Document:

EX-4.5

Exhibit 4.5

 

FORM OF 6.625% NEW BONDS

     The issue of the Guaranty of this Bond was approved by the Ministry of Finance and Public
Credit of Mexico on May 28, 2008 pursuant to Official Communication No. 305.-079/2008 and has been
given Registration No. 57-2000-FPG.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE OR ANY PORTION HEREOF IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE
& CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER
THAN DTC OR A NOMINEE THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

     THIS BOND IS A U.S. GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO
HEREINAFTER. THIS BOND MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A BOND REGISTERED IN THE
NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF EXCEPT IN THE LIMITED CIRCUMSTANCES SET
FORTH IN SECTION 3.05(a) OF THE INDENTURE.

 

 

PEMEX PROJECT FUNDING MASTER TRUST

6.625% Guaranteed Bonds due 2038

Unconditionally and Irrevocably Guaranteed by

PETROLEOS MEXICANOS

(A Decentralized Public Entity of the

Federal Government of the United Mexican States)

REGISTERED

NO. R-1

     The following summary of terms is subject to the information set forth on the reverse hereof.

	 	 	 
	PRINCIPAL AMOUNT:

	 	U.S. $500,000,000
	 
	 	 
	SPECIFIED CURRENCY:

	 	U.S. dollars (“U.S. $” or “$”)
	 
	 	 
	STATED MATURITY:

	 	June 15, 2038
	 
	 	 
	ISSUE DATE:

	 	                     , 2008
	 
	 	 
	CUSIP NO.:

	 	706451BR1
	 
	 	 
	INTEREST PAYMENT DATES:

	 	June 15 and December 15 of each year, commencing
December 15, 2008
	 
	 	 
	PRINCIPAL PAYING AGENT 

AND TRANSFER AGENT:

	 	Deutsche Bank Trust Company Americas, New York
	 
	 	 
	PAYING AGENTS AND

	 	 
	TRANSFER AGENTS:

	 	Deutsche Bank AG, London
Branch
Deutsche Bank Luxembourg S.A.

     Pemex Project Funding Master Trust (herein called “Pemex Project Funding Master Trust” or the
“Issuer,” which terms include any successor entity under the Indenture hereinafter referred to), a
statutory trust organized under the laws of the State of Delaware, for value received, hereby
promises, in accordance with and subject to the provisions set forth on the face and reverse hereof
and in the Indenture referred to below, to pay to Cede & Co. or registered assigns, the principal
amount of Five Hundred Million United States dollars (U.S. $500,000,000) on June 15, 2038 (the
“Maturity Date”), or on such earlier date as the same may become payable in accordance with the
terms hereof, and to pay interest thereon from June 15, 2008 or from the

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most recent Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on June 15 and December 15 of each year (each, an “Interest Payment
Date”), commencing December 15, 2008, at the rate of 6.625% per annum, until the principal amount
hereof is paid or made available for payment.

     Unless defined herein, capitalized terms used herein shall have the meanings assigned to them
on the reverse hereof and in the indenture dated as of December 30, 2004 (the “Indenture”), among
the Issuer, Petróleos Mexicanos, as Guarantor, and Deutsche Bank Trust Company Americas, as Trustee
(the “Trustee”, which expression shall include any successor to Deutsche Bank Trust Company
Americas, in its capacity as such).

     Reference is hereby made to the further provisions of this Bond set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

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     Unless the certificate of authentication hereon has been executed by the Trustee by manual
signature, this Bond shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

     IN WITNESS WHEREOF, the Issuer has caused this Bond to be duly executed.

Dated: August ____, 2008

	 	 	 	 	 	 	 	 	 
	 	 	PEMEX PROJECT FUNDING MASTER TRUST	 	 
	 
	 	 	by	 	THE BANK OF NEW YORK MELLON	 	 
	 	 	 	 	not in its individual capacity,

but solely as Managing Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 	 	 

CERTIFICATE OF AUTHENTICATION

     This is one of the series of Securities designated herein issued under the within-mentioned
Indenture.

Dated: August ____, 2008

	 	 	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST
COMPANY  AMERICAS	 	 
	 	 	 	 	as Trustee	 	 
	 
	 	 	By	 	DEUTSCHE BANK NATIONAL TRUST COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Authorized Signatory	 	 

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REVERSE OF BOND

     1. This Bond is one of a duly authorized series of Securities of Pemex Project Funding Master
Trust (the “Issuer”) designated as its 6.625% Guaranteed Bonds due 2038 (the “Bonds”), issued and
to be issued in accordance with an indenture, dated as of December 30, 2004 (herein called the
“Indenture”), among the Issuer, Petróleos Mexicanos, as Guarantor (the “Guarantor”), and Deutsche
Bank Trust Company Americas, as Trustee (herein called the “Trustee,” which term includes any
successor trustee under the Indenture), copies of which Indenture are on file and available for
inspection at the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York and, so long as the Bonds are listed on the Luxembourg Stock Exchange and such Exchange
shall so require, at the office of the Paying Agent in Luxembourg. Reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Issuer and the Holders of the Bonds and of the terms upon which the Bonds are,
and are to be, authenticated and delivered. This issuance is initially limited to
U.S. $500,000,000 subject to increase as provided in Paragraph 10 below. Capitalized terms not
otherwise defined herein or on the face of this Bond shall have the meanings assigned to them in
the Indenture.

     The Bonds are direct, unsecured and unsubordinated Public External Indebtedness (as defined in
Paragraph 8 below) of the Issuer for money borrowed and will rank pari passu with each other and
with all other present and future unsecured and unsubordinated Public External Indebtedness for
money borrowed of the Issuer. The Bonds are not obligations of, or guaranteed by, the United
Mexican States (“Mexico”).

     Each of the Bonds will have the benefit of the unconditional guaranty endorsed hereon (the
“Guaranty”) as to punctual payment when due of all amounts of principal of and interest (including
Additional Amounts) on the Bonds, and any other amounts payable by the Issuer under the Bonds or
the Indenture. The Guarantor’s payment obligations under the Guaranty and the Indenture will have
the benefit of an unconditional guaranty as to payment of principal and interest (including
Additional Amounts) jointly and severally from each of Pemex-Exploración y Producción,
Pemex-Refinación and Pemex-Gas y Petroquímica Básica (each, a “Subsidiary Guarantor” and together,
the “Subsidiary Guarantors”), pursuant to a Guaranty Agreement, dated July 29, 1996 (the
“Subsidiary Guaranty”), among the Guarantor and the Subsidiary Guarantors. The Guarantor has
designated its Guaranty of each of the Bonds and the Indenture as obligations of the Guarantor
entitled to the benefits of the Subsidiary Guaranty, pursuant to the certificate of designation,
dated June 4, 2008 (the “Certificates of Designation”).

     The Bonds are denominated in U.S. dollars. The Bonds are issuable only in fully registered
form, without interest coupons. The Bonds are issuable in authorized denominations of U.S. $10,000
and integral multiples of U.S. $1,000 in excess thereof.

     2. (a) The Bonds will bear interest from the date specified on the face hereof or from the
most recent Interest Payment Date to which interest has been paid or duly provided for, at the
interest rate per annum specified on the face hereof, until the principal hereof has been paid or
duly made available for payment. The interest on this Bond shall be payable in arrears on each
Interest Payment Date specified on the face hereof, and shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. Any payment on this Bond due on any

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day which is not a Business Day in The City of New York or the place of payment need not be
made on such day, but may be made on the next succeeding Business Day with the same force and
effect as if made on the due date, and no interest shall accrue for the period from and after such
due date. “Business Day,” as used herein with respect to any particular location, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in
such location are authorized or obligated by law to close in such location.

     (b) The interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will be paid to the person in whose name this Bond (or one or more predecessor Bonds)
is registered at the close of business on the 15th day (whether or not a Business Day)
(the “Regular Record Date”) next preceding such Interest Payment Date; provided that
interest payable on the Maturity Date will be payable to the person to whom principal shall be
payable; and provided, further, that if this Bond is a Global Security, any payment
of interest on this Bond shall be made to the applicable Depositary or its nominee, as the
registered owner hereof. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to
the person in whose name this Bond (or one or more predecessor Bonds) is registered at the close of
business on a special record date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Bonds not less than 10 days prior to such
special record date, or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Bonds may be listed, and upon such notice as
may be required by such exchange.

     (c) Payment of principal and any interest due with respect to the Bonds on the Maturity Date
will be made in immediately available funds in U.S. dollars upon surrender of such Bonds at the
corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or at the
specified office of any other Paying Agent, provided that the Bond is presented to the
Paying Agent in time for the Paying Agent to make such payments in such funds in accordance with
its normal procedures. Payments of principal and any interest in respect of this Bond to be made
other than on the Maturity Date or upon redemption will be made by check mailed on or before the
due date for such payments to the address of the persons entitled thereto as they appear in the
Security Register, provided that (i) the applicable Depositary, as Holder of the Global
Securities, shall be entitled to receive payments of interest by wire transfer of immediately
available funds and (ii) a Holder of U.S. $10,000,000 in aggregate principal or face amount of
Bonds having the same Interest Payment Date shall be entitled to receive payments of interest by
wire transfer to an account maintained by such Holder at a bank located in the United States as may
have been appropriately designated by such person to the Paying Agent in writing no later than the
relevant Regular Record Date. Unless such designation is revoked, any such designation made by
such Holder with respect to such Bond shall remain in effect with respect to any further payments
with respect to such Bond payable to such Holder.

     3. (a) The Issuer shall maintain in the Borough of Manhattan, The City of New York, an
office or agency where Bonds may be surrendered for registration of transfer or exchange. The
Issuer has initially appointed the corporate trust office of the Trustee as its agent in the
Borough of Manhattan, The City of New York, for such purpose and has agreed to cause to be kept at
such office a register in which, subject to such reasonable regulations as it may prescribe, the
Issuer will provide for the registration of Bonds and registration of transfers of

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Bonds. The Issuer reserves the right to vary or terminate the appointment of the Trustee as
security registrar or of any Transfer Agent or to appoint additional or other registrars or
Transfer Agents or to approve any change in the office through which any security registrar or any
Transfer Agent acts, provided that there will at all times be a security registrar in the Borough
of Manhattan, The City of New York and, so long as the Bonds are listed on the Luxembourg Stock
Exchange and such Exchange shall so require, a Transfer Agent in Luxembourg.

     (b) The transfer or exchange of a Bond is registrable on the aforementioned register upon
surrender of such Bond at the corporate trust office of the Trustee or any Transfer Agent duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer
and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing.
Upon such surrender of a Bond for registration of transfer, the Issuer shall execute one or more
new Bonds of any authorized denominations and of a like form, tenor and terms and a like aggregate
principal amount, the Guarantor shall execute the Guaranty endorsed thereon, and the Trustee shall
authenticate and deliver in the name of the designated transferee or transferees, such new Bonds,
dated the date of authentication thereof. At the option of the Holder upon request confirmed in
writing, Bonds may be exchanged for Bonds of any authorized denominations and of a like form, tenor
and terms and a like aggregate principal amount upon surrender of the Bonds to be exchanged at the
office of any Transfer Agent or at the corporate trust office of the Trustee. Whenever any Bonds
are so surrendered for exchange, the Issuer and shall execute the Bonds which the Holder making the
exchange is entitled to receive, the Guarantor shall execute the Guaranty endorsed thereon, and the
Trustee shall authenticate and deliver such Bonds.

     (c) Any registration of transfer or exchange will be effected upon the Transfer Agent or the
Trustee, as the case may be, being satisfied with the documents of title and identity of the person
making the request and subject to such reasonable regulations as the Issuer may from time to time
agree with any Transfer Agents and the Trustee.

     (d) In the event of a redemption of Bonds in part (if permitted by the provisions hereof),
the Issuer shall not be required (i) to register the transfer of or exchange any Bond during a
period beginning at the opening of business 15 days before, and continuing until, the date on which
notice is given identifying the Bonds to be redeemed, or (ii) to register the transfer of or
exchange any Bond, or portion thereof, called for redemption.

     (e) All Bonds issued upon any registration of transfer or exchange of Bonds shall be the
valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits, as
the Bonds surrendered upon such registration of transfer or exchange. No service charge shall be
made for any registration of transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any stamp tax or other governmental charge payable in connection therewith,
other than an exchange in connection with a partial redemption of a Bond not involving any
registration of a transfer.

     Prior to due presentment of this Bond for registration of transfer, the Issuer, the Guarantor,
each Subsidiary Guarantor, the Trustee and any agent of the Issuer, the Guarantor, any Subsidiary
Guarantor or the Trustee may treat the person in whose name this Bond is registered as the owner
hereof for all purposes, whether or not this Bond shall be overdue, and

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neither the Issuer, the Guarantor, any Subsidiary Guarantor, the Trustee nor any such agent
shall be affected by any notice to the contrary.

     4. The Issuer shall pay to the Trustee at its principal office in the Borough of Manhattan,
The City of New York, on or prior to 11:00 a.m., New York City time, on each Interest Payment Date,
any redemption date and at the Maturity Date of the Bonds, in such amounts sufficient (with any
amounts then held by the Trustee and available for the purpose) to pay the interest on, the
redemption price of and accrued interest (if the redemption date is not an Interest Payment Date)
on, and the principal of, the Bonds due and payable on such Interest Payment Date, redemption date
or Maturity Date, as the case may be. The Trustee shall apply the amounts so paid to it to the
payment of such interest, redemption price and principal in accordance with the terms of the Bonds.
Any monies paid by the Issuer to the Trustee for the payment of the principal of or interest on
any Bonds and remaining unclaimed at the end of two years after such principal or interest shall
have become due and payable (whether on the Maturity Date, upon call for redemption or otherwise)
shall then be repaid to the Issuer upon its written request, and upon such repayment all liability
of the Trustee with respect thereto shall cease, without, however, limiting in any way any
obligation the Issuer may have to pay the principal of and interest on each Bond as the same shall
become due. Notwithstanding the foregoing, the right of the Holders to receive any payment of
principal of (whether on the Maturity Date, upon call for redemption or otherwise) or interest on
the Bonds will become void at the end of five years after the due date for such payment.

     5. (a) The Issuer will pay all stamp and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or taxing authority of or in the foregoing with
respect to the Indenture or the issuance of this Bond. Except as otherwise provided herein, the
Issuer shall not be required to make any payment with respect to any tax, assessment or other
governmental charge imposed by any government or any political subdivision or taxing authority
thereof or therein.

     (b) The Issuer, or, in the case of a payment by the Guarantor or a Subsidiary Guarantor, such
Guarantor or Subsidiary Guarantor, will pay to the Holder of this Bond such additional amounts
(“Additional Amounts”) as may be necessary in order that every net payment made by the Issuer, the
Guarantor or a Subsidiary Guarantor on this Bond after deduction or withholding for or on account
of any present or future tax, assessment or other governmental charge imposed upon or as a result
of such payment by Mexico or any political subdivision or taxing authority thereof or therein
(“Mexican Withholding Taxes”), will not be less than the amount then due and payable on this Bond.
The foregoing obligation to pay Additional Amounts, however, will not apply to (i) any Mexican
Withholding Taxes that would not have been imposed or levied on the Holder of this Bond but for the
existence of any present or former connection between such Holder and Mexico or any political
subdivision or territory or possession thereof or area subject to its jurisdiction, including,
without limitation, such Holder (A) being or having been a citizen or resident thereof, (B)
maintaining or having maintained an office, permanent establishment or branch therein, or (C) being
or having been present or engaged in trade or business therein, except for a connection solely
arising from the mere ownership of, or receipt of payment under, this Bond; (ii) except as
otherwise provided, any estate, inheritance, gift, sales, transfer or personal property or similar
tax, assessment or other governmental charge; (iii) any Mexican Withholding Taxes that are imposed
or levied by reason

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of the failure by such Holder to comply with any certification, identification, information,
documentation, declaration or other reporting requirement that is required or imposed by a statute,
treaty, regulation, general rule or administrative practice as a precondition to exemption from, or
reduction in the rate of, the imposition, withholding or deduction of any Mexican Withholding
Taxes; provided that at least 60 days prior to (A) the first payment date with respect to
which the Issuer, the Guarantor or a Subsidiary Guarantor shall apply this clause (iii) and, (B) in
the event of a change in such certification, identification, information, documentation,
declaration or other reporting requirement, the first payment date subsequent to such change, the
Issuer, the Guarantor or a Subsidiary Guarantor, as the case may be, shall have notified the
Trustee in writing that the Holders of Bonds will be required to provide such certification,
identification, information or documentation, declaration or other reporting; (iv) any Mexican
Withholding Taxes imposed at a rate in excess of 4.9% in the event that such Holder has failed to
provide on a timely basis, at the reasonable request of the Issuer, information or documentation
(not described in clause (iii) above) concerning such Holder’s eligibility for benefits under an
income tax treaty that is in effect to which Mexico is a party that is necessary to determine the
appropriate rate of deduction or withholding of Mexican taxes under any such treaty; (v) any
Mexican Withholding Taxes that would not have been so imposed but for the presentation by such
Holder of this Bond for payment on a date more than 15 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided for, whichever occurs
later; (vi) any payment on this Bond to any Holder who is a fiduciary or partnership or other than
the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with
respect to such fiduciary, a member of such a partnership or the beneficial owner of such payment
would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or
beneficial owner been the Holder of this Bond; or (vii) any withholding tax or deduction imposed on
a payment to an individual and required to be made pursuant to European Council Directive
2003/48/EC or any other European Union Directive implementing the conclusions of the ECOFIN Council
meeting of November 26-27, 2000 on the taxation of savings income, or any law implementing or
complying with, or introduced in order to conform to, such a directive or presented for payment by
or on behalf of a Holder who would have been able to avoid such withholding or deduction by
presenting the relevant Bond to another Paying Agent in a Member State of the European Union. All
references in this Bond or in the Indenture to principal of and interest on the Bonds shall, unless
the context otherwise requires, be deemed to mean and include all Additional Amounts, if any,
payable in respect thereof as set forth in this paragraph (b).

     (c) Notwithstanding the foregoing, the limitations on the Issuer’s, the Guarantor’s and the
Subsidiary Guarantors’ obligation to pay Additional Amounts set forth in clauses (iii) and (iv)
above shall not apply if the provision of the certification, identification, information,
documentation, declaration or other evidence described in such clauses (iii) and (iv) would be
materially more onerous, in form, in procedure or in the substance of information disclosed, to a
Holder or beneficial owner of this Bond (taking into account any relevant differences between
United States and Mexican law, regulation or administrative practice) than comparable information
or other applicable reporting requirements imposed or provided for under United States federal
income tax law (including the United States-Mexico Income Tax Treaty), regulation (including
proposed regulations) and administrative practice. In addition, the limitations on the Issuer’s,
the Guarantor’s and the Subsidiary Guarantors’ obligation to pay Additional Amounts set forth in
clauses (iii) and (iv) above shall not apply if Article 195, Section

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II, paragraph a) of the Mexican Income Tax Law, or a substantially similar successor of such
provision is in effect, unless (A) the provision of the certification, identification, information,
documentation, declaration or other evidence described in clauses (iii) and (iv) is expressly
required by statute, regulation, general rules or administrative practice in order to apply Article
195, Section II, paragraph a) (or a substantially similar successor of such provision), the Issuer,
the Guarantor or the applicable Subsidiary Guarantor cannot obtain such certification,
identification, information, documentation, declaration or evidence, or satisfy any other reporting
requirements, on its own through reasonable diligence and the Issuer, the Guarantor or the
applicable Subsidiary Guarantor otherwise would meet the requirements for application of Article
195, Section II, paragraph a) (or such successor of such provision) or (B) in the case of a Holder
or beneficial owner of a Bond that is a pension fund or other tax-exempt organization, such Holder
or beneficial owner would be subject to Mexican Withholding Taxes at a rate less than that provided
by Article 195, Section II, paragraph a) if the information, documentation or other evidence
required under clause (iv) above were provided. In addition, clauses (iii) and (iv) above shall
not be construed to require that a non-Mexican pension or retirement fund, a non-Mexican tax-exempt
organization or a non-Mexican financial institution or any other Holder or beneficial owner of this
Bond register with the Ministry of Finance and Public Credit of Mexico for the purpose of
establishing eligibility for an exemption from or reduction of Mexican Withholding Taxes.

     (d) The Issuer, the Guarantor or a Subsidiary Guarantor, as the case may be, will, upon
written request, provide the Trustee, the Holders and the Paying Agents with a duly certified or
authenticated copy of an original receipt of the payment of Mexican Withholding Taxes which such
Issuer, Guarantor or Subsidiary Guarantor has withheld or deducted in respect of any payments made
under or with respect to the Bonds, the Guaranty or the Subsidiary Guaranty, as the case may be.

     (e) In the event that Additional Amounts actually paid with respect to this Bond are based on
rates of deduction or withholding of Mexican Withholding Taxes in excess of the appropriate rate
applicable to the Holder of this Bond, and, as a result thereof, such Holder is entitled to make a
claim for a refund or credit of such excess, then such Holder shall, by accepting this Bond, be
deemed to have assigned and transferred all right, title and interest to any such claim for a
refund or credit of such excess to the Issuer, the Guarantor or the applicable Subsidiary
Guarantor, as the case may be. However, by making such assignment, the Holder makes no
representation or warranty that the Issuer, the Guarantor or the applicable Subsidiary Guarantor,
as the case may be, will be entitled to receive such claim for a refund or credit and incurs no
other obligation with respect thereto.

     6. (a) This Bond may not be redeemed prior to the Stated Maturity, except as specified in
paragraphs (b) and (c) below.

     (b) The Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any
time, at par, together with, if applicable, interest accrued to but excluding the date fixed for
redemption, on giving not less than 30 nor more than 60 days’ notice to the Holders of the Bonds
(which notice shall be irrevocable), if (i) the Issuer or the Guarantor certifies to the Trustee
immediately prior to the giving of such notice that it has or will become obligated to pay
Additional Amounts in excess of the Additional Amounts that it would be obligated to pay if

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payments (including payments of interest) on the Bonds (or payments under the Guaranties with
respect to interest on the Bonds) were subject to Mexican Withholding Tax at a rate of 10%, as a
result of any change in, amendment to, or lapse of, the laws, rules or regulations of Mexico or any
political subdivision or any taxing authority thereof or therein affecting taxation, or any change
in, or amendment to, an official interpretation or application of such laws, rules or regulations,
which change or amendment becomes effective on or after the date of issuance of the Bonds and (ii)
prior to the publication of any notice of redemption, the Issuer or the Guarantor shall deliver to
the Trustee an Officer’s Certificate stating that the obligation referred to in (i) above cannot be
avoided by the Issuer or the Guarantor, as the case may be, taking reasonable measures available to
it, and the Trustee shall be entitled to accept such certificate as sufficient evidence of the
satisfaction of the condition precedent set out in (i) above in which event it shall be conclusive
and binding on the Holders of the Bonds; provided that no such notice of redemption shall
be given earlier than 90 days prior to the earliest date on which the Issuer or the Guarantor, as
the case may be, would be obligated but for such redemption to pay such Additional Amounts were a
payment in respect of the Bonds then due and, at the time such notice is given, such obligation to
pay such Additional Amounts remains in effect.

     (c) The Bonds are subject to redemption upon not less than 30 nor more than 60 days’ notice
by mail, in whole or in part, at any time or from time to time prior to Stated Maturity, at a
redemption price (the “Redemption Price”) equal to the sum of (A) 100% of the principal amount of
such Bonds and (B) the Make-Whole Amount (as defined below), plus accrued interest on the principal
amount of the Bonds to the date of redemption (the “Redemption Date”). “Make-Whole Amount” means
the excess of (A) the sum of the present values of each of the remaining scheduled payments of
principal and interest on the Bonds (exclusive of interest accrued to the Redemption Date)
discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined below) plus 30 basis points over (ii) the
principal amount of such Bonds. “Treasury Rate” means, with respect to any Redemption Date, the
rate per annum equal to the semiannual equivalent yield to maturity or interpolated maturity of the
Comparable Treasury Issue (as defined below), assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such
Redemption Date. “Comparable Treasury Issue” means the United States Treasury security or
securities selected by an Independent Investment Banker (as defined below) as having an actual or
interpolated maturity comparable to the remaining term of the Bonds to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of a comparable maturity to the remaining term of such
notes. “Independent Investment Banker” means one of the Reference Treasury Dealers (as defined
below) appointed by the Issuer. “Comparable Treasury Price” means, with respect to any Redemption
Date, (x) the arithmetic mean of the Reference Treasury Dealer Quotations (as defined below) for
such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer
Quotation or (y) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations,
the arithmetic mean of all such quotations. “Reference Treasury Dealer” means each of Credit
Suisse Securities (USA) LLC, Lehman Brothers Inc., UBS Securities LLC, Barclays Capital Inc.,
Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc. or their Affiliates which are primary
United States government securities dealers, and their respective successors; provided that if any
of the foregoing shall cease to be a primary United States government securities dealer in the City
of New York (a “Primary Treasury Dealer”), the Issuer

R-7

 

will substitute therefor another Primary Treasury Dealer. “Reference Treasury Dealer
Quotation” means, with respect to each Reference Treasury Dealer and any Redemption Date, the
arithmetic mean, as determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 3:30 p.m. New York time on the third business day
preceding such Redemption Date.

          (d) The Issuer, the Guarantor or any Subsidiary Guarantor may at any time purchase Bonds at
any price in the open market or otherwise. Bonds so purchased by the Issuer, the Guarantor or any
Subsidiary Guarantor may be held, resold (subject to compliance with applicable securities and tax
laws) or surrendered to the Trustee for cancellation.

          7. The Bonds are not redeemable at the option of the Issuer, except as provided in Paragraph
6, and are not repayable at the option of the Holder, except as provided in Paragraph 8 in the
event of acceleration.

          8. If any of the following events (each, an “Event of Default”) occurs and is continuing, the
Trustee, if so requested in writing by Holders of at least 20% in principal amount of the Bonds
then outstanding, shall give notice to the Issuer and the Guarantor that the Bonds are, and they
shall immediately become, due and payable at their principal amount together with accrued interest:

     (a) Non-Payment: default is made in payment of principal (or any part thereof)
of or any interest on, any of the Bonds when due and such failure continues, in the case of
non-payment of principal for seven days, and of interest for fourteen days after the due
date; or

     (b) Breach of Other Obligations: the Issuer or the Guarantor defaults in
performance or observance of or compliance with any of its other obligations set out in the
Bonds or the Guaranties or (insofar as it concerns the Bonds or the Guaranties) the
Indenture which default is incapable of remedy or, if capable of remedy, is not remedied
within 30 days after written notice of such default shall have been given to the Issuer, the
Guarantor and the Subsidiary Guarantors by the Trustee; or

     (c) Cross-Default: default by the Issuer, the Guarantor or any of the
Guarantor’s Material Subsidiaries (as defined below) or the Subsidiary Guarantors or any of
them or any of their respective Material Subsidiaries in the payment of the principal of, or
interest on, any Public External Indebtedness (as defined below) of, or guaranteed by, the
Issuer, the Guarantor or any of the Guarantor’s Material Subsidiaries or the Subsidiary
Guarantors or any of them or any of their respective Material Subsidiaries, in an aggregate
principal amount exceeding U.S. $40,000,000 or its equivalent, when and as the same shall
become due and payable, if such default shall continue for more than the period of grace, if
any, originally applicable thereto; or

     (d) Enforcement Proceedings: a distress or execution or other legal process is
levied or enforced or sued out upon or against any substantial part of the property, assets
or revenues of the Issuer, the Guarantor or any of the Guarantor’s Material Subsidiaries

R-8

 

or the Subsidiary Guarantors or any of them or any of their respective Material
Subsidiaries and is not discharged or stayed within 60 days of having been so levied,
enforced or sued out; or

     (e) Security Enforced: an encumbrancer takes possession or a receiver, manager
or other similar officer is appointed of the whole or any substantial part of the
undertaking, property, assets or revenues of the Issuer, the Guarantor or any of the
Guarantor’s Material Subsidiaries or the Subsidiary Guarantors or any of them or any of
their respective Material Subsidiaries; or

     (f) Insolvency: the Issuer, the Guarantor or any of the Guarantor’s Material
Subsidiaries or the Subsidiary Guarantors or any of them or any of their respective Material
Subsidiaries becomes insolvent or is generally unable to pay its debts as they mature or
applies for or consents to or suffers the appointment of an administrator, liquidator,
receiver or similar officer of the Issuer, the Guarantor or any of the Guarantor’s Material
Subsidiaries or the Subsidiary Guarantors or any of them or any of their respective Material
Subsidiaries or the whole or any substantial part of the undertaking, property, assets or
revenues of the Issuer, the Guarantor or any of the Guarantor’s Material Subsidiaries or the
Subsidiary Guarantors or any of them or any of their respective Material Subsidiaries or
takes any proceeding under any law for a readjustment or deferment of its obligations or any
part of them for insolvency, bankruptcy, concurso mercantil, reorganization, dissolution or
liquidation or makes or enters into a general assignment or an arrangement or composition
with or for the benefit of its creditors or stops or threatens to cease to carry on its
business or any substantial part of its business; or

     (g) Winding-up: an order is made or an effective resolution passed for winding
up the Issuer, the Guarantor or any of the Guarantor’s Material Subsidiaries or the
Subsidiary Guarantors or any of them or any of their respective Material Subsidiaries; or

     (h) Moratorium: a general moratorium is agreed or declared in respect of any
External Indebtedness (as defined below) of the Issuer, the Guarantor or any of the
Guarantor’s Material Subsidiaries or the Subsidiary Guarantors or any of them or any of
their respective Material Subsidiaries; or

     (i) Authorization and Consents: any action, condition or thing (including the
obtaining or effecting of any necessary consent, approval, authorization, exemption, filing,
license, order, recording or registration) at any time required to be taken, fulfilled or
done in order (i) to enable the Issuer lawfully to enter into, exercise its rights and
perform and comply with its obligations under the Bonds or the Indenture, (ii) to enable the
Guarantor lawfully to enter into, exercise its rights and perform and comply with its
obligations under the Guaranties relating to the Bonds, the Indenture or the Subsidiary
Guaranty Agreement in relation to the Bonds and the related Guaranties, (iii) to enable any
of the Subsidiary Guarantors lawfully to enter into, perform and comply with its obligations
under the Subsidiary Guaranty Agreement in relation to the Bonds, the related

R-9

 

Guaranties or the Indenture and (iv) to ensure that those obligations are legally
binding and enforceable, is not taken, fulfilled or done within 30 days of its being so
required; or

     (j) Illegality: it is or becomes unlawful for (i) the Issuer to perform or
comply with one or more of its obligations under any of the Bonds or the Indenture, (ii) the
Guarantor to perform or comply with any of its obligations under the Indenture, the
Guaranties or the Subsidiary Guaranty Agreement with respect to the Bonds, the related
Guaranties or the Indenture, or (iii) the Subsidiary Guarantors or any of them to perform or
comply with one or more of its obligations under the Subsidiary Guaranty Agreement with
respect to the Bonds, the related Guaranties or the Indenture; or

     (k) Control: the Guarantor ceases to be a decentralized public entity of the
Mexican Government or the Mexican Government otherwise ceases to control the Guarantor or
any Subsidiary Guarantor; or the Issuer, the Guarantor or any of the Subsidiary Guarantors
is dissolved, disestablished or suspends its respective operations, and such dissolution,
disestablishment or suspension of operations is material in relation to the business of the
Issuer, the Guarantor and the Subsidiary Guarantors taken as a whole; or the Guarantor and
the Subsidiary Guarantors cease to be the entities which have the exclusive right and
authority to conduct on behalf of Mexico the activities of exploration, exploitation,
refining, transportation, storage, distribution and first-hand sale of crude oil and
exploration, exploitation, production and first-hand sale of natural gas, as well as the
transportation and storage inextricably linked with such exploitation and production; or the
Issuer ceases to be controlled by the Guarantor; or

          (l) Disposals:

     (i) the Guarantor ceases to carry on all or a substantial part of its business,
or sells, transfers or otherwise disposes (whether voluntarily or involuntarily) of
all or substantially all of its assets (whether by one transaction or a series of
transactions whether related or not) other than (A) solely in connection with the
implementation of the Organic Law or (B) to a Subsidiary Guarantor; or

     (ii) any Subsidiary Guarantor ceases to carry on all or a substantial part of
its business, or sells, transfers or otherwise disposes (whether voluntarily or
involuntarily) of all or substantially all of its assets (whether by one transaction
or a series of transactions whether related or not) and such cessation, sale,
transfer or other disposal is material in relation to the business of the Guarantor
and the Subsidiary Guarantors taken as a whole; or

     (m) Analogous Events: any event occurs which under the laws of Mexico has an
analogous effect to any of the events referred to in paragraphs (d) to (g) above; or

     (n) Guaranties: the Guaranties or the Subsidiary Guaranty Agreement is not (or
is claimed by the Guarantor or any of the Subsidiary Guarantors not to be) in full force and
effect.

     “External Indebtedness” means Indebtedness which is payable, or at the option of its
holder may be paid, (i) in a currency or by reference to a currency other than the

R-10

 

currency of Mexico, (ii) to a person resident or having its head office or its
principal place of business outside Mexico and (iii) outside the territory of Mexico.

     “Guarantee” means any obligation of a person to pay the Indebtedness of another person,
including without limitation:

     (i) an obligation to pay or purchase such Indebtedness; or

     (ii) an obligation to lend money or to purchase or subscribe for shares or
other securities or to purchase assets or services in order to provide funds for the
payment of such Indebtedness; or

     (iii) any other agreement to be responsible for such Indebtedness.

     “Indebtedness” means any obligation (whether present or future, actual or contingent)
for the payment or repayment of money which has been borrowed or raised (including money
raised by acceptances and leasing).

     “Material Subsidiaries” means, at any time, each of the Subsidiary Guarantors and any
Subsidiary of the Guarantor or any of the Subsidiary Guarantors having, as of the end of the
most recent fiscal quarter of the Guarantor, total assets greater than 12% of the total
assets of the Guarantor, the Subsidiary Guarantors and their Subsidiaries on a consolidated
basis.

     “Public External Indebtedness” means any External Indebtedness which is in the form of,
or represented by, notes, bonds or other securities which are for the time being quoted,
listed or ordinarily dealt in on any stock exchange.

     “Subsidiary” means, in relation to any person, any other person (whether or not now
existing) which is controlled directly or indirectly by, or more than 50 percent of whose
issued equity share capital (or equivalent) is then held or beneficially owned by, the first
person and/or any one or more of the first person’s Subsidiaries, and “control” means the
power to appoint the majority of the members of the governing body or management of, or
otherwise to control the affairs and policies of, that person.

          After any such acceleration has been made, but before a judgment or decree for the payment of
money due based on acceleration has been obtained by the Trustee, the Holders of a majority in
aggregate principal amount of the Bonds then outstanding may rescind and annul such acceleration if
all Events of Default, other than the non-payment of the principal of the Bonds that have become
due solely by such declaration of acceleration have been cured or waived as provided in the
Indenture.

          9. (a) The Indenture permits, with certain exceptions as therein provided, amendments,
modifications and supplements of the rights and obligations of the Issuer and the Guarantor and the
rights of the Holders of the Bonds under the Indenture and the Bonds at any time to be made by the
Issuer, the Guarantor and the Trustee with the consent of the Holders of specified percentages in
principal amount of the Bonds at the time Outstanding, on behalf of the Holders of all Bonds. The
Indenture also contains provisions permitting the Holders of specified

R-11

 

percentages in principal amount of the Bonds at the time Outstanding, on behalf of the Holders of
all Bonds, to waive compliance by the Issuer or the Guarantor with certain provisions of the
Indenture and certain past defaults under the Indenture or the Bonds and their consequences. Any
such consent or waiver by the Holder of this Bond shall be conclusive and binding upon such Holder
and upon all future Holders of this Bond and of any Bond issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver
is made upon this Bond.

     (b) For purposes of voting on amendments, waivers, modifications, acceleration and other
actions by the Holders of the Bonds, the Bonds will be considered a single series with the Issuer’s
6.625% Bonds due 2038 issued on June 4, 2008.

     10. The Issuer may from time to time without the consent of any Holder of Bonds create and
issue additional bonds having the same terms and conditions as Bonds previously issued (or the same
except the first payment of interest or the issue price), which additional bonds may be
consolidated to form a single series with the outstanding Bonds; provided that such
additional bonds do not have, for purposes of U.S. federal income taxation, a greater amount of
original issue discount than the Bonds have as of the date of the issue of such additional bonds.

     11. No reference herein to the Indenture and no provision of this Bond or of the Indenture
shall alter or impair the obligations of the Issuer or the Guarantor, which are absolute and
unconditional, to pay the principal of and interest on this Bond (as such Bonds may be amended,
modified, supplemented or waived, as provided in the Indenture) at the times, place and rate, and
in the coin or currency, herein prescribed.

     12. The Bank of New York Mellon is executing this Bond not in its individual capacity but
solely as Managing Trustee of the Issuer and in no event shall The Bank of New York Mellon have any
liability for the representations, warranties, covenants, agreements or other obligations of the
Issuer or the Guarantor hereunder, as to which recourse shall be had solely to the assets of the
Issuer or the Guarantor, and under no circumstances shall The Bank of New York Mellon be personally
liable for the payment of any indebtedness due under this Bond. This Bond does not represent
interests in or obligations of The Bank of New York Mellon.

     13. THIS BOND SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, UNITED STATES OF AMERICA.

R-12

 

***

GUARANTY

     1. The Guarantor hereby unconditionally and irrevocably guarantees the punctual payment when
due, whether on the Maturity Date, upon redemption, upon acceleration or otherwise, of all payments
of principal of and interest (including Additional Amounts) on the Bonds, and any other amounts
payable by the Issuer under the Bonds or the Indenture (the “Obligations”). If the Issuer shall
fail to pay punctually any Obligation, the Guarantor shall forthwith pay such Obligation when and
as the same shall be due and payable to the person entitled thereto in the manner specified in the
Bonds or the Indenture. All payments hereunder shall be made in currency specified in the Bonds in
same day funds (or such other funds as may, at the time of payment, be customary for the settlement
in New York City of international banking transactions in the such currency) as if such payment
were made by the Issuer in accordance with the terms of the Bonds and the Indenture.

     2. The obligations of the Guarantor set forth herein shall constitute a guaranty of payment
and not of collection, and shall be absolute and unconditional. This Guaranty shall be continuing
and remain in full force and effect and be binding upon the Guarantor and its successors and
assigns and inure to the benefit of the Holders of the Bonds and the Trustee (each, a
“Beneficiary,” and collectively, the “Beneficiaries”) until all Obligations of the Issuer have been
discharged in full. The Guarantor hereby waives, to the extent permitted by applicable law, all
claims of waiver, exchange, release, surrender, alteration or compromise and all set-offs,
counterclaims and recoupments which it may have or assert against the Beneficiaries. The Guarantor
hereby waives promptness, diligence, presentment, demand for payment, notice of acceptance of this
Guaranty, protest of any kind whatsoever, any requirement that a Beneficiary exhaust any right or
take any action against the Issuer or any other person or entity or any property or collateral, as
well as any right to require a proceeding first against the Issuer or the Issuer’s property or the
exercise by a Holder of the Bonds of its rights upon the occurrence and continuation of an Event of
Default.

     3. This Guaranty shall not be valid or obligatory for any purpose until the certificate of
authentication on the Bond upon which this Guaranty is endorsed shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized signatories.

     4. The obligations of the Guarantor to the Beneficiaries pursuant to this Guaranty and the
Indenture, and the rights of the Guarantor with respect thereto, are expressly set forth in the
Indenture and reference is hereby made to the Indenture for the precise terms of this Guaranty,
which are incorporated herein by reference and made a part hereof.

     5. Capitalized terms used herein and not otherwise defined herein have the meanings specified
in the Indenture.

R-13

 

     THIS GUARANTY SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, UNITED STATES OF AMERICA, EXCEPT THAT ALL MATTERS RELATING TO THE AUTHORIZATION AND
EXECUTION BY THE GUARANTOR OF THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF MEXICO.

     IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed.

Dated:
August •, 2008

	 	 	 	 	 
	 	PETROLEOS MEXICANOS

 	 
	 	By:  	 	 
	 	 	Name:  	Mauricio Alazraki Pfeffer 	 
	 	 	Title:  	Managing Director of Finance and
Treasury 	 

R-14

 

ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:

	 	 	 	 	 	 	 
	TEN COM -

	 	as tenants
	 	UNIF GIFT	 	 
	 

	 	in common
	 	MIN ACT -
	 	                     Custodian                     
	 

	 	 	 	 	 	    (Cust)                       
     (Minor)
	TEN ENT -

	 	as tenants by

the entireties
	 	 	 	Under Uniform Gifts
to Minors
	 
	JT TEN -

	 	as joint tenants with	 	 	 	 
	 

	 	right of survivorship and	 	 	 	 
	 

	 	not as tenants in common	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	State

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED the undersigned hereby sell(s),

assign(s) and transfer(s) unto

PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

Please print or typewrite name and address

including postal zip code of assignee

 

the within bond and all rights thereunder,

hereby irrevocably constituting and appointing

         
                 
                                             
                                                 
attorney to transfer said bond on the books of
Pemex Project Funding Master Trust, with full power of substitution in the premises.

Dated:          
                   
                   
                   
                                  

NOTICE: The signature to this assignment must correspond with the name as written upon the face
of the within instrument in every particular, without alteration or enlargement or any change
whatever.

R-15exv4w1

Exhibit 4.1

EXECUTION VERSION

$400,000,000

NABORS INDUSTRIES, INC.

6.15% SENIOR NOTES DUE 2018

GUARANTEED BY NABORS INDUSTRIES LTD.

PURCHASE AGREEMENT

CITIGROUP GLOBAL MARKETS INC.

UBS SECURITIES LLC

July 17, 2008

 

 

July 17, 2008

CITIGROUP GLOBAL MARKETS INC.

      388 Greenwich Street

      New York, New York 10013

UBS SECURITIES LLC

      677 Washington Blvd.

      Stamford, CT 06901

Dear Sirs and Mesdames:

     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”) $400,000,000 aggregate principal
amount of its 6.15% Senior Notes Due 2018 (the “Notes”) to be issued pursuant to the provisions of
the Indenture dated as of February 20, 2008 (the “Indenture”) among the Company, the Guarantor (as
defined below) and Wells Fargo Bank, National Association, as Trustee (the “Trustee”). 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 Securities will be offered by the Initial Purchasers without being registered under the
Securities Act of 1933, as amended (the “Securities Act”), (i) to persons whom the Initial
Purchasers reasonably believe to be qualified institutional buyers in compliance with the exemption
from registration provided by Rule 144A of the Securities Act (“Rule 144A”), and (ii) to certain
persons who are not U.S. Persons (as defined in Regulation S promulgated under the Securities Act
(“Regulation S”))(such persons, “Non-U.S. Persons”) in offshore transactions in reliance on
Regulation S.

     The Initial Purchasers and their direct and indirect transferees will be entitled to the
benefits and subject to the obligations of a Registration Rights Agreement to be dated the Closing
Date (as defined below) among the Company, the Guarantor and the Initial Purchasers (the
“Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company and
the Guarantor will agree to file with the U.S. Securities and Exchange Commission (the
“Commission”) under the circumstances set forth therein, a registration statement or an amendment
thereto under the Securities Act relating to the Company’s 6.15% Senior Notes due 2018 (the
“Exchange Notes”) and the Guarantor’s Exchange Guarantees (the “Exchange Guarantees”) to be offered
in exchange for the Notes and the Guarantees (the “Exchange Offer”).

     In connection with the sale of the Securities, the Company has prepared and delivered to the
Initial Purchasers a preliminary offering memorandum, dated “subject to completion, dated July 17,
2008” (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 July 17, 2008, in the form attached hereto as Schedule I,
describing the terms of the Securities, the terms of the offering 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 under Section 6(j), 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 4:15 P.M. (New York time) on July 17, 2008. Promptly after the Applicable
Time and in any event no later than the Closing Date (as defined in Section 4), the Company will
prepare and deliver to the Initial Purchasers a final offering memorandum (the “Final 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. The Offering Memorandum and the Final
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 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 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 or will not contain, and on and as of
the Closing Date, the Disclosure Package and the Final 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 or omissions in the Disclosure Package or the Final Memorandum based
upon information relating to the Initial Purchasers furnished to the Company in writing by
the Initial Purchasers 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 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

-2-

 

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 Drilling
USA, LP, Nabors Diamond Holdings, Inc., Yellow Deer Investments Corp., Nabors Holding
Company, Nabors International Management, Ltd., Nabors Drilling International Ltd., Nabors
Drilling International II Ltd., Nabors Drilling Canada ULC, Nabors International Holdings
Ltd., Oak Leaf Investments, Inc., Nabors Drilling Limited (Canada), Nabors Industries Inc.,
Nabors Canada, Ryan Energy Technologies Inc., Nabors Well Services Co., Nabors Global
Holdings Ltd., Maple Leaf Holdings Ltd. and Nabors Hungary Kft.

     (d) This Agreement has been duly authorized, executed and delivered by the Company and
the Guarantor and is a valid and binding agreement of, each of the Company and the
Guarantor, enforceable in accordance with its respective 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.

     (e) The outstanding capital stock of the Company is indirectly owned by the Guarantor,
free and clear of all liens, encumbrances, equities or claims other than any liens,
encumbrances, equities or claims in favor of the Guarantor or a Significant Subsidiary.

     (f) 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 and the Registration Rights Agreement.

-3-

 

     (g) The issuance of the Exchange Notes has been duly authorized and, when the Exchange
Notes have been executed and authenticated in accordance with the provisions of the
Indenture and delivered as contemplated in the Registration Rights Agreement, will be valid
and binding obligations of the Company enforceable in accordance with their 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.

     (h) The issuance of the Exchange Guarantees has been duly authorized and, upon the due
execution and authentication of the Exchange Notes in accordance with the Indenture and the
issuance and delivery of the Exchange Notes in the Exchange Offer contemplated by the
Registration Rights Agreement, will be valid and binding obligations of the Guarantor
enforceable in accordance with their 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.

     (i) The Indenture has been duly authorized, executed and delivered by, and is 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.

     (j) The Registration Rights Agreement 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 Registration Rights Agreement by the Initial Purchasers 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.

     (k) 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, the Registration Rights Agreement, the Securities, the Exchange Notes and the
Exchange Guarantees (excluding the Indenture, the “Transaction Documents”) do not, with
respect to the Indenture, and will not, with respect to the Transaction Documents,
contravene any provision of (i) applicable law or the restated certificate of incorporation,
as amended, or by-laws, as amended, of the Company, 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) to the knowledge of the
Guarantor or the Company, any judgment, order 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.

-4-

 

     (l) 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 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 this Agreement, the Indenture, the
Registration Rights Agreement, the Securities, the Exchange Notes or the Exchange Guarantees
or to consummate the transactions contemplated by the Offering Memorandum.

     (m) 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, (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(2) of the Securities Act or (iii) engaged in
any directed selling efforts within the meaning of Regulation S, and all such persons have
complied with the offering restrictions requirement of Regulation S.

     (n) 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
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
under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939,
as amended.

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

     (p) 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 Memorandum neither will be, an “investment company” as
defined in the Investment Company Act of 1940.

     (q) Other than the Offering Memorandum, the Disclosure Package and the Final
Memorandum, 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.

-5-

 

     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 Notes set forth opposite such Initial Purchaser’s name on Schedule A hereto at a purchase
price of 96.742% of the principal amount thereof plus accrued interest thereon from February 20,
2008 (the “Purchase Price”).

     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 and the
exchange of the Securities for the Exchange Notes and the Exchange Guarantees in connection with
the Exchange Offer).

     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 Notes 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 at 10:00 a.m., New York City time, on July 22, 2008, 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. 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 or Regulation S shall
be represented by one or more global certificates.

     5. Conditions to the Initial Purchasers’ Obligations. The obligations of the several Initial Purchasers to purchase and pay for the Notes and related
Guarantees on the Closing Date are subject to the following conditions:

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

          (i) There shall not have occurred any downgrading, nor shall any notice have been given
of any intended or potential downgrading, below A3 from Moody’s Investors Service, Inc.,
BBB+ from Standard and Poor’s Ratings Services and A- from Fitch Inc., in the senior
unsecured rating accorded the Company or the Guarantor
or any of the 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 such term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and

-6-

 

          (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 a certificate, dated
the 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
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.

     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 Bruce M. Taten, Vice President and General Counsel of Nabors Corporate Services,
Inc., dated the 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, special United States counsel for the
Company and the Guarantor, dated the Closing Date, substantially to the effect set forth on
Annex 5(d) hereto.

     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 counsel shall state that such counsel has reviewed the Disclosure Package and the
Final Offering Memorandum prepared by the Company, as well as certain corporate records
and documents furnished to such counsel by the Company and such counsel has participated in
discussions with representatives of the Company and the Guarantor, counsel to the Company
and counsel to the Initial Purchasers regarding the contents of the Disclosure Package and
the Final Offering Memorandum and related matters; such

-7-

 

counsel shall also state that the
purpose of their professional engagement was not to establish or confirm factual matters set
forth in the Disclosure Package or the Final Offering Memorandum and they have not
undertaken to verify independently any of such factual matters and that moreover, many of
the determinations required to be made in the preparation of the Disclosure Package and the
Final Offering Memorandum involve matters of a non-legal nature; and that accordingly, they
are not passing upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Disclosure Package and the Final Offering
Memorandum and shall make no representation that they have independently verified the
accuracy, completeness or fairness of such statements, except as stated in Sections 2, 3,
and 11 of Annex 5(d).

     Such counsel shall also state that on the basis of and subject to the foregoing that
they confirm that nothing has come to such counsel’s attention that causes such counsel to
believe that: (i) the Disclosure Package as of the “Applicable Time” and as of the Closing
Date contained or contains or (ii) the Final Offering Memorandum, as of its date or as of
the Closing Date, 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 (it being understood
that such counsel need not comment in respect to (i) or (ii) above with respect to the
financial statements and other financial information contained or incorporated by reference
in the Disclosure Package or the Final Offering Memorandum).

     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. Such opinion
shall be rendered as of the 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 Appleby, special counsel for the Guarantor, dated the 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 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., counsel for
the Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to
the issuance and sale of the Securities, the Disclosure Package, the Final 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 letters, dated the date of the Applicable Time and Closing

-8-

 

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 shall use a “cut-off date” not earlier than the date hereof.

     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 July 17, 2008 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 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) 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

-9-

 

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, (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, registrar or depositary, and (vi) 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, transfer taxes
payable upon resale of any of the Securities by them and any advertising expenses connected
with any offers they may make.

     (f) 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.

     (g) 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(2) of the Securities Act.

     (h) While any of the Securities remain “restricted securities” within the meaning of
the Securities Act, 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.

     (i) Until the issuance of the Exchange Notes or the effectiveness of the shelf
registration statement contemplated by the Registration Rights Agreement, the Guarantor will
not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities
Act) to resell any of the Securities which constitute “restricted securities” under Rule 144
that have been reacquired by any of them.

-10-

 

     (j) 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 Memorandum), the Company will furnish to the
Initial Purchasers a copy of such written communication for 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(2) of the Securities Act, (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 and (iv) it
will solicit offers outside the United States only from, and will offer such Securities only to,
certain persons who are not U.S. Persons in offshore transactions in reliance on Regulation S.
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 Purchaser pursuant to Sections 5(c), 5(d), 5(e) and
5(f) by 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, 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 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 the Offering
Memorandum, the Disclosure Package, the Final 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 expressly for use therein, it being
understood and agreed that the

-11-

 

only information furnished by any such Initial Purchaser consists of
the information described in Section 8(b);

     (b) Each Initial Purchaser, severally and not jointly, agrees to indemnify and hold
harmless the Company, 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 to the Company expressly for use in the
Offering Memorandum, the Disclosure Package or the Final 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:
the eighth (first sentence only) and ninth 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. 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 Initial Purchasers, 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 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

-12-

 

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 includes an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.

     (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 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

-13-

 

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 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 (i) trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, The NASDAQ Stock Market LLC, or settlement of
trading shall have been materially disrupted, (ii) trading of any securities of the Guarantor 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 Notes agreed
to be purchased by such Initial Purchaser hereunder and such failure to purchase shall constitute
a default in the performance of its or their obligations under this Agreement, the remaining
Initial 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) the Notes that the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase; provided, however, that in the event that the aggregate principal amount of
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, the
remaining Initial Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Notes, and if such nondefaulting Initial Purchasers do not
purchase all the Notes, this Agreement will

-14-

 

terminate without liability to any nondefaulting
Initial Purchaser or the Company. In the event of a default by any Initial Purchaser as set forth
in this Section 10, the Closing Date shall be postponed for such period, not exceeding five
Business Days, as the Initial Purchasers shall determine in order that the required changes in the
Final Memorandum or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any nondefaulting Initial Purchaser 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, Mintflower Place, 8 Par-La-Ville Road, Hamilton, HM08,
Bermuda, or (c) if to the Initial Purchasers, to Citigroup Global Markets Inc., at its offices at
388 Greenwich Street, New York, New York 10013, Attention: General Counsel, and at the offices of
UBS Securities LLC, 677 Washington Blvd., Stamford, CT 06901, Attention: Fixed Income Syndicate, 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

-15-

 

transaction between the Company and the
Guarantor, on the one hand, and the Initial Purchasers and any affiliate through which it 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.

     18. 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.

-16-

 

	 	 	 	 	 
	 	Very truly yours,

NABORS INDUSTRIES LTD.

 	 
	 	By:  	/s/ Eugene M. Isenberg	 
	 	Name:  	Eugene M. Isenberg	 
	 	Title:  	Chairman and Chief Executive Officer	 
	 
	 	NABORS INDUSTRIES, INC.

 	 
	 	By:  	/s/ Eugene M. Isenberg	 
	 	Name:  	Eugene M. Isenberg	 
	 	Title:  	Chairman and Chief Executive Officer	 
	 

	 	 	 	 	 
	Accepted as of the date hereof	 	 
	 
	 	 	 	 
	CITIGROUP GLOBAL MARKETS INC.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Chandry M. Harjani	 	 
	Name:

	 	 
Chandry M. Harjani
	 	 
	Title:
	 	Vice President	 	 
	 
	 	 	 	 
	UBS SECURITIES LLC	 	 
	 
	 	 	 	 
	By:
	 	/s/ Chris Bradshaw	 	 
	 

	 	 	 	 
	Name:
	 	Chris Bradshaw	 	 
	Title:
	 	Director	 	 
	 
	 	 	 	 
	By:
	 	/s/ Stephen Perich	 	 
	 

	 	 	 	 
	Name:
	 	Stephen Perich	 	 
	Title:
	 	Associate Director	 	 

Signature Page to Purchase Agreement

 

 

SCHEDULE I

Pricing Supplement dated July 17, 2008

	 	 	 
	Initial Purchasers:

	 	Citigroup Global Markets Inc.
	 

	 	UBS Securities LLC
	 
	 	 
	Amount:

	 	 $400,000,000
	 

	 	($975,000,000 including the Senior Notes issued on February 20, 2008)
	 
	 	 
	Security Offered:

	 	Senior Notes
	 
	 	 
	Issuer:

	 	Nabors Industries, Inc.
	 
	 	 
	Guarantor:

	 	Nabors Industries Ltd.
	 
	 	 
	Underlying (Ticker):

	 	NBR
	 
	 	 
	Coupon:

	 	 6.150%
	 
	Price to Investor:

	 	97.192% (plus accrued interest thereon from February 20, 2008)
	 
	Purchase Price:

	 	96.742% (plus accrued interest thereon from February 20, 2008)
	 
	Bond Denomination:

	 	$2,000 and in integral multiples of $1,000 in excess thereof.
	 
	 	 
	Maturity:

	 	February 15, 2018
	 
	Yield to Maturity:

	 	 6.549%
	 
	 	 
	Call Feature:

	 	Make-whole call @ T + 35 bp
	 
	 	 
	Put:

	 	Offer to purchase by the Issuer if a Change of Control Triggering Event
occurs (as defined in the Indenture)
	 
	 	 
	1st Coupon:

	 	August 15, 2008
	 
	 	 
	Coupon Payment Dates:

	 	February 15 and August 15
	 
	 	 
	Gross Spread (%)

	 	 0.450
	 
	 	 
	Rating:

	 	A3 (Negative Watch) from Moody’s Investors Service, Inc.
BBB+ (Stable) from Standard & Poor’s Ratings Services
A- (Negative Outlook) from Fitch Inc.
	 
	 	 
	Offering Status:

	 	Rule 144A/Regulation S (with registration rights)
	 
	 	 
	CUSIPS:

	 	Rule 144A: 629568AR7
	 
	 

	 	Regulation S: U6295YAA1
	 
	 

	 	Exchange: 629568AQ9

-1-

 

	 	 	 
	ISIN:

	 	Rule 144A: US629568AR7-4
	 
	 	 
	 

	 	Regulation S: USU6295YAA1-1
	 
	 	 
	 

	 	Exchange: US629568AQ91
	 
	 	 
	Trade Date:

	 	July 17, 2008
	 
	 	 
	Settlement Date:

	 	July 22, 2008
	 
	 	 
	Contingent Interest:

	 	No

     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.

     The senior notes have not 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 and to certain non-U.S.
persons in offshore transactions in reliance on Regulation S. 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 UBS Securities LLC sales representatives to request it.

-2-

 

SCHEDULE A

	 	 	 	 	 
	 	 	Principal Amount of	 
	Initial Purchasers	 	Notes to be Purchased	 
	Citigroup Global Markets Inc.
	 	$	200,000,000	 
	UBS Securities LLC
	 	$	200,000,000	 
	 
	 	 	 
	Total
	 	$	400,000,000	 
	 
	 	 	 

-3-

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