Senior Unsecured Credit Facility Agreement

EXECUTION COPY


EXHIBIT 10.4


U.S. $1,000,000,000


SENIOR UNSECURED CREDIT FACILITY AGREEMENT


Dated as of November 3, 2003


Among


HALLIBURTON COMPANY


as Borrower,


THE BANKS NAMED HEREIN


as Banks,


CITICORP NORTH AMERICA, INC.


as Administrative Agent,


JPMORGAN CHASE BANK


as Syndication Agent,


and


ABN AMRO BANK, N.V.


as Documentation Agent


Co-Lead Arrangers:


CITIGROUP GLOBAL MARKETS INC.,


GOLDMAN SACHS CREDIT PARTNERS L.P.


and


J.P. MORGAN SECURITIES INC.


TABLE OF CONTENTS


Page
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Article I
DEFINITIONS AND ACCOUNTING TERMS


Section 1.01 Certain Defined Terms........................................ 1 Section 1.02 Computation of Time Periods.................................. 13 Section 1.03 Accounting Terms; GAAP....................................... 13 Section 1.04 Miscellaneous................................................ 13 Section 1.05 Ratings...................................................... 13


Article II
AMOUNTS AND TERMS OF THE ADVANCES


Section 2.01 The Advances................................................. 13 Section 2.02 Making the Advances.......................................... 14 Section 2.03 Repayment of Advances........................................ 14 Section 2.04 Termination and Reduction of Commitments..................... 15 Section 2.05 Prepayments.................................................. 15 Section 2.06 Fees......................................................... 16 Section 2.07 Interest..................................................... 16 Section 2.08 Additional Interest on Eurodollar Rate Advances.............. 17 Section 2.09 Interest Rate Determination.................................. 17 Section 2.10 Payments and Computations.................................... 18 Section 2.11 Increased Costs and Capital Requirements..................... 19 Section 2.12 Taxes........................................................ 20 Section 2.13 Sharing of Payments, Etc..................................... 22 Section 2.14 Illegality................................................... 22 Section 2.15 Conversion of Advances....................................... 23 Section 2.16 Replacement or Removal of Bank............................... 23 Section 2.17 Evidence of Indebtedness..................................... 24


Article III
CONDITIONS OF LENDING


Section 3.01 Conditions Precedent to Effectiveness........................ 24 Section 3.02 Conditions Precedent to Each Advance......................... 28 Section 3.03 Determinations Under Section 3.01............................ 28


Article IV
REPRESENTATIONS AND WARRANTIES


Section 4.01 Representations and Warranties of the Borrower............... 29


Article V
COVENANTS OF THE BORROWER


Section 5.01 Affirmative Covenants........................................ 31


Section 5.02 Negative Covenants........................................... 34 Section 5.03 Financial Covenants.......................................... 38


Article VI
EVENTS OF DEFAULT


Section 6.01 Events of Default............................................ 38


Article VII
THE AGENT


Section 7.01 Authorization and Action..................................... 40 Section 7.02 Agent's Reliance, Etc........................................ 41 Section 7.03 The Agent and its Affiliates................................. 41 Section 7.04 Bank Credit Decision......................................... 41 Section 7.05 Indemnification.............................................. 41 Section 7.06 Successor Agent.............................................. 42 Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.... 42


Article VIII
MISCELLANEOUS


Section 8.01 Amendments, Etc.............................................. 42 Section 8.02 Notices, Etc................................................. 43 Section 8.03 No Waiver; Remedies.......................................... 44 Section 8.04 Expenses and Taxes; Compensation............................. 44 Section 8.05 Right of Set-Off............................................. 45 Section 8.06 Limitation and Adjustment of Interest........................ 46 Section 8.07 Binding Effect............................................... 46 Section 8.08 Assignments and Participations............................... 47 Section 8.09 Execution in Counterparts.................................... 48 Section 8.10 Jurisdiction; Damages........................................ 49 Section 8.11 Confidentiality.............................................. 49 Section 8.12 Governing Law................................................ 50 Section 8.13 Waiver of Jury Trial......................................... 51


ANNEX


Annex A


SCHEDULES


Schedule I - Commitments Schedule II - Filing Entities Schedule III - Bank Information Schedule 4.01(g) - Asbestos and Silica Non-US Litigation Schedule 4.01(h) - Domestic Subsidiaries


EXHIBITS


Exhibit A - Form of Note Exhibit B - Form of Notice of Borrowing Exhibit C-1 - Form of Opinion of Bruce A. Metzinger Exhibit C-2 - Form of Opinion of Counsel to the Borrower Exhibit D - Form of Assignment and Acceptance


SENIOR UNSECURED CREDIT FACILITY AGREEMENT
Dated as of November 3, 2003


Halliburton Company, a Delaware corporation (the "Borrower"), the lenders party hereto and Citicorp North America, Inc. ("CNAI"), as Administrative 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 "CNAI" 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" has the meaning specified in Section 2.01 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 CNAI in its capacity as Administrative 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 _______________ at its office at ____________________, New York, New York _____, Account No. __________, Attention: _______________, or such other account as the Agent shall specify in writing to the Banks.


"Agreement" means this Senior Unsecured Credit Facility Agreement dated as of October 30, 2003 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.


"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.


"Asset Sale" means any sale, lease or other disposition by the Borrower or any of its Subsidiaries of any asset but excluding (i) dispositions of assets in the ordinary course of business, (ii) dividends and distributions permitted by Section 5.02(c), (iii) dispositions to the Borrower or a Subsidiary of the Borrower, (iv) dispositions constituting investments and capital contributions, (v) dispositions of any fixed or capital asset pursuant to a sale/leaseback transaction which is consummated within 180 days of the Borrower or such Subsidiary acquiring or completing the construction of such asset, and (vi) dispositions of "Collateral" under and as defined in the Revolving Credit Facility and the Master LC Facility which are required to be deposited in the Shared Collateral Account or the L/C Cash Collateral Account. For the avoidance of doubt, a Securitization Transaction does not constitute an Asset Sale.


"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 D.


"Availability Date" means the date, on or before the Termination Date, of satisfaction in full of the Conditions Precedent to Effectiveness set forth in Section 3.01.


"Bankruptcy Court" means the U.S. Bankruptcy Court for the Western District of Pennsylvania.


"Banks" means the Banks 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).


"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


(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.


"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.


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"Chapter 11 Cases" means the cases to be filed by the Filing Entities under Chapter 11 of the Bankruptcy Code.


"Citibank" means Citibank, N.A., a national banking association.


"Co-Lead Arrangers" means Citigroup Global Markets Inc., GSCP and J.P. Morgan Securities Inc.


"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.


"Collateral Trust Agreement" means the Collateral Trust Agreement, dated as of November __, 2003, between the Borrower and the Collateral Trustee.


"Collateral Trustee" means Citibank, N.A., in its capacity as collateral trustee under the Collateral Trust Agreement.


"Commitment" means, with respect to any Bank at any time, the amount set forth opposite such Bank's name on Schedule I hereto, as such amount may be reduced at or prior to such time pursuant to Section 2.04.


"Commitment Fee" has the meaning specified in Section 2.06(a).


"Consolidated Debt" means at any time the Debt of the Borrower and its consolidated subsidiaries calculated on a consolidated basis as of such time, determined in accordance with GAAP.


"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.


"Consolidated EBITDA" means, with reference to any period of time, the EBITDA of the Borrower and its consolidated subsidiaries calculated on a consolidated basis for such period, determined in accordance with GAAP.


"Consolidated Interest Expense" means, with reference to any period, the Interest Expense of the Borrower and its consolidated subsidiaries calculated on a consolidated basis for such period, determined in accordance with GAAP.


"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), determined in accordance with GAAP and excluding any aggregate charges for asbestos litigation claims.


"Convert", "Conversion" and "Converted" each refers to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.08, 2.14 or 2.15.


"Convertible Notes" means the 3 1/8% Convertible Senior Notes of the Borrower due July 15, 2023, issued pursuant to the Convertible Notes Indenture.


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"Convertible Notes Indenture" means the Indenture dated as of June 30, 2003 between the Borrower, as issuer and JPMCB, as Trustee.


"Debt" of any Person means (i) Indebtedness of such Person, plus (ii) obligations of such Person under direct third party guaranties for borrowed money, plus (iii) the aggregate face amount of all outstanding letters of credit in respect of which such Person has any reimbursement obligation (other than Performance Letters of Credit), plus (iv) 50% of the aggregate face amount of all outstanding Performance Letters of Credit issued of such Person, plus (v) the Net Asbestos Liability, minus (vi) any Unrestricted Cash.


"Debt Incurrence" means the issuance to unaffiliated third parties by the Borrower or any of its Subsidiaries of any Indebtedness in a public or private transaction, excluding Indebtedness (i) incurred pursuant to the Revolving Credit Facility or the Master LC Facility, (ii) incurred pursuant to a Working Capital Facility, (iii) of the type described in Section 5.02(a)(iii) or Section 5.02(b)(iii), (iv) constituting Permitted Non-Recourse Indebtedness, (v) constituting capital leases or (vi) constituting a guaranty of Indebtedness of a type described in clauses (i) through (v) of this definition.


"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" means the litigation described in the information provided by or on behalf of the Borrower to the Agent for disclosure to the Banks prior to the Availability Date of this Agreement.


"Disclosure Statement" means the disclosure statement, dated as of September 18, 2003, with respect to the Plan of Reorganization proposed to be filed in connection with the Chapter 11 Cases as may be supplemented or restated prior to the date of filing of the Chapter 11 Cases.


"Documentation Agent" means ABN AMRO Bank, N.V., solely in its capacity as documentation agent under the Agreement.


"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.


"EBITDA" means (a) Net Income plus (b) to the extent deducted in determining Net Income, (i) Interest Expense, (ii) taxes, and (iii) depreciation and amortization minus (c) to the extent added in determining Net Income, extraordinary gains (including gains from assets sales) for such period, plus (d) to the extent recognized in determining Net Income, extraordinary, non-recurring losses (excluding asbestos charges) for such period. EBITDA shall be calculated on a rolling four quarters basis using the financial results for the four-quarter period ending on the date as of which the calculation is made.


"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 the Borrower nor any Affiliate of the Borrower shall be an Eligible Assignee.


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"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.


"Equity Issuance" means any issuance in a capital markets transaction (public or private) of Equity Interests of the Borrower or any Subsidiary of the Borrower to unaffiliated third parties, excluding (i) Equity Interests issued pursuant to plans, programs and practices described in Section 5.02(c)(v) and (vii), (ii) Equity Interests issued as consideration for a business acquisition, (iii) Equity Interests issued in connection with the Stock Agreement and (iv) Equity Interests issued in a conversion of the Convertible Notes in accordance with their terms.


"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 Internal Revenue Code, and, for purposes of Section 412 of the Internal Revenue Code, Section 414(m) of the Internal Revenue 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; provided, however, that in no event shall the filing of the Chapter 11 Cases be an ERISA Event.


"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


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Office), or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Agent.


"Eurodollar Rate" means, for any Interest Period for each Eurodollar Rate Advance 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 Indebtedness" means Indebtedness of each Borrower and its Subsidiaries outstanding immediately before the date of filing of the Chapter 11 Cases.


"Exit Date" means the date on which (i) the Plan of Reorganization shall have been confirmed and (ii) the Order Entry shall have occurred.


"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.


"Filing Entities" means the Borrower's Subsidiaries listed on Schedule II hereto.


"Financial Statements" means the consolidated balance sheet and other financial statements of the Borrower and its consolidated subsidiaries dated December 31, 2002 included in the Borrower's F ...