in
      effect and applied immediately before such change shall have become effective
      until such notice shall have been withdrawn or such provision amended in
      accordance herewith. Notwithstanding the foregoing, any entity that is not
      a
      Subsidiary but would be required to be consolidated in the financial statements
      of the Borrower because of FIN 46, (i) shall not be considered a “Subsidiary”
for purposes of this Agreement and (ii) shall not be included in any computation
      of any financial covenant herein. 

     

    (b)
      In
      this Agreement, references to “pro forma compliance” shall mean pro forma
      compliance as determined in accordance with GAAP for the immediately preceding
      four fiscal quarters as of the date of determination and as such methodology
      is
      reasonably approved by the Agent.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

     

    Section
      1.04   Miscellaneous. 
      The words “hereof”, “herein” and “hereunder” and words of similar import when
      used in this Agreement shall refer to this Agreement as a whole and not to
      any
      particular provision of this Agreement, and Article, Section, Schedule and
      Exhibit references are to Articles and Sections of and Schedules and Exhibits
      to
      this Agreement, unless otherwise specified.

     

    Section
      1.05   Ratings.
 A
      rating, whether public or private, by S&P or Moody’s shall be deemed to be
      in effect on the date of announcement or publication by S&P or Moody’s, as
      the case may be, of such rating or, in the absence of such announcement or
      publication, on the effective date of such rating and will remain in effect
      until the announcement or publication of, or (in the absence of such
      announcement or publication) the effective date of, any change in such rating.
      In the event the standards for any rating by Moody’s or S&P are revised, or
      such rating is designated differently (such as by changing letter designations
      to numerical designations), then the references herein to such rating shall
      be
      deemed to refer to the revised or redesignated rating for which the standards
      are closest to, but not lower than, the standards at the date hereof for the
      rating which has been revised or redesignated, all as determined by the Required
      Banks in good faith. Long-term debt supported by a letter of credit, guarantee
      or other similar credit enhancement mechanism shall not be considered as senior
      unsecured long-term debt. If either Moody’s or S&P has at any time more than
      one rating applicable to senior unsecured long-term debt of any Person, the
      lowest such rating shall be applicable for purposes hereof. For example, if
      Moody’s rates some senior unsecured long-term debt of any Person Baa1 and other
      such debt of such Person Baa2, the senior unsecured long-term debt of such
      Person shall be deemed to be rated Baa2 by Moody’s.

     

    ARTICLE
      II

    AMOUNTS
      AND TERMS OF THE REVOLVING CREDIT ADVANCES

     

    Section
      2.01   The
      Revolving Credit Advances.
       (a) Each Bank severally agrees, on the terms and conditions hereinafter
      set forth, to make Revolving Credit Advances in Dollars to the Borrower from
      time to time on any Business Day during the period from the Effective Date
      until
      the Termination Date in an aggregate amount not to exceed such Bank’s Unused
      Revolving Credit Commitment at such time; provided that (i) no
      Revolving Credit Advance shall be required to be made, except as a part of
      a
      Revolving Credit Borrowing that is in an aggregate amount not less than
      $10,000,000 in the case of Eurodollar Rate Advances and $5,000,000 in the case
      of Base Rate Advances and in an integral multiple of $1,000,000, (ii) each
      Revolving Credit Borrowing shall consist of Revolving Credit Advances of the
      same Type made on the same day by the Banks ratably according to their
      respective Revolving Credit Commitments and (iii) the aggregate principal
      amount of all Revolving Credit Advances outstanding at such time shall not
      exceed the Borrowing Sublimit. Within the limits of each Bank’s Unused Revolving
      Credit Commitment in effect from time to time, the Borrower may borrow, prepay
      pursuant to Section 2.10 and reborrow under this Section 2.01. The Borrower
      agrees to give a Notice of Revolving Credit Borrowing in accordance with Section
      2.02(a) as to each Revolving Credit Advance. 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (b) Letters
      of Credit.
      Each
      Issuing Bank agrees, on the terms and conditions hereinafter set forth, to
      issue
      letters of credit (collectively, the “Letters
      of Credit”,
      and
      each a “Letter
      of Credit”)
      for
      the account of the Borrower (such issuance, and any funding of a draw
      thereunder, to be made by the Issuing Banks (including through such branches
      or
      Affiliates as such Issuing Bank and the Borrower shall jointly agree) in
      reliance on the agreements of the other Banks pursuant to Section 2.03) from
      time to time on any Business Day during the period from the Effective Date
      until
      10 days prior to the Maturity Date in an aggregate Available Amount (i) for
      all Letters of Credit issued by the Issuing Banks not to exceed at any time
      the
      lesser of (A) the aggregate Letter of Credit Commitments at such time and (B)
      the Letter of Credit Commitment of such Issuing Bank at such time (or such
      greater amount as such Issuing Bank shall approve) and (ii) for each such Letter
      of Credit not to exceed an amount equal to the Unused Revolving Credit
      Commitments of the Banks at such time. No Letters of Credit shall have
      expiration dates later than 10 Business Days prior to the Maturity Date. Within
      the limits referred to above, the Borrower may request the issuance of Letters
      of Credit under this Section 2.01(b), repay any Letter of Credit Advances
      resulting from drawings thereunder pursuant to Section 2.03(a) and request
      the
      issuance of additional Letters of Credit under this Section 2.01(b).

     

    Section
      2.02   Making
      the Revolving Credit Advances.
       (a)
      Each
      Revolving Credit Borrowing shall be made on notice in the form of Exhibit B-1
      (a
“Notice
      of Revolving Credit Borrowing”),
      given
      not later than 11:00 A.M. (New York City time) (i) on the date of a proposed
      Revolving Credit Borrowing comprised of Base Rate Advances and (ii) on the
      third
      Business Day prior to the date of a proposed Revolving Credit Borrowing
      comprised of Eurodollar Rate Advances, by the Borrower to the Agent, which
      shall
      give to each Bank prompt notice thereof by facsimile. Each Notice of Revolving
      Credit Borrowing shall be by facsimile, confirmed immediately in writing, in
      substantially the form of Exhibit B-1, specifying therein the requested (i)
      date
      of such Revolving Credit Borrowing, (ii) Type of Revolving Credit Advances
      comprising such Revolving Credit Borrowing, (iii) aggregate amount of such
      Revolving Credit Borrowing, and (iv) if such Revolving Credit Borrowing is
      to be
      comprised of Eurodollar Rate Advances, the initial Interest Period for each
      such
      Revolving Credit Advance. Each Bank shall, before 2:00 p.m. (New York City
      time)
      on the date of such Revolving Credit Borrowing, make available for the account
      of its Applicable Lending Office to the Agent at its address referred to in
      Section 8.02, in same day funds, such Bank’s ratable portion of such Revolving
      Credit Borrowing. After the Agent’s receipt of such funds and upon fulfillment
      of the applicable conditions set forth in Article III, the Agent will make
      such
      funds available to the Borrower at the Agent’s aforesaid address.

     

    (b)  Notwithstanding
      any other provision in this Agreement, at no time shall there be more than
      ten
      Revolving Credit Borrowings outstanding; provided
      that for
      purposes of the limitation set forth in this sentence, all Revolving Credit
      Borrowings consisting of Base Rate Advances shall constitute a single Revolving
      Credit Borrowing.

     

    (c)  Each
      Notice of Revolving Credit Borrowing shall be irrevocable and binding on the
      Borrower. In the case of any Revolving Credit Borrowing that the related Notice
      of Revolving Credit Borrowing specifies is to be comprised of Eurodollar Rate
      Advances, the Borrower shall indemnify each Bank against any loss, cost or
      expense incurred by such Bank as a result of any failure to fulfill on or before
      the date specified in such Notice of Revolving Credit Borrowing for such
      Revolving Credit Borrowing the applicable conditions set forth in Article III,
      including, without limitation, any loss (excluding loss of anticipated profits),
      cost or expense incurred by reason of the liquidation or reemployment of
      deposits or other funds acquired by such Bank to fund the Revolving Credit
      Advance to be made by such Bank as part of such Revolving Credit Borrowing
      when
      such Revolving Credit Advance, as a result of such failure, is not made on
      such
      date.

     

    
      
        
        

      

      
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    (d)  Unless
      the Agent shall have received notice from a Bank prior to the time of any
      Revolving Credit Borrowing that such Bank will not make available to the Agent
      such Bank’s ratable portion of such Revolving Credit Borrowing, the Agent may
      assume that such Bank has made such portion available to the Agent on the date
      of such Revolving Credit Borrowing in accordance with subsection (a) of this
      Section 2.02 and the Agent may, in reliance upon such assumption, make available
      to the Borrower on such date a corresponding amount. If and to the extent that
      such Bank shall not have so made such ratable portion available to the Agent,
      such Bank and the Borrower severally agree to repay to the Agent forthwith
      on
      demand such corresponding amount together with interest thereon, for each day
      from the date such amount is made available to the Borrower until the date
      such
      amount is repaid to the Agent, at (i) in the case of the Borrower, the interest
      rate applicable at the time to Revolving Credit Advances comprising such
      Revolving Credit Borrowing and (ii) in the case of such Bank, the Federal Funds
      Rate. If such Bank shall repay to the Agent such corresponding amount, such
      amount so repaid shall constitute such Bank’s Revolving Credit Advance as part
      of such Revolving Credit Borrowing for all purposes.

     

    (e)  The
      failure of any Bank to make the Revolving Credit Advance to be made by it as
      part of any Revolving Credit Borrowing shall not relieve any other Bank of
      its
      obligation, if any, hereunder to make its Revolving Credit Advance on the date
      of such Revolving Credit Borrowing, but no Bank shall be responsible for the
      failure of any other Bank to make the Revolving Credit Advance to be made by
      such other Bank on the date of any Revolving Credit Borrowing.

     

    Section
      2.03   Issuance
      of and Drawings and Reimbursement Under Letters of Credit.
       (a) Request
      for Issuance.
      Each
      Letter of Credit shall be issued upon notice and application, given not later
      than 11:00 A.M. (New York City time) on at least the third Business Day (or
      a
      later day, if acceptable to the relevant Issuing Bank in its sole discretion,
      but in no event later than the first Business Day) prior to the date of the
      proposed issuance of such Letter of Credit, by the Borrower to any Issuing
      Bank:
      Each of the Borrower and such Issuing Bank shall give to the Agent prompt notice
      of such notice of issuance by telex or facsimile. Each such notice of issuance
      of a Letter of Credit (a “Notice
      of Issuance and Application for Letter of Credit”)
      shall
      be by telephone, confirmed immediately in writing, or telex or facsimile (or
      by
      electronic communication, if arrangements for doing so have been approved by
      the
      applicable Issuing Bank), in the form of Exhibit B-2, specifying therein the
      requested (A) date of such issuance (which shall be a Business Day), (B)
      Available Amount of such Letter of Credit, (C) expiration date of such Letter
      of
      Credit, (D) name and address of the Subsidiary on behalf of which such
      issuance of such Letter of Credit is requested, if applicable, (E) name and
      address of the beneficiary of such Letter of Credit, (F) form of such Letter
      of
      Credit and (G) the requested currency of such Letter of Credit, if other than
      Dollars. If the requested form of such Letter of Credit is acceptable to such
      Issuing Bank in its reasonable discretion, such Issuing Bank will, upon
      fulfillment of the applicable conditions set forth in Article III, make such
      Letter of Credit available to the Borrower at its office referred to in Section
      8.02 or as otherwise agreed with the Borrower in connection with such issuance;
      provided
      that no
      Issuing Bank shall be obligated to issue any Letter of Credit in a Foreign
      Currency, but each Issuing Bank shall be permitted to do so in its sole
      discretion if requested by the Borrower; provided,
      further
      that no
      Issuing Bank shall be required to issue any Letter of Credit if after giving
      effect to such issuance the aggregate face amount of all outstanding Letters
      of
      Credit issued under this Agreement by such Issuing Bank would exceed its Letter
      of Credit Commitment, unless such Issuing Bank shall have otherwise agreed.
      Notwithstanding the foregoing, no Issuing Bank shall issue any Letter of Credit
      after it has received a notice from the Agent or the Required Banks that a
      Default or Event of Default has occurred and is continuing, until it receives
      a
      subsequent notice from the Agent or the Required Banks that such Default or
      Event of Default has been cured or waived. Each of the Borrower and each Issuing
      Bank shall promptly notify the Agent of any issuance of, amendment to, or
      extension of, any Letter of Credit issued hereunder.

     

    
      
        
        

      

      
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    (b) Letter
      of Credit Reports.
      Each
      Issuing Bank shall furnish (A) to the Agent on the first Business Day of each
      week a written report summarizing issuance and expiration dates of Letters
      of
      Credit issued by such Issuing Bank during the previous week and drawings during
      such week under all Letters of Credit issued by such Issuing Bank, (B) to the
      Agent on the first Business Day of each month a written report summarizing
      issuance and expiration dates of Letters of Credit issued by such Issuing Bank
      during the preceding month and drawings during such month under all Letters
      of
      Credit issued by such Issuing Bank and (C) to the Agent on the first Business
      Day of each calendar quarter a written report setting forth the average daily
      aggregate Available Amount during the preceding calendar quarter of all Letters
      of Credit issued by such Issuing Bank. The Agent shall promptly deliver such
      report to the Banks and the Borrower by the means provided for delivery of
      Communications pursuant to Section 8.02.

     

    (c) Drawing
      and Reimbursement.
      The
      payment by any Issuing Bank of a draft drawn under any Letter of Credit shall
      constitute for all purposes of this Agreement the making by such Issuing Bank
      of
      a Letter of Credit Advance, which shall be a Base Rate Advance, in the Dollar
      Equivalent amount of such draft. Upon the issuance of a Letter of Credit by
      any
      Issuing Bank under Section 2.03(a), such Issuing Bank shall be deemed, without
      further action by any party hereto, to have sold to each Bank, and each Bank
      shall be deemed, without further action by any party hereto, to have purchased
      from such Issuing Bank, a participation in such Letter of Credit in an amount
      for each Bank equal to such Bank’s Pro Rata Share of the Available Amount of
      such Letter of Credit, effective upon the issuance of such Letter of Credit.
      In
      consideration and in furtherance of the foregoing, each Bank hereby absolutely
      and unconditionally agrees to pay such Bank’s Pro Rata Share of each Letter of
      Credit Advance made by such Issuing Bank and not reimbursed by the Borrower
      forthwith on the date due by making available for the account of its Applicable
      Lending Office to the Agent for the account of such Issuing Bank by deposit
      to
      the Agent’s Account, in same day funds, an amount equal to such Bank’s Pro Rata
      Share of such Letter of Credit Advance. Each Bank acknowledges and agrees that
      its obligation to acquire participations pursuant to this Section 2.03(c) in
      respect of Letters of Credit is absolute and unconditional and shall not be
      affected by any circumstance whatsoever, including the occurrence and
      continuance of a Default or an Event of Default or the termination of the
      Commitments, and that each such payment shall be made without any off-set,
      abatement, withholding or reduction whatsoever. Upon any such participation
      of a
      Bank of a portion of a Letter of Credit Advance, such Issuing Bank represents
      and warrants to such other Bank that such Issuing Bank is the legal and
      beneficial owner of such interest being assigned by it, free and clear of any
      liens, but makes no other representation or warranty and assumes no
      responsibility with respect to such Letter of Credit Advance, the Loan Documents
      or the Borrower. If and to the extent that any Bank shall not have so made
      the
      amount of such Letter of Credit Advance available to the Agent, such Bank agrees
      to pay to the Agent forthwith on demand such amount together with interest
      thereon, for each day from the date such Letter of Credit Advance is due until
      the date such amount is paid to the Agent, at the Federal Funds Rate for its
      account or the account of such Issuing Bank, as applicable. If such Bank shall
      pay to the Agent such amount for the account of such Issuing Bank on any
      Business Day, such amount so paid in respect of principal shall constitute
      a
      Letter of Credit Advance made by such Bank on such Business Day for purposes
      of
      this Agreement, and the outstanding principal amount of the Letter of Credit
      Advance made by such Issuing Bank shall be reduced by such amount on such
      Business Day.

     

    (d) Failure
      to Make Letter of Credit Advances.
      The
      failure of any Bank to make the Letter of Credit Advance to be made by it on
      the
      date specified in Section 2.03(c) shall not relieve any other Bank of its
      obligation hereunder to make its Letter of Credit Advance on such date, but
      no
      Bank shall be responsible for the failure of any other Bank to make the Letter
      of Credit Advance to be made by such other Bank on such date.

     

    
      
        
        

      

      
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    Section
      2.04   Fees.
       (a)  Commitment
      Fees.
      The
      Borrower agrees to pay to the Agent for the account of each Bank a commitment
      fee through the Termination Date on the amount of such Bank’s Unused Revolving
      Credit Commitment, (i) from the date of this Agreement in the case of each
      Bank
      listed on the signature pages hereof or (ii) from the effective date specified
      in the Assignment and Acceptance pursuant to which it became a Bank, payable
      quarterly in arrears (within three Business Days after receipt from the Agent
      of
      an invoice therefore) for each period ending on the last day of each March,
      June, September and December hereafter, commencing December 31, 2005, and on
      the
      Termination Date, at a rate per annum equal to the Applicable Commitment Fee
      Rate in effect from time to time (the “Commitment
      Fee”).

     

    (b)  Letter
      of Credit Fees, Etc.
      (i) The
      Borrower shall pay to the Agent for the account of each Bank a commission,
      payable in arrears quarterly (within three Business Days after receipt from
      the
      Agent of an invoice therefor) for each period ending on the last day of each
      March, June, September and December, commencing December 31, 2005 and on the
      Termination Date, on such Bank’s Pro Rata Share of the average daily aggregate
      Available Amount during such quarter of all Letters of Credit then outstanding
      at a rate equal to the Applicable Margin on Eurodollar Rate Advances in effect
      from time to time; provided,
      however,
      that
      with respect to Performance Letters of Credit and Commercial Letters of Credit
      such commission shall be equal to 50% of such Applicable Margin from time to
      time.

     

    (ii)  The
      Borrower shall pay to each Issuing Bank, for its own account, (A) an issuance
      fee for each Letter of Credit issued by such Issuing Bank in an amount equal
      to
      0.125% of the Available Amount of such Letter of Credit on the date of issuance
      of such Letter of Credit, payable on such date and (B) such other commissions,
      fronting fees, transfer fees and other fees and charges in connection with
      the
      issuance or administration of each Letter of Credit as the Borrower and Issuing
      Bank shall agree.

     

    (c)  Other
      Fees.
      The
      Borrower agrees to pay to the Agent, the Co-Lead Arrangers, and the Banks such
      other fees as may be separately agreed to in writing.

     

    Section
      2.05   Reduction
      of Commitments.
       (a) Optional.
      The
      Borrower shall have the right, upon at least three Business Days’ notice to the
      Agent, to terminate in whole or reduce ratably in part the Unused Revolving
      Credit Commitments; provided
      that
      each partial reduction shall be in the minimum aggregate amount of $10,000,000
      and in an integral multiple of $5,000,000. Any termination or reduction of
      any
      of the Commitments shall be permanent.

     

    (b)  Mandatory.
      The
      Borrowing Sublimit shall be automatically and permanently reduced upon any
      sale,
      lease, transfer or other disposition of all or substantially all of the G&I
      Business Unit to a Person other than the Borrower or any Subsidiary of the
      Borrower to $350,000,000; provided
      that
      such reduction shall become effective upon the compliance by the Borrower or
      such Subsidiary of all terms and conditions specified in Section
      5.02(e)(iii).

     

    Section
      2.06   Repayment
      of Advances; Required Cash Collateral.
       (a) Revolving
      Credit Advances.
      The
      Borrower shall repay the principal amount of each Revolving Credit Advance
      owing
      to each Bank on the Termination Date or on such earlier date as may be
      applicable pursuant hereto.

     

    (b)  Letter
      of Credit Advances.
      

     

    
      
        
        

      

      
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    (i)  Each
      Issuing Bank, shall, promptly following its receipt thereof, examine all
      documents purporting to represent a demand for payment under a Letter of Credit
      issued by such Issuing Bank. Such Issuing Bank shall promptly notify the
      Administrative Agent and the Borrower by telephone (confirmed by facsimile)
      of
      such demand for payment and whether such Issuing Bank has made or will make
      a
      Letter of Credit Advance with respect thereto; provided that any failure to
      give
      or delay in giving such notice shall not relieve the Borrower of its obligation
      to reimburse such Issuing Bank and the Banks with respect to any such Letter
      of
      Credit Advance.

     

    (ii)  The
      Borrower shall repay to the Agent for the account of each Issuing Bank and
      each
      other Bank that has made a Letter of Credit Advance on the earlier of the third
      Business Day following the date on which such Letter of Credit Advance is made
      and the Termination Date the outstanding principal amount of each Letter of
      Credit Advance made by each of them.

     

    (iii)  The
      Obligations of the Borrower under this Agreement and any other agreement or
      instrument, in each case relating to any Letter of Credit, shall be
      unconditional and irrevocable, and shall be paid strictly in accordance with
      the
      terms of this Agreement and such other agreement or instrument under all
      circumstances, including, without limitation, the following circumstances (it
      being understood that any such payment by the Borrower is without prejudice
      to,
      and does not constitute a waiver of, any rights the Borrower might have or
      might
      acquire as a result of the payment by any Issuing Bank of any draft or the
      reimbursement by the Borrower thereof):

     

    (A)  any
      lack
      of validity or enforceability of any Loan Document, any Letter of Credit or
      any
      other agreement or instrument relating thereto (all of the foregoing being,
      collectively, the “L/C
      Related Documents”);

     

    (B)  any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Obligations of the Borrower in respect of any L/C Related Document
      or any other amendment or waiver of or any consent to departure from all or
      any
      of the L/C Related Documents;

     

    (C)  the
      existence of any claim, set-off, defense or other right that the Borrower may
      have at any time against any beneficiary or any transferee of a Letter of Credit
      (or any Persons for which any such beneficiary or any such transferee may be
      acting), any Issuing Bank or any other Person, whether in connection with the
      transactions contemplated by the L/C Related Documents or any unrelated
      transaction;

     

    (D)  any
      statement or any other document presented under a Letter of Credit proving
      to be
      forged, fraudulent, invalid or insufficient in any respect or any statement
      therein being untrue or inaccurate in any respect;

     

    (E)  payment
      by any Issuing Bank under a Letter of Credit against presentation of a draft
      or
      certificate that does not strictly comply with the terms of such Letter of
      Credit;

     

    (F)  any
      exchange, release or non-perfection of any collateral, or any release or
      amendment or waiver of or consent to departure from any guarantee, for all
      or
      any of the Obligations of the Borrower in respect of the L/C Related Documents;
      or

     

    
      
        
        

      

      
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    (G)  any
      other
      circumstance or happening whatsoever, whether or not similar to any of the
      foregoing, including, without limitation, any other circumstance that might
      otherwise constitute a defense available to, or a discharge of, the Borrower
      or
      a guarantor.

     

    (c)  Required
      Payment and Cash Collateral.
      (i) Letters
      of Credit.
      If on
      any date the sum of the aggregate Available Amount of all Letters of Credit
      outstanding on such date plus the aggregate principal amount of Advances
      outstanding on such date exceeds the aggregate Commitments on such date, the
      Borrower shall, within three Business Days thereafter, (i) prepay Advances
      in an
      aggregate principal amount sufficient to reduce the sum of the Available Amount
      of all Letters of Credit outstanding on such date plus the aggregate principal
      amount of Advances outstanding on such date to be less than or equal to the
      aggregate Commitments on such date or (ii) if no Advances are outstanding at
      such time, pay to the Agent in same day funds at the Agent’s office, for deposit
      in the L/C Cash Collateral Account, an amount equal to such excess, which amount
      shall be released within three Business Days after notice from the Borrower
      to
      the Agent that the sum of the aggregate Available Amount of all Letters of
      Credit plus the aggregate principal amount of Advances outstanding on such
      date
      no longer exceeds the aggregate Commitments.

     

    (ii)  Revolving
      Credit Advances.
      If on
      any date the sum of the aggregate principal amount of Revolving Credit Advances
      outstanding on such date exceeds the Borrowing Sublimit on such date, the
      Borrower shall, within three Business Days thereafter, prepay Revolving Credit
      Advances in an aggregate principal amount sufficient to reduce the sum of the
      Revolving Credit Advances outstanding on such date to be less than or equal
      to
      the Borrowing Sublimit on such date.

     

    Section
      2.07   Interest.
       The Borrower shall pay interest on the unpaid principal amount of each
      Advance from the date of such Advance until such principal amount shall be
      paid
      in full, at the following rates per annum:

     

    (a)  During
      such periods as such Advance is a Base Rate Advance, a rate per annum equal
      at
      all times to the Base Rate in effect from time to time plus the Applicable
      Margin in effect from time to time, payable quarterly in arrears on the last
      day
      of each March, June, September and December and on the date such Base Rate
      Advance shall be Converted or paid in full; provided
      that
      upon the occurrence and during the continuance of an Event of Default any amount
      of principal of a Base Rate Advance due hereunder shall bear interest, payable
      on demand, at a rate per annum equal at all times to the sum of the rate
      otherwise payable thereon plus 2%.

     

    (b)  During
      such periods as such Advance is a Eurodollar Rate Advance, a rate per annum
      equal at all times during each Interest Period for such Advance to the sum
      of
      the Eurodollar Rate for such Interest Period plus the Applicable Margin in
      effect from time to time, payable on the last day of such Interest Period and,
      if such Interest Period has a duration of more than three months, on each day
      that occurs during such Interest Period every three months from the first day
      of
      such Interest Period and on the date such Revolving Credit Advance shall be
      Converted or paid in full; provided
      that
      upon the occurrence and during the continuance of an Event of Default any amount
      of principal of a Eurodollar Rate Advance due hereunder shall bear interest,
      payable on demand, at a rate per annum equal at all times to the sum of the
      Eurodollar Rate for such Interest Period plus the Applicable Margin in effect
      from time to time plus 2%.

     

    
      
        
        

      

      
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    (c)  Upon
      the
      occurrence and during the continuance of an Event of Default under Section
      6.01(a), the Borrower shall pay simple interest, to the fullest extent permitted
      by law, on the amount of any interest, fee or other amount (other than principal
      of Advances which is covered by Sections 2.07(a) and 2.07(b)) payable hereunder
      that is not paid when due, from the date such amount shall be due until such
      amount shall be paid in full, payable in arrears on the date such amount shall
      be paid in full and on demand, at a rate per annum equal at all times to the
      sum
      of the rate of interest in effect from time to time for Base Rate Advances
      plus
      2% per annum.

     

    Section
      2.08   Additional
      Interest on Eurodollar Rate Advances.
       The Borrower shall pay to each Bank, so long as such Bank shall be
      required under regulations of the Federal Reserve Board to maintain reserves
      with respect to liabilities or assets consisting of or including Eurocurrency
      Liabilities, additional interest on the unpaid principal amount of each Advance
      of such Bank during such periods as such Advance is a Eurodollar Rate Advance,
      from the date of such Advance until such principal amount is paid in full,
      at an
      interest rate per annum equal at all times to the remainder obtained by
      subtracting (i) the Eurodollar Rate for the Interest Period then in effect
      for
      such Eurodollar Rate Advance from (ii) the rate obtained by dividing such
      Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve
      Percentage of such Bank for such Interest Period, payable on each date on which
      interest is payable on such Eurodollar Rate Advance. Such additional interest
      shall be determined by such Bank and notified to the Borrower through the
      Agent.

     

    Section
      2.09   Interest
      Rate Determination.
       (a)  The
      Agent shall give prompt notice to the Borrower and the Banks of the applicable
      interest rate determined by the Agent for purposes of Section
      2.07(b).

     

    (b)  If
      the
      Agent is unable to determine the Eurodollar Rate for any Eurodollar Rate
      Advances:

                                   
      (i)  the
      Agent
      shall forthwith notify the Borrower and the Banks that the interest rate cannot
      be determined for such Eurodollar Rate Advances,

     

                                  
      (ii)  each
      such
      Eurodollar Rate Advance will automatically, on the last day of the then existing
      Interest Period therefore, Convert into a Base Rate Advance (or if such Advance
      is then a Base Rate Advance, will continue as a Base Rate Advance),
      and

     

                                 
      (iii)  the
      obligation of the Banks to make Eurodollar Rate Advances or to Convert Revolving
      Credit Advances into Eurodollar Rate Advances shall be suspended until the
      Agent
      shall notify the Borrower and the Banks that the circumstances causing such
      suspension no longer exist.

     

    (c)  If,
      with
      respect to any Eurodollar Rate Advances, the Required Banks notify the Agent
      (A)
      that the Eurodollar Rate for any Interest Period for such Advances will not
      adequately reflect the cost to such Required Banks of making, funding or
      maintaining their respective Eurodollar Rate Advances for such Interest Period
      or (B) that Dollar deposits for the relevant amounts and Interest Period for
      their respective Advances are not available to them in the London interbank
      market, the Agent shall forthwith so notify the Borrower and the Banks,
      whereupon 

     

                                  
      (i)  each
      Eurodollar Rate Advance will automatically, on the last day of the then existing
      Interest Period therefore, Convert into a Base Rate Advance, and

     

    
      
        
        

      

      
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        (ii)  the
        obligation of the Banks to make, or to Convert Advances into, Eurodollar
        Rate
        Advances shall be suspended until the Agent shall notify the Borrower and
        the
        Banks that the circumstances causing such suspension no longer
        exist.

    

     

    (d)  If
      the
      Borrower shall fail to select the duration of any Interest Period for any
      Eurodollar Rate Advances in accordance with the provisions contained in the
      definition of “Interest Period” in Section 1.01, the Agent will forthwith so
      notify the Borrower and the Banks and such Revolving Credit Advances will
      automatically, on the last day of the then existing Interest Period therefore,
      Convert into Base Rate Advances (or if such Advances are then Base Rate
      Advances, will continue as Base Rate Advances).

     

    (e)  On
      the
      date on which the aggregate unpaid principal amount of Eurodollar Rate Advances
      comprising any Borrowing shall be reduced, by payment or prepayment or
      otherwise, to less than $10,000,000, such Advances shall automatically Convert
      into Base Rate Advances, and on and after such date the right of the Borrower
      to
      Convert such Advances into Eurodollar Rate Advances shall
      terminate.

     

    (f)  Upon
      the
      occurrence and during the continuance of any Event of Default under Section
      6.01(a), (i) each Eurodollar Rate Advance will automatically, on the last day
      of
      the then existing Interest Period therefore, Convert into a Base Rate Advance
      and (ii) the obligation of the Banks to make, or to Convert Advances into,
      Eurodollar Rate Advances shall be suspended.

     

    Section
      2.10   Optional
      Prepayments.
       The Borrower shall have no right to prepay any principal amount of any
      Advance other than as provided in this Section 2.10. The Borrower may, upon
      notice given to the Agent before 11:00 A.M. (New York City time) on at least
      the
      first Business Day prior to the date of prepayment in the case of Base Rate
      Advances or upon at least three Business Days’ notice to the Agent in the case
      of Eurodollar Rate Advances, in each case stating the proposed date (which
      shall
      be a Business Day) and aggregate principal amount of the prepayment, and if
      such
      notice is given the Borrower shall, subject to the terms thereof, prepay the
      outstanding principal amounts of the Advances comprising part of the same
      Borrowing in whole or ratably in part, together with accrued interest to the
      date of such prepayment on the principal amount prepaid; provided,
      however,
      that
      (x) each partial prepayment shall be in an aggregate principal amount not less
      than $10,000,000 in the case of Eurodollar Rate Advances and $5,000,000 in
      the
      case of Base Rate Advances and in integral multiples of $1,000,000, and after
      giving effect thereto no Borrowing then outstanding shall have a principal
      amount of less than $5,000,000; and (y) in the case of any such prepayment
      of a
      Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the Banks
      in respect thereof pursuant to Section 8.04(b).

     

    
      
        
        

      

      
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    Section
      2.11   Payments
      and Computations.
       (a)
      The
      Borrower shall make each payment hereunder and under the Notes not later than
      11:00 A.M. (New York City time) on the day when due in Dollars to the Agent
      (except that payments under Section 2.08 shall be paid directly to the Bank
      entitled thereto) at Two Penns Way, Suite 200, New Castle, Delaware 19720,
      in
      same day funds. The Agent will promptly thereafter cause to be distributed
      like
      funds relating to the payment of principal, interest, Commitment Fees or Letter
      of Credit Fees ratably (except amounts payable pursuant to Section 2.12 or
      Section 2.13 and except that any Bank may receive less than its ratable share
      of
      interest to the extent Section 8.06 is applicable to it) to the Banks for the
      account of their respective Applicable Lending Offices, and like funds relating
      to the payment of any other amount payable to any Bank to such Bank for the
      account of its Applicable Lending Office, in each case to be applied in
      accordance with the terms of this Agreement. Upon its acceptance of an
      Assignment and Acceptance and recording of the information contained therein
      in
      the Register pursuant to Section 8.08(c), from and after the effective date
      specified in such Assignment and Acceptance, the Agent shall make all payments
      hereunder and under the Notes in respect of the interest assigned thereby to
      the
      Bank assignee thereunder, and the parties to such Assignment and Acceptance
      shall make all appropriate adjustments in such payments for periods prior to
      such effective date directly between themselves. At the time of each payment
      of
      any principal of or interest on any Borrowing to the Agent, the Borrower shall
      notify the Agent of the Borrowing to which such payment shall apply. In the
      absence of such notice the Agent may specify the Borrowing to which such payment
      shall apply.

     

    (b)  All
      computations of interest based on the Base Rate (except during such times as
      the
      Base Rate is determined pursuant to clause (c) of the definition thereof),
      of
      Commitment Fees and of Letter of Credit Fees shall be made by the Agent on
      the
      basis of a year of 365 or 366 days, as the case may be, and all computations
      of
      interest based on the Eurodollar Rate, the Federal Funds Rate or, during such
      times as the Base Rate is determined pursuant to clause (c) of the definition
      thereof, the Base Rate shall be made by the Agent, and all computations of
      interest pursuant to Section 2.08 shall be made by a Bank, on the basis of
      a
      year of 360 days, in each case for the actual number of days (including the
      first day but excluding the last day) occurring in the period for which such
      interest or fees are payable. Each determination by the Agent (or in the case
      of
      Section 2.08, by a Bank) of an interest rate hereunder shall be conclusive
      and
      binding for all purposes, absent manifest error.

     

    (c)  Whenever
      any payment hereunder or under the Notes shall be stated to be due on a day
      other than a Business Day, such payment shall be made on the next succeeding
      Business Day, and such extension of time shall in such case be included in
      the
      computation of payment of interest, Commitment Fees and Letter of Credit Fees,
      as the case may be; provided,
      however,
      if such
      extension would cause payment of interest on or principal of Eurodollar Rate
      Advances to be made in the next following calendar month, such payment shall
      be
      made on the next preceding Business Day.

     

    (d)  Unless
      the Agent shall have received notice from the Borrower prior to the date on
      which any payment is due to the Banks hereunder that the Borrower will not
      make
      such payment in full, the Agent may assume that the Borrower has made such
      payment in full to the Agent on such date and the Agent may, in reliance upon
      such assumption, cause to be distributed to each Bank on such due date an amount
      equal to the amount then due such Bank. If and to the extent that the Borrower
      shall not have so made such payment in full to the Agent, each Bank shall repay
      to the Agent forthwith on demand such amount distributed to such Bank together
      with interest thereon, for each day from the date such amount is distributed
      to
      such Bank until the date such Bank repays such amount to the Agent, at the
      Federal Funds Rate.

     

    
      
        
        

      

      
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    Section
      2.12   Increased
      Costs and Capital Requirements.
       (a)  If,
      due to either (i) the introduction of or any change (other than any change
      by
      way of imposition or increase of reserve requirements included in the Eurodollar
      Rate Reserve Percentage) in or in the interpretation of any law or regulation
      by
      any Governmental Authority charged with the interpretation or administration
      thereof or (ii) the compliance with any guideline or request from any central
      bank or other Governmental Authority (whether or not having the force of law),
      there shall be any increase in the cost to any Bank of agreeing to make or
      making, funding or maintaining any Eurodollar Rate Advance or of agreeing to
      issue or of issuing or maintaining or participating in Letters of Credit or
      of
      agreeing to make or of making or maintaining Letter of Credit Advances
      (excluding, for purposes of this Section 2.12, any such increased costs
      resulting from (x) Taxes or Other Taxes (as to which Section 2.13 shall govern)
      and (y) changes in the basis of taxation of overall net income or overall gross
      income by the United States or by the foreign jurisdiction or state under the
      laws of which such Bank is organized or has its Applicable Lending Office or
      any
      political subdivision thereof), then the Borrower shall from time to time,
      within 15 days after demand by such Bank (with a copy of such demand to the
      Agent), pay to the Agent for the account of such Bank additional amounts
      sufficient to compensate such Bank for such increased cost; provided,
      however,
      that
      the Borrower shall not be required to pay to such Bank any portion of such
      additional amounts that are incurred more than 90 days prior to any such demand,
      unless such additional amounts had not been imposed or were not determinable
      on
      the date that is 90 days prior to such demand. A certificate setting forth
      in
      reasonable detail the amount of such increased cost, submitted to the Borrower
      and the Agent by such Bank, shall be conclusive and binding for all purposes,
      absent manifest error.

     

    (b)  If
      following the introduction of or any change in any applicable law or regulation
      or any guideline or request from any central bank or other Governmental
      Authority (whether or not having the force of law) any Bank determines that
      compliance by such Bank with any such law or regulation or guideline or request
      regarding capital adequacy affects or would affect the amount of capital
      required or expected to be maintained by such Bank or any Person controlling
      such Bank and that the amount of such capital is increased by or based upon
      the
      existence of such Bank’s commitment to lend or to issue or participate in
      Letters of Credit hereunder and other commitments of such type or the issuance
      or maintenance of or participation in Letters of Credit (or similar contingent
      Obligations), then, within 15 days after demand by such Bank (with a copy of
      such demand to the Agent), the Borrower shall pay to the Agent for the account
      of such Bank, from time to time as specified by such Bank, additional amounts
      sufficient to compensate such Bank or such Person in the light of such
      circumstances, to the extent that such Bank reasonably determines such increase
      in capital to be allocable to the existence of such Bank’s commitment to lend or
      to issue or participate in Letters of Credit hereunder or to the issuance of
      or
      participation in any Letters of Credit; provided,
      however,
      that
      the Borrower shall not be required to pay to such Bank any portion of such
      additional amounts that are incurred more than 90 days prior to any such demand,
      unless such additional amounts had not been imposed or were not determinable
      on
      the date that is 90 days prior to such demand. A certificate setting forth
      in
      reasonable detail such amounts submitted to the Borrower and the Agent by such
      Bank shall be conclusive and binding for all purposes, absent manifest
      error.

     

    (c)  Each
      Bank
      shall make reasonable efforts (consistent with its internal policies and legal
      and regulatory restrictions) to select a jurisdiction for its Applicable Lending
      Office or change the jurisdiction of its Applicable Lending Office, as the
      case
      may be, so as to avoid the imposition of any increased costs under this Section
      2.12 or to eliminate the amount of any such increased cost which may thereafter
      accrue; provided
      that no
      such selection or change of the jurisdiction for its Applicable Lending Office
      shall be made if, in the reasonable judgment of such Bank, such selection or
      change would be disadvantageous to such Bank.

     

    
      
        
        

      

      
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    Section
      2.13   Taxes.
       (a)  Any
      and all payments by the Borrower hereunder or under the Notes shall be made,
      in
      accordance with Section 2.11, free and clear of and without deduction for any
      and all present or future taxes, levies, imposts, deductions, charges and
      withholdings, and all liabilities with respect thereto, excluding,
      in the
      case of each Bank and the Agent, taxes imposed on its overall net income
      (including branch profits), and franchise taxes imposed on or measured by net
      income, by the jurisdiction under the laws of which such Bank or the Agent
      (as
      the case may be) is organized or any political subdivision thereof and, in
      the
      case of each Bank, taxes imposed on its overall net income (including branch
      profits), and franchise taxes imposed on or measured by net income, by the
      jurisdiction of such Bank’s Applicable Lending Office or principal executive
      office or any political subdivision thereof, and all liabilities with respect
      thereto (all such non-excluded taxes, levies, imposts, deductions, charges,
      withholdings and liabilities being hereinafter referred to as “Taxes”),
      except as may otherwise be required by law. If the Borrower shall be required
      by
      law to deduct any Taxes from or in respect of any sum payable hereunder or
      under
      any Note to any Bank or the Agent, (i) the sum payable shall be increased by
      such amount (an “Additional
      Amount”)
      as may
      be necessary so that after making all required deductions (including deductions
      applicable to additional sums payable under this Section 2.13) such Bank or
      the
      Agent (as the case may be) receives an amount equal to the sum it would have
      received had no such deductions been made, (ii) the Borrower shall make such
      deductions and (iii) the Borrower shall pay the full amount deducted to the
      relevant taxation authority or other authority in accordance with applicable
      law. Any such payment by the Borrower shall be made in the name of the relevant
      Bank or the Agent (as the case may be).

     

    (b)  In
      addition, the Borrower agrees to pay any present or future stamp or documentary
      taxes or any other excise or property taxes, charges or similar levies which
      arise from any payment made hereunder or under the Notes or from the execution,
      delivery or registration of, performing under, or otherwise with respect to,
      this Agreement or any of the Notes (hereinafter referred to as “Other
      Taxes”).

     

    (c)  The
      Borrower will indemnify each Bank and the Agent for the full amount of Taxes
      and
      Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
      by
      any jurisdiction on amounts payable under this Section 2.13) imposed on or
      paid
      by such Bank or the Agent (as the case may be) and any liability (including
      penalties, interest and reasonable expenses) arising therefrom or with respect
      thereto, whether or not such Taxes or Other Taxes were correctly or legally
      asserted. Payments under any indemnification provided for in this Section
      2.13(c) shall be made within 30 days from the date such Bank or the Agent (as
      the case may be) makes written demand therefore describing such Taxes or Other
      Taxes in reasonable detail.

     

    
      
        
        

      

      
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    (d)  If
      the
      Agent or a Bank reasonably determines that it has finally and irrevocably
      received a refund in respect of any Taxes or Other Taxes as to which it has
      been
      indemnified by the Borrower, or with respect to which the Borrower has paid
      Additional Amounts, pursuant to this Section 2.13, it shall within 30 days
      from
      the date of such receipt pay over such refund to the Borrower (but only to
      the
      extent such refund is attributable, as reasonably determined by such Agent
      or
      Bank, to such indemnity payments made, or Additional Amounts paid, by the
      Borrower under this Section 2.13 with respect to the Taxes or Other Taxes giving
      rise to such refund), net of all reasonable out-of-pocket expenses of the Agent
      or Bank and without interest (other than interest paid by the relevant taxation
      authority with respect to such refund); provided,
      however,
      that
      the Borrower, upon the request of the Agent or Bank, agrees to repay the amount
      paid over to the Borrower (plus penalties, interest or other charges, if any,
      imposed by the relevant taxation authority in respect of such repayment) to
      the
      Agent or Bank in the event the Agent or Bank is required to repay such refund
      to
      the applicable taxation authority. Nothing contained in this Section 2.13(d)
      shall interfere with the right of the Agent or any Bank to arrange its tax
      affairs in whatever manner it determines appropriate nor oblige the Agent or
      any
      Bank to claim any tax credit or to disclose any information relating to its
      tax
      affairs or any computations in respect thereof or require the Agent or any
      Bank
      to do anything that would prejudice its ability to benefit from any other tax
      relief to which it may be entitled.

     

    (e)  Within
      30
      days after the date of any payment of Taxes, the Borrower will furnish to the
      Agent, at its address referred to in Section 8.02, the original or a certified
      copy of a receipt evidencing payment thereof (or other evidence of payment
      reasonably satisfactory to the Agent). In the case of any payment hereunder
      or
      under the Notes by or on behalf of the Borrower through an account or branch
      outside the United States or by or on behalf of the Borrower by a payor that
      is
      not a United States person, if the Borrower determines that no Taxes are payable
      in respect thereof, the Borrower shall furnish, or shall cause such payor to
      furnish, to the Agent, at such address, an opinion of counsel reasonably
      acceptable to the Agent stating that such payment is exempt from Taxes imposed
      by the jurisdiction from which such payment is made. For purposes of this
      Section 2.13(e) and Section 2.13(f), the terms “United
      States”
and
      “United
      States person”
shall
      have the meanings specified in Section 7701 of the Code.

     

    
      
        
        

      

      
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    (f)  Each
      Bank
      organized under the laws of a jurisdiction outside the United States, (i) on
      or
      prior to the date of the Initial Extension of Credit in the case of each such
      Bank listed on the signature pages hereof, (ii) on the date of the Assignment
      and Acceptance pursuant to which it becomes a Bank, (iii) on or before the
      date,
      if any, it changes its Applicable Lending Office, and (iv) from time to time
      thereafter if reasonably requested in writing by the Borrower or the Agent
      or
      promptly upon the obsolescence or invalidity of any form previously delivered
      by
      such Bank (but only so long as such Bank remains lawfully able to do so), shall
      provide the Agent and the Borrower with two original Internal Revenue Service
      Forms W-8BEN or W-8ECI (or, in the case of a Bank that is entitled to claim
      exemption from withholding of United States federal income tax under Section
      871(h) or 881(c) of the Code, (A) a certificate representing that such Bank
      is
      not a “bank” for purposes of Section 881(c) of the Code, is not a 10-percent
      shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
      Borrower and is not a controlled foreign corporation related to the Borrower
      (within the meaning of Section 864(d)(4) of the Code) and (B) Internal Revenue
      Service Form W-8BEN), as appropriate, or any successor or other form prescribed
      by the Internal Revenue Service, properly completed and duly executed by such
      Bank, certifying that such Bank is exempt from or entitled to a reduced rate
      of
      United States withholding tax on payments pursuant to this Agreement or the
      Notes (or, in the case of a Bank providing the certificate described in clause
      (A), certifying that such Bank is a foreign corporation, partnership, estate
      or
      trust). If the forms provided by a Bank at the time such Bank first becomes
      a
      party to this Agreement indicate or require a United States interest withholding
      tax rate in excess of zero, withholding tax at such rate shall be considered
      excluded from Taxes for purposes of this Section 2.13 unless and until such
      Bank
      provides the appropriate forms certifying that a lesser rate applies, whereupon
      withholding tax at such lesser rate only shall be considered excluded from
      Taxes
      for periods governed by such forms; provided,
      however,
      that
      if, at the effective date of the Assignment and Acceptance pursuant to which
      a
      Bank becomes a party to this Agreement (or the date, if any, a Bank changes
      its
      Applicable Lending Office), the Bank assignor (or such Bank) was entitled to
      payments under subsection (a) of this Section 2.13 in respect of United States
      withholding tax with respect to interest paid at such date, then, to such
      extent, the term Taxes shall include (in addition to withholding taxes that
      may
      be imposed in the future or other amounts otherwise includable in Taxes, subject
      to the provisions of this subsection (f)) United States withholding tax, if
      any,
      applicable with respect to the Bank assignee (or such Bank) on such
      date.

     

    (g)  For
      any
      period with respect to which a Bank has failed to provide the Borrower with
      the
      appropriate form described in subsection (f) above (other than if such failure
      is due to a change in law, or in the interpretation or application thereof
      by
      any Governmental Authority charged with the interpretation or application
      thereof, occurring after the date on which a form originally was required to
      be
      provided or if such form otherwise is not required under subsection (f) above),
      such Bank shall not be entitled to indemnification or payment of an Additional
      Amount under subsection (a) or (c) of this Section 2.13 with respect to Taxes
      imposed by the United States to the extent such United States Taxes exceed
      the
      United States Taxes that would have been imposed had such form been provided;
      provided,
      however,
      that
      should a Bank become subject to Taxes because of its failure to deliver a form
      required hereunder, the Borrower shall take such steps as such Bank shall
      reasonably request to assist such Bank to recover such Taxes.

     

    (h)  Any
      Bank
      claiming any indemnity payment or Additional Amounts payable pursuant to this
      Section 2.13 shall use commercially reasonable efforts (consistent with its
      generally applicable internal policy and legal and regulatory restrictions)
      to
      file any certificate or document reasonably requested in writing by the Borrower
      or to designate a different Applicable Lending Office following the reasonable
      request in writing of the Borrower if the making of such a filing or change
      would avoid the need for or reduce the amount of any such indemnity payment
      or
      Additional Amounts that may thereafter accrue and would not, in the sole
      determination of such Bank, require the disclosure of information that the
      Bank
      reasonably considers confidential, or be otherwise disadvantageous to such
      Bank.

     

    
      
        
        

      

      
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    Section
      2.14   Sharing
      of Payments, Etc.  
      If any Bank shall obtain any payment (whether voluntary, involuntary, through
      the exercise of any right of set-off, or otherwise) on account of the principal
      of or interest on the Advances owing to it (except amounts payable pursuant
      to
      Sections 2.08, 2.12 or 2.13, and except that any Bank may receive less than
      its
      ratable share of interest to the extent Section 8.06 is applicable to it) in
      excess of its ratable share of payments on account of the principal of or
      interest on the Advances obtained by all the Banks, such Bank shall forthwith
      purchase from the other Banks such participations in the Advances owing to
      them
      as shall be necessary to cause such purchasing Bank to share the excess payment
      ratably with each of them, provided,
      however,
      that if
      all or any portion of such excess payment is thereafter recovered from such
      purchasing Bank, such purchase from each Bank shall be rescinded and such Bank
      shall repay to the purchasing Bank the purchase price to the extent of such
      Bank’s ratable share (according to the proportion of (i) the amount of the
      participation purchased from such Bank as a result of such excess payment to
      (ii) the total amount of such excess payment) of such recovery together with
      an
      amount equal to such Bank’s ratable share (according to the proportion of (i)
      the amount of such Bank’s required repayment to (ii) the total amount so
      recovered from the purchasing Bank) of any interest or other amount paid or
      payable by the purchasing Bank in respect of the total amount so recovered.
      The
      Borrower agrees that any Bank so purchasing a participation from another Bank
      pursuant to this Section 2.14 may, to the fullest extent permitted by law,
      exercise all its rights of payment (including the right of set-off) with respect
      to such participation as fully as if such Bank were the direct creditor of
      the
      Borrower in the amount of such participation.

     

    Section
      2.15   Illegality.
       Notwithstanding any other provision of this Agreement, if any Bank
      (“Affected
      Bank”)
      shall
      notify the Borrower and the Agent that the introduction of or any change in
      any
      law or regulation makes it unlawful, or any central bank or other Governmental
      Authority asserts that it is unlawful, for any Bank, or its Eurodollar Lending
      Office, to perform its obligations hereunder to make Eurodollar Rate Advances
      or
      to fund or maintain Eurodollar Rate Advances hereunder, (i) the obligation
      of
      the Affected Bank to make, or to Convert Advances into, Eurodollar Rate Advances
      shall forthwith be suspended (and any request by the Borrower for a Borrowing
      comprised of Eurodollar Rate Advances shall, as to each Affected Bank, be deemed
      a request for a Base Rate Advance to be made on the same day as the Eurodollar
      Rate Advances of the Banks that are not Affected Banks and such Base Rate
      Advance shall be considered as part of such Borrowing) until the Affected Bank
      shall notify the Borrower, the Banks and the Agent that the circumstances
      causing such suspension no longer exist and (ii) forthwith after such notice
      from an Affected Bank to the Agent and the Borrower, all Eurodollar Rate
      Advances of such Affected Bank shall be deemed to be Converted to Base Rate
      Advances (but will otherwise continue to be considered as a part of the
      respective Borrowings that they were a part of prior to such Conversion);
provided,
      however,
      that,
      before making any such demand, such Bank agrees to use reasonable efforts
      (consistent with its internal policy and legal and regulatory restrictions)
      to
      designate a different Eurodollar Lending Office if the making of such a
      designation would allow such Bank or its Eurodollar Lending Office to continue
      to perform its obligations to make Eurodollar Rate Advances or to continue
      to
      fund or maintain Eurodollar Rate Advances and would not, in the judgment of
      such
      Bank, be otherwise materially disadvantageous to such Bank. In the event any
      Bank shall notify the Agent of the occurrence of any circumstance contemplated
      under this Section 2.15, all payments and prepayments of principal that would
      otherwise have been applied to repay the Eurodollar Rate Advances that would
      have been made by such Bank or the Converted Eurodollar Rate Advances shall
      instead be applied to repay the Base Rate Advances made by such Bank in lieu
      of
      such Eurodollar Rate Advances or resulting from the Conversion of such
      Eurodollar Rate Advances and shall be made at the time that payments on the
      Eurodollar Rate Advances of the Banks that are not Affected Banks are made.
      Each
      Bank that has delivered a notice of illegality pursuant to this Section 2.15
      above agrees that it will notify the Borrower as soon as practicable if the
      conditions giving rise to the illegality cease to exist.

     

    
      
        
        

      

      
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    Section
      2.16   Conversion
      of Advances.
       The Borrower may on any Business Day, upon notice given to the Agent not
      later than 11:00 A.M. (New York City time) on the third Business Day prior
      to
      the date of the proposed Conversion and subject to the provisions of Sections
      2.02(b), 2.09 and 2.15, Convert all Advances of one Type comprising the same
      Borrowing into Advances of the other Type; provided,
      however,
      that
      (i) any Conversion of any Eurodollar Rate Advances into Base Rate Advances
      shall
      be made on, and only on, the last day of an Interest Period for such Eurodollar
      Rate Advances, except as provided in Section 2.15, and (ii) Advances comprising
      a Borrowing may not be Converted into Eurodollar Rate Advances if the
      outstanding principal amount of such Borrowing is less than $10,000,000 or
      if
      any Event of Default under Section 6.01(a) shall have occurred and be continuing
      on the date the related notice of Conversion would otherwise be given pursuant
      to this Section 2.16. Each such notice of a Conversion shall, within the
      restrictions specified above, specify (i) the date of such Conversion, (ii)
      the
      Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate
      Advances, the duration of the initial Interest Period for each such Advance.
      Each notice of Conversion shall be irrevocable and binding on the Borrower.
      If
      any Event of Default under Section 6.01(a) shall have occurred and be continuing
      on the third Business Day prior to the last day of any Interest Period for
      any
      Eurodollar Rate Advances, the Borrower agrees to Convert all such Advances
      into
      Base Rate Advances on the last day of such Interest Period.

     

    
      
        
        

      

      
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    Section
      2.17   Replacement
      or Removal of Bank.
       In the event that any Bank shall claim payment of any increased costs
      pursuant to Section 2.12 or the Borrower is required to pay any Additional
      Amounts, Taxes or Other Taxes to or on account of any Bank pursuant to Section
      2.13, or exercises its rights under Section 2.15, or if any Bank fails to
      execute and deliver a consent, amendment or waiver to this Agreement requested
      by the Borrower by the date specified by the Borrower (or gives the Borrower
      written notice prior to such date of its intention not to do so) the Borrower
      shall have the right, if no Default or Event of Default then exists, to (a)
      replace such Bank with an Eligible Assignee in accordance with Section 8.08(a),
      (b) and (d) (including execution of an appropriate Assignment and Acceptance);
      provided
      that
      such Eligible Assignee (i) shall unconditionally offer in writing (with a copy
      to the Agent) to purchase on a date therein specified all of such Bank’s rights
      hereunder and interest in the Advances owing to such Bank and the Note held
      by
      such Bank without recourse at the principal amount of such Note plus interest,
      Commitment Fees and Letter of Credit Fees accrued thereon to the date of such
      purchase and (ii) shall execute and deliver to the Agent an Assignment and
      Acceptance, as assignee, pursuant to which such Eligible Assignee becomes a
      party hereto with a Commitment equal to that of the Bank being replaced
      (plus,
      if such
      Eligible Assignee is already a Bank, the amount of its Commitment prior to
      such
      replacement), provided,
      further,
      that no
      Bank or other Person shall have any obligation to increase its Commitment or
      otherwise to replace, in whole or in part, any Bank or (b) remove such Bank
      without replacing it; provided
      that the
      Borrower may not remove a Bank pursuant to this clause (b) if the aggregate
      Commitments of all Banks so removed would exceed $100,000,000. Upon satisfaction
      of the requirements set forth in the first sentence of this Section 2.17,
      acceptance of such offer to purchase by the Bank to be replaced, payment to
      such
      Bank of the purchase price in immediately available funds by the Eligible
      Assignee replacing such Bank, execution of such Assignment and Acceptance by
      such Bank, such Eligible Assignee and the Agent, the payment by the Borrower
      of
      all requested costs accruing to the date of purchase which the Borrower is
      obligated to pay under Section 8.04 and all other amounts owed by the Borrower
      to such Bank (other than Commitment Fees and Letter of Credit Fees accrued
      for
      the account of such Bank and the principal of and interest on the Advances
      of
      such Bank purchased by such Eligible Assignee) and notice by the Borrower to
      the
      Agent that such payment has been made, such Eligible Assignee shall constitute
      a
“Bank” hereunder with a Commitment as so specified and the Bank being so
      replaced shall no longer constitute a “Bank” hereunder except that the rights
      under Sections 2.07, 2.12, 2.13 and 8.04 of the Bank being so replaced shall
      continue with respect to events and occurrences before or concurrently with
      its
      ceasing to be a “Bank” hereunder. If, however, (x) a Bank accepts such an offer
      and such Eligible Assignee fails to purchase such rights and interest on such
      specified date in accordance with the terms of such offer or such Eligible
      Assignee or the Agent fails to execute the relevant Assignment and Acceptance,
      the Borrower shall continue to be obligated to pay the increased costs to such
      Bank pursuant to Section 2.12 or the additional amounts pursuant to Section
      2.13, as the case may be, or (y) the Bank proposed to be replaced fails to
      accept such purchase offer or to execute the relevant Assignment and Acceptance,
      the Borrower shall not be obligated to pay to such Bank such increased costs
      or
      additional amounts incurred or accrued from and after the date of such purchase
      offer.

     

    Section
      2.18   Evidence
      of Indebtedness.
      Each
      Bank
      shall maintain in accordance with its usual practice an account or accounts
      evidencing the indebtedness of the Borrower to such Bank resulting from each
      Advance owing to such Bank from time to time, including the amounts of principal
      and interest payable and paid to such Bank from time to time hereunder. The
      Borrower agrees that upon notice by any Bank to the Borrower (with a copy of
      such notice to the Agent) to the effect that a promissory note or other evidence
      of indebtedness is required or appropriate in order for such Bank to evidence
      (whether for purposes of pledge, enforcement or otherwise) the Advances owing
      to, or to be made by, such Bank, the Borrower shall promptly execute and deliver
      to such Bank, with a copy to the Agent, a Note in substantially the form of
      Exhibit A hereto, payable to the order of such Bank in a principal amount equal
      to the Revolving Credit Commitment of such Bank. All references to Notes in
      the
      Loan Documents shall mean Notes, if any, to the extent issued
      hereunder.

     

     

    
      
        
        

      

      
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    Section
      2.19   Increase
      in the Aggregate Revolving Credit Commitments; Increase in Letter of Credit
      Commitment.
       (a)  The
      Borrower may, at any time and from time to time prior to the Termination Date,
      by notice to the Agent, request that the aggregate amount of the Revolving
      Credit Commitments to be used solely for the issuance of Letters of Credit
      be
      increased by an amount of not less than $50,000,000 and in integral multiples
      of
      $10,000,000 in excess thereof (each a “Commitment
      Increase”)
      to be
      effective as of a date that is at least 90 days prior to the scheduled Maturity
      Date (the “Increase
      Date”)
      as
      specified in the related notice to the Agent; provided,
      however,
      that
      (i) in no event shall the aggregate amount of the Revolving Credit Commitments
      at any time exceed $1,100,000,000 and (ii) on the date of any request by the
      Borrower for a Commitment Increase and on the related Increase Date, the
      applicable conditions set forth in Section 3.02 shall be satisfied. Any
      Commitment Increase shall not increase the Borrowing Sublimit.

     

    (b)  The
      Agent
      shall promptly notify the Banks of a request by the Borrower for a Commitment
      Increase, which notice shall include (i) the proposed amount of such requested
      Commitment Increase, (ii) the proposed Increase Date and (iii) the date by
      which
      Banks wishing to participate in the Commitment Increase must commit to an
      increase in the amount of their respective Revolving Credit Commitments (the
      “Commitment
      Date”).
      Each
      Bank that is willing to participate in such requested Commitment Increase (each
      an “Increasing
      Lender”)
      shall,
      in its sole discretion, give written notice to the Agent on or prior to the
      Commitment Date of the amount by which it is willing to increase its Revolving
      Credit Commitment. If the Banks notify the Agent that they are willing to
      increase the amount of their respective Revolving Credit Commitments by an
      aggregate amount that exceeds the amount of the requested Commitment Increase,
      the requested Commitment Increase shall be allocated among the Banks willing
      to
      participate therein in such amounts as are agreed between the Borrower and
      the
      Agent.

     

    (c)  Promptly
      following each Commitment Date, the Agent shall notify the Borrower as to the
      amount, if any, by which the Banks are willing to participate in the requested
      Commitment Increase. If the aggregate amount by which the Banks are willing
      to
      participate in any requested Commitment Increase on any such Commitment Date
      is
      less than the requested Commitment Increase, then the Borrower may extend offers
      to one or more Eligible Assignees to participate in any portion of the requested
      Commitment Increase that has not been committed to by the Banks as of the
      applicable Commitment Date; provided,
      however,
      that
      the Revolving Credit Commitment of each such Eligible Assignee shall be in
      an
      amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
      The Borrower, at its discretion, may withdraw its request for a Commitment
      Increase at any time prior to the Increase Date.

     

    (d)  On
      each
      Increase Date, each Eligible Assignee that accepts an offer to participate
      in a
      requested Commitment Increase in accordance with Section 2.19(c) (each such
      Eligible Assignee, an “Assuming
      Lender”)
      shall
      become a Bank party to this Agreement as of such Increase Date and the Revolving
      Credit Commitment of each Increasing Lender for such requested Commitment
      Increase shall be so increased by such amount (or by the amount allocated to
      such Bank pursuant to the last sentence of Section 2.19(b)) as of such Increase
      Date; provided,
      however,
      that
      the Agent shall have received on or before such Increase Date the following,
      each dated such date:

     

                                  
      (i)  an
      assumption agreement from each Assuming Lender, if any, in form and substance
      satisfactory to the Borrower and

                      
      the Agent (each an “Assumption
      Agreement”),
      duly
      executed by such Eligible Assignee, the Agent and the Borrower; and

     

                                  
      (ii)  confirmation
      from each Increasing Lender of the increase in the amount of its Commitment
      in a
      writing satisfactory to

                      
      the Borrower and the Agent.

     

    
      
        
        

      

      
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    (e)  At
      any
      time, any Issuing Bank and the Borrower may agree to increase the Letter of
      Credit Commitment of such Issuing Bank with the consent of the Agent. The Agent
      shall adjust the Letter of Credit Commitments of the existing Issuing Banks
      to
      the extent of the increase in such Issuing Bank’s Letter of Credit Commitment as
      the affected Issuing Banks and the Agent shall agree in writing.

     

    (f)  Any
      Bank
      may become an Issuing Bank by written agreement between such Bank and the
      Borrower, subject to notice to and the consent of the Agent. The Agent shall
      notify the Banks of the designation of any additional Issuing Bank hereunder
      and
      shall adjust the Letter of Credit Commitments of the existing Issuing Banks
      to
      the extent of such new Issuing Bank’s Letter of Credit Commitment as the
      affected Issuing Banks and the Agent shall agree in writing.

     

    On
      each
      Increase Date, upon fulfillment of the conditions set forth in Section 2.19(d),
      at the time any Issuing Bank and the Borrower agree to increase the Letter
      of
      Credit Commitment of such Issuing Bank pursuant to Section 2.19(e) and at the
      time any Bank becomes an Issuing Bank pursuant to Section 2.19(f), the Agent
      shall notify the Banks (including, without limitation, each Assuming Lender,
      if
      applicable) and the Borrower, on or before 1:00 P.M. (New York City time),
      by
      telecopier, of the occurrence of the Commitment Increase to be effected on
      such
      Increase Date, the Letter of Credit Commitment increase and the effective date
      thereof or any Bank becoming an Issuing Bank and the effective date thereof,
      as
      the case may be, and, in each case, shall record in the Register the relevant
      information with respect to each Increasing Lender, each Assuming Lender, each
      Letter of Credit Commitment increase or adjustment, as applicable, and any
      addition of an Issuing Bank, as applicable, on such date. On the last day of
      the
      Interest Period in effect on any Increase Date, the Borrower shall make such
      Borrowings and prepayments as shall be necessary to cause the outstanding
      Advances to be ratable with the revised Commitments resulting from any
      non-ratable increase in the Commitments under this Section 2.19.

     

    ARTICLE
      III

    CONDITIONS
      OF LENDING

     

    Section
      3.01   Conditions
      Precedent to Effectiveness.
       This Agreement shall become effective on and as of the first date (the
“Effective
      Date”)
      on
      which the Agent shall have received counterparts of this Agreement duly executed
      by the Borrower and all of the Banks and the following additional conditions
      precedent shall have been satisfied, except that Section 2.04(a) shall become
      effective as of the first date on which the Agent shall have received
      counterparts of this Agreement duly executed by the Borrower and all of the
      Banks:

     

    (a)  The
      Borrower shall have notified the Agent in writing as to the proposed Effective
      Date.

     

    (b)  The
      Agent
      shall have received on or before the Effective Date the following, each dated
      such day, in form and substance reasonably satisfactory to the Agent and (except
      for the Notes) in sufficient copies for each Bank:

     

    (i)  The
      Notes
      to the order of the Banks to the extent requested by any Bank pursuant to
      Section 2.18.

     

    (ii)  The
      Guarantee duly executed by each Subsidiary Guarantor.

     

    
      
        
        

      

      
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    (iii)  Certified
      copies of the resolutions of the Governing Body of each Relevant Party approving
      each Loan Document to which it is a party, and of all documents evidencing
      other
      necessary corporate or organizational action and governmental approvals, if
      any,
      with respect to each Loan Document.

     

    (iv)  A
      copy of
      a certificate of the Secretary of State of the jurisdiction of incorporation
      of
      each Relevant Party, dated reasonably near the Effective Date certifying (A)
      as
      to a true and correct copy of the charter or other formation document, as the
      case may be, of such Relevant Party and each amendment thereto on file in such
      Secretary’s office and (B) that (1) such amendments are the only amendments to
      such Relevant Party’s charter on file in such Secretary’s office, (2) such
      Relevant Party has paid all franchise taxes to the date of such certificate
      and
      (3) such Relevant Party is duly incorporated and in good standing or presently
      subsisting under the laws of the State of the jurisdiction of its
      organization.

     

    (v)  A
      certificate of the Borrower signed on behalf of the Borrower by its President
      or
      a Vice President and its Secretary or any Assistant Secretary, dated the
      Effective Date (the statements made in which certificate shall be true on and
      as
      of the Effective Date), certifying as to (A) the absence of any amendments
      to
      the formation document of the Borrower since the date of the Secretary of
      State’s certificate referred to in Section 3.01(b)(iv), (B) a true and correct
      copy of the limited liability company agreement of the Borrower as in effect
      on
      the date on which the resolutions referred to in Section 3.01(b)(iii) were
      adopted and on the Effective Date, (C) the due organization and good standing
      or
      valid existence of the Borrower as a limited liability company organized under
      the laws of the jurisdiction of its organization, and the absence of any
      proceeding for the dissolution or liquidation of the Borrower, (D) the truth
      of
      the representations and warranties contained in the Loan Documents as though
      made on and as of the Effective Date and (E) the absence of any event occurring
      and continuing, or resulting from the Initial Extension of Credit, that
      constitutes a Default or Event of Default. 

     

    (vi)  A
      certificate of each other Relevant Party signed on behalf of such other Relevant
      Party by its Secretary or any Assistant Secretary, dated the Effective Date
      (the
      statements made in which certificate shall be true on and as of the Effective
      Date), certifying as to (A) the absence of any amendments to the charter or
      other formation document, as the case may be, of such Relevant Party since
      the
      date of the Secretary of State’s certificate referred to in Section 3.01(b)(iv),
      (B) a true and correct copy of the bylaws, limited liability company agreement
      or partnership agreement, as the case may be, of such Relevant Party as in
      effect on the date on which the resolutions referred to in Section 3.01(b)(iii)
      were adopted and on the Effective Date, and (C) the due organization and good
      standing or valid existence of such Relevant Party as a corporation, limited
      liability company or limited partnership organized under the laws of the
      jurisdiction of its organization, and the absence of any proceeding for the
      dissolution or liquidation of such Relevant Party.

     

    (vii)  A
      certificate of the Secretary or an Assistant Secretary of each Relevant Party
      certifying the names and true signatures of the officers of such Relevant Party
      authorized to sign each Loan Document to which it is a party and the other
      documents to be delivered by the Relevant Parties hereunder.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    (viii)  A
      certificate of the President or Vice President of the Borrower certifying
      working capital of the Borrower and the Subsidiaries of the Borrower as of
      November 30, 2005 pursuant to the GWC Contracts.

     

    (ix)  A
      favorable opinion of James H. Lehmann, Senior Vice President-Legal of the
      Borrower, in substantially the form of Exhibit C-1 hereto.

     

    (x)  A
      favorable opinion of Bruce A. Metzinger, Assistant Secretary and Assistant
      General Counsel of the Parent, in substantially the form of Exhibit C-2
      hereto.

     

    (xi)  A
      favorable opinion of Baker Botts, LLP, counsel for the Borrower, in
      substantially the form of Exhibit C-3 hereto.

     

    (xii)  A
      favorable opinion of Shearman & Sterling LLP, counsel for the Agent, in form
      and substance satisfactory to the Agent.

     

    (xiii)  A
      certificate of the President or Vice President of the Borrower certifying that
      not less than $300,000,000 of intercompany payable owed by the Borrower to
      HESI
      has been capitalized. 

     

     

    (c)  The
      Borrower shall have delivered to the Agent (i) evidence satisfactory to the
      Agent that (A) the maturity date of the Intercompany Note shall be on a date
      on
      or after December 31, 2010 and (B) the Parent and the Borrower shall have
      completed the capitalization of the Intercompany Note of an amount not less
      than
      $300,000,000; (ii) the Subordination Agreement duly executed by the Parent,
      HESI, the Borrower and the Agent and (iii) the Indemnity Agreement duly executed
      by the Parent and the Agent.

     

    (d)  All
      accrued fees and reasonable out-of-pocket expenses of the Co-Lead Arrangers
      (including the reasonable fees and expenses of counsel to the Co-Lead Arrangers
      for which invoices have been submitted) shall have been paid.

     

    (e)  The
      Borrower shall have paid all accrued fees and reasonable out-of-pocket expenses
      of the Agent (including reasonable fees and expenses of counsel for which
      invoices have been submitted).

     

    
      
        
        

      

      
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    Section
      3.02   Conditions
      Precedent to Each Revolving Credit Advance,
      Each
      Commitment Increase and Each Issuance, Renewal, Amendment, Increase and
      Extension of Each Letter of Credit.
       The obligation of each Bank to make an Advance (other than a Letter of
      Credit Advance made by an Issuing Bank or a Revolving Credit Bank pursuant
      to
      Section 2.03(c)) (including, without limitation, the initial Revolving
      Credit Advance) and each Issuing Bank to issue, renew, extend or amend Letters
      of Credit (including the initial Letter of Credit), each Commitment Increase
      and
      each amendment of a Letter of Credit that has the effect of increasing the
      Available Amount of such Letter of Credit or extending the Expiration Date
      thereof shall be subject to the conditions precedent that on the date of such
      Advance, such Commitment Increase or such issuance, renewal, extension,
      amendment or increase of a Letter of Credit, the following statements shall
      be
      true (and each of the giving of the applicable Notice of Revolving Credit
      Borrowing, Notice of Issuance and Application for Letter of Credit, request
      for
      amendment of any Letter of Credit, request for a Commitment Increase, request
      for increase of a Letter of Credit or extending the Expiration Date thereof
      and
      the acceptance by the Borrower of the proceeds of such Advance or such
      Commitment Increase, such Letter of Credit or of the renewal, amendment,
      increase or extension of such Letter of Credit shall constitute a representation
      and warranty by the Borrower that on the date of such Advance, such Commitment
      Increase or such issuance, renewal, amendment, increase or extension of such
      Letter of Credit such statements are true):

     

    (i)  the
      representations and warranties contained in each Loan Document are correct
      on
      and as of the date of such Revolving Credit Advance or such Letter of Credit
      (except (A) those representations and warranties contained in
      (I) Section 4.01(i) to the extent such matters are subject to, and covered
      by, (x) the Indemnity Agreement and (y) the Disclosed Litigation, and
      (II) Section 4.01(f) and (B) those other representations and
      warranties that expressly relate solely to a specific earlier date, which shall
      remain correct as of such earlier date) before and after giving effect to such
      Borrowing or issuance or renewal and to the application of the proceeds
      therefrom, as though made on and as of such date; 

     

    (ii)  no
      event
      has occurred and is continuing, or would result from such Borrowing or such
      issuance or renewal or from the application of the proceeds therefrom, which
      constitutes a Default or an Event of Default; and

     

    (iii)  there
      exists no request or directive issued by any Governmental Authority, central
      bank or comparable agency, injunction, stay, order, litigation or proceeding
      purporting to affect or calling into question the legality, validity or
      enforceability of any Loan Document or the consummation of any transaction
      (including any Advance or proposed Advance or issuance, renewal, amendment,
      increase or extension of a Letter of Credit or proposed Letter of Credit)
      contemplated hereby.

     

    Section
      3.03   Determinations
      Under Section 3.01.
       For purposes of determining compliance with the conditions specified in
      Section 3.01, the Agent, the Co-Lead Arrangers and each Bank shall be deemed
      to
      have consented to, approved or accepted or to be satisfied with each document
      or
      other matter required thereunder to be consented to or approved by or acceptable
      or satisfactory to such Persons unless an officer of the Agent responsible
      for
      the transactions contemplated by this Agreement shall have received notice
      from
      such Person prior to the date that the Borrower, by notice to the Agent,
      designates as the proposed Effective Date, specifying its objection thereto.
      The
      Agent shall promptly notify the Banks and the Borrower of the occurrence of
      the
      Effective Date, which notice shall be conclusive and binding.

     

    
      
        
        

      

      
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    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      4.01   Representations
      and Warranties of the Borrower.
       The Borrower represents and warrants as follows:

     

    (a)  Each
      Loan
      Party and each of its Subsidiaries (i) is a corporation, limited liability
      company or limited partnership duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its organization, (ii) is duly
      qualified and in good standing as a foreign corporation or company in each
      other
      jurisdiction in which it owns or leases property or in which the conduct of
      its
      business requires it to so qualify or be licensed and (iii) has all requisite
      corporate, limited liability company or partnership (as applicable) power and
      authority (including, without limitation, all permits, approvals, licenses
      or
      other authorizations to own or lease and operate its properties and to carry
      on
      its business as now conducted and as proposed to be conducted, except for any
      failures to be so organized, existing, qualified to do business or in good
      standing or to have such power and authority as would not, individually or
      in
      the aggregate, have a Material Adverse Effect.

     

    (b)  Set
      forth
      on Schedule 4.01(b)
      hereto
      is a complete and accurate list of the Borrower and all Subsidiary Guarantors
      as
      of the date hereof, showing as of the date hereof (as to such Person) the
      jurisdiction of its organization, the number of shares, membership interests
      or
      partnership interests (as applicable) of each class of its Equity Interests
      authorized, and the number outstanding, on the date hereof and the percentage
      of
      each such class of its Equity Interests owned (directly or indirectly) by the
      Borrower or such Subsidiary Guarantor. All of the outstanding Equity Interests
      in each Subsidiary Guarantor have been validly issued, are fully paid and
      non-assessable and are owned by the Borrower or one or more of its Subsidiaries
      free and clear of all Liens. As of the date hereof, the copy of the charter
      of
      the Borrower and each Subsidiary Guarantor and each amendment thereto provided
      pursuant to Section 3.01(b)(iv) is a true and correct copy of each such
      document, each of which is valid and in full force and effect

     

    (c)  The
      execution, delivery and performance by each Loan Party of each Loan Document
      to
      which it is or is to be a party and the consummation of the transactions
      contemplated hereby or thereby (including, without limitation, each Revolving
      Credit Borrowing and issuance or renewal of a Letter of Credit hereunder and
      the
      use of the proceeds thereof) and the transactions contemplated thereby (i)
      are
      within such Loan Party’s organizational power, (ii) have been duly authorized by
      all necessary organizational action, and (iii) do not contravene (A) such Loan
      Party’s certificate of organization or by-laws, (B) any law, rule, regulation,
      order, writ, injunction or decree, or (C) any contractual restriction under
      any
      material agreements binding on or affecting such Loan Party or any Subsidiary
      of
      such Loan Party or any other contractual restriction the contravention of which
      would have a Material Adverse Effect.

     

    (d)  No
      authorization, approval, consent, license or other action by, and no notice
      to
      or filing with, any Governmental Authority or other Person is required for
      the
      due execution, delivery and performance by any Loan Party of each Loan Document
      to which it is or is to be a party, or for the consummation of the transactions
      contemplated hereby or thereby (including, without limitation, each Revolving
      Credit Borrowing and issuance or renewal of a Letter of Credit hereunder and
      the
      use of the proceeds thereof) and the transactions contemplated thereby, except
      (i) consents, authorizations, filings and notices which have been obtained
      or
      made and are in full force and effect, (ii) approvals that would be required
      under agreements that are not material agreements and (iii) as otherwise
      permitted by the Loan Documents.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (e)  This
      Agreement has been, and each other Loan Document when delivered hereunder will
      have been, duly executed and delivered by each Loan Party party thereto and
      constitute legal, valid and binding obligations of each Loan Party party thereto
      enforceable against such Loan Party in accordance with their respective terms,
      except as such enforceability may be limited by any applicable bankruptcy,
      insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally.

     

    (f)  The
      combined balance sheet of the Borrower and its combined subsidiaries as at
      December 31, 2004, and the related combined statement of income and combined
      statement of cash flows of the Borrower and its combined subsidiaries for the
      fiscal year then ended, accompanied by an unqualified opinion of KPMG LLP,
      independent public accountants, and the combined balance sheet of the Borrower
      and its combined subsidiaries as at September 30, 2005, and the related combined
      statement of income and combined statement of cash flows of the Borrower and
      its
      combined subsidiaries for the nine months then ended, duly certified by the
      chief financial officer of the Borrower, copies of which have been furnished
      to
      each Bank, fairly present, subject, in the case of said balance sheet as at
      September 30, 2005, and said statements of income and cash flows for the nine
      months then ended, to normal year-end adjustments, the combined financial
      condition of the Borrower and its combined subsidiaries as at such dates and
      the
      combined results of operations of the Borrower and its combined subsidiaries
      for
      the periods ended on such dates, all in accordance with GAAP applied on a
      consistent basis (which combined statements are substantially similar to
      statements prepared on a consolidated basis). Since September 30, 2005 through
      the date hereof there has been no Material Adverse Change (excluding the
      Disclosed Litigation and matters subject to, or covered by, the Indemnity
      Agreement, which is addressed in Section 4.01(i) below). 

     

    (g)  Except
      as
      to matters subject to, or covered by the Indemnity Agreement and except for
      Disclosed Litigation, each Loan Party and its Subsidiaries is in compliance,
      in
      all material respects,
      with the requirements of all applicable laws, rules, regulations and orders,
      including, without limitation, compliance with ERISA, Environmental Laws and
      Environmental Permits.

     

    (h)  As
      of the
      Effective Date, each Loan Party is, individually and together with its
      Subsidiaries, Solvent.

     

    (i)  Other
      than the matters described on Schedule 4.01(i) hereto (the “Disclosed
      Litigation”)
      and
      matters subject to, or covered by, the Indemnity Agreement, there is no
      litigation, investigation or proceeding pending against or to the Borrower’s
      knowledge threatened against or affecting, the Borrower, any of its Subsidiaries
      or any of its or their respective rights or properties before any court or
      by or
      before any arbitrator or governmental department, commission, board, bureau,
      agency or instrumentality, domestic or foreign, (i) that could reasonably be
      expected to have a Material Adverse Effect or (ii) that in any manner draws
      into
      question or purports to affect any transaction contemplated hereby or the
      legality, validity, binding effect or enforceability of the Borrower’s
      Obligations or the rights and remedies of the Banks relating to this Agreement
      and the other Loan Documents, and, as of the Effective Date, there has been
      no
      material adverse change since December 15, 2005 in the status, or financial
      effect on any Loan Party or any of its Subsidiaries, of the Disclosed Litigation
      from that described on Schedule 4.01(i) hereto.

     

    (j)  Neither
      the Borrower nor any Subsidiary is engaged in the business of extending credit
      for the purpose of purchasing or carrying margin stock (within the meaning
      of
      Regulation U). No proceeds of any Advance or any Letter of Credit will be used
      in any manner that is not permitted by Section 5.02(m).

     

    
      
        
        

      

      
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    (k)  No
      Loan
      Party is an “investment company”, or a company “controlled” by an “investment
      company”, within the meaning of the Investment Company Act of 1940, as
      amended.

     

    (l)  Neither
      any Loan Party nor any of its Subsidiaries is a “holding company”, or a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
      company” or of a “subsidiary company” of a “holding company”, as such terms are
      defined in the Public Utility Holding Company Act of 1935, as amended, so long
      as such statute shall be in effect. 

     

    (m)  No
      statement or information contained in this Agreement or any other document,
      certificate or statement furnished to the Agent or the Banks by or on behalf
      of
      the Borrower for use in connection with the transactions contemplated by this
      Agreement or the Notes (as modified or supplemented by other information
      furnished) contains as of the date such statement, information, document or
      certificate was so furnished any untrue statement of a material fact or omitted
      to state a material fact necessary in order to make the statements contained
      herein or therein not misleading in light of the circumstances under which
      they
      were made; provided,
      however,
      that,
      with respect to any such information, exhibit or report consisting of
      statements, estimates, pro forma financial information, forward-looking
      statements and projections regarding the future performance of the Borrower
      or
      any of its Subsidiaries (“Projections”),
      no
      representation or warranty is made other than that such Projections have been
      prepared in good faith based upon assumptions believed to be reasonable at
      the
      time.

     

    (n)  Other
      than as could not reasonably be expected to have a Material Adverse Effect
      (or
      those matters constituting Disclosed Litigation), (i) there are no strikes,
      lockouts or other material labor disputes or grievances against the Borrower
      or
      any of its Subsidiaries, or, to the Borrower’s knowledge, threatened against or
      affecting the Borrower or any of its Subsidiaries, and (ii) no significant
      unfair labor practice charges or grievances are pending against the Borrower
      or
      any of its Subsidiaries, or to the Borrower’s knowledge, threatened against any
      of them before any Governmental Authority. All payments due from the Borrower
      or
      any of its Subsidiaries pursuant to the provisions of any collective bargaining
      agreement have been paid or accrued as a liability on the books of the Borrower
      or such Subsidiary, except where the failure to do so could not reasonably
      be
      expected to have a Material Adverse Effect.

     

    (o)  (i) No
      ERISA
      Event has occurred or is reasonably expected to occur with respect to any Plan
      that has resulted in or is reasonably expected to result in a Material Adverse
      Effect.

     

    (ii)  No
      Loan
      Party and no ERISA Affiliate has incurred or is reasonably expected to incur
      any
      Withdrawal Liability to any Multiemployer Plan that has resulted in or is
      reasonably expected to result in a Material Adverse Effect.

     

    (iii)  No
      Loan
      Party and no ERISA Affiliate has been notified by the sponsor of a Multiemployer
      Plan that such Multiemployer Plan is in reorganization or has been terminated,
      within the meaning of Title IV of ERISA, and no such Multiemployer Plan is
      reasonably expected to be in reorganization or to be terminated, within the
      meaning of Title IV of ERISA to the extent such termination or reorganization
      has resulted in or is reasonably expected to result in a Material Adverse
      Effect.

     

    
      
        
        

      

      
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    (p)  (i)
      Except
      where such event could not reasonably be expected to have a Material Adverse
      Effect, the operations and properties of each Loan Party and each of its
      Subsidiaries comply with all applicable Environmental Laws and Environmental
      Permits, all past non-compliance with such Environmental Laws and Environmental
      Permits has been resolved without ongoing obligations or costs, and no
      circumstances exist that could be reasonably expected to (A) form the basis
      of
      an Environmental Action against any Loan Party or any of its Subsidiaries or
      any
      of their properties or (B) cause any such property to be subject to any
      restrictions on ownership, occupancy, use or transferability under any
      Environmental Law.

     

    (ii)  Except
      where such event could not reasonably be expected to have a Material Adverse
      Effect, (A) none of the properties currently or formerly owned or operated
      by
      any Loan Party or any of its Subsidiaries is listed or proposed for listing
      on
      the NPL or on the CERCLIS or any analogous foreign, state or local list or
      is
      adjacent to any such property; (B) there are no and never have been any
      underground or aboveground storage tanks or any surface impoundments, septic
      tanks, pits, sumps or lagoons in which Hazardous Materials are being or have
      been treated, stored or disposed on any property currently owned or operated
      by
      any Loan Party or any of its Subsidiaries or, to the best of its knowledge,
      on
      any property formerly owned or operated by any Loan Party or any of its
      Subsidiaries; (C) there is no asbestos or asbestos-containing material on any
      property currently owned or operated by any Loan Party or any of its
      Subsidiaries; and (D) Hazardous Materials have not been released,
      discharged or disposed of on any property currently or formerly owned or
      operated by any Loan Party or any of its Subsidiaries.

     

    (iii)  All
      Hazardous Materials generated, used, treated, handled or stored at, or
      transported to or from, any property currently or formerly owned or operated
      by
      any Loan Party or any of its Subsidiaries have been disposed of in a manner
      not
      reasonably expected to result in a Material Adverse Effect.

     

    (q)  (i)
      Neither any Loan Party nor any of its Subsidiaries is party to any tax sharing
      agreement other than (A) as of the Effective Date, the agreement entered
      into among the Parent and certain of its Subsidiaries on January 1, 2001, as
      amended and restated June 2, 2002 and further amended on January 1,
      2003, and
      (B) since the Effective Date, (I) tax sharing arrangements permitted
      pursuant to Section 5.01(i)(vii) and (II) any other tax sharing agreement that
      does not materially increase the Obligations of the Borrower or any of its
      Subsidiaries with respect to the allocation of any tax liability among such
      parties.

     

    (ii)  Each
      Loan
      Party and each of its Subsidiaries has filed, has caused to be filed or has
      been
      included in all material tax returns (Federal, state, local and foreign)
      required to be filed and has paid all material taxes shown thereon to be due,
      together with applicable interest and penalties except taxes that are being
      contested in good faith by appropriate proceedings and for which the Borrower
      or
      such Subsidiary, as applicable, has set aside on its books adequate reserves.
      For purposes of this
      Section
      4.01(q)(ii),
      any
      determination with respect to “material” shall be made as to the Borrower and
      the Subsidiaries of the Borrower taken as a whole.

     

    (r)  Each
      Loan
      Party and each of its Subsidiaries maintains, or the Parent maintains on behalf
      of such Loan Party or such Subsidiary, insurance with responsible and reputable
      insurance companies or associations in such amounts and covering such risks
      as
      is usually carried by companies engaged in similar businesses and owning similar
      properties in the same general areas in which each Loan Party and such
      Subsidiary operates.

     

    
      
        
        

      

      
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    (s)  Each
      Loan
      Party has (i) good and marketable title to (in the case of fee interests in
      real property), (ii) valid leasehold interests in (in the case of leasehold
      interests in real or personal property), or (iii) good title to (in the
      case of all other personal property), all of their respective properties and
      assets, in each case to the extent reasonably necessary to the conduct of such
      Loan Party’s business.

     

    (t)  Neither
      the Borrower nor any of its Subsidiaries is in violation of any laws relating
      to
      terrorism or money laundering, including, without limitation, the Patriot Act,
      except to the extent such violation could not reasonably be expected to have
      a
      Material Adverse Effect. 

     

    (u)  As
      of the
      date of the
      Pre-IPO
      Repositioning if such Pre-IPO Repositioning shall have occurred and
      immediately after giving effect to the transactions contemplated in
      connection therewith, (i) the assets and liabilities of the
      Borrower and its Subsidiaries, taken as a whole, shall remain as specified
      in
      the combined financial statements of the Borrower and its Subsidiaries delivered
      pursuant to Section 4.01(f), except (A) as otherwise permitted in
      accordance with this Agreement (other than Section 5.04) and (B) that a
      Subsidiary of the Borrower shall cease to be the holder of the note dated
      December 15, 2003 in a principal amount equal to $1,000,000,000 made by DII
      Industries, LLC, and (ii) no interim action or activity in respect of the
      Pre-IPO Repositioning could,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.

     

    ARTICLE
      V

    COVENANTS
      OF THE BORROWER

     

    Section
      5.01   Affirmative
      Covenants.
       So long as any Advance or any other amount payable by the Borrower
      hereunder or under any other Loan Document shall remain unpaid, any Letter
      of
      Credit shall be outstanding or any Bank shall have any Commitment hereunder,
      the
      Borrower will, unless the Required Banks shall otherwise consent in
      writing:

     

    (a)  Compliance
      with Laws, Etc.
      Comply,
      and cause each of its Subsidiaries to comply, with all applicable laws, rules,
      regulations and orders (including, without limitation, ERISA, Environmental
      Laws
      and Environmental Permits) except to the extent that failure to so comply (in
      the aggregate for all such failures) could not reasonably be expected to have
      a
      Material Adverse Effect.

     

    
      
        
        

      

      
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    (b)  Preservation
      of Corporate or Organizational Existence, Etc.
      (i)
      Preserve and maintain and cause each of its Subsidiaries to preserve and
      maintain (unless,
      in the case of any Subsidiary, the Borrower or such Subsidiary determines that
      such preservation and maintenance is no longer necessary in the conduct of
      the
      business of the Borrower and its Subsidiaries, taken as a whole),
      its
      corporate or organizational existence, rights (charter and statutory),
      franchises, permits, licenses, approvals and privileges in the jurisdiction
      of
      its organization; provided,
      however,
      that
      the Borrower and its Subsidiaries may consummate any merger, consolidation
      conveyance, transfer, lease, disposition, spin-off, split-off or similar
      transaction permitted under Section 5.02(d) and provided further
      that
      neither the Borrower nor any of its Subsidiaries shall be required to preserve
      any right, permit, license, approval, privilege, franchise or, solely in the
      case of Subsidiaries, existence, where the failure to do so could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect and (ii) qualify and remain qualified and cause each of its
      Subsidiaries to qualify and remain qualified, as a foreign organization in
      each
      jurisdiction in which qualification is necessary or desirable in view of its
      business and operations or the ownership of its Properties, except where the
      failure to so qualify or remain qualified could not, individually or in the
      aggregate, reasonably be expected to give rise to a Material Adverse
      Effect.

     

    (c)  Payment
      of Taxes, Etc.
      Pay and
      discharge, and cause each of its Subsidiaries to pay and discharge, before
      the
      same shall become delinquent, (i) all taxes, assessments, charges and like
      levies levied or imposed upon it or upon its income, profits or Property prior
      to the date on which penalties attach thereto and (ii) all lawful claims
      that, if unpaid, might by law become a Lien upon its Property; provided
      that
      neither the Borrower nor any Subsidiary shall be required to pay and discharge
      any such tax, assessment, charge, levy or claim if the failure to do so (in
      the
      aggregate for all such failures) could not reasonably be expected to have a
      Material Adverse Effect.

     

    (d)  Reporting
      Requirements.
      Furnish
      to the Agent:

     

    (i)  not
      later
      than 60 days after the end of each of the first three quarters of each fiscal
      year of the Borrower, the consolidated balance sheet of the Borrower and its
      consolidated subsidiaries as at the end of such quarter and the consolidated
      statements of income and cash flows of the Borrower and its consolidated
      subsidiaries for the period commencing at the end of the previous fiscal year
      and ending with the end of such quarter, all in reasonable detail and duly
      certified (subject to normal year-end adjustments) by a Responsible Officer
      of
      the Borrower as having been prepared in accordance with GAAP, together with
      (A)
      a certificate of said officer stating that no Default or Event of Default has
      occurred and is continuing or, if a Default or Event of Default has occurred
      and
      is continuing, a statement as to the nature thereof and the action that the
      Borrower has taken and proposes to take with respect thereto and (B) a schedule
      in form satisfactory to the Agent of the computations used by the Borrower
      in
      determining compliance with the covenants contained in Section 5.03, including
      a
      reconciliation in reasonable detail of excluding (x) Project Finance
      Subsidiaries and (y) entities excluded because of the last sentence of Section
      1.03(a) with respect to FIN 46, on the computation of compliance with the
      covenants contained in Section 5.03;

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    (ii)  not
      later
      than 120 days after the end of each fiscal year of the Borrower, copies of
      the
      audited consolidated balance sheet of the Borrower and its consolidated
      subsidiaries as at the end of such fiscal year and audited consolidated
      statements of income, retained earnings and cash flows of the Borrower and
      its
      consolidated subsidiaries for such fiscal year,
      in each
      case accompanied by an opinion as to such audit report of KPMG LLP or other
      independent public accountants of recognized standing acceptable to the Required
      Lenders certified in a manner to which the Agent has not objected, together
      with
      a certificate of a Responsible Officer of the Borrower (A) as to compliance
      with
      the terms of this Agreement, (B) stating that no Default or Event of Default
      has
      occurred and is continuing or, if a Default or Event of Default has occurred
      and
      is continuing, a statement as to the nature thereof and the action that the
      Borrower has taken and proposes to take with respect thereto and (C) setting
      forth in reasonable detail the calculations necessary to demonstrate compliance
      with Section 5.03 and reconciling in reasonable detail the effect of excluding
      (x) Project Finance Subsidiaries and (y) entities excluded because of the last
      sentence of Section 1.03(a) with respect to FIN 46, on the computation of
      compliance with the covenants contained in Section 5.03;

     

    (iii)  as
      soon
      as possible, and in any event within ten days after any Responsible Officer
      has
      obtained knowledge of the occurrence of any Default or Event of Default, written
      notice thereof setting forth details of such Default or Event of Default and
      the
      actions that the Borrower has taken and proposes to take with respect
      thereto;

     

    (iv)  during
      such time as the Parent’s senior unsecured long-term debt rating is not at least
      Baa3 by Moody’s and BBB- by S&P, promptly (and in any event within five
      Business Days) after any change in, or withdrawal or termination of, the rating
      of any senior unsecured long-term debt of the Parent by Moody’s or S&P,
      notice thereof; 

     

    (v)  promptly
      after the sending or filing thereof, copies of all reports that the Borrower
      sends to any of its holders of common stock other than to the
      Parent;

     

    (vi)  Promptly
      after a Responsible Officer has obtained knowledge of the commencement thereof,
      notice of all actions, suits, investigations, litigation and proceedings before
      any Governmental Authority affecting any Loan Party or any of its Subsidiaries
      of the type described in Section 4.01(i), and promptly after a Responsible
      Officer has obtained knowledge of the occurrence thereof, notice of any adverse
      change in the status of the Disclosed Litigation from that described on Schedule
      4.01(i) hereto which could reasonably be expected to have a Material Adverse
      Effect.

     

    (vii)  (A)
      (I)
      Promptly and in any event within 10 Business Days after any Loan Party knows
      or
      has reason to know that any ERISA Event has occurred which is reasonably likely
      to result in liability to the Loan Party in excess of $25,000,000, a statement
      of a Responsible Officer of the Borrower describing such ERISA Event and the
      action, if any, that such Loan Party or ERISA Affiliate has taken and proposes
      to take with respect thereto and (II) on the date any records, documents or
      other information must be furnished to the PBGC with respect to any Plan
      pursuant to Section 4010 of ERISA, a copy of such records, documents and
      information.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    (B) Promptly
      and in any event within 10 Business Days after receipt thereof by any Loan
      Party
      or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
      each
      notice concerning (I) the imposition of Withdrawal Liability by any such
      Multiemployer Plan, (II) the reorganization or termination, within the meaning
      of Title IV of ERISA, of any such Multiemployer Plan, if the amount of liability
      incurred, or that may be incurred, by such Loan Party in connection with any
      event described in clause (I) or (II) is reasonably likely to be in excess
      of
      $25,000,000.

     

    (viii)  such
      other information as any Bank through the Agent may from time to time reasonably
      request.

     

    Information
      required to be delivered pursuant to Section 5.01(d)(i) or Section 5.01(d)(ii)
      shall be deemed to have been delivered on the date on which the Borrower
      provides notice to the Agent that such information has been posted on the
      Borrower’s website on the Internet at http://www.kbr.com or
      at
      another website identified in such notice and accessible by the Banks without
      charge; provided
      that the
      Borrower shall deliver paper copies of the information referred to in such
      Sections to the Agent for distribution to (x) any Bank to which the above
      referenced websites are for any reason not available if such Bank has so
      notified the Borrower and (y) any Bank that has notified the Borrower that
      it
      desires paper copies of all such information; provided further
      that the
      Agent shall notify the Banks as provided in Section 8.02 of any materials
      delivered pursuant to this Section 5.01(d) (other than clause (v) hereof).
      Information required to be delivered pursuant to Section 5.01(d)(v) shall be
      deemed to have been delivered on the date when posted on a website as provided
      in the preceding sentence.

     

    (e)  Inspections.
      At any
      reasonable time and from time to time, in each case upon reasonable notice
      to
      the Borrower and subject to any applicable restrictions or limitations on access
      to any facility or information that is classified or restricted by contract
      or
      by law, regulation or governmental guidelines, permit each Bank to visit and
      inspect the properties of the Borrower or any Material Subsidiary of the
      Borrower, and to examine and make copies of and abstracts from the records
      and
      books of account of the Borrower and its material Subsidiaries and discuss
      the
      affairs, finances and accounts of the Borrower and its material Subsidiaries
      with its and their officers and independent accountants provided,
      however,
      that
      advance notice of any discussion with such independent public accountants shall
      be given to the Borrower and the Borrower shall have the opportunity to be
      present at any such discussion.

     

    (f)  Keeping
      of Books.
      Keep
      proper books of record and account, in which full and correct entries shall
      be
      made of all financial transactions and the assets and business of the Borrower
      and each Subsidiary in accordance with GAAP on a consolidated
      basis.

     

    (g)  Maintenance
      of Properties, Etc.
      Maintain and preserve, and cause each of its Material Subsidiaries to maintain
      and preserve, all of its material properties that are used or useful in the
      conduct of the business of the Borrower and its Material Subsidiaries, taken
      as
      a whole, in good working order and condition, ordinary wear and tear
      excepted.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    (h)  Maintenance
      of Insurance.
      Maintain, and cause each of its Material Subsidiaries to maintain, insurance
      with responsible and reputable insurance companies or associations in such
      amounts and covering such risks as is usually carried by companies engaged
      in
      similar businesses and owning similar properties in the same general areas
      in
      which the Borrower or such Material Subsidiary operates; provided
      that the
      Loan Parties shall be deemed to be in compliance with the requirements of this
      Section 5.01(h) to the extent the Parent shall maintain such insurance on behalf
      of such Loan Parties; provided further
      that the
      Loan Parties shall be permitted to self-insure in such amounts and covering
      such
      risks as is usual and customary among companies engaged in similar businesses
      and owning similar properties in the same general areas in which the Borrower
      or
      such Material Subsidiary operates. 

     

    (i)  Transactions
      with Affiliates.
      Conduct, and cause each of its Subsidiaries to conduct, all transactions
      otherwise permitted under this Agreement with any of their Affiliates on terms
      that are fair and reasonable and, if a comparable arm’s-length transaction is
      known by the Borrower, no less favorable to the Borrower or such Subsidiary,
      taken as a whole, than it would obtain in a comparable arm’s-length transaction
      with a Person not an Affiliate; provided,
      however,
      that
      the foregoing restriction shall not apply to:

     

    (i)  transactions
      between or among the Borrower and its subsidiaries;

     

    (ii)  transactions
      or payments pursuant to any employment arrangements or employee, officer or
      director benefit plans or arrangements entered into by the Borrower or any
      of
      its Subsidiaries in the ordinary course of business;

     

    (iii)  to
      the
      extent permitted by law, customary loans, advances, fees and compensation paid
      to, and indemnity provided on behalf of, officers, directors, employees or
      consultants of the Borrower or any of its Subsidiaries;

     

    (iv)  transactions
      pursuant to any contract or agreement in effect on the date hereof, as the
      same
      may be amended, modified or replaced from time to time, so long as any such
      contract or agreement as so amended, modified or replaced is, taken as a whole,
      no less favorable to the Borrower and its Subsidiaries in any material respect
      than the contract or agreement as in effect on the date hereof;

     

    (v)  any
      transaction or series of transactions between the Borrower or any Subsidiary
      and
      any of their joint ventures, provided
      that (a)
      such transaction or series of transactions is in the ordinary course of business
      and consistent with past practices of the Borrower, and/or its Subsidiaries
      and
      their joint ventures and (b) such Affiliate transaction involves aggregate
      consideration paid to such Affiliate not in excess of $20,000,000;

     

    (vi)  the
      Intercompany Note, the Subordination Agreement, the Indemnity Agreement, the
      Halliburton Cash Management Note and the KBR Cash Management Note;

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    (vii)  transactions
      pursuant to which (i) taxes are allocated among the Borrower and its Affiliates
      in any manner consistent with Section 1552 (or any successor provision) of
      the
      Code and Regulation 1.1502-33(d) of the Treasury Regulations, (ii) insurance,
      information technology, and other general and administrative expenses are
      allocated among the Borrower and its Affiliates in any manner consistent with
      Section 482 (or any successor provision) of the Code, and (iii) interest is
      charged or credited to Affiliates in any reasonable manner not inconsistent
      with
      the Code; or

     

    (viii)  transactions
      permitted by Section 5.02(e)(iv), Section 5.02(f)(vii) and Section
      5.02(g).

     

    (j)  Covenant
      to Guarantee Obligations.
      Upon
      the formation or acquisition of any new direct or indirect Material Domestic
      Subsidiaries by any Loan Party or upon the request of the Agent thereafter,
      at
      the Borrower’s expense: (i) within 10 Business Days after such formation or
      acquisition, cause each such Material Domestic Subsidiary to duly execute and
      deliver to the Agent a guarantee supplement, in form and substance reasonably
      satisfactory to the Agent, guaranteeing the other Loan Parties’ Obligations
      under the Loan Documents; (ii) within 60 days after such request, formation
      or acquisition, deliver to the Agent, upon the request of the Agent in its
      sole
      discretion, a signed copy of a favorable opinion, addressed to the Agent and
      the
      Banks, of counsel for the Loan Parties reasonably acceptable to the Agent as
      to
      (A) such guarantee supplement being the legal, valid and binding obligations
      of
      each additional Subsidiary Guarantor party thereto enforceable in accordance
      with its terms and (B) such other matters as the Agent may reasonably request
      and (iii) at any time and from time to time, promptly execute and deliver,
      and cause each Loan Party and each newly acquired or newly formed Material
      Domestic Subsidiary to execute and deliver, any and all further instruments
      and
      documents and take, and cause each Loan Party and each such newly acquired
      or
      newly formed Material Domestic Subsidiary to take, all such other action as
      the
      Agent may reasonably deem necessary or desirable in obtaining the full benefits
      of such guarantees.
      In
      addition, the Borrower may cause any other Subsidiary to become a Subsidiary
      Guarantor by delivering a guarantee supplement to the Guarantee and within
      60
      days thereafter, deliver to the Agent, upon the request of the Agent in its
      sole
      discretion, a signed copy of a favorable opinion, addressed to the Agent and
      the
      Banks, of counsel for the Loan Parties reasonably acceptable to the Agent as
      to
      (A) such guarantee supplement being the legal, valid and binding obligations
      of
      each additional Subsidiary Guarantor party thereto enforceable in accordance
      with its terms and (B) such other matters as the Agent may reasonably
      request.

     

    Section
      5.02   Negative
      Covenants.
       So long as any Advance or any other amount payable by the Borrower
      hereunder or under any other Loan Document shall remain unpaid, any Letter
      of
      Credit shall be outstanding or any Bank shall have any Commitment hereunder,
      the
      Borrower will not, without the written consent of the Required
      Banks:

     

    (a)  Liens,
      Etc.
      Create
      or suffer to exist, or permit any of its Subsidiaries to create or suffer to
      exist, any
      Lien
      on or with respect to any of its Properties whether now owned or hereafter
      acquired to secure Indebtedness or reimbursement Obligations in respect of
      letters of credit, acceptances or bank guarantees, or assign, or permit any
      of
      its Subsidiaries to assign, any accounts or other right to receive income,
      except:

     

    (i)  Liens
      on
      or with respect to any of the properties of the Borrower and any of its
      Subsidiaries existing on the date hereof and set forth on Schedule
      5.02(a)(i);

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    (ii)  (A)
      Liens
      upon or in property acquired (including acquisitions through merger or
      consolidation) or constructed or improved by the Borrower or any of its
      Subsidiaries including general tangibles, proceeds and improvements, accessories
      and upgrades thereto and created contemporaneously with, or within 12 months
      after, such acquisition or the completion of construction or improvement to
      secure or provide for the payment of all or a portion of the purchase price
      of
      such property or the cost of construction or improvement thereof (including
      any
      Indebtedness incurred to finance such acquisition, construction or improvement),
      as the case may be and (B) Liens on property (including any unimproved portion
      of partially improved property) of the Borrower or any of its Subsidiaries
      created within 12 months of completion of construction of a new plant or plants
      on such property to secure all or part of the cost of such construction
      (including any Indebtedness incurred to finance such construction) if, in the
      opinion of the Borrower, such property or such portion thereof was prior to
      such
      construction substantially unimproved for the use intended by the Borrower;
      provided,
      however,
      no such
      Lien shall extend to or cover any property other than the property being
      acquired, constructed or improved (including any unimproved portion of a
      partially improved property) including general intangibles, proceeds and
      improvements, accessories and upgrades thereto;

     

    (iii)  Liens
      arising in connection with capitalized leases, provided
      that no
      such Lien shall extend to or cover any assets other than the assets subject
      to
      such capitalized leases and proceeds (including, without limitation, proceeds
      from associated contracts and insurances) of, and improvements, accessories
      and
      upgrades to, the property leased pursuant thereto;

     

    (iv)  Any
      Lien
      existing on any property including general intangibles, proceeds and
      improvements, accessories and upgrades thereto prior to the acquisition
      (including acquisition through merger or consolidation) thereof by the Borrower
      or any of its Subsidiaries or existing on any property of any Person that
      becomes a Subsidiary after the date hereof prior to the time such Person becomes
      a Subsidiary, provided
      that
      such a Lien is not created in contemplation or in connection with such
      acquisition or such Person becoming a Subsidiary and no such Lien shall be
      extended to cover property other than the asset being acquired including general
      intangibles proceeds and improvements, accessories and upgrades
      thereto;

     

    (v)  Liens
      to
      secure any extension, renewal, refunding or replacement (or successive
      extensions, renewals, refinancing, refundings or replacements), in whole or
      in
      part, of any Indebtedness or other Obligation secured by any Lien referred
      to in
      clauses (ii), (iii), (iv), (vii), and (ix), provided
      that (A)
      the principal amount of the Indebtedness or other Obligation secured thereby
      is
      no greater than the outstanding principal amount of such Indebtedness or other
      Obligation immediately before such extension, renewal, refinancing, refunding
      or
      replacement and (B) such Lien shall only extend to such assets as are already
      subject to a Lien in respect of such Indebtedness or other
      Obligation;

     

    (vi)  Liens
      on
      the Equity Interests of Mid-Valley, Inc. in favor of the trusts organized
      pursuant to Sections 524(g) and 105(a) of the Bankruptcy Code as provided in
      the
      Plan of Reorganization of those entities and other Subsidiaries of the
      Borrower;

     

    (vii)  Liens
      (A) arising in connection with the pledge of any Equity Interests in (and
      assets of) any Project Finance Subsidiary, so long as such Liens secure only
      Project Financing and (B) securing Permitted Non-Recourse
      Indebtedness;

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    (viii)  Liens
      arising in connection with the pledge of any Equity Interests in any joint
      venture (that is not a Subsidiary), and liens on the assets of a JV Subsidiary,
      in each case to secure Joint Venture Debt of such joint venture and/or such
      JV
      Subsidiary. “Joint
      Venture Debt”
shall
      mean Indebtedness and other obligations as to which the lenders will not,
      pursuant to the terms in the agreements governing such Indebtedness, have any
      recourse to the stock or assets of the Borrower or any Subsidiary, other than
      such pledged assets of such JV Subsidiary;

     

    (ix)  Liens
      securing reimbursement obligations in respect of local jurisdiction overdraft
      facilities, letters of credit, acceptances or bank guarantees and other
      Indebtedness, provided
      that at
      the time of the creation, incurrence or assumption of any reimbursement
      obligations in respect of local jurisdiction overdraft facilities, letters
      of
      credit, acceptances or bank guarantees or other Indebtedness secured by such
      Liens and after giving effect thereto, the sum of the principal amount of such
      reimbursement obligations in respect of such local jurisdiction overdraft
      facilities, letters of credit, acceptances or bank guarantees and other
      Indebtedness secured by Liens permitted by this clause (ix)
      shall
      not exceed $75,000,000.

     

                                  
      (b)  Indebtedness.
      Create,
      incur, assume or suffer to exist, or permit any of its Subsidiaries to create,
      incur, assume or

                    
      suffer to exist, any Indebtedness, except:

     

    (i)  Indebtedness
      under the Loan Documents;

     

    (ii)  Indebtedness
      of each Loan Party and its Subsidiaries outstanding on the date hereof specified
      in Schedule 5.02(b)(ii) (“Existing
      Debt”)
      and
      any refinancings, refundings, renewals, replacements or extensions thereof;
      provided
      that the
      aggregate principal amount of all such Indebtedness is not increased at the
      time
      of any such refinancing, refunding, renewal, replacement or extension except
      by
      an amount equal to a reasonable premium or other reasonable amount paid, and
      fees and expenses reasonably incurred, in connection with such refinancing,
      refunding, renewal, replacement or extension and by an amount equal to any
      existing commitments unutilized thereunder;

     

    (iii)  Indebtedness
      of any Person that becomes a Subsidiary of any Loan Party or is merged or
      consolidated into a Subsidiary of any Loan Party after the date hereof in
      accordance with the terms of Section 5.02(d), which Indebtedness is existing
      at
      the time such Person becomes a Subsidiary of such Loan Party or at the time
      of
      such merger or consolidation, as the case may be (other than Indebtedness
      incurred solely in contemplation of such Person becoming a Subsidiary of such
      Loan Party); 

     

    (iv)  Indebtedness
      secured by Liens permitted by Section 5.02(a)(ii) in an aggregate principal
      amount at any time outstanding not to exceed $75,000,000;

     

    (v)  Indebtedness
      secured by Liens permitted by Section 5.02(a)(iii) and Section
      5.02(a)(v);

     

    (vi)  Indebtedness
      incurred by any Project Finance Subsidiary in respect of any Project Financing
      or any Permitted Non-Recourse Indebtedness;

     

    (vii)  Indebtedness
      among Borrower and its Subsidiaries;

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    (viii)  Indebtedness
      of the Borrower and its Subsidiaries to Persons other than Borrower or any
      of
      its Subsidiaries in an aggregate principal amount not to exceed at any time
      $250,000,000; provided
      that not
      more than $75,000,000 of such Indebtedness may be secured by Liens pursuant
      to
      Section 5.02(a)(ix);

     

    (ix)  Indebtedness
      of the Borrower or any Subsidiary of the Borrower owed to the Parent or HESI
      in
      respect of the KBR Cash Management Note or the obligation of the Borrower or
      such Subsidiary to reimburse the Parent or HESI in respect of payments or cash
      collateralization made by the Parent or HESI under Other L/C Guarantees, Surety
      Guarantees, Project L/C Guarantees or Barracuda-Caratinga Losses and acceptances
      and bank guarantees issued on behalf of Borrower or any Subsidiary of the
      Borrower to the extent that the obligations of the Borrower or such Subsidiary
      thereunder constitute Other Guaranteed Debt; provided
      that (i)
      such Other Guaranteed Debt shall have a final maturity no earlier than 6 months
      following the Maturity Date and (ii) such Other Guaranteed Debt and KBR
      Cash Management Note shall be subordinated in right of payment to the
      Obligations of the Borrower hereunder pursuant to the terms of the Subordination
      Agreement. 

     

    (c)  Change
      in Nature of Business.
      Make
      any material change in the nature of the business of the Borrower and its
      Subsidiaries as carried on at the date hereof, taken as a whole, except as
      otherwise permitted pursuant to Section 5.02(e)(iii) and Section
      5.02(e)(iv).

     

    (d)  Mergers,
      Etc.
      Merge
      or consolidate with or into, or convey, transfer, lease or otherwise dispose
      of
      (whether in one transaction or in a series of transactions, all or substantially
      all of its assets (whether now owned or hereafter acquired) to, any Person;
      provided,
      however,
      that:

     

    (i)  
      this
      Section 5.02(d) shall not prohibit any such merger or consolidation if the
      Borrower is the surviving entity in such merger or consolidation;

     

    (ii)  any
      Subsidiary of the Borrower may convey, transfer, lease or otherwise dispose
      of
      assets to, or merge into or consolidate with, the Borrower (provided the
      Borrower is the surviving entity) or any other Subsidiary of the Borrower;
      provided,
      however,
      no
      Subsidiary Guarantor shall be permitted to transfer, lease or otherwise dispose
      of, all or substantially all of its assets to a foreign Subsidiary of the
      Borrower; 

     

    (iii)  as
      part
      of any acquisition permitted under Section 5.02(f), any Subsidiary of the
      Borrower may merge into or consolidate with, or convey, transfer, lease or
      otherwise dispose of assets to, any other Person or permit any other Person
      to
      merge into or consolidate with, or convey, transfer, lease or otherwise dispose
      of assets to it; provided
      that the
      Person surviving such merger shall be a Subsidiary of the Borrower; and
provided further
      that,
      in
      the case of any merger or consolidation to which a Subsidiary Guarantor is
      a
      party, the Person formed by such merger or consolidation shall be a Subsidiary
      Guarantor;

     

    (iv)  as
      part
      of any acquisition permitted under Section 5.02(f), any Affiliate of the
      Borrower other than a Subsidiary may merge into or consolidate with, or convey,
      transfer, lease or otherwise dispose of assets to, any other Person or permit
      any other Person to merge into or consolidate with, or convey, transfer, lease
      or otherwise dispose of assets to it;

     

    (v)  as
      part
      of any sale or other disposition permitted under Section 5.02(e), any Subsidiary
      of the Borrower may merge into or consolidate with any other Person or permit
      any other Person to merge into or consolidate with it;

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    provided further
      that in
      each case, immediately before and after giving effect thereto, no Default or
      Event of Default shall have occurred and be continuing.

     

    (e)  Sales,
      Etc., of Assets.
      Sell,
      lease, transfer or otherwise dispose of, or permit any of its Subsidiaries
      to
      sell, lease, transfer or otherwise dispose of, any assets, or grant any option
      or other right to purchase, lease or otherwise acquire, or permit any of its
      Subsidiaries to grant any option or other right to purchase, lease or otherwise
      acquire (unless such option or other right is subject to and conditioned upon
      the approval of the Required Lenders or the termination of this Agreement),
      any
      assets, except:

     

    (i)  sales
      of
      inventory in the ordinary course of its business and the granting of any option
      or other right to purchase, lease or otherwise acquire inventory in the ordinary
      course of its business;

     

    (ii)  in
      a
      transaction authorized by Section 5.02(d);

     

    (iii)  the
      sale,
      transfer or other disposition of all or substantially all of the G&I
      Business Unit; provided
      that
      (A) the cash portion, if any, of the purchase price for such G&I
      Business Unit paid to the Borrower and its Subsidiaries shall be either the
      sole
      consideration paid or shall be in an amount at least equal to the amount
      required to satisfy all Obligations referred to in (E) below, (B) prior to,
      and after giving effect to such sale, transfer or other disposition, the
      Borrower shall be in pro forma compliance with the covenants contained in
      Section 5.03, (C) no Default or Event of Default shall have occurred and be
      continuing, (D) the Borrower shall pay the aggregate principal amount of
      all Advances outstanding at such time in excess of the Borrowing Sublimit
      pursuant to Section 2.05(b) and (E) to the extent of such outstanding
      Obligations, the net cash proceeds thereof (net of, without limitation, amounts
      contributed or to be contributed within one year to any pension plan in the
      United Kingdom and other amounts the repatriation of which will require the
      imposition of tax or require the approval or consent of a third party) are
      used
      by the Borrower to prepay, redeem, purchase, defease or otherwise satisfy the
      Obligations of the Borrower in respect of the Intercompany Note;

     

    (iv)  the
      sale,
      transfer or other disposition of all or any part of the offshore maintenance
      operations of
      the
      Borrower or any of its Subsidiaries;

     

    (v)  sales,
      transfers or other dispositions of assets among the Borrower and its
      Subsidiaries; provided,
      however,
      no
      Subsidiary Guarantor shall be permitted to transfer, lease or otherwise dispose
      of, all or substantially all of its assets to a foreign Subsidiary of the
      Borrower;

     

    (vi)  goods,
      equipment or other property that are, in the reasonable opinion of the Borrower
      or such Subsidiary, obsolete or unproductive or utilized as trade-in for goods,
      equipment or other property of at least comparable value;

     

    (vii)  in
      order
      to resolve disputes that occur in the ordinary course of business, Borrower
      and
      its Subsidiaries may discount or otherwise compromise for less than the face
      value thereof, notes or accounts receivable;

     

    (viii)  Borrower
      and its Subsidiaries may sell or dispose of Equity Interests of any of its
      Subsidiaries in order to qualify members of the Governing Body of any such
      Subsidiary if required by applicable law;

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    (ix)  licenses
      or sublicenses by Borrower and its Subsidiaries of software, trademarks, patents
      and other intellectual property and leases of real property interests in the
      ordinary course of business and which do not materially interfere with the
      business of Borrower or any of its Subsidiaries;

     

    (x)  transfers
      of condemned property to the respective Governmental Authority that has
      condemned the same (whether by deed in lieu of condemnation or otherwise),
      and
      transfers of properties that have been subject to a casualty to the respective
      insurer of such property or its designee as part of an insurance
      settlement;

     

    (xi)  Borrower
      and its Subsidiaries may sell or otherwise dispose of Cash Equivalents permitted
      to be made or owned pursuant to Section 5.02(f)(iv); 

     

    (xii)  sales,
      transfers or other dispositions by the Borrower or any of its Subsidiaries
      of
      Equity Interests (and assets of) in Project Finance Subsidiaries and joint
      venture interests held by the Borrower or any of its Subsidiaries; 

     

    (xiii)  sales,
      transfers or other dispositions by the Borrower or any of its Subsidiaries
      of
      assets in an aggregate principal amount not to exceed $100,000,000 during any
      fiscal year of the Borrower (plus any sales, transfers or other dispositions
      the
      net cash proceeds of which are reinvested in equipment or other productive
      assets within one year of such sale, transfer or other disposition);
      and

     

    (xiv)  the
      sale
      by the Borrower and its Subsidiaries of (A) the Nigg, Scotland fabrication
      yard
      and (B) the Greens Bayou fabrication yard.

     

    (f)  Investments
      in Other Persons.
      Make or
      hold, or permit any of its Subsidiaries to make or hold, any Investment in
      any
      Person, except:

     

    (i)  Investments
      existing on the date hereof;

     

    (ii)  Investments
      by the Borrower and its Subsidiaries in their Subsidiaries (including, if as
      a
      result of such Investment (i) a Person becomes a Subsidiary of the Borrower
      or
      (ii) a Person is merged, consolidated or amalgamated with or into, or conveys
      substantially all of its assets to, or is liquidated into, the Borrower or
      a
      Subsidiary); provided
      that any
      advances and guarantees by the Borrower and its Subsidiaries in favor of their
      respective Subsidiaries (other than Subsidiary Guarantors) shall be in the
      ordinary course of business consistent with past practices;

     

    (iii)  advances
      under the Halliburton Cash Management Note provided
      that (A)
      such transfers are consistent with past practices, (B) Parent’s senior unsecured
      long term debt is rated at least BBB- by S&P and Baa3 by Moody’s at the time
      of each such transfer, and (C) no Default or Event of Default shall have
      occurred and be continuing;

     

    (iv)  any
      Investment in Cash Equivalents;

     

    (v)  any
      acquisition of assets solely in exchange for, or with the net cash proceeds
      of,
      an issuance of Equity Interests of the Borrower;

     

    (vi)  any
      Investment made with the proceeds of a capital contribution from the Parent
      or
      its Subsidiaries (other than the Borrower and its Subsidiaries);

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    (vii)  Investments
      by the Borrower
      and its Subsidiaries in all or any part of the Equity Interests in
      MMM held
      by
      the Parent
      and its
      Subsidiaries.

     

    (viii)  other
      Investments in (A) Allenby-Connaught not to exceed an aggregate amount of
      $105,000,000, (B) Egypt Basic Industries Company (EBIC) not to exceed an
      aggregate amount of $22,500,000, and (C) in other joint ventures and other
      minority interests in an aggregate amount not to exceed $75,000,000 plus
      the net
      cash proceeds of sales permitted by Section 5.02(e)(xii) and of sales of
      Investments made pursuant to this Section 5.02(f)(viii) and sales of other
      minority interests and dividends and distributions received from Project Finance
      Subsidiaries and other minority interests and from Investments made pursuant
      to
      this Section 5.02(f)(viii), in each case, at the time such Investment is
      made;

     

    (ix)  Investments
      in any joint venture made during any fiscal year of the Borrower or within
      45
      days after the end of such fiscal year in amounts that, together with all other
      Investments made in such joint venture in respect of such fiscal year in
      reliance on this Section 5.02(f)(ix) during such fiscal year or within 45 days
      after the end of such fiscal year, do not exceed the amount of dividends or
      distributions previously paid in respect of such fiscal year to the Borrower
      or
      any Subsidiary by such joint venture;

     

    (x)  Borrower
      and its Subsidiaries may make Investments with the net cash proceeds from sales
      of Equity Interests in the Borrower; and

     

    (xi)  Investments
      of amounts referred to in Section 5.02(g)(viii) to the extent such funds are
      available for distribution on account of the equity interests of the
      Borrower.

     

    (g)  Restricted
      Payments.
      Declare
      or pay any dividends, purchase, redeem, retire, defease or otherwise acquire
      for
      value any of its Equity Interests now or hereafter outstanding, return any
      capital to its stockholders, partners or members (or the equivalent Persons
      thereof) as such, make any distribution of assets, Equity Interests, Obligations
      or securities to its stockholders, partners or members (or the equivalent
      Persons thereof) as such or issue or sell any Equity Interests, or permit any
      of
      its Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries
      to purchase, redeem, retire, defease or otherwise acquire for value any Equity
      Interests in the Borrower, except that, so long as no Default or Event of
      Default shall have occurred and be continuing at the time of any action
      described below or would result therefrom:

     

    (i)  Borrower
      and any Subsidiary may make dividends and distributions payable in Equity
      Interests;

     

    (ii)  any
      Subsidiary may make dividends and distributions payable to the Borrower or
      any
      Subsidiary;

     

    (iii)  any
      Subsidiary may make dividends and distributions payable to the holders of a
      class of Equity Interests of such Subsidiary on a pro rata basis or a basis
      that
      is more favorable to the Borrower;

     

    (iv)  any
      Subsidiary may issue Equity Interests to the Borrower or any other
      Subsidiary;

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    (v)  Borrower
      may issue Equity Interests to the extent not constituting an Event of Default
      under Section 6.01(i);

     

    (vi)  Equity
      Interests of any Subsidiary may be issued or sold to the extent permitted by
      Section 5.02(d) or 5.02(e);

     

    (vii)  Borrower
      or any Subsidiary may take such action to the extent constituting an Investment
      permitted by Section 5.02(f);

     

    (viii)  From
      and
      after payment, prepayment, redemption, purchase, defeasance or other
      satisfaction of the Obligations of the Borrower in respect of the Intercompany
      Note in full as provided in Section 5.02(j), the Borrower may distribute or
      return any capital in an amount equal to (A) proceeds from the disposition
      of
      the G&I Business Unit, to the extent remaining after application to the
      Intercompany Note pursuant to Section 5.02(e)(iii), (B) proceeds from the
      disposition of the offshore maintenance operations and (C) the Government
      Working Capital Reduction to the extent remaining after application to the
      Intercompany Note pursuant to Section 5.02(j); provided
      in the
      case of each of clause (A), (B) and (C) above that no amount of any Advance
      shall be outstanding at the time of such payment; and

     

    (ix)  Borrower
      may make dividends and distributions payable with the net cash proceeds from
      sales of Equity Interests in the Borrower.

     

    (h)  Amendments
      of Constitutive Documents.
      Amend,
      or permit any of its Subsidiaries to amend, its certificate of incorporation
      or
      bylaws or other constitutive documents other than amendments that could not
      be
      reasonably expected to have a Material Adverse Effect.

     

    (i)  Accounting
      Changes.
      Make or
      permit, or permit any of its Subsidiaries to make or permit, any change in
      (i)
      accounting policies or reporting practices, except as required or permitted
      by
      GAAP, or (ii) fiscal year.

     

    (j)  Prepayments
      of Intercompany Note.
      Prepay,
      redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
      thereof in any manner, or make any payment in violation of any subordination
      terms of, the Intercompany Note, except (i) any payment of scheduled
      interest on such Intercompany Note, (ii) any such prepayment, redemption,
      purchase, defeasance or other satisfaction of the Obligations of the Borrower
      in
      respect of the Intercompany Note with the net cash proceeds of any sales made
      pursuant to Section 5.02(e)(iii) or Section 5.02(e)(iv), or from Government
      Working Capital Reduction and (iii) any payment, redemption, purchase,
      defeasance or other satisfaction of the Obligations of the Borrower in respect
      of the Intercompany Note with the net cash proceeds from the sale of Equity
      Interests of the Borrower or a holding company of the Borrower; provided
      that
      prior, and after giving effect thereto, no Default or Event of Default shall
      have occurred and be continuing and the Borrower shall be in pro forma
      compliance with the covenants contained in Section 5.03.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    (k)  Payments
      of Other Guaranteed Debt, Barracuda-Caratinga Guaranteed Debt, KBR Cash
      Management Note, Etc.
      (i) Prepay, redeem, purchase, defease or otherwise satisfy prior to the
      scheduled maturity thereof in any manner, or make any payment in violation
      of
      any subordination terms of, the Other Guaranteed Debt, except any payment of
      scheduled interest on such Other Guaranteed Debt; provided
      that
      prior, and after giving effect thereto, no Default or Event of Default shall
      have occurred and be continuing and the Borrower shall be in pro forma
      compliance with the covenants contained in Section 5.03, and (ii) pay,
      prepay, redeem, purchase, defease or otherwise satisfy in any manner, or make
      any payment in violation of any terms of the Subordination Agreement in respect
      of, the Barracuda-Caratinga Guaranteed Debt; provided
      that
      after the payment, prepayment, redemption, purchase, defeasance or other
      satisfaction of the Obligations of the Borrower in respect of the Intercompany
      Note in full as provided in Section 5.02(j), the Borrower or any of its
      Subsidiaries may use any proceeds remaining from the disposition of the G&I
      Business Unit, the offshore maintenance operations or the Government Working
      Capital Reduction, as the case may be, to pay, prepay, redeem, purchase, defease
      or otherwise in any manner any Other Guaranteed Debt or Barracuda-Caratinga
      Guaranteed Debt to the extent of such proceeds; provided,
      further,
      that
      the Borrower may pay, prepay, redeem, purchase, defease or otherwise satisfy
      the
      Other Guaranteed Debt, the Barracuda-Caratinga Debt and the Indebtedness arising
      under the KBR Cash Management Note with the net cash proceeds from the sale
      of
      Equity Interests of the Borrower or a holding company of the
      Borrower.

     

    (l)  Amendments
      to Intercompany Note.
      Amend,
      modify or change in any manner any term or condition of the Intercompany Note,
      agree in any manner to any other amendment, modification or change of any term
      or condition of the Intercompany Note or take any other action in connection
      with the Intercompany Note that would impair the interest or rights of the
      Agent
      or any Bank, or permit any of its Subsidiaries to do any of the
      foregoing.

     

    (m)  Use
      of
      Proceeds.
      Use the
      proceeds of any Advance or any Letter of Credit for any purpose other than
      for
      working capital and general corporate purposes of the Borrower and its
      Subsidiaries or use any such proceeds (i) in a manner which violates or results
      in a violation of any law or regulation, (ii) to purchase or carry any margin
      stock (as defined in Regulation U), (iii) to extend credit to others for
      the purpose of purchasing or carrying any margin stock (as defined in Regulation
      U), (iv) to prepay, redeem, purchase, defease or otherwise satisfy prior to
      the scheduled maturity thereof in any manner, or make any payment in violation
      of any subordination terms of, the Intercompany Note, other than as permitted
      pursuant to Section 5.02(e)(iii), (v) to pay any dividends, return any capital,
      or make any distribution of assets, Equity Interests, Obligations or securities
      to the Parent, except as expressly provided in the Loan Documents, (vi) to
      acquire any equity security of a class which is registered pursuant to Section
      12 of the Securities Exchange Act of 1934, as amended, if such acquisition
      would
      give the Borrower a controlling interest in the Person that has issued such
      security, unless the Governing Body of such Person or of the parent of such
      Person shall have approved such acquisition or (vii) to pay, prepay, redeem,
      purchase, defease or otherwise satisfy any other Indebtedness (excluding any
      Indebtedness arising in respect of Letters of Credit issued hereunder to
      guarantee any other letter of credit, bank guarantee or similar instrument
      but
      including, without limitation, the KBR Cash Management Note).

     

    Section
      5.03   Financial
      Covenants.
       So long as any Advance or any other amount payable by the Borrower
      hereunder or under any other Loan Document shall remain unpaid, any Letter
      of
      Credit shall be outstanding or any Bank shall have any Commitment hereunder,
      the
      Borrower will:

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    (a)  Consolidated
      Debt to Total Consolidated Capitalization Ratio.
      Maintain at all times a maximum Consolidated Debt to Total Consolidated
      Capitalization Ratio of (i) from the date hereof until June 30, 2007, 0.55
      to 1.00 and (ii) thereafter, 0.50 to 1.00.

     

    (b)  Leverage
      Ratio.
      Maintain, as of the end of each quarter for the four quarters then ended, a
      Leverage Ratio of not more than 3.50 to 1.00.

     

    (c)  Fixed
      Charge Coverage Ratio.
      Maintain, as of the end of each quarter for the four quarters then ended, a
      Fixed Charge Coverage Ratio of not less than 3.00 to 1.00.

     

    Section
      5.04   Pre-IPO
      Repositioning Exclusion.
       Notwithstanding any other provisions of this Agreement, the Parent and its
      Subsidiaries may complete the Pre-IPO Repositioning.

     

    ARTICLE
      VI

    EVENTS
      OF
      DEFAULT

     

    Section
      6.01   Events
      of Default.
       If any of the following events (“Events
      of Default”)
      shall
      occur and be continuing:

     

    (a)  (i)
      The
      Borrower shall fail to pay any principal of any Advance when the same becomes
      due and payable, whether at the due date thereof or by acceleration thereof
      or
      otherwise or (ii) the Borrower shall fail to pay any interest on any Advance
      or
      any fees hereunder or other amount payable hereunder, or any Relevant Party
      shall fail to make any other payment under any Loan Document, in each case
      under
      this clause (ii), within five Business Days of when the same becomes due and
      payable, whether at the due date thereof or by acceleration thereof or
      otherwise; or

     

    (b)  Any
      representation, warranty or certification made by any Relevant Party (or any
      of
      its Responsible Officers) herein pursuant to or in connection with any Loan
      Document or in any certificate or document furnished to any Bank pursuant to
      or
      in connection with any Loan Document, or any representation or warranty deemed
      to have been made by any Relevant Party pursuant to Section 3.02, shall prove
      to
      have been incorrect or misleading in any material respect when made or so deemed
      to have been made; or

     

    (c)  (i)
      The
      Borrower shall fail to perform or observe any term, covenant or agreement
      contained in Section 5.01(b), (e), (i) or (j), 5.02 or 5.03 of this Agreement;
      or (ii) any Loan Party shall fail to perform or observe any other term, covenant
      or agreement contained in this Agreement on its part to be performed or observed
      (other than any term, covenant or agreement covered by Section 6.01(a)) and,
      in
      each case under this clause (ii), such failure shall remain unremedied for
      30
      days after notice thereof shall have been given to such Loan Party by the Agent
      or by any Bank; or

     

    
      
        
        

      

      
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    (d)  Any
      Loan
      Party or any of its Material Subsidiaries shall fail to pay any principal of,
      premium or interest on or any other amount payable in respect of any
      Indebtedness (other than Project Financing or Permitted Non-Recourse Debt)
      of
      such Loan Party or such Material Subsidiary (as the case may be) that is
      outstanding in a principal amount of at least $100,000,000 either individually
      or in the aggregate for all such Loan Parties and Material Subsidiaries (but
      excluding Indebtedness outstanding hereunder), when the same becomes due and
      payable (whether by scheduled maturity, required prepayment, acceleration,
      demand or otherwise), and such failure shall continue after the applicable
      grace
      period, if any, specified in the agreement or instrument relating to such
      Indebtedness; or any other event shall occur or condition shall exist under
      any
      agreement or instrument relating to any such Indebtedness and shall continue
      after the applicable grace period, if any, specified in such agreement or
      instrument, if the effect of such event or condition is to accelerate, or to
      permit the acceleration of, the maturity of such Indebtedness or otherwise
      to
      cause, or to permit the holder thereof to cause, such Indebtedness to mature;
      or
      any such Indebtedness shall become due prior to its stated maturity (other
      than
      by a regularly-scheduled required payment and mandatory prepayments from
      proceeds of asset sales, debt incurrence, excess cash flow, equity issuances
      and
      insurance proceeds); provided that for the avoidance of doubt the parties
      acknowledge and agree that any payment required to be made under a guarantee
      described in the definition herein of Indebtedness shall be due and payable
      at
      the time such payment is due and payable under the terms of such guarantee
      (taking into account any applicable grace period) and such payment shall not
      be
      deemed to have been accelerated or have become due as a result of the obligation
      guaranteed having become due; or

     

    (e)  Any
      Relevant Party or any Material Subsidiary of any Relevant Party shall be
      adjudicated a bankrupt or insolvent by a court of competent jurisdiction, or
      generally not pay its debts as such debts become due, or shall admit in writing
      its inability to pay its debts generally, or shall make a general assignment
      for
      the benefit of creditors; or any proceeding shall be instituted by or against
      any Relevant Party or any such Material Subsidiary seeking to adjudicate it
      a
      bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
      arrangement, adjustment, protection, relief or composition of it or its debts
      under any law relating to bankruptcy, insolvency or reorganization or relief
      of
      debtors, or seeking the entry of an order for relief or the appointment of
      a
      receiver, trustee, custodian or other similar official for it or for any
      substantial part of its Property and, in the case of any such proceeding
      instituted against it (but not instituted by it), either such proceeding shall
      remain undismissed or unstayed for a period of 90 days, or any of the actions
      sought in such proceeding (including, without limitation, the entry of an order
      for relief against, or the appointment of a receiver, trustee, custodian or
      other similar official for, it or for any substantial part of its Property)
      shall occur; or such Relevant Party or any such Material Subsidiary shall take
      any corporate or organizational action to authorize any of the actions set
      forth
      above in this subsection (e) (provided that for purposes of this clause (e),
      “Relevant Party” shall only include the Parent and HESI to the extent each is
      party to a Loan Document); or

     

    (f)  Any
      final, non-appealable judgment or order by a court of competent jurisdiction
      for
      the payment of money in excess of $100,000,000 over and above the amount of
      insurance coverage available from a financially sound insurer that has
      acknowledged coverage shall be rendered against any Loan Party or any Material
      Subsidiary of any Loan Party and not discharged within 30 days after such order
      or judgment becomes final; or any judgment, writ, warrant of attachment or
      execution or similar process shall be issued or levied against a substantial
      part of the property of any Loan Party or any Material Subsidiary of any Loan
      Party and such judgment, writ, warrant of attachment or execution or similar
      process shall not be released, stayed, vacated or fully bonded within 30 days
      after its issue or levy; or

     

    
      
        
        

      

      
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    (g)  Any
      non
      monetary judgment or order by a court or Governmental Authority of competent
      jurisdiction shall be rendered against any Loan Party or any Subsidiary of
      any
      Loan Party that could reasonably likely to have a Material Adverse Effect,
      and
      there shall be any period of 30 consecutive days during which a stay of
      enforcement of such judgment or order, by reason of a pending appeal or
      otherwise, shall not be in effect; or

     

    (h)  Any
      provision of any Loan Document after delivery thereof pursuant to
      Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding
      on or enforceable against any Relevant Party party to it, or any such Relevant
      Party shall so state in writing; or

     

    (i)  The
      Parent shall at any time for any reason cease to be the direct or indirect
      record and beneficial owner of no less than fifty-one percent (51%) of the
      Equity Interests in the Borrower; or

     

    (j)  Any
      Loan
      Party shall incur, or, in the reasonable opinion of the Required Banks, shall
      be
      reasonably likely to incur liability in excess of $100,000,000 in the aggregate
      as a result of one or more of the following: (i) the occurrence of any ERISA
      Event; (ii) the partial or complete withdrawal of any Loan Party or any of
      its
      ERISA Affiliates from a Multiemployer Plan; or (iii) the reorganization or
      termination of a Multiemployer Plan; or

     

    then,
      and
      in any such event, the Agent (i) shall at the request, or may with the consent,
      of the Required Banks, by notice to the Borrower, declare the obligation of
      each
      Bank to make Advances (other than Letter of Credit Advances by an Issuing Bank
      or a Bank pursuant to Section 2.03(c)) and of each Issuing Bank to issue
      Letters of Credit to be terminated, whereupon the same (and all of the
      Commitments) shall forthwith terminate, and (ii) shall at the request, or may
      with the consent, of the Required Banks, by notice to the Borrower, declare
      the
      Advances, all interest thereon and all other amounts payable under this
      Agreement to be forthwith due and payable, whereupon the Advances, all such
      interest and all such other amounts shall become and be forthwith due and
      payable, without presentment, demand, protest, notice of intent to accelerate,
      notice of acceleration or any other notice of any kind, all of which are hereby
      expressly waived by the Borrower; provided,
      however,
      that in
      the event of any actual or deemed entry of an order for relief with respect
      to
      the Borrower under the Bankruptcy Code, (A) the Commitment of each Bank and
      the obligation of each Bank to make Advances (other than Letter of Credit
      Advances by an Issuing Bank or a Bank pursuant to Section 2.03(c)) and of
      each Issuing Bank to issue Letters of Credit shall automatically be terminated,
      and (B) the Advances, all interest thereon and all other amounts payable under
      this Agreement shall automatically and immediately become and be due and
      payable, without presentment, demand, protest, notice of intent to accelerate,
      notice of acceleration, or any other notice of any kind, all of which are hereby
      expressly waived by the Borrower.

     

    
      
        
        

      

      
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    Section
      6.02   Actions
      in Respect of the Letters of Credit upon Default.
       If any Event of Default shall have occurred and be continuing, the Agent
      may, or shall at the request of the Required Banks, irrespective of whether
      it
      is taking any of the actions described in Section 6.01 or otherwise, make
      demand upon the Borrower to, and forthwith upon such demand the Borrower will,
      pay to the Agent on behalf of the Banks in same day funds at the Agent’s office
      designated in such demand, for deposit in the L/C Cash Collateral Account,
      an
      amount equal to the aggregate Available Amount of all Letters of Credit then
      outstanding. If at any time the Agent determines that any funds held in the
      L/C
      Cash Collateral Account are subject to any right or claim of any Person other
      than the Agent and the Banks or that the total amount of such funds is less
      than
      the aggregate Available Amount of all Letters of Credit, the Borrower will,
      forthwith upon demand by the Agent, pay to the Agent, as additional funds to
      be
      deposited and held in the L/C Cash Collateral Account, an amount equal to the
      excess of (a) such aggregate Available Amount over (b) the total
      amount of funds, if any, then held in the L/C Cash Collateral Account that
      the
      Agent determines to be free and clear of any such right and claim. Upon the
      drawing of any Letter of Credit for which funds are on deposit in the L/C Cash
      Collateral Account, such funds shall be applied to reimburse the relevant
      Issuing Bank or the Banks, as applicable, to the extent permitted by applicable
      law.

     

    ARTICLE
      VII

    THE
      AGENT

     

    Section
      7.01   Authorization
      and Action.
       Each Bank hereby appoints and authorizes the Agent to take such action as
      Agent on its behalf and to exercise such powers under the Loan Documents as
      are
      delegated to the Agent by the terms hereof or of any other Loan Document,
      together with such powers and discretion as are reasonably incidental thereto.
      As to any matters not expressly provided for by this Agreement (including,
      without limitation, enforcement or collection of the Notes), the Agent shall
      not
      be required to exercise any discretion or take any action, but shall be required
      to act or to refrain from acting (and shall be fully protected in so acting
      or
      refraining from acting) upon the instructions of the Required Banks and such
      instructions shall be binding upon all Banks and all holders of Notes;
provided,
      however,
      that
      the Agent shall not be required to take any action which exposes the Agent
      to
      personal liability or which is contrary to any Loan Document or applicable
      law.
      The Agent agrees to give to each Bank prompt notice of each notice given to
      it
      by the Borrower pursuant to the terms of this Agreement.

     

    Section
      7.02   Agent’s
      Reliance, Etc.  Neither
      the Agent nor any of its directors, officers, agents or employees shall be
      liable for any action taken or omitted to be taken by it or them under or in
      connection with any Loan Document, except for their own gross negligence or
      willful misconduct. Without limitation of the generality of the foregoing,
      the
      Agent: (i) may consult with legal counsel (including, without limitation,
      counsel for the Borrower), independent public accountants and other experts
      selected by it and shall not be liable for any action taken or omitted to be
      taken in good faith by it in accordance with the advice of such counsel,
      accountants or experts; (ii) makes no warranty or representation to any Bank
      and
      shall not be responsible to any Bank for any statements, warranties or
      representations (whether written or oral) made in or in connection with any
      of
      the Loan Documents or any other instrument or document; (iii) shall not have
      any
      duty to ascertain or to inquire as to the performance or observance of any
      of
      the terms, covenants or conditions of any of Loan Documents or any other
      instrument or document on the part of the Borrower, any Subsidiary Guarantor
      or
      any Subsidiary of the Loan Parties or to inspect the Property (including the
      books and records) of the Borrower, any Subsidiary Guarantor or any Subsidiary
      of the Loan Parties; (iv) shall not be responsible to any Bank for the due
      execution, legality, validity, enforceability, genuineness, sufficiency or
      value
      of any of the Loan Documents or any other instrument or document; and (v) shall
      incur no liability under or in respect of any of Loan Documents or any other
      instrument or document by acting upon any notice (including telephonic notice),
      consent, certificate or other instrument or writing (which may be by facsimile,
      telegram or telex) believed by it to be genuine and signed, given or sent by
      the
      proper party or parties.

     

    
      
        
        

      

      
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    Section
      7.03   The
      Agent and its Affiliates. 
      With respect to its Commitment, the Advances owed to it and the Notes issued
      to
      it, each Bank which is also the Agent shall have the same rights and powers
      under this Agreement as any other Bank and may exercise the same as though
      it
      were not the Agent; and the term “Bank” or “Banks” shall, unless otherwise
      expressly indicated, include any Bank serving as the Agent in its individual
      capacity. Any Bank serving as the Agent and its affiliates may accept deposits
      from, lend money to, act as trustee under indentures of, accept investment
      banking engagements from and generally engage in any kind of business with,
      the
      Borrower, any Subsidiary Guarantor, any Affiliate of the Loan Parties and any
      Person who may do business with or own securities of the Borrower, any
      Subsidiary Guarantor or any Affiliate of the Borrower, all as if such Bank
      were
      not the Agent and without any duty to account therefore to the
      Banks.

     

    Section
      7.04   Bank
      Credit Decision. 
      Each Bank acknowledges that it has, independently and without reliance upon
      the
      Agent or any other Bank and based on the financial statements delivered pursuant
      to Section 5.01(d) and such other documents and information as it has deemed
      appropriate, made its own credit analysis and decision to enter into this
      Agreement. Each Bank also acknowledges that it will, independently and without
      reliance upon the Agent or any other Bank and based on such documents and
      information as it shall deem appropriate at the time, continue to make its
      own
      credit decisions in taking or not taking action under the Loan Documents or
      any
      other instrument or document.

     

    Section
      7.05   Indemnification. 
      The Banks agree to indemnify the Agent (to the extent not promptly reimbursed
      by
      the Borrower), ratably according to either (a) the respective amounts of the
      Banks’ Revolving Credit Commitments, or (b) if no Revolving Credit Commitments
      are at the time outstanding, the respective amounts of the Revolving Credit
      Commitments immediately prior to the time the Revolving Credit Commitments
      ceased to be outstanding), from and against any and all liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, costs,
      expenses and disbursements of any kind or nature whatsoever which may be imposed
      on, incurred by, or asserted against the Agent in any way relating to or arising
      out of any of the Loan Documents or any other instrument or document furnished
      pursuant hereto or in connection herewith, or any action taken or omitted by
      the
      Agent under any of the Loan Documents or any other instrument or document
      furnished pursuant hereto or in connection herewith (“Indemnified
      Costs”);
      provided
      that no
      Bank shall be liable for any portion of such liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, costs, expenses or disbursements
      resulting from the Agent’s gross negligence or willful misconduct as found in a
      final, non-appealable judgment by a court of competent jurisdiction. Without
      limitation of the foregoing, each Bank agrees to reimburse the Agent promptly
      upon demand for such Bank’s ratable share of any costs and expenses (including,
      without limitation, counsel fees) incurred by the Agent in connection with
      the
      preparation, execution, delivery, administration, modification, amendment or
      enforcement (whether through negotiations, legal proceedings or otherwise)
      of,
      or legal advice in respect of rights or responsibilities under, any of the
      Loan
      Documents or any other instrument or document furnished pursuant hereto or
      in
      connection herewith to the extent that the Agent is not reimbursed for such
      expenses by the Borrower. In the case of any investigation, litigation or
      proceeding giving rise to any Indemnified Costs, this Section 7.05 applies
      whether any such investigation, litigation or proceeding is brought by the
      Agent, any other Agent, any Bank or a third party.

     

    
      
        
        

      

      
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    Section
      7.06   Successor
      Agent.
       The Agent may resign at any time by giving written notice thereof to the
      Banks and the Borrower and may be removed at any time with or without cause
      by
      the Required Banks. Upon any such resignation or removal, the Required Banks
      shall have the right to appoint a successor Agent which, if such successor
      Agent
      is not a Bank, is approved by the Borrower (which approval will not be
      unreasonably withheld). If no successor Agent shall have been so appointed
      by
      the Required Banks (and, if not a Bank, approved by the Borrower), and shall
      have accepted such appointment, within 30 days after the retiring Agent’s giving
      of notice of resignation or the Required Banks’ removal of the retiring Agent,
      then the retiring Agent may, on behalf of the Banks, appoint a successor Agent,
      which shall be a commercial bank organized or licensed under the laws of the
      United States of America or of any State thereof and having a combined capital
      and surplus of at least $500,000,000. Upon the acceptance of any appointment
      as
      Agent hereunder by a successor Agent, such successor Agent shall thereupon
      succeed to and become vested with all the rights, powers, privileges and duties
      of the retiring Agent, and the retiring Agent shall be discharged from its
      duties and obligations under this Agreement and the other Loan Documents. After
      any retiring Agent’s resignation or removal hereunder as Agent, the provisions
      of this Article VII shall inure to its benefit as to any actions taken or
      omitted to be taken by it while it was Agent under this Agreement.

     

    Section
      7.07   Co-Lead
      Arrangers,
      Co-Administrative Agents, Syndication Agent, Co-Documentation
      Agents.
       The Co-Lead Arrangers, Co-Administrative Agents, Syndication Agent and
      Co-Documentation Agents shall have no duties, obligations or liabilities
      hereunder or in connection herewith.

     

    ARTICLE
      VIII

    MISCELLANEOUS

     

    Section
      8.01   Amendments,
      Etc. 
      No amendment or waiver of any provision of any Loan Document, nor consent to
      any
      departure by the Relevant Party therefrom, shall in any event be effective
      unless the same shall be in writing and signed by the Required Banks, and then
      such waiver or consent shall be effective only in the specific instance and
      for
      the specific purpose for which given; provided,
      however,
      that no
      such amendment, waiver or consent shall: (a) waive any of the conditions
      specified in Section 3.01 of this Agreement without the written consent of
      each
      Bank, (b) increase the Commitment of any Bank or subject any Bank to any
      additional obligations without the written consent of such Bank, (c) reduce
      the
      principal of, or interest on, the Advances or any fees or other amounts payable
      hereunder, without the written consent of each Bank affected thereby, (d)
      postpone any date fixed for any payment of principal of, or interest on, the
      Advances or any fees or other amounts payable hereunder without the written
      consent of each Bank affected thereby, (e) amend the definition of “Required
      Banks” without the written consent of each Bank; (f) amend Section 2.14 of
      this Agreement or this Section 8.01 of this Agreement without the written
      consent of each Bank, or (g) except as provided in the next sentence, release
      any Subsidiary Guarantor from its guarantee under the Guarantee without the
      written consent of each Bank; and provided,
      further,
      that
      (x) no amendment, waiver or consent shall, unless in writing and signed by
      the
      Agent in addition to the Banks required above to take such action, affect the
      rights or duties of the Agent under this Agreement or any of the Notes and
      (y) no amendment, waiver or consent shall, unless in writing and signed by
      each Issuing Bank in addition to the Banks required above to take such action,
      affect the rights or obligations of the Issuing Banks under this
      Agreement.

     

    Notwithstanding
      the foregoing, any guarantee of a Subsidiary Guarantor under the Guarantee
      shall
      be terminated from time to time as necessary to effect the sale, merger or
      consolidation of any Subsidiary Guarantor permitted by this Agreement and the
      Agent shall execute and deliver all release and termination documents reasonably
      requested in connection therewith.

     

    
      
        
        

      

      
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    Section
      8.02   Notices,
      Etc.
       (a)
      All
      notices and other communications provided for hereunder shall be either (x)
      in
      writing (including facsimile communication) and mailed, telecopied, or delivered
      or (y) as and to the extent set forth in Section 8.02(b) and in the proviso
      to
      this Section 8.02(a), (i) if to the Borrower, at its address at 4100 Clinton
      Drive, Post Office Box 3, Houston, TX 77001-0003 Attention: Vice President
      and
      Treasurer, Facsimile: (713) 753-2517; (ii) if to any Bank listed on the
      signature pages hereof, at its Domestic Lending Office specified opposite its
      name on Schedule II hereto; (iii) if to any other Banks, at its Domestic Lending
      Office specified in the Assignment and Acceptance pursuant to which it becomes
      a
      Bank; (iv) if to the Agent, at the addresses set forth below:

     

    Two
      Penns
      Way, Suite 200

    New
      Castle, Delaware 19720

    Facsimile
      No.: (302) 894-6120

    Attention:
      Bank Loan Syndications Department

     

    with
      a
      copy to:

     

    333
      Clay,
      Suite 3700

    Houston,
      Texas 77002 

    Facsimile
      No.: (713) 654-2849

    Attention:
      Amy Pincu, Director

    

    (but
      references herein to the address of the Agent for purposes of payments or making
      available funds or for purposes of Section 8.08(c) shall not include the address
      to which copies are to be sent); or, as to the Borrower or the Agent, at such
      other address as shall be designated by such party in a written notice to the
      other parties and, as to each other party, at such other address as shall be
      designated by such party in a written notice to the Borrower and the Agent,
      provided
      that
      materials required to be delivered pursuant to Section 5.01(d)(i), (ii) or
      (iii), unless delivered by posting to a website as provided in Section 5.01(d),
      shall be delivered to the Agent as specified in Section 8.02(b) or as otherwise
      specified to the Borrower by the Agent. Each such notice or communication shall
      be effective (i) if mailed, upon receipt, (ii) if delivered by hand, upon
      delivery with written receipt, and (iii) if telecopied, when receipt is
      confirmed by telephone, except that any notice or communication to the Agent
      pursuant to this Agreement shall not be effective until actually received by
      the
      Agent.

     

    
      
        
        

      

      
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    (b)  The
      Borrower hereby agrees that it will provide to the Agent all information,
      documents and other materials that it is obligated to furnish to the Agent
      pursuant to the Loan Documents, including, without limitation, all notices,
      requests, financial statements, financial and other reports, certificates and
      other information materials, but excluding any such communication that
      (i) relates to a request for a new, or a conversion of an existing,
      borrowing or other extension of credit (including any election of an interest
      rate or interest period relating thereto), (ii) relates to the payment of any
      principal or other amount due under the Credit Agreement prior to the scheduled
      date therefore, (iii) provides notice of any default or event of default
      under the Credit Agreement, (iv) is required to be delivered to satisfy any
      condition precedent to the effectiveness of the Credit Agreement and/or any
      borrowing or other extension of credit thereunder or (v) is delivered by posting
      to a website as provided in Section 5.01(d) (all such non-excluded
      communications being referred to herein collectively as “Communications”),
      by
      transmitting the Communications in an electronic/soft medium in a format
      acceptable to the Agent to oploanswebadmin@citigroup.com. In addition, the
      Borrower agrees to continue to provide the Communications to the Agent in the
      manner specified in the Loan Documents but only to the extent requested by
      the
      Agent. The Borrower further agrees that the Agent may make the Communications
      available to the Banks by posting the Communications on Intralinks
      or a
      substantially similar electronic transmission system
      (the
“Platform”).
      THE
      PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED
      BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR
      THE
      ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR
      OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
      OR
      STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
      FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
      FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
      CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE AGENT
      OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
      EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT
      PARTIES”)
      HAVE
      ANY LIABILITY TO THE BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR
      DAMAGES OF ANY KIND,
      INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
      CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES
      (WHETHER
      IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE AGENT’S
      TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
      LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY
      A
      COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
      PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. The Agent agrees that the
      receipt of the Communications by the Agent at its e-mail address set forth
      above
      shall constitute effective delivery of the Communications to the Agent for
      purposes of the Loan Documents.

     

    (c)  Each
      Bank
      agrees that notice to it (as provided in the next sentence) (a “Notice”)
      specifying that any Communications have been posted to the Platform shall
      constitute effective delivery of such information, documents or other materials
      to such Bank for purposes of this Agreement; provided
      that if
      requested by any Bank the Agent shall deliver a copy of the Communications
      to
      such Bank by email or facsimile. Each Bank agrees (i) to notify the Agent in
      writing of such Bank’s e-mail address to which a Notice may be sent by
      electronic transmission (including by electronic communication) on or before
      the
      date such Bank becomes a party to this Agreement (and from time to time
      thereafter to ensure that the Agent has on record an effective e-mail address
      for such Bank) and (ii) that any Notice may be sent to such e-mail
      address.

     

    
      
        
        

      

      
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    (d)  Nothing
      herein shall prejudice the right of the Agent or any Lender to give any notice
      or other communication pursuant to any Loan Document in any other manner
      specified in such Loan Document.

     

    Section
      8.03   No
      Waiver; Remedies.
       No failure on the part of any Bank or the Agent to exercise, and no delay
      in exercising, any right hereunder or under any Note shall operate as a waiver
      thereof; nor shall any single or partial exercise of any such right preclude
      any
      other or further exercise thereof or the exercise of any other right. The
      remedies herein provided are cumulative and not exclusive of any remedies
      provided by law.

     

    Section
      8.04   Expenses
      and Taxes; Compensation.
       (a)  The
      Borrower agrees to pay on demand (i) all reasonable out-of-pocket costs and
      expenses (including, without limitation, reasonable fees and expenses of
      counsel) of the Co-Lead Arrangers and the Agent and each of their respective
      affiliates in connection with the preparation, execution, delivery and
      administration of the Loan Documents and the other documents and instruments
      delivered hereunder or in connection with any amendments, modifications,
      consents or waivers in connection with the Loan Documents, (ii) all reasonable
      fees and expenses of counsel for the Co-Lead Arrangers and the Agent, during
      the
      existence of any Event of Default, any Bank with respect to advising the Agent
      or, during the existence of any Event of Default, any Bank as to its rights
      and
      responsibilities under the Loan Documents and (iii) all reasonable out-of-pocket
      costs and expenses (including, without limitation, reasonable fees and expenses
      of counsel) of the Co-Lead Arrangers, the Agent and each Bank in connection
      with
      the enforcement (whether through negotiations, legal proceedings or otherwise)
      of the Loan Documents (including the enforcement of rights under this Section
      8.04(a)) and the other documents and instruments delivered hereunder and rights
      and remedies hereunder and thereunder.

     

    (b)  If
      any
      payment or purchase of principal of, or Conversion of, any Eurodollar Rate
      Advance is made other than on the last day of the Interest Period for such
      Advance, as a result of a payment, purchase or Conversion pursuant to Section
      2.09, Section 2.10, Section 2.15, Section 2.16 or Section 2.17, acceleration
      of
      the maturity of the Advances pursuant to Section 6.01 or for any other reason,
      the Borrower shall, within 15 days after demand by any Bank (with a copy of
      such
      demand to the Agent), pay to the Agent for the account of such Bank any amounts
      required to compensate such Bank for any additional losses, costs or expenses
      which it may reasonably incur as a result of such payment, purchase or
      Conversion, including, without limitation, any loss (excluding loss of
      anticipated profits), cost or expense reasonably incurred by reason of the
      liquidation or reemployment of deposits or other funds acquired by any Bank
      to
      fund or maintain such Advance. A certificate as to the amount of such additional
      losses, costs or expenses, submitted to the Borrower and the Agent by such
      Bank,
      shall be conclusive and binding for all purposes, absent manifest
      error.

     

    
      
        
        

      

      
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    (c)  The
      Borrower agrees to indemnify and hold harmless the Agent, the Banks, the Co-Lead
      Arrangers and their respective directors, officers, employees, affiliates,
      advisors, attorneys and agents (each, an “Indemnified
      Party”)
      from and against any and all claims, damages, losses, liabilities and expenses
      (including, without limitation, fees and expenses of counsel) for which any
      of
      them may become liable or which may be incurred by or asserted against any
      of
      the Indemnified Parties in connection with or arising out of (i) any Loan
      Document or any other document or instrument delivered in connection herewith
      or
      the actual or proposed use of the proceeds of any Advance or Letter of Credit
      or
      any of the transactions contemplated hereby or thereby, (ii) the existence
      of
      any condition on any property of the Borrower, any Subsidiary Guarantor or
      any
      of their Subsidiaries that constitutes a violation of any environmental
      protection law or any other law, rule, regulation or order, or (iii) any
      investigation, litigation, or proceeding, whether or not any of the Indemnified
      Parties is a party thereto, related to or in connection with any of the
      foregoing or any Loan Document, including, without limitation, any transaction
      in which any proceeds of any Advance or Letter of Credit are applied, including,
      without limitation, in each of the foregoing cases, any such claim, damage,
      loss, liability or expense resulting from the negligence of any Indemnified
      Party, but excluding any such claim, damage, loss, liability or expense sought
      to be recovered by any Indemnified Party to the extent such claim, damage,
      loss,
      liability or expense is found in a final, non-appealable judgment by a court
      of
      competent jurisdiction to have resulted from the gross negligence or willful
      misconduct of such Indemnified Party. 

     

    (d)  Except
      as
      set forth in the next succeeding sentence, each of the Banks and the Agent
      and
      each of their respective directors, officers, employees, affiliates, advisors
      and agents shall not be liable to the Borrower for, and the Borrower agrees
      not
      to assert any claim for, amounts constituting special, indirect, consequential,
      punitive, treble or exemplary damages arising out of or in connection with
      any
      breach by such Bank or the Agent of any of its obligations hereunder. If the
      Borrower becomes liable to a third party for amounts constituting punitive,
      treble or exemplary damages as a result of a breach of an obligation hereunder
      by a Bank or the Agent, as the case may be, the Borrower shall be entitled
      to
      claim and recover (and does not waive its rights to claim and recover) such
      amounts from such Bank or the Agent, as the case may be, to the extent such
      Bank
      or the Agent, as the case may be, would be liable to the Borrower for such
      amounts but for the limitation set forth in the preceding sentence.

     

    (e)  Without
      prejudice to the survival of any other agreement of the Borrower hereunder,
      all
      obligations of the Borrower under Section 2.12, Section 2.13 and this Section
      8.04 shall survive the termination of the Commitments and this Agreement and
      the
      payment in full of all amounts hereunder and under the Notes.

     

    Section
      8.05   Right
      of Set-Off.
       Upon (i) the occurrence and during the continuance of any Event of Default
      and (ii) the making by the Required Banks of the request or the granting by
      the
      Required Banks of the consent specified by Section 6.01 to authorize the Agent
      to declare the Advances due and payable pursuant to the provisions of Section
      6.01, each Bank is hereby authorized at any time and from time to time, to
      the
      fullest extent permitted by law, to set off and apply any and all deposits
      (general or special, time or demand, provisional or final) at any time held
      and
      other indebtedness at any time owing by such Bank (or by any branch, agency,
      subsidiary or other Affiliate of such Bank, wherever located) to or for the
      credit or the account of the Borrower against any and all of the obligations
      of
      the Borrower now or hereafter existing under this Agreement or any Note held
      by
      such Bank, whether or not such Bank shall have made any demand under this
      Agreement or any such Note and although such obligations may be unmatured.
      Each
      Bank agrees promptly to notify the Borrower after any such set-off and
      application made by such Bank, provided that the failure to give such notice
      shall not affect the validity of such set-off and application. The rights of
      each Bank under this Section are in addition to other rights and remedies
      (including, without limitation, other rights of setoff) which such Bank may
      have.

     

    
      
        
        

      

      
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    Section
      8.06   Limitation
      and Adjustment of Interest.
       (a)  Notwithstanding
      anything to the contrary set forth herein, in any other Loan Document or in
      any
      other document or instrument, no provision of any of the Loan Documents or
      any
      other instrument or document furnished pursuant hereto or in connection herewith
      is intended or shall be construed to require the payment or permit the
      collection of interest in excess of the maximum non-usurious rate permitted
      by
      applicable law. Accordingly, if the transactions with any Bank contemplated
      hereby would be usurious under applicable law, if any, then, in that event,
      notwithstanding anything to the contrary in any Note payable to such Bank,
      this
      Agreement or any other document or instrument, it is agreed as follows: (i)
      the
      aggregate of all consideration which constitutes interest under applicable
      law
      that is contracted for, taken, reserved, charged or received by such Bank under
      any Note payable to such Bank, this Agreement or any other document or
      instrument shall under no circumstances exceed the maximum amount allowed by
      such applicable law, and any excess shall be canceled automatically and, if
      theretofore paid, shall, at the option of such Bank, be credited by such Bank
      on
      the principal amount of the indebtedness owed to such Bank by the Borrower
      or
      refunded by such Bank to the Borrower, and (ii) in the event that the maturity
      of any Note payable to such Bank is accelerated or in the event of any required
      or permitted prepayment, then such consideration that constitutes interest
      under
      law applicable to such Bank may never include more than the maximum amount
      allowed by such applicable law and excess interest, if any, to such Bank
      provided for in this Agreement or otherwise shall be canceled automatically
      as
      of the date of such acceleration or prepayment and, if theretofore paid, shall,
      at the option of such Bank, be credited by such Bank on the principal amount
      of
      the indebtedness owed to such Bank by the Borrower or refunded by such Bank
      to
      the Borrower. In determining whether or not the interest contracted for, taken,
      reserved, charged or received by any Bank exceeds the maximum non-usurious
      rate
      permitted by applicable law, such determination shall be made, to the extent
      that doing so does not result in a violation of applicable law, by amortizing,
      prorating, allocating and spreading, in equal parts during the period of the
      full stated term of the loans hereunder, all interest at any time contracted
      for, taken, charged, received or reserved by such Bank in connection with such
      loans.

     

    (b)  In
      the
      event that at any time the interest rate applicable to any Advance made by
      any
      Bank would exceed the maximum non-usurious rate allowed by applicable law,
      the
      rate of interest to accrue on the Advances by such Bank shall be limited to
      the
      maximum non-usurious rate allowed by applicable law, but shall accrue, to the
      extent permitted by law, on the principal amount of the Advances made by such
      Bank from time to time outstanding, if any, at the maximum non-usurious rate
      allowed by applicable law until the total amount of interest accrued on the
      Advances made by such Bank equals the amount of interest which would have
      accrued if the interest rates applicable to the Advances pursuant to Article
      II
      had at all times been in effect. In the event that upon the final payment of
      the
      Advances made by any Bank and termination of the Commitment of such Bank, the
      total amount of interest paid to such Bank hereunder and under the Notes is
      less
      than the total amount of interest which would have accrued if the interest
      rates
      applicable to such Advances pursuant to Article II had at all times been in
      effect, then the Borrower agrees to pay to such Bank, to the extent permitted
      by
      law, an amount equal to the excess of (a) the lesser of (i) the amount of
      interest which would have accrued on such Advances if the maximum non-usurious
      rate allowed by applicable law had at all times been in effect or (ii) the
      amount of interest which would have accrued on such Advances if the interest
      rates applicable to such Advances pursuant to Article II had at all times been
      in effect over (b) the amount of interest otherwise accrued on such Advances
      in
      accordance with this Agreement.

     

    Section
      8.07   Binding
      Effect.
       This Agreement shall become effective as provided in Section 3.01 hereof
      and thereafter shall be binding upon and inure to the benefit of the Borrower
      and the Agent and each Bank and their respective successors and assigns, except
      that the Borrower shall not have the right to assign its rights or obligations
      hereunder or under any other Loan Document or any interest herein or therein
      without the prior written consent of all of the Banks.

     

    
      
        
        

      

      
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    Section
      8.08   Assignments
      and Participations.
       (a)  Each
      Bank may assign to one or more banks or other entities all or a portion of
      its
      rights and obligations under this Agreement (including, without limitation,
      all
      or a portion of its Commitment, the Advances owing to it and the Notes held
      by
      it); provided,
      however,
      that
      (i) each such assignment shall be of a constant, and not a varying, percentage
      of all rights and obligations under this Agreement, (ii) except in the case
      of an assignment of all of a Bank’s rights and obligations under this Agreement,
      the amount of the Commitment of the assigning Bank being assigned pursuant
      to
      each such assignment (determined as of the date of the Assignment and Acceptance
      with respect to such assignment) shall in no event be less than $5,000,000,
      (iii) each such assignment shall be to an Eligible Assignee, and (iv) the
      parties to each such assignment shall execute and deliver to the Agent, for
      its
      acceptance and recording in the Register, an Assignment and Acceptance, together
      with the Notes subject to such assignment and a processing and recordation
      fee
      of $3,000. Upon such execution, delivery, acceptance and recording, from and
      after the effective date specified in each Assignment and Acceptance, (x) the
      assignee thereunder shall be a party hereto and, to the extent that rights
      and
      obligations hereunder have been assigned to it pursuant to such Assignment
      and
      Acceptance, have the rights and obligations of a Bank hereunder and (y) the
      Bank
      assignor thereunder shall, to the extent that rights and obligations hereunder
      have been assigned by it pursuant to such Assignment and Acceptance, relinquish
      its rights and be released from its obligations under this Agreement (and,
      in
      the case of an Assignment and Acceptance covering all of an assigning Bank’s
      rights and obligations under this Agreement, such Bank shall cease to be a
      party
      hereto).

     

    (b)  By
      executing and delivering an Assignment and Acceptance, the Bank assignor
      thereunder and the assignee thereunder confirm to and agree with each other
      and
      the other parties hereto as follows: (i) other than as provided in such
      Assignment and Acceptance, such assigning Bank makes no representation or
      warranty and assumes no responsibility with respect to any statements,
      warranties or representations made in or in connection with any Loan Document
      or
      any other instrument or document furnished pursuant hereto or in connection
      herewith or the execution, legality, validity, enforceability, genuineness,
      sufficiency or value of any Loan Document or any other instrument or document
      furnished pursuant hereto or in connection herewith; (ii) such assigning Bank
      makes no representation or warranty and assumes no responsibility with respect
      to the financial condition of the Borrower or any other Person or the
      performance or observance by the Borrower or any other Person of any of its
      respective obligations under any Loan Document or any other instrument or
      document furnished pursuant hereto or in connection herewith; (iii) such
      assignee confirms that it has received a copy of this Agreement, together with
      copies of the most recent financial statements delivered pursuant to Section
      5.01(d) and such other documents and information as it has deemed appropriate
      to
      make its own credit analysis and decision to enter into such Assignment and
      Acceptance; (iv) such assignee will, independently and without reliance upon
      the
      Agent, such assigning Bank or any other Bank and based on such documents and
      information as it shall deem appropriate at the time, continue to make its
      own
      credit decisions in taking or not taking action under this Agreement, any of
      the
      other Loan Documents or any other instrument or document; (v) such assignee
      confirms that it is an Eligible Assignee; (vi) such assignee appoints and
      authorizes the Agent to take such action as Agent on its behalf and to exercise
      such powers and discretion under the Loan Documents as are delegated to the
      Agent by the terms hereof or thereof, together with such powers and discretion
      as are reasonably incidental thereto; and (vii) such assignee agrees that it
      will perform in accordance with their terms all of the obligations which by
      the
      terms of this Agreement are required to be performed by it as a
      Bank.

     

    
      
        
        

      

      
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    (c)  The
      Agent
      shall maintain at its address referred to in Section 8.02 a copy of each
      Assignment and Acceptance delivered to and accepted by it and a register for
      the
      recordation of the names and addresses of the Banks and the Commitment of,
      and
      the principal amount of the Revolving Credit Advances owing to, each Bank from
      time to time (the “Register”).
      The
      entries in the Register shall be conclusive and binding for all purposes, absent
      manifest error, and the Borrower, the Agent and the Banks may treat each Person
      whose name is recorded in the Register as a Bank hereunder for all purposes
      of
      this Agreement. The Register shall be available for inspection by the Borrower
      or any Bank at any reasonable time and from time to time upon reasonable prior
      notice.

     

    (d)  Upon
      its
      receipt of an Assignment and Acceptance executed by an assigning Bank and an
      assignee representing that it is an Eligible Assignee, together with the Notes,
      if any, subject to such assignment, the Agent shall, if such Assignment and
      Acceptance has been completed and is in substantially the form of Exhibit E,
      (i)
      accept such Assignment and Acceptance, (ii) record the information contained
      therein in the Register and (iii) give prompt notice thereof to the Borrower.
      Within five Business Days after its receipt of such notice, the Borrower shall
      execute and deliver to the Agent in exchange for the surrendered Notes, if
      any,
      a new Note (if requested by the assignee) payable to the order of such Eligible
      Assignee in an amount equal to the Commitment assumed by it pursuant to such
      Assignment and Acceptance and, if the assigning Bank has retained a Commitment
      hereunder, a new Note payable to the order of the assigning Bank in an amount
      equal to the Commitment retained by it hereunder (such new Notes shall be in
      an
      aggregate principal amount equal to the aggregate principal amount of such
      surrendered Notes, shall be dated the effective date of such Assignment and
      Acceptance and shall otherwise be in substantially the form of Exhibit
      A).

     

    (e)  Each
      Bank
      may sell participations to one or more banks or other entities (other than
      the
      Borrower or any of its Affiliates) in or to all or a portion of its rights
      and
      obligations under this Agreement (including, without limitation, all or a
      portion of its Commitment, the Advances owing to it and the Notes held by it);
      provided,
      however,
      that
      (i) such Bank’s obligations under this Agreement (including, without limitation,
      its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such
      Bank
      shall remain solely responsible to the other parties hereto for the performance
      of such obligations, (iii) such Bank shall remain the holder of any such Notes
      for all purposes of this Agreement, (iv) the Borrower, the Agent and the other
      Banks shall continue to deal solely and directly with such Bank in connection
      with such Bank’s rights and obligations under this Agreement, and (v) the terms
      of any such participation shall not restrict such Bank’s ability to make any
      amendment or waiver of this Agreement or any Note or such Bank’s ability to
      consent to any departure by the Borrower therefrom without the approval of
      the
      participant, except that the approval of the participant may be required to
      the
      extent that such amendment, waiver or consent would reduce the principal of,
      or
      interest on, the Notes or any fees or other amounts payable hereunder, in each
      case to the extent subject to such participation, or postpone any date fixed
      for
      any payment of principal of, or interest on, the Notes or any fees or other
      amounts payable hereunder, in each case to the extent subject to such
      participation.

     

    (f)  Each
      Issuing Bank may assign to an Eligible Assignee all of its rights and
      obligations under the undrawn portion of its Letter of Credit Commitment at
      any
      time; provided,
      however,
      that
      (i) each such assignment shall be to an Eligible Assignee and (ii) the parties
      to each such assignment shall execute and deliver to the Agent, for its
      acceptance and recording in the Register, an Assignment and Acceptance, together
      with a processing and recordation fee of $3,000.

     

    
      
        
        

      

      
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    (g)  Any
      Bank
      may, in connection with any assignment or participation or proposed assignment
      or participation pursuant to this Section 8.08, disclose to the assignee or
      participant or proposed assignee or participant, any information relating to
      the
      Borrower or any of its Subsidiaries furnished to such Bank by or on behalf
      of
      the Borrower or any of its Subsidiaries; provided
      that,
      prior to any such disclosure, the assignee or participant or proposed assignee
      or participant shall agree to comply with Section 8.14.

     

    (h)  Notwithstanding
      any other provision set forth in this Agreement, any Bank may at any time create
      a security interest in all or any portion of its rights under this Agreement
      (including, without limitation, the Revolving Credit Advances owing to it and
      the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance
      with Regulation A of the Federal Reserve Board.

     

    Section
      8.09   No
      Liability of Issuing Banks. 
      The
      Borrower assumes all risks of the acts or omissions of any beneficiary or
      transferee of any Letter of Credit with respect to its use of such Letter of
      Credit. Neither any Issuing Bank nor any of its officers or directors shall
      be
      liable or responsible for: (a) the use that may be made of any Letter of Credit
      or any acts or omissions of any beneficiary or transferee in connection
      therewith; (b) the validity, sufficiency or genuineness of documents, or of
      any endorsement thereon, even if such documents should prove to be in any or
      all
      respects invalid, insufficient, fraudulent or forged; (c) payment by such
      Issuing Bank against presentation of documents that do not comply with the
      terms
      of a Letter of Credit, including failure of any documents to bear any reference
      or adequate reference to the Letter of Credit; or (d) any other
      circumstances whatsoever in making or failing to make payment under any Letter
      of Credit, except that the Borrower shall have a claim against such Issuing
      Bank, and such Issuing Bank shall be liable to the Borrower, to the extent
      of
      any direct, but not consequential, damages suffered by the Borrower that the
      Borrower proves were caused by (i) such Issuing Bank’s willful misconduct
      or gross negligence as determined in a final, non-appealable judgment by a
      court
      of competent jurisdiction in determining whether documents presented under
      any
      Letter of Credit comply with the terms of the Letter of Credit or (ii) such
      Issuing Bank’s willful failure to make lawful payment under a Letter of Credit
      after the presentation to it of a draft and certificates strictly complying
      with
      the terms and conditions of the Letter of Credit. In furtherance and not in
      limitation of the foregoing, such Issuing Bank may accept documents that appear
      on their face to be in order, without responsibility for further investigation,
      regardless of any notice or information to the contrary.

     

    Section
      8.10   Execution
      in Counterparts.
       This Agreement may be executed in any number of counterparts and by
      different parties hereto in separate counterparts, each of which when so
      executed shall be deemed to be an original and all of which taken together
      shall
      constitute one and the same agreement. Delivery of an executed counterpart
      of a
      signature page to this Agreement by facsimile shall be as effective as delivery
      of a manually executed counterpart of this Agreement.

     

    Section
      8.11   Judgment  
      (a)
      If for
      the purposes of obtaining judgment in any court it is necessary to convert
      a sum
      due hereunder in Dollars into another currency, the parties hereto agree, to
      the
      fullest extent that they may effectively do so, that the rate of exchange used
      shall be that at which in accordance with normal banking procedures the Agent
      could purchase Dollars with such other currency at Citibank’s principal office
      in London at 11:00 A.M. (London time) on the Business Day preceding that on
      which final judgment is given.

     

    (b)  If
      for
      the purposes of obtaining judgment in any court it is necessary to convert
      a sum
      due hereunder in a Foreign Currency into Dollars, the parties agree to the
      fullest extent that they may effectively do so, that the rate of exchange used
      shall be that at which in accordance with normal banking procedures the Agent
      could purchase such Foreign Currency with Dollars at Citibank’s principal office
      in London at 11:00 A.M. (London time) on the Business Day preceding that on
      which final judgment is given.

     

    
      
        
        

      

      
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    (c)  The
      obligation of the Borrower in respect of any sum due from it in any currency
      (the “Primary
      Currency”)
      to any
      Bank or the Agent hereunder shall, notwithstanding any judgment in any other
      currency, be discharged only to the extent that on the Business Day following
      receipt by such Bank or the Agent (as the case may be), of any sum adjudged
      to
      be so due in such other currency, such Bank or the Agent (as the case may be)
      may in accordance with normal banking procedures purchase the applicable Primary
      Currency with such other currency; if the amount of the applicable Primary
      Currency so purchased is less than such sum due to such Bank or the Agent (as
      the case may be) in the applicable Primary Currency, the Borrower agrees, as
      a
      separate obligation and notwithstanding any such judgment, to indemnify such
      Bank or the Agent (as the case may be) against such loss, and if the amount
      of
      the applicable Primary Currency so purchased exceeds such sum due to any Bank
      or
      the Agent (as the case may be) in the applicable Primary Currency, such Bank
      or
      the Agent (as the case may be) agrees to remit to the Borrower such
      excess.

     

    Section
      8.12   Governing
      Law.
       This Agreement and the Notes shall be governed by, and construed in
      accordance with, the laws of the State of New York. Without limiting the intent
      of the parties set forth above, (i) Chapter 346 of the Texas Finance Code
      (formerly known as Chapter 15, Subtitle 3, Title 79, of the Revised Civil
      Statutes of Texas, 1925), as amended (relating to revolving loans and revolving
      triparty accounts), shall not apply to this Agreement, the Notes or the
      transactions contemplated hereby, and (ii) to the extent that any Bank may
      be
      subject to Texas law limiting the amount of interest payable for its account,
      such Bank shall utilize the indicated (weekly) rate ceiling from time to time
      in
      effect as provided in Chapter 303 of the Texas Finance Code (formerly known
      as
      Article 5069-1.04 of the Revised Civil Statutes of Texas), as
      amended.

     

    Section
      8.13   Jurisdiction;
      Damages.
       To the fullest extent it may effectively do so under applicable law, (i)
      each of the parties hereto hereby irrevocably and unconditionally submits,
      for
      itself and its Property, to the non-exclusive jurisdiction of any New York
      state
      court or federal court sitting in New York City, and any appellate court from
      any appeal thereof, in any action or proceeding arising out of or relating
      to
      this Agreement, any of the Notes, or any other instrument or document furnished
      pursuant hereto or in connection herewith or for recognition or enforcement
      of
      any judgment, and each of the parties hereto hereby irrevocably and
      unconditionally agrees that all claims in respect of such action or proceeding
      may be heard and determined in any such court; (ii) each of the parties hereto
      hereby irrevocably and unconditionally waives the defense of an inconvenient
      forum to the maintenance of such action or proceeding and any objection that
      it
      may now or hereafter have to the laying of venue of any such action or
      proceeding in any such court; (iii) the Borrower hereby agrees that service
      of
      copies of the summons and complaint and any other process which may be served
      in
      any such action or proceeding may be made by mailing or delivering a copy of
      such process to the Borrower at its address specified in Section 8.02; and
      (iv)
      each of the parties hereto agrees that a final judgment in any such action
      or
      proceeding shall be conclusive and may be enforced in other jurisdictions by
      suit on the judgment or in any other manner provided by law. Nothing herein
      shall affect the rights of any Bank or the Agent to serve legal process in
      any
      other manner permitted by law or affect the right that any party hereto may
      otherwise have to bring any action or proceeding relating to this Agreement,
      any
      of the Notes or any other instrument or document furnished pursuant hereto
      or in
      connection herewith in the courts of any other jurisdiction. Each of the
      Borrower, the Agent and the Banks hereby irrevocably and unconditionally waives,
      to the fullest extent it may effectively do so under applicable law, any right
      it may have to claim or recover in any action or proceeding referred to in
      this
      Section 8.13 any exemplary or punitive damages. The Borrower hereby further
      irrevocably waives, to the fullest extent it may effectively do so under
      applicable law, any right it may have to claim or recover in any action or
      proceeding referred to in this Section 8.13 any special or consequential
      damages.

     

    
      
        
        

      

      
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    Section
      8.14   Confidentiality.
       Each Bank agrees that it will use reasonable efforts, to the extent not
      inconsistent with practical business requirements, not to disclose without
      the
      prior consent of the Borrower (other than to employees, auditors, accountants,
      counsel or other professional advisors of the Agent or any Bank) any information
      with respect to the Borrower, each Guarantor or their respective Subsidiaries
      which is furnished pursuant to this Agreement, provided that any Bank may
      disclose any such information (a) as has become generally available to the
      public, (b) as may be required or appropriate in any report, statement or
      testimony submitted to or required by any municipal, state or Federal regulatory
      body having or claiming to have jurisdiction over any Bank or its Affiliates
      or
      submitted to or required by the Federal Reserve Board or the Federal Deposit
      Insurance Corporation or similar organizations (whether in the United States
      or
      elsewhere) or their successors, and including any self-regulatory body having
      or
      claiming authority to regulate or oversee any aspect of any Bank’s or its
      Affiliates’ businesses, (c) as may be required or appropriate in response to any
      summons or subpoena in connection with any litigation, (d) in order to comply
      with any law, order, regulation or ruling applicable to any Bank, (e) to any
      assignee, participant, prospective assignee, or prospective participant that
      has
      agreed to comply with this Section 8.14, (f) in connection with the exercise
      of
      any remedy by any Bank pertaining to this Agreement, any of the Notes or any
      other document or instrument delivered in connection herewith, (g) in connection
      with any litigation involving any Bank pertaining to any Loan Document or any
      other document or instrument delivered in connection herewith, (h) to any Bank
      or the Agent, or (i) to any Affiliate of any Bank.

     

    Section
      8.15   Patriot
      Act Notice. 
      Each Bank and the Agent (for itself and not on behalf of any Bank) hereby
      notifies the Borrower that pursuant to the requirements of the Patriot Act,
      it
      is required to obtain, verify and record information that identifies the
      Borrower, which information includes the name and address of the Borrower and
      other information that will allow such Bank or the Agent, as applicable, to
      identify the Borrower in accordance with the Patriot Act. The Borrower shall
      provide, to the extent commercially reasonable in light of applicable
      restrictions or limitations under contract or law, regulation or governmental
      guidelines, such information and take such actions as are reasonably requested
      by the Agent or any Banks in order to assist the Agent and the Banks in
      maintaining compliance with the Patriot Act.

     

    Section
      8.16   Waiver
      of Jury Trial.
       Each of the Borrower, the Agent and the Banks hereby irrevocably and
      unconditionally waives, to the fullest extent it may effectively do so under
      applicable law, any and all right to trial by jury in any action or proceeding
      arising out of or relating to this Agreement, any of the Notes, any other Loan
      Document or any other instrument or document furnished pursuant hereto or in
      connection herewith or the transactions contemplated hereby.

     

    

     

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

     

    BORROWER:

    

    KBR
      HOLDINGS, LLC

    

    

    By:
      /s/
      Cedric W. Burgher

    Name:
      Cedric W. Burger

    Title:
      Vice President and Chief Financial Officer

    

    Taxpayer
      Identification of Borrower: 32-0158407

    

    Address
      of Principal Place of Business of Borrower:

    4100
      Clinton Dr.

    Houston,
      Texas 77020

    

    

    *
      Bank
      signature pages omitted.

    

    
      
        
        

      

      
        75

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