The scope of the KBR projects is to provide food service operations for 2 base camps and 2 satellite camps located on Camp Fallujah in Iraq. The contracts also require that we provide new kitchen equipment for the 2 base camps and a labor camp for our 400 workers.

The US Government camps currently house approx. 10,300 marines. We have a subcontract with KBR and KBR has a prime contract with the USG. The contract is for a base period of 5 months with a 7 month option and 2-1 year option periods — or a total 3 years.

The 5 month base period was established to accommodate the expiration of KBR's existing contract and issuance of a new KBR contract by the USG. It is expected and highly probable the options will be exercised.

The supply of kitchen equipment and labor camp is subject to an operating lease with KBR-and by contract if the first 7 month option period is not exercised then KBR will be required to pay an amount equal to 7 additional months of monthly lease payments or a total of 1 year. This provision was inserted to allow for the return of the full cost of the upfront capital required to supply the kitchen equipment and labor camp.

The contract start date is April 1, 2007. The guaranteed lease payments for the 12 month period is $5.6 million and the purchased cost of the equipment and camps is approx. $4.5 million. Monthly payment terms are net 30 days. We are seeking a 1 year term loan for the upfront cost of the equipment and camps and a traditional working capital line of credit. The term loan would be collateralized by the equipment and camps as well as the operating lease payments. The line of credit would be collateralized by the receivables related to our monthly services other than the operating lease.