Document:

exv10w92

Exhibit 10.92

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO
THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

EMISPHERE TECHNOLOGIES, INC.

WARRANT

			
	 
	Warrant No. A-51
	 	Original Issue Date: August 26, 2010

     EMISPHERE TECHNOLOGIES, INC., a Delaware corporation (the “Company”), hereby certifies
that, for value received, MHR Institutional Partners IIA LP or its permitted registered assigns
(the “Holder”), is entitled to purchase from the Company up to a total of 538,191 shares of
Common Stock (as defined below) of the Company (each such share, a “Warrant Share” and all
such shares, the “Warrant Shares”) at an exercise price equal to $1.26 per share (as
adjusted from time to time as provided herein, the “Exercise Price”), at any time and from
time to time on or after the Original Issue Date and through and including the Expiration Date (as
defined below), and subject to the following terms and conditions:

     This Warrant is one of a series of warrants issued pursuant to that certain Securities
Purchase Agreement dated August 25, 2010 (the “Subscription Date”), by and between the
Company and each the purchasers identified therein (the “Purchase Agreement”). All such
warrants are referred to herein, collectively, as the “Warrants.”

     1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
Section 18.

     2. List of Warrant Holders. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the
record Holder (which shall include the initial Holder or, as the case may be, any registered
assignee to which this Warrant is permissibly assigned hereunder from time to time). The Company
may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all other

 

 

purposes, absent actual notice to the contrary.

     3. List of Transfers; Restrictions on Transfer.

     (a) This Warrant may be offered for sale, sold, transferred or assigned without the consent of
the Company, except as may otherwise be required by Section 2(g) of the Purchase Agreement.

     (b) The Company shall register any such transfer of all or any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed, to the Company at its address specified herein. Upon any such registration
or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (in
accordance with Section 3(e)), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a new Warrant evidencing the remaining portion of this Warrant not so
transferred, if any, shall be issued to the transferring Holder. The acceptance of the new Warrant
by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights
and obligations in respect of the new Warrant that the Holder has in respect of this Warrant.

     (c) This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Warrant or Warrants (in accordance with Section 3(e)) representing
in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant,
and each such new Warrant will represent the right to purchase such portion of such Warrant Shares
as is designated by the Holder at the time of such surrender; provided, however, no warrants for
fractional shares of Common Stock shall be given.

     (d) If, but only if, at the time of the surrender of this Warrant in connection with any
transfer of this Warrant, the Holder is an affiliate of the Company, and transfer of this Warrant
shall not be registered pursuant to an effective registration statement under the Securities Act
and under applicable state securities or blue sky laws, the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be,
furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the effect that such
transfer may be made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company
an investment letter in form and substance acceptable to the Company and (iii) that the transferee
be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act.

     (e) Whenever the Company is required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as
indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying
this Warrant (or in the case of a new Warrant being issued pursuant to this Section 3 or Section 7,
the Warrant Shares designated by the Holder which, when added to the number of shares of Common
Stock underlying the other new Warrants issued in connection with such issuance, does not exceed
the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as
indicated on the face of such new Warrant which is the same as the Original Issue Date, and (iv)
shall have the same rights and conditions as this Warrant

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     4. Exercise and Duration of Warrants.

     (a) All or any part of this Warrant shall be exercisable by the registered Holder in any
manner permitted by Section 3 of this Warrant at any time and from time to time on or after the
Original Issue Date and through and including the Expiration Date. At 5:00 p.m., New York City
time, on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value and this Warrant shall be terminated and no longer outstanding. In
addition, if cashless exercise would be permitted under Section 4(c) of this Warrant, then all or
part of this Warrant may be exercised by the registered Holder utilizing such cashless exercise
provisions at any time, or from time to time, on or after the Original Issue Date and through and
including the Expiration Date.

     (b) The Holder may exercise this Warrant by delivering to the Company an exercise notice, in
the form attached hereto (the “Exercise Notice”), completed and duly signed. If such
Holder is not utilizing the cashless exercise provisions set forth in this Warrant, within one (1)
Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to
the Company of an amount equal to the Exercise Price for the number of Warrant Shares as to which
this Warrant is being exercised (the “Aggregate Exercise Price”). The date the Exercise
Notice is delivered to the Company (as determined in accordance with the notice provisions hereof)
is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in
order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have
the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares. Additionally, at the request of the
Holder, if this Warrant shall have been exercised in part and the Holder shall have surrendered
this Warrant certificate, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant.

     (c) Notwithstanding anything contained herein to the contrary, if at the time of exercise
hereof, a Registration Statement (as defined in the Registration Rights Agreement (as defined in
the Purchase Agreement)) is not effective (or the prospectus contained therein is not available for
use) for the resale by the Holder of all of the Warrant Shares, then the Holder may, in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate
Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common
Stock determined according to the following formula (a “Cashless Exercise”):

	 	 	 

	 

	 	Net Number = (A x B) -  (A x C)
	 

	 	B

	 
	 	 
	 

	 	For purposes of the foregoing formula:

	 	A= 	 	 the total number of shares with respect to which this Warrant
is then being exercised.

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	 	B= 	 	 as applicable: (i) the Closing Sale Price of the Common Stock
on the Trading Day immediately preceding the date of the applicable Exercise
Notice if such Exercise Notice is (1) both executed and delivered pursuant to
Section 4 hereof on a day that is not a Trading Day or (2) both executed and
delivered pursuant to Section 4 hereof on a Trading Day prior to the opening of
“regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS
promulgated under the federal securities laws) on such Trading Day, (ii) the
Bid Price of the Common Stock as of the time of the Holder’s execution of the
applicable Exercise Notice if such Exercise Notice is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours
thereafter pursuant to Section 4 hereof and (iii) the Closing Sale Price of the
Common Stock on the date of the applicable Exercise Notice if the date of such
Exercise Notice is a Trading Day and such Exercise Notice is both executed and
delivered pursuant to Section 4 hereof after the close of “regular trading
hours” on such Trading Day.
	 
	 	C= 	 	 the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.

     (d) In the case of a dispute as to the determination of the Exercise Price or the arithmetic
calculation of the number of Warrant Shares to be issued pursuant to the terms hereof, the Company
shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 15.

     5. Delivery of Warrant Shares.

     (a) On or before the first (1st) Trading Day following the date on which the
Company has received an Exercise Notice, the Company shall transmit by facsimile an acknowledgment
of confirmation of receipt of such Exercise Notice, to the Holder and the Company’s transfer agent
(the “Transfer Agent”). On or before the third (3rd) Trading Day following the
date on which the Company has received such Exercise Notice, the Company shall (X) provided that
the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program and the Warrant Shares can be issued without restrictive legends, upon
the request of the Holder, credit such aggregate number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program or the Warrant Shares cannot be
issued without restrictive legends, issue and deliver to the Holder or, at the Holder’s instruction
pursuant to the Exercise Notice, the Holder’s agent or designee, in each case, sent by reputable
overnight courier to the address as specified in the applicable Exercise Notice, a certificate,
registered in the Company’s share register in the name of the Holder or its designee (as indicated
in the applicable Exercise Notice), for the number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited
to the Holder’s DTC account or the date of delivery

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of the certificates evidencing such Warrant Shares (as the case may be). The Holder, or any
Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have
become the holder of record of such Warrant Shares as of the Exercise Date. Notwithstanding the
foregoing, except in the case where an exercise of this Warrant is validly made pursuant to a
cashless exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to the
later of (x) the close of the third Trading Day after delivery of an Exercise Notice and (y) the
Trading Day in which the Company’s receives the Aggregate Exercise Price (such later date, the
“Share Delivery Deadline”) shall not be deemed to be a breach of this Warrant.

     (b) If by the Share Delivery Deadline, the Company fails to deliver to the Holder a
certificate representing the required number of Warrant Shares in the manner required pursuant to
Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares,
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall, within three Trading
Days after the Holder’s request and in the Holder’s sole discretion, either (1) pay in cash to the
Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Common Stock times (B) the
Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the
applicable Exercise Notice.

     (c) To the extent permitted by law, the Company’s obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any
action or inaction by the Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of any other
circumstance that might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue
or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax that may be

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payable in respect of any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a new Warrant (in accordance
with Section 3(e)) , but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable indemnity (which shall not include a
surety bond), if requested. Applicants for a new Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a new Warrant is requested as a result of a
mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the new Warrant.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares that are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into account the adjustments
and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. If,
notwithstanding the foregoing, and not in limitation thereof, at any time while any of the Warrants
remain outstanding the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the
Warrants at least a number of shares of Common Stock equal to the number of shares of Common Stock
as shall from time to time be necessary to effect the exercise of all of the Warrants then
outstanding (the “Required Reserve Amount”, and such reservation failure, an
“Authorized Share Failure”), then the Company shall promptly take all action necessary to
increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for all the Warrants then outstanding. Without
limiting the generality of the foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the
occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use
its best efforts to solicit its stockholders’ approval of such increase in authorized shares of
Common Stock and to cause its board of directors to recommend to the stockholders that they approve
such proposal.

     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

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     (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock
split, stock dividend, recapitalization or otherwise) outstanding shares of Common Stock into a
larger number of shares, or (iii) combines (by combination, reverse stock split or otherwise)
outstanding shares of Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event. Any adjustment
made pursuant to clause (i) of this paragraph shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution, and
any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an
adjustment under this paragraph occurs during the period that an Exercise Price is calculated
hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.

     (b) Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after
the date of the Purchase Agreement until the six (6) month anniversary of the Original Issue Date,
(I) the Company issues or sells, or in accordance with this Section 9 is deemed to have issued or
sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company) for a consideration per share (the “New Issuance
Price”) less than a price equal to the Exercise Price in effect immediately prior to such issue
or sale or deemed issuance or sale (such Exercise Price then in effect is referred to as the
“Applicable Price”) (the foregoing a “Dilutive Issuance”), (II) as a result of any
Dilutive Issuance, any conversion price or any exercise price (as the case may be) of any MHR
Securities is actually reduced or otherwise decreased or lowered (such a resulting Dilutive
Issuance is referred to as an “MHR Dilutive Issuance” and such reduced, decreased or
lowered (as the case may be) MHR conversion price or exercise price (as the case may be) is
referred to herein as the “New MHR Issuance Price”) and (III) such New MHR Issuance Price
is less than the Applicable Price, then immediately after such Dilutive Issuance, the Exercise
Price then in effect shall be reduced to an amount equal to the New MHR Issuance Price. For
purposes of determining the adjusted Exercise Price under this Section 9(b), the following shall be
applicable:

     (i) Issuance of Options. If the Company in any manner grants or sells any
Options and the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to have been issued and
sold by the Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 9(b)(i), the “lowest price per share for which one share
of Common Stock is issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such
Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any one share
of Common Stock upon the granting or sale of such Option,

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upon exercise of such Option and upon conversion, exercise or exchange of any
Convertible Security issuable upon exercise of such Option and (y) the lowest exercise price
set forth in such Option for which one share of Common Stock is issuable upon the exercise
of any such Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option minus (2) the sum of all amounts paid or payable
to the holder of such Option (or any affiliate or designee of such holder) upon the granting
or sale of such Option, upon exercise of such Option and upon conversion, exercise or
exchange of any Convertible Security issuable upon exercise of such Option plus the value of
any other consideration received or receivable by, or benefit conferred on, the holder of
such Option (or any affiliate or designee of such holder). Except as contemplated by Section
9(b)(iii) below, the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible Securities shall not
be deemed to be an issuance or sale of Common Stock for purposes of clause (I) of Section
9(b) that may trigger an adjustment hereunder.

     (ii) Issuance of Convertible Securities. If the Company in any manner issues or
sells any Convertible Securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this Section 9(b)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof” shall be equal to (1) the lower of (x) the sum of
the lowest amounts of consideration (if any) received or receivable by the Company with
respect to one share of Common Stock upon the issuance or sale of the Convertible Security
and upon conversion, exercise or exchange of such Convertible Security and (y) the lowest
conversion price set forth in such Convertible Security for which one share of Common Stock
is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts
paid or payable to the holder of such Convertible Security (or any affiliate or designee of
such holder) upon the issuance or sale of such Convertible Security plus the value of any
other consideration received or receivable by, or benefit conferred on, the holder of such
Convertible Security (or any affiliate or designee of such holder). Except as contemplated
by Section 9(b)(iii) below, the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities shall not be deemed to be an
issuance or sale of Common Stock for purposes of Section 9(b)(i) that may trigger an
adjustment hereunder, and any such issue or sale of such Convertible Securities made upon
exercise of any Options for which adjustment of this Warrant has been or is to be made
pursuant to other provisions of this Section 9(b), except as contemplated below, shall not
be deemed to be an issuance or sale of Common Stock for purposes of clause (I) of Section
9(b) hereunder that may trigger an adjustment hereunder.

     (iii) Change in Option Price or Rate of Conversion. If the purchase or exercise
price provided for in any Options, the additional consideration, if any, payable upon the
issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which

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any Convertible Securities are convertible into or exercisable or exchangeable for
shares of Common Stock decreases at any time, then for purposes of this Section 9(b) the
shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such decrease.

     (iv) Calculation of Consideration Received. If any Option or Convertible
Security is issued in connection with the issuance or sale or deemed issuance or sale of any
other securities of the Company, together comprising one integrated transaction, (x) such
Option or Convertible Security (as applicable) will be deemed to have been issued for
consideration equal to the Black Scholes Consideration Value thereof and (y) the other
securities issued or sold or deemed to have been issued or sold in such integrated
transaction shall be deemed to have been issued for consideration equal to the difference of
(I) the aggregate consideration received by the Company minus (II) the Black Scholes
Consideration Value of each such Option or Convertible Security (as applicable). If any
shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be deemed to be
the net amount of consideration received by the Company therefor. If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of
such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company for such securities will
be the arithmetic average of the VWAPs of such security for each of the five (5) Trading
Days immediately preceding the date of receipt. If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration other than
cash or publicly traded securities will be determined jointly by the Company and the Holder.
If such parties are unable to reach agreement within ten (10) days after the occurrence of
an event requiring valuation (the “Valuation Event”), the fair value of such
consideration will be determined within five (5) Trading Days after the tenth
(10th) day following such Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the Holder. The determination of such appraiser shall be
final and binding upon all parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company.

     (v) Waiver. For the avoidance of doubt, and notwithstanding anything contained
in this Section 9(b) to the contrary, the Holder acknowledges that (1) MHR has the right, in
its sole discretion, to waive (whether or not for consideration) any anti-dilution,
conversion price and/or exercise price adjustments under the MHR Securities, and (2)
determination of whether and to what extent, if any, the Exercise Price shall be adjusted in
accordance with the terms of this Section 9(b) shall be determined only after giving full
effect to any such waiver.

     (c) Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to all holders of Common Stock for no consideration (i) evidences of its

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indebtedness, (ii) any security (other than a distribution of Common Stock covered by Section
9(a)), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset
(in each case, “Distributed Property”), then, upon any exercise of this Warrant that occurs
after the record date fixed for determination of stockholders entitled to receive such
distribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwise
issuable upon such exercise (if applicable) (without regard to any limitations on exercise hereof),
the Distributed Property that such Holder would have been entitled to receive in respect of such
number of Warrant Shares had the Holder been the record holder of such Warrant Shares immediately
prior to such record date.

     (d) Fundamental Transactions.

     (i) Prior to the consummation of each Fundamental Transaction pursuant to which holders
of shares of Common Stock are entitled to receive securities or other assets with respect to
or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall
make appropriate provision to insure that the Holder will thereafter have the right to
receive upon an exercise of this Warrant at any time after the consummation of the
applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 9(c) above, which shall continue to be receivable thereafter))
issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares
of stock, securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any
limitations on the exercise of this Warrant). Provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Holder.

     (ii) Notwithstanding anything to the contrary, in the event of a Change of Control that
(i) occurs at any time during the period commencing on the date of the Purchase Agreement
and ending on the six (6) month anniversary of the Original Issue Date and (ii) is (1) an
all cash transaction or (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the
Exchange Act, then the Company or any Successor Entity (as defined below) shall, at the
Holder’s option, exercisable at any time concurrently with, or within 30 days after, the
consummation of the applicable Change of Control, and in lieu of any other consideration
which such Holder would have been entitled to receive in respect of such Warrant (and any
underlying Common Stock) in the applicable Change of Control, purchase this Warrant from the
Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the
remaining unexercised portion of this Warrant on the date of the consummation of the
applicable Change of Control.

     (iii) The provisions of this Section 9(d) shall apply similarly and equally to
successive Corporate Events and shall be applied as if this Warrant (and any such subsequent
warrants) were fully exercisable and without regard to any limitations on the exercise of
this Warrant.

     (e) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise

10

 

Price pursuant to paragraphs (a) and (b) of this Section 9, the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number
of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to
such adjustment.

     (f) Calculations. All calculations under this Section 9 shall be made to the nearest
cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.

     (g) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will, at the written request of the Holder, promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or
type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in detail the facts upon
which such adjustment is based. Upon written request, the Company will promptly deliver a copy of
each such certificate to the Holder and to the Company’s Transfer Agent.

     (h) Notice of Events. The Company will give written notice to the Holder (i) at least
two (2) days prior to the date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the shares of Common Stock, or (B) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or liquidation and (iii) at
least two (2) Trading Days prior to the consummation of any Change of Control. Notwithstanding the
foregoing, the failure deliver such notice or any defect therein shall not affect the validity of
the corporate action required to be described in such notice. To the extent that any notice
provided hereunder constitutes, or contains, material, non-public information regarding the Company
(including its subsidiaries), the Company shall simultaneously file such notice with the SEC (as
defined in the Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly
understood and agreed that the time of execution specified by the Holder in each Exercise Notice
shall be definitive and may not be disputed or challenged by the Company.

     10. Payment of Exercise Price. The Holder shall pay the Exercise Price by delivering
immediately available funds to the Company unless the Holder has specified a “Cashless Exercise” in
the applicable Exercise Notice.

     11. No Fractional Shares. No fractional Warrant Shares will be issued in connection
with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be
issuable, the Company shall pay cash equal to the product of such fraction multiplied by the
Closing Bid Price of one Warrant Share on the applicable Exercise Date.

     12. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or

11

 

communication is delivered via facsimile at the facsimile number specified in this Section at
or prior to 5:00 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later than 5:00 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. The addresses for such notices or communications shall be: if
to the Company, to Emisphere Technologies, Inc., 240 Cedar Knolls Road, Suite 200, Cedar Knolls,
New Jersey 07927. Attention: Chief Financial Officer, Facsimile No.: (973) 532-8121 (or such other
address as the Company shall indicate in writing in accordance with this Section) or (ii) if to the
Holder, to the address or facsimile number appearing on the Warrant Register (or such other address
as the Company shall indicate in writing in accordance with this Section).

     13. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this Warrant without any
further act. Any such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s
last address as shown on the Warrant Register.

     14. Noncircumvention. The Company hereby covenants and agrees that the Company will
not, by amendment of its Articles of Incorporation (as defined in the Purchase Agreement), Bylaws
(as defined in the Purchase Agreement) or through any reorganization, transfer of assets,
consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and
take all action as may be required to protect the rights of the Holder. Without limiting the
generality of the foregoing, the Company (i) shall not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect,
(ii) shall take all such actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the Warrants, the maximum number of shares of
Common Stock as shall from time to time be necessary to effect the exercise of the Warrants then
outstanding (without regard to any limitations on exercise).

     15. Dispute Resolution. In the case of a dispute as to the determination of the
Exercise Price, the Closing Bid Price, the Closing Sale Price, the Bid Price or fair market value
or the arithmetic calculation of the number of Warrant Shares (as the case may be), the Company or
the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations
(as the case may be) via facsimile (i) within two (2) Business Days after receipt of the applicable
notice giving rise to such dispute to the Company or the Holder (as the case may

12

 

be) or (ii) if no notice gave rise to such dispute, at any time after the Holder learned of
the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree
upon such determination or calculation (as the case may be) of the Exercise Price, the Closing Bid
Price, the Closing Sale Price, the Bid Price or fair market value or the number of Warrant Shares
(as the case may be) within three (3) Business Days of such disputed determination or arithmetic
calculation being submitted to the Company or the Holder (as the case may be), then the Company
shall, within two (2) Business Days submit via facsimile (a) the disputed determination of the
Exercise Price, the Closing Bid Price, the Closing Sale Price, the Bid Price or fair market value
(as the case may be) to an independent, reputable investment bank selected by the Company and
approved by the Holder or (b) the disputed arithmetic calculation of the number of Warrant Shares
to the Company’s independent, outside accountant. The Company shall cause the investment bank or
the accountant (as the case may be) to perform the determinations or calculations (as the case may
be) and notify the Company and the Holder of the results no later than ten (10) Business Days from
the time it receives such disputed determinations or calculations (as the case may be). Such
investment bank’s or accountant’s determination or calculation (as the case may be) shall be
binding upon all parties absent demonstrable error. If a disputed determination or arithmetic
calculation is submitted to the investment bank or the accountant (as the case may be) pursuant to
this Section 15, then the prevailing party in such determination or calculation shall be reimbursed
by the other party for its costs and expenses (including any and all fees and expenses charged by
the investment back or accountant) incurred in connection with the determination or calculation (as
the case may be).

     16. Remedies, Characterization, Other Obligations, Breaches and Injunctive Relief. The
remedies provided in this Warrant shall be cumulative and in addition to all other remedies
available under this Warrant and the other Transaction Documents, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing herein shall limit the
right of the Holder to pursue actual damages for any failure by the Company to comply with the
terms of this Warrant. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided
for herein with respect to payments, exercises and the like (and the computation thereof) shall be
the amounts to be received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach,
without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is
requested by the Holder that is reasonably necessary to enable the Holder to confirm the Company’s
compliance with the terms and conditions of this Warrant. The issuance of shares and certificates
for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to
the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than the Holder or its
agent on its behalf.

13

 

     17. Miscellaneous.

     (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder, or their successors and assigns. No waiver shall be
effective unless it is in writing and signed by an authorized representative of the waiving party.

     (b) This Warrant shall be governed by and construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant
shall be governed by, the internal laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of New York. The parties hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. THE PARTIES HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

     (c) If any provision of this Warrant is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise
be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability of such provision
shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant
as so modified continues to express, without material change, the original intentions of the
parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or
reciprocal obligations of the parties or the practical realization of the benefits that would
otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to
replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect
of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).

     (d) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

     (e) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a

14

 

commercially reasonable substitute therefore, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.

     (f) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

     18. Certain Definitions. For purposes of this Warrant, the following terms shall have
the following meanings:

     (a) “Bid Price” means, for any security as of the particular time of determination, the bid
price for such security on the Principal Market as reported by Bloomberg as of such time of
determination, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg as of such time of
determination, or if the foregoing does not apply, the bid price of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg
as of such time of determination, or, if no bid price is reported for such security by Bloomberg as
of such time of determination, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.)
as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as
of such time of determination shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved in accordance with the procedures in Section 15.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.

     (b) “Black Scholes Consideration Value” means the value of the applicable Option or
Convertible Security (as the case may be) as of the date of issuance thereof calculated using the
Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an
underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the public announcement of the execution of definitive documents with respect
to the issuance of such Option or Convertible Security (as the case may be), (ii) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of
such Option or Convertible Security (as the case may be) as of the date of issuance of such Option
or Convertible Security (as the case may be) and (iii) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of
issuance of such Option or Convertible Security (as the case may be).

     (c) “Black Scholes Value” means the value of the unexercised portion of this Warrant based on
the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined
as of the day of consummation of the applicable Change of Control for pricing purposes and
reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal
to the time between the date of the public announcement of the applicable Change of Control and the
Expiration Date, (B) an expected volatility equal to the

15

 

greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of
the Trading Day immediately following the public announcement of the applicable Change of Control,
(C) the underlying price per share used in such calculation shall be the sum of the price per share
being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered
in such Change of Control and (D) a remaining option time equal to the time between the date of the
public announcement of the applicable Change of Control and the Expiration Date.

     (d) “Bloomberg” means Bloomberg, L.P.

     (e) “Business Day” means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain closed.

     (f) “Change of Control” means at any time while this Warrant is outstanding (i) the Company,
directly or indirectly, effects any merger or consolidation with or into another Person, in which
the shareholders of the Company as of immediately prior to the transaction own less than a majority
of the outstanding stock of the surviving entity, (ii) the Company, directly or indirectly, effects
any sale of all or substantially all of its assets in one or a series of related transactions,
(iii) any purchase, tender or exchange offer (whether by the Company or any other Person) that is
accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such purchase, tender or
exchange offer), or (iv) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property.

     (g) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price (as
the case may be) then the last bid price or last trade price, respectively, of such security prior
to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the
principal securities exchange or trading market for such security, the last closing bid price or
last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price
or the Closing Sale Price (as the case may be) of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such dispute shall be
resolved in accordance with the procedures in Section 15. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during

16

 

such period.

     (h) “Common Stock” means (i) the Company’s shares of common stock, $0.01 par value per share,
and (ii) any capital stock into which such common stock shall have been changed or any share
capital resulting from a reclassification of such common stock.

     (i) “Convertible Securities” means any stock or other security (other than Options) that is at
any time and under any circumstances, directly or indirectly, convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common
Stock.

     (j) “Eligible Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global
Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the Principal Market.

     (k) “Expiration Date” means the date that is the fifth (5th) anniversary of the
Original Issue Date or, if such date falls on a day other than a Business Day or on which trading
does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday.

     (l) “Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall,
directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into
(whether or not the Company or any of its Subsidiaries is the surviving corporation) any other
Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or
substantially all of its respective properties or assets to any other Person, or (3) allow any
other Person to make a purchase, tender or exchange offer that is accepted by the holders of more
than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of
Voting Stock of the Company held by the Person or Persons making or party to, or associated or
affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4)
consummate a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock
of the Company (not including any shares of Voting Stock of the Company held by the other Person or
other Persons making or party to, or associated or affiliated with the other Persons making or
party to, such stock or share purchase agreement or other business combination), or (5) (I)
reorganize, recapitalize or reclassify the Common Stock, or (II) effect or consummate a stock
combination, reverse stock split or other similar transaction involving the Common Stock, or (ii)
any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the
aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company
(other than MHR).

     (m) “MHR” means, collectively, MHR Fund Management, LLC and any of its affiliated investment
funds and controlled accounts.

     (n) “MHR Securities” means (i) the MHR Notes and (ii) the MHR Warrants.

     (o) “MHR Notes” means those certain 11% Senior Secured Convertible Notes from

17

 

time to time outstanding in the name of MHR Capital Partners (100) LP, MHR Capital Partners
Master Account LP, MHR Institutional Partners II LP and/or MHR Institutional Partners IIA LP.

     (p) “MHR Warrants” means, collectively, the following (x) warrants of the Company dated as of
September 21, 2006: (i) Warrant No. A-12 issued to MHR Institutional Partners IIA LP; (ii) Warrant
No. A-13 issued to MHR Institutional Partners II LP; (iii) Warrant No. A-14 issued to MHR Capital
Partners (100) LP; and (iv) Warrant No. A-15 issued to MHR Capital Partners Master Account LP and
(y) warrants issued by the Company to MHR and the MHR Purchasers (as defined in the Purchase
Agreement) in connection with the Concurrent Offering (as defined in the Purchase Agreement).

     (q) “Options” means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.

     (r) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the
applicable Person and whose common stock or equivalent equity security is quoted or listed on an
Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the
Fundamental Transaction.

     (s) “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity or a government or any
department or agency thereof.

     (t) “Principal Market” means the OTC Bulletin Board.

     (u) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected
by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered
into.

     (v) “Trading Day” means any day on which the Common Stock is traded on the Principal Market,
or, if the Principal Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to
trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is
suspended from trading during the final hour of trading on such exchange or market (or if such
exchange or market does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder and the Company.

     (w) “Voting Stock” of a Person means capital stock of such Person of the class or classes
pursuant to which the holders thereof have the general voting power to elect, or the general power
to appoint, at least a majority of the board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of any other class or classes shall have
or might have voting power by reason of the happening of any contingency).

18

 

     (x) “VWAP” means, for any security as of any date, the dollar volume-weighted average price
for such security on the Principal Market (or, if the Principal Market is not the principal trading
market for such security, then on the principal securities exchange or securities market on which
such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and
ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price”
function or, if the foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for such security during
the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the “pink sheets” by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If VWAP cannot be calculated for such
security on such date on any of the foregoing bases, the VWAP of such security on such date shall
be the fair market value as mutually determined by the Company and the Holder. If the Company and
the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved in accordance with the procedures in Section 15. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

19

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 
	 	EMISPHERE TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Michael R. Garone
 	 
	 	 	Name:  	Michael R. Garone 	 
	 	 	Title:  	Chief Financial Officer 	 

20

 

	 	 	 	 	 

EXERCISE NOTICE

EMISPHERE TECHNOLOGIES, INC.

WARRANT NO. A-51 DATED AUGUST 26, 2010

Ladies and Gentlemen:

     (1) Form of Exercise Price. The Holder intends that payment of the Exercise Price
shall be made as:

               
                    
                 a “Cash Exercise” with respect to   
      
           
            
          Warrant Shares; and/or

                
                     
               a “Cashless Exercise” with respect to          
             
              
     Warrant Shares.

     In the event that the Holder has elected a Cashless Exercise with respect to some or all of
the Warrant Shares to be issued pursuant hereto, the Holder hereby represents and warrants that (i)
this Exercise Notice was executed by the Holder at                      [a.m.][p.m.] on the date set forth
below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice
was $                    .

     (2) Payment of Exercise Price. In the event that the Holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
shall pay the Aggregate Exercise Price in the sum of $                                         to the Company in
accordance with the terms of the Warrant.

     (3) Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee
or agent as specified below,                      Warrant Shares in accordance with the terms of the Warrant.
Delivery shall be made to Holder, or for its benefit, to the following address:

	 	 	 	 	 

	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

     (4) Limitations on Exercise. By its delivery of this Exercise Notice, the undersigned
represents and warrants to the Company that in giving effect to the exercise evidenced hereby the
Holder will not beneficially own in excess of the number of shares of Common Stock (as determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned
under Section 11 of this Warrant to which this notice relates.

	 	 	 	 	 
	 	HOLDER

 	 
	 	(Print name) 	 
	 	 	 
	 	 	 
	 	By:  	
 	 
	 
	 	Title:	 
	 	 	 	 

21

 

WARRANT ORIGINALLY ISSUED AUGUST 26, 2010

WARRANT NO. A-51

FORM OF ASSIGNMENT

To be completed and signed only upon transfer of Warrant

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                     
the right represented by the within Warrant to purchase                     shares of Common
Stock to which the within Warrant relates and appoints                      attorney to transfer said
right on the books of the Company with full power of substitution in the premises.

	 	 	 	 	 	 	 	 	 	 	 

	Dated:	 	 	 	 	 	TRANSFEROR:	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Print name)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 	 	 	 	 	 	TRANSFEREE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Print name)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Address of Transferee)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

	 	 	 

	In the presence of:	 	 
	 	 	 

22exv4w1

Exhibit 4.1

Execution Copy

$700,000,000,

NABORS INDUSTRIES, INC.

5.0% SENIOR NOTES DUE 2020

GUARANTEED BY NABORS INDUSTRIES LTD.

PURCHASE AGREEMENT

UBS SECURITIES LLC

CITIGROUP GLOBAL MARKETS INC.

DEUTSCHE BANK SECURITIES INC.

MIZUHO SECURITIES USA INC.

BANC OF AMERICA SECURITIES LLC

MORGAN STANLEY & CO. INCORPORATED

HSBC SECURITIES (USA) INC.

PNC CAPITAL MARKETS LLC

SCOTIA CAPITAL (USA) INC.

September 9, 2010

 

 

September 9, 2010

UBS SECURITIES LLC

CITIGROUP GLOBAL MARKETS INC.

DEUTSCHE BANK SECURITIES INC.

MIZUHO SECURITIES USA INC.

As representatives of the Initial

Purchasers named in Schedule A

Hereto

c/o

UBS Securities LLC

677 Washington Boulevard

Stamford, CT 06901

CITIGROUP GLOBAL MARKETS INC.

388 Greenwich Street

New York, New York 10013

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”) $700,000,000 aggregate principal
amount of its 5.0% Senior Notes due 2020 (the “Notes”) to be issued pursuant to the provisions of
an Indenture to be dated as of the Closing Date (as defined below) (the “Indenture”) among the
Company, the Guarantor (as defined below), Wilmington Trust Company, as Trustee (the “Trustee”) and
Citibank, N.A., as Securities Administrator (the “Securities Administrator”). The Notes will be
fully and unconditionally guaranteed (the “Guarantees”) by Nabors Industries Ltd., a Bermuda
exempted company (the “Guarantor”). The Notes and the Guarantees are hereinafter collectively
referred to as the “Securities.”

     The 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 5.0% Senior
Notes due 2020 (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 September
8, 2010” (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 September 9, 2010, 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 9:15 A.M. (New York time) on September 9, 2010. 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

-2-

 

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 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 Limited., Nabors
Drilling International Limited, Nabors Drilling International II Limited., Nabors Well Services
Co., Nabors Global Holdings Limited, Nabors Global Holdings II Limited, Nabors Red Lion Limited,
Nabors Blue Shield Ltd., Nabors Lux Finance 1 S.à.r.l., Nabors Lux Finance 2 S.à.r.l., Nabors Finance
Holdings S.à.r.l. 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.

-3-

 

     (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.

     (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) Each of the Indenture and 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 Indenture by the Trustee and the Securities
Administrator and 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.

     (j) 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 (the “Transaction Documents”) will not 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

-4-

 

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.

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

     (1) 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.

     (m) 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.

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

     (o) 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.

     (p) 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

-5-

 

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.

     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 98.914% of the principal amount thereof plus
accrued interest thereon from September 14, 2010 (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 September 14,
2010, 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 Baa2(Negative) from
Moody’s Investors Service, Inc., BBB(Stable) from Standard and Poor’s Ratings Services and
BBB+ (Negative) 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

-6-

 

“nationally recognized statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and

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

     (b) The Initial Purchasers shall have received on the Closing Date 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 Laura W. Doerre, 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 and the Guarantor, as well as certain
corporate records and documents furnished to such counsel by the Company and

-7-

 

the Guarantor 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
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 paragraphs 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 at the Closing Date contained or contains
or (ii) the Final Offering Memorandum, as of its date and at 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

-8-

 

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 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 September 14, 2010 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

-9-

 

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 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

-10-

 

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.

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

     8. Indemnity
and Contribution. (a) The Company and the Guarantor, jointly and severally, agree
to indemnify and hold harmless each Initial Purchaser, 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

-11-

 

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 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 ninth (first sentence only) and tenth paragraphs under the caption “Plan of
Distribution.”

     (c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought pursuant to
Section 8(a) or 8(b), such person (the “indemnified
party”) shall promptly notify the person
against whom such indemnity may be sought (the
“indemnifying party”) in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and disbursements
of such counsel related to such proceeding; but the omission so to promptly notify the
indemnifying party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection provided that the party entitled to
be so notified is not prejudiced by such delay to promptly notify. In any such proceeding,
any indemnified party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not, in respect
of the legal expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified parties and that
all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the 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

-12-

 

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

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

     (e) The Company, the Guarantor and the Initial Purchasers agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata allocation or by
any other method of allocation that does not take account of the

-13-

 

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 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, either the New York Stock Exchange or The NASDAQ
Stock Market LLC, or settlement of trading shall have been materially disrupted, (ii) trading of
any securities of the Guarantor 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

-14-

 

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 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. Notwithstanding the foregoing, if and when the
sale of the Notes is consummated, the Initial Purchasers will reimburse the Company for certain of
the Company’s expenses in connection with the transactions contemplated by this Agreement in an
amount of $910,000.

     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., 388 Greenwich Street, New York, NY 10013, Attention: General Counsel and UBS Securities LLC
at its offices at 677 Washington Boulevard, Stamford CT 06901, Attn: 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.

-15-

 

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

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

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

     17. No Fiduciary Duty. The Company and Guarantor hereby acknowledge that (a) the purchase and
sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between
the Company and the Guarantor, on the one hand, and the Initial Purchasers and any affiliate
through which they may be acting, on the other, (b) the Initial Purchasers are acting as principal
and not as an agent or fiduciary of the Company or the Guarantor and (c) the Company’s engagement
of the Initial Purchasers in connection with the offering and the process leading up to the
offering is as independent contractors and not in any other capacity. Furthermore, the Company and
the Guarantor agree that they are solely responsible for making their own judgments in connection
with the offering (irrespective of whether any of the Initial Purchasers has advised or is
currently advising the Company or the Guarantor on related or other matters). The Company and the
Guarantor agree that they will not claim that the Initial Purchasers have rendered advisory
services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company or
the Guarantor, in connection with such transaction or the process leading thereto.

     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/ Mark D. Andrews
 	 
	 	 	Name:  	Mark D. Andrews 	 
	 	 	  	CORPORATE SECRETARY 	 
	 

	 	 	 	 	 
	 	NABORS INDUSTRIES, INC.

 	 
	 	By:  	/s/ Clark Wood
 	 
	 	 	Name:  	Clark Wood 	 
	 	 	Title:  	Controller 	 
	 

	 	 	 	 	 
	Accepted as of the date hereof:

CITIGROUP GLOBAL MARKETS INC.

 	 	 
	By:  	/s/ Brian Bednarski
 	 	 
	 	Name:  	Brian Bednarski 	 	 
	 	Title:  	Managing Director 	 	 
	 

	 	 	 	 	 
	

UBS SECURITIES LLC

 	 	 
	By:  	/s/ Scott Whitney
 	 	 
	 	Name:  	Scott Whitney 	 	 
	 	Title:  	Managing Director

UBS Securities LLC 	 	 
	 

	 	 	 	 	 
	 	 	 
	By:  	/s/ Matthew Baldwin
 	 	 
	 	Name:  	Matthew Baldwin 	 	 
	 	Title:  	Associate Director

Debt Capital Markets

UBS Securities LLC 	 	 
	 

Signature Page to Purchase Agreement

 

 

SCHEDULE I

Pricing Supplement dated September 9, 2010

	 	 	 

	Initial Purchasers:

	 	UBS Securities LLC
	 

	 	Citigroup Global Markets Inc.
	 

	 	Deutsche Bank Securities Inc.
	 

	 	Mizuho Securities USA Inc.
	 

	 	Banc of America Securities LLC
	 

	 	Morgan Stanley & Co. Incorporated
	 

	 	HSBC Securities (USA) Inc.
	 

	 	PNC Capital Markets LLC
	 

	 	Scotia Capital (USA) Inc.
	Amount:

	 	$700,000,000
	Security Offered:

	 	Senior Unsecured Notes
	Issuer:

	 	Nabors Industries, Inc.
	Guarantor:

	 	Nabors Industries Ltd.
	 
	 	 
	Coupon:

	 	5.000%
	Price to Investor:

	 	99.564%
	Purchase Price:

	 	98.914%
	Bond Denomination:

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

	 	September 15, 2020
	Yield to Maturity:

	 	5.056%
	 
	 	 
	Call Feature:

	 	Make-whole call @ T + 37.5 bps
	 
	 	 
	Put:

	 	Offer to purchase by the Issuer if a Change of Control Triggering Event
	 

	 	occurs (as defined in the Indenture)
	 
	 	 
	1st Coupon:

	 	March 15, 2011
	 
	 	 
	Coupon Payment Dates:

	 	March 15 and September 15
	 
	 	 
	Gross Spread (%)

	 	0.650%
	 
	 	 
	Rating:

	 	Baa2 (Negative) from Moody’s Investors Service, Inc.
	 

	 	BBB (Stable) from Standard & Poor’s Ratings Services
	 

	 	BBB+ (Negative) from Fitch Inc.
	 
	 	 
	Offering Status:

	 	Rule 144A/Regulation S (with registration rights)

-1-

 

	 	 	 

	CUSIPS:

	 	Rule 144A: 629568 AU0
	 

	 	Regulation S: U6295Y AC7
	 

	 	Exchange: 629568 AV8
	 
	ISIN:

	 	Rule 144A: US629568AU04
	 

	 	Regulation S: USU6295YAC76
	 

	 	Exchange: US629568AV86
	 
	Trade Date:

	 	September 9, 2010
	 
	Settlement Date:

	 	September 14, 2009
	 
	Contingent Interest:

	 	No

     In addition:

	 	•	 	As of June 30, 2010, after giving effect to the offering contemplated
by this offering
memorandum, Nabors’ consolidated total indebtedness would have been
approximately
$4.4 billion in debt outstanding, resulting in a gross funded debt to capital ratio
of 0.43:1 and a net funded debt to capital ratio of 0.37:1
	 
	 	•	 	Our (i) cash and cash equivalents, and short-term and long-term investments and
other receivables,
(ii) total long-term debt, (iii) total capitalization and (iv) total short-term and
long-term debt, net of
cash and cash equivalents, short-term and long-term investments and other
receivables, each as of
June 30, 2010 as adjusted to give effect to this offering of the notes and the
application of the net
proceeds thereof would be $1,073 million, $3,065 million, $9,639 million and $3,337
million,
respectively.
	 
	 	•	 	The net proceeds from the offering, after deducting estimated offering
commissions and expenses
payable by us, are expected to be $686.2 million. We plan to use the proceeds to
repay a
borrowing in the amount of $600 million under our Revolving Credit Facility incurred
to fund the
purchase of the Superior Common Stock. To the extent that any portion of the
proceeds is not used
to repay such indebtedness, we intend to use such proceeds for general corporate
purposes. Until
the net proceeds are applied for these purposes, we may invest them in cash
equivalents or other
short-term investments. Certain of the Initial Purchasers or their affiliates are
parties to the
Revolving Credit Facility and will receive a portion of the net proceeds of the
notes offering as a
result of any repayment of the Revolving Credit Facility.

     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 UBS
Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities
USA Inc., Bane of

-2-

 

America Securities LLC, Morgan Stanley & Co. Incorporated, HSBC Securities (USA) Inc., PNC
Capital Markets LLC, or Scotia Capital (USA) Inc. sales representatives to request it.

-3-

 

SCHEDULE A

	 	 	 	 	 
	 	 	Principal Amount of	 
	Initial Purchasers	 	Notes to be Purchased	 
	UBS Securities LLC
	 	$	112,000,000	 
	Citigroup Global Markets Inc.
	 	$	112,000,000	 
	Deutsche Bank Securities Inc.
	 	$	112,000,000	 
	Mizuho Securities USA Inc.
	 	$	112,000,000	 
	Bane of America Securities LLC
	 	$	73,500,000	 
	Morgan Stanley & Co. Incorporated
	 	$	73,500,000	 
	HSBC Securities (USA) Inc.
	 	$	35,000,000	 
	PNC Capital Markets LLC
	 	$	35,000,000	 
	Scotia Capital (USA) Inc.
	 	$	35,000,000	 
	 
	 	 	 
	Total
	 	$	700,000,000	 
	 
	 	 	 

-4-

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