Exhibit 10.1

 

Execution Version

 

NABORS INDUSTRIES, INC.

 

$500,000,000 0.75% EXCHANGEABLE SENIOR NOTES DUE 2024

 

GUARANTEED BY NABORS INDUSTRIES LTD.

 

PURCHASE AGREEMENT

 

CITIGROUP GLOBAL MARKETS INC.

GOLDMAN, SACHS & CO.

 

JANUARY 9, 2017

 

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January 9, 2017

 

CITIGROUP GLOBAL MARKETS INC.

388 Greenwich Street

New York, New York  10013

 

GOLDMAN, SACHS & CO.

200 West Street

New York, New York 10282-2198

 

As Representatives of the Initial Purchasers

named in Schedule A hereto

 

Dear Ladies and Gentlemen:

 

Nabors Industries, Inc., a Delaware corporation (the “Company”), proposes, upon
the terms and conditions set forth in this agreement (the “Agreement”), to issue
and sell to the several initial purchasers named in Schedule A hereto (the
“Initial Purchasers”) $500,000,000 aggregate principal amount of its 0.75%
Exchangeable Senior Notes due 2024 (the “Purchased Notes”). The Company also
proposes to grant to the several initial purchasers named in Schedule B hereto
(the “Option Purchasers”) an option pursuant to Section 2 hereof to purchase up
to an additional $75,000,000 aggregate principal amount of its 0.75%
Exchangeable Senior Notes due 2024 solely to cover overallotments (the “Option
Notes” and, together with the Purchased Notes, the “Notes”). The Notes are to be
issued pursuant to the provisions of an Indenture to be dated as of the Closing
Date (as defined in Section 4) (the “Indenture”) among the Company, the
Guarantor (as defined below), Wilmington Trust National Association, as Trustee
(the “Trustee”) and Citibank N.A., as Exchange Agent and Securities
Administrator (the “Securities Administrator”). The Notes will be fully and
unconditionally guaranteed (the “Guarantees”) by Nabors Industries Ltd., a
Bermuda exempted company (the “Guarantor”).  The Notes and the Guarantees are
hereinafter collectively referred to as the “Securities.”

 

The Notes are exchangeable into common shares, par value $0.001 per share (the
“Common Shares”) of the Guarantor at the applicable exchange rate set forth in
the Final Offering Memorandum (as defined herein).

 

The Securities will be offered by the Initial Purchasers without being
registered under the U.S. Securities Act of 1933, as amended (the “Securities
Act”),  to persons whom the Initial Purchasers reasonably believe to be
qualified institutional buyers (as defined in Rule 144A under the Securities Act
(“Rule 144A”)) in compliance with the exemption from registration provided by
Rule 144A.

 

In connection with the sale of the Securities, the Company has prepared and
delivered to the Initial Purchasers a preliminary offering memorandum, dated
January 9, 2017 (together with any exhibits thereto and the documents
incorporated by reference therein, the “Offering Memorandum”) and has prepared
and delivered a pricing supplement (the “Pricing Supplement”) dated January 9,
2017, in the form attached hereto as Schedule I, describing the terms of the
Securities and the Common Shares underlying the Notes, the terms of the offering

 

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and the Company and the Guarantor, each for use by the Initial Purchasers in
connection with their solicitation of offers to purchase the Securities.  As
used herein, “Disclosure Package” shall mean the Offering Memorandum, as
supplemented by the Pricing Supplement and any written communications (as
defined in Rule 405 under the Securities Act) authorized for use pursuant to
Section 6(l), each in the most recent form that has been prepared and delivered
by the Company to the Initial Purchasers in connection with their solicitation
of offers to purchase the Securities as of the Applicable Time.  “Applicable
Time” means 11:59 P.M. (New York time) on January 9, 2017.  Promptly after the
Applicable Time and in any event no later than the Closing Date, the Company
will prepare and deliver to the Initial Purchasers a final offering memorandum
(the “Final Offering Memorandum”), which will consist of the Offering Memorandum
with only such changes therein as are required to reflect the information
contained in the Pricing Supplement, unless the Initial Purchasers consent to
such changes.  The Offering Memorandum and the Final Offering Memorandum are
each sometimes referred to herein as a “Memorandum.”  As used herein (including
the schedule and annexes hereto), the term “Memorandum” shall include in each
case the documents incorporated by reference therein.  The terms “supplement”,
“amendment” and “amend” as used herein with respect to the Memorandum shall
include all documents deemed to be incorporated by reference in the Memorandum
that are filed subsequent to the date of the Memorandum with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).

 

1.     Representations and Warranties

 

The Guarantor and the Company, jointly and severally, represent and warrant to,
and agree with each of the Initial Purchasers as of the Applicable Time and as
of the Closing Date and each Option Closing Date (as defined herein), that:

 

(a)           (i)            Each document filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Memorandum complied or will
comply when so filed or amended in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder, and
(ii) as of its date, the Offering Memorandum did not contain, as of the
Applicable Time, the Disclosure Package did not contain, and on and, as of its
date and the Closing Date and, if applicable, and each Option Closing Date (as
defined herein), the Final Offering Memorandum will not contain, any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements in or omissions from the Offering
Memorandum, Disclosure Package or the Final Offering Memorandum based upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers through the Representatives expressly for use
therein, it being understood and agreed that the only such information is that
described in Section 8(b).

 

(b)           Each of the Guarantor and the Company has been duly incorporated,
organized or formed, is validly existing as a Bermuda exempted company and
Delaware corporation, respectively, in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Offering Memorandum
and is duly qualified to transact

 

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business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Guarantor and its
subsidiaries, taken as a whole (a “Material Adverse Effect”).

 

(c)           Each Significant Subsidiary (as defined below) has been duly
organized, is validly existing as a corporation or limited partnership in good
standing under the laws of the jurisdiction of its organization, has the
corporate or limited partnership power and authority to own its property and to
conduct its business to the extent described in the Offering Memorandum and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.  All
of the issued shares of capital stock (or limited partnership interests) of each
Significant Subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned by the Guarantor, directly or
indirectly, free and clear of all liens, encumbrances, equities or claims other
than any liens, encumbrances, equities or claims in favor of the Guarantor or
another Significant Subsidiary.  “Significant Subsidiaries” shall mean the
Company, Nabors International Finance Inc., Nabors Holdings Ltd., Nabors
International Management Limited, Nabors Drilling International Limited, Nabors
Drilling International II Limited, Nabors Global Holdings Limited, Nabors Global
Holdings II Ltd., Nabors Blue Shield Ltd., Nabors Lux Finance 1 S.à.r.l., Nabors
Lux 2 S.à.r.l., Nabors Drilling Technologies USA, Inc., Nabors Drilling Holdings
Inc. and Nabors Yellow Reef Ltd.

 

(d)           The Guarantor’s authorized share capital is as set forth in the
Disclosure Package and the Final Offering Memorandum, and all of the issued
shares of the Guarantor conform to the description thereof contained in the
Disclosure Package and the Final Offering Memorandum and have been duly and
validly authorized and issued and are fully paid and non-assessable; the Common
Shares initially issuable upon exchange of the Notes have been duly authorized
and, when issued upon exchange of the Notes, will be validly issued, fully paid
and non-assessable; the Board of Directors (or a duly authorized committee
thereof) of the Guarantor has duly and validly adopted resolutions reserving the
Common Shares issuable upon exchange of the Notes; the holders of outstanding
shares of each of the Company and the Guarantor are not entitled to preemptive
or other rights to subscribe for the Securities or Common Shares issuable upon
exchange thereof; and, except as set forth in the Disclosure Package and the
Final Offering Memorandum, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of or ownership
interest in the Company or the Guarantor are outstanding.

 

(e)           The Common Shares issuable upon exchange of the Notes will be
approved for listing prior to the Closing Date, subject to official notice of
issuance and evidence of satisfactory distribution, on the New York Stock
Exchange.

 

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(f)            This Agreement has been duly authorized, executed and delivered
by the Company and the Guarantor.

 

(g)           The issuance of the Securities has been duly authorized and, when
the Notes have been executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Securities will be valid and
binding obligations of the Company and the Guarantor, as the case may be,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance or similar laws
affecting creditors’ rights generally, general principles of equity and implied
covenants of good faith and fair dealing, and will be entitled to the benefits
of the Indenture.

 

(h)           The Indenture has been duly authorized and, on or prior to the
Closing Date will have been, executed and delivered by, and, assuming due
authorization, execution and delivery of the Indenture by the Trustee and the
Securities Administrator, will be a valid and binding agreement of, the Company
and the Guarantor, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and general principles of equity and implied covenants of good faith
and fair dealing and except as rights to indemnification and contribution may be
limited under applicable law.

 

(i)            The execution and delivery by the Company and the Guarantor of,
and the performance by the Company and the Guarantor of their respective
obligations under, this Agreement, the Indenture and the Securities, including
the issuance of the Common Shares upon exchange of the Notes, (the “Transaction
Documents”) will not contravene any provision of (i) the restated certificate of
incorporation, as amended, or by-laws, as amended, of the Company or the
Memorandum of Association or Bye-laws, as amended, of the Guarantor or (ii) any
agreement or other instrument binding upon the Guarantor, the Company or any of
the Significant Subsidiaries that is material to the Guarantor and its
subsidiaries, taken as a whole, or, (iii) any judgment, order, applicable law or
decree of any governmental body, agency or court having jurisdiction over the
Guarantor, the Company or any Significant Subsidiary, except, in the cases of
clauses (ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.

 

(j)            Assuming compliance by the Initial Purchasers with this
Agreement, no consent, approval, authorization or order of, or filing or
qualification with, any governmental body or agency is required for the
execution, delivery and performance by the Company and the Guarantor of their
obligations under the Transaction Documents, including the issuance of the
Common Shares upon exchange of the Notes, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
purchase and resale of the Securities by the Initial Purchasers and the listing
of the Common Shares on the New York Stock Exchange.

 

(k)           There are no material legal or governmental proceedings pending
or, to the knowledge of the Guarantor or the Company, threatened to which the
Company or any of

 

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the Significant Subsidiaries is a party or to which any of the properties of the
Guarantor or the Company or any of their subsidiaries is subject other than
proceedings accurately described in all material respects in the Offering
Memorandum and proceedings that would not have a Material Adverse Effect or
material adverse effect on the power or ability of the Guarantor or the Company
to perform its obligations under the Transaction Documents, including the
issuance of the Common Shares upon exchange of the Notes, or to consummate the
transactions contemplated by the Offering Memorandum.

 

(l)            With respect to the common share options (the “Common Share
Options”) granted pursuant to the common share-based compensation plans of the
Guarantor and its subsidiaries (the “Guarantor Common Share Plans”), (i) each
grant of a Common Share Option was duly authorized no later than the date on
which the grant of such Common Share Option was by its terms to be effective by
all necessary corporate action, including, as applicable, approval by the board
of directors of the Guarantor (or a duly constituted and authorized committee
thereof) and any required shareholder approval by the necessary number of votes
or written consents, and the award agreement governing such grant (if any) was
duly executed and delivered by each party thereto, and (ii) each such grant was
made in all material respects in accordance with the terms of the Guarantor
Common Share Plans, the Securities Act, the Exchange Act and all other
applicable laws and regulatory rules or requirements. The Guarantor has not
knowingly granted, and there is no and has been no policy or practice of the
Guarantor of granting, Common Share Options prior to, or otherwise coordinating
the grant of Common Share Options with, the release or other public announcement
of material information regarding the Guarantor or its subsidiaries or their
results of operations or prospects.

 

(m)          Except as described in the Offering Memorandum, the Company, the
Guarantor and the Significant Subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses as
described in the Memorandum and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except in the case of clause
(i), (ii) and (iii), where such noncompliance would not, singly or in the
aggregate, have a Material Adverse Effect.

 

(n)           Except as described in the Offering Memorandum, there are no costs
or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
Material Adverse Effect.

 

(o)           Neither the Company, the Guarantor or any of the Significant
Subsidiaries, nor any of their respective directors or officers, nor, to the
Company’s or the Guarantor’s knowledge, any agent or employee acting at the
direction of the Company, the Guarantor or any Significant Subsidiary, has taken
any action in furtherance of an offer, payment,

 

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promise to pay, or authorization or approval of the payment or giving of money,
property, gifts or anything else of value, directly or indirectly, to any
“government official” (including any officer or employee of a government or
government-owned or controlled entity or of a public international organization,
or any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office) to influence official action or secure an improper advantage in material
violation of applicable anti-corruption laws; and the Company, the Guarantor and
the Significant Subsidiaries have conducted their businesses in compliance with
applicable anti-corruption laws and have instituted and maintain and will
continue to maintain policies and procedures designed to promote and achieve
compliance with such laws and with the representation and warranty contained
herein.

 

(p)           The operations of the Company, the Guarantor and the Significant
Subsidiaries are and have been conducted at all times in material compliance
with all applicable financial recordkeeping and reporting requirements,
including those of the Bank Secrecy Act, as amended by Title III of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable
anti-money laundering statutes of jurisdictions where the Company, the Guarantor
and the Significant Subsidiaries conduct business, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the
“Anti-Money Laundering Laws”), and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving
the Company, the Guarantor or any Significant Subsidiary with respect to the
Anti-Money Laundering Laws is pending or, to the best knowledge of the Company
and the Guarantor, threatened.

 

(q)           (i) Neither the Company, the Guarantor nor any of the Significant
Subsidiaries, nor any of their respective directors or officer, nor, to the
Company’s and the Guarantor’s knowledge, any agent, affiliate or employee  of
the Company, the Guarantor or any of the Significant Subsidiaries, is an
individual or entity (“Person”) that is, or is owned or controlled by a Person
that is:

 

(A)  the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United
Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority with jurisdiction over
the Company, the Guarantor or any of the Significant Subsidiaries (collectively,
“Sanctions”), nor

 

(B)  domiciled, organized or ordinarily resident in a country or territory that
is the subject of comprehensive Sanctions (including, as of the date hereof,
Cuba, Iran, North Korea, Sudan and Syria)

 

(ii)  The Company will not, directly or indirectly, use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person:

 

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(A)  to fund or facilitate any activities or business of or with any Person or
in any country or territory that, at the time of such funding or facilitation,
is the subject of Sanctions (except to the extent permissible under applicable
Sanctions); or

 

(B)  in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).

 

(iii)  For the past five years, the Company, the Guarantor and the Significant
Subsidiaries have not knowingly engaged in, are not now knowingly engaged in,
and will not engage in, any dealings or transactions with any Person, or in any
country or territory, that at the time of the dealing or transaction is or was
the subject of Sanctions, in each case, in a manner that would constitute a
violation of applicable Sanctions.

 

(r)            The Company, the Guarantor and each of the Significant
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and (v) the
interactive data in eXtensible Business Reporting Language included or
incorporated by reference in the Offering Memorandum is accurate. Except as
described in the Offering Memorandum, since the end of the Company’s and the
Guarantor’s most recent audited fiscal year, there has been (i) no material
weakness in the Company’s or the Guarantor’s internal control over financial
reporting (whether or not remediated) and (ii) no change in the Company’s or the
Guarantor’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s or the
Guarantor’s internal control over financial reporting.

 

(s)            None of the Company, the Guarantor nor any affiliate (as defined
in Rule 501(b) of Regulation D under the Securities Act, an “Affiliate”) of the
Company or the Guarantor has directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated with
the sale of the Securities in a manner that would require the registration under
the Securities Act of the Securities or the Common Shares issuable upon exchange
of the Notes or (ii) engaged in any form of general solicitation or general
advertising in connection with the offering of the Securities (as those terms
are used in Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(a)(2) of the Securities Act.

 

(t)            Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 7 and their compliance with the agreements set
forth therein, it is

 

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not necessary in connection with the offer, sale and delivery of the Securities
to the Initial Purchasers in the manner contemplated by this Agreement to
register the Securities  or the Common Shares issuable upon exchange of the
Notes under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.

 

(u)           The Securities satisfy the requirements set forth in
Rule 144A(d)(3) under the Securities Act.

 

(v)           Neither the Company nor the Guarantor is, and after giving effect
to the offering and sale of the Notes and the application of the proceeds
thereof as described in the Disclosure Package and the Final Offering Memorandum
neither will be, an “investment company” as defined in the Investment Company
Act of 1940.

 

(w)          Other than (i) the Offering Memorandum, the Disclosure Package and
the Final Offering Memorandum and (ii) any electronic road show or other written
communications authorized for use pursuant to Section 6(j), neither the Company
nor the Guarantor (including their respective agents and representatives, other
than the Initial Purchasers in their capacity as such) has made, used or
prepared, authorized, approved or referred to nor will they prepare, make, use,
authorize, approve or refer to any written communication that constitutes an
offer to sell or solicitation of an offer to buy the Securities without the
prior written consent of the Initial Purchasers. Each such communication by the
Company, the Guarantor or their agents and representatives pursuant to clause
(ii) of the preceding sentence (each, an “Additional Written Communication”),
when taken together with the Disclosure Package and the Final Offering
Memorandum, as applicable, did not as of the Applicable Time, and at the Closing
Date and each Option Closing Date (as defined herein) will not, include any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements, in the light of the circumstances under which they were
made, not misleading; except that this representation and warranty does not
apply to statements in or omissions from each such Additional Written
Communication based upon information relating to the Initial Purchasers
furnished to the Company in writing by the Initial Purchasers through the
Representatives expressly for use therein, it being understood and agreed that
the only such information is that described in Section 8(b).

 

(x)           Any required United States federal income tax returns of the
Guarantor and its subsidiaries required by law to be filed have been filed and
all taxes shown by such returns or otherwise assessed, which are due and
payable, have been paid, except assessments against which appeals have been or
will be promptly taken and as to which adequate reserves have been provided. 
The Guarantor and its subsidiaries have filed all other tax returns that are
required to have been filed by them pursuant to applicable foreign, state, local
or other law except insofar as the failure to file such returns would not result
in a Material Adverse Effect, and have paid all taxes shown on such returns or
pursuant to any assessment received by the Guarantor and its subsidiaries,
except for such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been established by the Guarantor.  The Guarantor
has maintained the charges, accruals and reserves on the books of the Guarantor
in respect of any income and corporation tax

 

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liability in accordance with accounting principles generally accepted in the
United States of America, except to the extent that would not result in a
Material Adverse Effect.

 

(y)           The Company was not a “passive foreign investment company”
(“PFIC”) as defined in Section 1297 of the United States Internal Revenue Code
of 1986, as amended, for its most recently completed taxable year and is not
expected to be a PFIC for any taxable year subsequent to such year.

 

2.     Agreements to Sell and Purchase

 

The Company hereby agrees to sell to the Initial Purchasers, and the Initial
Purchasers, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree, severally
and not jointly, to purchase from the Company the principal amount of the
Purchased Notes set forth opposite such Initial Purchaser’s name on Schedule A
hereto at the purchase price set forth on Schedule II hereto, payable on the
Closing Date (the “Purchase Price”).

 

Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company and the Guarantor hereby grant an
option to the several Option Purchasers to purchase, severally and not jointly,
the Option Notes at the same purchase price set forth in Schedule II hereto
(plus accrued interest, if any) for the Purchased Notes. Said option may be
exercised only to cover overallotments in the sale of the Purchased Notes by the
Option Purchasers. Said option may be exercised in whole or in part at any time
on or before the 30th day after the date of the Final Offering Memorandum upon
written or electronic notice by the Representatives to the Company and the
Guarantor setting forth the aggregate principal amount of the Option Notes as to
which the several Option Purchasers are exercising the option and the settlement
date (each such date, an “Option Closing Date”), which shall not be later than
five business days after the date of such notice; provided that such option
cannot be exercised unless the Option Notes will be fungible with the Purchased
Notes for purposes of U.S. federal income tax laws. The aggregate principal
amount of Option Notes to be purchased by each Option Purchaser shall be the
percentage of the total aggregate principal amount of the Option Notes set forth
opposite their names in Schedule B hereto, subject to such adjustments as the
Representatives in its absolute discretion shall make to ensure that the Option
Notes are not issued in minimum denominations of less than $1,000 and integral
multiples of $1,000 in excess thereof.

 

The Company and the Guarantor hereby agree that, without the prior written
consent of the Initial Purchasers, they will not, during the period beginning on
the date hereof and continuing to and including the Closing Date, offer, sell,
contract to sell or otherwise dispose of any debt of the Company or warrants to
purchase debt of the Company in each case of a type substantially similar to the
Securities (other than the sale of the Securities under this Agreement,
including the Option Notes).

 

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3.     Terms of Offering

 

You have advised the Company and the Guarantor that the Initial Purchasers will
make an offering of the Securities to be purchased by the Initial Purchasers
hereunder on the terms set forth in this Agreement and the Offering Memorandum.

 

4.     Payment and Delivery

 

Payment of the Purchase Price for the Purchased Notes and the Option Notes (if
the option provided for in Section 2 hereof shall have been exercised on or
before the third business day immediately preceding the Closing Date) shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Notes for the account of the Initial Purchasers
and Option Purchasers, as applicable, at 10:00 A.M., New York City time, on
January 13, 2017, or at such other time on the same or such other date, as shall
hereafter be agreed upon by the Company and the Initial Purchasers and the
Option Purchasers, as applicable.  The time and date of such payment are
hereinafter referred to as the “Closing Date.”

 

Delivery of the Notes shall be made through the facilities of The Depository
Trust Company (“DTC”) pursuant to its Full-Fast Delivery Program unless the
Initial Purchasers shall otherwise instruct, and Notes sold by the Initial
Purchasers in reliance on Rule 144A shall be represented by one or more global
certificates.

 

If the option provided for in Section 2 hereof is exercised after the third
business day immediately preceding the Closing Date, the Company will deliver
the Option Notes (at the expense of the Company) to the Representatives, at 388
Greenwich Street, New York, New York, 10013 and 200 West Street, New York, New
York 10282-2198, on the applicable Option Closing Date specified by the
Representatives (which shall be within five business days after exercise of said
option) for the respective accounts of the several Option Purchasers, against
payment by the several Option Purchasers through the Representatives of the
purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. If settlement
for the Option Notes occurs after the Closing Date, the Company will deliver to
the Representatives on each Option Closing Date, and the obligation of the
Option Purchasers to purchase the Option Notes shall be conditioned upon
compliance with Section 5 hereof.

 

5.     Conditions to the Initial Purchasers’ Obligations

 

The obligations of the several Initial Purchasers and Option Purchasers, as
applicable, to purchase and pay for the Notes and related Guarantees on any
Closing Date and each Option Closing Date are subject to the following
conditions:

 

(a)           Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date and each Option Closing Date:

 

(i)                    There shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading, below
Ba2(Negative) from Moody’s Investors Service, Inc., BBB-(Negative) from Standard
and Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc. and
BBB (Negative) from Fitch Inc., in the senior unsecured rating accorded the
Company or the Guarantor or any of the

 

10

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Company’s or the Guarantor’s senior unsecured securities or in the rating
outlook for the Company or the Guarantor by any “nationally recognized
statistical rating organization,” as that term is defined in Section 3(a)(62) of
the Exchange Act; and

 

(ii)                   There shall not have occurred any change, or any
development involving a prospective change, in the financial position, or in the
earnings, business or operations of the Guarantor and its subsidiaries, taken as
a whole, from that set forth in the Offering Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum.

 

(b)           The Initial Purchasers shall have received on the Closing Date
and, if applicable, any Option Closing Date, a certificate, dated the Closing
Date and, if applicable, any Option Closing Date, and signed by an executive
officer of each of the Company, with respect to the Company, and the Guarantor,
with respect to the Guarantor, to the effect set forth in Section 5(a) and to
the effect that the representations and warranties of the Company and the
Guarantor contained in this Agreement are true and correct as of the Closing
Date and, if applicable, such Option Closing Date, and that each of the Company
and the Guarantor has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or before
the Closing Date and, if applicable, such Option Closing Date.

 

The officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.

 

(c)           The Company and the Guarantor shall have furnished to the Initial
Purchasers the opinion of Julia Wright, Vice President and General Counsel of
the Company, dated the Closing Date and, if applicable, any Option Closing Date,
substantially to the effect set forth on Annex 5(c) hereto.  In giving such
opinion, such counsel may rely as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Company or the
Guarantor and the Significant Subsidiaries and of public officials.  Such
opinion may be relied upon only by the Initial Purchasers in connection with the
transactions contemplated by this Agreement, and may not be used or relied upon
by the Initial Purchasers for any other purpose, or by any other person, firm,
corporation or entity for any purpose whatsoever, without the prior written
consent of such counsel.  Such opinion may be limited to the laws of the State
of Texas and the corporation, limited partnership and limited liability company
statutes of the State of Delaware.

 

(d)           The Company and the Guarantor shall have furnished to the Initial
Purchasers the opinion of Milbank, Tweed, Hadley & McCloy LLP (“MTHM”), special
United States counsel for the Company and the Guarantor, dated the Closing Date
and, if applicable, any Option Closing Date, substantially to the effect set
forth on Annex 5(d)-1 hereto.

 

11

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In rendering their opinions pursuant to this Section 5(d), such counsel may
rely, to the extent deemed advisable by such counsel, (i) as to factual matters
on certificates of officers of the Company or the Guarantor and (ii) upon
certificates of public officials.

 

Such opinion shall be limited to the laws of the State of New York, the Federal
laws of the United States and the General Corporation Law of the State of
Delaware. In addition, the Company shall have furnished to the Initial
Purchasers the negative assurance letter of MTHM dated the Closing Date and, if
applicable, any Option Closing Date, substantially to the effect set forth on
Annex 5(d)-2.  Such opinion and negative assurance letter shall be rendered as
of the Closing Date and, if applicable, any Option Closing Date,  only in
connection with this Agreement and will be solely for the benefit of the Initial
Purchasers, and may not be relied upon, nor shown to or quoted from, for any
other purpose, or to any other person, firm or corporation.

 

(e)           The Company and the Guarantor shall have furnished to the Initial
Purchasers the opinion of Conyers Dill & Pearman Limited, special counsel for
the Guarantor, dated the Closing Date and, if applicable, any Option Closing
Date,  in the form set forth on Annex 5(e) hereto.  Such opinion shall be
limited to the laws of Bermuda.  Such opinion shall be rendered as of the
Closing Date and, if applicable, any Option Closing Date, only in connection
with the Agreement and will be solely for the benefit of the Initial Purchasers,
and may not be relied upon, nor shown to or quoted from, for any other purpose,
or to any other person, firm or corporation.

 

(f)            The Initial Purchasers shall have received from Vinson & Elkins
L.L.P. and Latham and Watkins LLP, counsel for the Initial Purchasers, such
opinion or opinions, dated the Closing Date and, if applicable, any Option
Closing Date, with respect to the issuance and sale of the Securities, the
Disclosure Package, the Final Offering Memorandum and other related matters as
the Initial Purchasers may reasonably require, and the Company and the Guarantor
shall have furnished to such counsel such documents as such counsel reasonably
requests for the purpose of enabling such counsel to pass upon such matters.

 

(g)           The Initial Purchasers shall have received on the date of the
Applicable Time and on the Closing Date and, if applicable, any Option Closing
Date, letters, dated the date of the Applicable Time and Closing Date and, if
applicable, any Option Closing Date, respectively, in form and substance
satisfactory to the Initial Purchasers, from PricewaterhouseCoopers LLP,
independent public accountants, containing statements and information of the
type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into each Memorandum; provided that the letter
delivered on the Closing Date and, if applicable, any Option Closing Date, shall
use a “cut-off date” not earlier than three days from the date hereof.

 

(h)           The Common Shares issuable upon exchange of the Notes shall have
been approved for listing on the New York Stock Exchange, subject to official
notice of issuance, and satisfactory evidence of such actions shall have been
provided to the Representatives.

 

12

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6.     Covenants of the Company and the Guarantor

 

In further consideration of the agreements of the Initial Purchasers contained
in this Agreement, the Company and the Guarantor, jointly and severally,
covenant with the Initial Purchasers as follows:

 

(a)           To furnish to the Initial Purchasers in New York City, without
charge, prior to 10:00 A.M. New York City time on January 13, 2017 and during
the period mentioned in Section 6(c), as many copies of the Disclosure Package,
the Memorandum, any documents incorporated by reference therein and any
supplements and amendments thereto as the Initial Purchasers may reasonably
request.

 

(b)           Before amending or supplementing the Disclosure Package or the
Memorandum, to furnish to the Initial Purchasers a copy of each such proposed
amendment or supplement and not to use any such proposed amendment or supplement
to which the Initial Purchasers reasonably object.

 

(c)           If, during such period after the date hereof and prior to the date
on which all of the Securities (including the Option Notes) shall have been sold
by the Initial Purchasers, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Disclosure Package or the
Memorandum in order to make the statements therein, in the light of the
circumstances when the Disclosure Package or the Memorandum is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the Initial
Purchasers, it is necessary to amend or supplement the Disclosure Package or the
Memorandum to comply with applicable law, forthwith to prepare and furnish, at
its own expense, to the Initial Purchasers, either amendments or supplements to
the Disclosure Package or the Memorandum so that the statements in the
Disclosure Package or the Memorandum as so amended or supplemented will not, in
the light of the circumstances when the Disclosure Package or the Memorandum is
delivered to a purchaser, be misleading or so that the Disclosure Package or the
Memorandum, as amended or supplemented, will comply with applicable law.

 

(d)           To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
shall reasonably request; provided, however that neither the Company nor the
Guarantor shall be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.

 

(e)           The Company and the Guarantor will not, without the prior written
consent of Citigroup Global Markets Inc. and Goldman, Sachs & Co. offer, sell,
contract to sell, pledge, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company, the Guarantor or any affiliate
of the Company or the Guarantor), directly or indirectly, including the filing
(or participation in the filing) of a registration statement

 

13

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with the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Exchange Act, any Common Shares or any securities
convertible into, or exercisable, or exchangeable for, Common Shares; or
publicly announce an intention to effect any such transaction, until 60 days
after the Applicable Time, provided, however, that (i) the Guarantor may issue
and sell Common Shares pursuant to any employee stock option plan, stock
ownership plan or dividend reinvestment plan of the Guarantor in effect at the
Applicable Time; (ii) the Guarantor may issue Common Shares issuable upon the
conversion of securities or the exercise of warrants or options outstanding at
the Applicable Time and file a registration statement under the Securities Act
related thereto; (iii) the Guarantor may issue Common Shares as consideration in
an acquisition of the stock or assets of another entity or any contract or offer
to enter into a contract therefore and file a registration statement with the
Commission related thereto; (iv) the Guarantor may enter into an agreement
providing for the issuance of Common Shares or any security or convertible into
or exercisable for Common Shares in connection with joint ventures, commercial
relationships or other strategic transactions, and may issue such securities
pursuant to any such agreement and file a registration statement with the
Commission related thereto; (v) the Guarantor or any affiliate of the Guarantor
may engage in an intercompany transfer of existing Common Shares; and (vi) the
Guarantor may issue Common Shares in connection with any exchange of the Notes;
provided, however, that any Common Shares issued pursuant to clauses (iii) and
(iv) above will not exceed 25% of the Guarantor’s issued and outstanding share
capital on the date of the Offering Memorandum and will be subject to a lockup
agreement for a period of time equal to the time remaining under the Company and
Guarantor lockup described above.

 

(f)            The Guarantor will reserve and/or keep available at all times,
free of preemptive rights, the full number of Common Shares issuable upon
exchange of the Notes. The Guarantor will use all reasonable best efforts to
maintain the listing of the Common Shares issuable upon exchange of the Notes on
the New York Stock Exchange for so long as any Notes are outstanding.

 

(g)           Between the date hereof and the Closing Date, the Company and the
Guarantor will not do or authorize any act or thing that would result in an
adjustment of the exchange rate set forth in the Final Offering Memorandum.

 

(h)           Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of their respective obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company’s
and the Guarantor’s counsel and the Company’s and the Guarantor’s accountants in
connection with the issuance and sale of the Securities and all other fees or
expenses of the Company and the Guarantor in connection with the preparation of
the Disclosure Package and the Memorandum and all amendments and supplements
thereto, including all printing costs associated therewith, and the delivery of
copies thereof to the Initial Purchasers, in the quantities herein above
specified, (ii) all costs and expenses related to the issuance, transfer and
delivery of the Securities to the Initial Purchasers, including any transfer or
other taxes payable thereon, and the issuance of the Common Shares upon exchange
of

 

14

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the Notes, (iii) the cost of printing or producing any blue sky or legal
investment memorandum in connection with the offer and sale of the Securities
under state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities laws
as provided in Section 6(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Initial Purchasers in connection with
such qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Securities, (v) the costs and charges of the Trustee and any transfer agent,
exchange agent registrar, depositary, or the Securities Administrator, (vi) the
costs and expenses of the Company and the Guarantor relating to investor
presentations on any “road show” undertaken in connection with the marketing of
the offering of the Securities, including, without limitation, expenses
associated with the preparation or dissemination of any electronic road show,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company or the Guarantor, travel
and lodging expenses of the representatives and officers of the Company and the
Guarantor and any such consultants, and the cost of any aircraft chartered in
connection with the road show, (vii) the costs and expenses relating to the
listing of the Common Shares on the New York Stock Exchange and (viii) all other
costs and expenses incident to the performance of the obligations of the Company
and the Guarantor hereunder for which provision is not otherwise made in this
Section.  It is understood, however, that except as provided elsewhere in this
Agreement, the Initial Purchasers will pay all of their costs and expenses,
including fees and disbursements of their counsel, including structuring
counsel, transfer taxes payable upon their resale of any of the Securities by
them and any advertising expenses connected with any offers they may make.

 

(i)            Neither the Guarantor nor any Affiliate of the Guarantor will
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner that would require the registration
under the Securities Act of the Securities or the Common Shares issuable upon
exchange of the Notes.

 

(j)            Not to solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(a)(2) of the
Securities Act.

 

(k)           While any of the Securities or Common Shares issuable upon
exchange of the Notes remain “restricted securities” within the meaning of
Rule 144(c)(3), to make available, upon request, to any seller of such
Securities the information specified in Rule 144A(d)(4) under the Securities
Act, unless the Guarantor is then subject to Section 13 or 15(d) of the Exchange
Act.

 

(l)            Before using, authorizing, approving or referring to any written
communication that constitutes an offer to sell or a solicitation to buy the
Notes or the Guarantees (other than the Disclosure Package and the Final
Offering Memorandum), the Company will furnish to the Initial Purchasers a copy
of such written communication for

 

15

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review and will not use, authorize, approve or refer to any such written
communication to which the Initial Purchasers reasonably object.

 

7.     Offering of Securities; Restrictions on Transfer

 

(a)  Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that (i) it is a qualified institutional buyer as defined in Rule 144A
under the Securities Act (a “QIB”), and an “accredited investor” within the
meaning of Rule 501 under the Securities Act, (ii) it has not solicited offers
for, or offered or sold, and will not solicit offers for, or offer or sell, such
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(a)(2) of the
Securities Act and (iii) it will solicit offers for such Securities only from,
and will offer such Securities only to, persons that it reasonably believes to
be QIBs in transactions pursuant to Rule 144A and in connection with each such
sale, it has taken or will take reasonable steps to ensure that such sale is
being made in reliance on Rule 144A.  Each Initial Purchaser will comply with
all applicable laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Securities or has in its possession or distributes the
Disclosure Package or the Memorandum or any such other material, in all cases at
its own expense, except as provided in Section 6(e).

 

(b)           Each Initial Purchaser acknowledges and agrees that the Company
and, for the purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 5(c), 5(d), 5(e) and 5(f), counsel for the Company, counsel
for the Guarantor and counsel for the Initial Purchasers, respectively, may rely
upon the accuracy of the representations and warranties of such Initial
Purchaser, and compliance of such Initial Purchaser with its agreements,
contained in paragraph 7(a) above, and such Initial Purchaser hereby consents to
such reliance.

 

8.     Indemnity and Contribution

 

(a)  The Company and the Guarantor, jointly and severally, agree to indemnify
and hold harmless each Initial Purchaser, its affiliates, the respective
officers and directors of the Initial Purchasers, and each person, if any, who
controls any Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each selling agent who is
deemed to have participated or alleged to have participated in the distribution
of the Securities from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Additional Written Communication, the Offering
Memorandum, the Disclosure Package, the Final Offering Memorandum, or in any
amendment or supplement thereto, or caused by any omission or alleged omission
to state therein a material fact necessary to make the statements therein in the
light of the circumstances under which they were made not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished to the Company in writing by the Initial Purchasers
through the Representatives expressly for use therein, it being understood and
agreed that the only information furnished by any such Initial Purchaser
consists of the information described in Section 8(b);

 

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(b)           Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company, its affiliates, its directors, its
officers, the Guarantor, its directors, its officers and each other person, if
any, who controls the Company or the Guarantor within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the Guarantor to the
Initial Purchasers, but only with reference to information relating to the
Initial Purchasers furnished in writing by the Initial Purchasers through the
Representatives to the Company expressly for use in any Additional Written
Communication, the Offering Memorandum, the Disclosure Package or the Final
Offering Memorandum or any amendments or supplements thereto, it being
understood and agreed that the only information furnished by any such Initial
Purchaser consists of the following information in the Offering Memorandum:
(i) the names of the Initial Purchasers on the cover page and (ii) the tenth
(first sentence only) and eleventh paragraphs under the caption “Plan of
Distribution.”

 

(c)           In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the “indemnified party”)
shall promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding; but the omission so to
promptly notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party provided that the party entitled to
be so notified is not prejudiced by such delay to promptly notify.  In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them.  It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred.  Such firm shall be
designated in writing by the Representatives, in the case of parties indemnified
pursuant to Section 8(a), and by the Guarantor, in the case of parties
indemnified pursuant to Section 8(b).  The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for

 

17

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any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding, and (ii) does not include an admission of fault,
culpability or a culpable failure to act, by or on behalf of an indemnified
party.

 

(d)           To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company or the Guarantor on the one hand and the
Initial Purchasers on the other hand from the offering of the Notes or (ii) if
the allocation provided by clause 8(d)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(d)(i) above but also the relative fault of the
Company or the Guarantor on the one hand and of the Initial Purchasers on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations.  The relative benefits received by the Company or the Guarantor
on the one hand and the Initial Purchasers on the other hand in connection with
the offering of the Notes shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Notes (before deducting
expenses) received by the Company and the total discounts and commissions
received by the Initial Purchasers, in each case as set forth in the Offering
Memorandum or herein, bear to the aggregate offering price of the Notes.  The
relative fault of the Company or the Guarantor on the one hand and of the
Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantor or by the Initial
Purchasers, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

 

(e)           The Company, the Guarantor and the Initial Purchasers agree that
it would not be just or equitable if contribution pursuant to this Section 8
were determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in
Section 8(d).  The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in Section 8(d) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  Notwithstanding the
provisions of

 

18

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this Section 8, no Initial Purchaser shall be required to contribute any amount
in excess of the amount by which the total price at which the Notes resold by it
in the initial placement of such Notes were offered to investors exceeds the
amount of any damages that such Initial Purchaser has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.  The
remedies provided for in this Section 8 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity. The Initial Purchasers’ obligations to contribute pursuant
to this Section 8(e) are several in proportion to the respective principal
amount of Notes they have agreed to purchase hereunder and not joint.

 

(f)            The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company or the Guarantor contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Initial Purchaser or any
person controlling any Initial Purchaser or by or on behalf of the Company, its
officers or directors, the Guarantor, its officers or directors or any other
person controlling the Company or the Guarantor and (iii) acceptance of and
payment for any of the Notes.

 

9.     Termination

 

This Agreement shall be subject to termination by notice given by the Initial
Purchasers to the Company and the Guarantor, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date or, if applicable, any
Option Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, either the New York Stock
Exchange or The NASDAQ Stock Market LLC, or settlement of trading shall have
been materially disrupted, (ii) trading of any securities of the Guarantor,
including the Common Shares, shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities (including without limitation an act of terrorism) or any change
in financial markets or any calamity or crisis that, in your judgment, is
material and adverse to the financial markets generally and (b) in the case of
any of the events specified in clauses 9(a)(i) through 9(a)(iv), such event,
singly or together with any other such event, makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum.

 

10.  Default by an Initial Purchaser

 

If any one or more Initial Purchasers shall fail to purchase and pay for any of
the Purchased Notes and, if applicable, one or more of the Option Purchasers
shall fail to purchase and pay for any of the Option Notes, if any, agreed to be
purchased by such Initial Purchaser or Option Purchaser, as applicable,
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Initial

 

19

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Purchasers or, in the case of the Option Notes, the remaining Option Purchasers,
shall be obligated severally to take up and pay for (in the respective
proportions that the principal amount of Notes set forth opposite their names in
Schedule A hereto bears to the aggregate principal amount of Notes set forth
opposite the names of all the remaining Initial Purchasers or, in the case of
the Option Notes, the respective proportions that the percentage set forth
opposite their names in Schedule B hereto bears to the aggregate percentage set
forth opposite the names of all the remaining Option Purchasers) the Purchased
Notes or the Option Notes, as applicable, that the defaulting Initial Purchaser
or Initial Purchasers or Option Purchasers agreed but failed to purchase;
provided, however, that in the event that the aggregate principal amount of
Purchased Notes that the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Notes set forth in Schedule A hereto or in the event that the aggregate
principal amount of Option Notes that the defaulting Option Purchaser or Option
Purchasers agreed but failed to purchase shall exceed 10% of such Option Notes
sold with respect to such Option Closing Date, the remaining Initial Purchasers
or Option Purchasers, as applicable, shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Purchased Notes or, if
applicable, the Option Notes, and if such nondefaulting Initial Purchasers or
Option Purchasers, as applicable, do not purchase all the Purchased Notes or, if
applicable, the Option Notes, this Agreement will terminate without liability to
any nondefaulting Initial Purchaser or Option Purchaser or the Company.  In the
event of a default by any Initial Purchaser or Option Purchaser as set forth in
this Section 10, the Closing Date and, if applicable, any Option Closing Date
shall be postponed for such period, not exceeding five business days, as the
Initial Purchasers or Option Purchasers, as applicable, shall determine in order
that the required changes in the Final Offering Memorandum or in any other
documents or arrangements may be effected.  Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser or Option Purchaser, as
applicable, of its liability, if any, to the Company or any nondefaulting
Initial Purchaser or Option Purchaser, as applicable, for damages occasioned by
its default hereunder.

 

11.       Effectiveness; Expense Reimbursement

 

This Agreement shall become effective upon the execution and delivery hereof by
the parties hereto.

 

If this Agreement shall be terminated by the Initial Purchasers because of any
failure or refusal on the part of the Company or the Guarantor to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company or the Guarantor shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Initial Purchasers for all
out-of-pocket expenses (including the fees and disbursements of their counsel up
to a maximum of $100,000) reasonably incurred by the Initial Purchasers in
connection with this Agreement or the offering contemplated hereunder.

 

12.       Notices

 

Notices given pursuant to this Agreement shall be in writing and shall be
delivered (a) if to the Company, at 515 W. Greens Road, Suite 1200, Houston,
Texas 77067, Attention: Chief Financial Officer, or (b) if to the Guarantor,
Crown House, 4 Par-La-Ville Road, Hamilton, Second Floor, HM08, Bermuda, or
(c) if to the Initial Purchasers, to Citigroup Global Markets

 

20

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

 

Inc., 388 Greenwich Street, New York, New York, 10013, Attention: General
Counsel, facsimile number 1-646-291-1469 and Goldman, Sachs & Co., 200 West
Street, New York, New York 10282-2198, Attention: Registration Department, or in
any case to such other address as the person to be notified may have requested
in writing.

 

13.       Successors

 

This Agreement is made solely for the benefit of the Initial Purchasers, the
Company, the Guarantor, their respective directors and officers and other
controlling persons referred to in Section 8 hereof, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement.  The term “successors and assigns” as used
in this Agreement shall not include a purchaser from the Initial Purchasers of
any of the Securities in its status as such purchaser.

 

14.       Partial Unenforceability

 

If any section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, such determination shall not affect
the validity or enforceability of any other section, paragraph or provision
hereof.

 

15.       Counterparts

 

This Agreement may be signed (including by facsimile) in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

 

16.       Applicable Law

 

This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.

 

17.       No Fiduciary Duty

 

The Company and Guarantor hereby acknowledge that (a) the purchase and sale of
the Securities pursuant to this Agreement is an arm’s-length commercial
transaction between the Company and the Guarantor, on the one hand, and the
Initial Purchasers and any affiliate through which they may be acting, on the
other, (b) the Initial Purchasers are acting as principal and not as an agent or
fiduciary of the Company or the Guarantor and (c) the Company’s engagement of
the Initial Purchasers in connection with the offering and the process leading
up to the offering is as independent contractors and not in any other capacity. 
Furthermore, the Company and the Guarantor agree that they are solely
responsible for making their own judgments in connection with the offering
(irrespective of whether any of the Initial Purchasers has advised or is
currently advising the Company or the Guarantor on related or other matters). 
The Company and the Guarantor agree that they will not claim that the Initial
Purchasers have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the Company or the Guarantor, in connection
with such transaction or the process leading thereto.

 

21

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

 

18.       Consent to Jurisdiction

 

Any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby (“Related Proceedings”) may be
instituted in the federal courts of the United States of America located in the
City and County of New York, Borough of Manhattan, or the courts of the State of
New York in each case located in the City and County of New York, Borough of
Manhattan  (collectively, the “Specified Courts”), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding.  Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court.  The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.  Each party not located in the
United States irrevocably appoints CT Corporation System as its agent to receive
service of process or other legal summons for purposes of any such suit, action
or proceeding that may be instituted in any state or federal court in the City
and County of New York.

 

19.       Waiver of Immunity

 

With respect to any Related Proceeding, each party irrevocably waives, to the
fullest extent permitted by applicable law, all immunity (whether on the basis
of sovereignty or otherwise) from jurisdiction, service of process, attachment
(both before and after judgment) and execution to which it might otherwise be
entitled in the Specified Courts, and with respect to any Related Judgment, each
party waives any such immunity in the Specified Courts or any other court of
competent jurisdiction, and will not raise or claim or cause to be pleaded any
such immunity at or in respect of any such Related Proceeding or Related
Judgment, including, without limitation, any immunity pursuant to the United
States Foreign Sovereign Immunities Act of 1976, as amended.

 

20.       Headings

 

The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.

 

22

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

 

 

Very truly yours,

 

 

 

NABORS INDUSTRIES LTD.

 

 

 

 

 

By:

/s/ Mark Andrews

 

Name:

Mark D. Andrews

 

Title:

Corporate Secretary

 

 

 

 

 

 

 

NABORS INDUSTRIES, INC.

 

 

 

 

 

By:

/s/ William Restrepo

 

Name:

William Restrepo

 

Title:

Chief Financial Officer

 

Signature Page to Purchase Agreement

 

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

 

Accepted as of the date hereof:

 

 

 

CITIGROUP GLOBAL MARKETS INC.

 

 

 

 

 

By:

/s/ Jason Howard

 

Name:

Jason Howard

 

Title:

Director

 

 

 

 

GOLDMAN, SACHS & CO.

 

 

 

 

 

By:

/s/ Richard Cohn

 

Name:

Richard Cohn

 

Title:

Managing Director

 

 

Signature Page to Purchase Agreement

 

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

 

SCHEDULE I

 

Pricing Supplement

 

Schedule I-1

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

 

Pricing Supplement dated January 9, 2017

 

This Pricing Supplement is qualified in its entirety by reference to the
Preliminary Offering Memorandum dated January 9, 2017 (the “Preliminary Offering
Memorandum”). The information in this Pricing Supplement supplements the
Preliminary Offering Memorandum and supersedes the information in the
Preliminary Offering Memorandum. Capitalized terms used but not defined herein
have the meanings assigned to such terms in the Preliminary Offering Memorandum.

 

The Notes have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), and are being offered only to qualified institutional
buyers pursuant to Rule 144A under the Securities Act.

 

Terms Applicable to the 0.75% Exchangeable Senior Notes due 2024 (the “Notes”)

 

Security Offered:

 

0.75% Exchangeable Senior Notes due 2024. Unless the context requires otherwise,
as used in this Pricing Supplement, each Note refers to a Note having a
principal amount of $1,000.

 

 

 

Ticker/Exchange for Common Shares of the Guarantor:

 

NBR / NYSE

 

 

 

Issuer:

 

Nabors Industries, Inc.

 

 

 

Guarantor:

 

Nabors Industries Ltd.

 

 

 

Principal Amount:

 

$500,000,000 aggregate principal amount of Notes

 

 

 

Gross Proceeds:

 

$500,000,000

 

 

 

Net Proceeds:

 

$488,118,000

 

 

 

Initial Purchasers’ Over-Allotment Option:

 

$75,000,000 aggregate principal amount of Notes

 

 

 

Maturity Date:

 

January 15, 2024, unless earlier exchanged, redeemed or purchased

 

 

 

Offering Price to Investors:

 

100.000% of the principal amount

 

 

 

Coupon:

 

0.75%

 

 

 

Yield to Maturity:

 

0.75%

 

 

 

Interest Payment Dates:

 

January 15 and July 15, beginning July 15, 2017

 

Schedule I - 2

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

 

Regular Record Dates:

 

January 1 and July 1

 

 

 

NYSE Last Reported Sale Price on January 9, 2017:

 

$17.97 per Common Share

 

 

 

Exchange Premium:

 

Approximately 40% above the NYSE Last Reported Sale Price on January 9, 2017

 

 

 

Initial Exchange Price:

 

Approximately $25.16 per Common Share

 

 

 

Initial Exchange Rate:

 

39.7488 Common Shares per $1,000 principal amount of Notes

 

 

 

Redemption at the Issuer’s Option:

 

The Notes may not be redeemed at the Issuer’s option, except in limited
circumstances in connection with a change in tax law, as described in the
Preliminary Offering Memorandum. Notice of such a redemption would be deemed to
constitute a “make-whole fundamental change,” which will in certain
circumstances result in a temporary increased exchange rate.

 

 

 

Joint Book-Runners:

 

Citigroup Global Markets Inc.
Goldman, Sachs & Co.
Mizuho Securities USA Inc.
Merrill Lynch, Pierce, Fenner & Smith

Incorporated

 

 

 

Co-Managers:

 

Morgan Stanley & Co. LLC
HSBC Securities (USA) Inc.
MUFG Securities Americas Inc.
Deutsche Bank Securities Inc.
Wells Fargo Securities, LLC
PNC Capital Markets LLC
BBVA Securities Inc.
SMBC Nikko Securities America, Inc.
U.S. Bancorp Investments, Inc.
Credit Suisse Securities (USA) LLC
RBC Capital Markets, LLC
Scotia Capital (USA) Inc.
ANZ Securities, Inc.

 

 

 

Trade Date:

 

January 10, 2017

 

 

 

Settlement Date:

 

January 13, 2017 (T+3)

 

 

 

Denominations:

 

$1,000 and in integral multiples of $1,000 in excess thereof

 

Schedule I - 3

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

 

CUSIP:

 

Rule 144A: 62957H AA3

 

 

 

ISIN:

 

Rule 144A: US62957HAA32

 

 

 

Capped Call Transactions:

 

In connection with the pricing of the Notes, the Issuer and the Guarantor expect
to enter into capped call transactions with one or more of the Initial
Purchasers and/or any of their affiliates (the “option counterparties”). The
capped call transactions are intended to reduce the dilutive impact of the
exchange feature of the Notes on the Guarantor’s issued and outstanding common
shares and/or offset any cash payments the Issuer will be required to make in
excess of the principal amount, upon any exchange of the Notes, with such
reduction and/or offset subject to a cap. If the Initial Purchasers exercise
their overallotment option to purchase additional Notes, the Issuer may enter
into additional capped call transactions.

In connection with establishing their initial hedge of the capped call
transactions, the option counterparties and/or their affiliates expect to enter
into various derivative transactions with respect to the common shares
concurrently with or shortly after the pricing of the Notes. This activity could
increase (or reduce the size of any decrease in) the market price of the common
shares or the Notes at that time.

In addition, the option counterparties and/or their affiliates may modify their
hedge positions by entering into or unwinding various derivatives with respect
to the common shares and/or purchasing or selling the common shares in secondary
market transactions following the pricing of the Notes and prior to the maturity
of the Notes (and are likely to do so during any exchange period related to an
exchange of Notes). This activity could also cause or avoid an increase or a
decrease in the market price of the common shares or the Notes, which could
affect holders ability to exchange the Notes and, to the extent the activity
occurs during any exchange period related to an exchange of Notes, could affect
the amount and value of the consideration that holders will receive upon
exchange of the Notes. See ‘‘Risk Factors—Risk Factors Related to the
Offering—The capped call transactions may affect the value of the Notes and
Nabors’ common shares in the Preliminary Offering Memorandum.

 

Schedule I - 4

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

 

Use of Proceeds:

 

The net proceeds of this offering, after deducting commissions and estimated
offering expenses payable by the Issuer, are expected to be approximately $488.1
million (or $561.6 million if the Initial Purchasers exercise their
overallotment option in full). The Issuer intends to use approximately $35.0
million of the net proceeds from this offering to pay the cost of the capped
call transactions it intends to enter into with respect to the common shares.
The Issuer intends to use approximately $162.5 million of the net proceeds to
prepay the remaining balance of its $325.0 million unsecured term loan which
matures in 2020. The Issuer intends to use any remaining net proceeds from the
offering for general corporate purposes, including to repurchase or repay other
indebtedness. See “Use of Proceeds” in the Preliminary Offering Memorandum. To
the extent that the Initial Purchasers exercise their overallotment option, the
Issuer will use a portion of the proceeds from such issuance of additional Notes
to pay the cost of any related capped call transactions it enters into in
connection with such exercise of the overallotment option and will use remaining
proceeds for general corporate purposes, including to repurchase or repay other
indebtedness.

 

 

 

Indebtedness:

 

As of September 30, 2016, the Guarantor had total consolidated indebtedness of
$3.48 billion, resulting in a gross debt to capital ratio of 0.49:1 and a net
debt to capital ratio of 0.48:1. As of the same date, after giving effect to
both the December 2016 Senior Notes Offering and this offering and the use of
proceeds therefrom, the Guarantor’s total consolidated indebtedness would have
been $3.90 billion, resulting in a gross debt to capital ratio of 0.52:1 and a
net debt to capital ratio of 0.48:1. The indenture governing the Notes will not
limit the amount of debt that the Issuer, the Guarantor or their respective
subsidiaries may incur.

 

 

 

Fundamental Change Purchase Right:

 

If fundamental change occurs (as defined in the Preliminary Offering Memorandum
under the caption “Description of the Notes— Purchase at the Option of the
Holder Upon a Fundamental Change”) prior to maturity, holders will have the
right, at such holder’s option, to require the Issuer to purchase for cash some
or all of such holders’ Notes at a purchase price equal to 100% of the principal
amount of the Notes being purchased, plus accrued and unpaid interest to, but
excluding, the fundamental change purchase date.

 

 

 

Increase in Exchange Rate in Connection with a Make-Whole Fundamental Change:

 

The following table sets forth, for each share price and make-whole fundamental
change effective date set forth below, the number of additional shares by which
the exchange rate will be increased in connection with a make-whole fundamental
change per $1,000 principal amount of Notes:

 

Schedule I - 5

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

 

 

 

Share Price

 

Effective Date

 

$17.97

 

$20.00

 

$22.50

 

$25.16

 

$27.50

 

$30.00

 

$35.00

 

$40.00

 

$50.00

 

$60.00

 

$75.00

 

January 13, 2017

 

15.8995

 

13.1490

 

10.5413

 

8.4320

 

6.9825

 

5.7427

 

3.9326

 

2.7138

 

1.2746

 

0.5487

 

0.0900

 

January 15, 2018

 

15.8995

 

13.1490

 

10.5413

 

8.4118

 

6.9153

 

5.6437

 

3.8057

 

2.5845

 

1.1704

 

0.4788

 

0.0647

 

January 15, 2019

 

15.8995

 

13.1490

 

10.5413

 

8.3398

 

6.7927

 

5.4887

 

3.6266

 

2.4105

 

1.0372

 

0.3923

 

0.0360

 

January 15, 2020

 

15.8995

 

13.1490

 

10.5329

 

8.1475

 

6.5502

 

5.2183

 

3.3483

 

2.1563

 

0.8578

 

0.2847

 

0.0100

 

January 15, 2021

 

15.8995

 

13.1490

 

10.2156

 

7.7273

 

6.0876

 

4.7427

 

2.9031

 

1.7745

 

0.6158

 

0.1570

 

0.0000

 

January 15, 2022

 

15.8995

 

12.9315

 

9.5058

 

6.9110

 

5.2491

 

3.9260

 

2.2029

 

1.2200

 

0.3182

 

0.0363

 

0.0000

 

January 15, 2023

 

15.8995

 

11.8580

 

8.0587

 

5.3271

 

3.6982

 

2.5037

 

1.1389

 

0.4940

 

0.0494

 

0.0000

 

0.0000

 

January 15, 2024

 

15.8995

 

10.2510

 

4.6956

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

 

The exact share price and make-whole fundamental change effective date may not
be set forth on the table, in which case, if the share price is:

 

·                  between two share prices in the table or such make-whole
fundamental change effective date is between two dates on the table, the number
of make-whole shares added to the exchange rate of the notes will be determined
by straight- line interpolation between the number of make-whole shares set
forth for the higher and lower share price amounts and the two dates, as
applicable, based on a 360-day year;

 

·                  in excess of $75.00 per share (subject to adjustment in the
same manner and at the same time as the share prices in the table above), no
make-whole shares will be added to the exchange rate of the notes;

 

·                  less than $17.97 per share (subject to adjustment in the same
manner and at the same time as the share prices in the table above), no
make-whole shares will be added to the exchange rate of the notes.

 

Notwithstanding the foregoing, in no event will the exchange rate for the notes
exceed 55.6483 shares per $1,000 principal amount of the notes, subject to
adjustments in the same manner as the exchange rate.

 

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

 

Note: A securities rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time.

 

This communication is for informational purposes only and does not constitute an
offer to sell, or a solicitation of an offer to buy any security.  No offer to
buy securities described herein can be accepted, and no part of the purchase
price thereof can be received, unless the person making such investment decision
has received and reviewed the information contained in the relevant offering
memorandum in making their investment decisions.  This communication is not
intended to be a confirmation as required under Rule 10b-10 of the Securities
Exchange Act of 1934.  A formal confirmation will be delivered to you
separately.

 

None of the exchangeable senior notes, the guarantee or the common shares
deliverable upon exchange of the notes, if any, have been registered under the
Securities Act.  The notes may not be offered or sold within the United States
or to U.S. persons except to qualified institutional buyers in reliance on the
exemption from registration provided by Rule 144A.  You are hereby notified that
sellers of the notes may be relying on the exemption from the provisions of
Section 5 of the Securities Act provided by Rule 144A.  You may obtain a copy of
the Preliminary Offering Memorandum and the Final Offering Memorandum (when
available) for this transaction by calling your Citigroup Global Markets Inc. or
Goldman, Sachs & Co. sales representative to request it.

 

Schedule I - 6

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

 

SCHEDULE II

 

Purchase Price: 97.90% of the aggregate principal amount of the Notes

 

Schedule II - 1

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

 

SCHEDULE A

 

Initial Purchasers

 

Principal Amount of
Notes to be Purchased

 

Citigroup Global Markets Inc.

 

$

148,381,000

 

Goldman, Sachs & Co.

 

$

124,952,000

 

Mizuho Securities USA Inc.

 

$

58,571,000

 

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

 

$

58,571,000

 

Morgan Stanley & Co. LLC

 

$

14,286,000

 

HSBC Securities (USA) Inc.

 

$

14,286,000

 

MUFG Securities Americas Inc.

 

$

14,286,000

 

Deutsche Bank Securities Inc.

 

$

14,286,000

 

Wells Fargo Securities, LLC

 

$

14,286,000

 

PNC Capital Markets LLC

 

$

7,619,000

 

BBVA Securities Inc.

 

$

4,762,000

 

SMBC Nikko Securities America, Inc.

 

$

4,762,000

 

U.S. Bancorp Investments, Inc.

 

$

4,762,000

 

Credit Suisse Securities (USA) LLC

 

$

4,762,000

 

RBC Capital Markets, LLC

 

$

4,762,000

 

Scotia Capital (USA) Inc.

 

$

4,762,000

 

ANZ Securities, Inc.

 

$

1,904,000

 

Total

 

$

500,000,000

 

 

Schedule A - 1

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

 

SCHEDULE B

 

Initial Purchasers

 

Percentage of Option Notes
to be Purchased

 

Citigroup Global Markets Inc.

 

38.0

%

Goldman, Sachs & Co.

 

32.0

%

Mizuho Securities USA Inc.

 

15.0

%

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

 

15.0

%

Total

 

100.0

%

 

Schedule B - 1

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

 

ANNEX 5(C)

 

OPINION OF JULIA WRIGHT

 

(i)                                     Each of the Company, Nabors
International Finance Inc., Nabors Drilling Technologies USA, Inc. and Nabors
Drilling Holdings Inc. (collectively, the “Selected Subsidiaries” and each a
“Selected Subsidiary”), has been duly organized and is validly existing as a
corporation or limited partnership in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate or
partnership power and authority to own its properties and conduct its business
as described in each Memorandum, and is duly qualified to do business as a
foreign corporation or limited partnership and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it owns or
leases properties or conducts business, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Guarantor and its subsidiaries, taken as a whole;

 

(ii)                                  All outstanding shares of capital stock
(or limited partnership interests) of each of the Company and the other
Significant Subsidiaries are owned by the Guarantor either directly or through
wholly owned subsidiaries free and clear of any perfected security interest,
other than any perfected security interest in favor of the Guarantor or another
Significant Subsidiary and, to the knowledge of such counsel, any other security
interests, claims, liens or encumbrances other than any liens, encumbrances,
equities or claims in favor of the Guarantor or another Significant Subsidiary;

 

(iii)                               To the knowledge of such counsel, there is
no pending or threatened material action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the Guarantor
or any of its subsidiaries of a character required to be disclosed in either
Memorandum which is not disclosed in each such Memorandum; and

 

(iv)                              Neither the issue and sale of the Notes, the
consummation of any other of the transactions contemplated by this Agreement or
the Indenture nor the fulfillment of the terms thereof will conflict with,
result in a breach or violation of, or constitute a default under the terms of
(A) any indenture or other agreement or instrument known to such counsel and to
which the Company, the Guarantor or any of the Significant Subsidiaries is a
party or bound, or any judgment, order or decree known to such counsel to be
applicable to the Company, the Guarantor or any of the Significant Subsidiaries
of any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company, the Guarantor or any of the
Significant Subsidiaries, except such as would not, either singly or in the
aggregate, have a material adverse effect upon the Guarantor and its
subsidiaries, taken as a whole, or prevent the Company or the Guarantor from
performing its obligations under this Agreement or the Indenture or (B) the
respective charters, bylaws or other organizational documents of the Significant
Subsidiaries (assuming that the relevant laws of the jurisdiction of
organization of any Significant Subsidiary not organized in Texas or Delaware
are the same as those of Texas).

 

Such counsel shall also state that it has no reason to believe that the
Disclosure Package, as of the Applicable Time and at the Closing Date, or the
Final Offering Memorandum, as of its date and at the Closing Date, contained or
contains an untrue statement of a material fact or

 

Annex 5(C) - 1

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

 

omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need not express an
opinion or comment with respect to the financial statements and the other
financial information contained or incorporated by reference therein or excluded
therefrom).

 

Annex 5(C) - 2

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

 

ANNEX 5(D)-1

 

OPINION OF MILBANK, TWEED, HADLEY & McCLOY LLP

 

1.                                      The Company is validly existing as a
corporation in good standing under the laws of the State of Delaware.

 

2.                                      The statements in the Offering
Memorandum under “Description of the Notes” and “Transfer Restrictions” insofar
as such statements purport to summarize certain provisions of the Notes,
Guarantees and the Indenture referred to therein as of the date hereof, fairly
summarize such provisions.

 

3.                                      The statements in the discussion of
matters in connection with the United States Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), contained under the caption each Offering
Memorandum titled “Certain Employee Benefit Plan Considerations for Investors”
are, to the extent they concern matters of law or legal conclusions, correct in
all material respects.

 

4.                                      Neither the offer, sale and delivery of
the Notes and Guarantees by the Company and the Guarantor to the Initial
Purchasers, the initial resale thereof by the Initial Purchasers in the manner
contemplated in the Disclosure Package and the Final Offering Memorandum and by
the Purchase Agreement require registration under the Securities Act of 1933, as
amended (it being understood that we express no opinion in this paragraph as to
any subsequent resale of any Securities), and the Indenture is not required to
be qualified under the Trust Indenture Act of 1939, as amended.

 

5.                                      The Indenture has been duly authorized,
executed and delivered by the Company, and, assuming it has been duly
authorized, executed and delivered by each of the Guarantor, the Trustee and the
Securities Administrator, the Indenture constitutes a legal, valid and binding
agreement enforceable against the Company and the Guarantor in accordance with
its terms (subject to the qualification that (a) enforceability of the
obligations of the Company and the Guarantor thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer, or similar laws relating to or affecting creditors’ rights generally;
(b) the enforceability thereof is subject to the application of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law), including (i) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy, (ii) concepts of materiality,
reasonableness, good faith and fair dealing, and (iii) in the case of the
Guarantor, possible judicial action giving effect to foreign governmental
actions or foreign law; and (c) in the case of rights to indemnity and
contribution, as may be limited by provisions imposed by law or public policy).

 

6.                                      The Notes have been duly authorized by
the Company and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to the Purchase Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the Indenture
(subject to the qualification that (a) enforceability of the obligations of the
Company thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or

 

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similar laws relating to or affecting creditors’ rights generally; and (b) the
enforceability thereof is subject to the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law),
including (i) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (ii) concepts of materiality,
reasonableness, good faith and fair dealing); and assuming that the Guarantees
have been duly authorized by the Guarantor and that the Guarantor has duly
authorized, executed and delivered the Indenture, when the Notes have been
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers pursuant to the Purchase
Agreement, the Guarantees will constitute legal, valid and binding obligations
of the Guarantor entitled to the benefits of the Indenture (subject to the
qualification that (a) enforceability of the obligations of the Guarantor
thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or similar laws relating to or affecting
creditors’ rights generally; and (b) the enforceability thereof is subject to
the application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including (i) the possible
unavailability of specific performance, injunctive relief or any other equitable
remedy, (ii) concepts of materiality, reasonableness, good faith and fair
dealing, and (iii) possible judicial action giving effect to foreign
governmental actions or foreign law).

 

7.                                      The Purchase Agreement has been duly
authorized, executed and delivered by the Company.

 

8.                                      No consent, approval, authorization or
order of any Governmental Authority (as defined below) is required for the
consummation of the transactions contemplated by the Purchase Agreement, except
such as have been made or obtained prior to the date hereof, as may be required
under state securities or “blue sky” laws of any jurisdiction, and by United
States federal and state securities laws and the listing of the Common Shares on
the New York Stock Exchange.

 

9.                                      Neither the issue and sale of the
Securities by the Company and the Guarantor, nor the consummation of any of the
other transactions contemplated in the Purchase Agreement, nor the fulfillment
of the terms of the Purchase Agreement, results in a breach or violation of
(a) Applicable Law (as defined below), except such as would not, either singly
or in the aggregate, have a material adverse effect on the Guarantor and its
subsidiaries, taken as a whole, or prevent either of the Company or the
Guarantor from performing its obligations under the Purchase Agreement or the
Indenture, or (b) the Restated Certificate of Incorporation or By-laws of the
Company.

 

10.                               The statements in the each Offering Memorandum
under the caption titled “Certain United States Federal Income Tax
Considerations” to the extent they constitute statements of law or legal
conclusions are, subject to the limitations, qualifications, exceptions, and
assumptions set forth therein, correct in all material respects.

 

11.                               The Company is not required to, and,
immediately after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in each Offering
Memorandum, the Company will not be required to register as an investment
company under the Investment Company Act of 1940, as amended.

 

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The foregoing opinions in paragraphs 3 and 10 above are limited to matters
involving United States federal law, and we do not express any opinion as to the
laws of any other jurisdiction.  The foregoing opinions in paragraphs 3 and 10
are based on the law in effect on the date hereof, including the United States
Internal Revenue Code of 1986, as amended (the “Code”), ERISA, United States
Treasury and Department of Labor regulations (including proposed regulations)
promulgated under the Code and ERISA, respectively, the legislative history
thereof, judicial decisions and administrative pronouncements, rulings of the
United States Internal Revenue Service and opinions of the United States
Department of Labor.  Such laws are subject to change, possibly with retroactive
effect, and we undertake no obligation to update such opinions or otherwise
advise you if any such laws should change.  Our opinion is not binding on the
Internal Revenue Service, the Department of Labor or a court and, in particular
due to the absence of authority addressing a closely comparable transaction,
there can be no assurance that the Internal Revenue Service, the Department of
Labor or a court will not adopt a position contrary to our opinion.

 

We express no opinion:  (a) as to whether a United States federal or state court
outside the State of New York would give effect to the choice of New York law in
the Indenture and the Securities; (b) as to whether the United States federal
courts could exercise jurisdiction over any action brought against the Guarantor
or the Company by any party not a “citizen” of any state for purposes of
28 U.S.C. §1331 and 28 U.S.C. §1332; (c) as to the enforceability of any
provision to the extent such provision provides indemnity in respect of any loss
sustained as the result of the conversion into United States dollars of a
judgment or order rendered by a court or tribunal of any particular jurisdiction
and expressed in a currency other than United States dollars; (d) as to the
enforceability in the United States of any waiver of immunity to the extent it
applies to immunity acquired after the date of the relevant agreement; or
(e) any waiver of forum non conveniens or similar doctrine with respect to
proceedings in any court other than a court of the State of New York.

 

For purposes of the opinions rendered above, (i) “Applicable Law” means United
States federal laws (other than the federal securities laws), the laws of the
State of New York and those provisions of the General Corporation Law of the
State of Delaware which in each case in our experience are normally applicable
to transactions of the type contemplated by the Purchase Agreement and
(ii) “Governmental Authority” means any United States federal or State of New
York administrative, judicial or other governmental agency, authority, tribunal
or body.

 

We express no opinion as to matters governed by any laws other than the laws of
the State of New York, the General Corporation Law of the State of Delaware, and
United States federal laws. The opinions contained herein are rendered to you
and are solely for your benefit in connection with the closing under the
Purchase Agreement of the sale of the Securities occurring today and may not be
used, quoted, relied upon or otherwise referred to by any other person or for
any other purpose without our express written consent in each instance. We
disclaim any obligation to update anything herein for events occurring after the
date hereof.

 

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ANNEX 5(D)-2

 

NEGATIVE ASSURANCE LETTER

OF

MILBANK, TWEED, HADLEY & McCLOY LLP

 

On the basis of and subject to the foregoing, we confirm to you that nothing has
come to our attention that causes us to believe that: (i) the Disclosure Package
(other than the financial statements and other financial information contained
or incorporated by reference in or omitted from the Disclosure Package, as to
which we express no belief and make no statement), as of the Applicable Time, or
(ii) the Final Offering Memorandum (other than the financial statements and
other financial information contained or incorporated by reference in or omitted
from the Final Offering Memorandum, as to which we express no belief and make no
statement), as of its date and at the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

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ANNEX 5(E)

 

OPINION OF CONYERS DILL & PEARMAN LIMITED

 

1.                                      The Guarantor is duly incorporated and
existing under the laws of Bermuda in good standing (meaning solely that it has
not failed to make any filing with any Bermuda governmental authority, or to pay
any Bermuda government fee or tax, which would make it liable to be struck off
the Register of Companies and thereby cease to exist under the laws of Bermuda).

 

2.                                      The Guarantor has the necessary
corporate power and authority to conduct its business and to own, lease and
operate its property as described in the Offering Memorandum.

 

3.                                      The Guarantor has the necessary
corporate power and authority to enter into and perform its obligations under
the Documents, including, for the avoidance of doubt, the issuance of the
Exchange Shares. The execution and delivery of the Documents by the Guarantor
and the performance by the Guarantor of its obligations thereunder will not
violate the memorandum of association or bye-laws of the Guarantor nor any
applicable law, regulation, order or decree in Bermuda.

 

4.                                      The Guarantor has taken all corporate
action required to authorise its execution, delivery and performance of the
Documents, including, for the avoidance of doubt, the issuance of the Exchange
Shares.  The Documents have been duly executed and delivered by or on behalf of
the Guarantor, and constitute the valid, binding and enforceable obligations of
the Guarantor in accordance with the terms thereof.

 

5.                                      No order, consent, approval, licence,
authorisation or validation of or exemption by any government or public body or
authority of Bermuda or any sub-division thereof is required to authorise or is
required in connection with the execution, delivery, performance and enforcement
of the Documents, except such as have been duly obtained in accordance with
Bermuda law.

 

6.                                      It is not necessary or desirable to
ensure the enforceability in Bermuda of the Documents that they be registered in
any register kept by, or filed with, any governmental authority or regulatory
body in Bermuda.  However, to the extent that any of the Documents creates a
charge over assets of the Guarantor, it may be desirable to ensure the priority
in Bermuda of the charge that it be registered in the Register of Charges in
accordance with Section 55 of the Companies Act 1981.  On registration, to the
extent that Bermuda law governs the priority of a charge, such charge will have
priority in Bermuda over any unregistered charges, and over any subsequently
registered charges, in respect of the assets which are the subject of the
charge.  A registration fee of $630 will be payable in respect of the
registration.

 

While there is no exhaustive definition of a charge under Bermuda law, a charge
includes any interest created in property by way of security (including any
mortgage, assignment, pledge, lien or hypothecation).  As the Documents are
governed by the

 

Annex 5(E) - 1

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Foreign Laws, the question of whether they create such an interest in property
would be determined under the Foreign Laws.

 

7.                                      The Documents will not be subject to ad
valorem stamp duty in Bermuda and no registration, documentary, recording,
transfer or other similar tax, fee or charge is payable in Bermuda in connection
with the execution, delivery, filing, registration or performance of the
Documents other than as stated in paragraph 5 hereof.

 

8.                                      The Exchange Shares have been duly
authorized and when issued and paid for upon exchange of the Notes in accordance
with the Indenture, will be validly issued, fully paid and non-assessable.

 

9.                                      Based solely on a search of the public
records in respect of the Guarantor maintained at the offices of the Registrar
of Companies at [TIME] on [•] January 2017, the authorised share capital of the
Guarantor is US$825,000 divided into 825,000,000 total shares of which
800,000,000 are Common Shares and 25,000,000 are preferred shares, par value
US$0.001 each.

 

10.                               Based solely upon a review of the register of
members of the Guarantor prepared by Computershare Shareholder Services Inc.,
the branch registrar of the Guarantor, on [31] December 2016, there are
[333,597,742] issued Common Shares of the Guarantor, all of which are validly
issued, fully paid and non-assessable (which term when used herein means that no
further sums are required to be paid by the holders thereof in connection with
the issue thereof) and such shares are not subject to any statutory pre-emptive
or similar rights.

 

11.                               The statements set forth in the Offering
Memorandum under the caption “Description of Authorized Share Capital” and
“Certain Bermuda Tax Considerations” to the extent they constitute statements of
Bermuda law, are accurate in all material respects.

 

12.                               The choice of the Foreign Laws as the
governing law of the Documents is a valid choice of law and would be recognised
and given effect to in any action brought before a court of competent
jurisdiction in Bermuda, except for those laws (i) which such court considers to
be procedural in nature; (ii) which are revenue or penal laws or (iii) the
application of which would be inconsistent with public policy, as such term is
interpreted under the laws of Bermuda.  The submission in the Documents to the
jurisdiction of the respective Foreign Courts is valid and binding upon the
Guarantor. The appointment of an agent for service of process pursuant to the
Documents is valid and binding upon the Guarantor.

 

13.                               The courts of Bermuda would recognise as a
valid judgment, a final and conclusive judgment in personam obtained in the
respective Foreign Courts against the Guarantor based upon the Documents under
which a sum of money is payable (other than a sum of money payable in respect of
multiple damages, taxes or other charges of a like nature or in respect of a
fine or other penalty) and would give a judgment

 

Annex 5(E) - 2

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based thereon provided that (a) such courts had proper jurisdiction over the
parties subject to such judgment; (b) such courts did not contravene the
rules of natural justice of Bermuda; (c) such judgment was not obtained by
fraud; (d) the enforcement of the judgment would not be contrary to the public
policy of Bermuda; (e) no new admissible evidence relevant to the action is
submitted prior to the rendering of the judgment by the courts of Bermuda; and
(f) there is due compliance with the correct procedures under the laws of
Bermuda.

 

14.                               The obligations of the Guarantor under the
Documents will rank at least pari passu in priority of payment with all other
unsecured unsubordinated indebtedness of the Guarantor, other than indebtedness
which is preferred by virtue of any provision of the laws of Bermuda of general
application.

 

15.                               The transactions contemplated by the Documents
are not subject to any currency deposit or reserve requirements in Bermuda. The
Guarantor has been designated as non-resident of Bermuda for the purposes of the
Exchange Control Act 1972 and, as such, is free to acquire, hold and sell
foreign currency and securities without restriction.

 

16.                               Based solely upon a search of the Cause Book
of the Supreme Court of Bermuda conducted at approximately [TIME] a.m. on [•]
January 2017 (which would not reveal details of proceedings which have been
filed but not actually entered in the Cause Book at the time of our search),
there are no judgments against the Guarantor, nor any legal or governmental
proceedings pending in Bermuda to which the Guarantor is subject.

 

17.                               Based solely on a search of the public records
in respect of the Guarantor maintained at the offices of the Registrar of
Companies at approximately [TIME] a.m. on [•] January 2017 (which would not
reveal details of matters which have not been lodged for registration or have
been lodged for registration but not actually registered at the time of our
search) and a search of the Cause Book of the Supreme Court of Bermuda conducted
at approximately [TIME] a.m. on [•] January 2017  (which would not reveal
details of proceedings which have been filed but not actually entered in the
Cause Book at the time of our search), no details have been registered of any
steps taken in Bermuda for the appointment of a receiver or liquidator to, or
for the winding-up, dissolution, reconstruction or reorganisation of, the
Guarantor, though it should be noted that the public files maintained by the
Registrar of Companies do not reveal whether a winding-up petition or
application to the Court for the appointment of a receiver has been presented
and entries in the Cause Book may not specify the nature of the relevant
proceedings.

 

18.                               The Guarantor is not entitled to any immunity
under the laws of Bermuda, whether characterised as sovereign immunity or
otherwise, from any legal proceedings to enforce the Documents in respect of
itself or its property.

 

Annex 5(E) - 3

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19.                               At the present time, there is no Bermuda
income or profits tax, withholding tax, capital gains tax, capital transfer tax,
estate duty or inheritance tax payable by the Guarantor or by its shareholders
in respect of its shares. The Guarantor has obtained an assurance from the
Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection
Act 1966 that, in the event that any legislation is enacted in Bermuda imposing
any tax computed on profits or income, or computed on any capital asset, gain or
appreciation or any tax in the nature of estate duty or inheritance tax, such
tax shall not, until 31 March 2035, be applicable to the Guarantor or to any of
its operations or to its shares, debentures or other obligations except insofar
as such tax applies to persons ordinarily resident in Bermuda or is payable by
the Guarantor in respect of real property owned or leased by the Guarantor in
Bermuda.

 

Annex 5(E) - 4

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