<SUBMISSION>
<ACCESSION-NUMBER>0000950129-02-004529
<TYPE>S-3
<PUBLIC-DOCUMENT-COUNT>8
<FILING-DATE>20020906
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>NABORS INDUSTRIES LTD
<CIK>0001163739
<IRS-NUMBER>980363970
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3
<ACT>33
<FILE-NUMBER>333-99267
<FILM-NUMBER>02758631
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>C/O NABORS INDUSTRIES INC
<STREET2>515 WEST GREENS ROAD
<CITY>HOUSTON
<STATE>TX
<ZIP>77067
<PHONE>2818740035
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>C/O NABORS INDUSTRIES INC
<STREET2>515 WEST GREENS ROAD
<CITY>HOUSTON
<STATE>TX
<ZIP>77067
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>h99572sv3.txt
<DESCRIPTION>NABORS INDUSTRIES LTD.
<TEXT>
<PAGE>

   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 6, 2002

                                                      REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                             ---------------------

                             NABORS INDUSTRIES LTD.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                <C>                                <C>
             BERMUDA                              1381                            980363970
 (State or other jurisdiction of      (Primary Standard Industrial             (I.R.S. Employer
  organization of incorporation)      Classification Code Number)            Identification No.)
</Table>

<Table>
<S>                                                 <C>
                                                                    KATHERINE P. ELLIS
        C/O THE CORPORATE SECRETARY LIMITED                           GENERAL COUNSEL
                  WHITEPARK HOUSE                             NABORS CORPORATE SERVICES, INC.
                  WHITE PARK ROAD                            515 WEST GREENS ROAD, SUITE 1200
               BRIDGETOWN, BARBADOS                                HOUSTON, TEXAS 77067
             TELEPHONE: (246) 228-1590                           TELEPHONE: (281) 874-0035
(Address, Including Zip Code, and Telephone Number,         (Name, Address, Including Zip Code,
       Including Area Code, of Registrant's              and Telephone Number, Including Area Code
           Principal Executive Offices)                            of Agent for Service)
</Table>

                             ---------------------
                                WITH COPIES TO:

                             MICHAEL P. ROGAN, ESQ.
                    SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                           1440 NEW YORK AVENUE, N.W.
                          WASHINGTON, D.C. 20005-2111
                                 (202) 371-7000

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  From time
to time after the effective date of this Registration Statement.

    If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.  [ ]

    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box.  [X]

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.  [ ]

    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  [ ]

    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.  [ ]

                        CALCULATION OF REGISTRATION FEE

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
                                                         PROPOSED MAXIMUM     PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES     AMOUNT TO BE        OFFERING PRICE     AGGREGATE OFFERING       AMOUNT OF
        TO BE REGISTERED               REGISTERED            PER UNIT             PRICE(1)       REGISTRATION FEE(2)
---------------------------------------------------------------------------------------------------------------------
<S>                               <C>                  <C>                  <C>                  <C>
Common shares, par value $.001
  per share.....................       1,000,000              $31.43            $31,430,000           $2,891.56
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
</Table>

(1) Estimated solely for the purposes of calculating the registration fee
    pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based on
    the average high and low per share prices of Nabors Industries Ltd. on
    September 3, 2002, as reported on the American Stock Exchange ($31.43 per
    share).
(2) Calculated by multiplying 0.000092 by the proposed maximum aggregate
    offering price.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO THE SAID SECTION
8(a), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission relating to these securities is effective.
This prospectus is not an offer to sell these securities and is not seeking an
offer to buy these securities in any state where the offer or sale is not
permitted.

                 SUBJECT TO COMPLETION, DATED SEPTEMBER 6, 2002

PROSPECTUS

                            [NABORS INDUSTRIES LOGO]

                         UP TO 1,000,000 COMMON SHARES
                         (PAR VALUE US$.001 PER SHARE)

                                       OF

                             NABORS INDUSTRIES LTD.

     This prospectus relates to the common shares of Nabors Industries Ltd., a
Bermuda exempted company (which we refer to as Nabors in this prospectus),
issuable upon exchange or redemption of the exchangeable shares of Nabors
Exchangeco (Canada) Inc., a Canadian corporation and an indirect subsidiary of
Nabors, which we call Exchangeco in this prospectus.

     The exchangeable shares are being issued to the former shareholders of Ryan
Energy Technologies Inc., a corporation incorporated under the laws of Alberta,
Canada (which we refer to as Ryan in this prospectus), in connection with our
acquisition of Ryan. Each exchangeable share may be exchanged for one of our
common shares, plus the aggregate amount of dividends payable and unpaid, if
any, on each such exchangeable share. In some cases, Exchangeco may redeem each
exchangeable share for one of our common shares plus the aggregate amount of
dividends payable and unpaid, if any, on each such exchangeable share. Because
our common shares offered by this prospectus will be issued in exchange for, or
upon the redemption of, the exchangeable shares, we will not receive any cash
proceeds from the issuance of our common shares upon exchange or redemption of
exchangeable shares in connection with this offering.

     We are paying all expenses of registration incurred in connection with this
offering.

     Nabors' common shares are traded on the American Stock Exchange under the
symbol "NBR." On September 5, 2002, the last reported sale price of our common
shares on that exchange was $30.95. Unless otherwise indicated, all dollar
references in this prospectus are to U.S. dollars.

     INVESTING IN NABORS' COMMON SHARES INVOLVES RISKS.   SEE "RISK FACTORS"
BEGINNING ON PAGE 5.

     NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                The date of this prospectus is           , 2002.
<PAGE>

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
About This Prospectus.......................................    1
The Company.................................................    1
Recent Developments.........................................    2
Risk Factors................................................    5
Where You Can Find More Information.........................    6
Incorporation of Certain Documents by Reference.............    6
Forward-Looking Statements..................................    7
Use of Proceeds.............................................    8
Plan of Distribution........................................    8
Description of Our Share Capital............................   14
Income Tax Considerations...................................   17
Legal Matters...............................................   25
Independent Accountants.....................................   25
</Table>
<PAGE>

                             ABOUT THIS PROSPECTUS

     This document is called a prospectus and a copy has been filed, as part of
a registration statement, with the Securities and Exchange Commission (which we
refer to as the SEC in this prospectus) using a "shelf" registration or
continuous offering process.

     The registration statement containing this prospectus, including the
exhibits to the registration statement, provides additional information about us
and the securities offered under this prospectus. The registration statement,
including the exhibits, can be read at the SEC web site or at the SEC office
mentioned under the heading "Where You Can Find More Information."

     You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer or soliciting a purchase of
these securities in any jurisdiction in which the offer or solicitation is not
authorized or in which the person making the offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make the offer or
solicitation. You should not assume that the information in this prospectus or
any prospectus supplement is accurate as of any date other than the date on the
front of this document.

     THIS PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT BUSINESS AND FINANCIAL
INFORMATION ABOUT NABORS, EXCHANGECO, THE EXCHANGEABLE SHARES AND THE COMMON
SHARES OF NABORS THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS.
COPIES OF THE INCORPORATED DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS,
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE THEREIN) WILL BE
FURNISHED UPON WRITTEN OR ORAL REQUEST WITHOUT CHARGE TO EACH PERSON TO WHOM
THIS PROSPECTUS IS DELIVERED. REQUESTS SHOULD BE DIRECTED TO NABORS INDUSTRIES
LTD., WHITEPARK HOUSE, WHITE PARK ROAD, BRIDGETOWN, BARBADOS, OR VISIT OUR
WEBSITE AT "HTTP://WWW.NABORS.COM". WEBSITE MATERIALS ARE NOT PART OF THIS
PROSPECTUS.

     Unless we have indicated otherwise, references in this prospectus to
"Nabors," "we," "us," and "our" or similar terms are to Nabors Industries Ltd.
and its consolidated subsidiaries. Additionally, references in this prospectus
to documents incorporated by reference of Nabors Industries, Inc. (which we
refer to as Nabors Delaware in this prospectus) pertain to Nabors because,
pursuant to a reorganization (which we refer to as the reorganization in this
prospectus), Nabors became the successor entity to Nabors Delaware.

                                  THE COMPANY

     Nabors, together with its subsidiaries, is the largest land drilling
contractor in the world, with almost 600 land drilling rigs as of August 31,
2002. We conduct oil, gas and geothermal land drilling operations in the U.S.
lower 48 states, Alaska and Canada, and elsewhere, primarily in South and
Central America, the Middle East and Africa. We also are one of the largest land
well-servicing and workover contractors in the United States and in Canada. We
own approximately 745 land well-servicing and workover rigs in the southwestern
and western United States, and approximately 233 land well-servicing and
workover rigs in other markets, including approximately 193 rigs in Canada. We
also are a leading provider of offshore platform workover and drilling rigs. We
operate 44 platform, 17 jackup and three barge rigs in the Gulf of Mexico and
other markets. These rigs provide well-servicing, workover and drilling
services.

     To further supplement our primary business, we offer a number of ancillary
well-site services, including oilfield management, engineering, transportation,
construction, maintenance, well logging and other support services, in selected
domestic and international markets. Our land transportation and hauling fleet
includes approximately 240 rig and oilfield equipment hauling tractor-trailers
and a number of cranes, loaders and light-duty vehicles. We also maintain over
290 fluid hauling trucks, approximately 700 fluid storage tanks, eight salt
water disposal wells and other auxiliary equipment used in domestic drilling and
well-servicing operations. In addition, we market a fleet of 30 marine
transportation and support vessels,

                                        1
<PAGE>

primarily in the Gulf of Mexico, that provides transportation of drilling
materials, supplies and crews for offshore rig operations and support for other
offshore operations. And we manufacture and lease or sell top drives for a broad
range of drilling rig applications, rig instrumentation and data collection
equipment, and rig reporting software.

     Nabors was formed as a Bermuda exempted company on December 11, 2001. Our
principal executive offices are located at Whitepark House, White Park Road,
Bridgetown, Barbados. Our phone number at our principal executive offices is
(246) 228-1590.

                              RECENT DEVELOPMENTS

AGREEMENT TO ACQUIRE RYAN

     On August 12, 2002, we entered into an arrangement agreement to acquire
Ryan. The acquisition will become effective pursuant to a plan of arrangement
submitted for approval to the securityholders of Ryan and to the Court of
Queen's Bench of Alberta. We have agreed to pay Cdn$1.85 per Ryan common share.
The purchase price is payable, at the election of each individual Ryan
shareholder, in cash, in exchangeable shares of Exchangeco or in a combination
of cash and such exchangeable shares. The exchangeable shares will be
exchangeable for our common shares on a 1:1 basis, plus the aggregate amount of
dividends payable and unpaid, if any, on each such exchangeable share. We
anticipate that the acquisition will close on or about October 9, 2002.

     Under the terms of the arrangement, if the transaction is completed, each
holder of Ryan common shares who so elects will receive a number of exchangeable
shares for each common share equal to the exchange ratio. Each registered
shareholder will receive only a whole number of exchangeable shares, and will be
paid a cash amount by Exchangeco in lieu of any fractional entitlement. Each
exchangeable share will have economic and voting rights effectively equivalent
to one Nabors common share and will be exchangeable at any time for one Nabors
common share.

     Pursuant to the arrangement, the exchange ratio means a fraction the
numerator of which is Cdn$1.85 and the denominator of which is the weighted
average trading price of Nabors common shares on the American Stock Exchange,
converted to Canadian dollars, for the three consecutive trading days ending on
the third business day prior to the date of the Ryan shareholders meeting to
approve the plan of arrangement (currently expected to be October 8, 2002). For
these purposes, the "weighted average trading price" will be determined by
dividing the aggregate sale price of all Nabors common shares sold on the
American Stock Exchange during the three trading day period by the total number
of Nabors common shares sold. The weighted average trading price will be
converted to Canadian dollars based on the average of the noon buying rates
(expressed to the fourth decimal place) in New York City for cable transfers in
Canadian dollars as certified for customs purposes by the Federal Reserve Bank
of New York for each such trading day.

     Nabors and Ryan will issue a press release announcing the exchange ratio at
the end of the measurement period, currently anticipated to be issued after the
close of business on October 3, 2002.

     Optionholders of Ryan may exercise their options prior to the arrangement
becoming effective and elect to receive exchangeable shares, cash or a
combination thereof in respect of the Ryan common shares issued on such
exercise. Alternatively, optionholders of Ryan may surrender their options for
termination in which case they will be paid in cash at closing of the
arrangement, in respect of each such option, the greater of: (i) the positive
difference, if any, between Cdn$1.85 and the exercise price of such option for
each Ryan common share issuable on exercise of such option, and (ii) Cdn$0.10
per common share issuable on exercise of such option, subject to required
withholdings.

     As a result of the arrangement, all options to acquire Ryan common shares
that have not previously been exercised or surrendered for termination will be
terminated and each holder of such options will be paid in cash, in respect of
each such option, the greater of: (i) the positive difference, if any, between
Cdn$1.85 and the exercise price of such option for each Ryan common share
issuable on exercise of such

                                        2
<PAGE>

option, and (ii) Cdn$0.10 per common share issuable on exercise of such option,
subject to required withholdings.

     Certain shareholders and optionholders of Ryan who own or control an
aggregate of 4,454,058 Ryan common shares and options to acquire 450,000 Ryan
common shares, which constitute approximately 21% of the outstanding common
shares of Ryan (diluted for in-the-money options), have agreed, subject to the
terms and conditions of those agreements, to vote their Ryan common shares and
options in favor of the plan of arrangement.

     Nabors may acquire the 4,454,058 Ryan common shares, discussed above, for
Cdn$1.85 each, upon the occurrence of the following events:

     - Ryan's board of directors withdrawing or adversely modifying or changing
       its recommendations or determinations related to the acquisition of Ryan,

     - Ryan's board of directors failing to reaffirm its recommendation of the
       arrangement by press statement within three business days after the
       expiration of the time period for Nabors to advise whether it will amend
       the terms of the arrangement to account for a superior proposal (which
       involves a proposal which is demonstrably superior to the arrangement
       from a financial point of view to Ryan's shareholders), and three
       business days after the public announcement or commencement of another
       acquisition proposal (which involves a proposal to acquire in any manner,
       directly or indirectly, beneficial ownership of or control or direction
       over more than 20% of the outstanding voting shares of Ryan),

     - Ryan's board of directors recommending that any of its shareholders
       deposit their shares under, vote in favour of, or otherwise accept, an
       acquisition proposal,

     - Ryan entering into an agreement, commitment or understanding with any
       person, entity or group with respect to an acquisition proposal prior to
       the closing of the acquisition, excluding permitted confidentiality
       agreements,

     - prior to the closing of the acquisition, Ryan breaching any of its
       representations, warranties, agreements or obligations in the arrangement
       agreement which breach would result in the failure to satisfy conditions
       related to the closing of the acquisition and which breach is: related to
       Ryan's agreement not to solicit other acquisitions, an intentional
       breach, not curable or not cured within 5 days of notice, and

     - the existence of an acquisition proposal being publicly announced or made
       to the shareholders of Ryan or Ryan providing notice of such acquisition
       proposal.

As a result of Nabors' ability to acquire the 4,454,058 Ryan common shares,
Nabors may be considered to have acquired ownership, control or direction over
such shares. Nabors did not previously own or exercise control or direction over
any securities of Ryan.

CORPORATE REORGANIZATION

     Effective June 24, 2002, Nabors became the successor to Nabors Delaware
following a corporate reorganization, which effectively changed the jurisdiction
of incorporation of Nabors from Delaware to Bermuda. The reorganization was
accomplished through a merger of an indirect, newly formed Delaware subsidiary
of Nabors with and into Nabors Delaware. Nabors Delaware was the surviving
company in the merger. As a result of the merger, Nabors Delaware became a
wholly-owned, indirect subsidiary of Nabors. Upon consummation of the merger,
all outstanding shares of Nabors Delaware common stock automatically converted
into the right to receive Nabors common shares, with the result that the
shareholders of Nabors Delaware on the date of the merger became the
shareholders of Nabors. Nabors and its subsidiaries continue to conduct the
businesses previously conducted by Nabors Delaware and its subsidiaries. The
reorganization has been accounted for as a reorganization of entities under
common control and accordingly, it did not result in any changes to the
consolidated amounts of assets, liabilities and stockholders' equity.

                                        3
<PAGE>

     The Board of Nabors Delaware approved the expatriation transaction because
international activities are an important part of Nabors' current business and
they believe that international operations will continue to grow in the future.
Expansion of Nabors' international business is an important part of its current
business strategy and significant growth opportunities exist in the
international marketplace. Nabors believes that reorganizing as a Bermuda
company will allow Nabors to implement its business strategy more effectively.
In addition, Nabors believes that the reorganization should increase its access
to international capital markets and acquisition opportunities, increase its
attractiveness to non-U.S. investors, improve global cash management, improve
its global tax position and result in a more favorable corporate structure for
expansion of its current business.

     Several members of the United States Congress have introduced legislation
that, if enacted, would have the effect of eliminating the tax benefits of the
reorganization. In particular, on June 18, 2002, the Senate Finance Committee
approved legislation introduced by Senator Charles Grassley, the Ranking
Minority Member of the Senate Finance Committee, along with Senator Max Baucus,
the Chairman of the Senate Finance Committee, (S. 2119) that, for United States
federal tax purposes, would treat a foreign corporation, such as Nabors, that
undertakes a corporate expatriation transaction, such as the reorganization, as
a domestic corporation and, thus, such foreign corporation would be subject to
United States federal income tax. S. 2119 is proposed to be effective for
corporate expatriation transactions completed after March 20, 2002. In addition,
on July 11, 2002, Representative Bill Thomas, Chairman of the House Committee on
Ways and Means, introduced legislation (H.R. 5095) that is substantially similar
to S. 2119 with respect to its treatment of corporations that undertake a
corporate expatriation transaction such as the reorganization, except that (i)
it is proposed to apply to transactions completed after March 20, 2002 and
before March 21, 2005 and (ii) it would not permit shareholders to qualify for
tax-free treatment with respect to a corporate expatriation transaction such as
the reorganization. If any of the proposed legislation, including S. 2119 or
H.R. 5095, were enacted with their proposed effective dates, the tax savings
would not be realized from the reorganization.

     In addition, there has been significant, increased negative publicity and
criticism of corporate expatriation transactions from public pension funds and
other investors since the time Nabors completed its reorganization.

     In light of such events and if and when any such legislation is enacted,
Nabors will consider the effects of such legislation and will evaluate all
strategic alternatives that may be necessary or prudent in response to such
legislation.

ISSUANCE OF SENIOR NOTES BY NABORS DELAWARE AND NABORS HOLDINGS

     On August 22, 2002 Nabors Holdings 1, ULC (which we refer to as Nabors
Holdings in this prospectus), an indirect, wholly-owned subsidiary of Nabors,
issued $225 million aggregate principal amount of 4.875% senior notes due 2009
(which refer to as Nabors Holdings notes in this prospectus), fully and
unconditionally guaranteed by Nabors and Nabors Delaware, to qualified
institutional buyers under Rule 144A of the Securities Act of 1933, as amended,
of the United States (which we refer to as Rule 144A in this prospectus).
Concurrently with this offering by Nabors Holdings, Nabors Delaware issued $275
million aggregate principal amount of 5.375% senior notes due 2012 (which we
refer to as the Nabors Delaware notes in this prospectus), fully and
unconditionally guaranteed by Nabors, to qualified institutional buyers under
Rule 144A. Interest on the Nabors Holdings notes and the Nabors Delaware notes
is payable August 15 and February 15 of each year, beginning on February 15,
2003.

     Both the Nabors Holdings notes and the Nabors Delaware notes are unsecured
and are effectively junior in right of payment to any of such issuer's future
secured debt. The Nabors Holdings notes and Nabors Delaware notes will rank
equally in right of payment with any of such issuer's future unsubordinated debt
and will be senior in right of payment to any of such issuer's subordinated
debt. The guarantees of Nabors Delaware and Nabors with respect to the Nabors
Holdings notes, and the guarantee of Nabors with respect to the Nabors Delaware
notes, will be similarly unsecured and have a similar ranking to the series of
notes so guaranteed.

                                        4
<PAGE>

     Subject to certain qualifications and limitations, the indenture governing
the Nabors Holdings notes and the indenture governing the Nabors Delaware notes
limit the ability of Nabors and its subsidiaries to incur liens and to enter
into sale and lease-back transactions. In addition, such indentures limit the
ability of Nabors, Nabors Delaware and Nabors Holdings to enter into mergers,
consolidations or transfers of all or substantially all of such entity's assets
unless the successor company assumes the obligations of such entity under the
applicable indenture.

     In exchange for Nabors Holdings notes, Nabors Holdings expects to issue new
notes consisting of up to $225 million aggregate principal amount of 4.875%
senior notes due 2009 which will have been registered under the Securities Act
of 1933, as amended (which we refer to as the Nabors Holdings exchange notes in
this prospectus). The terms of the Nabors Holdings exchange notes, including the
terms of the guarantees by Nabors Delaware and Nabors, will be substantially
identical to those of the Nabors Holdings notes, except that the transfer
restrictions and registration rights relating to the Nabors Holdings notes will
not apply to the Nabors Holdings exchange notes.

     Similarly, Nabors Delaware expects to issue new notes consisting of up to
$275 million aggregate principal amount of 5.375% senior notes due 2012 which
will have been registered under the Securities Act of 1933, as amended (which we
refer to as the Nabors Delaware exchange notes in this prospectus) in exchange
for the Nabors Delaware notes. The terms of the Nabors Delaware exchange notes,
including the terms of the guarantee by Nabors, will be substantially identical
to those of the Nabors Delaware notes, except that the transfer restrictions and
registration rights relating to the Nabors Delaware notes will not apply to the
Nabors Delaware exchange notes.

                                  RISK FACTORS

     Investing in our common shares involves risk. In addition to the risk
factors described: (i) in Nabors Delaware's Annual Report on Form 10-K, for the
year ended December 31, 2001, as amended, under the heading "Item 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS", (ii) in our Quarterly Report on Form 10-Q, for the quarter ended
June 30, 2002, under the heading "Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and (iii) in our Registration
Statement on Form S-4, filed with the SEC on January 2, 2002, as amended, under
the heading "RISK FACTORS," which are incorporated by reference in this
prospectus, and the other information contained or incorporated by reference in
this prospectus, you should carefully consider the risk factors described below
before making an investment decision. The risks and uncertainties described
below and incorporated by reference are not the only risks we face. Additional
risks and uncertainties not presently known to us or that we currently deem
immaterial may impair our future business operations.

THE EXCHANGE OF YOUR EXCHANGEABLE SHARES IS GENERALLY TAXABLE.

     Based on the tax laws as of the date of this prospectus, the exchange of
exchangeable shares for our common shares is generally a taxable event in Canada
and may be a taxable event in the United States. A holder's tax consequences can
vary depending on a number of factors, including the residency of the holder,
the method of the exchange and the length of time that the exchangeable shares
were held prior to the exchange. Canadian and United States federal income tax
consequences will vary depending on your particular circumstances. We strongly
urge you to consult your tax advisor as to the tax consequences of exchanging
your exchangeable shares for our common shares. See "Income Tax Considerations."

THE MARKET PRICE OF OUR COMMON SHARES MAY BE LESS THAN THE MARKET PRICE OF THE
EXCHANGEABLE SHARES.

     Our common shares are listed on the American Stock Exchange, and the
exchangeable shares are listed on the Toronto Stock Exchange. We do not intend
to list the exchangeable shares or our common shares on any other stock exchange
in Canada or in the United States. As a result, the price at which the
exchangeable shares trade is based upon the market for such shares on the
Toronto Stock Exchange, and
                                        5
<PAGE>

the price at which our common shares trade is based upon the market for such
shares on the American Stock Exchange. Although we believe that the market price
of the exchangeable shares on the Toronto Stock Exchange and the market price of
our common shares on the American Stock Exchange should reflect essentially
equivalent values, there can be no assurance that the market price of our common
shares will be identical, or even similar, to the market price of the
exchangeable shares.

OUR COMMON SHARES WILL BE FOREIGN PROPERTY FOR CANADIAN TAX PURPOSES.

     You may be required to limit your investment in our common shares or risk
incurring penalties under the Income Tax Act (Canada) if you are:

     - a registered pension plan;

     - a registered retirement savings plan;

     - a registered retirement income fund;

     - a deferred profit sharing plan; or

     - among some other classes of tax-exempt person.

     So long as the exchangeable shares are listed on a prescribed Canadian
stock exchange, which exchanges include the Toronto Stock Exchange, and
Exchangeco maintains a substantial presence in Canada, the exchangeable shares
will not be foreign property under the Income Tax Act (Canada). Our common
shares will, however, be foreign property for these plans or persons. These
plans or persons may have to limit their investment in our common shares or risk
incurring penalties under the Income Tax Act (Canada).

                      WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and current reports, proxy statements and other
information with the SEC. Nabors Delaware previously filed such reports and
materials but is no longer required to do so following the corporate
reorganization on June 24, 2002, described under the section entitled "Recent
Developments." Nabors Delaware's previous filings pertain to Nabors because
Nabors pursuant to a reorganization became the successor entity to Nabors
Delaware. You may obtain any document we file or filed by Nabors Delaware with
the SEC at the SEC's Public Reference Room in Washington, D.C. You may obtain
information on the operation of the SEC's Public Reference Room by calling the
SEC at 1-800-SEC-0330. You can request copies of these documents, upon payment
of a duplicating fee, by writing to the SEC at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549-1004. Our SEC filings are also accessible
through the Internet at the SEC's web site at http://www.sec.gov. In addition,
reports, proxy and information statements and other information concerning
Nabors can be inspected at the American Stock Exchange, 86 Trinity Place, New
York, New York 10006, where Nabors' common shares are listed.

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The SEC permits us to "incorporate by reference" into this prospectus the
information in documents we and Nabors Delaware file with it, which means that
we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be a part
of this prospectus, and later information that we file with the SEC will update
and supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, until the offering is
otherwise terminated:

     - Nabors Delaware's Annual Report on Form 10-K for the fiscal year ended
       December 31, 2001 (File No. 001-09245), as amended by Form 10-K/A filed
       by Nabors on June 26, 2002 (File No. 000-49887);
                                        6
<PAGE>

     - Nabors Delaware's Quarterly Report on Form 10-Q for the quarter ended
       March 31, 2002 (File No. 001-09245);

     - Nabors' Quarterly Report on Form 10-Q for the quarter ended June 30, 2002
       (File No. 000-49887);

     - Nabors Delaware's Current Reports on Form 8-K filed on January 3, 2002,
       January 25, 2002, April 18, 2002, June 14, 2002, and June 25, 2002 (File
       No. 001-09245);

     - Nabors' Current Reports on Form 8-K filed on June 25, 2002 (File No.
       333-76198), June 26, 2002, July 18, 2002, August 14, 2002, August 16,
       2002, and August 20, 2002 (File No. 000-49887); and

     - The description of Nabors' common shares contained in Nabors'
       Registration Statement on Form S-4, filed on January 2, 2002, as amended
       by Pre-Effective Amendment No. 1, Pre-Effective Amendment No. 2,
       Pre-Effective Amendment No. 3 and Pre-Effective Amendment No. 4 to Form
       S-4, filed with the SEC on March 25, 2002, April 17, 2002, April 29,
       2002, and May 10, 2002, respectively (Registration No. 333-76198).

     If you request a copy of any or all of the documents incorporated by
reference, we will send to you the copies you requested at no charge. However,
we will not send exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents. You should direct
requests for such copies to Nabors Industries Ltd., Whitepark House, White Park
Road, Bridgetown, Barbados, telephone: (246) 228-1590.

     We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, as amended (which we refer to as the Securities Act in
this prospectus), covering the securities described in this prospectus. This
prospectus does not contain all of the information included in the registration
statement. Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual contract,
agreement or other document. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or matter involved.
Each statement regarding a contract, agreement or other document is qualified in
its entirety by reference to the actual document.

                           FORWARD-LOOKING STATEMENTS

     The statements in this document and the documents incorporated by reference
that relate to matters that are not historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934. When used in this document and the
documents incorporated by reference, words such as "anticipate," "believe,"
"expect," "plan," "intend," "estimate," "project," "will," "should," "could,"
"may," "predict" and similar expressions are intended to identify
forward-looking statements. Further events and actual results may differ
materially from those set forth or implied in forward-looking statements. Any
forward-looking statements, including statements regarding the intent, belief or
current expectations of Nabors or management, are not guarantees of future
performance and involve risks, uncertainties and assumptions about Nabors and
the industry in which we operate, including, among other things:

     - fluctuations in worldwide prices and demand for oil and natural gas;

     - fluctuations to levels of oil and natural gas exploration and development
       activities;

     - fluctuations in the demand for contract drilling and workover services;

     - the existence of competitors, technological changes and developments in
       the oilfield services industry;

     - the existence of operating risks inherent in the oilfield services
       industry;

     - the existence of regulatory and legislative uncertainties;
                                        7
<PAGE>

     - outcomes of pending and future litigation;

     - the possibility of political instability, war or acts of terrorism in any
       of the countries in which we do or will do business;

     - changes in capital needs;

     - an inability to execute our business strategy; and

     - general economic conditions.

     Our businesses depend, to a large degree, on the level of spending by oil
and gas companies for exploration, development and production activities.
Therefore, a sustained increase or decrease in the price of natural gas or oil,
which could have a material impact on exploration and production activities,
could also materially affect our financial position, results of operations and
cash flows.

     All forward-looking statements in this prospectus are based on information
available to us on the date of this prospectus. We do not intend to update or
revise any forward-looking statements that we may make in this prospectus or
other documents, reports, filings or press releases, whether as a result of new
information, future events or otherwise.

                                USE OF PROCEEDS

     Because our common shares will be issued in exchange for exchangeable
shares, we will not receive any cash proceeds upon the issuance of our common
shares upon exchange or redemption of the exchangeable shares.

                              PLAN OF DISTRIBUTION

EXCHANGEABLE SHARES

     Our common shares may be issued to you in exchange for your exchangeable
shares in the following ways:

     - You may require Exchangeco to exchange your exchangeable shares for an
       equivalent number of our common shares. We refer to this as your
       retraction rights.

     - Exchangeco may automatically redeem your exchangeable shares for our
       common shares at any time on or after April 26, 2007, or upon the
       occurrence of any of the events described under "Our Redemption Rights."
       We refer to these rights as our redemption rights.

     - Upon our liquidation or the liquidation or insolvency of Exchangeco, you
       may be required to, or may choose to, exchange your exchangeable shares
       for our common shares. We refer to these rights as your exchange rights.

     In addition, 3064297 Nova Scotia Company, an unlimited liability company
organized under the laws of Nova Scotia, Canada, and our indirect, wholly-owned
subsidiary (which we refer to as Callco in this prospectus) may exercise call
rights over your exchangeable shares as described under "Callco's Call Rights"
beginning on page 12. These call rights permit Callco to require an exchange of
your exchangeable shares for our common shares if you exercise your retraction
rights or exchange rights or in any circumstance where Exchangeco exercises its
redemption rights. We are also permitted to exercise the call right identified
below as the "change of law call right". Callco and Nabors plan to exercise
their call rights, when available, and we currently foresee no circumstances
under which Callco or Nabors would not exercise their call rights. Consequently,
we expect that you will receive our common shares through an exchange with
Callco or Nabors, as the case may be, as opposed to a redemption by Exchangeco,
of your exchangeable shares for our common shares. While the consideration
received upon an exchange with

                                        8
<PAGE>

Callco or Nabors or a redemption by Exchangeco will be the same, the tax
consequences will be substantially different. These call rights are described
below and are respectively called the:

     - retraction call rights;

     - liquidation call rights;

     - redemption call rights; and

     - change of law call rights.

YOUR RETRACTION RIGHTS

     Subject to applicable law and Callco's retraction call right described in
this prospectus, you are entitled at any time to retract, or require Exchangeco
to redeem, any or all of your exchangeable shares and to receive an equal number
of our common shares plus the aggregate amount of dividends payable and unpaid,
if any, on each such exchangeable share. You may exercise your retraction rights
by presenting to the transfer agent for the exchangeable shares or Exchangeco:

     - a certificate or certificates representing the number of exchangeable
       shares you desire to retract;

     - any other documents as may be required to effect the retraction of such
       exchangeable shares; and

     - a duly executed retraction request:

      - specifying the number of exchangeable shares you desire to retract;

      - stating the retraction date on which you desire to have Exchangeco
        redeem your exchangeable shares, which must be between 10 and 15
        business days from the date Exchangeco receives the request; and

      - acknowledging Callco's overriding retraction call right to purchase all
        but not less than all of the retracted shares directly from you and that
        the retraction request will be deemed to be a revocable offer by you to
        sell the retracted shares to Callco in accordance with Callco's
        retraction call right on the terms and conditions described below.

     Exchangeco will promptly notify Callco upon receipt of a retraction
request. In order to exercise its retraction call right, Callco must notify
Exchangeco of its determination to do so within five business days of
Exchangeco's receipt of the retraction request. If Callco delivers the call
notice to Exchangeco within five business days, and you have not revoked your
retraction request, Exchangeco will not redeem the retracted shares and Callco
will purchase from you the retracted shares on the retraction date. If Callco
does not timely deliver the call notice and you have not revoked your retraction
request, Exchangeco will redeem the retracted shares on the retraction date. In
the event that Callco exercises its retraction call right, the closing of the
purchase and sale of the retracted shares under the retraction call right will
be deemed to occur as at the close of business on the retraction date, and no
redemption by Exchangeco of the retracted shares will take place on the
retraction date.

     You may revoke a retraction request by giving notice in writing to
Exchangeco at any time prior to the close of business on the business day
immediately preceding the retraction date, in which case the retracted shares
will neither be purchased by Callco nor be redeemed by Exchangeco. If the
retraction request is not revoked on or prior to the close of business on the
business day immediately preceding the retraction date, the retracted shares
will either be purchased by Callco or redeemed by Exchangeco. Callco or
Exchangeco, as the case may be, will then deliver or cause Exchangeco's transfer
agent to deliver the retraction price to you by mailing:

     - certificates representing the number of our common shares equal to the
       number of exchangeable shares purchased or redeemed, registered in your
       name or such other name as you may request; and

     - if applicable, a check payable to you for the aggregate amount of
       dividends payable and unpaid on each such exchangeable share,

                                        9
<PAGE>

to the address recorded in the securities register of Exchangeco or to the
address specified in your retraction request or by holding the same for you to
pick up at the registered office of Exchangeco or the office of Exchangeco's
transfer agent as specified by Exchangeco, in each case less any amounts
required to be withheld because of applicable taxes.

     If, as a result of solvency requirements or applicable law, Exchangeco is
not permitted to redeem all of your exchangeable shares specified in the
retraction request, and provided Callco has not exercised its retraction call
right with respect to such retracted shares, Exchangeco will redeem only those
retracted shares requested by you (rounded down to a whole number of shares) as
would not be contrary to provisions of applicable law. The trustee under the
voting and exchange trust agreement, on your behalf, will require us to purchase
the retracted shares not redeemed by Exchangeco or purchased by Callco on the
retraction date or as soon as reasonably practicable after the retraction date,
under your exchange rights.

OUR REDEMPTION RIGHTS

     Subject to applicable law and Callco's redemption call rights discussed
below, on an automatic redemption date, Exchangeco will redeem all of the then
outstanding exchangeable shares in exchange for an equal number of our common
shares, plus the aggregate amount of dividends payable and unpaid, if any, on
each such exchangeable share. Notwithstanding any proposed redemption of the
exchangeable shares you may initiate, our redemption rights give us the
overriding right to acquire on an automatic redemption date all but not less
than all of the outstanding exchangeable shares in exchange for an equal number
of our common shares, plus the amount of all payable and unpaid dividends, if
any, on each such exchangeable share.

     An automatic redemption will occur upon the first to occur of:

     - April 26, 2007, at the discretion of the board of directors of
       Exchangeco;

     - the date that there are outstanding less than 1,500,000 exchangeable
       shares (other than exchangeable shares held by us and our affiliates) and
       the board of directors of Exchangeco decides to accelerate the redemption
       of the exchangeable shares prior to April 26, 2007 (Exchangeco will not
       exercise the redemption right based on the number of exchangeable shares
       outstanding prior to January 1, 2003, or if Ryan shareholders elect
       pursuant to the arrangement to receive in aggregate not less than 300,000
       exchangeable shares, prior to January 1, 2004);

     - the occurrence of any merger, amalgamation, tender offer, material sale
       of shares or similar transactions involving Nabors, or any proposal to
       carry out the same, in which case the board of directors of Exchangeco
       determines in good faith that it is not reasonably practicable to
       substantially replicate the terms and conditions of the exchangeable
       shares in connection with such transaction and that the redemption of all
       but not less than all of the exchangeable shares is necessary to enable
       the completion of such transaction in accordance with its terms;

     - the business day prior to the record date for any meeting or vote of
       Exchangeco shareholders to consider any matter in which the holders of
       exchangeable shares would be entitled to vote as Exchangeco shareholders,
       but, except as described in the bullet immediately following below,
       excluding meetings or votes regarding changes to the rights, privileges,
       restrictions or conditions of the exchangeable shares requiring the
       approval of the holders of the exchangeable shares; and

     - the business day following the day on which the holders of exchangeable
       shares fail to take the necessary action at a meeting or other vote of
       holders of exchangeable shares, if and to the extent the action is
       required, to approve or disapprove any change to, or in the rights of the
       holders of, the exchangeable shares, if the approval or disapproval of
       the change would be required to maintain the economic and legal
       equivalence of the exchangeable shares and our common shares.

     At least 45 days before an automatic redemption date (or if the automatic
redemption date occurs as a result of a Nabors control transaction, a record
date for a vote of Exchangeco shareholders or the failure

                                        10
<PAGE>

of Exchangeco shareholders to approve a change to the exchangeable shares
described in the three immediately preceding bullet points above, on as many
days prior written notice as the board of directors of Exchangeco determines to
be reasonably practicable under the circumstances), Exchangeco shall provide you
with written notice of the proposed redemption or possible redemption of the
exchangeable shares by Exchangeco or the purchase of the exchangeable shares by
Callco under its redemption call right, as the case may be. In the case of a
possible automatic redemption date, the notice will be given contingently and
will be withdrawn if the contingency does not occur.

YOUR EXCHANGE RIGHTS

     Liquidation and Insolvency Rights with Respect to Exchangeco.  Subject to
Callco's liquidation call right described below, in the event of the
liquidation, dissolution or winding-up of Exchangeco or any other distribution
of assets of Exchangeco among its shareholders for the purpose of winding-up its
affairs, you will be entitled to receive for each exchangeable share one of our
common shares, together with all dividends payable and unpaid on such
exchangeable share, if any.

     In the event of the liquidation, dissolution or winding-up of Exchangeco or
any other proposed distribution of the assets of Exchangeco among its
shareholders for the purpose of winding-up its affairs, holders of the
exchangeable shares will have, subject to applicable law, preferential rights to
receive from Exchangeco, for each exchangeable share held, an amount equal to
the market price of our common shares on the last business day prior to the
liquidation, which amount shall be paid by the delivery to such holders of one
of our common shares for each exchangeable share held plus the aggregate amount
of dividends payable and unpaid on each such exchangeable share, if any. Upon
the occurrence of such liquidation, dissolution or winding-up, Callco will have
an overriding right to purchase all of the outstanding exchangeable shares
(other than exchangeable shares held by us and our affiliates) from the holders
of the exchangeable shares on the effective date of such liquidation,
dissolution or winding-up for a purchase price per share equal to the market
price of our common shares on the last business day prior to the liquidation
(which amount shall be paid by the delivery to such holders of one of our common
shares for each exchangeable share held), plus, to the extent it is not paid by
Exchangeco, the aggregate amount of dividends payable and unpaid, if any, on
each such exchangeable share.

     Upon, and during the continuance of, insolvency of Exchangeco, a holder of
exchangeable shares will be entitled to instruct the trustee under the voting
and exchange trust agreement to exercise the exchange rights with respect to any
or all of the exchangeable shares held by such holder, thereby requiring us to
purchase such exchangeable shares from the holder. As soon as practicable
following the occurrence of such an insolvency of Exchangeco or any event which
would, with the passage of time and/or the giving of notice, lead to insolvency
of Exchangeco, we and Exchangeco will give written notice of an insolvency or
such event to the trustee. As soon as practicable after the delivery of such
notice, the trustee will then notify each holder of exchangeable shares of such
event or potential event and will advise the holder of its rights with respect
to the insolvency exchange right. The purchase price payable by us for each
exchangeable share purchased under this right will be satisfied by the issuance
of one of our common shares plus, to the extent not paid by Exchangeco, the
aggregate amount of dividends payable and unpaid, if any, on each such
exchangeable share.

     An insolvency event will occur in respect of Exchangeco upon:

     - the institution by Exchangeco of any proceeding to be adjudicated as
       bankrupt or insolvent or to be wound up, or the consent of Exchangeco to
       the institution of bankruptcy, insolvency or winding-up proceedings
       against it;

     - the filing of a petition, answer or consent seeking dissolution or
       winding-up under any bankruptcy, insolvency or analogous laws, including
       the Companies Creditors' Arrangement Act (Canada) and the Bankruptcy and
       Insolvency Act (Canada), and Exchangeco's failure to contest in good
       faith such proceedings commenced in respect of Exchangeco within 30 days
       of becoming aware of the proceedings, or the consent by Exchangeco to the
       filing of any such petition or to the appointment of a receiver;
                                        11
<PAGE>

     - the making by Exchangeco of a general assignment for the benefit of
       creditors, or the admission in writing by Exchangeco of its inability to
       pay its debts generally as they come due; or

     - Exchangeco not being permitted, under solvency requirements of applicable
       law, to redeem any retracted exchangeable shares in accordance with the
       exchangeable share conditions.

     Liquidation with Respect to Nabors.  In order for the holders of the
exchangeable shares to participate on a pro rata basis with the holders of our
common shares in the event of our liquidation, immediately prior to the
effective date of a liquidation event, each exchangeable share will
automatically be exchanged for an equivalent number of our common shares, plus,
to the extent not paid by Exchangeco, the aggregate amount of dividends payable
and unpaid, if any, on each such exchangeable share. Upon a holder's request and
surrender of exchangeable share certificates, duly endorsed in blank and
accompanied by such instruments of transfer as we may reasonably require, we
will deliver to such holder certificates representing an equivalent number of
our common shares plus, to the extent not paid by Exchangeco, the aggregate
amount of dividends payable and unpaid, if any, on exchangeable shares for each
exchangeable share exchanged under this exchange right.

     A liquidation event will occur in respect of Nabors upon:

     - determination by the Nabors board to institute voluntary liquidation,
       dissolution, or winding-up proceedings with respect to Nabors or to
       effect any other distribution of its assets among its shareholders for
       the purpose of winding-up its affairs, at least 60 days prior to the
       proposed effective date of such liquidation, dissolution, winding-up or
       other distribution; or

     - receipt by Nabors of notice of, or Nabors otherwise becoming aware of,
       any threatened or instituted claim, suit, petition or other proceedings
       with respect to the involuntary liquidation, dissolution or winding-up of
       Nabors or to effect any distribution of assets of Nabors among its
       shareholders for the purpose of winding-up its affairs, in each case
       where Nabors has failed to contest in good faith any such proceeding
       commenced in respect of Nabors within 30 days of becoming aware of the
       proceeding.

CALLCO'S CALL RIGHTS

     In the circumstances described below, Callco and, in the case of the change
of law call right, we will have overriding call rights to acquire your
exchangeable shares by delivering an equal number of our common shares, plus all
dividends then payable but unpaid on the exchangeable shares. DIFFERENT CANADIAN
FEDERAL INCOME TAX CONSEQUENCES MAY ARISE DEPENDING UPON WHETHER WE OR CALLCO
EXERCISE THE CALL RIGHTS OR WHETHER YOUR EXCHANGEABLE SHARES ARE REDEEMED BY
EXCHANGECO. See "Income Tax Considerations -- Canadian Federal Income Tax
Considerations." In any circumstance where Exchangeco is required to purchase
your exchangeable shares, we may cause Callco to acquire from us and deliver to
you our common shares. In addition, we and Callco will have an overriding call
right on your exchangeable shares if there are changes to Canadian tax laws
permitting you to exchange your exchangeable shares without recognizing any gain
or loss or any actual or deemed dividend in respect of such exchange. If and
when Callco or, if applicable, Nabors, acquires your exchangeable shares as a
result of exercise of the call rights, neither of them will be entitled to
exercise any of the voting rights attached to your exchangeable shares.

     Retraction Call Right.  If you request the redemption by Exchangeco of your
exchangeable shares, you will be deemed to offer your exchangeable shares to
Callco, and Callco will have an overriding retraction call right to acquire all,
but not less than all, of the exchangeable shares that you have requested
Exchangeco to redeem in exchange for an equal number of our common shares, plus
the aggregate amount of dividends payable and unpaid, if any, on each such
exchangeable share. Upon the exercise of Callco's retraction call right, you
will be obligated to transfer your exchangeable shares to Callco.

     Redemption Call Right.  Callco has an overriding redemption call right to
acquire on an automatic redemption date all, but not less than all, of the
exchangeable shares then outstanding (other than exchangeable shares held by
Nabors and its affiliates) in exchange for an equal number of our common
                                        12
<PAGE>

shares, plus the aggregate amount of dividends payable and unpaid, if any, on
each such exchangeable share, and, upon the exercise of Callco's redemption call
right, you will be obligated to transfer your shares to Callco.

     Liquidation Call Right.  Callco will be granted an overriding liquidation
call right, in the event of and notwithstanding a proposed liquidation,
dissolution or winding-up of Exchangeco or any other distribution of the assets
of Exchangeco among its shareholders for the purpose of winding-up its affairs,
to acquire all, but not less than all, of the exchangeable shares then
outstanding (other than exchangeable shares held by Nabors and its affiliates)
in exchange for an equal number of our common shares, plus the aggregate amount
of dividends payable and unpaid, if any, on each such exchangeable share. Upon
the exercise of Callco's liquidation call right, you will be obligated to
transfer your exchangeable shares to Callco. Callco's acquisition of all of the
outstanding exchangeable shares upon the exercise of the liquidation call right
will occur on the effective date of the voluntary or involuntary liquidation,
dissolution or winding-up of Exchangeco.

     Change of Law Call Right.  We have the overriding right, in the event of
any amendment to the Income Tax Act (Canada) and other applicable Canadian
provincial income tax laws that permits holders of exchangeable shares who are
resident in Canada, hold the exchangeable shares as capital property and deal at
arm's length with us and Ryan (all for the purposes of the Income Tax Act
(Canada) and other applicable Canadian provincial income tax laws) to exchange
their exchangeable shares for our common shares on a basis that will not require
such holders to recognize any gain or loss or any actual or deemed dividend in
respect of such exchange for the purposes of the Income Tax Act (Canada) and
other applicable Canadian provincial income tax laws, to purchase (or to cause
Callco to purchase) from all but not less than all of the holders of the
exchangeable shares (other than any holder which is an affiliate of Nabors) all
but not less than all of the exchangeable shares held by each such holder upon
payment by Nabors or Callco, as the case may be, of an amount per share equal to
the exchangeable share price applicable on the last business day prior to the
date on which Nabors or Callco intends to purchase such shares. Payment of the
exchangeable share price will be fully satisfied by the delivery for each
exchangeable share of one of our common shares plus the aggregate amount of
dividends payable and unpaid, if any, on each such exchangeable share.

     To exercise the foregoing right, Nabors or Callco must notify the transfer
agent for the exchangeable shares of its intention to exercise such right at
least 45 days before the date on which Nabors or Callco intends to acquire the
exchangeable shares. Upon the exercise of this right, holders will be obligated
to sell their exchangeable shares to Nabors or Callco, as the case may be.

     If we or Callco exercise one or more of our call rights, Nabors or Callco
will issue or deliver our common shares to you and will become the holder of
your exchangeable shares. If and when Callco or, if applicable, Nabors, acquires
your exchangeable shares under the call rights, neither of them will be entitled
to exercise any of the voting rights attached to your exchangeable shares. If we
or Callco decline to exercise our respective call rights when available, we will
be required to issue our common shares as Exchangeco directs, including to
Exchangeco, which will, in turn, transfer our common shares to you in
consideration for the return and cancellation of your exchangeable shares. In
the event we or Callco do not exercise our call rights when applicable and
instead deliver our common shares as Exchangeco directs, you would receive the
same consideration, but the Canadian tax consequences will be substantially
different. See "Income Tax Considerations -- Canadian Federal Income Tax
Considerations." However, we anticipate that we or Callco will exercise our call
rights, when available, and currently foresee no circumstances under which we or
Callco would not exercise our call rights. In addition, we do not anticipate any
restriction or limitation on the number of exchangeable shares we or Callco
would acquire upon the exercise of our call rights.

WITHHOLDING RIGHTS

     Each of Nabors, Callco, Exchangeco, Exchangeco's transfer agent and the
trustee will be entitled to deduct and withhold from any dividend or other
consideration otherwise payable to any holder of

                                        13
<PAGE>

exchangeable shares or our common shares such amounts as each of Nabors, Callco,
Exchangeco, Exchangeco's transfer agent or the trustee is required to deduct and
withhold with respect to such payment under the Income Tax Act (Canada), the
United States Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of federal, provincial, state, local or foreign tax law. To the extent
that amounts are so withheld, such withheld amounts will be treated for all
purposes as having been paid to the holder of the exchangeable shares or our
common shares, as the case may be, in respect of which the deduction and
withholding was made, provided that the withheld amounts are actually remitted
to the appropriate taxing authority. To the extent that the amount required to
be deducted or withheld from any payment to a holder exceeds the cash portion of
the dividend or other consideration otherwise payable to the holder, Nabors,
Callco, Exchangeco, Exchangeco's transfer agent and the trustee are authorized
to sell or otherwise dispose of the portion of the consideration necessary to
provide sufficient funds to Nabors, Callco, Exchangeco, Exchangeco's transfer
agent or the trustee, as the case may be, to enable it to comply with the
deduction or withholding requirement and Nabors, Callco, Exchangeco,
Exchangeco's transfer agent or the trustee, as the case may be, will notify the
holder and remit to the holder any unapplied balance of the net proceeds of such
sale.

                        DESCRIPTION OF OUR SHARE CAPITAL

     Our authorized share capital consists of 425,000,000 shares of capital
stock of which 400,000,000 are common shares, par value $0.001 per share, and
25,000,000 are preferred shares, par value $0.001 per share. The following
summary is qualified in its entirety by the provisions of Nabors' Memorandum of
Association, dated December 10, 2001 and Nabors' Amended and Restated Bye-Laws,
which are both publicly available. See "Where You Can Find More Information." As
of August 31, 2002, there were 144,459,268 Nabors common shares outstanding and
one Nabors special voting preferred share, par value $0.001 per share,
outstanding. No other shares of any class or series were outstanding as of
August 31, 2002.

COMMON SHARES

     Holders of our common shares are entitled to one vote on any question to be
decided on a show of hands and one vote per share on a poll on all matters
submitted to a vote of the shareholders of Nabors. Except as specifically
provided in Nabors' bye-laws or in The Companies Act 1981 (Bermuda), as amended
(which we refer to as the Companies Act in this prospectus), any action to be
taken by shareholders at any meeting at which a quorum is in attendance shall be
decided by a majority of the issued shares present in person or represented by
proxy and entitled to vote. There are no limitations imposed by Bermuda law or
Nabors' bye-laws on the right of shareholders who are not Bermuda residents to
hold or to vote their Nabors common shares.

     Our bye-laws do not provide for cumulative voting. A special meeting of
shareholders may be called by Nabors' board of directors or as otherwise
provided by the Companies Act and applicable law. Any action, except the removal
of auditors and directors, required or permitted to be taken at any annual or
special meeting of shareholders may be taken by written consent if the consent
is signed by each shareholder, or their proxy, entitled to vote on the matter.

     Holders of Nabors common shares do not have a preemptive or preferential
right to purchase any other securities of Nabors. Nabors' common shares have no
sinking fund provision.

PRICE RANGE OF COMMON SHARES

     Our common shares are traded on the American Stock Exchange under the
symbol "NBR." The following table sets forth, for the periods indicated, the
high and low sale price per share of our common

                                        14
<PAGE>

shares, since the reorganization, and the high and low sale price per share of
Nabors Delaware common stock, prior to the reorganization, in each case on the
American Stock Exchange.

<Table>
<Caption>
                                                              HIGH (U.S.$)   LOW (U.S.$)
                                                              ------------   -----------
<S>                                                           <C>            <C>
2000 -- NABORS DELAWARE
First Quarter...............................................  40.5625        28.125
Second Quarter..............................................  44.25          34.00
Third Quarter...............................................  53.8125        38.5625
Fourth Quarter..............................................  60.47          40.50
2001 -- NABORS DELAWARE
First Quarter...............................................  63.12          50.70
Second Quarter..............................................  61.25          37.20
Third Quarter...............................................  38.12          18.00
Fourth Quarter..............................................  36.15          19.76
2002 -- NABORS DELAWARE
First Quarter...............................................  43.00          26.98
Second Quarter (through June 25, 2002)......................  49.98          36.00
2002 -- NABORS
Second Quarter:
(from June 26, 2002 to June 30, 2002).......................  37.00          35.13
Third Quarter:
(from July 1, 2002 to September 5, 2002)....................  37.63          26.14
</Table>

     On September 5, 2002, the last sale price reported on the American Stock
Exchange for our common shares was $30.95 per share.

DIVIDEND POLICY

     We have never declared or paid any cash dividends on our common shares.
Nabors Delaware last paid a cash dividend in 1982. We do not anticipate paying
any cash dividends on our common shares in the foreseeable future.

PREFERRED SHARES

     The board of directors of Nabors is authorized, without further shareholder
action, to issue from time to time up to 25,000,000 preferred shares in one or
more classes or series, and fix for each such class or series such voting power,
full or limited, or no voting power, and such designations, preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as are provided in the
resolutions adopted by the board of directors providing for the issuance of such
class or series. The Nabors board of directors in authorizing such class or
series may provide that any such class or series may be:

     - subject to redemption at the option of the company or the holders, or
       both, at such time or times and at such price or prices;

     - entitled to receive dividends (which may be cumulative or non-cumulative)
       at such rates, on such conditions, and at such times, and payable in
       preference to, or in relation to, the dividends payable on any other
       class or classes or any other series;

     - entitled to such rights upon the dissolution of, or upon any distribution
       of the assets of, Nabors; or

                                        15
<PAGE>

     - convertible into, or exchangeable for, shares of any other class or
       classes of shares, or of any other series of the same or any other class
       or classes of shares, of Nabors at such price or prices or at such rates
       of exchange and with such adjustments;

in each case, as set forth in the resolutions authorizing the class or series of
preferred shares.

     A series of preferred shares, consisting of one share, has been designated
as a special voting preferred share, having a par value of $0.001 per share and
a liquidation preference of $0.01. The special voting preferred share has been
issued to Computershare Trust Company of Canada, as trustee under a voting and
exchange trust agreement among us, Exchangeco and such trustee. Except as
otherwise required by law, our memorandum of association or our bye-laws, the
one special voting preferred share will possess a number of votes for the
election of directors and on all other matters submitted to a vote of our
shareholders equal to the number of outstanding exchangeable shares from time to
time not owned by us or any entity controlled by us. The holders of our common
shares and the holder of the special voting preferred share will vote together
as a single class on all matters on which holders of our common shares are
eligible to vote. In the event of our liquidation, dissolution or winding-up,
all outstanding exchangeable shares will automatically be exchanged for shares
of our common shares, and the holder of the special voting preferred share will
not be entitled to receive any assets available for distribution to our
shareholders (other than the $.01 liquidation preference). The holder of the
special voting preferred share will not be entitled to receive dividends. At
such time as the one special voting preferred share has no votes attached to it
because there are no exchangeable shares outstanding not owned by us or an
entity controlled by us, the special voting preferred share will be canceled.

TRANSFER AGENT AND REGISTRAR

     The transfer agent and registrar for Nabors' common shares is EquiServe.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND
BYE-LAWS

     Nabors' bye-laws have provisions that could have an anti-takeover effect.
In addition, Nabors' bye-laws include an "advance notice" provision which places
time limitations on shareholders' nominations of directors and submission of
proposals for consideration at an annual general meeting. These provisions are
intended to enhance the likelihood of continuity and stability in the
composition of the board of directors and in the policies formulated by the
board of directors and to encourage negotiations with the board of directors in
transactions that may involve an actual or potential change of control of
Nabors.

     The bye-laws provide that Nabors' board of directors will be divided into
three classes serving staggered three-year terms. Directors can be removed from
office prior to the expiration of their term only for cause by the affirmative
vote of the holders of a majority of the voting power of Nabors on the relevant
record date. The board of directors does not have the power to remove directors.
As long as a quorum of directors remains and is present, vacancies on the board
of directors may be filled by a majority vote of the remaining directors. Any
general meeting can authorize the board of directors to fill any vacancy left
unfilled at a general meeting. Each of these provisions can delay a shareholder
from obtaining majority representation on the board of directors.

     The bye-laws also provide that the board of directors will consist of not
less than five nor more than eighteen persons, the exact number to be set from
time to time by the affirmative vote of a majority of the directors then in
office. Accordingly, the board of directors, and not the shareholders, has the
authority to determine the number of directors and could delay any shareholder
from obtaining majority representation on the board of directors by enlarging
the board of directors and filling the new vacancies with its own nominees.

     The bye-laws of Nabors provide that at any annual general meeting, only
such business shall be conducted as shall have been brought before the meeting
by or at the direction of the board of directors, by any shareholder who
complies with certain procedures set forth in the bye-laws or by any shareholder
pursuant to the valid exercise of the power granted under the Companies Act.

                                        16
<PAGE>

     For business to be properly brought before an annual general meeting by a
shareholder in accordance with the terms of the bye-laws the shareholder must
have given timely notice thereof in proper written form to the Secretary of
Nabors and satisfied all requirements under applicable rules promulgated by the
SEC. To be timely for consideration at the annual general meeting, a
shareholder's notice must be received by the Secretary at Nabors' principal
executive offices and its registered office in Bermuda not less than 60 days nor
more than 90 days prior to the anniversary date of the immediately preceding
annual general meeting, provided that in the event that the annual general
meeting is called for a date that is not within 30 days before or after such
anniversary date, not later than the 10th day following the day on which such
notice of the date of the annual general meeting was mailed or public disclosure
of the date of the annual general meeting was made, whichever occurs first. In
order for a shareholder to nominate directors in connection with an annual
general meeting of shareholders, a shareholder's notice of his intention to make
such nominations must be received in proper written form as specified in the
bye-laws of Nabors by the Secretary of Nabors within the time limits described
above.

     In addition, the Companies Act provides for a mechanism by which 100
shareholders acting together or shareholders holding at least 5% of the voting
power of a Bermuda company may properly propose a resolution for consideration
at a general meeting of the company.

     Subject to the terms of any other class of shares in issue, any action
required or permitted to be taken by the holders of Nabors' common shares must
be taken at a duly called annual or special general meeting of shareholders
unless taken by written consent of all holders of common shares. Under the
bye-laws, special general meetings may be called at any time by the board of
directors or when requisitioned by shareholders pursuant to the provisions of
the Companies Act. The Companies Act currently permits shareholders holding 10%
of the shares of a company entitled to vote at general meeting to requisition a
special general meeting.

     The board of directors is authorized, without obtaining any vote or consent
of the holders of any class or series of shares unless expressly provided by the
terms of issue of a class or series, to from time to time issue any authorized
and unissued shares on such terms and conditions as it may determine. For
example, the board of directors could authorize the issuance of preferred shares
with terms and conditions that could discourage a takeover or other transaction
that holders of some or a majority of the Nabors common shares might believe to
be in their best interests or in which holders might receive a premium for their
shares over the then market price of the shares.

                           INCOME TAX CONSIDERATIONS

                   CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

     In the opinion of Stikeman Elliott, our Canadian counsel, the following is
a fair and accurate summary of the material Canadian federal income tax
considerations generally applicable under the Income Tax Act (Canada) (the
"Canadian Income Tax Act") if you will hold exchangeable shares or acquire our
common shares on the exchange of exchangeable shares and if, for purposes of the
Canadian Income Tax Act, you deal with us at arm's length and will hold your
exchangeable shares and our common shares as capital property. This discussion
does not apply to you if you are a "financial institution", as defined in the
Canadian Income Tax Act for the purposes of the mark-to-market provisions
thereof.

     The exchangeable shares and our common shares will generally be considered
to be capital property to you unless such shares are held by you in the course
of carrying on a business of buying and selling securities or such shares are
acquired by you in a transaction considered to be an adventure in the nature of
trade. If you are a resident of Canada and the exchangeable shares might not
otherwise qualify as capital property, you may be entitled to obtain this
qualification by making the irrevocable election provided under subsection 39(4)
of the Canadian Income Tax Act. If you will not hold your exchangeable shares or
our common shares as capital property, you should consult your own tax advisors
for information and advice having regard to your particular circumstances.

                                        17
<PAGE>

     This summary is based on the current provisions of the Canadian Income Tax
Act and regulations thereunder, the current provisions of the Convention Between
the United States of America and Canada with Respect to Taxes on Income and on
Capital, signed September 26, 1980, as amended, (the "Canada-U.S. Tax
Convention") and our counsel's understanding of the current published
administrative practices of the Canada Customs and Revenue Agency (the "CCRA").
This summary takes into account all specific proposals to amend the Canadian
Income Tax Act and regulations that have been publicly announced by the Minister
of Finance (Canada) prior to the date hereof and assumes that all of these
proposed amendments will be enacted in their present form. No assurances can be
given that any proposed amendments will be enacted in the form proposed, if at
all. Except for the foregoing, this summary does not take into account or
anticipate any changes in law, whether by legislative, administrative or
judicial decision or action, nor does it take into account provincial,
territorial or foreign income tax legislation or considerations, which may
differ from the Canadian federal income tax considerations described below. No
advance income tax ruling has been sought or obtained from the CCRA to confirm
the tax consequences of any of the transactions relating to the exchangeable
shares or the acquisition of our common shares on the exchange of exchangeable
shares.

     For purposes of the Canadian Income Tax Act, all amounts otherwise
denominated in United States dollars relating to the acquisition, holding or
disposition of our common shares, including dividends, adjusted cost base
amounts and proceeds of disposition, must be converted into Canadian dollars
based on the prevailing United States dollar exchange rate generally at the time
these amounts arise.

THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, AND SHOULD
NOT BE CONSTRUED TO BE, LEGAL, BUSINESS OR TAX ADVICE TO YOU. THEREFORE, YOU ARE
URGED TO CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO YOUR PARTICULAR
CIRCUMSTANCES.

SHAREHOLDERS RESIDENT IN CANADA

     The following portion of this summary will apply to you only if, for the
purposes of the Canadian Income Tax Act and any applicable income tax treaty or
convention, you are resident or deemed to be resident in Canada at all relevant
times. This summary does not apply to you if we are or will be a "foreign
affiliate" of you as defined in the Canadian Income Tax Act.

  REDEMPTION OF EXCHANGEABLE SHARES

     On a redemption (including a retraction) of your exchangeable shares by
Exchangeco, you will be deemed to have received a dividend equal to the amount,
if any, by which the redemption proceeds exceed the "paid-up capital" of the
exchangeable shares so redeemed. The "paid-up capital" of an exchangeable share
will be equal to the aggregate paid-up capital of all of the exchangeable shares
divided by the number of exchangeable shares outstanding. The aggregate paid-up
capital of all of the exchangeable shares will generally be equal to the
aggregate consideration for which the exchangeable shares were issued (provided
that amount was added to the stated capital account maintained for the
exchangeable shares under the relevant corporate law), less an amount to be
determined based upon the Canadian tax elections that are (or were) filed by
former shareholders of Ryan and Enserco Energy Services Company Inc. ("Enserco")
who elected to exchange their Ryan or Enserco shares, as the case may be, for
exchangeable shares under the applicable arrangement and who are or were
permitted under the terms of the applicable arrangement to, and do, file such
Canadian tax elections. For these purposes, the redemption proceeds will be the
fair market value of our common shares received from Exchangeco at the time of
the redemption plus the amount, if any, of all payable and unpaid dividends on
the exchangeable shares paid on the redemption. The taxation of dividends
received or deemed to be received on the exchangeable shares is described below.
We anticipate that we or Callco, as the case may be, will exercise our call
rights, when available, and currently foresee no circumstances under which
exchangeable shares would be redeemed by Exchangeco.

                                        18
<PAGE>

     On a redemption (including a retraction) of your exchangeable shares, you
will also be considered to have disposed of your exchangeable shares, but the
amount of the deemed dividend, described above, will be excluded in computing
your proceeds of disposition for purposes of computing any capital gain or
capital loss arising on the disposition. If you are a corporation, in some
circumstances, the amount of any such deemed dividend may be treated as proceeds
of disposition and not as a dividend. The taxation of capital gains and capital
losses is described below.

  EXCHANGE OF EXCHANGEABLE SHARES WITH US

     On an exchange of your exchangeable shares with us or Callco for our common
shares, you will generally realize a capital gain (or a capital loss) equal to
the amount by which the proceeds of disposition of your exchangeable shares, net
of any reasonable costs of disposition, exceed (or are less than) the adjusted
cost base to you of the exchangeable shares immediately before the exchange. For
these purposes, the proceeds of disposition will be the fair market value at the
time of the exchange of our common shares which you receive. The taxation of
capital gains and capital losses is described below. Any amount received by you
as part of the exchange that is in lieu of or in satisfaction of dividends that
are payable but not paid on the exchangeable shares will be treated as a
dividend rather than as proceeds of disposition. The taxation of dividends
received or deemed to be received on the exchangeable shares is discussed below.

  DIVIDENDS ON EXCHANGEABLE SHARES

     If you are an individual, dividends received or deemed to be received on
the exchangeable shares will be included in computing your income, and will be
subject to the gross-up and dividend tax credit rules normally applicable to
taxable dividends received from a corporation resident in Canada.

     Subject to the discussion below regarding our status as a "specified
financial institution" for the purposes of the Canadian Income Tax Act, if you
are a corporation other than a "specified financial institution," as defined in
the Canadian Income Tax Act, dividends received or deemed to be received on the
exchangeable shares normally will be included in your income and be deductible
in computing your taxable income.

     If you are a "specified financial institution", as defined in the Canadian
Income Tax Act, a dividend received on the exchangeable shares will be
deductible in computing your taxable income only if:

          1. you did not acquire the exchangeable shares in the ordinary course
     of carrying on your business; or

          2. at the time the dividend is received, the exchangeable shares are
     listed on a prescribed stock exchange in Canada (which currently includes
     the TSX) and you, either alone or together with persons with whom you do
     not deal at arm's length, do not receive (and are not deemed to receive)
     dividends in respect of more than 10% of the issued and outstanding
     exchangeable shares.

     If you are a specified financial institution, you should consult your own
tax advisors.

     We have been advised by our counsel (based in part on representations made
by us as to certain factual matters) that we currently qualify as a "specified
financial institution" for the purposes of the Canadian Income Tax Act. As a
consequence, and for so long as we continue to so qualify, if you are a
corporation (including a "specified financial institution" as defined in the
Canadian Income Tax Act), dividends received or deemed to be received on the
exchangeable shares may not be deductible in computing your taxable income
unless, at the time such dividends or deemed dividends are received, the
exchangeable shares are listed on a prescribed stock exchange (which includes
the TSX), we are "related" to Exchangeco for the purposes of the Canadian Income
Tax Act (which we are now and anticipate that we will continue to be), and you,
either alone or together with persons with whom you do not deal at arm's length
or trusts or partnerships of which you or any such non-arm's length person is a
beneficiary or member, receive dividends in respect of not more than 10 percent
of the issued and outstanding exchangeable shares.
                                        19
<PAGE>

     If you are a "private corporation," as defined in the Canadian Income Tax
Act, or any other corporation resident in Canada and controlled or deemed to be
controlled by or for the benefit of an individual or a related group of
individuals, you may be liable under Part IV of the Canadian Income Tax Act to
pay a refundable tax of 33 1/3 percent of any dividends received or deemed to be
received on your exchangeable shares to the extent that these dividends are
deductible in computing your taxable income.

     If you are throughout the relevant taxation year a "Canadian-controlled
private corporation," as defined in the Canadian Income Tax Act, you may be
liable to pay an additional refundable tax of 6 2/3 percent of your "aggregate
investment income" for the year which will include dividends or deemed dividends
on the exchangeable shares that are not deductible in computing taxable income.

     If there is non-resident withholding tax on any dividends you receive on
exchangeable shares, you will generally be eligible for foreign tax credit or
deduction treatment where applicable under the Canadian Income Tax Act.

     If you are a corporation, the amount of any capital loss realized on a
disposition or deemed disposition of exchangeable shares may be reduced by the
amount of any dividends received or deemed to have been received by you on the
exchangeable shares to the extent and under circumstances prescribed by the
Canadian Income Tax Act. Similar rules may apply where you are a corporation and
a member of a partnership or a beneficiary of a trust that owns these shares.

  ACQUISITION AND DISPOSITION OF OUR COMMON SHARES

     The cost of our common shares received on a retraction, redemption or
exchange of exchangeable shares will be equal to the fair market value of such
common shares at the time of that event, and will be averaged with the adjusted
cost base of any other of our common shares held by you at that time as capital
property. A disposition or deemed disposition of our common shares by you will
generally result in the realization of a capital gain (or a capital loss) equal
to the amount by which the proceeds of disposition, net of any reasonable costs
of disposition, exceed (or are less than) the adjusted cost base to you of these
shares immediately before the disposition. The taxation of capital gains and
capital losses is described below.

  DIVIDENDS ON OUR COMMON SHARES

     Dividends on our common shares will be included in your income for the
purposes of the Canadian Income Tax Act. If you are an individual, these
dividends will not be subject to the gross-up and dividend tax credit rules in
the Canadian Income Tax Act applicable to dividends received from corporations
resident in Canada. If you are a corporation, you will be required to include
these dividends in computing your income and generally will not be entitled to
deduct the amount of these dividends in computing your taxable income.

     If you are throughout the relevant taxation year a "Canadian-controlled
private corporation," as defined in the Canadian Income Tax Act, you may be
liable to pay an additional refundable tax of 6 2/3 percent of your "aggregate
investment income" for the year which will include these dividends.

     If there is non-resident withholding tax on any dividends you receive on
our common shares, you will generally be eligible for foreign tax credit or
deduction treatment where applicable under the Canadian Income Tax Act.

  TAXATION OF CAPITAL GAINS AND CAPITAL LOSSES

     One-half of any capital gain realized on a disposition or deemed
disposition of exchangeable shares or our common shares must be included in your
income for the year of the disposition. You generally may be able to deduct
one-half of any capital losses against one-half of any capital gains realized in
the year of the disposition. Any capital losses in excess of capital gains in
the year of the disposition may generally be carried back and deducted against
net capital gains (capital gains less capital losses) in any of the three
taxation years immediately preceding, or carried forward and deducted against
net capital gains in any
                                        20
<PAGE>

taxation year following, the year of disposition, to the extent and in the
circumstances prescribed in the Canadian Income Tax Act.

     If you are an individual or trust, other than certain trusts, capital gains
realized by you may give rise to alternative minimum tax under the Canadian
Income Tax Act.

     If you are throughout the relevant taxation year a "Canadian-controlled
private corporation," as defined in the Canadian Income Tax Act, you may be
liable to pay an additional refundable tax of 6 2/3 percent of your "aggregate
investment income" for the year which will include an amount in respect of
taxable capital gains.

  FOREIGN PROPERTY INFORMATION REPORTING

     With some exceptions, any taxpayer resident in Canada during a year is a
"specified Canadian entity," as defined in the Canadian Income Tax Act. If you
are a specified Canadian entity for a taxation year or fiscal period and the
total cost amount of "specified foreign property," which would include our
common shares and the exchangeable shares, at any time in the year or fiscal
period exceeds Cdn.$100,000, you will be required to file an information return
for the year or period disclosing prescribed information, your cost amount, any
dividends received in the year, and any gains or losses realized in the year, in
respect of the specified foreign property. You should consult your own advisors
about whether you must comply with these rules with respect to the ownership of
our common shares or the exchangeable shares.

  FOREIGN INVESTMENT ENTITY DRAFT LEGISLATION

     On August 2, 2001, the Canadian Minister of Finance released draft
legislation to amend the Canadian Income Tax Act to implement a proposal
concerning the taxation of certain holdings in "foreign investment entities."
Generally, a non-resident corporation will be a "foreign investment entity" for
the purposes of these rules as at any time in a particular taxation year unless
at the end of the taxation year either (i) the carrying value of the
corporation's investment properties is not greater than one-half of the carrying
value of all of its properties, or (ii) the corporation's principal business is
not an investment business. Detailed rules are proposed in respect of each of
these tests. We have been advised by our counsel (based in part on
representations made by us as to certain factual matters) that although no
assurances can be given in this regard, it appears reasonable to conclude that
we meet and will continue to meet one or both of these exceptions. Accordingly,
while a definitive opinion cannot be given, it is reasonable to expect that we
will not be considered to be a foreign investment entity and that the proposed
rules will not apply to an investment in exchangeable shares or in common shares
of Nabors.

     If Nabors is or were to become a "foreign investment entity," a Canadian
resident who holds exchangeable shares or Nabors common shares could, subject to
certain exceptions, be required to take into account in computing income, on an
annual basis, certain amounts in respect of the income of Nabors or the value of
the common shares of Nabors.

     On December 17, 2001, the Canadian Minister of Finance announced that the
proposed new rules would generally apply for taxation years beginning after
2002. However, the proposed rules have not yet been enacted and are subject to
further amendment. Accordingly, you should consult your own tax advisor
concerning these rules.

SHAREHOLDERS NOT RESIDENT IN CANADA

     The following portion of this summary will apply to you only if, for
purposes of the Canadian Income Tax Act and any applicable tax treaty or
convention, you will not be resident or deemed to be resident in Canada at any
time while you hold exchangeable shares or our common shares, and will not use
or hold the exchangeable shares or our common shares in, or in the course of,
carrying on a business (including an insurance business) in Canada and, except
as specifically discussed below, if those shares do not constitute "taxable
Canadian property" to you as defined in the Canadian Income Tax Act.

                                        21
<PAGE>

     The exchangeable shares will generally not be taxable Canadian property to
you at a particular time provided that these shares are listed on a prescribed
stock exchange (which includes the TSX) and you, or persons with whom you do not
deal at arm's length, or you together with such persons have not owned (or had
under option) 25 percent or more of the issued shares of any class or series of
the capital stock of Exchangeco at any time within five years preceding the
particular time. Our common shares will generally not constitute taxable
Canadian property to you.

     Provided the exchangeable shares or our common shares are not taxable
Canadian property to you, you will not be subject to tax under the Canadian
Income Tax Act on the exchange of exchangeable shares for our common shares
(except to the extent the exchange gives rise to a deemed dividend as discussed
below), or on the sale or other disposition of exchangeable shares or our common
shares.

     Dividends paid or deemed to be paid on the exchangeable shares will be
subject to non-resident withholding tax under the Canadian Income Tax Act at the
rate of 25 percent, although this rate may be reduced under the provisions of an
applicable income tax treaty or convention. For example, under the Canada-U.S.
Tax Convention, the rate of non-resident withholding tax is generally reduced to
15 percent in respect of dividends paid to a person who is the beneficial owner
thereof and who is resident in the United States for purposes of the convention.

     A holder whose exchangeable shares are redeemed by Exchangeco (either under
redemption rights or pursuant to retraction rights) will be deemed to receive a
dividend equal to the amount, if any, by which the redemption proceeds exceed
the "paid-up capital," for the purposes of the Canadian Income Tax Act, of the
exchangeable shares at the time the exchangeable shares are redeemed. For these
purposes, the redemption proceeds will be the fair market value of our common
shares received from Exchangeco at the time of the redemption plus the amount,
if any, of all payable and unpaid dividends on the exchangeable shares paid on
the redemption. Any deemed dividend will be subject to non-resident withholding
tax as described in the preceding paragraph. However, we anticipate that we or
Callco, as the case may be, will exercise our call rights, when available, and
currently foresee no circumstances under which exchangeable shares would be
redeemed by Exchangeco.

            MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

     In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, the following
general discussion constitutes a fair and accurate summary of the anticipated
material United States federal income tax consequences of the ownership and
disposition of exchangeable shares that may be relevant to holders generally.
This discussion is based on the Code, United States Treasury regulations
promulgated thereunder, and judicial and administrative interpretations thereof,
in each case as in effect and available as of the date of this prospectus. These
income tax laws, regulations and interpretations, however, may change at any
time, and any change could be retroactive. It should be noted that legislation
has been introduced which, if enacted in its present form, could materially
change the discussion set forth below. Moreover, the United States Treasury
Department is currently studying transactions such as the reorganization and, as
a result, changes in these income tax laws, regulations, and interpretations may
occur, possibly with retroactive effect, which could affect the discussion set
forth below. These income tax laws and regulations are also subject to various
interpretations, and the IRS or the United States courts could later disagree
with the explanations or conclusions contained in this summary.

     No statutory, judicial or administrative authority exists that directly
addresses the United States federal income tax consequences of instruments
comparable to the exchangeable shares together with the associated ancillary
rights and call rights. Consequently, the United States federal income tax
treatment of the ownership of exchangeable shares and the exchange of
exchangeable shares for shares of Nabors common shares is not certain. No
advance ruling has been sought or obtained from the IRS regarding the tax
consequence of any of the transactions described herein and there can be no
assurance that the IRS would not challenge the conclusions contained in the
discussion below, or, if challenged, that a court would not agree with the IRS.

                                        22
<PAGE>

     As used herein, a "United States Holder" is a beneficial owner of
exchangeable shares that, for United States federal income tax purposes, is: (1)
a citizen or resident of the United States, (2) a corporation (including for
this purpose any entity treated as a corporation for United States federal
income tax purposes) or partnership created or organized in or under the laws of
the United States, or of any political subdivision thereof, (3) an estate or
other entity the income of which is includible in its gross income for United
States federal income tax purposes without regard to its source or (4) a trust
if (A) a court within the United States is able to exercise primary supervision
over the administration of such trust and one or more United States persons have
the authority to control all substantial decisions of the trust or (B) the trust
has a valid election in effect under the applicable United States Treasury
regulations to be treated as a United States person. A "non-United States
Holder" is a beneficial owner of exchangeable shares that is not a United States
Holder. If a partnership (including for this purpose any entity treated as a
partnership for United States federal income tax purposes) is a beneficial owner
of the exchangeable shares, the partnership itself will not be subject to United
States federal income tax on a net income basis, but the United States federal
income tax treatment of a partner in the partnership will generally depend upon
the status of the partner and upon the activities of the partnership. A holder
that is a partnership and partners in such partnership are urged to consult
their tax advisers about the United States federal income tax consequences of
owning and disposing of exchangeable shares. Based on current estimates of gross
income and gross assets and the nature of the business, Nabors believes that
none of Exchangeco, Ryan or Nabors will be classified as a foreign personal
holding company or a passive foreign investment company for the current taxable
year. The status of Exchangeco, Ryan and Nabors in future years, however, will
depend on their income, assets and activities in those years. Accordingly, this
summary assumes that none of Exchangeco, Ryan or Nabors are or will be a
"foreign personal holding company" or a "passive foreign investment company" for
United States federal income tax purposes. This summary also assumes that none
of Exchangeco, Ryan or Nabors are or will be a "controlled foreign corporation"
for United States federal income tax purposes. This discussion does not address
persons subject to special provisions of United States federal income tax law,
such as tax-exempt organizations, banks, financial institutions, insurance
companies, real estate investment trusts, regulated investment companies,
dealers or traders in securities or currencies, grantor trusts, persons having a
"functional currency" other than the United States dollar, non-United States
Holders, holders who own, or are deemed to own, 10% or more, determined by
voting power or value, of exchangeable shares, holders who hold exchangeable
shares as part of a hedge, straddle, wash sale, synthetic security, conversion
transaction or other integrated investment and holders of exchangeable shares
who acquired their interests through the exercise of employee stock options or
otherwise as compensation for services. This discussion is limited to holders
who hold exchangeable shares as, and who will hold Nabors common shares as, a
capital asset as defined in the Code.

     This discussion does not address all aspects of United States federal
income taxation that may be applicable to a particular holder in light of the
holder's particular circumstances. Accordingly, all holders are urged to consult
their tax advisors with respect to the United States federal income tax
consequences to them of the ownership and disposition of exchangeable shares in
light of their particular circumstances. This discussion does not address any
aspects of United States federal income taxation that may be applicable to
holders of options or warrants. In addition, this discussion does not address
the United States state or local tax consequences or the foreign tax
consequences of the ownership and disposition of the exchangeable shares.
Holders are urged to consult their tax advisors with respect to the United
States federal, state and local tax consequences, the foreign tax consequences
and the non-tax consequences of the ownership and disposition of exchangeable
shares, Nabors common shares and ancillary rights and call rights.

UNITED STATES HOLDERS

  EXCHANGE OF EXCHANGEABLE SHARES

     There is no authority directly addressing the proper characterization of
instruments similar to the exchangeable shares together with the associated
ancillary rights and call rights or the exchange of exchangeable shares for
Nabors common shares (including an exchange upon the occurrence of an

                                        23
<PAGE>

automatic redemption date). As a result, the consequences to a United States
Holder of such an exchange are unclear.

     A United States Holder may be justified in taking the position that the
exchangeable shares (together with the ancillary rights and call rights)
constitute stock of Nabors for United States federal income tax purposes. If the
exchangeable shares (together with the ancillary rights and call rights)
constitute stock of Nabors for United States federal income tax purposes, the
exchange of the exchangeable shares for Nabors common shares should not be a
taxable event. In such event, the aggregate tax basis of the Nabors common
shares received pursuant to the exchange would equal the United States Holder's
aggregate tax basis in the exchangeable shares and the holding period of the
Nabors common shares received by such holder would include the holding period of
the exchangeable shares surrendered in the exchange.

     Alternatively, if the exchangeable shares constitute stock of Exchangeco
for United States federal income tax purposes, a United States Holder who
exchanges its exchangeable shares for shares of Nabors common shares would
generally recognize gain or loss. Such gain or loss would be measured by the
difference, if any, between (1) the fair market value of the shares of Nabors
common shares received at the time of the exchange and (2) the United States
Holder's tax basis in the exchangeable shares surrendered, and would generally
be capital gain or loss, except with respect to any declared but unpaid
dividends on the exchangeable shares. Under this alternative characterization, a
United States Holder's tax basis in the shares of Nabors common shares received
would be equal to the fair market value of such shares at the time of the
exchange and the holding period for such shares would begin on the day after the
exchange.

     For United States federal income tax purposes, gain recognized on the
exchange of exchangeable shares for shares of Nabors common shares will
generally be treated as United States source gain. Any Canadian tax imposed on
the exchange may be available as a credit against United States federal income
taxes, subject to applicable limitations. The use of a credit may be limited or
precluded entirely if the United States Holder has no income that is treated as
non-United States source income for United States federal income tax purposes.
Alternatively, a United States Holder may be entitled to claim a deduction with
respect to any Canadian tax paid in computing United States taxable income.

  DISTRIBUTIONS ON THE EXCHANGEABLE SHARES

     Because the treatment of exchangeable shares is not clear, the treatment of
dividends with respect to such shares is also not clear. If dividends received
by a United States Holder with respect to the exchangeable shares constitute
dividends from Nabors for United States federal income tax purposes, then any
dividends paid with respect to the exchangeable shares out of Nabors' earnings
and profits generally would be treated as foreign source dividend income.

     Alternatively, if dividends received by a United States Holder with respect
to the exchangeable shares constitute dividends from Exchangeco for United
States federal income tax purposes, then any dividends paid with respect to the
exchangeable shares out of Exchangeco's earnings and profits generally would be
treated as foreign source dividend income.

     Dividends paid in Canadian dollars will be includible in the income of a
United States Holder in a United States dollar amount calculated by reference to
the exchange rate in effect on the date the dividends are deemed received.
United States Holders are urged to consult their tax advisors regarding the
treatment of any foreign currency gain or loss on any Canadian dollars received
which are not converted into United States dollars on such date.

     Under the terms of the Canada-United States Tax Convention, distributions
with respect to the exchangeable shares received by United States Holders may be
subject to Canadian withholding tax at a rate of 15% irrespective of the
treatment for United States federal income tax purposes. Subject to certain
limitations of United States federal income tax law, a United States Holder
should generally be entitled to either a credit against its United States
federal income tax liability or a deduction in computing United

                                        24
<PAGE>

States taxable income for Canadian income taxes withheld from distributions with
respect to the exchangeable shares.

  BACKUP WITHHOLDING AND INFORMATION REPORTING

     Payments of dividends made with respect to, or the proceeds of the sale or
other disposition of, the exchangeable shares and shares of Nabors common
shares, as the case may be, may be subject to information reporting and United
States federal backup withholding tax at the then applicable rate if the
recipient of such payment fails to supply an accurate taxpayer identification
number or otherwise fails to comply with applicable United States information
reporting or certification requirements. Any amount withheld from a payment to a
United States Holder under the backup withholding rules is allowable as a credit
against the holder's United States federal income tax, provided that the
required information is furnished to the IRS.

NON-UNITED STATES HOLDERS

     A non-United States Holder should generally not be subject to United States
federal income tax as a result of the ownership and disposition of exchangeable
shares. However, as noted above, legislation has been introduced which, if
enacted in its present form, could materially change the United States federal
income tax consequences of the ownership and disposition of exchangeable shares
to non-United States Holders. It is difficult at this time to predict what, if
any, changes might occur. Non-United States Holders are urged to consult their
tax advisors regarding the possibility and effect of any such changes.

                       BERMUDA INCOME TAX CONSIDERATIONS

     Under current Bermuda law, we are not subject to tax in Bermuda on our
income or capital gains. Furthermore, we have obtained from the Minister of
Finance of Bermuda, under the Exempted Undertakings Tax Protection Act 1966, an
undertaking that, in the event that Bermuda enacts any legislation imposing tax
computed on any income or capital gains, that tax will not be applicable to us
until March 28, 2016. This undertaking does not, however, prevent the imposition
of any tax or duty on persons ordinarily resident in Bermuda or any property tax
on leasehold interests we may have in Bermuda. We will pay an annual government
fee in Bermuda based on our authorised share capital and share premium. The
maximum annual government fee applicable to us is currently $29,215, and we
expect to be subject to the maximum fee.

     Under current Bermuda law, no income, withholding or other taxes or stamp
or other duties are imposed in Bermuda upon the issue, transfer or sale of our
common shares or on any payments in respect of our common shares (except, in
certain circumstances, to persons ordinarily resident in Bermuda).

     In the opinion of Appleby, Spurling & Kempe, the exchange of exchangeable
shares for common shares of Nabors will be tax-free under Bermuda law to Nabors
and the holders of the exchangeable shares.

                                 LEGAL MATTERS

     The validity of our common shares issuable hereunder will be passed upon
for us by Appleby, Spurling & Kempe. Certain Bermuda income tax matters have
been passed on by Appleby, Spurling & Kempe, certain United States federal
income tax matters have been passed upon by Skadden, Arps, Slate, Meagher & Flom
LLP and certain Canadian federal income tax matters have been passed upon by
Stikeman Elliott.

                            INDEPENDENT ACCOUNTANTS

     The consolidated financial statements incorporated in this prospectus by
reference to Nabors' Current Report on Form 8-K filed on August 20, 2002 (File
No. 000-49887) have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

                                        25
<PAGE>

     With respect to the unaudited financial information of Nabors Delaware for
the three-month periods ended March 31, 2002 and 2001 and of Nabors for the
six-month periods ended June 30, 2002 and 2001, incorporated by reference in
this prospectus, PricewaterhouseCoopers LLP reported that they have applied
limited procedures in accordance with professional standards for a review of
such information. However, their separate reports dated April 17, 2002, except
for Notes 1 and 2, as to which the date is April 29, 2002, and July 17, 2002,
except for Note 11, as to which the date is August 13, 2002, incorporated by
reference herein, state that they did not audit and they do not express an
opinion on that unaudited financial information. Accordingly, the degree of
reliance on their report on such information should be restricted in light of
the limited nature of the review procedures applied. PricewaterhouseCoopers LLP
is not subject to the liability provisions of Section 11 of the Securities Act
of 1933 for their report on the unaudited financial information because that
report is not a "report" or a "part" of the registration statement prepared or
certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11
of the Act.

                                        26
<PAGE>

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following table sets forth the costs and expenses payable by us in
connection with issuance and distribution of the securities being registered.
All amounts are estimates subject to future contingencies except the SEC
registration statement filing fee.

<Table>
<S>                                                           <C>
SEC registration statement filing fee.......................  $  2,892
American Stock Exchange Listing fee.........................    17,500
Accounting fees and expenses................................    15,000
Legal fees and expenses.....................................    55,000
Printing fees...............................................    75,000
Transfer agent fees.........................................     5,000
Miscellaneous...............................................     9,608
                                                              --------
Total.......................................................  $180,000
                                                              ========
</Table>

ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Under Bermuda law, a company is permitted to indemnify its directors and
officers subject to certain restrictions. Section One (1) and Seventy-Five (75)
of Nabors' Amended and Restated Bye-Laws, state:

          "Officer" means a Director, Secretary, or other officer of the Company
     appointed pursuant to these Bye-laws, but does not include any person
     holding the office of auditor in relation to the Company;

          "75. Exemption and Indemnification of Officers. Subject always to
     these Bye-laws, no Officer shall be liable for the acts, receipts, neglects
     or defaults of any other Officer nor shall any Officer be liable in respect
     of any negligence, default or breach of duty on his or her own part in
     relation to the Company or any Subsidiary, or for any loss, misfortune or
     damage which may happen, in or arising out of the actual or purported
     execution or discharge of his or her duties or the exercise or purported
     exercise of his or her powers or otherwise in relation to or in connection
     with his or her duties, powers or office.

          75.1. Subject always to these Bye-laws, every Officer shall be
     indemnified and held harmless out of the funds of the Company against all
     liabilities, losses, damages or expenses (including but not limited to
     liabilities under contract, tort and statute or any applicable foreign law
     or regulation and all legal and other costs and expenses properly payable)
     incurred or suffered by the Officer arising out of the actual or purported
     execution or discharge of the Officer's duties (including, without
     limitation, in respect of his or her service at the request of the Company
     as a director, officer, partner, trustee, employee, agent or similar
     functionary of another person) or the exercise or purported exercise of the
     Officer's powers or otherwise, in relation to or in connection with the
     Officer's duties, powers or office (including but not limited to
     liabilities attaching to the Officer and losses arising by virtue of any
     rule of law in respect of any negligence, default, breach of duty or breach
     of trust of which such Officer may be guilty in relation to the Company or
     any Subsidiary of the Company).

          75.2. Every Officer shall be indemnified out of the funds of the
     Company against all liabilities arising out of the actual or purported
     execution or discharge of the Officer's duties or the exercise or purported
     exercise of the Officer's powers or otherwise, in relation to or in
     connection with the Officer's duties, powers or office, incurred by such
     Officer in defending any proceedings, whether civil or criminal, in which
     judgment is given in the Officer's favour, or in which the Officer is
     acquitted, or in connection with any application under the Companies Acts
     in which relief from liability is granted to the Officer by the court.

                                       II-1
<PAGE>

          75.3. In this Bye-law 75 (i) the term "Officer" includes, in addition
     to the persons specified in the definition of that term in Bye-law 1, the
     Resident Representative, a member of a committee constituted under these
     Bye-laws, any person acting as an Officer or committee member in the
     reasonable belief that the Officer has been so appointed or elected,
     notwithstanding any defect in such appointment or election, and any person
     who formerly was an Officer or acted in any of the other capacities
     described in this clause (i) and (ii) where the context so admits,
     references to an Officer include the estate and personal representatives of
     a deceased Officer or any such other person.

          75.4. The provisions for exemption from liability and indemnity
     contained in this Bye-law shall have effect to the fullest extent permitted
     by Applicable Law, but shall not extend to any matter which would render
     any of them void pursuant to the Companies Acts.

          75.5. To the extent that any person is entitled to claim an indemnity
     pursuant to these Bye-laws in respect of an amount paid or discharged by
     him or her, the relevant indemnity shall take effect as an obligation of
     the Company to reimburse the person making such payment (including advance
     payments of fees or other costs) or effecting such discharge.

          75.6. The rights to indemnification and reimbursement of expenses
     provided by these Bye-laws shall not be deemed to be exclusive of, and are
     in addition to, any other rights to which a person may be entitled. Any
     repeal or amendment of this Bye-law 75 shall be prospective only and shall
     not limit the rights of any Officer or the obligation of the Company with
     respect to any claim arising prior to any such repeal or amendment.

          75.7. In so far as it is permissible under Applicable Law, each
     Shareholder and the Company agree to waive any claim or right of action the
     Shareholder or it may at any time have, whether individually or by or in
     the right of the Company, against any Officer on account of any action
     taken by such Officer or the failure of such Officer to take any action in
     the performance of his duties with or for the Company, provided however,
     that such waiver shall not apply to any claims or rights of action arising
     out of the fraud or dishonesty of such Officer or to recover any gain,
     personal profit or advantage to which such Officer is not legally entitled.

          75.8. Subject to the Companies Acts, expenses incurred in defending
     any civil or criminal action or proceeding for which indemnification is
     required pursuant to this Bye-law 75 shall be paid by the Company in
     advance of the final disposition of such action or proceeding upon receipt
     of an undertaking by or on behalf of the indemnified party to repay such
     amount if it shall ultimately be determined that the indemnified party is
     not entitled to be indemnified pursuant to this Bye-law 75.

          75.9. Each Shareholder of the Company, by virtue of its acquisition
     and continued holding of a Share, shall be deemed to have acknowledged and
     agreed that the advances of funds may be made by the Company as aforesaid,
     and when made by the Company under this Bye-law 75 are made to meet
     expenditures incurred for the purpose of enabling such Officer to properly
     perform his or her duties as an Officer."

     Nabors has entered into agreements with certain of its directors and
officers indemnifying them against expenses, settlements, judgments and fines in
connection with any threatened, pending or completed action, suit, arbitration
or proceeding where the individual's involvement is by reason of the fact that
he is or was a director or officer or served at Nabors' request as a director or
officer of another organization, except where such indemnification is not
permitted under applicable law.

     The officers and directors of Nabors are covered by directors and officers
insurance aggregating $50,000,000.

     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling Nabors pursuant
to the foregoing provisions, Nabors has been informed that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.

                                       II-2
<PAGE>

ITEM 16.  EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER                      DESCRIPTION OF EXHIBIT
-------                     ----------------------
<C>      <S>
  2.1    Arrangement Agreement, dated as of August 12, 2002, by and
         between Nabors Industries Ltd. and Ryan Energy Technology
         Inc.
  2.2    Form of Plan of Arrangement Under Section 193 of the
         Business Corporations Act (Alberta) Involving and Affecting
         Ryan Energy Technologies Inc. and its Securityholders
         (included in Schedule B to Exhibit 2.1)
 +2.3    Agreement and Plan of Merger among Nabors Industries, Inc.,
         Nabors Acquisition Corp. VIII, Nabors Industries Ltd. and
         Nabors US Holdings Inc. (incorporated by reference to Annex
         I to the proxy statement/prospectus included in Nabors
         Industries Ltd.'s Registration Statement on Form S-4
         (Registration No. 333-76198) filed with the SEC on May 10,
         2002, as amended)
 +3.1    Memorandum of Association of Nabors Industries Ltd.
         (incorporated by reference to Annex II to the proxy
         statement/prospectus included in Nabors Industries Ltd.'s
         Registration Statement on Form S-4 (Registration No.
         333-76198) filed with the SEC on May 10, 2002, as amended)
 +3.2    Amended and Restated Bye-Laws of Nabors Industries Ltd.
         (incorporated by reference to Annex III to the proxy
         statement/prospectus included in Nabors Industries Ltd.'s
         Registration Statement on Form S-4 (Registration No.
         333-76198) filed with the SEC on May 10, 2002, as amended)
 +3.3    Form of Resolutions of the Board of Directors of Nabors
         Industries Ltd. authorizing the issue of the Special Voting
         Preferred Share (incorporated by reference to Exhibit 3.3 to
         Nabors Industries Ltd.'s Post Effective Amendment No. 1 to
         Registration Statement on Form S-3 (Registration No.
         333-85228-99) filed with the SEC on June 11, 2002)
 +4.1    Form of Provisions Attaching to the Exchangeable Shares of
         Nabors Exchangeco (Canada) Inc. (incorporated by reference
         to Exhibit 4.1 to Nabors Industries, Inc.'s Registration
         Statement on Form S-3 (Registration No. 333-85228) filed
         with the SEC on March 29, 2002, as amended)
 +4.2    Form of Support Agreement between Nabors Industries, Inc.,
         3064297 Nova Scotia Company and Nabors Exchangeco (Canada)
         Inc. (incorporated by reference to Exhibit 4.2 to Nabors
         Industries, Inc.'s Registration Statement on Form S-3
         (Registration No. 333-85228) filed with the SEC on March 29,
         2002, as amended)
 +4.3    Form of Acknowledgement of Novation to Nabors Industries,
         Inc., Nabors Exchangeco (Canada) Inc., Computershare Trust
         Company of Canada and 3064297 Nova Scotia Company executed
         by Nabors Industries Ltd. (incorporated by reference to
         Exhibit 4.3 to Nabors Industries Ltd.'s Post Effective
         Amendment No. 1 to Registration Statement on Form S-3
         (Registration No. 333-85228-99) filed with the SEC on June
         11, 2002)
  5.1    Opinion of Appleby, Spurling & Kempe regarding the legality
         of the securities being registered
  8.1    Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
         certain United States tax matters
  8.2    Opinion of Appleby, Spurling & Kempe as to certain Bermuda
         tax matters
  8.3    Opinion of Stikeman Elliott as to certain Canadian tax
         matters
 +9.1    Form of Voting and Exchange Trust Agreement between Nabors
         Industries, Inc. and Nabors Exchangeco (Canada) Inc. and
         Computershare Trust Company of Canada, as trustee
         (Incorporated by reference to Exhibit 9.1 to Nabors
         Industries, Inc.'s Registration Statement on Form S-3
         (Registration No. 333-85228) filed with the SEC on March 29,
         2002, as amended)
 15.1    Awareness Letter of PricewaterhouseCoopers LLP to the
         Securities and Exchange Commission
 23.1    Consent of PricewaterhouseCoopers LLP
 23.2    Consent of Appleby, Spurling & Kempe (included in Exhibits
         5.1 and 8.2)
 23.3    Consent of Skadden, Arps, Slate, Meagher & Flom LLP
         (included in Exhibit 8.1)
 23.4    Consent of Stikeman Elliott (included in Exhibit 8.3)
 24.1    Powers of Attorney (included in signature page of this
         registration statement)
</Table>

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

+ Incorporated by reference as indicated.

                                       II-3
<PAGE>

ITEM 17.  UNDERTAKINGS

     The undersigned registrant hereby undertakes:

          (a) (1) To file, during any period in which offers or sales are being
     made, a post effective amendment to this registration statement:

             (i) To include any prospectus required by Section 10(a)(3) of the
        Securities Act;

             (ii) To reflect in the prospectus any facts or events arising after
        the effective date of this registration statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in this registration statement. Notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high end of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission pursuant to Rule 424(b) if, in the aggregate, the
        changes in volume and price represent no more than 20 percent change in
        the maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective registration statement; and

             (iii) to include any material information with respect to the plan
        of distribution not previously disclosed in this registration statement
        or any material change to such information in this registration
        statement;

          provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
     section do not apply if the information required to be included in a
     post-effective amendment by those paragraphs is contained in periodic
     reports filed with or furnished to the SEC by the registrant pursuant to
     Section 13 or Section 15(d) of the Securities Exchange Act that are
     incorporated by reference in this registration statement.

          (2) That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new registration statement relating to the securities offered therein, and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.

     (b) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act, and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act, that is incorporated by reference in this registration
statement, shall be deemed to be a new registration statement, relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and therefore is unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by them is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

                                       II-4
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this registration statement on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Houston, Texas, on this 6th day of
September, 2002.

                                          NABORS INDUSTRIES LTD.

                                          By:     /s/ DANIEL MCLACHLIN
                                            ------------------------------------
                                                      Daniel McLachlin
                                              Vice President -- Administration
                                                  and Corporate Secretary

     Each person whose signature to this registration statement appears below
hereby appoints Daniel McLachlin, Anthony G. Petrello or Bruce P. Koch as his
attorney-in-fact, with full power of substitution, to sign on his behalf,
individually and in the capacities stated below, and to file (i) any and all
amendments and post-effective amendments to this registration statement and (ii)
any registration statement relating to the same offering pursuant to Rule 462(b)
under the Securities Act of 1933 which amendments or registration statements may
make such changes and additions as such attorney-in-fact may deem necessary or
appropriate. In accordance with the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the dates stated.

<Table>
<Caption>
                   SIGNATURE                                    TITLE                         DATE
                   ---------                                    -----                         ----
<S>     <C>                                       <C>                                  <C>

            /s/ EUGENE M. ISENBERG                   Chairman and Chief Executive      September 6, 2002
  -------------------------------------------                  Officer
              Eugene M. Isenberg

            /s/ ANTHONY G. PETRELLO               President, Chief Operating Officer   September 6, 2002
  -------------------------------------------                and Director
              Anthony G. Petrello

            /s/ RICHARD A. STRATTON                   Vice Chairman and Director       September 6, 2002
  -------------------------------------------
              Richard A. Stratton

               /s/ BRUCE P. KOCH                      Vice President -- Finance        September 6, 2002
  -------------------------------------------          (Principal Financial and
                 Bruce P. Koch                           Accounting Officer)

              /s/ JAMES L. PAYNE                               Director                September 6, 2002
  -------------------------------------------
                James L. Payne

               /s/ HANS SCHMIDT                                Director                September 6, 2002
  -------------------------------------------
                 Hans Schmidt

            /s/ MYRON M. SHEINFELD                             Director                September 6, 2002
  -------------------------------------------
              Myron M. Sheinfeld

                /s/ JACK WEXLER                                Director                September 6, 2002
  -------------------------------------------
                  Jack Wexler

             /s/ MARTIN J. WHITMAN                             Director                September 6, 2002
  -------------------------------------------
               Martin J. Whitman
</Table>

                                       II-5
<PAGE>

                               INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER                       DESCRIPTION OF EXHIBIT
-------                      ----------------------
<C>       <S>
  2.1     Arrangement Agreement, dated as of August 12, 2002, by and
          between Nabors Industries Ltd. and Ryan Energy Technology
          Inc.
  2.2     Form of Plan of Arrangement Under Section 193 of the
          Business Corporations Act (Alberta) Involving and Affecting
          Ryan Energy Technologies Inc. and its Securityholders
          (included in Schedule B to Exhibit 2.1)
 +2.3     Agreement and Plan of Merger among Nabors Industries, Inc.,
          Nabors Acquisition Corp. VIII, Nabors Industries Ltd. and
          Nabors US Holdings Inc. (incorporated by reference to Annex
          I to the proxy statement/prospectus included in Nabors
          Industries Ltd.'s Registration Statement on Form S-4
          (Registration No. 333-76198) filed with the SEC on May 10,
          2002, as amended)
 +3.1     Memorandum of Association of Nabors Industries Ltd.
          (incorporated by reference to Annex II to the proxy
          statement/prospectus included in Nabors Industries Ltd.'s
          Registration Statement on Form S-4 (Registration No.
          333-76198) filed with the SEC on May 10, 2002, as amended)
 +3.2     Amended and Restated Bye-Laws of Nabors Industries Ltd.
          (incorporated by reference to Annex III to the proxy
          statement/prospectus included in Nabors Industries Ltd.'s
          Registration Statement on Form S-4 (Registration No.
          333-76198) filed with the SEC on May 10, 2002, as amended)
 +3.3     Form of Resolutions of the Board of Directors of Nabors
          Industries Ltd. authorizing the issue of the Special Voting
          Preferred Share (incorporated by reference to Exhibit 3.3 to
          Nabors Industries Ltd.'s Post Effective Amendment No. 1 to
          Registration Statement on Form S-3 (Registration No. 333-
          85228-99) filed with the SEC on June 11, 2002)
 +4.1     Form of Provisions Attaching to the Exchangeable Shares of
          Nabors Exchangeco (Canada) Inc. (incorporated by reference
          to Exhibit 4.1 to Nabors Industries, Inc.'s Registration
          Statement on Form S-3 (Registration No. 333-85228) filed
          with the SEC on March 29, 2002, as amended)
 +4.2     Form of Support Agreement between Nabors Industries, Inc.,
          3064297 Nova Scotia Company and Nabors Exchangeco (Canada)
          Inc. (incorporated by reference to Exhibit 4.2 to Nabors
          Industries, Inc.'s Registration Statement on Form S-3
          (Registration No. 333-85228) filed with the SEC on March 29,
          2002, as amended)
 +4.3     Form of Acknowledgement of Novation to Nabors Industries,
          Inc., Nabors Exchangeco (Canada) Inc., Computershare Trust
          Company of Canada and 3064297 Nova Scotia Company executed
          by Nabors Industries Ltd. (incorporated by reference to
          Exhibit 4.3 to Nabors Industries Ltd.'s Post Effective
          Amendment No. 1 to Registration Statement on Form S-3
          (Registration No. 333-85228-99) filed with the SEC on June
          11, 2002)
  5.1     Opinion of Appleby, Spurling & Kempe regarding the legality
          of the securities being registered
  8.1     Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
          certain United States tax matters
  8.2     Opinion of Appleby, Spurling & Kempe as to certain Bermuda
          tax matters
  8.3     Opinion of Stikeman Elliott as to certain Canadian tax
          matters
 +9.1     Form of Voting and Exchange Trust Agreement between Nabors
          Industries, Inc. and Nabors Exchangeco (Canada) Inc. and
          Computershare Trust Company of Canada, as trustee
          (Incorporated by reference to Exhibit 9.1 to Nabors
          Industries, Inc.'s Registration Statement on Form S-3
          (Registration No. 333-85228) filed with the SEC on March 29,
          2002, as amended)
 15.1     Awareness Letter of PricewaterhouseCoopers LLP to the
          Securities and Exchange Commission
 23.1     Consent of PricewaterhouseCoopers LLP
 23.2     Consent of Appleby, Spurling & Kempe (included in Exhibits
          5.1 and 8.2)
 23.3     Consent of Skadden, Arps, Slate, Meagher & Flom LLP
          (included in Exhibit 8.1)
 23.4     Consent of Stikeman Elliott (included in Exhibit 8.3)
 24.1     Powers of Attorney (included in signature page of this
          registration statement)
</Table>

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

+ Incorporated by reference as indicated.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>3
<FILENAME>h99572exv2w1.txt
<DESCRIPTION>ARRANGEMENT AGREEMENT - NABORS INDUSTRIES LTD
<TEXT>
<PAGE>
                                                                     EXHIBIT 2.1



                              ARRANGEMENT AGREEMENT







                                    BETWEEN:



                   NABORS INDUSTRIES LTD., an exempted company
                     incorporated under the laws of Bermuda,

                                     - and -

                        RYAN ENERGY TECHNOLOGIES INC., a
               corporation incorporated under the laws of Alberta.





                                 August 12, 2002




<PAGE>
                            TABLE OF CONTENTS


                                 ARTICLE 1
                                DEFINITIONS

1.1     Definitions........................................................1
1.2     Singular, Plural, etc..............................................8
1.3     Deemed Currency....................................................8
1.4     Date for Any Action................................................8
1.5     Decision by Board of Directors.....................................8
1.6     Interpretation Not Affected by Party Drafting......................9
1.7     Statutes...........................................................9

                                 ARTICLE 2
                             THE ARRANGEMENT

2.1     Implementation Steps by the Corporation............................9
2.2     Implementation Steps by Acquiror...................................9
2.3     Interim Order.....................................................10
2.4     Dissenting Securities.............................................10
2.5     Articles of Arrangement...........................................10
2.6     Corporation Approval of the Arrangement...........................10
2.7     Proxy Circular....................................................11
2.8     Securities Compliance.............................................11
2.9     Preparation of Filings............................................12
2.10    Cooperation.......................................................14
2.11    Press Release and Public Disclosure...............................17
2.12    Outstanding Rights to Acquire Shares..............................17

                                 ARTICLE 3
                       COVENANTS OF THE CORPORATION

3.1     Ordinary Course of Business.......................................19
3.2     Non-Solicitation..................................................22
3.3     Notice of Material Change.........................................25
3.4     Access to Information.............................................26
3.5     Public Filings....................................................26

                                 ARTICLE 4
                        FEES AND OTHER ARRANGEMENTS

4.1     Fees..............................................................26

                                 ARTICLE 5
                           COVENANTS OF ACQUIROR

5.1     Officers' and Directors' Insurance................................28
5.2     Indemnities.......................................................28

<PAGE>
                                      -2-

5.3     Employment Agreements.............................................28
5.4     Third Party Beneficiaries.........................................28
5.5     Availability of Funds.............................................29
5.6     Availability of Personnel.........................................29

                                ARTICLE 6
                            MUTUAL COVENANTS

6.1     Consultation......................................................29
6.2     Other Filings.....................................................29

                                ARTICLE 7
            REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

7.1     Representations...................................................29
7.2     Investigation.....................................................39

                                ARTICLE 8
               REPRESENTATIONS AND WARRANTIES OF ACQUIROR

8.1     Representations...................................................39
8.2     Investigation.....................................................44

                                ARTICLE 9
                               CONDITIONS

9.1     Conditions Precedent to Obligations of Each Party.................44
9.2     Acquiror Conditions...............................................45
9.3     Corporation Conditions............................................47

                               ARTICLE 10
                               TERMINATION

10.1    Termination.......................................................48

                               ARTICLE 11
                              MISCELLANEOUS

11.1    Amendment or Waiver...............................................49
11.2    Entire Agreement..................................................49
11.3    Headings..........................................................49
11.4    Notices...........................................................49
11.5    Counterparts and Facsimiles.......................................50
11.6    Expenses..........................................................50
11.7    Assignment........................................................51
11.8    Severability......................................................51
11.9    Choice of Law.....................................................51
11.10   Attornment........................................................51
11.11   Remedies..........................................................51
11.12   Survival of Representations and Warranties........................52

<PAGE>
                                      -3-

11.13   Time of Essence...................................................52

                                ARTICLE 1
                             INTERPRETATION

1.1     Definitions........................................................1
1.2     Sections and Headings..............................................5
1.3     Number, Gender and Persons.........................................5
1.4     Date for any Action................................................5
1.5     Currency...........................................................5
1.6     Statutory References...............................................5

                                ARTICLE 2
                               ARRANGEMENT

2.1     Binding Effect.....................................................5
2.2     Arrangement........................................................5
2.3     Holdco Alternative.................................................7
2.4     Elections..........................................................8
2.5     Adjustments To Exchange Ratio......................................9
2.6     Restriction on Redemption of Exchangeable Shares...................9

                                ARTICLE 3
                            RIGHTS OF DISSENT

3.1     Rights of Dissent.................................................10

                                ARTICLE 4
                   CERTIFICATES AND FRACTIONAL SHARES

4.1     Payment of Cash...................................................10
4.2     Issuance of Certificates Representing Exchangeable Shares.........11
4.3     Distributions With Respect To Unsurrendered Certificates..........12
4.4     No Fractional Shares..............................................12
4.5     Lost Certificates.................................................13
4.6     Extinguishment Of Rights..........................................13
4.7     Withholding Rights................................................13
4.8     Termination of Depositary.........................................14

                                ARTICLE 5
         CERTAIN RIGHTS OF CALLCO TO ACQUIRE EXCHANGEABLE SHARES

5.1     Callco Liquidation Call Right.....................................14
5.2     Callco Redemption Call Right......................................15
5.3     Change of Law Call Right..........................................17

                                ARTICLE 6
                                AMENDMENT

6.1     Plan of Arrangement Amendment.....................................18
<PAGE>
                                      -4-

SCHEDULE A - Arrangement Resolution

SCHEDULE B - Plan of Arrangement

SCHEDULE C - Form of Lock-up Agreement



<PAGE>

         THIS ARRANGEMENT AGREEMENT made as of the 12th day of August, 2002.

BETWEEN:

                  NABORS INDUSTRIES LTD., an exempted company incorporated under
                  the laws of Bermuda,
                  ("ACQUIROR")

                                     - and -

                  RYAN ENERGY TECHNOLOGIES INC., a corporation incorporated
                  under the laws of Alberta,
                  (the "CORPORATION")



                                    RECITALS

WHEREAS:

A.   The Acquiror has made a proposal to acquire all of the outstanding Shares
at a price of $1.85 per Share (payable, at the election of each Shareholder, in
cash or in exchangeable shares of Canco) pursuant to the Plan of Arrangement;

B.   The Board of Directors has determined that it would be in the best
interests of the Corporation, its Shareholders and the Optionholders to
recommend acceptance of the Arrangement to the Shareholders, to cooperate with
Acquiror and to take all reasonable action to support the Arrangement; and

C.   The Board of Directors has determined that it would be in the best
interests of the Corporation, the Shareholders and the Optionholders to enter
into this Agreement;

         NOW THEREFORE IN CONSIDERATION of the mutual covenants set out below,
Acquiror and the Corporation agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

1.1      DEFINITIONS

         In this Agreement, unless the context otherwise requires, the following
terms have the meanings specified:

         "ACQUIROR SHARES" means shares in the common stock of Acquiror;

         "ACQUISITION PROPOSAL" means a proposal or offer by any Person (other
         than Acquiror or an affiliate of Acquiror), whether or not subject to
         conditions and whether or not in



<PAGE>
                                      -2-

         writing, to acquire in any manner, directly or indirectly, beneficial
         ownership of all or a material portion of the assets of the Corporation
         or any Subsidiary of the Corporation or to acquire in any manner,
         directly or indirectly, beneficial ownership of or control or direction
         over more than 20% of the outstanding voting shares of the Corporation,
         whether by means of an arrangement or amalgamation, a merger,
         consolidation or other business combination, a sale of shares or
         assets, a take-over bid, tender offer or exchange offer, or any other
         transaction involving the Corporation or any Subsidiary of the
         Corporation, including, without limitation, any single or multi-step
         transaction or series of related transactions structured to permit such
         Person to acquire beneficial ownership of all or a material portion of
         the assets of the Corporation or any Subsidiary of the Corporation or
         to acquire in any manner, directly or indirectly, more than 20% of the
         outstanding voting shares of the Corporation (other than the
         transaction contemplated by this Agreement);

         "ACT" means the Business Corporations Act (Alberta);

         "AFFILIATE" has the meaning set forth in the Securities Act (Alberta);

         "AGREEMENT", and "THIS AGREEMENT", and similar expressions refer to
         this Agreement, as the same may be amended, restated or supplemented
         from time to time and, where applicable, to the appropriate Schedules
         to this Agreement;

         "ARRANGEMENT" means the arrangement under Section 193 of the Act on the
         terms and conditions set out in the Plan of Arrangement;

         "ARRANGEMENT RESOLUTION" means the special resolution of the
         Shareholders and Optionholders to be substantially as set forth in
         Schedule A hereto;

         "ARTICLES OF ARRANGEMENT" means the articles of arrangement of the
         Corporation in respect of the Arrangement that are required by the Act
         to be sent to the Registrar after the Final Order;

         "BOARD OF DIRECTORS" means the board of directors of the Corporation as
         constituted from time to time;

         "BUSINESS DAY" means any day excepting a Saturday, Sunday or statutory
         holiday in Calgary, Alberta or Houston, Texas;

         "CALLCO" means 3064297 Nova Scotia Company, an unlimited liability
         company incorporated under the laws of the Province of Nova Scotia;

         "CANCO" means Nabors Exchangeco (Canada) Inc., an indirect wholly-owned
         Subsidiary of Acquiror incorporated under the Canada Business
         Corporations Act;

         "CLOSING" means the closing of the Arrangement and the transactions
         contemplated hereby;

         "CLOSING DATE" means the date of Closing;


<PAGE>
                                      -3-

         "CONFIDENTIALITY AGREEMENT" means the confidentiality agreement made as
         of March 19, 2002 between Acquiror and the Corporation;

         "COURT" means the Court of Queen's Bench of Alberta;

         "DATE HEREOF", "DATE OF THIS AGREEMENT" and other similar terms mean,
         unless the context otherwise requires, August 12th, 2002;

         "DILUTED BASIS" means, with respect to the number of outstanding Shares
         at any time, such number of outstanding Shares calculated assuming that
         all outstanding in-the-money Options and other securities entitling the
         holder to acquire Shares are exercised;

         "DISCLOSURE LETTER" means the letter delivered by the Corporation to
         Acquiror on the date of this Agreement, in each case referencing the
         Section or subsection of this Agreement in respect of which disclosure
         is being made;

         "DISSENT RIGHTS" means the rights of dissent in respect of the
         Arrangement Resolution provided in Section 3.1 of the Plan of
         Arrangement;

         "EFFECTIVE DATE" means the effective date of the Arrangement, being the
         date on which the Articles of Arrangement are filed under the Act
         giving effect to the Arrangement;

         "EFFECTIVE TIME" means the time on the Effective Date at which the
         Articles of Arrangement are filed under the Act;

         "EMPLOYEE OBLIGATIONS" means any obligations or liabilities of the
         Corporation or any Subsidiary of the Corporation to pay, whether or not
         on condition, any amount to its officers, directors, or employees,
         (other than for salary, bonuses under their existing bonus arrangements
         and directors' fees in each case in the ordinary and regular course of
         business consistent with past practice and obligations or liabilities
         in respect of insurance or indemnification contemplated in Article 5)
         and, without limiting the generality of the foregoing, Employee
         Obligations shall include the obligations or liabilities of the
         Corporation or any of its Subsidiaries to officers or employees (i) for
         severance or termination payments on the change of control of the
         Corporation pursuant to any executive involuntary severance and
         termination agreements in the case of officers and pursuant to the
         Corporation's severance policy in the case of employees and (ii) for
         retention bonus payments pursuant to any retention bonus program, but
         shall exclude any statutory or common law obligations or liabilities in
         respect of termination or severance;

         "ENCUMBRANCE" includes, without limitation, any mortgage, pledge,
         assignment, charge, lien, security interest or trust, royalty, carried,
         working, participation or net profits interest or other third party
         interest and any agreement, option, right or privilege (whether by law,
         contract or otherwise) capable of becoming any of the foregoing;

         "ENVIRONMENTAL LAWS" means all applicable statutes, regulations,
         ordinances, by-laws, and codes and all international treaties and
         agreements, in Canada and the United States (whether federal,
         provincial, state or municipal) relating to pollution or the protection
         and preservation of the environment, occupational health and safety,
         product safety, product

<PAGE>
                                      -4-

         liability or Hazardous Substances, including, without limitation, laws
         relating to Releases or threatened Releases of Hazardous Substances
         into the indoor or outdoor environment (including, without limitation,
         ambient air, surface water, groundwater, land, surface and subsurface
         strata) or otherwise relating to the manufacture, processing,
         distribution, use, treatment, storage, Release, transport or handling
         of Hazardous Substances and all laws and regulations with regard to
         recordkeeping, notification, disclosure and reporting requirements
         respecting Hazardous Substances, and all laws relating to endangered or
         threatened species of fish, wildlife and plants and the management or
         use of natural resources, including, without limitation, the
         Environmental Protection and Enhancement Act (Alberta), and the
         Canadian Environmental Protection Act;

         "ENVIRONMENTAL PERMITS" includes all orders, permits, certificates,
         approvals, consents, registrations and licences issued by any competent
         authority under Environmental Laws;

         "EXCHANGE" means The Toronto Stock Exchange;

         "EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
         restrictions and conditions attaching to the Exchangeable Shares as set
         forth in the articles of Canco;

         "EXCHANGEABLE SHARES" means exchangeable shares of Canco as constituted
         on the date hereof and governed by the Exchangeable Share Provisions;

         "FEE EVENT" has the meaning set forth in Section 4.1;

         "FINAL ORDER" has the meaning set forth in Section 2.1;

         "FINANCIAL STATEMENTS" means the audited consolidated balance sheet and
         related consolidated statement of earnings and retained earnings and
         consolidated statement of cash flow of the Corporation for the fiscal
         years ending December 31, 2001 and 2000 and the unaudited consolidated
         balance sheets and consolidated statements of earnings and retained
         earnings and consolidated statements of cash flow for the periods ended
         March 31, 2002 and 2001, in each case as set forth in the Public
         Record;

         "GOVERNING DOCUMENTS" means, with respect to any Person, the
         certificate or articles of incorporation, by-laws, articles of
         organization, limited liability company agreement, partnership
         agreement, formation agreement, joint venture agreement, unanimous
         shareholder agreement or declaration or other similar governing
         documents of such Person;

         "GOVERNMENTAL ENTITY" means any (i) multinational, federal, provincial,
         state, municipal, local or other governmental or public department,
         central bank, court, commission, board, bureau, agency or
         instrumentality, domestic or foreign, (ii) any subdivision or authority
         of any of the foregoing, or (iii) any quasi-governmental or private
         body exercising any regulatory, expropriation or taxing authority under
         or for the account of any of the above.

         "HAZARDOUS SUBSTANCE" means, collectively, any contaminant (as defined
         in the Environmental Protection and Enhancement Act (Alberta)), toxic
         substance (as defined

<PAGE>
                                      -5-

         in the Canadian Environmental Protection Act), dangerous goods (as
         defined in the Transportation of Dangerous Goods Act (Canada), or
         pollutant or any other substance that when Released to the natural
         environment is likely to cause, at some immediate or future time,
         material harm or degradation to the natural environment or material
         risk to human health, including without limitation, (a) any
         petrochemical or petroleum products, radioactive materials, asbestos in
         any form that is or could become friable, urea formaldehyde foam
         insulation, transformers or other equipment that contains dielectric
         fluid containing polychlorinated biphenyls, and radon gas; (b) any
         chemicals, materials or substances defined as or included in the
         definition of "hazardous substances", "hazardous wastes", "hazardous
         materials", "restricted hazardous materials", "extremely hazardous
         substances", "toxic substances", "contaminants" or "pollutants" or
         words of similar meaning and regulatory effect; or (c) any other
         chemical, material or substance, exposure to which is prohibited,
         limited, or regulated by any applicable Environmental Law;

         "INTERIM ORDER" has the meaning set forth in Section 2.1;

         "IN-THE-MONEY" means, in respect of Options, such of them as have an
         exercise price per Share less than the Per Share Price;

         "MATERIAL ADVERSE CHANGE", in respect of the Corporation or the
         Acquiror, means any change (or changes which in the aggregate would be
         material) (or any condition, event or development involving a
         prospective material change) in the business, operations, results of
         operations, assets, capitalization, financial condition, rights,
         liabilities, prospects or privileges, whether contractual or otherwise,
         of the Corporation or the Acquiror, as the case may be, or any of its
         Subsidiaries which is materially adverse to the business thereof
         considered as a whole, other than a change: (i) resulting from
         conditions affecting the oil and gas industry as a whole or the oil and
         gas services industry as a whole; (ii) resulting from general economic,
         financial, currency exchange, securities or commodity market conditions
         in Canada or elsewhere; (iii) previously disclosed publicly or in the
         Disclosure Letter; or (iv) resulting from changes in the market price
         of crude oil or natural gas; provided that such change or changes shall
         be considered to be material if its or their value or financial effect
         (net of reasonably anticipated insurance recoveries in respect of such
         change) exceeds, in the aggregate, $2 million in respect of the
         Corporation and its Subsidiaries or $165 million in respect of Acquiror
         and its Subsidiaries;

         "MATERIAL ADVERSE EFFECT" means, where used in relation to the
         Corporation or the Acquiror and a fact or circumstance, such fact or
         circumstance (together with all other facts or circumstances) has or is
         reasonably expected to: (i) have a material adverse effect on the
         business, operations, results of operations, assets, capitalization,
         condition (financial or otherwise), licenses, permits, concessions,
         rights, liabilities (contingent or otherwise), prospects or privileges,
         whether contractual or otherwise, of the Corporation and its
         Subsidiaries considered as a whole or the Acquiror and its Subsidiaries
         considered as a whole, as the case may be, excluding any such effect:
         (A) resulting from conditions affecting the oil and gas industry as a
         whole or the oil and gas services industry as a whole; (B) resulting
         from general economic, financial, currency exchange, securities or
         commodity market conditions in Canada or elsewhere; (C) previously
         disclosed publicly or in the Disclosure Letter; or (D) resulting from
         changes in the market price of crude oil



<PAGE>
                                      -6-

         or natural gas; provided that such change or changes shall be
         considered to be material if its or their value or financial effect
         (net of reasonably anticipated insurance recoveries in respect of such
         change) exceeds, in the aggregate, $2 million in respect of the
         Corporation and its Subsidiaries or $165 million in respect of Acquiror
         and its Subsidiaries; (ii) prevent, materially delay or materially
         affect the consummation of the transactions contemplated by this
         Agreement; or (iii) materially affect the ability of the Corporation or
         the Acquiror, as the case may be, to perform its obligations hereunder
         or under the Arrangement;

         "MATERIAL CONTRACT" means an agreement or understanding (whether or not
         in writing) to which the Corporation or any of its Subsidiaries is a
         party or by which any thereof is bound: pursuant to which the
         Corporation or any of its Subsidiaries has or may have an obligation in
         excess of, or having a value in excess of, $150,000 annually and which
         has a term in excess of 90 days without being terminable by the
         Corporation or its Subsidiary without penalty;

         "MISREPRESENTATION" has the meaning set forth in the Securities Act
         (Alberta);

         "OPTIONHOLDERS" means the holders of Options from time to time;

         "OPTIONS" means the outstanding options to acquire Shares under the
         Stock Option Plan;

         "PER SHARE PRICE" means $1.85;

         "PERSON" includes an individual, partnership, trust, firm, body
         corporate, government, governmental body, agency or instrumentality,
         unincorporated body of persons or association;

         "PLAN OF ARRANGEMENT" means the plan of arrangement substantially in
         the form attached hereto as Schedule B and any amendments or variations
         thereto made in accordance with Article 6 of the Plan of Arrangement or
         made at the direction of the Court in the Final Order;

         "PREDECESSOR CORPORATIONS" means those corporations which merged with
         the Corporation pursuant to various amalgamations including, without
         limitation, Adesso Corporation and 747253 Alberta Ltd.;

         "PROXY CIRCULAR" means the management information circular of the
         Corporation to be sent to the Shareholders and the Optionholders in
         connection with the Shareholder Meeting (including, without limitation,
         information incorporated by reference);

         "PUBLIC RECORD" means all information and materials filed by, or on
         behalf of, the Corporation or any of the Predecessor Corporations with
         any of the Securities Authorities available through the SEDAR website;

         "REAL PROPERTY" has the meaning set forth in Section 7.1(o);

         "REGISTRAR" means the Registrar appointed pursuant to Section 263 of
         the Act;
<PAGE>
                                      -7-

         "REGULATORY APPROVALS" means all approvals, consents and authorizations
         of all Governmental Entities and other regulators (including stock
         exchanges) reasonably necessary or desirable in connection with the
         Arrangement and the other transactions contemplated hereby;

         "RELEASE" means any release, spill, emission, discharge, leaking,
         pumping, dumping, escape, injection, deposit, disposal, discharge,
         dispersal, leaching or migration into the indoor or outdoor environment
         (including, without limitation, ambient air, surface water,
         groundwater, and surface or subsurface strata) or into or out of any
         property, including the movement of Hazardous Substances through or in
         the air, soil, surface water, groundwater or property;

         "RETURNS" means all reports, estimates, declarations of estimated tax,
         information statements and returns relating to, or required to be filed
         in connection with, any Taxes;

         "SEC" means the Securities and Exchange Commission of the United
         States;

         "SECURITIES AUTHORITIES" means the appropriate securities commission or
         similar regulatory authorities in Canada and each of the provinces and
         territories thereof and in the United States and each of the states
         thereof;

         "SECURITIES LAWS" means, collectively, all applicable Canadian
         provincial and territorial corporate and securities laws, United States
         securities laws, the "blue sky" or securities laws of the states of the
         United States and any other applicable securities laws;

         "SHAREHOLDERS" means the holders of Shares from time to time;

         "SHAREHOLDER MEETING" means the special meeting of the Shareholders and
         Optionholders, including any adjournments or postponement thereof, to
         be called and held in accordance with the Interim Order to consider
         and, if deemed advisable, approve the Arrangement Resolution;

         "SHARES" means common shares in the share capital of the Corporation;

         "STOCK OPTION PLAN" means the stock option plan of the Corporation
         approved by the shareholders of the Corporation on September 18, 1996
         and amended with approval of such shareholders given at the 1997, 1998,
         2000 and 2001 Annual and Special Meetings of the Corporation;

         "SUBSIDIARY" has the meaning set forth in the Act and, in respect of
         the Corporation, includes (without limitation) Ryan Energy Technologies
         USA, Inc. (Delaware); Ryan Energy Technologies de Venezuela, C.A.
         (Venezuela); Data Wise Solutions Inc. (Delaware); Data Wise Solutions
         Inc. (Canada); Ryan Energy Technologies International Inc. (Barbados),
         Ryan Financial Services Company LLC (Delaware), Ryan Investment
         Partners (Delaware) and each other partnership or other entity
         controlled, directly or indirectly, by the Corporation;

         "SUPERIOR PROPOSAL" has the meaning set forth in section 3.2(a);


<PAGE>
                                      -8-

         "SUPPORT AGREEMENT" means the agreement so entitled among Nabors
         Industries, Inc., Callco and Canco dated April 26, 2002, as
         supplemented by an Acknowledgement of Novation between Nabors
         Industries, Inc., Callco, Canco, Computershare Trust Company of Canada
         and Acquiror;

         "TAXES" shall mean all taxes, however denominated, including any
         interest, penalties or other additions that may become payable in
         respect thereof, imposed by any federal, territorial, provincial,
         state, local or foreign government or any agency or political
         subdivision of any such government, which taxes shall include, without
         limiting the generality of the foregoing, all income or profits taxes
         (including, but not limited to, federal income taxes and provincial
         income taxes), payroll and employee withholding taxes, unemployment
         insurance, social insurance taxes, sales and use taxes, ad valorem
         taxes, excise taxes, franchise taxes, gross receipts taxes, business
         license taxes, occupation taxes, real and personal property taxes,
         stamp taxes, environmental taxes, transfer taxes, workers' compensation
         and other governmental charges, and other obligations of the same or of
         a similar nature to any of the foregoing, which the Corporation or any
         of its Subsidiaries is required to pay, withhold or collect;

         "U.S. SECURITIES ACT" means the United States Securities Act of 1933,
         as amended; and

         "VOTING AND EXCHANGE TRUST AGREEMENT" means the agreement so entitled
         among Nabors Industries, Inc., Canco and Computershare Trust Company of
         Canada dated April 26, 2002, as supplemented by an Acknowledgement of
         Novation between Nabors Industries, Inc., Callco, Canco, Computershare
         Trust Company of Canada and Acquiror.

1.2      SINGULAR, PLURAL, ETC.

         Words importing the singular number include the plural and vice versa
and words importing gender include the masculine, feminine and neuter genders.

1.3      DEEMED CURRENCY

         In the absence of a specific designation of any currency, any
undescribed dollar amount herein shall be deemed to refer to Canadian dollars.

1.4      DATE FOR ANY ACTION

         In the event that any date on which any action is required to be taken
hereunder by any of the parties hereunder is not a Business Day, such action
shall be required to be taken on the next succeeding day which is a Business
Day.

1.5      DECISION BY BOARD OF DIRECTORS

         Any reference herein to a decision or determination, unanimous or
otherwise, of the Board of Directors means a decision or determination by a
quorum of the directors of the Corporation entitled to vote under the Act and
the constating documents of the Corporation.
<PAGE>
                                      -9-

1.6      INTERPRETATION NOT AFFECTED BY PARTY DRAFTING

         The parties hereto acknowledge that their respective legal counsel have
reviewed and participated in settling the terms of this Agreement, and the
parties hereby agree that any rule of construction to the effect that any
ambiguity is to be resolved against the drafting party will not be applicable in
the interpretation of this Agreement.

1.7      STATUTES

         Any reference to a statute herein shall include any and all rules or
regulations promulgated thereunder and any and all amendments made to such
statute, rules or regulations prior to the date hereof and hereafter from time
to time.

                                   ARTICLE 2
                                 THE ARRANGEMENT

2.1      IMPLEMENTATION STEPS BY THE CORPORATION

         The Corporation agrees that it shall use its commercially reasonable
efforts to:

         (a)      as soon as reasonably practicable, and in any event, on or
                  before September 16, 2002, apply to the Court in a manner
                  acceptable to Acquiror acting reasonably, under Section 193 of
                  the Act for an interim order (the "INTERIM ORDER") providing
                  for, among other things, the calling and holding of the
                  Shareholder Meeting, and thereafter proceed with and
                  diligently seek the Interim Order, in form and substance
                  satisfactory to the Corporation and Acquiror, acting
                  reasonably;

         (b)      lawfully convene and hold the Shareholder Meeting as soon as
                  reasonably practicable and, in any event, on or before October
                  31, 2002;

         (c)      subject to obtaining the approvals as are required by the
                  Interim Order, proceed with and diligently pursue the
                  application to the Court for a final order of the Court
                  approving the Arrangement in form and substance satisfactory
                  to the Corporation and Acquiror, acting reasonably, (the
                  "FINAL ORDER"); and

         (d)      subject to obtaining the Final Order and the satisfaction or
                  waiver of the other conditions herein contained in favour of
                  each party, send to the Registrar, for filing under the Act,
                  the Articles of Arrangement and such other documents as may be
                  required in connection therewith under the Act to give effect
                  to the Arrangement.

2.2      IMPLEMENTATION STEPS BY ACQUIROR

         Acquiror agrees that, on or prior to the Effective Date and subject to
the satisfaction or waiver of the conditions herein contained in favour of
Acquiror, Acquiror shall issue to the trustee under the Voting and Exchange
Trust Agreement such share or shares as required by the



<PAGE>
                                      -10-

Voting and Exchange Trust Agreement, if any, in respect of the Exchangeable
Shares to be issued pursuant to the Arrangement.

2.3      INTERIM ORDER

         The notice of motion for the application referred to in Section 2.1
shall request that the Interim Order provide, among other things:

         (a)      for the class of persons to whom notice is to be provided in
                  respect of the Arrangement and the Shareholder Meeting and for
                  the manner in which such notice is to be provided;

         (b)      that the requisite approval for the Arrangement Resolution
                  shall be 662/3% of the votes cast on the Arrangement
                  Resolution by Shareholders and Optionholders, voting together
                  as a single class, present in person or by proxy at the
                  Shareholder Meeting (such that each holder of Shares is
                  entitled to one vote for each Share held and each Optionholder
                  is entitled to one vote for each Share such holder would have
                  received on a valid exercise of such Option, as the case may
                  be);

         (c)      that, in all other respects, the terms, restrictions and
                  conditions of the governing documents of the Corporation,
                  including quorum requirements and all other matters, shall
                  apply in respect of the Shareholder Meeting; and

         (d)      for the grant of the Dissent Rights.

2.4      DISSENTING SECURITIES

         Each Shareholder and each Optionholder may exercise Dissent Rights in
connection with the Arrangement pursuant to and in the manner set forth in
Section 191 of the Act and the Interim Order (such holders referred to as
"DISSENTERS" or as "DISSENTING SHAREHOLDERS" when referring exclusively to
Shareholders). The Corporation shall give Acquiror (i) prompt notice of any
written notices of exercise of rights of dissent, withdrawals of such notices,
and any other instruments served pursuant to the Act and received by the
Corporation and (ii) the opportunity to participate in all negotiations and
proceedings with respect to such rights. Without the prior written consent of
Acquiror, except as required by applicable law, the Corporation shall not make
any payment with respect to any such rights or offer to settle or settle any
such rights.

2.5      ARTICLES OF ARRANGEMENT

         The Articles of Arrangement shall, together with such other matters as
are necessary to effect the Arrangement, implement the Plan of Arrangement.

2.6      CORPORATION APPROVAL OF THE ARRANGEMENT

         (a)      The Corporation represents that the Board of Directors, upon
                  consultation with its advisors, has unanimously determined
                  that:


<PAGE>
                                      -11-

                  (i)      the Arrangement is fair from a financial point of
                           view to the Shareholders and Optionholders and is in
                           the best interests of the Corporation, the
                           Shareholders and Optionholders; and

                  (ii)     the Board of Directors will unanimously recommend
                           that Shareholders and Optionholders vote in favour of
                           the Arrangement, which recommendation may not be
                           withdrawn, modified or changed in any manner except
                           (A) as provided in Section 3.2; (B) pursuant to the
                           exercise by the Board of Directors of their fiduciary
                           duties, provided the fee provided for in Section 4.1
                           is paid; or (C) in the event of the termination of
                           this Agreement pursuant to Section 10.1.

         (b)      The Corporation represents that the Board of Directors has
                  received an oral opinion from the Corporation's financial
                  advisor, Peters & Co. Limited, that the consideration under
                  the Arrangement is fair from a financial point of view to the
                  Shareholders and that such financial advisor has advised it
                  that it will provide a written opinion to such effect on or
                  before the application referred to in Section 2.1(a).

         (c)      The Corporation represents that its senior officers and
                  directors have advised the Corporation that, at the date
                  hereof, they intend to vote any Shares and Options held by
                  them in favour of the Arrangement Resolution and will so
                  represent in the Proxy Circular.

2.7      PROXY CIRCULAR

         As promptly as reasonably practicable, the Corporation shall prepare
the Proxy Circular (setting forth inter alia the recommendation of the Board of
Directors set forth in Section 2.6(a) and the opinion of the Corporation's
financial advisors referred to in Section 2.6(b) and reflecting the execution of
the lock-up agreements referred to in Section 9.2(e) and the intention of the
senior officers and directors referred to in Section 2.6(c)) together with any
other documents required by Securities Laws or other applicable laws in
connection with the approval of the Arrangement by the Shareholders and
Optionholders and the Corporation shall, on a confidential basis, provide
Acquiror timely opportunity to review and a reasonable period of time in the
circumstances to comment on all such documentation and all such documentation
shall be reasonably satisfactory to Acquiror before it is filed or distributed
to the Shareholders and Optionholders. As promptly as practicable after
obtaining the Interim Order and, in any event on or before September 30, 2002,
the Corporation shall use its commercially reasonable efforts to cause the Proxy
Circular and other documentation required in connection with the Shareholder
Meeting to be sent to each Shareholder and each Optionholder and filed as
required by the Interim Order and applicable laws.

2.8      SECURITIES COMPLIANCE

         (a)      Acquiror shall, or shall cause its Subsidiaries (and the
                  Corporation agrees to cooperate in respect thereof) to use
                  commercially reasonable efforts to obtain all orders required
                  from the applicable Canadian Governmental Entities to permit
                  the



<PAGE>
                                      -12-

                  issuance and first resale of (i) the Exchangeable Shares
                  issuable pursuant to the Arrangement, and (ii) Acquiror Shares
                  issuable upon exchange of the Exchangeable Shares from time to
                  time without qualification with, or approval of, or the filing
                  of any prospectus or similar document, or undertaking, from,
                  any Canadian Governmental Entity under any Canadian federal,
                  provincial or territorial securities or other laws or pursuant
                  to the rules and regulations of any Governmental Entity
                  administering such laws, or the fulfilment of any other legal
                  requirement in any such jurisdiction (other than, with respect
                  to such first resale being from the holdings of a "CONTROL
                  PERSON" for purposes of Canadian Securities Laws).

         (b)      Acquiror agrees to file a registration statement on Form S-3
                  (or other applicable form) (the "S-3 REGISTRATION STATEMENT")
                  with the SEC in order to register under the U.S. Securities
                  Act the Acquiror Shares issuable from time to time after the
                  Effective Time upon exchange of the Exchangeable Shares, and
                  shall use all commercially reasonable efforts to cause the S-3
                  Registration Statement to become effective and to maintain the
                  effectiveness of such registration so long as any Exchangeable
                  Shares remain outstanding (other than those Exchangeable
                  Shares held by Acquiror or any of its affiliates).

2.9      PREPARATION OF FILINGS

         (a)      Acquiror and the Corporation shall, acting reasonably and
                  promptly in the circumstances, cooperate in:

                  (i)      the preparation of the Proxy Circular and any
                           application for the orders and the preparation of any
                           required registration statements and any other
                           documents reasonably deemed by Acquiror or the
                           Corporation to be necessary to discharge their
                           respective obligations under Securities Laws in
                           connection with the Arrangement and the other
                           transactions contemplated hereby;

                  (ii)     the taking of all such action as may be required
                           under any applicable Securities Laws (including "blue
                           sky laws") in connection with the issuance of the
                           Exchangeable Shares and Acquiror Shares in connection
                           with the Arrangement; provided, however, that with
                           respect to the United States "blue sky" and Canadian
                           provincial qualifications neither Acquiror nor the
                           Corporation shall be required to register or qualify
                           as a foreign corporation or to take any action that
                           would subject it to service of process in any
                           jurisdiction where such entity is not now so subject,
                           except as to matters and transactions arising solely
                           from the offer and sale of the Exchangeable Shares
                           and Acquiror Shares; and

                  (iii)    the taking of all such action as may be required
                           under the Act in connection with the transactions
                           contemplated by this Agreement and the Plan of
                           Arrangement.
<PAGE>
                                      -13-

         (b)      Each of Acquiror and the Corporation agree to promptly furnish
                  to the other all information concerning it, Canco, the
                  Shareholders and the Optionholders as may be required to give
                  effect to the actions described in Sections 2.7 and 2.8 and
                  the foregoing provisions of this Section 2.9, and each
                  covenants that no information furnished by it (to its
                  knowledge in the case of information concerning its
                  shareholders) in connection with such actions or otherwise in
                  connection with the consummation of the Arrangement and the
                  other transactions contemplated by this Agreement will contain
                  any misrepresentation or any untrue statement of a material
                  fact or omit to state a material fact required to be stated in
                  any such document or necessary in order to make any
                  information so furnished for use in any such document not
                  misleading in the light of the circumstances in which it is
                  furnished.

         (c)      Each of Acquiror and the Corporation agree to promptly notify
                  the other if at any time before or after the Effective Time it
                  becomes aware that the Proxy Circular or an application for an
                  order or a registration statement described in Section 2.8
                  contains any misrepresentation or any untrue statement of a
                  material fact or omits to state a material fact required to be
                  stated therein or necessary to make the statements contained
                  therein not misleading in light of the circumstances in which
                  they are made, or that otherwise requires an amendment or
                  supplement to the Proxy Circular or such application or
                  registration statement. In any such event, Acquiror and the
                  Corporation agree to cooperate in the preparation of a
                  supplement or amendment to the Proxy Circular or such other
                  document, as required and as the case may be, and, if
                  required, shall cause the same to be distributed to the
                  Shareholders and Optionholders or filed with the relevant
                  securities regulatory authorities.

         (d)      The Corporation shall ensure that the Proxy Circular complies
                  with all applicable laws and, without limiting the generality
                  of the foregoing, that the Proxy Circular does not contain any
                  misrepresentation or any untrue statement of a material fact
                  or omit to state a material fact required to be stated therein
                  or necessary to make the statements contained there not
                  misleading in light of the circumstances in which they are
                  made (other than with respect to any information relating to
                  and provided by Acquiror). Without limiting the generality of
                  the foregoing, the Corporation shall ensure that the Proxy
                  Circular complies with OSC Rule 54-501 and the Interim Order
                  and provides Shareholders and Optionholders with information
                  in sufficient detail to permit them to form a reasoned
                  judgement concerning the matters to be placed before them at
                  the Shareholder Meeting. The Corporation shall ensure that
                  none of the information supplied or to be supplied by the
                  Corporation for inclusion or incorporation by reference in the
                  S-3 Registration Statement will at the time such registration
                  statement is declared or becomes effective contain any untrue
                  statement of material fact or omit to state a material fact
                  required to be stated therein or necessary in order to make
                  the statements made therein in light of the circumstances
                  under which they were made not misleading. The Corporation
                  will take all reasonable steps within its control to ensure
                  that the Proxy Circular is prepared as to form in all material



<PAGE>
                                      -14-

                  respects in compliance with the provisions of the Act and
                  Canadian Securities Laws.

         (e)      Acquiror shall ensure that the S-3 Registration Statement
                  complies with all U.S. Securities Laws and, without limiting
                  the generality of the foregoing, that such documents do not
                  contain any untrue statement of a material fact or omit to
                  state a material fact required to be stated therein or
                  necessary to make the statements contained therein not
                  misleading in light of the circumstances in which they are
                  made (other than with respect to any information relating to
                  and provided by the Corporation).

2.10     COOPERATION

         (a)      The Corporation agrees to use its commercially reasonable
                  efforts to, and shall use its commercially reasonable efforts
                  to cause its Subsidiaries to, perform all obligations required
                  to be performed by the Corporation or any of its Subsidiaries
                  under this Agreement, cooperate with Acquiror in connection
                  therewith, and do all such other acts and things as may be
                  necessary or desirable in order to consummate and make
                  effective, as soon as reasonably practicable, the transactions
                  contemplated in this Agreement and, without limiting the
                  generality of the foregoing, the Corporation shall:

                  (i)      subject to Section 3.2, at the request of Acquiror,
                           solicit from the Shareholders and Optionholders
                           proxies in favour of approval of the Arrangement
                           Resolution and use commercially reasonable efforts to
                           obtain the approval by such Shareholders and
                           Optionholders of the Arrangement Resolution, voting
                           as a single class;

                  (ii)     not adjourn, postpone or cancel (or propose
                           adjournment, postponement or cancellation of) the
                           Shareholder Meeting without Acquiror's prior written
                           consent except as required by applicable laws, or in
                           the case of adjournment, if a Material Adverse Change
                           or Material Adverse Effect occurs in the affairs of
                           Acquiror on or after the day which is two Business
                           Days preceding the commencement of the Measurement
                           Period (as defined in the Plan of Arrangement) or as
                           may be required by Shareholders and Optionholders as
                           expressed by majority resolution, voting as a single
                           class;

                  (iii)    use commercially reasonable efforts to satisfy or
                           cause to be satisfied as soon as reasonably
                           practicable all the conditions precedent that are set
                           forth in Article 9;

                  (iv)     apply for and use commercially reasonable efforts to
                           obtain as promptly as practicable all Regulatory
                           Approvals relating to the Corporation or any of its
                           Subsidiaries and, in doing so, to keep Acquiror
                           reasonably informed as to the status of the
                           proceedings related to obtaining the Regulatory
                           Approvals, including, but not limited to, providing
                           Acquiror the
<PAGE>
                                      -15-

                           opportunity to be present for or participate in all
                           communications with any Governmental Entity and
                           providing Acquiror with copies of all related
                           applications and notifications, in draft form, in
                           order for Acquiror to provide its reasonable
                           comments;

                  (v)      apply for and use commercially reasonable efforts to
                           obtain the Interim Order and the Final Order;

                  (vi)     carry out the terms of the Interim Order and the
                           Final Order applicable to it and use commercially
                           reasonable efforts to comply promptly with all
                           requirements which applicable laws may impose on the
                           Corporation or its Subsidiaries with respect to the
                           transactions contemplated hereby and by the
                           Arrangement;

                  (vii)    use commercially reasonable efforts to defend all
                           lawsuits or other legal, regulatory or other
                           proceedings to which it is a party challenging or
                           affecting this Agreement or the consummation of the
                           transactions contemplated hereby;

                  (viii)   use commercially reasonable efforts to have lifted or
                           rescinded any injunction or restraining order or
                           other order which may adversely affect the ability of
                           the parties to consummate the transactions
                           contemplated hereby;

                  (ix)     effect all necessary registrations, filings and
                           submissions of information required by Governmental
                           Entities from the Corporation or any of its
                           Subsidiaries in connection with the transactions
                           contemplated hereby;

                  (x)      consult with Acquiror prior to making publicly
                           available its financial results for any period after
                           the date of this Agreement provided that the
                           Corporation is not unreasonably impaired in
                           satisfying all disclosure requirements under
                           Securities Laws in respect thereof; and

                  (xi)     use commercially reasonable efforts to obtain all
                           waivers, consents and approvals from other parties to
                           loan agreements, leases or other contracts required
                           to be obtained by the Corporation or a Subsidiary of
                           the Corporation to consummate the transactions
                           contemplated hereby which the failure to obtain would
                           have a Material Adverse Effect.

         (b)      Acquiror agrees that, until the earlier of the Effective Date
                  and the termination of this Agreement pursuant to its terms,
                  in each case except (i) with the consent of the Corporation to
                  any deviation therefrom, or (ii) as expressly contemplated by
                  this Agreement or the Plan of Arrangement, Acquiror shall and
                  will cause its Subsidiaries to:

                  (i)      subject to Section 2.10(c)(vii), not adopt or propose
                           to adopt any amendments to its governing documents or
                           the governing documents of Canco or Acquiror or to
                           the Support Agreement or the Voting and



<PAGE>
                                      -16-

                           Exchange Trust Agreement which would have a material
                           adverse impact on the consummation of the
                           transactions contemplated hereby or the economic
                           terms of, or the form of, consideration to be
                           provided pursuant to the Arrangement; and

                  (ii)     not take any action which may jeopardize the exchange
                           of the Shares by Shareholders who are resident in
                           Canada for the purposes of the Income Tax Act
                           (Canada) from being treated on a tax deferred basis
                           under the Income Tax Act (Canada) for holders who are
                           otherwise eligible for such treatment.

         (c)      Acquiror agrees to use its commercially reasonable efforts to,
                  and shall use its commercially reasonable efforts to cause its
                  Subsidiaries to, perform all obligations required to be
                  performed by it or any of its Subsidiaries under this
                  Agreement, cooperate with the Corporation in connection
                  therewith, and do all such other acts and things as may be
                  necessary or desirable in order to consummate and make
                  effective, as soon as reasonably practicable, the transactions
                  contemplated by this Agreement and, without limiting the
                  generality of the following:

                  (i)      use commercially reasonable efforts to satisfy or
                           cause to be satisfied as soon as reasonably
                           practicable all conditions precedent that are set
                           forth in Article 9 hereof;

                  (ii)     apply for and use commercially reasonable efforts to
                           obtain promptly all Regulatory Approvals relating to
                           Acquiror or any of its Subsidiaries, and, in doing
                           so, to keep the Corporation reasonably informed as to
                           the status of the proceedings related to obtaining
                           the Regulatory Approvals, including, but not limited
                           to, providing the Corporation with copies of all
                           related applications and notifications, in draft
                           form, in order for the Corporation to provide its
                           reasonable comments;

                  (iii)    carry out the terms of the Interim Order and Final
                           Order applicable to it and use commercially
                           reasonable efforts to comply promptly with all
                           requirements which applicable laws may impose on
                           Acquiror with respect to the transactions
                           contemplated hereby and by the Arrangement;

                  (iv)     in respect of holders of Shares who are resident in
                           Canada for the purposes of the Income Tax Act
                           (Canada) and are not exempt from tax under Part 1 of
                           the Income Tax Act (Canada) and who receive
                           Exchangeable Shares under the Arrangement, to cause
                           Canco to enter into elections with any such holders
                           who make elections under Section 85 of the Income Tax
                           Act (Canada) and any equivalents thereof under
                           provincial laws;

                  (v)      use commercially reasonable efforts to defend all
                           lawsuits or other legal, regulatory or other
                           proceedings to which it is a party challenging or



<PAGE>
                                      -17-

                           affecting this Agreement or the consummation of the
                           transactions contemplated hereby;

                  (vi)     use commercially reasonable efforts to have lifted or
                           rescinded any injunction or restraining order or
                           other order relating to Acquiror or any of its
                           Subsidiaries which may adversely affect the ability
                           of the parties to consummate the transactions
                           contemplated hereby;

                  (vii)    effect all necessary registrations, filings and
                           submissions of information required by Governmental
                           Entities from Acquiror or any of its Subsidiaries in
                           connection with the transactions contemplated hereby;

                  (viii)   reserve or have available a sufficient number of
                           Acquiror Shares for issuance upon the exchange from
                           time to time of Exchangeable Shares issued pursuant
                           to the Arrangement, and use commercially reasonable
                           efforts to cause such Acquiror Shares to be approved
                           for listing on the American Stock Exchange, subject
                           to official notice of issuance, prior to the
                           Effective Time;

                  (ix)     use commercially reasonable efforts (A) to cause the
                           Exchangeable Shares issued pursuant to the
                           Arrangement to be listed for trading on the Exchange
                           by the Effective Date and (B) to ensure that Canco
                           remains a "public corporation" within the meaning of
                           the Income Tax Act (Canada) for so long as any
                           Exchangeable Shares are outstanding (other than those
                           Exchangeable Shares held by Acquiror or any of its
                           affiliates); and

                  (x)      not, during the Measurement Period (as defined in the
                           Plan of Arrangement) buy back any of its outstanding
                           Acquiror Shares.

2.11     PRESS RELEASE AND PUBLIC DISCLOSURE

         Each of Acquiror and the Corporation agrees to issue a joint press
release in the form agreed to between them and the Corporation agrees to file a
copy of this Agreement, as an attachment to a material change report with
respect to the Arrangement, as soon as possible with the Securities Authorities
having jurisdiction over the Corporation.

2.12     OUTSTANDING RIGHTS TO ACQUIRE SHARES

         The Corporation agrees and represents that the Board of Directors has
unanimously resolved that:

         (a)      The Corporation shall use all commercially reasonable efforts
                  to provide that Persons holding Options who may do so under
                  Securities Laws and in accordance with the Stock Option Plan
                  or the relevant agreements governing such Options (or pursuant
                  to this Section 2.12) shall be entitled to exercise all of
                  their Options and vote all Shares issued in connection
                  therewith at the Shareholder Meeting. It is agreed by Acquiror
                  that all Options that are duly surrendered for exercise,
                  conditional on Closing and with appropriate instructions that
                  the Options are to be



<PAGE>
                                      -18-

                  voted in favour of the Arrangement (the "CONDITIONAL OPTION
                  EXERCISE"), shall be exercised immediately prior to the
                  Effective Time. Furthermore, Acquiror shall accept as validly
                  issued all Shares that are to be issued pursuant to the
                  Conditional Option Exercise. The Corporation may make
                  arrangements to loan Optionholders who elect to receive cash
                  pursuant to the Arrangement, the exercise price thereof with
                  repayment of the loan to be made from the proceeds received
                  under the Arrangement for the Shares acquired on such
                  exercise.

         (b)      Prior to the Effective Time, the Corporation shall use all
                  commercially reasonable efforts to enter into releases, in a
                  form approved by Acquiror, acting reasonably, with each
                  Optionholder pursuant to which the parties thereto shall agree
                  that, upon Closing, each holder that has not previously
                  exercised such Options, as the case may be, will receive from
                  the Corporation, in consideration of the termination of all
                  such holder's unexercised Options, the greater of:

                  (i)      the positive difference, if any, between the Per
                           Share Price and the exercise price of the holder's
                           Options, as the case may be, per Share, regardless of
                           the vesting of any such Options under the Stock
                           Option Plan and the agreements governing such
                           Options, as applicable; and

                  (ii)     $0.10,

                  for each Share that is subject to such issuance.

                  The Corporation shall make appropriate withholdings of taxes
                  or other applicable source deductions from any such payments
                  made to any Optionholders as required by applicable law.

         (c)      The Corporation shall use all commercially reasonable efforts
                  to ensure that, at the Effective Time, all of the Options have
                  been exercised or surrendered for termination as contemplated
                  by this Section 2.12, and without limiting the generality of
                  the forgoing, the Corporation shall:

                  (i)      encourage and facilitate all persons holding Options
                           to exercise those Options and vote all Shares issued
                           in connection therewith in favour of the Arrangement
                           at the Shareholder Meeting pursuant to the
                           Conditional Option Exercise or otherwise or surrender
                           their Options in the manner provided for in this
                           Section 2.12; and

                  (ii)     cause the vesting of option entitlements under the
                           Stock Option Plan to accelerate prior to or
                           concurrently with the completion of the Arrangement,
                           such that all outstanding Options shall be
                           exercisable and fully vested prior to the Effective
                           Time.
<PAGE>
                                      -19-

                                   ARTICLE 3
                          COVENANTS OF THE CORPORATION

3.1      ORDINARY COURSE OF BUSINESS

         The Corporation covenants and agrees that, from the date hereof until
the earlier of the Effective Time and the date this Agreement is terminated
pursuant to its terms, unless Acquiror otherwise agrees in writing or except as
otherwise expressly contemplated or permitted by this Agreement or the
Disclosure Letter:

         (a)      the Corporation shall, and shall cause each of its
                  Subsidiaries to, conduct its and their respective business
                  only in, and not take action except in, the usual, ordinary
                  and regular course of business and consistent with past
                  practice;

         (b)      the Corporation shall not directly or indirectly do or permit
                  to occur any of the following:

                  (i)      (other than transactions solely among the Corporation
                           and its Subsidiaries) issue, sell, pledge, lease,
                           dispose of, encumber or agree to issue, sell, pledge,
                           lease, dispose of or encumber (or permit any of its
                           Subsidiaries to issue, sell, pledge, lease, dispose
                           of, encumber or agree to issue, sell, pledge, lease,
                           dispose of or encumber):

                           (A)      any additional shares of, or any options,
                                    warrants, calls, conversion privileges or
                                    rights of any kind to acquire any shares of,
                                    any capital stock of the Corporation or any
                                    of its Subsidiaries (other than pursuant to
                                    the exercise of outstanding Options), or

                           (B)      except in the ordinary and regular course of
                                    business, consistent with past practice and
                                    not exceeding $50,000 individually and
                                    $150,000 in the aggregate any assets of the
                                    Corporation or any of its Subsidiaries;

                  (ii)     amend or propose to amend its governing documents or
                           those of any of its Subsidiaries;

                  (iii)    split, combine or reclassify any outstanding Shares,
                           or declare, set aside or pay any dividend or other
                           distribution payable in cash, stock, property or
                           otherwise with respect to the Shares;

                  (iv)     except as set forth in Section 2.12, redeem, purchase
                           or offer to purchase (or permit any of its
                           Subsidiaries to redeem, purchase or offer to
                           purchase) any Shares or other securities of the
                           Corporation or any of its Subsidiaries;

                  (v)      reorganize, amalgamate or merge the Corporation or
                           any of its Subsidiaries with any other Person;
<PAGE>
                                      -20-

                  (vi)     acquire or agree to acquire (by merger, amalgamation,
                           acquisition of stock or assets or otherwise) any
                           Person or acquire or agree to acquire any assets,
                           except in the ordinary and regular course of
                           business, consistent with past practice and not
                           exceeding $50,000 individually or $150,000 in the
                           aggregate;

                  (vii)    except in the ordinary and regular course of
                           business, consistent with past practice: (A) pay,
                           discharge or satisfy any material claims, liabilities
                           or obligations; or (B) except such as have been
                           reserved against in the Financial Statements,
                           relinquish any material contractual rights;

                  (viii)   enter into any interest rate, currency or commodity
                           swaps, hedges or other similar financial instruments;

                  (ix)     waive, release, grant or transfer any rights of
                           material value or modify or change in any material
                           respect any existing material licence, lease,
                           contract or other document, other than in the
                           ordinary and regular course of business, consistent
                           with past practice;

                  (x)      authorize, recommend or propose any release or
                           relinquishment of any material contract right other
                           than in the ordinary and regular course of business,
                           consistent with past practice;

                  (xi)     (other than the rollover of presently outstanding
                           bankers' acceptances or the conversion of prime rate
                           advances to bankers' acceptances) incur or commit to
                           incur any indebtedness for borrowed money or any
                           other material liability or obligation or issue any
                           debt or assume, guarantee, endorse or otherwise as an
                           accommodation become responsible for, the obligations
                           of any other person, or make loans (other than as
                           contemplated in Section 2.12) or advances, except, in
                           either case, in the ordinary and regular course of
                           business consistent with past practice under
                           facilities currently outstanding; and

                  (xii)    authorize or propose any of the foregoing, or enter
                           into or modify any contract, agreement, commitment or
                           arrangement to do any of the foregoing;

         (c)      the Corporation shall not, and shall cause each of its
                  Subsidiaries to not:

                  (i)      take any action with respect to the entering into,
                           assuming or modifying of any employment, severance,
                           collective bargaining or similar agreements, policies
                           or arrangements with respect to the grant of any
                           bonuses, salary increases, stock options, pension
                           benefits, retirement allowances, deferred
                           compensation, severance or termination pay or any
                           other form of compensation or profit sharing or with
                           respect to any increase of benefits payable, provided
                           that the Corporation shall be permitted to modify the
                           number, types and salary of non-executive employees
                           in the employment



<PAGE>
                                      -21-

                           of the Corporation, acting reasonably, to reflect
                           changing industry conditions from time to time; or

                  (ii)     without limiting the foregoing, create, enter into,
                           assume or modify any Employee Obligations;

         (d)      the Corporation shall use its reasonable efforts to cause its
                  current insurance (or re-insurance) policies not to be
                  cancelled or terminated or any of the coverage thereunder to
                  lapse, unless simultaneously with such termination,
                  cancellation or lapse, replacement policies underwritten by
                  insurance and re-insurance companies of nationally recognized
                  standing providing commercially reasonable coverage in
                  accordance with industry practice for similar entities
                  carrying on comparable business are obtained;

         (e)      the Corporation shall:

                  (i)      in the context of the transactions contemplated
                           hereby, use its commercially reasonable efforts, and
                           cause each of its Subsidiaries to use its
                           commercially reasonable efforts, to preserve intact
                           their respective business organizations and goodwill,
                           to keep available the services of its officers and
                           employees as a group and to maintain satisfactory
                           relationships with suppliers, agents, distributors,
                           customers and others having business relationships
                           with it or its Subsidiaries, provided that the
                           Corporation shall be permitted to modify the number
                           and types of non-executive employees in the
                           employment of the Corporation, acting reasonably, to
                           reflect changing industry conditions from time to
                           time;

                  (ii)     not take any action, or permit any of its
                           Subsidiaries to take any action, that would render,
                           or that reasonably may be expected to render, any
                           representation or warranty made by it in this
                           Agreement untrue in any material respect at any time
                           prior to the Effective Time if then made; and

                  (iii)    confer on a regular basis with Acquiror with respect
                           to material operational matters;

         (f)      the Corporation shall not settle or compromise any claim
                  brought by any present, former or purported holder of any
                  securities of the Corporation in connection with the
                  transactions contemplated by this Agreement or the
                  Arrangement;

         (g)      except as set forth in Section 2.12, the Corporation shall not
                  enter into or modify any contract, agreement, commitment or
                  arrangement inconsistent with any of the matters set forth in
                  this Section 3.1 without the prior written consent of
                  Acquiror; and

         (h)      the Corporation shall use all commercially reasonable efforts
                  to obtain receipt of the consents of any and all lenders to
                  the Corporation whose consent is required to prevent a default
                  or any event that with the passage of time may constitute an
                  event of default thereunder, to the transactions contemplated
                  herein.
<PAGE>
                                      -22-

3.2      NON-SOLICITATION

         (a)      The Corporation shall not, directly or indirectly, through any
                  officer, director, employee, representative or agent of the
                  Corporation or any of its Subsidiaries, (i) solicit, initiate
                  or encourage (including by way of furnishing information or
                  entering into any form of agreement, arrangement or
                  understanding) the initiation of any inquiries, discussions,
                  negotiations, proposals or offers from any Person or other
                  entity or group (other than Acquiror) in respect of any matter
                  or thing inconsistent with the successful completion of the
                  Arrangement, including, without limitation, any Acquisition
                  Proposal or (ii) provide any non-public information to,
                  participate in any discussions or negotiations relating to any
                  such matter or thing with, or otherwise cooperate with or
                  assist or participate in any effort to take such action by,
                  any Person or other entity or group; provided nothing
                  contained in this Section 3.2 or otherwise in this Agreement
                  shall prevent the Board of Directors from:

                  (i)      considering, negotiating or providing information in
                           connection with, or otherwise (except as provided for
                           in (iii) below) responding to, an unsolicited bona
                           fide written Acquisition Proposal in respect of
                           which:

                           (A)      the funds or other consideration provided
                                    for in the Acquisition Proposal are
                                    demonstrably available and the Acquisition
                                    Proposal is not subject to any due diligence
                                    condition other than confirmatory due
                                    diligence;

                           (B)      the Board of Directors has determined in
                                    good faith (after receiving the advice of
                                    its financial advisors that is reflected in
                                    the minutes of the Board of Directors) to be
                                    a commercially feasible transaction that
                                    could be carried out within a time frame
                                    that is reasonable in the circumstances and
                                    would, if consummated in accordance with its
                                    terms, result in a transaction demonstrably
                                    superior to the Arrangement from a financial
                                    point of view to the Shareholders; and

                           (C)      after consultation with its financial
                                    advisors, and after receiving advice of
                                    outside counsel that is reflected in the
                                    minutes of the Board of Directors, the Board
                                    of Directors concludes in good faith such
                                    action is necessary for the Board of
                                    Directors to discharge properly its
                                    fiduciary duties under applicable law;

                           (any such Acquisition Proposal that meets such
                           requirements being referred to herein as a "SUPERIOR
                           PROPOSAL"), provided that the Corporation is in
                           compliance with Sections 3.2(c) and (d) in respect of
                           the Acquisition Proposal;
<PAGE>
                                      -23-

                  (ii)     complying with Securities Laws relating to the
                           provision of directors' circulars and making
                           appropriate disclosure with respect thereto to
                           Shareholders; and

                  (iii)    accepting, recommending, approving or implementing
                           any Superior Proposal if the Corporation has complied
                           with Sections 3.2(c) and (d) in respect of the
                           Superior Proposal and prior to such acceptance,
                           recommendation, approval or implementation:

                           (A)      after consultation with its financial
                                    advisors, and after receiving advice of
                                    outside counsel that is reflected in the
                                    minutes of the Board of Directors, the Board
                                    of Directors concludes in good faith such
                                    action is necessary for the Board of
                                    Directors to discharge properly its
                                    fiduciary duties under applicable law; and

                           (B)      in arriving at such conclusion, the Board of
                                    Directors gives consideration to any
                                    amendment proposed by Acquiror in writing in
                                    the three Business Day period referred to in
                                    Section 3.2(d); and

                           (C)      the Corporation concurrently pays the fee
                                    provided in Section 4.1 to Acquiror.

         (b)      The Corporation shall, and shall direct and use reasonable
                  efforts to cause its officers, directors, employees,
                  representatives and agents to, immediately cease and cause to
                  be terminated any existing discussions or negotiations with
                  any parties (other than Acquiror or an affiliate of Acquiror)
                  with respect to any potential Acquisition Proposal. To the
                  extent not already done so, the Corporation shall immediately
                  close any and all data rooms which may have been opened. The
                  Corporation agrees not to waive, in whole or in part, or
                  release, in whole or in part, any third party from, or consent
                  to any action pursuant to, any confidentiality or standstill
                  obligation to which the Corporation and such third party is a
                  party except in respect of a Superior Proposal in accordance
                  with Section 3.2(d). The Corporation shall immediately request
                  the return or destruction of all confidential non-public
                  information provided to any third parties who have entered
                  into a confidentiality agreement with the Corporation relating
                  to a potential Acquisition Proposal, shall use all reasonable
                  efforts to ensure that such requests are honoured and shall
                  immediately advise Acquiror orally and in writing of any
                  responses or action (actual or threatened) by any recipient of
                  such request which could hinder, prevent, delay or otherwise
                  adversely affect the completion of the Arrangement.

         (c)      The Corporation shall immediately notify Acquiror of any
                  Acquisition Proposal (including, without limitation any
                  amended, supplemented, replaced or renewed Acquisition
                  Proposal previously made) or any request for non-public
                  information relating to the Corporation or any of its
                  Subsidiaries or for access to the properties, books or records
                  of the Corporation or any Subsidiary by any Person or other
                  entity or group that informs the Corporation or such
                  Subsidiary that it is



<PAGE>
                                      -24-

                  considering making, or has made, an Acquisition Proposal. Such
                  notice to Acquiror shall be made, from time to time, orally
                  and in writing, and shall indicate such details of the
                  proposal, inquiry or contact known to such person as Acquiror
                  may reasonably request including, without limitation, the
                  identity of the Person or other entity or group making such
                  proposal, inquiry or contact and shall include a copy of any
                  written form of Acquisition Proposal (all of which information
                  shall be subject to the provisions of the Confidentiality
                  Agreement as if it were Confidential Information as referred
                  to in that agreement).

         (d)      If the Board of Directors determines that an Acquisition
                  Proposal constitutes a Superior Proposal pursuant to Section
                  3.2(a), the Corporation shall give immediate notice of such
                  determination to the Acquiror (together with a copy of any
                  written advice of outside counsel that is reflected in the
                  minutes of the Board of Directors, referred to in Section
                  3.2(a)) and shall give Acquiror not less than three Business
                  Days advance notice of any action to be taken by the Board of
                  Directors to withdraw, modify or change any recommendation
                  regarding the Arrangement or to enter into any agreement to
                  implement the Superior Proposal, and provide to Acquiror the
                  right, during such three Business Days, to advise the Board of
                  Directors that Acquiror will, within such period, announce its
                  intention to, and, as soon as practicable in the circumstances
                  and, in any event, within three Business Days of such
                  announcement, amend the terms of the Arrangement to provide
                  that the holders of Shares shall, pursuant to the Arrangement
                  as amended, receive a value per Share equal to or greater than
                  the value per Share provided in the Superior Proposal. If
                  Acquiror so advises the Board of Directors and so amends the
                  Arrangement, the Board of Directors shall not withdraw, modify
                  or change any recommendation with respect to the Arrangement,
                  as so amended, and neither the Corporation nor the Board of
                  Directors shall take any action to accept, recommend, approve
                  or implement the Superior Proposal, including, without
                  limitation, any release of the party making the Superior
                  Proposal from any standstill or confidentiality obligation,
                  any further consideration or negotiation of the Superior
                  Proposal or entry into of any agreement regarding the Superior
                  Proposal and the Corporation agrees to amend this Agreement to
                  provide for the Arrangement as so amended.

         (e)      If the Board of Directors receives a request for non-public
                  information from a party who has made or is considering making
                  an unsolicited bona fide Acquisition Proposal and the Board of
                  Directors determines that such Acquisition Proposal
                  constitutes a Superior Proposal pursuant to Section 3.2(a),
                  then, and only in such case, the Corporation may, subject to
                  the execution of a confidentiality agreement substantially
                  similar to the Confidentiality Agreement, provide such party
                  with access to information regarding the Corporation provided
                  that the Corporation complies with its obligations pursuant to
                  Section 3.2(c), sends a copy of any such confidentiality
                  agreement to Acquiror immediately upon its execution and
                  provides copies to Acquiror of any information provided to
                  such party (that has not been previously provided to Acquiror)
                  concurrently with its provision to such party.
<PAGE>
                                      -25-

         (f)      The Corporation shall ensure that the officers, directors and
                  employees of the Corporation and its Subsidiaries and any
                  investment bankers or other advisors or representatives
                  retained by the Corporation are aware of the provisions of
                  this Section, and the Corporation shall be responsible for any
                  breach of this Section 3.2 by such investment bankers,
                  advisors or other representatives.

3.3      NOTICE OF MATERIAL CHANGE

         (a)      From the date hereof until the earlier of the Effective Time
                  and the date this Agreement is terminated pursuant to its
                  terms, the Corporation shall promptly notify Acquiror in
                  writing of:

                  (i)      any Material Adverse Change (as defined but without
                           regard to the dollar amount proviso in such
                           definition) with respect to the Corporation;

                  (ii)     any change in information relating to any
                           representation or warranty of the Corporation set
                           forth in this Agreement which is or may be of such a
                           nature as to render any such representation or
                           warranty misleading or untrue in a material respect;

                  (iii)    any material fact that arises and which would have
                           been required to be stated herein or disclosed to
                           Acquiror had such fact arisen on or prior to the date
                           of this Agreement;

                  (iv)     any claim, action, proceeding or investigation
                           pending or, to the knowledge of the Corporation,
                           threatened referred to in Section 7.1(n) or any basis
                           for any such claim, action, proceeding or
                           investigation; and

                  (v)      any claim under policies of insurance referred to in
                           Section 7.1(r).

                  The Corporation shall in good faith discuss with Acquiror any
                  change in circumstances (actual, anticipated, contemplated or,
                  to the knowledge of the Corporation, threatened), financial or
                  otherwise, which is of such a nature that there may be a
                  reasonable question as to whether notice is required to be
                  given pursuant to this Section.

         (b)      From the date hereof until the earlier of the Effective Time
                  and the date this Agreement is terminated pursuant to its
                  terms, Acquiror shall promptly notify the Corporation in
                  writing of any change in information relating to any
                  representation or warranty of Acquiror set forth in this
                  Agreement which is or may be of such a nature as to render any
                  such representation or warranty misleading or untrue in a
                  material respect. Acquiror shall in good faith discuss with
                  the Corporation any change in circumstances (actual,
                  anticipated, contemplated or, to the knowledge of Acquiror,
                  threatened), financial or otherwise, which is of such a nature
                  that there may be a reasonable question as to whether notice
                  is required to be given pursuant to this Section.
<PAGE>
                                      -26-

3.4      ACCESS TO INFORMATION.

         Subject to the Confidentiality Agreement, upon reasonable notice, the
Corporation shall, and shall cause each of its Subsidiaries to, afford
Acquiror's officers, employees, counsel, accountants and other authorized
representatives and advisors ("REPRESENTATIVES") reasonable access, during
normal business hours from the date hereof and until the earlier of the
Effective Time and the date this Agreement is terminated pursuant to its terms,
to its facilities (including the ability to conduct reasonable environmental
tests in respect of any of the properties of the Corporation or its
Subsidiaries, at Acquiror's cost) properties, books, contracts and records as
well as to its management personnel, and, during such period, the Corporation
shall, and shall cause such of its Subsidiaries to, furnish promptly to Acquiror
all information concerning its business, properties and personnel as Acquiror
may reasonably request, provided that the Acquiror shall make reasonable efforts
to minimize the number of Representatives attending at the Corporation's offices
and facilities and to work cooperatively with the Corporation to minimize
disruptions in the business of the Corporation. All such access and all requests
for information shall be coordinated through the Vice-President, Finance of the
Corporation.

3.5      PUBLIC FILINGS

         The Corporation shall deliver to Acquiror as soon as they become
available true and complete copies of any report or statement filed by it with
Securities Authorities or provided to its Shareholders subsequent to the date of
this Agreement. As of their respective dates, such reports and statements
(excluding any information therein provided by Acquiror, as to which the
Corporation makes no representation) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading and will comply in all material respects
with the requirements of applicable law and stock exchange rules. The
consolidated financial statements of the Corporation issued by the Corporation
or to be included in such reports and statements (excluding any information
therein provided by Acquiror, as to which the Corporation makes no
representation) will be prepared in accordance with generally accepted
accounting principles applicable in Canada (except as otherwise indicated in
such financial statements and the notes thereto or, in the case of audited
statements, in the related report of the auditor), and will present fairly the
consolidated financial position, results of operations and changes in financial
position of the Corporation as of the dates thereof and for the periods
indicated therein (subject, in the case of any unaudited interim financial
statements, to normal year-end audit adjustments).

                                   ARTICLE 4
                           FEES AND OTHER ARRANGEMENTS

4.1      FEES.

         Provided Acquiror has not breached in any material respect its
representations, warranties or covenants in this Agreement, if at any time after
the execution of this Agreement:
<PAGE>
                                      -27-

         (a)      the Board of Directors has withdrawn, modified or changed,
                  prior to the Effective Date, any of its recommendations or
                  determinations referred to in Section 2.6 in a manner adverse
                  to Acquiror or shall have resolved to do so;

         (b)      the Board of Directors shall have failed to reaffirm its
                  recommendation of the Arrangement by press statement within
                  three Business Days after the expiry of the period set forth
                  in Section 3.2(d) for Acquiror to advise whether it will amend
                  the terms of the Arrangement, in the case of a Superior
                  Proposal, and three Business Days after the public
                  announcement or commencement of any other Acquisition
                  Proposal;

         (c)      the Board of Directors recommends that any of its Shareholders
                  deposit their Shares under, vote in favour of, or otherwise
                  accept, an Acquisition Proposal;

         (d)      the Corporation enters into any agreement, commitment or
                  understanding with any Person or other entity or group with
                  respect to an Acquisition Proposal prior to the Closing,
                  excluding a confidentiality agreement entered into in
                  compliance with Section 3.2(e);

         (e)      any Acquisition Proposal is publicly announced or made to the
                  Shareholders or to the Corporation; on the date of the
                  Shareholder Meeting any such Acquisition Proposal has either
                  been accepted or has not expired or been withdrawn; the
                  Shareholders do not approve the Arrangement at the Shareholder
                  Meeting; this Agreement is terminated pursuant to Section
                  10.1(b) or (d); and within 24 months of such termination an
                  Acquisition Proposal is consummated; or

         (f)      at any time prior to the Effective Time, the Corporation has
                  breached any of its representations, warranties, agreements or
                  obligations herein which breach would result in the failure to
                  satisfy one or more conditions set forth in Section 9.2(a) or
                  (b) and such breach is: (i) in relation to Section 3.2; (ii)
                  an intentional breach by the Corporation; (iii) not curable;
                  or (iv) curable, but is not cured within 5 days after notice
                  thereof has been received by the Corporation;

(each of the above being a "FEE EVENT"), then the Corporation shall pay to
Acquiror $1.75 million in immediately available funds to an account designated
by Acquiror within one Business Day and interest thereon at a rate of 8% per
annum, if payment is not made when due after the first to occur of the events
described above, provided that the Corporation shall only be obligated to make
one payment pursuant to this Section 4.1.

         Any payment pursuant to this Section shall be without prejudice to the
rights or remedies available to Acquiror upon the breach of any provision of
this Agreement.
<PAGE>
                                      -28-

                                   ARTICLE 5
                              COVENANTS OF ACQUIROR

5.1      OFFICERS' AND DIRECTORS' INSURANCE

         Acquiror agrees that for the entire period from the Effective Time
until six years after the Effective Time, Acquiror will cause the Corporation or
any successor to the Corporation to maintain the Corporation's current
directors' and officers' insurance policy or an equivalent policy, subject in
either case to terms and conditions no less advantageous to the directors and
officers of the Corporation than those contained in the policy in effect on the
date hereof, providing coverage on a "trailing" or "run-off" basis for all
present and former directors and officers of the Corporation, covering claims
made prior to or within six years after the Effective Time.

5.2      INDEMNITIES

         Acquiror agrees that, if the Arrangement is completed, it shall cause
each of the Corporation and its Subsidiaries to fulfil their obligations
pursuant to indemnities provided or available to present officers and directors
of the Corporation and its Subsidiaries pursuant to the provisions of the
articles, bylaws or similar constating documents of the Corporation and its
Subsidiaries, applicable corporate legislation and the written indemnity
agreements between the Corporation or its Subsidiaries and its present directors
and officers, copies of which are attached to the Disclosure Letter.

5.3      EMPLOYMENT AGREEMENTS

         Acquiror covenants and agrees, and after the Effective Time Acquiror
will cause the Corporation and any successor to the Corporation, to honour and
comply with the terms of those existing employment agreements, termination,
severance and retention plans or policies of the Corporation which the
Corporation has disclosed to Acquiror in the Disclosure Letter including,
without limitation, the Employee Obligations.

5.4      THIRD PARTY BENEFICIARIES

         The provisions of Sections 5.1, 5.2 and 5.3 are (i) intended for the
benefit of all present and former directors, officers and employees of the
Corporation and its Subsidiaries, as and to the extent applicable in accordance
with their terms, and shall be enforceable by each of such persons and each such
person's heirs, executors, administrators and other legal representatives
(collectively, the "THIRD PARTY BENEFICIARIES") and the Corporation shall hold
the rights and benefits of Sections 5.1, 5.2 and 5.3 in trust for and on behalf
of the Third Party Beneficiaries and the Corporation hereby accepts such trust
and agrees to hold the benefit of and enforce performance of such covenants on
behalf of the Third Party Beneficiaries, and (ii) are in addition to, and not in
substitution for, any other rights that the Third Party Beneficiaries may have
by contract or otherwise.
<PAGE>
                                      -29-

5.5      AVAILABILITY OF FUNDS

         At all times from the date of this Agreement to the Effective Time,
Acquiror will not take any action which would or could result in the
representation and warranty set out in Section 8.1(j) being untrue or inaccurate
in any material respect.

5.6      AVAILABILITY OF PERSONNEL

         Acquiror agrees to make appropriate personnel available to the
Corporation on a timely basis for consultation, meetings or discussions with the
Corporation as contemplated by the provisions of this Agreement including,
without limitation, Section 3.1(e)(iii). Acquiror agrees to designate in writing
to the Corporation those persons upon whom the Corporation may rely in respect
of any consent, approval or authorization required of Acquiror pursuant to this
Agreement.

                                   ARTICLE 6
                                MUTUAL COVENANTS

6.1      CONSULTATION

         Acquiror and the Corporation agree to consult with each other in
issuing any press releases or otherwise making public statements with respect to
the Arrangement and in making any filings with any federal, provincial or state
governmental or regulatory agency or with any securities exchange with respect
thereto. Each party shall use all commercially reasonable efforts to enable the
other party to review and comment on all such press releases prior to release
thereof.

6.2      OTHER FILINGS

         Acquiror and the Corporation shall, as promptly as practicable
hereafter, prepare and file any filings required under the Competition Act
(Canada), any Securities Laws, the rules of the Exchange and the American Stock
Exchange, the United States Securities Exchange Act of 1934, as amended, state
securities or "blue sky" laws of the states of the United States, as amended, or
any other applicable law or rule of applicable stock exchange relating to the
transactions contemplated in this Agreement.

                                   ARTICLE 7
                REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

7.1      REPRESENTATIONS

         The Corporation hereby represents and warrants, except as otherwise set
forth in the Disclosure Letter, to Acquiror (and acknowledges that Acquiror is
relying upon such representations and warranties in connection with entering
into this Agreement):
<PAGE>
                                      -30-

         (a)      Organization

                  The Corporation and each of its Subsidiaries has been duly
                  incorporated or formed under applicable law, is validly
                  existing and has full corporate or legal power and authority
                  to own its properties and conduct its business as presently
                  owned and conducted. The Corporation and each of its
                  Subsidiaries is duly registered to do business and is in good
                  standing in each jurisdiction in which the character of its
                  properties, owned or leased, or the nature of its activities
                  makes such registration necessary, except where the failure to
                  be so registered or in good standing would not have a Material
                  Adverse Effect in respect of the Corporation. All of the
                  outstanding shares of capital stock and other ownership
                  interests of the Subsidiaries are validly issued, fully paid
                  and non-assessable and all such shares and other ownership
                  interests owned directly or indirectly by the Corporation are,
                  except in connection with the Corporation's existing banking
                  arrangements, owned free and clear of all material liens,
                  claims or encumbrances, and there are no outstanding options,
                  rights, entitlements, understandings or commitments
                  (contingent or otherwise) regarding the right to acquire any
                  shares of capital stock or other ownership interests in any of
                  its Subsidiaries. The Corporation has no Subsidiaries except
                  those Persons listed in the Disclosure Letter.

         (b)      Capitalization

                  As of the date hereof, the authorized capital of the
                  Corporation consists of an unlimited number of Shares; there
                  are only 22,716,848 Shares issued and outstanding; up to a
                  maximum of 565,566 Shares may be issued pursuant to
                  outstanding in-the-money Options; and up to a maximum of
                  1,731,450 Shares may be issued pursuant to outstanding Options
                  that are not in-the-money; and the details of such Options are
                  as set forth in the Disclosure Letter. Except as described in
                  the immediately preceding sentence or as set forth in the
                  Disclosure Letter, there are no other issued or outstanding
                  securities of the Corporation or (other than those owned by
                  the Corporation and its Subsidiaries) its Subsidiaries and,
                  without limitation, there are no options, warrants, conversion
                  privileges or other rights, agreements, arrangements or
                  commitments obligating the Corporation or any of its
                  Subsidiaries to issue or sell any shares of any capital stock
                  of the Corporation or any of its Subsidiaries or securities or
                  obligations of any kind convertible into or exchangeable for
                  any shares of capital stock of the Corporation or any of its
                  Subsidiaries, nor, is there outstanding any stock appreciation
                  rights, phantom equity or similar rights, agreements,
                  arrangements or commitments based upon the book value, income
                  or any other attribute of the Corporation or any of its
                  Subsidiaries.

         (c)      Authority

                  The Corporation has the requisite corporate power and
                  authority to enter into this Agreement and to perform its
                  obligations hereunder and to complete the transactions
                  contemplated hereby. The execution and delivery of this
                  Agreement by the Corporation and the consummation by the
                  Corporation of the transactions



<PAGE>
                                      -31-

                  contemplated by this Agreement have been duly authorized by
                  the Board of Directors and no other corporate proceedings on
                  the part of the Corporation are necessary to authorize this
                  Agreement or the transactions contemplated hereby other than
                  the approval of the Shareholders and Optionholders and the
                  approval of the Court as provided in this Agreement. This
                  Agreement has been duly executed and delivered by the
                  Corporation and constitutes a valid and binding obligation of
                  the Corporation, enforceable against the Corporation in
                  accordance with its terms subject to bankruptcy, insolvency,
                  reorganization, fraudulent transfer, moratorium and other laws
                  relating to or affecting creditors' rights generally, to
                  general principles of equity and the qualifications that the
                  consummation of the Arrangement is subject to approval of
                  Shareholders and Optionholders and the Court as provided in
                  this Agreement. Except as disclosed in the Disclosure Letter,
                  the execution and delivery by the Corporation of this
                  Agreement and performance by it of its obligations hereunder
                  and the completion of the Arrangement and the transactions
                  contemplated thereby, will not:

                  (i)      result in a violation or breach of, require any
                           consent to be obtained under or give rise to any
                           termination rights under any provision of:

                           (A)      its or any of its Subsidiaries' certificate
                                    of incorporation, articles, by-laws or other
                                    charter documents, including any unanimous
                                    shareholder agreement or any other agreement
                                    or understanding with any party holding an
                                    ownership interest in any Subsidiary;

                           (B)      any law, regulation, order, judgment or
                                    decree; or

                           (C)      any Material Contract;

                  (ii)     give rise to any right of termination or acceleration
                           of indebtedness, or cause any indebtedness to come
                           due before its stated maturity or cause any available
                           credit to cease to be available;

                  (iii)    result in the imposition of any Encumbrance upon any
                           of its assets or the assets of any Subsidiary, or
                           restrict, hinder, impair or limit the ability of the
                           Corporation or any Subsidiary to carry on the
                           business of the Corporation or any Subsidiary as and
                           where it is now being carried on or as and where it
                           may be carried on in the future; or

                  (iv)     result (alone or together with other adverse changes)
                           in a Material Adverse Change.

         (d)      Impediments

                  Other than in connection with or in compliance with the
                  provisions of Securities Laws and the rules of the Exchange
                  and the receipt of the applicable approvals under the
                  Competition Act, (i) there is no legal restrictions to the
                  consummation by the Corporation of the transactions
                  contemplated by this Agreement or the performance by the
                  Corporation of its obligations hereunder and (ii) no filing or

<PAGE>
                                      -32-

                  registration by the Corporation with, or authorization,
                  consent or approval of, any domestic or foreign public body or
                  authority is necessary in connection with the consummation of
                  the Arrangement, except for such filings or registrations
                  which, if not made, or such authorizations, consents or
                  approvals, which, if not received, would not have a Material
                  Adverse Effect in respect of the Corporation.

         (e)      Public Record

                  As of their respective dates, the documents and materials
                  comprising the Public Record (including all exhibits and
                  schedules thereto and documents incorporated by reference
                  therein) did not contain any untrue statement of a material
                  fact or omit to state a material fact required to be stated
                  therein or necessary to make the statements therein, in light
                  of the circumstances under which they were made, not
                  misleading, and complied in all material respects with all
                  applicable legal and stock exchange requirements.

         (f)      Books and Records

                  All financial transactions of the Corporation and its
                  Subsidiaries have been recorded in the financial books and
                  records of the Corporation and each Subsidiary, as applicable,
                  in accordance with good business practice, and such financial
                  books and records accurately reflect the basis for the
                  financial condition and the revenues, expenses and results of
                  operations of the Corporation and its Subsidiaries shown in
                  the Financial Statements. The Corporation and its Subsidiaries
                  have not entered into and are not parties to any material
                  financial transactions which are not reflected in the
                  Financial Statements. No information, records or systems
                  pertaining to the operation or administration of the business
                  of the Corporation and its Subsidiaries are in the possession
                  of, recorded, stored, maintained by or otherwise dependent
                  upon any Person other than the Corporation and its
                  Subsidiaries, other than information relating to payroll
                  services which are handled by a contractor and corporate
                  minute books held by outside counsel.

         (g)      Absence of Changes

                  Since January 1, 2002 and except as has been publicly
                  disclosed in any document filed with the Alberta Securities
                  Commission: (i) the Corporation, the Subsidiaries and the
                  Predecessor Corporations have conducted their respective
                  businesses only in the ordinary course, (ii) no liability or
                  obligation of any nature (whether absolute, accrued,
                  contingent or otherwise) material to the Corporation (on a
                  consolidated basis) has been incurred, and (iii) there has not
                  been any (alone or together with other adverse changes)
                  Material Adverse Change.

         (h)      Employment Agreements and Benefit Plans

                  Except as set forth in the Disclosure Letter, neither the
                  Corporation nor any Subsidiary is a party to any written or
                  oral policy, agreement, obligation or understanding providing
                  for severance or termination payments to, or any



<PAGE>
                                      -33-

                  employment agreement or, without limitation, any Employee
                  Obligation, with, any Person; all benefit plans covering
                  active, former or retired employees, officers or Directors of
                  the Corporation or any of its Subsidiaries are listed in the
                  Disclosure Letter; the Corporation has made available to
                  Acquiror true and complete copies of all of the respective
                  terms thereof and: each such plan has been maintained and
                  administered in material compliance with its terms and is, to
                  the extent required by applicable law or contract, fully
                  funded without any deficit or unfunded actuarial liability or
                  adequate provision therefor having been made; all such plans
                  are in compliance with applicable laws, rules, regulations and
                  policies (including those as to registration or other
                  qualification); to the knowledge of the Corporation there are
                  no pending, anticipated or threatened claims against or
                  involving any of the plans; and all contributions, reserves or
                  premium payments required or provided for have been made.

         (i)      Disclosure

                  There is no information known to the officers of the
                  Corporation regarding any event, circumstance or action taken
                  or failed to be taken which may reasonably be expected to
                  result in (alone or together with other adverse changes) a
                  Material Adverse Change.

         (j)      Material Contracts

                  The Corporation has provided Acquiror with access to true and
                  complete copies of all Material Contracts and all Material
                  Contracts are listed in the Disclosure Letter. Except as
                  disclosed in the Disclosure Letter, such agreements do not
                  contain any "change of control" provisions which would be
                  triggered or affected by the Arrangement. Each of the
                  Corporation and its Subsidiaries has performed in all material
                  respects the obligations required to be performed by it and is
                  entitled to all benefits under the Material Contracts. None of
                  the Corporation or its Subsidiaries has violated or breached,
                  in any material respect, any of the terms or conditions of the
                  Material Contracts and there exists no default or event of
                  default or event, occurrence, condition or act which, with the
                  giving of notice, the lapse of time or the happening of any
                  other event or condition, would become a default or event of
                  default by the Corporation or any of its Subsidiaries under
                  any of the Material Contracts. Except as disclosed in the
                  Disclosure Letter, none of the Corporation or the Subsidiaries
                  is a party to or bound by any agreement containing any
                  standstill, restrictive covenant or similar provision that
                  would restrict or limit its right to acquire or hold any
                  asset, carry on any business or activity, solicit business
                  from any Person or in any geographical area, or otherwise to
                  conduct its business as it may determine.

         (k)      Financial Statements

                  The Financial Statements were prepared in accordance with
                  generally accepted accounting principles in Canada
                  consistently applied, and fairly present the consolidated
                  financial condition of the Corporation at the respective dates



<PAGE>
                                      -34-

                  indicated and the results of operations of the Corporation (on
                  a consolidated basis) for the periods covered (subject, in the
                  case of unaudited interim financial statements, to normal
                  year-end adjustments). Except (a) as disclosed or reflected in
                  the Financial Statements or (b) liabilities and obligations
                  (i) incurred in the ordinary course of business and consistent
                  with past practice or (ii) pursuant to the terms of this
                  Agreement, neither the Corporation nor any of its Subsidiaries
                  has incurred any liabilities of any nature, whether accrued,
                  contingent or otherwise (or which would be required by
                  generally accepted accounting principles applicable in Canada
                  to be reflected on a consolidated balance sheet of the
                  Corporation) that have constituted or would be reasonably
                  likely to constitute (alone or together with other adverse
                  changes) a Material Adverse Change. Without limiting the
                  generality of the foregoing provisions of this Section and
                  except as set forth in the Disclosure Letter, the Corporation
                  has not committed to make any capital expenditures, nor have
                  any capital expenditures been authorized by the Corporation at
                  any time since December 31, 2001, except for capital
                  expenditures, made in the ordinary and regular course of
                  business consistent with past practice and not exceeding
                  $50,000 individually and $150,000 in the aggregate.

         (l)      Employee Obligations, Etc.

                  The Employee Obligations (all of which are listed in the
                  Disclosure Letter) do not exceed the amounts set forth in the
                  Disclosure Letter in respect of each of the persons listed
                  therein in respect of this subsection nor exceed in aggregate
                  $1,800,000.

         (m)      Compliance with Law

                  Each of the Corporation, its Subsidiaries and the Predecessor
                  Corporations has complied with and is in compliance with all
                  laws and regulations applicable to the operation of its
                  business, except where such non-compliance, considered
                  individually or in the aggregate, would not constitute (alone
                  or together with other adverse changes) a Material Adverse
                  Change or have a Material Adverse Effect in respect of the
                  Corporation.

         (n)      Litigation, etc.

                  Except as set forth in the Disclosure Letter, there is no
                  claim, action, proceeding or investigation pending or, to the
                  knowledge of the Corporation threatened against or relating to
                  the Corporation or any of its Subsidiaries or affecting any of
                  their properties or assets before any court or governmental or
                  regulatory authority or body, for an amount in excess of
                  $150,000, nor is the Corporation aware of any basis for any
                  such claim, action, proceeding or investigation. Neither the
                  Corporation nor any of its Subsidiaries is subject to any
                  outstanding order, writ, injunction or decree that has had or
                  is reasonably likely to have a Material Adverse Effect in
                  respect of the Corporation.

<PAGE>
                                      -35-

         (o)      Real Property

                  Except such property as is described in the Disclosure Letter
                  (the "REAL PROPERTY"), the Corporation does not own or lease
                  and has not agreed to acquire or lease any real property or
                  interest in real property other than the Real Property. The
                  Corporation has the exclusive right to possess, use and
                  occupy, and as applicable, has good and marketable title in
                  fee simple to, all the Real Property, free and clear of all
                  Encumbrances, easements or other restrictions of any kind
                  other than as set forth in the Disclosure Letter. All
                  buildings, structures, improvements and appurtenances situated
                  on the Real Property are in good operating condition and in a
                  state of good maintenance and repair, except as set out in the
                  Disclosure Letter, are adequate and suitable for the purposes
                  for which they are currently being used and the Corporation
                  has adequate rights of ingress and egress for the operation of
                  its business in the ordinary course with such exceptions as
                  would not have a Material Adverse Effect in respect of the
                  Corporation. None of the buildings, structures, improvements
                  or appurtenances located on the Real Property (or any
                  equipment therein), nor the operation or maintenance thereof,
                  violates any restrictive covenant or any provision of any
                  federal, provincial or municipal law, ordinance, rule or
                  regulation, or encroaches on any property owned by others,
                  other than violations or encroachments that do not,
                  individually or in the aggregate, have a material adverse
                  effect on the current use of such property or a Material
                  Adverse Effect in respect of the Corporation.

         (p)      Environmental

                  (i)      The operation of the business of each of the
                           Corporation and its Subsidiaries, the property and
                           assets owned or used by the Corporation and its
                           Subsidiaries and the use, maintenance and operation
                           thereof have been and are in compliance with all
                           Environmental Laws (except where non-compliance would
                           not have a Material Adverse Effect in respect of the
                           Corporation). Each of the Corporation and its
                           Subsidiaries have complied with all reporting and
                           monitoring requirements under all Environmental Laws
                           (except where non-compliance would not have a
                           Material Adverse Effect in respect of the
                           Corporation). None of the Corporation and its
                           Subsidiaries has received any notice of any
                           non-compliance with any Environmental Laws or
                           Environmental Permits, and none of the Corporation
                           and its Subsidiaries have been convicted of an
                           offence for non-compliance with any Environmental
                           Laws or Environmental Permits or been fined or
                           otherwise sentenced or settled such prosecution short
                           of conviction, (except where such non-compliance
                           would not have a Material Adverse Effect in respect
                           of the Corporation). There is no civil, criminal or
                           administrative action, suit, demand, claim, hearing,
                           notice of violation, investigation, proceeding,
                           notice or demand letter existing or pending, or to
                           the best knowledge of the Corporation, threatened,
                           relating to the property or assets owned or used by
                           the Corporation or any of its Subsidiaries, relating
                           in any way to the Environmental Laws.
<PAGE>
                                      -36-

                  (ii)     Each of the Corporation and its Subsidiaries has
                           obtained all Environmental Permits necessary to
                           conduct its business and to own, use and operate its
                           properties and assets (except where the failure to
                           obtain any such permit would not have a Material
                           Adverse Effect in respect of the Corporation), all
                           such Environmental Permits are in effect, no appeal
                           and no other action is pending to revoke any such
                           permit, license or authorization (except where
                           revocation of any such permit would not have a
                           Material Adverse Effect in respect of the
                           Corporation) and the operation of the business of
                           each of the Corporation and its Subsidiaries, the
                           property and assets owned by each the Corporation and
                           its Subsidiaries and the use, maintenance and
                           operation thereof have been and are in compliance
                           with all Environmental Permits (except where such
                           non-compliance would not have a Material Adverse
                           Effect in respect of the Corporation). To the extent
                           required by applicable Environmental Laws, each of
                           the Corporation and its Subsidiaries has filed all
                           applications necessary to renew or obtain any
                           necessary permits, licenses, or authorizations in a
                           timely fashion so as to allow it to continue to
                           operate its business in compliance with applicable
                           Environmental Laws, and the Corporation does not
                           expect such new or renewed licenses, permits or other
                           authorizations to include any terms or conditions
                           that will have a Material Adverse Effect in respect
                           of the Corporation.

                  (iii)    Each of the Corporation and its Subsidiaries has, at
                           all times, used, generated, treated, stored,
                           transported, disposed of or otherwise handled its
                           Hazardous Substances in compliance with all
                           Environmental Laws and Environmental Permits (except
                           where such non-compliance would not have a Material
                           Adverse Effect in respect of the Corporation).

                  (iv)     None of the Corporation and its Subsidiaries is, and,
                           to the knowledge of the Corporation, there is no
                           reasonable basis upon which the Corporation or any of
                           its Subsidiaries could become, responsible for any
                           material clean-up or corrective action under any
                           Environmental Laws. All audits, assessments and
                           studies with respect to environmental matters
                           relating to the Corporation or any of its
                           Subsidiaries have been referenced in the Disclosure
                           Letter.

                  (v)      There are no past or present (or, to the best of the
                           Corporation's knowledge, future) events, conditions,
                           circumstances, activities, practices, incidents,
                           actions or plans which may interfere with or prevent
                           compliance or continued compliance with the
                           Environmental Laws as in effect on the date hereof or
                           which may give rise to any common law or legal
                           liability under the Environmental Laws, or otherwise
                           form the basis of any claim, action, demand, suit,
                           proceeding, hearing, notice of violation, study or
                           investigation, based on or related to the
                           manufacture, generation, processing, distribution,
                           use, treatment, storage, disposal, transport or
                           handling, or the Release or threatened Release into
                           the indoor or outdoor environment by the Corporation
                           or any of its Subsidiaries of any



<PAGE>
                                      -37-

                           Hazardous Substances (except, in any event, where it
                           would not have a Material Adverse Effect in respect
                           of the Corporation).

                  (vi)     Prior to the Effective Time, the Corporation shall
                           allow the Acquiror to conduct at its expense such
                           audits, assessments and studies deemed necessary by
                           the Acquiror to satisfy itself of the status of the
                           environmental matters and accuracy of the
                           representations and warranties contained in this
                           Agreement.

         (q)      Patent, Trademark and Related Matters

                  All of the patents, registered trademarks and service marks,
                  trade names and licenses owned or used by the Corporation or
                  any of its Subsidiaries are in good standing, valid and
                  adequate to permit the Corporation and its Subsidiaries to
                  conduct its business as presently conducted (except, in any
                  event, where it would not have a Material Adverse Effect in
                  respect of the Corporation). To the knowledge of the
                  Corporation, neither the Corporation nor any of its
                  Subsidiaries is infringing or is alleged to be infringing on
                  the rights of any Person with respect to any patent,
                  trademark, service mark, trade name, copyright (or any
                  application or registration in respect thereof), licence,
                  discovery, improvement, process, formula, know-how, data, plan
                  or specification where the infringement or alleged
                  infringement could reasonably be expected to have a Material
                  Adverse Effect. Without limiting the generality of the
                  foregoing, Data Wise Solutions Inc. (Delaware) is the owner
                  free and clear of any Encumbrances or other restrictions of
                  all intellectual property, including trademarks, trade names,
                  service marks, copyrights, patents and licenses, all software
                  (including source codes, object codes and other computer files
                  and objects) and firmware and all hardware designs of or
                  relating to the Tru Vu product line and has all rights to
                  license, use, modify, fix, improve, enhance and/or create
                  derivative works of the software and hardware of the Tru Vu
                  product line.

         (r)      Insurance

                  Policies of insurance in force as of the date hereof naming
                  the Corporation or any of its Subsidiaries as an insured
                  adequately cover all risks reasonably and prudently
                  foreseeable in the operation and conduct of the business of
                  the Corporation and its Subsidiaries as would be customary in
                  respect of the businesses carried on by the Corporation and
                  all such policies of insurance are as listed in the Disclosure
                  Letter. All such policies of insurance shall remain in force
                  and effect and shall not be cancelled or otherwise terminated
                  as a result of the transactions contemplated hereby. There are
                  no outstanding claims under any such policies of insurance,
                  for an amount in excess of $150,000, except as set forth in
                  the Disclosure Letter.
<PAGE>
                                      -38-

         (s)      Tax Matters

                  (i)      RETURNS FILED AND TAXES PAID. All Returns required to
                           be filed prior to the date hereof by or on behalf of
                           the Corporation or any Subsidiaries have been duly
                           filed on a timely basis and such Returns are true,
                           complete and correct in all material respects. All
                           taxes shown to be payable on the Returns or on
                           subsequent assessments or reassessments with respect
                           thereto have been paid in full or objected to on a
                           timely basis, and no other Taxes are payable by the
                           Corporation or any of its Subsidiaries with respect
                           to items or periods covered by such Returns.

                  (ii)     TAX RESERVES. The Corporation has paid or provided
                           adequate accruals in its financial statements for
                           Taxes, including income taxes and related future
                           taxes, in conformity with generally accepted
                           accounting principles applicable in Canada.

                  (iii)    RETURNS FURNISHED. For all periods ending on and
                           after January 1, 2000, Acquiror has been provided
                           access by the Corporation to true and complete copies
                           of all federal and provincial income tax returns for
                           the Corporation or any of its Subsidiaries.

                  (iv)     TAX DEFICIENCIES; AUDITS; STATUTES OF LIMITATIONS.
                           Except as disclosed in the Disclosure Letter: (i) no
                           deficiencies exist or have been asserted with respect
                           to Taxes of the Corporation or any of its
                           Subsidiaries; (ii) neither the Corporation nor any of
                           its Subsidiaries is a party to any action or
                           proceeding for assessment or collection of Taxes, nor
                           has such event been asserted or threatened against
                           the Corporation or any of its Subsidiaries or any of
                           their respective assets which, if successful, would
                           constitute (alone or together with other adverse
                           changes) a Material Adverse Change; (iii) no waiver
                           or extension of any statute of limitations is in
                           effect with respect to Taxes or Returns of the
                           Corporation or any Subsidiary; and (iv) the Returns
                           of the Corporation and any Subsidiary have never been
                           audited by a government or taxing authority, nor is
                           any such audit in process, pending or threatened.

         (t)      Pension and Termination Benefits

                  The Corporation has provided adequate accruals in its
                  financial statements (or such amounts are fully funded) for
                  all pension or other employee benefit obligations of the
                  Corporation arising under or relating to each of the pension
                  or retirement income plans or other employee benefit plans or
                  agreements or policies maintained by or binding on the
                  Corporation or any of its Subsidiaries as well as for any
                  other payment required to be made by the Corporation in
                  connection with the termination of employment or retirement of
                  any employee of the Corporation or any of its Subsidiaries.
<PAGE>
                                      -39-

         (u)      Reports

                  All forms, reports, schedules, statements and other documents
                  filed by the Corporation in compliance, or purported
                  compliance, with Securities Laws, at the time of filing, (i)
                  did not contain any misrepresentation and (ii) complied in all
                  material respects with the applicable requirements of the
                  Securities Laws.

         (v)      United States Relationships

                  The Corporation's shares are not traded on a United States
                  national securities exchange or quoted on the NASDAQ Stock
                  Market in the United States nor are any of its securities
                  registered under the United States Securities Exchange Act of
                  1934, as amended, or any state securities laws.

         (w)      Confidentiality Agreements

                  All agreements entered into by the Corporation with Persons
                  other than Acquiror regarding the confidentiality of
                  information provided to such Persons or reviewed by such
                  Persons with respect to any Acquisition Proposal are in
                  substantially the form of the Confidentiality Agreement. The
                  Corporation has not negotiated any Acquisition Proposal with
                  any Person who has not entered into such a confidentiality
                  agreement and has not waived any "standstill" provisions in
                  any such agreement.

         (x)      Corrupt Practices

                  There have been no actions taken by the Corporation, any of
                  its Subsidiaries or any of their Affiliates which are in
                  violation of the Foreign Corrupt Practices Act (United States)
                  or the Corruption of Foreign Public Officials Act (Canada).

7.2      INVESTIGATION.

         Any investigation by Acquiror and its advisors shall not mitigate,
diminish or affect the representations and warranties of the Corporation
provided pursuant to this Agreement. Where the provisions of Section 7.1 refer
to disclosure in writing, such disclosure shall be made expressly in response to
the applicable provision and shall be signed by a senior officer of the
Corporation.

                                   ARTICLE 8
                   REPRESENTATIONS AND WARRANTIES OF ACQUIROR

8.1      REPRESENTATIONS.

         Acquiror hereby represents and warrants to the Corporation (and
acknowledges that the Corporation is relying upon such representations and
warranties in connection with entering into this Agreement):
<PAGE>
                                      -40-

         (a)      Organization

                  Each of Acquiror and Canco has been duly incorporated and
                  organized, and is validly existing, as an exempted company
                  under the laws of Bermuda and a corporation under the laws of
                  Canada respectively, and has the requisite corporate power and
                  authority to carry on its business as it is now being
                  conducted.

         (b)      Capitalization

                  As of the date hereof, the authorized share capital of
                  Acquiror is $425,000, which consists of 425,000,000 shares of
                  stock, par value U.S. $0.0001 per share, of which 400,000,000
                  are Acquiror Shares and 25,000,000 are shares of preferred
                  stock. As of July 31, 2002, there are 144,429,630 Acquiror
                  Shares and 1 preferred share issued and outstanding and, up to
                  a maximum of approximately 50,000,000 Acquiror Shares are
                  reserved for issuance pursuant to stock option plans or upon
                  exchange or conversion of outstanding Acquiror debt securities
                  or warrants or previously issued Exchangeable Shares. The
                  authorized capital of Canco is an unlimited number of common
                  shares and an unlimited number of Exchangeable Shares. As at
                  the date hereof, all of the common shares of Canco and, except
                  for 670,545 Exchangeable Shares, all of the Exchangeable
                  Shares are owned by Acquiror and its Subsidiaries. Except as
                  described in the immediately preceding sentences, there are no
                  other issued or outstanding securities of Acquiror or (other
                  than those owned by Acquiror) its Subsidiaries and, without
                  limitation, there are no options, warrants, conversion
                  privileges or other rights, agreements, arrangements or
                  commitments obligating Acquiror or any of its Subsidiaries to
                  issue or sell any shares of any capital stock of Acquiror or
                  any of its Subsidiaries or securities or obligations of any
                  kind convertible into or exchangeable for any shares of
                  capital stock of Acquiror or any of its Subsidiaries, nor, is
                  there outstanding any stock appreciation rights, phantom
                  equity or similar rights, agreements, arrangements or
                  commitments based upon the book value, income or any other
                  attribute of Acquiror or any of its Subsidiaries.

         (c)      Authority

                  Acquiror has the requisite corporate power and authority to
                  enter into this Agreement and to perform its obligations
                  hereunder and to complete the transactions contemplated
                  hereby. Canco has the requisite corporate power and authority
                  to complete the transactions contemplated in the Arrangement,
                  including the issue of the Exchangeable Shares pursuant to the
                  transactions contemplated by this Agreement. The execution and
                  delivery of this Agreement by the Acquiror and the
                  consummation by the Acquiror and Canco of the transactions
                  contemplated by this Agreement and the Arrangement have been
                  duly authorized and no other corporate proceedings on the part
                  of Acquiror or Canco are necessary to authorize this Agreement
                  or the transactions contemplated hereby and by the
                  Arrangement. This Agreement has been duly executed and
                  delivered by Acquiror and constitutes a valid and binding
                  obligation of Acquiror, enforceable against Acquiror in
                  accordance with its terms, subject to bankruptcy,



<PAGE>
                                      -41-

                  insolvency, reorganization, fraudulent transfer, moratorium
                  and other laws relating to or affecting creditors' rights
                  generally and to general principles of equity. The execution
                  and delivery by Acquiror of this Agreement and performance by
                  it of its obligations hereunder and the completion of the
                  Arrangement and the transactions contemplated thereby, will
                  not:

                  (i)      result in a violation or breach of, require any
                           consent to be obtained under or give rise to any
                           termination rights under any provision of:

                           (A)      its or any of its Subsidiaries' certificate
                                    of incorporation, articles, by-laws or other
                                    charter documents, including any unanimous
                                    shareholder agreement or any other agreement
                                    or understanding with any party holding an
                                    ownership interest in any Subsidiary;

                           (B)      any law, regulation, order, judgment or
                                    decree; or

                           (C)      any material contract, agreement, license,
                                    franchise or permit to which the Acquiror or
                                    any Subsidiary is bound or is subject or is
                                    the beneficiary;

                  (ii)     give rise to any right of termination or acceleration
                           of indebtedness, or cause any indebtedness to come
                           due before its stated maturity or cause any available
                           credit to cease to be available;

                  (iii)    result in the imposition of any Encumbrance, upon any
                           of its assets or the assets of any Subsidiary, or
                           restrict, hinder, impair or limit the ability of
                           Acquiror or any Subsidiary to carry on the business
                           of Acquiror or any Subsidiary as and where it is now
                           being carried on or as and where it is currently
                           intended to be carried on in the future; or

                  (iv)     result (alone or together with other adverse changes)
                           in a Material Adverse Change.

         (d)      Impediments

                  Other than in connection with or in compliance with the
                  provisions of Securities Laws and the rules of The Toronto
                  Stock Exchange and the American Stock Exchange and the receipt
                  of the applicable approvals under the Competition Act, (i)
                  there are no legal restrictions to the consummation by
                  Acquiror and Canco of the transactions contemplated by this
                  Agreement or the performance by each of Acquiror and Canco of
                  its obligations hereunder and (ii) no filing or registration
                  by Acquiror or Canco with, or authorization, consent or
                  approval of, any domestic or foreign public body or authority
                  is necessary in connection with the consummation of the
                  Arrangement, except for such filings or registrations which,
                  if not made, or such authorizations, consents or approvals,
                  which, if not received, would not have a Material Adverse
                  Effect in respect of Acquiror.

<PAGE>
                                      -42-


        (e)       Public Record

                  As of their respective dates, the documents and materials
                  comprising the public record of Acquiror (including all
                  exhibits and schedules thereto and documents incorporated by
                  reference therein) did not contain any untrue statement of a
                  material fact or omit to state a material fact required to be
                  stated therein or necessary to make the statements therein, in
                  light of the circumstances under which they were made, not
                  misleading, and complied in all material respects with all
                  applicable legal and stock exchange requirements.

        (f)       Books and Records

                  All financial transactions of Acquiror and its Subsidiaries
                  have been recorded in the financial books and records of
                  Acquiror and each Subsidiary, as applicable, in accordance
                  with good business practice, and such financial books and
                  records accurately reflect the basis for the financial
                  condition and the revenues, expenses and results of operations
                  of Acquiror and its Subsidiaries shown in the audited
                  financial statements of Acquiror for the year ended December
                  31, 2001 and the unaudited interim financial statements of
                  Acquiror for the periods ended March 31, 2002 and 2001
                  (collectively, the "ACQUIROR FINANCIAL STATEMENTS"). Acquiror
                  and its Subsidiaries have not entered into and are not parties
                  to any material financial transactions which are not reflected
                  in such financial statements.

        (g)       Absence of Changes

                  Since January 1, 2002 and except as has been publicly
                  disclosed in any document filed with the SEC: (i) Acquiror and
                  its Subsidiaries have conducted their respective businesses
                  only in the ordinary course, (ii) no extraordinary liability
                  or obligation of any nature (whether absolute, accrued,
                  contingent or otherwise) material to Acquiror (on a
                  consolidated basis) has been incurred, and (iii) there has not
                  been any (alone or together with other adverse changes)
                  Material Adverse Change.

        (h)       Disclosure

                  There is no information known to the officers of Acquiror
                  regarding any event, circumstance or action taken or failed to
                  be taken which may reasonably be expected to result in (alone
                  or together with other adverse changes) a Material Adverse
                  Change.

        (i)       Acquiror Financial Statements

                  The Acquiror Financial Statements were prepared in accordance
                  with generally accepted accounting principles in the United
                  States consistently applied, and fairly present the
                  consolidated financial condition of Acquiror at the respective
                  dates indicated and the results of operations of Acquiror (on
                  a consolidated basis) for the periods covered. Except (a) as
                  disclosed or reflected in the Acquiror

<PAGE>
                                      -43-

                  Financial Statements and (b) liabilities and obligations (i)
                  incurred in the ordinary course of business and consistent
                  with past practice or (ii) pursuant to the terms of this
                  Agreement, neither Acquiror nor any of its Subsidiaries has
                  incurred any liabilities of any nature, whether accrued,
                  contingent or otherwise (or which would be required by
                  generally accepted accounting principles applicable in the
                  United States to be reflected on a consolidated balance sheet
                  of Acquiror) that have constituted or would be reasonably
                  likely constitute (alone or together with other adverse
                  changes) a Material Adverse Change.

        (j)       Financing

                  Acquiror has access to cash balances and available credit
                  facilities sufficient to fund all amounts that may be required
                  by it and Canco in connection with and pursuant to the
                  Arrangement.

        (k)       Compliance with Law

                  Each of Acquiror and its Subsidiaries has complied with and is
                  in compliance with all laws and regulations applicable to the
                  operation of its business, except where such non-compliance,
                  considered individually or in the aggregate, would not
                  constitute (alone or together with other adverse changes) a
                  Material Adverse Change and would not materially affect the
                  consummation of the transactions contemplated hereby or the
                  ability of Acquiror to perform its obligations hereunder.

        (l)       Information Supplied

                  None of the information supplied or to be supplied by Acquiror
                  for inclusion or incorporation by reference in the Proxy
                  Circular will, at the time the Proxy Circular is mailed to the
                  Shareholders and at the time of the Shareholder Meeting, as
                  may be adjourned from time to time, contain any untrue
                  statement which, at the time and in light of the circumstances
                  under which it is made, is false or misleading with respect to
                  any material fact or omit to state any material fact required
                  to be stated therein or necessary in order to make the
                  statements therein not false or misleading or necessary to
                  correct any statement in any earlier communication with
                  respect to the solicitation of a proxy for the same meeting or
                  subject matter which has become false or misleading. None of
                  the information supplied or to be supplied by Acquiror for
                  inclusion or incorporation by reference in the S-3
                  Registration Statement will at the time such registration
                  statement is declared or becomes effective contain any untrue
                  statement of a material fact or omit to state a material fact
                  required to be stated therein or necessary in order to make
                  the statements made therein, in light of the circumstances
                  under which they were made, not misleading.

        (m)       Support Agreement and Voting and Exchange Trust Agreement

                  The Support Agreement and the Voting and Exchange Trust
                  Agreement are in full force and effect unamended and are valid
                  and binding obligations of Acquiror,

<PAGE>
                                      -44-

                  Nabors Industries, Inc. and Canco. Each of Acquiror, Nabors
                  Industries, Inc. and Canco has performed in all material
                  respects the obligations required to be performed by it under
                  the Support Agreement and the Voting and Exchange Trust
                  Agreement and is entitled to all benefits thereunder. None of
                  Acquiror, Nabors Industries, Inc. or Canco has violated or
                  breached, in any material respect, any of the terms or
                  conditions of the Support Agreement or the Voting and Exchange
                  Trust Agreement and there exists no default or event of
                  default or event, occurrence, condition or act which, with the
                  giving of notice, the lapse of time or the happening of any
                  other event or condition, would become a default or event of
                  default by any of Acquiror, Nabors Industries, Inc. or Canco
                  under the Support Agreement and Voting and Exchange Trust
                  Agreement.

8.2      INVESTIGATION

         Any investigation by the Corporation and its advisors shall not
mitigate, diminish or affect the representations and warranties of Acquiror
provided pursuant to this Agreement. Where the provisions of Section 8.1 refer
to disclosure in writing, such disclosure shall be made expressly in response to
the applicable provision and shall be signed by a senior officer of Acquiror.

                                   ARTICLE 9
                                   CONDITIONS

9.1      CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY

         The obligations of the parties hereto to consummate and effect the
transactions contemplated hereunder shall be subject to the satisfaction or
waiver by both parties on or before the Effective Date of the following
conditions:

        (a)       the Arrangement and the other transactions contemplated hereby
                  shall have been approved and adopted by the Shareholders and
                  Optionholders, voting as a single class, in accordance with
                  applicable law (including the Interim Order) and the
                  Corporation's articles and bylaws;

        (b)       the Court shall have issued the Interim Order and Final Order
                  approving the Arrangement each in form and substance
                  reasonably satisfactory to Acquiror and the Corporation (such
                  approvals not to be unreasonably withheld or delayed by
                  Acquiror or the Corporation) reflecting the terms hereof and
                  such orders shall not have been set aside or modified in a
                  manner unacceptable to either thereof, acting reasonably, on
                  appeal or otherwise;

        (c)       the S-3 Registration Statement shall have been declared or
                  become effective under the U.S. Securities Act on or before
                  the Effective Date, and, such registration statement, at its
                  effective date and on the Closing Date shall not be the
                  subject of any SEC stop-order or SEC proceedings seeking a
                  stop-order, and the Arrangement shall, on the Closing Date,
                  not be subject to any similar proceedings commenced or
                  threatened by the Securities Authorities;

<PAGE>
                                      -45-

        (d)       the Acquiror Shares to be issued from time to time after the
                  Effective Time upon exchange of the Exchangeable Shares issued
                  pursuant to the Arrangement shall have been approved for
                  listing on the American Stock Exchange;

        (e)       all Regulatory Approvals shall have been obtained on
                  reasonably satisfactory terms and conditions and shall be in
                  full force and effect and all applicable statutory or
                  regulatory waiting periods shall have expired or been
                  terminated and no objection or opposition shall have been
                  filed, initiated or made during any applicable statutory or
                  regulatory waiting period which would adversely affect
                  Acquiror's ability to consummate the Arrangement or the
                  transactions contemplated hereby or which is or would be
                  materially adverse to the business of the Corporation and its
                  Subsidiaries considered on a consolidated basis or to the
                  value of the Shares to Acquiror;

        (f)       there shall not exist any prohibition at law against the
                  consummation of the Arrangement or the transactions
                  contemplated hereby; and

        (g)       (i) the Commissioner of Competition (the "COMMISSIONER")
                  appointed under the Competition Act shall have issued an
                  advance ruling certificate under Section 102 of the
                  Competition Act in respect of the acquisition of the Shares by
                  Acquiror under the Arrangement (the "TRANSACTION"); or (ii)
                  the applicable waiting period under Section 123 of the
                  Competition Act shall have expired or the requirements of Part
                  IX of the Competition Act shall have been waived and the
                  Commissioner shall have issued a written opinion, in terms
                  satisfactory to the Acquiror in its sole discretion, to the
                  effect that he is satisfied that there are no grounds upon
                  which to seek an order from the Competition Tribunal under
                  Section 92 of the Competition Act in respect of the
                  Transaction.

9.2      ACQUIROR CONDITIONS

         The obligations of Acquiror to consummate and effect the transactions
contemplated hereunder shall be subject to the following conditions:

        (a)       the Corporation shall have performed or complied with, in all
                  material respects, each of its obligations, covenants and
                  agreements hereunder to be performed and complied with by it
                  on or before the Effective Time;

        (b)       each of the representations and warranties of the Corporation
                  in this Agreement (which for purposes of this clause (b) shall
                  be read as though none of them contained any material adverse
                  effect or other materiality qualification), shall be true and
                  correct in all respects on the date of this Agreement and as
                  of the Effective Date as if made on and as of such date
                  (except for such representations and warranties made as of a
                  specified date, which shall be true and correct as of such
                  specified date) except where the failure of such
                  representations and warranties in the aggregate to be true and
                  correct in all respects is not and would not be reasonably
                  expected to result in a Material Adverse Effect;

<PAGE>
                                      -46-

         (c)      no act, action, suit or proceeding shall have been taken
                  before or by any Canadian or United States federal,
                  provincial, state or foreign court or other tribunal or
                  governmental agency or other regulatory or administrative
                  agency or commission or by any elected or appointed public
                  official or other Person in Canada, the United States or
                  elsewhere, whether or not having the force of law, and no law,
                  regulation or policy have been proposed, enacted, promulgated
                  or applied, whether or not having the force of law, which
                  could reasonably be expected to have the effect of:

                  (i)      making illegal, or otherwise directly or indirectly
                           restraining or prohibiting the Arrangement, the
                           acceptance for payment of, payment for, or ownership,
                           directly or indirectly, of some or all of the Shares
                           by Acquiror, or the consummation of any of the
                           transactions contemplated by the Arrangement;

                  (ii)     prohibiting or materially limiting the ownership or
                           operation by the Corporation or any of its
                           Subsidiaries, or by Acquiror, directly or indirectly,
                           of all or any material portion of the business or
                           assets of the Corporation, on a consolidated basis,
                           or Acquiror, directly or indirectly, or compelling
                           Acquiror, directly or indirectly, to dispose of or
                           hold separate all or any material portion of the
                           business or assets of the Corporation, on a
                           consolidated basis, or Acquiror, directly or
                           indirectly, as a result of the transactions
                           contemplated by the Arrangement;

                  (iii)    imposing or confirming limitations on the ability of
                           Acquiror, directly or indirectly, effectively to
                           acquire or hold or to exercise full rights of
                           ownership of the Shares, including without limitation
                           the right to vote any Shares acquired or owned by
                           Acquiror, directly or indirectly, on all matters
                           properly presented to the Shareholders of the
                           Corporation, including without limitation the right
                           to vote any shares of capital stock of any Subsidiary
                           (other than immaterial Subsidiaries) directly or
                           indirectly owned by the Corporation materially
                           adversely affecting the business, financial condition
                           or results of operations of the Corporation and its
                           Subsidiaries taken as a whole or the value of the
                           Shares to Acquiror; or

                  (iv)     requiring divestiture by Acquiror, directly or
                           indirectly, of any Shares or any Subsidiary;

         (d)      Acquiror shall not have received on or prior to the Effective
                  Time from the Corporation notices by the holders of more than
                  5% of the issued and outstanding securities entitled to vote
                  at the Shareholder Meeting of their intention to exercise
                  their dissent rights, as granted in the Interim Order, under
                  section 193 of the Act;

         (e)      holders of not less than 4,395,000 Shares and Options to
                  purchase not less than 400,000 Shares shall have entered into,
                  and continue to be bound by and not to have breached, lock-up
                  agreements in the form attached as Schedule C hereto;

<PAGE>
                                      -47-

         (f)      Acquiror shall be satisfied, acting reasonably, that, after
                  giving effect to the Arrangement and other than as set forth
                  in the Disclosure Letter, none of Acquiror or its then
                  Subsidiaries will be subject to any limitations, either: (A)
                  in the ownership, licensing, use, modification, fixing,
                  improvement, enhancement and/or creation of derivative works
                  of the intellectual property, including trademarks, trade
                  names, service marks, copyrights, patents and licenses, all
                  software (including source codes, object codes and other
                  computer files and objects) and firmware and all hardware
                  designs of or relating to (i) the Tru Vu product line or (ii)
                  any system owned or licensed by Acquiror or its current
                  Subsidiaries; or (B) (other than Data Wise Solutions, Inc.
                  (Delaware)) in the ownership, licensing, use, modification,
                  fixing, improvement, enhancement and/or creation of products
                  for drilling, workover or well servicing rigs; and

         (g)      all holders of options to purchase shares of Date Wise
                  Solutions Inc. (Delaware) shall have fully relinquished all
                  rights under, and released such corporation from and in
                  respect of, such options;

which conditions are for the exclusive benefit of Acquiror and may be waived by
Acquiror in whole or in part at any time and from time to time, before the
Effective Time.

9.3      CORPORATION CONDITIONS

         The obligations of the Corporation to consummate and effect the
transactions contemplated hereunder shall be subject to the following
conditions:

         (a)      Acquiror shall have performed or complied with, in all
                  material respects, each of its obligations, covenants and
                  agreements hereunder to be performed and complied with by it
                  on or before the Effective Time;

         (b)      each of the representations and warranties of Acquiror in this
                  Agreement (which for purposes of this clause (b) shall be read
                  as though none of them contained any material adverse effect
                  or other materiality qualification), shall be true and correct
                  in all respects on the date of this Agreement and as of the
                  Effective Date as if made on and as of such date (except for
                  such representations and warranties made as of a specified
                  date, which shall be true and correct as of such specified
                  date) except where the failure of such representations and
                  warranties in the aggregate to be true and correct in all
                  respects is not and would not be reasonably expected to result
                  in a Material Adverse Effect;

         (c)      no act, action, suit or proceeding shall have been taken
                  before or by any Canadian or United States federal,
                  provincial, state or foreign court or other tribunal or
                  governmental agency or other regulatory or administrative
                  agency or commission or by any elected or appointed public
                  official or other Person in Canada, the United States or
                  elsewhere, whether or not having the force of law, and no law,
                  regulation or policy have been proposed, enacted, promulgated
                  or applied, whether or not having the force of law, which
                  could reasonably be expected to have the effect of making
                  illegal, or otherwise directly or indirectly restraining or


<PAGE>
                                      -48-

                  prohibiting the Arrangement, the acceptance for payment of,
                  payment for, or ownership, directly or indirectly, of some or
                  all of the Shares by Acquiror, or the consummation of any of
                  the transactions contemplated by the Arrangement; and

         (d)      the Exchangeable Shares to be issued pursuant to the
                  Arrangement shall be listed on the Exchange and shall be
                  freely tradeable,

which conditions are for the exclusive benefit of the Corporation and may be
waived by the Corporation in whole or in part at any time and from time to time,
before the Effective Time.

                                   ARTICLE 10
                                   TERMINATION

10.1     TERMINATION

         This Agreement may be terminated at any time prior to the Effective
Time (notwithstanding any approval of the Arrangement Resolution):

         (a)      by mutual written consent of Acquiror and the Corporation;

         (b)      by either Acquiror or the Corporation if the Shareholders and
                  Optionholders do not approve the Arrangement Resolution at the
                  Shareholder Meeting;

         (c)      by Acquiror, if a fee as provided in Section 4.1 becomes
                  payable, or, by the Corporation, if a fee as provided in
                  Section 4.1 becomes payable, other than pursuant to Section
                  4.1(f), and is paid;

         (d)      by either the Corporation or Acquiror, if the Effective Date
                  does not occur on or before December 15, 2002 provided that
                  the failure is not due to the party seeking to terminate this
                  Agreement to perform the obligations required to be performed
                  by it under this Agreement;

         (e)      by Acquiror, if the Corporation has breached any of its
                  representations, warranties, agreements or obligations herein
                  which breach would result in the failure to satisfy one or
                  more conditions set forth in Section 9.2(a) or (b); or

         (f)      by the Corporation, if Acquiror has breached any of its
                  representations, warranties, agreements or obligations herein
                  which breach would result in the failure to satisfy one or
                  more conditions set forth in Section 9.3(a) or (b),

         except that the obligations set forth in Section 4.1 (in respect of any
         Fee Event occurring prior to the termination) shall survive the
         termination of this Agreement.

<PAGE>
                                      -49-

                                   ARTICLE 11
                                  MISCELLANEOUS

11.1     AMENDMENT OR WAIVER

         This Agreement, may be amended, modified or superseded, and any of the
terms, covenants, representations, warranties or conditions hereof may be
waived, but only by written instrument executed by Acquiror and the Corporation;
provided, however, that either Acquiror or the Corporation may in its discretion
waive a condition herein which is solely for its benefit without the consent of
the other. No waiver of any nature, in any one or more instances, shall be
deemed or construed as a further or continued waiver of any condition or any
breach of any other term, representation or warranty in this Agreement.

11.2     ENTIRE AGREEMENT

         This Agreement, the Confidentiality Agreement and the other documents
referred to herein constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements,
arrangement or understandings with respect thereto.

11.3     HEADINGS

         The division of the Agreement into Articles, Sections and other
partitions and the insertion of headings are for convenience of reference only
and shall not control or affect the meaning or construction of any provisions of
this Agreement.

11.4     NOTICES

         All notices or other communication which are required or permitted
hereunder shall be communicated confidentially and in writing and shall be
sufficient if delivered personally, or sent by confidential telecopier addressed
as follows:

         To Acquiror:

         Nabors Industries Ltd.
         c/o The Corporate Secretary Limited
         Whitepark House
         White Park Road
         Bridgetown, Barbados
         Attention:  Vice-President and Corporate Secretary
         Fax:        (246) 427-8617

         With a copy to:


<PAGE>

                                      -50-

         Nabors Corporate Services, Inc.
         515 West Greens Road
         Suite 1200
         Houston, Texas  77067
         Attention:  Katherine Ellis
         Fax:        (281) 775-4318

         And a copy to:

         Stikeman Elliott
         4300 Bankers Hall West
         888 - 3rd Street S.W.
         Calgary, Alberta  T2P 5C5
         Attention:  Christopher W. Nixon
         Fax:        (403) 266-9034

         To the Corporation:

         Ryan Energy Technologies Inc.
         Suite 700, 505 - 2nd Street S.W.
         Calgary, Alberta  T2P 1N8
         Attention:  President and Chief Executive Officer
         Fax:        (403) 261-6323

         With a copy to:

         Macleod Dixon LLP
         3700 Canterra Tower
         400 - 3rd Avenue S.W.
         Calgary, Alberta  T2P 4H2
         Attention:  Andrew Love
         Telecopier: (403) 264-5973

11.5     COUNTERPARTS AND FACSIMILES

         This Agreement may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original instrument but all such
counterparts together shall constitute but one Agreement. The parties hereto
shall be entitled to rely upon delivery of an executed facsimile copy of the
Agreement, and such facsimile copy shall be legally effective to create a valid
and binding agreement between the parties hereto.

11.6     EXPENSES

         Each party will pay its own expenses. The Corporation represents and
warrants that, except for fees payable to Growth Capital Partners pursuant to
the engagement letter dated July 16, 2002 and Peters & Co. Limited pursuant to
the engagement letter dated July 16, 2002, a copy of each of which has been
provided to Acquiror, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission, or to the reimbursement of any

<PAGE>
                                      -51-

of its expenses, in connection with the Arrangement. Notwithstanding anything
provided in this Agreement, the Corporation may pay to Growth Capital Partners
and Peters & Co. Limited the fees (not in excess, with all amounts previously
paid, of U.S. $600,000 plus GST where applicable) and expenses pursuant to and
in accordance with such engagement letters. The Corporation has provided to
Acquiror a correct and complete copy of all agreements between the Corporation
and its financial advisors as are in existence at the date hereof. The
Corporation covenants not to amend the terms of any such agreements relating to
the payment of fees and expenses without the prior written approval of Acquiror.

11.7     ASSIGNMENT

         Acquiror may assign all or any part of its rights or obligations under
this Agreement to a direct or indirect wholly-owned Subsidiary of Acquiror or
any other party related to Acquiror, but, if such assignment takes place,
Acquiror shall continue to be liable to the Corporation for any default in
performance by the assignee. This Agreement shall not otherwise be assignable by
either party without the prior written consent of the other party.

11.8     SEVERABILITY

         If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated and the parties shall negotiate in good faith to modify
this Agreement to preserve each party's anticipated benefits under this
Agreement.

11.9     CHOICE OF LAW

         This Agreement shall be governed by, construed and interpreted in
accordance with the laws of the Province of Alberta.

11.10    ATTORNMENT

         The parties hereby irrevocably and unconditionally consent to and
submit to the courts of the Province of Alberta for any actions, suits or
proceedings arising out of or relating to this Agreement or the matters
contemplated hereby (and agree not to commence any action, suit or proceeding
relating thereto except in such courts) and further agree that service of any
process, summons, notice or document by single registered mail to the addresses
of the parties set forth in this Agreement shall be effective service of process
for any action, suit or proceeding brought against either party in such court.
The parties hereby irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the matters contemplated hereby in the courts of the Province of Alberta and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding so brought has
been brought in an inconvenient forum.

11.11    REMEDIES

         The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were

<PAGE>
                                      -52-

otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to remedy or prevent non-compliance with or
breaches of the terms of this Agreement and to enforce specifically the terms
and provisions hereof in any court of the Province of Alberta having
jurisdiction; provided that such remedies shall be in addition to, and not in
substitution for, any other remedy to which the parties may be entitled at law
or in equity.

11.12    SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         The representations and warranties of the Corporation and Acquiror
contained in this Agreement shall not survive the completion of the Arrangement
and shall expire and be terminated at the earlier of the Effective Time and
(except in respect of a termination pursuant to Sections 10.1(e) or (f) in which
respect the covenants, representations and warranties of the Corporation or
Acquiror, respectively, shall survive the termination of this Agreement) the
date on which this Agreement is terminated in accordance with its terms.

11.13    TIME OF ESSENCE

         Time shall be of the essence in this Agreement.

         IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on their behalf by their officers thereunto duly authorized as of the
date first written above.

                                      NABORS INDUSTRIES LTD.

                                      By: /s/ Daniel McLachin
                                          --------------------------------------
                                          Daniel McLachin



                                      RYAN ENERGY TECHNOLOGIES INC.

                                      By: /s/ Richard Ryan
                                          --------------------------------------
                                          Richard Ryan

                                      By: /s/ Donald Seaman
                                          --------------------------------------
                                          Donald Seaman



<PAGE>


                                   SCHEDULE A

                             ARRANGEMENT RESOLUTION

                     SPECIAL RESOLUTION OF THE SHAREHOLDERS



BE IT RESOLVED THAT:

1.       The arrangement (the "ARRANGEMENT") under Section 193 of the Business
         Corporations Act (Alberta) (the "ACT") involving Ryan Energy
         Technologies Inc. (the "CORPORATION"), substantially as set out in the
         plan of arrangement (the "PLAN OF ARRANGEMENT") attached as Schedule B
         to the Arrangement Agreement dated August 12, 2002 between Nabors
         Industries Ltd. and the Corporation (as amended and restated from time
         to time, the "ARRANGEMENT AGREEMENT") is hereby authorized, approved
         and adopted.

2.       The Plan of Arrangement is hereby authorized, approved and adopted.

3.       Notwithstanding that this resolution has been passed (and the
         Arrangement adopted) by the shareholders and optionholders of the
         Corporation or that the Arrangement has been approved by the Court of
         Queen's Bench of Alberta, the directors of the Corporation are hereby
         authorized and empowered (i) to amend the Arrangement Agreement or the
         Plan of Arrangement to the extent permitted by the Arrangement
         Agreement, and (ii) not to proceed with the Arrangement without further
         approval of the shareholders and optionholders of the Corporation, but
         only if the Arrangement Agreement is terminated in accordance with
         Section 10.1 thereof.

4.       Any officer or director of the Corporation is hereby authorized and
         directed for and on behalf of the Corporation to execute, under the
         seal of the Corporation or otherwise, and to deliver articles of
         arrangement, and such other documents as are necessary or desirable, to
         the Registrar under the Act in accordance with the Arrangement
         Agreement for filing.

5.       Any officer or director of the Corporation is hereby authorized and
         directed for and on behalf of the Corporation to execute or cause to be
         executed, under the seal of the Corporation or otherwise, and to
         deliver or cause to be delivered, all such other documents and
         instruments and to perform or cause to be performed all such other acts
         and things as in such person's opinion may be necessary or desirable to
         give full effect to the foregoing resolution and the matters authorized
         thereby, such determination to be conclusively evidenced by the
         execution and delivery of such document, agreement or instrument or the
         doing of any such act or thing.


<PAGE>



                                   SCHEDULE B

                           FORM OF PLAN OF ARRANGEMENT
                                UNDER SECTION 193
                   OF THE BUSINESS CORPORATIONS ACT (ALBERTA)
                             INVOLVING AND AFFECTING
                        RYAN ENERGY TECHNOLOGIES INC. AND
                               ITS SECURITYHOLDERS

                                    ARTICLE 1
                                 INTERPRETATION

1.1      DEFINITIONS

In this Plan of Arrangement, unless there is something in the subject matter or
context inconsistent therewith, the following terms shall have the respective
meanings set out below (and grammatical variations of such terms shall have
corresponding meanings):

"ACQUIROR" means Nabors Industries Ltd., an exempted company incorporated under
the laws of Bermuda;

"ACQUIROR AVERAGE PRICE" means the weighted average trading price of Acquiror
Shares on the American Stock Exchange (as reported by the American Stock
Exchange and converted, as hereinafter provided, to Canadian dollars and
expressed to the fourth decimal place) for the Measurement Period. For these
purposes, (i) the U.S. dollar/Canadian dollar exchange rate for determining the
Acquiror Average Price shall be the average of the Canadian Dollar Exchange Rate
(expressed to the fourth decimal place) for each of the trading days in the
Measurement Period; and (ii) the "weighted average trading price" shall be
determined by dividing the aggregate sale price of all Acquiror Shares sold on
the American Stock Exchange during the Measurement Period by the total number of
Acquiror Shares sold during such period;

"ACQUIROR CONTROL TRANSACTION" has the meaning provided in the Exchangeable
Share Provisions;

"ACQUIROR SHARES" has the meaning provided in the Exchangeable Share Provisions
and any other securities into which such shares may be changed, exchanged or
converted;

"ACT" means the Business Corporations Act (Alberta), as the same has been and
may hereafter from time to time be amended;

"ANCILLARY RIGHTS" means the interest of a holder of Holdco Shares or Shares who
elects to receive Exchangeable Shares as a beneficiary of the trust created
under the Voting and Exchange Trust Agreement;

"ARRANGEMENT" means the arrangement under Section 193 of the Act on the terms
and subject to the conditions set out in this Plan of Arrangement, subject to
any amendments thereto made (i) in accordance with Section 3.2 of the
Arrangement Agreement; (ii) in accordance with Section 6.1 hereof, or (iii) at
the direction of the Court in the Final Order;

<PAGE>
                                      B-2

"ARRANGEMENT AGREEMENT" means the arrangement agreement by and between Acquiror
and the Corporation dated August 12, 2002, as amended and restated from time to
time, providing for, among other things, this Plan of Arrangement and the
Arrangement;

"ARRANGEMENT RESOLUTION" means the special resolution passed by the Shareholders
and Optionholders at the Shareholder Meeting, such resolution to be
substantially in the form and content of Schedule A to the Arrangement
Agreement;

"BUSINESS DAY" has the meaning provided in the Exchangeable Share Provisions;

"CALLCO" means 3064297 Nova Scotia Company, an unlimited liability company
incorporated under the laws of the Province of Nova Scotia;

"CANADIAN DOLLAR EXCHANGE RATE" means, with respect to determining the exchange
rate from U.S. dollars to Canadian dollars on a particular day, the amount
expressed in U.S. dollars as the noon buying rate (expressed to the fourth
decimal place) in New York City for cable transfers in Canadian dollars as
certified for customs purposes by the Federal Reserve Bank of New York on such
day;

"CANCO" means Nabors Exchangeco (Canada) Inc., a corporation incorporated under
the laws of Canada;

"CCRA" means the Canada Customs and Revenue Agency;

"CHANGE OF LAW" means any amendment to the ITA and other applicable provincial
income tax laws that permits holders of Exchangeable Shares who are resident in
Canada, hold the Exchangeable Shares as capital property and deal at arm's
length with Acquiror and the Corporation (all for the purposes of the ITA and
other applicable provincial income tax laws) to exchange their Exchangeable
Shares for Acquiror Shares on a basis that will not require such holders to
recognize any gain or loss or any actual or deemed dividend in respect of such
exchange for the purposes of the ITA or applicable provincial income tax laws;

"CHANGE OF LAW CALL DATE" has the meaning provided in Section 5.3(b);

"CHANGE OF LAW CALL PURCHASE PRICE" has the meaning provided in Section 5.3(a);

"CHANGE OF LAW CALL RIGHT" has the meaning provided in Section 5.3(a);

"CODE" means the United States Internal Revenue Code of 1986, as amended;

"CORPORATION" means Ryan Energy Technologies Inc., a corporation incorporated
under the laws of Alberta;

"COURT" means the Court of Queen's Bench of Alberta;

"DEPOSITARY" means the duly appointed depositary in respect of the Arrangement
at its principal transfer offices in Calgary, Alberta and Toronto, Ontario;


<PAGE>
                                      B-3

"EFFECTIVE DATE" means the effective date of the Arrangement, being the date on
which the articles of arrangement are filed under the Act giving effect to the
Arrangement;

"EFFECTIVE TIME" means the time on the Effective Date at which the articles of
arrangement are filed under the Act;

"ELECTION DEADLINE" means 5:00 p.m. (local time) at the place of deposit on the
date that is the Business Day immediately prior to the commencement of the
Measurement Period;

"EXCHANGE RATIO" means, subject to adjustment, if any, as provided in Section
2.5, the number, calculated to four decimal places, equal to the Per Share Price
divided by the Acquiror Average Price;

"EXCHANGEABLE SHARE CONSIDERATION" has the meaning provided in the Exchangeable
Share Provisions;

"EXCHANGEABLE SHARE PRICE" has the meaning provided in the Exchangeable Share
Provisions;

"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares, as set forth in the articles of
Canco;

"EXCHANGEABLE SHARES" means the exchangeable shares in the capital of Canco
governed by the Exchangeable Share Provisions;

"FINAL ORDER" means the final order of the Court approving the Arrangement, as
such order may be amended by the Court at any time and from time to time prior
to the Effective Time;

"HOLDCO" has the meaning ascribed in Section 2.3;

"HOLDCO LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of transmittal
and election form for use by holders of Holdco Shares in connection with the
Arrangement;

"HOLDCO SHAREHOLDERS" means the holders at the relevant time of Holdco Shares;

"HOLDCO SHARES" means all issued and outstanding shares of any particular
Holdco;

"INTERIM ORDER" means the interim order of the Court in relation to the
Arrangement, as such order may be amended by the Court at any time and from time
to time;

"ITA" means the Income Tax Act (Canada), as amended;

"LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of transmittal and
election form provided for use by holders of Shares (other than Holdcos) in
connection with the Arrangement;

"LIQUIDATION AMOUNT" has the meaning provided in the Exchangeable Share
Provisions;

"LIQUIDATION CALL PURCHASE PRICE" has the meaning provided in Section 5.1(a);

"LIQUIDATION CALL RIGHT" has the meaning provided in Section 5.1(a);

<PAGE>
                                      B-4

"LIQUIDATION DATE" has the meaning provided in the Exchangeable Share
Provisions;

"MEASUREMENT PERIOD" means the period of 3 consecutive trading days ending on
the third Business Day prior to the date of the Shareholder Meeting (including
any adjournment thereof);

"OPTIONHOLDERS" means holders of Options from time to time;

"OPTIONS" means the outstanding options to acquire Shares under the Stock Option
Plan;

"PER SHARE PRICE" means $1.85;

"PREDECESSOR CORPORATIONS" means those corporations which merged with the
Corporation pursuant to various amalgamations including, without limitation,
Adesso Corporation and 747253 Alberta Ltd.;

"REDEMPTION CALL PURCHASE PRICE" has the meaning provided in Section 5.2(a);

"REDEMPTION CALL RIGHT" has the meaning provided in Section 5.2(a);

"REDEMPTION DATE" has the meaning provided in the Exchangeable Share Provisions;

"REDEMPTION PRICE" has the meaning provided in the Exchangeable Share
Provisions;

"SHAREHOLDER MEETING" means the special meeting of the Shareholders and
Optionholders to be held to consider this Plan of Arrangement;

"SHAREHOLDERS" means holders of Shares from time to time;

"SHARES" means the common shares in the capital of the Corporation;

"STOCK OPTION PLAN" means the stock option plan of the Corporation approved by
the Shareholders of the Corporation on September 18, 1996 and amended with
approval of such Shareholders given at the 1997, 1998, 2000 and 2001 Annual and
Special Meeting of the Corporation;

"SUPPORT AGREEMENT" means the agreement so entitled among Nabors Industries,
Inc., Callco and Canco dated April 26, 2002, as supplemented by an
Acknowledgement of Novation between Nabors Industries, Inc., Callco, Canco,
Computershare Trust Company of Canada and Acquiror;

"TRANSFER AGENT" means the duly appointed transfer agent for the time being of
the Exchangeable Shares, and, if there is more than one such transfer agent,
then the principal Canadian transfer agent; and

"VOTING AND EXCHANGE TRUST AGREEMENT" means the agreement so entitled among
Nabors Industries, Inc., Canco and Computershare Trust Company of Canada dated
April 26, 2002, as supplemented by an Acknowledgement of Novation between Nabors
Industries, Inc., Callco, Canco, Computershare Trust Company of Canada and
Acquiror.

<PAGE>
                                      B-5

1.2      SECTIONS AND HEADINGS

The division of this Plan of Arrangement into sections and the insertion of
headings are for reference purposes only and shall not affect the interpretation
of this Plan of Arrangement. Unless otherwise indicated, any reference in this
Plan of Arrangement to a Section refers to the specified Section of this Plan of
Arrangement.

1.3      NUMBER, GENDER AND PERSONS

In this Plan of Arrangement, unless the context otherwise requires, words
importing the singular number include the plural and vice versa, words importing
any gender include all genders and words importing persons include individuals,
bodies corporate, partnerships, associations, trusts, unincorporated
organizations, governmental bodies and other legal or business entities of any
kind.

1.4      DATE FOR ANY ACTION

In the event that any date on or by which any action is required or permitted to
be taken hereunder is not a Business Day, such action shall be required or
permitted to be taken on or by the next succeeding day which is a Business Day.

1.5      CURRENCY

Unless otherwise expressly stated herein, all references to currency and
payments in cash or money in this Plan of Arrangement are to Canadian dollars.

1.6      STATUTORY REFERENCES

Any reference in this Plan of Arrangement to a statute includes such statute as
amended, consolidated or re-enacted from time to time, all regulations made
thereunder, all amendments to such regulations from time to time, and any
statute or regulation which supersedes such statute or regulations.

                                    ARTICLE 2
                                   ARRANGEMENT

2.1      BINDING EFFECT

This Plan of Arrangement will become effective at, and be binding at and after,
the Effective Time on (i) Acquiror, Canco and Callco; (ii) the Corporation;
(iii) all holders and all beneficial owners of Shares; (iv) all Holdcos and all
holders and all beneficial owners of Holdco Shares; and (v) all holders and all
beneficial owners of Options.

2.2      ARRANGEMENT

At the Effective Time, the following transactions shall occur and shall be
deemed to occur in the following order without any further act or formality:

<PAGE>
                                      B-6

         (a)      Each Holdco Share will be transferred to, and acquired by,
                  Canco without any act or formality on the part of the holder
                  of such Holdco Share or the entity which acquires such Holdco
                  Share, free and clear of all liens, claims and encumbrances,
                  in exchange for, at the holder's election (or deemed
                  election), (w) the Per Share Price in cash without interest;
                  (x) such number of fully paid and non-assessable Exchangeable
                  Shares (and the Ancillary Rights) as is equal to the Exchange
                  Ratio; or (y) such amount of cash, less than the Per Share
                  Price, as is specified by the holder in the holder's election
                  (whether as a specific dollar amount or a percentage of the
                  Per Share Price) (the "CASH PORTION") plus such number of
                  fully paid and non-assessable Exchangeable Shares (and the
                  Ancillary Rights) as is equal to the positive difference
                  between the Per Share Price and the Cash Portion, divided by
                  the Acquiror Average Price calculated to four decimal places,
                  in each case multiplied by a fraction having as its numerator
                  the number of Shares held by the Holdco and as its denominator
                  the number of issued and outstanding Holdco Shares of the
                  Holdco; payable, in each case, in accordance with Article 4
                  hereof, and the name of each such holder of Holdco Shares will
                  be removed from the register of holders of Holdco Shares and
                  added to the register of holders of the Exchangeable Shares
                  comprising all or part of the consideration to be received by
                  such holder for such transfer, and Canco will be recorded as
                  the registered holder of each such Holdco Share so exchanged
                  and will be deemed to be the legal and beneficial owner
                  thereof.

         (b)      Each Share (other than Shares owned by Holdcos in respect of
                  which Section 2.2(a) applies) that is not held by (i) a
                  Shareholder who has exercised its right to dissent in
                  accordance with Article 3 hereof and who is ultimately
                  entitled to be paid the fair value of its Shares, or (ii)
                  Acquiror or any affiliate (within the meaning of the Act)
                  thereof (which Share shall not be exchanged under the
                  Arrangement and shall remain outstanding as a Share held by
                  Acquiror or any affiliate thereof), will be transferred to,
                  and acquired by, Canco without any act or formality on the
                  part of the holder of such Share or the entity which acquires
                  such Share, free and clear of all liens, claims and
                  encumbrances, in exchange for, at the holder's election (or
                  deemed election), (w) the Per Share Price in cash without
                  interest; (x) such number of fully paid and non-assessable
                  Exchangeable Shares (and the Ancillary Rights) as is equal to
                  the Exchange Ratio; or (y) such amount of cash, less than the
                  Per Share Price, as is specified by the holder in the holder's
                  election (whether as a specific dollar amount or a percentage
                  of the Per Share Price) (the "CASH PORTION") plus such number
                  of fully paid and non-assessable Exchangeable Shares (and the
                  Ancillary Rights) as is equal to the positive difference
                  between the Per Share Price and the Cash Portion, divided by
                  the Acquiror Average Price calculated to four decimal places,
                  payable, in each case, in accordance with Article 4 hereof,
                  and the name of each such holder of Shares will be removed
                  from the register of holders of Shares and added to the
                  register of holders of the Exchangeable Shares comprising all
                  or part of the consideration to be received by such holder for
                  such transfer, and Canco will be recorded as the registered
                  holder of each such Share so exchanged and will be deemed to
                  be the legal and beneficial owner thereof.

<PAGE>
                                      B-7

         (c)      Each Share (other than Shares owned by Holdcos in respect of
                  which Section 2.2(a) applies) in respect of which no election
                  has been made by the holder thereof or in respect of which an
                  effective election has not been made (other than Shares held
                  by (i) a Shareholder who has exercised its right to dissent in
                  accordance with Article 3 hereof and who is ultimately
                  entitled to be paid the fair value of its Shares, or (ii)
                  Acquiror or any affiliate (within the meaning of the Act)
                  thereof (which Share shall not be exchanged under the
                  Arrangement and shall remain outstanding as a Share held by
                  Acquiror or any affiliate thereof)) will be transferred to,
                  and acquired by, Canco, without any act or formality on the
                  part of the holder of such Share or Canco, free and clear of
                  all liens, claims and encumbrances, and the holder shall be
                  deemed to have elected to receive in exchange therefor the Per
                  Share Price in cash without interest, payable in accordance
                  with Article 4 hereof, and the name of each such holder of
                  Shares will be removed from the register of holders of Shares
                  and Canco will be recorded as the registered holder of each
                  such Share so exchanged and will be deemed to be the legal and
                  beneficial owner thereof.

         (d)      Each Option that has not been duly exercised or surrendered
                  for termination prior to the Effective Time (whether in
                  accordance with Section 2.12 of the Arrangement Agreement or
                  otherwise) shall be terminated and, in consideration for such
                  termination, each holder of such Option shall receive cash,
                  without interest, in an amount equal to the greater of: (A)
                  the positive difference, if any, between (i) the Per Share
                  Price and (ii) the exercise price per share of such Option;
                  and (B) $0.10, for each Share subject to issuance pursuant to
                  such Option.

2.3      HOLDCO ALTERNATIVE

Each Shareholder shall be entitled to transfer its Shares to a
newly-incorporated corporation (a "Holdco") and transfer the Holdco Shares to
Canco as provided in Section 2.2(a) provided that each of the following
conditions are satisfied on or prior to and as of the Effective Date:

         (a)      the Shareholder is a resident of Canada for the purposes of
                  the ITA;

         (b)      Holdco is incorporated no earlier than August 31, 2002, under
                  the Act;

         (c)      the Shareholder transfers its Shares to Holdco solely in
                  consideration for the Holdco Shares;

         (d)      Holdco has no indebtedness or liabilities and owns no assets
                  other than the Shares;

         (e)      the Shareholder indemnifies Acquiror, the Corporation, Canco
                  and Callco for any and all liabilities of Holdco (other than
                  tax liabilities of Holdco that arise solely as a result of the
                  tax status of Acquiror, Canco or Callco as a "financial
                  institution" for purposes of the ITA) in a form satisfactory
                  to Acquiror in its sole discretion, and such Shareholder
                  either has net assets as reflected on its audited financial
                  statements for its most recently ended fiscal year which are
                  satisfactory to Acquiror or provides Acquiror with security
                  satisfactory to Acquiror in respect of such shareholder's
                  indemnification obligations as set out above;

<PAGE>
                                      B-8

         (f)      prior to the Effective Date, Holdco (i) declares one or more
                  stock dividends which (if the Holdco Shares are to be acquired
                  by Canco) may be in the form of preferred shares of Holdco
                  that are converted into common shares of Holdco prior to the
                  Effective Date, (ii) increases the stated capital of the
                  Holdco Shares; or (iii) (if the Holdco Shares are to be
                  acquired by Canco) declares one or more cash dividends,
                  provided that such cash is used to subscribe, directly or
                  indirectly, for shares of Holdco;

         (g)      on the Effective Date, Holdco has no issued shares outstanding
                  other than the Holdco Shares and such shares will be owned by
                  the Shareholder;

         (h)      on or prior to the Effective Date, Holdco has never entered
                  into any transaction (or conducted any business or operations
                  or engaged in any activity) other than those described herein
                  or such other transactions as are necessary to facilitate
                  those transactions described herein with Acquiror's consent,
                  acting reasonably;

         (i)      other than as provided in (f) above, Holdco will not declare
                  or pay any dividends or other distributions;

         (j)      the Shareholder shall prepare and file all income tax returns
                  of its Holdco in respect of the taxation year-end of such
                  Holdco ending immediately prior to the acquisition of such
                  Holdco Shares by Canco subject to Acquiror's right to approve
                  all such returns as to form and substance;

         (k)      the Shareholder provides the Corporation and Acquiror with
                  copies of all documents necessary to effect the transactions
                  contemplated in this Section 2.3 at least ten days prior to
                  the Effective Date which documents must be approved by both
                  the Corporation and Acquiror in their sole discretion; and

         (l)      the Shareholder and its Holdco execute a share purchase
                  agreement in the form required by Acquiror, acting reasonably,
                  providing for, among other things, the sale of the Holdco
                  Shares to Canco and containing the terms and conditions, among
                  others, set out in this Section 2.3.

2.4      ELECTIONS

         (a)      Each person who, at or prior to the Election Deadline, is a
                  holder of Shares or Holdco Shares will be entitled, with
                  respect to all or a portion of their shares, to make an
                  election at or prior to the Election Deadline to receive (i)
                  cash, (ii) Exchangeable Shares (and the Ancillary Rights), or
                  (iii) a combination thereof, in exchange for such holder's
                  Shares or Holdco Shares on the basis set forth herein and in
                  the Letter of Transmittal and Election Form or the Holdco
                  Letter of Transmittal and Election Form, as the case may be,
                  failing which election such persons shall be deemed to have
                  elected to receive cash.

         (b)      Holders of Shares and holders of Holdco Shares who are
                  resident in Canada for purposes of the ITA, other than any
                  such holders who are exempt from tax under Part I of the ITA,
                  and who have elected to receive Exchangeable Shares (and the
                  Ancillary Rights) or a combination of cash and Exchangeable
                  Shares (and the

<PAGE>
                                      B-9

                  Ancillary Rights) shall be entitled to make an income tax
                  election pursuant to subsection 85(1) of the ITA or, if the
                  holder is a partnership, subsection 85(2) of the ITA (and in
                  each case, where applicable, the analogous provisions of
                  provincial income tax law) with respect to the transfer of
                  their Shares or Holdco Shares, as the case may be, to Canco by
                  providing two signed copies of the necessary prescribed
                  election forms to the Depositary within 90 days following the
                  Effective Date, duly completed with the details of the number
                  of Shares or Holdco Shares, as the case may be, transferred
                  and the applicable agreed amounts for the purposes of such
                  elections. Thereafter, subject to the election forms being
                  correct and complete and complying with the provisions of the
                  ITA (or any applicable provincial income tax law), the forms
                  will be signed by Canco and returned to such holders within 30
                  days after the receipt thereof by the Depositary for filing
                  with CCRA (or the applicable provincial taxing authority).
                  Canco will not be responsible for the proper completion of any
                  election form and, except for Canco's obligation to return
                  duly completed election forms which are received by the
                  Depositary within 90 days following the Effective Date, within
                  30 days after the receipt thereof by the Depositary, Canco
                  will not be responsible for any taxes, interest, penalties or
                  any other costs or damages resulting from the failure by a
                  holder of Shares or Holdco Shares to properly complete or file
                  the election forms in the form and manner and within the time
                  prescribed by the ITA (or any applicable provincial income tax
                  law). In its sole discretion, Canco may choose to sign and
                  return an election form received more than 90 days following
                  the Effective Date, but Canco will have no obligation to do
                  so.

2.5      ADJUSTMENTS TO EXCHANGE RATIO

The Exchange Ratio shall be proportionately and appropriately adjusted to
reflect fully the effect of (a) any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into Acquiror
Shares or Shares), reorganization, recapitalization or other like change with
respect to Acquiror Shares or Shares, and (b) any extraordinary dividend or
distribution with respect to Acquiror Shares (other than a dividend or
distribution referenced in clause (a)); provided that the foregoing adjustments
shall not be made if the record date for the stock split, reverse split, stock
dividend, reorganization, recapitalization, other like change or extraordinary
dividend or distribution referred to in clauses (a) and (b) above does not occur
after the date of the Arrangement Agreement and prior to the Effective Time. In
any case where the Exchange Ratio is adjusted in accordance with the foregoing,
a corresponding adjustment shall be made to the number of Exchangeable Shares
(and Ancillary Rights) that are acquired by holders of Shares or Holdco Shares
who have elected to receive a combination of cash and Exchangeable Shares (and
Ancillary Rights).

2.6      RESTRICTION ON REDEMPTION OF EXCHANGEABLE SHARES

Canco and its Board of Directors shall not establish a Redemption Date for any
Exchangeable Shares pursuant to subsection (a) of the definition of Redemption
Date prior to: (i) if holders of Shares and Holdco Shares elect in accordance
with Section 2.4 to receive, in aggregate, not less than 300,000 Exchangeable
Shares, January 1, 2004; or (ii) otherwise, January 1, 2003.

<PAGE>
                                      B-10

                                   ARTICLE 3
                                RIGHTS OF DISSENT

3.1      RIGHTS OF DISSENT

Holders of Shares or Options may exercise rights of dissent with respect to such
Shares or Options, as the case may be, pursuant to and in the manner set forth
in Section 191 of the Act as modified by the Interim Order and this Section 3.1
in connection with the Arrangement; provided that, notwithstanding subsection
191(5) of the Act, the written objection to the Arrangement Resolution referred
to in subsection 191(5) of the Act must be received by the Corporation not later
than 2:00 p.m. (Calgary time) on the Business Day preceding the Shareholder
Meeting. Holders of Shares or Options, as the case may be, who duly exercise
such rights of dissent and who:

         (a)      are ultimately determined to be entitled to be paid fair value
                  for their Shares or Options, as the case may be, shall be
                  deemed to have transferred such Shares or Options, as the case
                  may be, as of the Effective Time, without any further act or
                  formality and free and clear of all liens, claims and
                  encumbrances, to Canco, in consideration for a payment of cash
                  from Canco equal to such fair value; or

         (b)      are ultimately determined not to be entitled, for any reason,
                  to be paid fair value for their Shares or Options, as the case
                  may be, shall be deemed to have participated in the
                  Arrangement, as of the Effective Time, on the same basis as a
                  non-dissenting holder of Shares or Options, as the case may
                  be, who did not make an election and shall receive cash on the
                  same basis as holders of Shares or Options in respect of which
                  no election has been made,

but in no case shall Acquiror, the Corporation, Canco, Callco or any other
person be required to recognize any holder of Shares or Options who exercises
rights of dissent as a holder of Shares or Options after the Effective Time and
the names of each such holder shall be deleted from the register of holders of
Shares or Options at the Effective Time.

                                   ARTICLE 4
                       CERTIFICATES AND FRACTIONAL SHARES

4.1      PAYMENT OF CASH

At or promptly after the Effective Time, Canco shall deposit with the
Depositary, for the benefit of the holders of Holdco Shares, Shares and Options
who will receive cash in connection with the Arrangement, cash in an amount
sufficient to satisfy all of the cash payment obligations to Holdco Shareholders
and Shareholders in connection with the acquisition of Holdco Shares and Shares
pursuant to the Arrangement (together with any unpaid dividends or distributions
declared on the Shares, if any, prior to the Effective Time) and to
Optionholders required pursuant to Section 2.2(d) or otherwise under this Plan
of Arrangement. Upon surrender to the Depositary for transfer to Canco of a
certificate which immediately prior to or upon the Effective Time represented
Holdco Shares or Shares in respect of which the holder is entitled to receive
cash under the Arrangement, together with (i) a duly completed Letter of
Transmittal and Election Form or Holdco Letter of Transmittal and Election Form
, (ii) such other documents and

<PAGE>
                                      B-11

instruments as would have been required to effect the transfer of the Holdco
Shares or Shares formerly represented by such certificate under the Act and the
by-laws of the Corporation, and (iii) such additional documents and instruments
as the Depositary may reasonably require, the holder of such surrendered
certificate shall be entitled to receive in exchange therefor, and after the
Effective Time the Depositary shall deliver to such holder, the amount of cash
such holder is entitled to receive under the Arrangement (together with any
unpaid dividends or distributions declared on the surrendered Shares or Shares
owned by the relevant Holdco, if any, prior to the Effective Time), and any
certificate so surrendered shall forthwith be transferred to Canco. No interest
shall be paid or accrued on unpaid dividends and distributions, if any, payable
to holders of certificates that formerly represented Shares. In the event of a
transfer of ownership of such Shares or Holdco Shares that was not registered in
the securities register of the Corporation or Holdco, as the case may be, the
amount of cash payable for such Shares under the Arrangement may be delivered to
the transferee if the certificate representing such Shares or Holdco Shares is
presented to the Depositary as provided above, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 4.1, each certificate which immediately prior to or
upon the Effective Time represented one or more outstanding Shares or Holdco
Shares that, under the Arrangement, were exchanged or were deemed to be
exchanged for cash pursuant to Section 2.2 shall be deemed at all times after
the Effective Time to represent only the right to receive upon such surrender
the cash payment contemplated by this Section 4.1.

4.2      ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES

At or promptly after the Effective Time, Canco shall deposit with the
Depositary, for the benefit of the holders of Holdco Shares and Shares who will
receive Exchangeable Shares (and the Ancillary Rights) in connection with the
Arrangement, certificates representing the number of Exchangeable Shares
sufficient to satisfy all of the Exchangeable Share payment obligations to
Holdco Shareholders and Shareholders in connection with the acquisition of
Holdco Shares and Shares pursuant to the Arrangement (together with cash in an
amount equal to the sum of any unpaid dividends or distributions declared on the
surrendered Shares or Shares owned by the relevant Holdco, if any, prior to the
Effective Time, and any payments for fractional shares required by Section 4.4).
Upon surrender to the Depositary for transfer to Canco of a certificate which
immediately prior to or upon the Effective Time represented Holdco Shares or
Shares in respect of which the holder is entitled to receive Exchangeable Shares
under the Arrangement, together with (i) a duly completed Letter of Transmittal
and Election Form or Holdco Letter of Transmittal and Election Form, (ii) such
other documents and instruments as would have been required to effect the
transfer of the Holdco Shares or Shares formerly represented by such certificate
under the Act and the by-laws of the relevant Holdco or the Corporation, and
(iii) such additional documents and instruments as the Depositary may reasonably
require, the holder of such surrendered certificate shall be entitled to receive
in exchange therefor, and after the Effective Time the Depositary shall deliver
to such holder, a certificate representing that number (rounded down to the
nearest whole number) of Exchangeable Shares which such holder has the right to
receive (together with any unpaid dividends or distributions declared on the
surrendered Shares or Shares owned by the relevant Holdco prior to the Effective
Time), and any certificate so surrendered shall forthwith be transferred to
Canco. No interest shall be paid or accrued on the cash in lieu of fractional
shares, if any, or on unpaid dividends and distributions, if any, payable to
holders of certificates that formerly represented Shares. In the event of a
transfer of ownership of Holdco Shares or Shares that was not registered in the
securities register of the

<PAGE>
                                      B-12

relevant Holdco or the Corporation, as the case may be, a certificate
representing the proper number of Exchangeable Shares (together with any unpaid
dividends or distributions declared on the surrendered Shares prior to the
Effective Time) may be issued to the transferee if the certificate representing
such Holdco Shares or Shares is presented to the Depositary as provided above,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 4.2, each certificate which
immediately prior to or upon the Effective Time represented one or more Holdco
Shares or Shares that, under the Arrangement, were exchanged or were deemed to
be exchanged for Exchangeable Shares pursuant to Section 2.2 shall be deemed at
all times after the Effective Time, but subject to Section 4.3, to represent
only the right to receive upon such surrender a certificate representing that
number (rounded down to the nearest whole number) of Exchangeable Shares
(together with any unpaid dividends or distributions declared on the surrendered
Shares, or Shares owned by the relevant Holdco, prior to the Effective Time)
which such holder has the right to receive.

4.3      DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES

No dividends or other distributions paid, declared or made with respect to
Exchangeable Shares, in each case with a record date after the Effective Time,
shall be paid to the holder of any unsurrendered certificate which immediately
prior to the Effective Time represented outstanding Holdco Shares or Shares that
were exchanged for Exchangeable Shares pursuant to Section 2.2 unless and until
the holder of such certificate shall comply with the provisions of Section 4.2.
Subject to applicable law, at the time such holder shall have complied with the
provisions of Section 4.2 (or, in the case of clause (ii) below, at the
appropriate payment date), there shall be paid to the holder of the certificates
formerly representing Holdco Shares or Shares, without interest, (i) the amount
of dividends or other distributions with a record date after the Effective Time
paid with respect to the Exchangeable Shares to which such holder is entitled
pursuant hereto, and (ii) on the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to the date of compliance by such holder with the provisions of Section
4.2 and a payment date subsequent to the date of such compliance and payable
with respect to such Exchangeable Shares.

4.4      NO FRACTIONAL SHARES

No certificates representing fractional Exchangeable Shares shall be issued upon
compliance with the provisions of Section 4.2 and no dividend, stock split or
other change in the capital structure of Canco shall relate to any such
fractional security and such fractional interests shall not entitle the owner
thereof to exercise any rights as a security holder of Canco. In lieu of any
such fractional securities, each holder otherwise entitled to a fractional
interest in an Exchangeable Share will be entitled to receive a cash payment
from the Depositary equal to the product of such fractional interest and the
Acquiror Average Price, such amount to be provided to the Depositary by Canco,
upon request. Such payment with respect to fractional shares is merely intended
to provide a mechanical rounding off of, and is not separately bargained for,
consideration. If more than one certificate formerly representing Holdco Shares
or Shares is surrendered for the account of the same holder, the number of
Exchangeable Shares for which such certificates have been surrendered shall be
computed on the basis of the aggregate number of Holdco Shares or Shares
represented by the certificates so surrendered. On the date of the notice
referred to in Section 7.2 of the Exchangeable Share Provisions, the aggregate
number of

<PAGE>
                                      B-13

Exchangeable Shares for which no certificates were issued as a result of the
foregoing provisions of this Section 4.4 shall be deemed to have been
surrendered by the Depositary for no consideration to Canco.

4.5      LOST CERTIFICATES

In the event any certificate which immediately prior to the Effective Time
represented one or more outstanding Holdco Shares or Shares that were exchanged
pursuant to Section 2.2 shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the holder of Holdco Shares or Shares
claiming such certificate to be lost, stolen or destroyed, the Depositary will
issue in exchange for such lost, stolen or destroyed certificate, any cash
pursuant to Section 4.1 and/or one or more certificates representing one or more
Exchangeable Shares pursuant to Section 4.2 (and any dividends or distributions
with respect thereto) in each case deliverable in accordance with Section 2.2.
When authorizing such payment in exchange for any lost, stolen or destroyed
certificate, the holder to whom cash and/or certificates representing
Exchangeable Shares are to be issued shall, as a condition precedent to the
issuance thereof, give a bond satisfactory to the Corporation and Canco and
their respective transfer agents in such sum as any of them may direct or
otherwise indemnify the Corporation and Canco in a manner satisfactory to the
Corporation and Canco against any claim that may be made against any of them
with respect to the certificate alleged to have been lost, stolen or destroyed.

4.6      EXTINGUISHMENT OF RIGHTS

Any certificate which immediately prior to the Effective Time represented
outstanding Shares that are not held by a Shareholder who has exercised its
right to dissent in accordance with Article 3 hereof and who is ultimately
entitled to be paid fair value of the Shares held by such Shareholder but was
exchanged or was deemed to have been exchanged pursuant to Section 2.2, that has
not been deposited with all other instruments required by Section 4.1 or Section
4.2, on or prior to the sixth anniversary of the Effective Date shall cease to
represent a claim or interest of any kind or nature to such cash payment and/or
as a holder of Exchangeable Shares or Acquiror Shares. On such date, the cash
payment and/or the Exchangeable Shares or Acquiror Shares (and any dividends or
distributions with respect thereto) to which the former holder of the
certificate referred to in the preceding sentence was ultimately entitled shall
be deemed to have been surrendered for no consideration to Callco or Canco, as
the case may be, together with all entitlements to dividends, distributions,
cash and interest in respect thereof held for such former holder. None of
Acquiror, the Corporation, Canco, Callco or the Depositary shall be liable to
any person in respect of any cash payment or Exchangeable Shares or Acquiror
Shares (or dividends, distributions and/or cash in lieu of fractional shares)
delivered to a public official pursuant to and in compliance with any applicable
abandoned property, escheat or similar law.

4.7      WITHHOLDING RIGHTS

Acquiror, the Corporation, Canco, Callco and the Depositary shall be entitled to
deduct and withhold from any dividend or consideration otherwise payable to any
holder of Shares or Exchangeable Shares such amounts as the Corporation, Canco,
Callco or the Depositary is required to deduct and withhold with respect to such
payment under the ITA, the Code or any provision of federal, provincial,
territorial, state, local or foreign tax law, in each case, as amended. To the
extent that amounts are so withheld, such withheld amounts shall be treated for

<PAGE>
                                      B-14

all purposes hereof as having been paid to the holder of the shares in respect
of which such deduction and withholding was made, provided that such withheld
amounts are actually remitted to the appropriate taxing authority. To the extent
that the amount so required to be deducted or withheld from any payment to a
holder exceeds the cash portion of the consideration otherwise payable to the
holder, the Corporation, Canco, Callco and the Depositary are hereby authorized
to sell or otherwise dispose of such portion of the consideration as is
necessary to provide sufficient funds to the Corporation, Canco, Callco or the
Depositary, as the case may be, to enable it to comply with such deduction or
withholding requirement and the Corporation, Canco, Callco or the Depositary
shall notify the holder thereof and remit any unapplied balance of the net
proceeds of such sale.

4.8      TERMINATION OF DEPOSITARY

Any Exchangeable Shares, together with any funds held by the Depositary, that
remain undistributed to former holders of Shares nine months after the Effective
Date shall be delivered to Canco or Callco upon demand therefor, and holders of
certificates previously representing Shares who have not theretofore complied
with Section 4.1 or Section 4.2 shall thereafter, subject to Section 4.6, look
only to Canco or Callco for payment of any claim to cash, Exchangeable Shares,
cash in lieu of fractional shares thereof, Acquiror Shares or dividends or
distributions, if any, in respect thereof.

                                   ARTICLE 5
             CERTAIN RIGHTS OF CALLCO TO ACQUIRE EXCHANGEABLE SHARES

5.1      CALLCO LIQUIDATION CALL RIGHT

         (a)      Callco shall have the overriding right (the "Liquidation Call
                  Right"), in the event of and notwithstanding the proposed
                  liquidation, dissolution or winding-up of Canco or any other
                  distribution of the assets of Canco among its shareholders for
                  the purpose of winding-up its affairs, pursuant to Article 5
                  of the Exchangeable Share Provisions, to purchase from all but
                  not less than all of the holders of Exchangeable Shares (other
                  than any holder of Exchangeable Shares which is an affiliate
                  of Acquiror) on the Liquidation Date all but not less than all
                  of the Exchangeable Shares held by each such holder upon
                  payment by Callco to each such holder of the Exchangeable
                  Share Price applicable on the last Business Day prior to the
                  Liquidation Date (the "Liquidation Call Purchase Price") in
                  accordance with Section 5.1(c). In the event of the exercise
                  of the Liquidation Call Right by Callco, each holder shall be
                  obligated to sell all the Exchangeable Shares held by such
                  holder to Callco on the Liquidation Date upon payment by
                  Callco to such holder of the Liquidation Call Purchase Price
                  for each such Exchangeable Share, whereupon Canco shall have
                  no obligation to pay any Liquidation Amount to the holders of
                  such shares so purchased by Callco.

         (b)      To exercise the Liquidation Call Right, Callco must notify
                  Canco and the Transfer Agent of Callco's intention to exercise
                  such right at least 45 days before the Liquidation Date, in
                  the case of a voluntary liquidation, dissolution or winding-up
                  of Canco or any other voluntary distribution of the assets of
                  Canco among its

<PAGE>
                                      B-15

                  shareholders for the purpose of winding-up its affairs, and at
                  least five Business Days before the Liquidation Date, in the
                  case of an involuntary liquidation, dissolution or winding-up
                  of Canco or any other involuntary distribution of the assets
                  of Canco among its shareholders for the purpose of winding up
                  its affairs. The Transfer Agent will notify the holders of
                  Exchangeable Shares as to whether Callco has exercised the
                  Liquidation Call Right forthwith after the expiry of the
                  period during which the same may be exercised by Callco. If
                  Callco exercises the Liquidation Call Right, then on the
                  Liquidation Date, Callco will purchase and the holders of
                  Exchangeable Shares will sell all of the Exchangeable Shares
                  then outstanding for a price per share equal to the
                  Liquidation Call Purchase Price.

         (c)      For the purposes of completing the purchase of the
                  Exchangeable Shares pursuant to the Liquidation Call Right,
                  Callco shall deposit or cause to be deposited with the
                  Transfer Agent, on or before the Liquidation Date, the
                  Exchangeable Share Consideration representing the total
                  Liquidation Call Purchase Price. Provided that such
                  Exchangeable Share Consideration has been so deposited with
                  the Transfer Agent, on and after the Liquidation Date, the
                  holders of the Exchangeable Shares shall cease to be holders
                  of the Exchangeable Shares and shall not be entitled to
                  exercise any of the rights of holders in respect thereof
                  (including any rights under the Voting and Exchange Trust
                  Agreement ), other than the right to receive their
                  proportionate part of the total Liquidation Call Purchase
                  Price payable by Callco, without interest, upon presentation
                  and surrender by the holder of certificates representing the
                  Exchangeable Shares held by such holder and the holder shall
                  on and after the Liquidation Date be considered and deemed for
                  all purposes to be the holder of Acquiror Shares to which such
                  holder is entitled. Upon surrender to the Transfer Agent of a
                  certificate or certificates representing Exchangeable Shares,
                  together with such other documents and instruments as may be
                  required to effect a transfer of Exchangeable Shares under the
                  Act and the by-laws of Canco and such additional documents and
                  instruments as the Transfer Agent may reasonably require, the
                  holder of such surrendered certificate or certificates shall
                  be entitled to receive in exchange therefor, and the Transfer
                  Agent on behalf of Callco shall deliver to such holder, the
                  Exchangeable Share Consideration to which such holder is
                  entitled. If Callco does not exercise the Liquidation Call
                  Right in the manner described above, on the Liquidation Date
                  the holders of the Exchangeable Shares will be entitled to
                  receive in exchange therefor the Liquidation Amount otherwise
                  payable by Canco in connection with the liquidation,
                  dissolution or winding-up of Canco pursuant to Article 5 of
                  the Exchangeable Share Provisions.

5.2      CALLCO REDEMPTION CALL RIGHT

In addition to Callco's rights contained in the Exchangeable Share Provisions,
including the Retraction Call Right (as defined in the Exchangeable Share
Provisions), Callco shall have the following rights in respect of the
Exchangeable Shares:

         (a)      Callco shall have the overriding right (the "Redemption Call
                  Right"), in the event of and notwithstanding the proposed
                  redemption of the Exchangeable Shares by Canco pursuant to
                  Article 7 of the Exchangeable Share Provisions, to purchase

<PAGE>
                                      B-16

                  from all but not less than all of the holders of Exchangeable
                  Shares (other than any holder of Exchangeable Shares which is
                  an affiliate of Acquiror) on the Redemption Date all but not
                  less than all of the Exchangeable Shares held by each such
                  holder upon payment by Callco to each such holder of the
                  Exchangeable Share Price applicable on the last Business Day
                  prior to the Redemption Date (the "Redemption Call Purchase
                  Price") in accordance with 5.2(c). In the event of the
                  exercise of the Redemption Call Right by Callco, each holder
                  of Exchangeable Shares shall be obligated to sell all the
                  Exchangeable Shares held by such holder to Callco on the
                  Redemption Date upon payment by Callco to such holder of the
                  Redemption Call Purchase Price for each such Exchangeable
                  Share, whereupon Canco shall have no obligation to redeem, or
                  to pay the Redemption Price in respect of, such shares so
                  purchased by Callco.

         (b)      To exercise the Redemption Call Right, Callco must notify the
                  Transfer Agent of Callco's intention to exercise such right at
                  least 60 days before the Redemption Date, except in the case
                  of a redemption occurring as a result of an Acquiror Control
                  Transaction, a Exchangeable Share Voting Event or an Exempt
                  Exchangeable Share Voting Event (each as defined in the
                  Exchangeable Share Provisions), in which case Callco shall so
                  notify the Transfer Agent and Canco on or before the
                  Redemption Date. The Transfer Agent will notify the holders of
                  the Exchangeable Shares as to whether Callco has exercised the
                  Redemption Call Right forthwith after the expiry of the period
                  during which the same may be exercised by Callco. If Callco
                  exercises the Redemption Call Right, then, on the Redemption
                  Date, Callco will purchase and the holders of Exchangeable
                  Shares will sell all of the Exchangeable Shares then
                  outstanding for a price per share equal to the Redemption Call
                  Purchase Price.

         (c)      For the purposes of completing the purchase of the
                  Exchangeable Shares pursuant to the exercise of the Redemption
                  Call Right, Callco shall deposit or cause to be deposited with
                  the Transfer Agent, on or before the Redemption Date, the
                  Exchangeable Share Consideration representing the total
                  Redemption Call Purchase Price. Provided that such
                  Exchangeable Share Consideration has been so deposited with
                  the Transfer Agent, on and after the Redemption Date the
                  holders of the Exchangeable Shares shall cease to be holders
                  of the Exchangeable Shares and shall not be entitled to
                  exercise any of the rights of holders in respect thereof
                  (including any rights under the Voting and Exchange Trust
                  Agreement ), other than the right to receive their
                  proportionate part of the total Redemption Call Purchase Price
                  payable by Callco, without interest, upon presentation and
                  surrender by the holder of certificates representing the
                  Exchangeable Shares held by such holder and the holder shall
                  on and after the Redemption Date be considered and deemed for
                  all purposes to be the holder of Acquiror Shares to which such
                  holder is entitled. Upon surrender to the Transfer Agent of a
                  certificate or certificates representing Exchangeable Shares,
                  together with such other documents and instruments as may be
                  required to effect a transfer of Exchangeable Shares under the
                  Act and the by-laws of Canco and such additional documents and
                  instruments as the Transfer Agent may reasonably require, the
                  holder of such surrendered certificate or certificates shall
                  be entitled to receive in exchange therefor, and the Transfer
                  Agent on behalf of Callco shall deliver to

<PAGE>
                                      B-17

                  such holder, the Exchangeable Share Consideration to which
                  such holder is entitled. If Callco does not exercise the
                  Redemption Call Right in the manner described above, on the
                  Redemption Date the holders of the Exchangeable Shares will be
                  entitled to receive in exchange therefor the Redemption Price
                  otherwise payable by Canco in connection with the redemption
                  of the Exchangeable Shares pursuant to Article 7 of the
                  Exchangeable Share Provisions.

5.3      CHANGE OF LAW CALL RIGHT

         (a)      Acquiror shall have the overriding right (the "Change of Law
                  Call Right"), in the event of a Change of Law, to purchase (or
                  to cause Callco to purchase) from all but not less than all of
                  the holders of Exchangeable Shares (other than any holder of
                  Exchangeable Shares which is an affiliate of Acquiror) all but
                  not less than all of the Exchangeable Shares held by each such
                  holder upon payment by Acquiror or Callco, as the case may be,
                  of an amount per share (the "Change of Law Call Purchase
                  Price") equal to the Exchangeable Share Price applicable on
                  the last Business Day prior to the Change of Law Call Date, in
                  accordance with Section 5.3(c). In the event of the exercise
                  of the Change of Law Call Right by Acquiror or Callco, as the
                  case may be, each holder of Exchangeable Shares shall be
                  obligated to sell all the Exchangeable Shares held by such
                  holder to Acquiror or Callco, as the case may be, on the
                  Change of Law Call Date upon payment by Acquiror to such
                  holder of the Change of Law Call Purchase Price for each such
                  Exchangeable Share.

         (b)      To exercise the Change of Law Call Right, Acquiror or Callco
                  must notify the Transfer Agent of its intention to exercise
                  such right at least 45 days before the date on which Acquiror
                  or Callco intends to acquire the Exchangeable Shares (the
                  "Change of Law Call Date"). If Acquiror or Callco exercises
                  the Change of Law Call Right, then, on the Change of Law Call
                  Date, Acquiror or Callco, as the case may be, will purchase
                  and the holders of Exchangeable Shares will sell all of the
                  Exchangeable Shares then outstanding for a price per share
                  equal to the Change of Law Call Purchase Price.

         (c)      For the purposes of completing the purchase of the
                  Exchangeable Shares pursuant to the exercise of the Change of
                  Law Call Right, Acquiror or Callco, as the case may be, shall
                  deposit or cause to be deposited with the Transfer Agent, on
                  or before the Change of Law Call Date, the Exchangeable Share
                  Consideration representing the total Change of Law Call
                  Purchase Price. Provided that such Exchangeable Share
                  Consideration has been so deposited with the Transfer Agent,
                  on and after the Change of Law Call Date the holders of the
                  Exchangeable Shares shall cease to be holders of the
                  Exchangeable Shares and shall not be entitled to exercise any
                  of the rights of holders in respect thereof (including any
                  rights under the Voting and Exchange Trust Agreement ), other
                  than the right to receive their proportionate part of the
                  total Change of Law Purchase Price payable by Acquiror or
                  Callco, as the case may be, without interest, upon
                  presentation and surrender by the holder of certificates
                  representing the Exchangeable Shares held by such holder and
                  the holder shall on and after the Change of Law Call Date be
                  considered and deemed for all purposes to be the holder of
                  Acquiror Shares to

<PAGE>
                                      B-18

                  which such holder is entitled. Upon surrender to the Transfer
                  Agent of a certificate or certificates representing
                  Exchangeable Shares, together with such other documents and
                  instruments as may be required to effect a transfer of
                  Exchangeable Shares under the Act and the by-laws of Canco and
                  such additional documents and instruments as the Transfer
                  Agent may reasonably require, the holder of such surrendered
                  certificate or certificates shall be entitled to receive in
                  exchange therefor, and the Transfer Agent on behalf of
                  Acquiror or Callco, as the case may be, shall deliver to such
                  holder, the Exchangeable Share Consideration to which such
                  holder is entitled.

                                    ARTICLE 6
                                    AMENDMENT

6.1      PLAN OF ARRANGEMENT AMENDMENT

The Corporation and Acquiror reserve the right to amend, modify and/or
supplement this Plan of Arrangement from time to time at any time prior to the
Effective Time provided that any such amendment, modification or supplement must
be contained in a written document that is (a) agreed to by Acquiror, (b) filed
with the Court and, if made following the Shareholder Meeting, approved by the
Court, and (c) communicated to Shareholders and Optionholders in the manner
required by the Court (if so required).

Any amendment, modification or supplement to this Plan of Arrangement may be
proposed by the Corporation and Acquiror at any time prior to or at the
Shareholder Meeting (provided that Acquiror shall have consented thereto) with
or without any other prior notice or communication, and if so proposed and
accepted by the persons voting at the Shareholder Meeting (other than as may be
required under the Interim Order), shall become part of this Plan of Arrangement
for all purposes.

Any amendment, modification or supplement to this Plan of Arrangement which is
approved or directed by the Court following the Shareholder Meeting shall be
effective only if it is consented to by each of the Corporation and Acquiror,
and if required by the Court or applicable law, it is consented to by the
Shareholders and Optionholders or the holders of the Exchangeable Shares, as the
case may be.

Subject to applicable law, any amendment, modification or supplement to this
Plan of Arrangement may be made following the Effective Time unilaterally by
Acquiror; provided that it concerns a matter which, in the reasonable opinion of
Acquiror, is of an administrative nature required to better give effect to the
implementation of this Plan of Arrangement and is not adverse to the financial
or economic interests of any Shareholders or Optionholders.

<PAGE>

                                   SCHEDULE C

                                LOCK-UP AGREEMENT


         August 12, 2002

         BETWEEN

         NABORS INDUSTRIES LTD., an exempted company, incorporated under the
 laws of Bermuda (hereinafter called "NABORS"); and

<Table>
<S>                                                                  <C>
-----------------------------------------------------------------------------------------------
Name of                                                              (hereinafter called the
Securityholder:                                                      "Securityholder")
-----------------------------------------------------------------------------------------------
</TABLE>


Nabors understands that the Securityholder is the beneficial owner of or
exercises control and direction over that number of common shares (the "RYAN
SHARES") of Ryan Energy Technologies Inc. ("RYAN") and that number of options to
purchase further Ryan Shares (collectively referred to as "OPTIONS") as set
forth below:

<Table>
<S>                                          <C>                                        <C>
------------------------------------------------------------------------------------------------------------
                                               Number of Options                         Registration of
       Number of Ryan Shares                  to Acquire Ryan Shares                      Ryan Shares(1)
------------------------------------------------------------------------------------------------------------

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

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

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

------------------------------------------------------------------------------------------------------------
</Table>
Note:

(1)      Include any nominee or nominee account information, as applicable.

         Nabors and Ryan have entered into an agreement dated August 12, 2002,
as amended from time to time thereafter, (the "ARRANGEMENT AGREEMENT") which
contemplates a plan of arrangement under the Business Corporations Act (Alberta)
pursuant to which each holder of Ryan Shares will receive, in exchange for such
holder's Ryan Shares, $1.85 (Canadian) per Ryan Share payable, at the election
of each holder, in cash or in exchangeable shares of Nabors Exchangeco (Canada)
Inc., in each case as provided in the Arrangement Agreement (the "ARRANGEMENT").

         For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, this document, which includes Appendix "A"
attached, sets forth the agreement (this "AGREEMENT") between the Securityholder
and Nabors relating to the Securityholder

<PAGE>
                                      C-2

exercising the votes attached to all of the Ryan Shares and Options that the
Securityholder beneficially owns, or over which it exercises control or
direction, as set forth above (the "PRESENTLY HELD RYAN SECURITIES"), and any
additional Ryan Shares that the Securityholder may hereafter become the
beneficial owner of or exercise control or direction over (the "AFTER ACQUIRED
RYAN SHARES") (the Presently Held Ryan Securities and the After Acquired Ryan
Shares collectively referred to as the "SUBJECT SECURITIES"), in favour of the
Arrangement. Subject Securities excludes Ryan Shares and Options in respect of
which the Securityholder's only control or direction is pursuant to a proxy
appointing the Securityholder as proxy to vote such securities.

         The Terms and Conditions contained in Appendix "A" are incorporated
into and form a part of this Agreement.

<Table>
<S>                                                  <C>
ACKNOWLEDGED AND AGREED TO:
                                                     ------------------------------------------------
                                                      Name of Securityholder


--------------------------------------------------   ------------------------------------------------
Witness as to the signature of the Securityholder     (Signature of Securityholder)


                                                     ------------------------------------------------
                                                      (address, including postal or zip code)


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

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



                                                     NABORS INDUSTRIES LTD.
                                                     Per:
                                                          -------------------------------------------
                                                           Authorized Signing Officer
</Table>

<PAGE>


                                  APPENDIX "A"
                              TERMS AND CONDITIONS

1.       AGREEMENT TO VOTE

         Subject to the terms and conditions hereof, the Securityholder hereby
irrevocably agrees to exercise all voting rights attached to the Subject
Securities, or cause the registered holder thereof to exercise all voting rights
attached to Subject Securities, in approval of the Arrangement at any meeting of
the Shareholders and Optionholders of Ryan called to consider the Arrangement
and any adjournment thereof (the "Shareholders Meeting") and, with respect to
any other matter that may be put before the Shareholders and Optionholders of
Ryan, as Nabors may direct.

2.       AGREEMENT REGARDING OPTIONS

         The parties acknowledge and agree that Ryan will, in accordance with
the Arrangement Agreement, use all commercially reasonable efforts to enter into
Option releases, in a form approved by Nabors, acting reasonably, with the
Securityholder in respect of his or her Options, pursuant to which Ryan and the
Securityholder agree that, upon the Arrangement becoming effective, the
Securityholder will receive from Ryan, in consideration of the termination of
all (or the Securityholder's agreement not to exercise) the Securityholder's
unexercised Options the greater of: (iv) the positive difference, if any,
between the Per Share Price (as defined in the Arrangement Agreement) and the
exercise price of each Option for each Ryan Share subject to issuance upon the
exercise of such Options regardless of the vesting of those Options under Ryan's
stock option plan and/or the agreements governing those Options; and (v) $0.10
for each Ryan Share subject to such issuance. The parties further acknowledge
and agree that, in such case, Ryan will make appropriate withholdings of taxes
and other applicable source deductions from any such payments made to the
Securityholder as required by applicable law.

3.       OPTION TO PURCHASE

         The Securityholder hereby grants to Nabors, exercisable at any time
after the Trigger Event and on or before 120 days following the date of this
Agreement, an irrevocable option to purchase the Ryan Shares for the amount
equal to $1.85 for each Ryan Share by notice of exercise by Nabors to the
Securityholder. Upon such notice, the purchase shall be completed on the 2nd
Business Day (as defined in the Arrangement Agreement) following the delivery of
such notice of exercise. For this purpose, "Trigger Event" means (i) a Fee Event
as set forth in subsections (a), (b), (c), (d) or (f) of the Arrangement
Agreement; (ii) any notice by Ryan to Nabors pursuant to subsection 3.2 (c) of
the Arrangement Agreement or (iii) any Acquisition Proposal as defined in the
Arrangement Agreement is publicly announced or made to the shareholders of Ryan.
Notwithstanding the foregoing, Nabors cannot exercise the foregoing option if it
has breached in any material respect its representations, warranties or
covenants in the Arrangement Agreement or this Agreement. In addition, the
Securityholder may elect, by notice to Nabors by the close of business on the
Business Day (as defined in the Arrangement Agreement) following the delivery of
such notice of exercise, to transfer its Ryan Shares to a Holdco (as defined in
the Plan of Arrangement) and transfer the Holdco Shares (as defined in the Plan
of Arrangement) to Nabors in lieu of its Ryan Shares and in exchange for the
same aggregate purchase price, provided the conditions set forth in Section 2.3
of the Plan of

<PAGE>
                                      -2-

Arrangement are satisfied, to the extent reasonably applicable, on or prior to
and as of the date the purchase is to be completed.

4.       OBLIGATION OF NABORS TO PURCHASE THE SECURITIES

         Nabors agrees to comply with the terms and conditions of the
Arrangement Agreement.

5.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITYHOLDER

         (a)      The Securityholder represents and warrants to Nabors, and
                  acknowledges that Nabors is relying upon such representations
                  and warranties in entering into this Agreement, that:

                  (i)      the Securityholder has good and sufficient power,
                           authority and right to enter into this Agreement and
                           to complete the transactions contemplated hereby;

                  (ii)     assuming the due execution and delivery of this
                           Agreement by Nabors, upon the execution and delivery
                           hereof by the Securityholder, this Agreement shall be
                           a legal, valid and binding obligation of the
                           Securityholder enforceable by Nabors against the
                           Securityholder in accordance with its terms, subject
                           to bankruptcy, insolvency, reorganization, fraudulent
                           transfer, moratorium and other laws relating to or
                           affecting creditors' rights generally and to general
                           principles of equity and the consummation by the
                           Securityholder of the transactions contemplated
                           hereby will not constitute a violation of or default
                           under, or conflict with, any contract, commitment,
                           agreement, arrangement, understanding or restriction
                           of any kind to which the Securityholder is a party or
                           by which the Securityholder is bound;

                  (iii)    the Securityholder is the beneficial owner of or
                           exercises control or direction over the Presently
                           Held Ryan Securities (and the Presently Held Ryan
                           Securities represent all of the Ryan Shares and
                           Options beneficially owned or over which control or
                           direction is exercised by the Securityholder) free
                           and clear of all liens, charges, encumbrances,
                           security interests and other rights of others
                           whatsoever (except in favour of Nabors hereunder) and
                           has good and sufficient power, authority and right to
                           transfer or cause to be transferred the legal and
                           beneficial title to such Ryan Shares to Nabors with
                           good and marketable title thereto;

                  (iv)     neither the Securityholder nor any associate or
                           affiliate (each as defined in the Securities Act
                           (Alberta) (the "ASA")) of the Securityholder is
                           directly or indirectly a party to any contract or
                           agreement with Ryan or any subsidiary thereof,
                           whether written or oral, other than agreements of
                           indemnity, agreements granting the Options to the
                           Securityholder, and employment and related
                           agreements, copies of which have previously been
                           provided to Nabors, nor, to the knowledge of the
                           Securityholders,

<PAGE>
                                      -3-

                           does the Securityholder have, as of the date hereof,
                           any cause of action or other claim (except for
                           accruing remuneration) whatsoever against, or owe any
                           amount to, Ryan or its subsidiaries;

                  (v)      the Securityholder is not a non-resident of Canada
                           within the meaning of the Income Tax Act (Canada);
                           and

                  (vi)     the foregoing representations and warranties will be
                           true, correct and complete on the date of closing of
                           the Arrangement.

         (b)      The Securityholder covenants and agrees with Nabors that so
                  long as the Securityholder is subject to the terms of this
                  Agreement, the Securityholder will not, and will use its
                  commercially reasonable efforts to cause any representatives,
                  affiliates (as defined in the ASA) or advisors it may have not
                  to, directly or indirectly:

                  (i)      solicit, initiate, invite, encourage or continue
                           (including, without limitation, by way of furnishing
                           information) any inquiries or proposals from, or
                           negotiations with, any person, company or other
                           entity other than Nabors or any of its affiliates
                           which constitutes, or may reasonably be expected to
                           lead to (in either case whether in one transaction or
                           a series of transactions): (A) an acquisition from
                           Ryan or its securityholders of any securities of Ryan
                           or its subsidiaries; (B) any acquisition of a
                           substantial amount of assets of any of Ryan or its
                           subsidiaries; (C) any amalgamation, arrangement,
                           merger, or consolidation of any of Ryan or its
                           subsidiaries; or (D) any take-over bid, issuer bid,
                           exchange offer, recapitalization, liquidation,
                           dissolution, reorganization into a royalty trust or
                           income fund or similar transaction involving any of
                           Ryan or its subsidiaries or any other transaction,
                           the consummation of which would or could reasonably
                           be expected to impede, interfere with, prevent or
                           delay the completion of the Arrangement or which
                           would or could reasonably be expected to materially
                           reduce the benefits to Nabors under the Arrangement
                           (any such inquiry or proposal in respect of any of
                           the foregoing being an "RYAN ACQUISITION PROPOSAL");

                  (ii)     enter into or participate in any discussions or
                           negotiations regarding an Ryan Acquisition Proposal,
                           or, except in the ordinary course of business,
                           furnish, or cause to be furnished, to any person
                           (other than Nabors) any information with respect to
                           the business, properties, operations, prospects or
                           conditions (financial or otherwise) of Ryan or any of
                           its subsidiaries or an Ryan Acquisition Proposal or
                           otherwise cooperate in any way with, or assist or
                           participate in, facilitate or encourage, any effort
                           or attempt of any other person to do or seek to do
                           any of the foregoing; or

                  (iii)    take any action that might reasonably be expected to
                           reduce the likelihood of completion of the
                           Arrangement;

<PAGE>
                                      -4-

                  provided that the foregoing shall, in the case of any person
                  who is a director or officer of Ryan, be subject to the
                  fiduciary duties of such person in respect of Ryan and,
                  without limiting the generality of the foregoing, the
                  Securityholder, in the case of a person who is a director of
                  Ryan, shall be entitled to recommend to Shareholders (as
                  defined in the Arrangement Agreement) acceptance of a Superior
                  Proposal (as defined in the Arrangement Agreement) provided
                  that the Securityholder shall remain obligated to vote the
                  Subject Securities pursuant to this Agreement.

         (c)      The Securityholder covenants and agrees with Nabors, so long
                  as the Securityholder is subject to the terms of this
                  Agreement, that:

                  (i)      it shall provide Nabors immediate notice of any
                           additional Ryan Shares that the Securityholder may
                           hereafter become the beneficial owner of or exercise
                           control or direction over;

                  (ii)     it shall not, without the prior consent of Nabors
                           sell, assign, convey or otherwise dispose of any of
                           the Subject Securities (except to an affiliate of the
                           Securityholder, provided that such affiliate agrees
                           to be bound by the terms of this Agreement and
                           provided that the Securityholder remains liable for
                           the performance by such affiliate of all terms and
                           obligations of the Securityholder hereunder); and

                  (iii)    it shall not exercise any statutory rights of dissent
                           or appraisal in respect of any resolution approving
                           the Arrangement, or any aspect thereof and it shall
                           not exercise any shareholder rights or remedies
                           available at common law or pursuant to applicable
                           securities or corporate laws to delay, hinder, upset
                           or challenge the Arrangement.

6.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF NABORS

         Nabors represents and warrants to the Securityholder, and acknowledges
that the Securityholder is relying upon such representations and warranties in
entering into this Agreement, that:

         (a)      it has good and sufficient power, authority and right to enter
                  into this Agreement and to complete the transactions
                  contemplated hereby;

         (b)      upon the due execution and delivery of this Agreement by the
                  Securityholder, this Agreement shall be a legal, valid and
                  binding obligation of Nabors enforceable by the Securityholder
                  against Nabors in accordance with its terms subject to
                  bankruptcy, insolvency, reorganization, fraudulent transfer,
                  moratorium and other laws relating to or affecting creditors'
                  rights generally and to general principles of equity, and the
                  consummation by Nabors of the transactions contemplated hereby
                  will not constitute a violation of or default under, or
                  conflict with, the constating documents of Nabors or any
                  contract, commitment, agreement, arrangement,

<PAGE>
                                      -5-

                  understanding or restriction of any kind to which Nabors is a
                  party or by which Nabors is bound; and

         (c)      the foregoing representations and warranties will be true,
                  correct and complete on the date of closing of the
                  Arrangement.

7.       TERMINATION

         This Agreement may be terminated:

         (a)      at the option of the Securityholder:

                  (i)      upon written notice given by the Securityholder to
                           Nabors, if the Arrangement has not, for any reason
                           whatsoever, become effective by December 15, 2002; or

                  (ii)     upon written notice given by the Securityholder to
                           Nabors, if Nabors has breached or failed to perform
                           any of its covenants or agreements herein contained
                           in a material respect or any of the representations
                           and warranties of Nabors set forth herein are not
                           true and correct in any material respect;

         (b)      at the option of Nabors upon written notice given by Nabors to
                  the Securityholder if Ryan has breached the terms of the
                  Arrangement Agreement;

         (c)      at the option of the Securityholder if the Arrangement
                  Agreement is terminated pursuant to Sections 10.1(a), (d) or
                  (f) of the Arrangement Agreement;

         (d)      at the option of the Securityholder, at any time after 15 days
                  following termination of the Arrangement Agreement pursuant to
                  Sections 10.1(b), (c) or (e) of the Arrangement Agreement; and

         (e)      by the mutual written consent of each of the Securityholder
                  and Nabors.

         In the event of the termination of this Agreement as provided above,
this Agreement shall forthwith become void and of no further force or effect and
there shall be no liability on the part of any party hereto, provided that the
foregoing shall not relieve any party from any liability for any breach of this
Agreement prior to such termination.

8.       DUTY TO DISCLOSE COMPETING TRANSACTIONS

         The Securityholder will promptly (but in no case later than 24 hours)
notify Nabors in writing of the existence of any proposal, discussion,
negotiation or inquiry received by the Securityholder in its capacity as such
regarding any Ryan Acquisition Proposal, and the Securityholder will promptly
communicate to Nabors the terms of any proposal, discussion, negotiation or
inquiry received regarding any Ryan Acquisition Proposal (and promptly provide
to Nabors copies of any written materials received by the Securityholder in its
capacity as such in connection with such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry or
engaging in such discussion or negotiation.

<PAGE>
                                      -6-

         For greater certainty, this Section 8 shall not apply to any person(s)
in his or her fiduciary capacity as a director or officer of Ryan.

9.       NOTICE

         Any notice or other communication required or permitted to be given
hereunder shall be sufficiently given if delivered in person or sent by fax:

         (a)      in the case of the Securityholder, to the address appearing on
                  the second page of this Agreement; or

         (b)      in the case of Nabors to:

                           Nabors Industries, Ltd.
                           c/o The Corporate Secretary Limited
                           Whitepark House
                           White Park Road
                           Bridgetown, Barbados
                           Attention:  Vice-President

                           Fax:     (246) 427-8167

                           With a copy to:

                           Nabors Corporate Services Inc.
                           515 West Greens Road, Suite 1200
                           Houston, Texas 77067
                           Attention:  General Counsel
                           Tel:     (281) 874-0035
                           Fax:     (281) 775-4318

or at such other address as the party to which such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this Section 9.

10.      EXPENSES

         Each party hereto agrees to pay its own expenses incurred in connection
with this Agreement.

11.      PUBLIC DISCLOSURE

         No disclosure of the subject matter of this Agreement shall be made by
the Securityholder or by Nabors except to affiliates and associates of the
Securityholder and to their respective counsel or to any other professional
advisor engaged by them or to their respective counsel or as may be required by
applicable law or regulatory authorities; provided, however, that the foregoing
shall not prevent Nabors or Ryan from disclosing the terms of this Agreement in
any disclosure document required to be delivered by Nabors or Ryan in relation
to the Arrangement, as required under applicable securities legislation and
further provided that this

<PAGE>
                                      -7-

Section 11 shall not apply to any disclosure which a party is advised by legal
counsel is required or advisable to be made by applicable laws, stock exchange
rules or policies of regulatory authorities having jurisdiction.

12.      AMENDMENTS

         This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by Nabors
and the Securityholder.

13.      TIME

         Time shall be of the essence of this Agreement.

14.      SUCCESSORS AND ASSIGNS

         This Agreement shall not be assignable by any party hereto, provided
that Nabors may assign all of the rights and benefits under this Agreement to
any of its affiliates but Nabors shall remain liable to the Securityholder for
the full performance by such affiliate under this Agreement. Subject to the
foregoing, this Agreement shall be binding upon, enure to the benefit of and be
enforceable by the Securityholder and Nabors and their respective successors and
permitted assigns.

15.      REMEDIES

         The Securityholder and Nabors agree that if this Agreement is breached,
or if a breach hereof is threatened, damages may be an inadequate remedy, and,
therefore, without limiting any other remedy available at law or in equity, an
injunction, restraining order, specific performance, and other forms of
equitable relief for damages, or any combination thereof shall be available to
the Securityholder and Nabors.

16.      FURTHER ASSURANCES

         Nabors and the Securityholder shall from time to time and at all times
hereafter at the request of the other party but without further consideration,
do and perform all such further acts, matters and things and execute and deliver
all such further documents, deeds, assignments, agreements, notices and writings
and give such further assurances as shall be reasonably required for the purpose
of giving effect to this Agreement.

17.      GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the Province of Alberta and the parties irrevocably attorn to the
jurisdiction of the courts of the Province of Alberta.

18.      EXECUTION

         This Agreement may be signed in one or more counterparts, by either
original or facsimile execution, which together shall be deemed to constitute
one valid and binding

<PAGE>
                                      -8-

agreement, and delivery of the counterparts may be effected by means of
telecopier among the parties.

19.      SEVERABILITY

         If any term, condition or provision in this Agreement is determined to
be void or unenforceable in whole or in part, such term, condition or provision
shall be severable from all other terms, conditions and provisions hereof and
shall not affect or impair the validity of any other term, condition or
provisions hereof.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>4
<FILENAME>h99572exv5w1.txt
<DESCRIPTION>OPINION OF APPLEBY SPURLING & KEMPE - LEGALITY
<TEXT>
<PAGE>
                                                                     EXHIBIT 5.1


                    [Letterhead of Appleby Spurling & Kempe]


                                                              6th September 2002


Nabors Industries Ltd.
c/o The Corporate Secretary Limited
Whitepark House
White Park Road
Bridgetown, Barbados

Dear Sirs

NABORS INDUSTRIES LTD. (THE "COMPANY")

We have acted as legal counsel to the Company in Bermuda and this opinion is
addressed to you in connection with the filing by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
of a Registration Statement on Form S-3 on 6th September 2002, in relation to
the registration of up to 1,000,000 common shares of par value US$0.001 each
(the "Shares") in the share capital of the Company (the "Registration
Statement").

For the purposes of this opinion we have examined and relied upon the documents
listed, and in some cases defined, in the Schedule to this opinion (the
"Documents").

ASSUMPTIONS

In stating our opinion we have assumed:-

(a)      the authenticity, accuracy and completeness of all Documents submitted
         to us, and such other documents examined by us, as originals, and the
         conformity to authentic original Documents of all Documents submitted
         to us, and such other documents examined by us, as certified,
         conformed, notarised, faxed or photostatic copies;

(b)      that each of the Documents and other such documentation which was
         received by electronic means is complete, intact and in conformity with
         the transmission as sent;

(c)      the genuineness of all signatures on the Documents;

(d)      the authority, capacity and power of each of the persons signing the
         Documents (other than the Company);

(e)      that any representation, warranty or statement of fact or law, other
         than as to the laws of Bermuda, made in any of the Documents is true,
         accurate and complete;

<PAGE>

Nabors Industries Ltd.                  2                       6 September 2002


(f)      that there are no provisions of the laws or regulations of any
         jurisdiction other than Bermuda which would be contravened by the
         execution or delivery of the Subject Agreements or the Registration
         Statement or which would have any implication in relation to the
         opinion expressed herein and that, in so far as any obligation under,
         or action to be taken under, the Registration Statement or the Subject
         Agreements is required to be performed or taken in any jurisdiction
         outside Bermuda such action or obligation will not be illegal by virtue
         of the laws of that jurisdiction;

(g)      that each of the Company or any other party to the Subject Agreements
         is not carrying on investment business in or from within Bermuda under
         the provisions of the Investment Business Act 1998 as amended from time
         to time;

(h)      that the records which were the subject of the Company Search were
         complete and accurate at the time of such search and disclosed all
         information which is material for the purposes of this opinion and such
         information has not since the date of the Company Search been
         materially altered;

(i)      that the records which were the subject of the Litigation Search were
         complete and accurate at the time of such search and disclosed all
         information which is material for the purposes of this opinion and such
         information has not since the date of the Litigation Search been
         materially altered;

(j)      that the Resolutions are in full force and effect, have not been
         rescinded, either in whole or in part, and there is no matter affecting
         the authority of the Directors to enter into the Subject Agreements, or
         to perform their obligations under the Registration Statement not
         disclosed by the Constitutional Documents or the Resolutions, which
         would have any adverse implication in relation to the opinions
         expressed herein;

(k)      that the Subject Agreements will effect and constitute legal, valid and
         binding obligations of the parties thereto, enforceable in accordance
         with its terms under the laws of the Province of Alberta by which they
         are expressed to be governed and that the Company has entered into its
         obligations under the Subject Agreements in good faith for the purpose
         of carrying on its business and that, at the time it did so, there were
         reasonable grounds for believing that the transactions contemplated by
         the Subject Agreements would benefit the Company;

(l)      that the Subject Agreements constitutes the legal, valid and binding
         obligations of the parties thereto, other than the Company, under the
         laws of their jurisdiction of incorporation or jurisdiction of
         formation;

(m)      that the Subject Agreements have been validly authorised, executed and
         delivered by each of the parties thereto, other than the Company, and
         the

<PAGE>
Nabors Industries Ltd.                  3                       6 September 2002


         performance thereof is within the capacity and power of each such party
         thereto and that each such party to which the Company purportedly
         delivered the Subject Agreements has actually received and accepted
         delivery of the Subject Agreements; and

(n)      that as a consequence of the Subject Agreements, the Company will
         receive money or monies worth at least equal to the value of the Shares
         being issued and none of such Shares will be issued for less than the
         par value thereof.

OPINION

Based upon and subject to the foregoing and subject to the reservations set out
below and to any matters not disclosed to us, we are of the opinion that:-

(1)      The Company is an exempted company incorporated with limited liability
         and existing under the laws of Bermuda. The Company possesses the
         capacity to sue and be sued in its own name and is in good standing
         under the laws of Bermuda.

(2)      The Company has taken all necessary corporate action to authorise the
         delivery of the Registration Statement and the registration of the
         Shares pursuant to the Registration Statement.

(3)      The Company has taken all necessary corporate action to authorise the
         issuance of the Shares.

(4)      When issued in accordance with the Resolutions and the Subject
         Agreements, the Shares will be duly and validly issued, fully paid,
         non-assessable shares of the Company.

(5)      The issue by the Company of the Shares will not violate:-

         (a)      any provision of any applicable law of Bermuda, nor, as far as
                  can be ascertained from public record, any regulation or order
                  of any governmental, judicial or public body or authority of
                  or in Bermuda;

         (b)      the Memorandum of Association or Bye-laws of the Company.

(6)      Other than obtaining the consent of the Bermuda Monetary Authority to
         the issue and transfer of the Shares, which consent has been obtained
         there is no registration or filing with, or consent, license, approval,
         declaration, permission, authorisation, exemption or similar instrument
         of, or the taking of any other action by any person in Bermuda which is
         required in connection with the issuance of the Shares.

<PAGE>

Nabors Industries Ltd.                  4                       6 September 2002


(7)      Based solely upon the Company Search and the Litigation Search:

         (i)      no litigation, arbitration or administrative or other
                  proceeding of or before any arbitrator or governmental
                  authority of Bermuda is pending against or affecting the
                  Company or against or affecting any of its properties, rights,
                  revenues or assets; and

         (ii)     no notice to the Registrar of Companies of the passing of a
                  resolution of members or creditors to wind up or the
                  appointment of a liquidator or receiver has been given. No
                  petition to wind up the Company or application to reorganise
                  its affairs pursuant to a Scheme of Arrangement or application
                  for the appointment of a receiver has been filed with the
                  Supreme Court.

(8)      The Company has received an assurance from the Ministry of Finance
         granting an exemption, until 28 March 2016, from the imposition of tax
         under any applicable Bermuda law computed on profits or income or
         computed on any capital asset, gain or appreciation, or any tax in the
         nature of estate duty or inheritance tax, provided that such exemption
         shall not prevent the application of any such tax or duty to such
         persons as are ordinarily resident in Bermuda and shall not prevent the
         application of any tax payable in accordance with the provisions of the
         Land Tax Act 1967 or otherwise payable in relation to land in Bermuda
         leased to the Company. There are, subject as otherwise provided in this
         opinion, no Bermuda taxes, stamp or documentary taxes, duties or
         similar charges now due, or which could in the future become due, in
         connection with the delivery, performance of the Subject Agreements or
         the transactions contemplated thereby and the Company is not required
         by any Bermuda law or regulation to make any deductions or withholdings
         in Bermuda from any payment it may make thereunder.

RESERVATIONS

We have the following reservations:-

(a)      The term "enforceable" as used in this opinion means that there is a
         way of ensuring that each party performs an agreement or that there are
         remedies available for breach.

(b)      We express no opinion as to the availability of equitable remedies such
         as specific performance or injunctive relief, or as to any matters,
         which are within the discretion of the courts of Bermuda in respect of
         any obligations of the Company as set out in the Subject Agreements. In
         particular, we express no opinion as to the enforceability of any
         present or future waiver of any provision of law (whether substantive
         or procedural) or of any right or remedy which might otherwise be
         available presently or in the future under the Subject Agreements.

<PAGE>
Nabors Industries Ltd.                  5                       6 September 2002


(c)      Enforcement of the obligations of the Company under the Subject
         Agreements may be limited or affected by applicable laws from time to
         time in effect relating to bankruptcy, insolvency or liquidation or any
         other laws or other legal procedures affecting generally the
         enforcement of creditors' rights.

(d)      Enforcement of the obligations of the Company may be the subject of a
         statutory limitation of the time within which such proceedings may be
         brought.

(e)      We express no opinion as to any law other than Bermuda law and none of
         the opinions expressed herein relates to compliance with or matters
         governed by the laws of any jurisdiction except Bermuda. This opinion
         is limited to Bermuda law as applied by the Courts of Bermuda at the
         date hereof.

(f)      Where an obligation is to be performed in a jurisdiction other than
         Bermuda, the courts of Bermuda may refuse to enforce it to the extent
         that such performance would be illegal under the laws of, or contrary
         to public policy of, such other jurisdiction.

(g)      Where a person is vested with a discretion or may determine a matter in
         his or its opinion, such discretion may have to be exercised reasonably
         or such an opinion may have to be based on reasonable grounds.

(h)      A Bermuda court may refuse to give effect to any provisions of the
         Subject Agreements in respect of costs of unsuccessful litigation
         brought before the Bermuda court or where that court has itself made an
         order for costs.

(i)      Searches of the Register of Companies at the office of the Registrar of
         Companies and of the Supreme Court Causes Book at the Registry of the
         Supreme Court are not conclusive and it should be noted that the
         Register of Companies and the Supreme Court Causes Book do not reveal:

         (i)      whether an application to the Supreme Court for a winding up
                  petition or for the appointment of a receiver or manager has
                  been prepared but not yet been presented or has been presented
                  but does not appear in the Causes Book at the date and time
                  the Search is concluded;

         (ii)     whether any arbitration or administrative proceedings are
                  pending or whether any proceedings are threatened, or whether
                  any arbitrator has been appointed;

         (iii)    details of matters which have been lodged for filing or
                  registration which as a matter of general practice of the
                  Registrar of Companies would have or should have been
                  disclosed on the public file but have not actually been
                  registered or to the extent that they have been registered
                  have not been disclosed or do not appear in the public records
                  at the date and time the search is concluded;

<PAGE>
Nabors Industries Ltd.                  6                       6 September 2002


         (iv)     details of matters which should have been lodged for
                  registration but have not been lodged for registration at the
                  date the search is concluded; or

         (v)      whether a receiver or manager has been appointed privately
                  pursuant to the provisions of a debenture or other security,
                  unless notice of the fact has been entered in the Register of
                  Charges in accordance with the provisions of the Companies Act
                  1981.

         Furthermore, in the absence of a statutorily defined system for the
         registration of charges created by companies incorporated outside
         Bermuda ("overseas companies") over their assets located in Bermuda, it
         is not possible to determine definitively from searches of the Register
         of Charges maintained by the Registrar of Companies in respect of such
         overseas companies what charges have been registered over any of their
         assets located in Bermuda or whether any one charge has priority over
         any other charge over such assets.

(j)      In order to issue this opinion we have carried out the Company Search
         as referred to in the Schedule to this opinion and have not enquired as
         to whether there has been any change since the date and time such
         search was completed.

(k)      In order to issue this opinion we have carried out the Litigation
         Search as referred to in the Schedule to this opinion and have not
         enquired as to whether there has been any change since the date and
         time such search was completed.

(l)      In paragraph (1) above, the term "good standing" means that the Company
         has received a Certificate of Compliance from the Registrar of
         Companies.

(m)      Any reference to this opinion to being "non-assessable" shall mean to
         fully-paid shares of the Company and subject to any contrary provision
         in any agreement in writing between the Company and the holder of
         shares, that no shareholder shall be obliged to contribute further
         amounts to the capital of the Company, either in order to complete
         payment for their shares, to satisfy claims of creditors of the
         Company, or otherwise; and no shareholder shall be bound by an
         alteration of the Memorandum of Association or Bye-laws of the Company
         after the date on which he became a shareholder, if and so far as the
         alteration requires him to take, or subscribe for additional shares, or
         in any way increase his liability to contribute to the share capital
         of, or otherwise to pay money to the Company.

DISCLOSURE

This opinion is addressed to you solely for your benefit and is neither to be
transmitted to any other person, nor relied upon by any other person or for any
other purpose nor quoted or referred to in any public document nor filed with
any governmental agency or

<PAGE>
Nabors Industries Ltd.                  7                       6 September 2002


person, without our prior written consent. We consent to the filing of this
opinion as an exhibit to the Registration Statement.

This opinion speaks as of its date and is strictly limited to the matters stated
herein and we assume no obligation to review or update this opinion if
applicable law or the existing facts or circumstances should change.

Yours faithfully

/s/ APPLEBY SPURLING & KEMPE


<PAGE>
                                    SCHEDULE


1.       The entries and filings shown in respect of the Company on the file of
         the Company maintained in the Register of Companies at office of the
         Registrar of Companies in Hamilton, Bermuda, as revealed by a search
         completed on 3rd September, 2002 (the "Company Search").

2.       The entries and filings shown in respect of the Company in the Supreme
         Court Causes Book maintained at the Registry of the Supreme Court in
         Hamilton, Bermuda, as revealed by a search completed on 3rd September,
         2002 in respect of the Company (the "Litigation Search").

         (The Company Search and the Litigation Search are together referred to
         as the "Searches").

3.       A copy of the final Registration Statement on Form S-3, pursuant to
         which the Company will register 1,000,000 common shares of par value
         US$0.001 each in the share capital of the Company.

4.       Certified copies of the Certificate of Incorporation, Memorandum of
         Association and Bye-laws for the Company (collectively referred to as
         the "Constitutional Documents").

5.       A certified copy of the minutes of the Board of Directors of the
         Company effective 17th July, 2002 and copies of the minutes of the
         Board of Director's meeting held 24th June 2002 (the "Resolutions").

6.       A certified copy of the "Foreign Exchange Letter", dated 11 December,
         2001 and a letter of permission dated 15 April 2002, issued by the
         Bermuda Monetary Authority, Hamilton Bermuda in relation to the
         Company.

7.       A certified copy of the "Tax Assurance", dated 7 January, 2002, issued
         by the Registrar of Companies for the Minister of Finance in relation
         to the Company.

8.       A Certificate of Compliance, dated 3rd September, 2002 issued by the
         Ministry of Finance in respect of the Company.

9.       A copy of the executed Support Agreement dated as of 26 April, 2002,
         between the Nabors Industries, Inc., Nabors ExchangeCo (Canada) Inc.
         and 3064297 Novia Scotia Company (the "Support Agreement").

10.      A copy of the executed Voting and Exchange Trust Agreement dated as of
         26 April, 2002, between Nabors Industries, Inc., Nabors ExchangeCo
         (Canada) Inc.

<PAGE>

         and Computershare Trust Company of Canada (the "Voting and Exchange
         Trust Agreement").

11.      An executed copy of the Acknowledgement of Novation of the Support
         Agreement and the Voting and Exchange Trust Agreement executed by the
         Company, and addressed to Nabors Industries, Inc., Nabors ExchangeCo
         (Canada) Inc. and Computershare Trust Company of Canada (the
         "Acknowledgement of Novation").

12.      An executed copy of the Arrangement Agreement dated 12 August 2002
         entered into between the Company and Ryan Energy Technologies Inc. (the
         "Arrangement Agreement").

         The Support Agreement, the Voting and Exchange Trust Agreement, the
         Acknowledgement of Novation and the Arrangement Agreement are
         collectively referred to in this opinion as the "Subject Agreements".

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>5
<FILENAME>h99572exv8w1.txt
<DESCRIPTION>OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM
<TEXT>
<PAGE>


                                                                     EXHIBIT 8.1



            [Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]


                                                              September 6, 2002



Nabors Industries Ltd.
c/o The Corporate Secretary Limited
Whitepark House
White Park Road
Bridgetown, Barbados

Gentlemen:

                  We have acted as special tax counsel to Nabors Industries
Ltd., a Bermuda exempted company ("Nabors"), in connection with the preparation
and filing of the registration statement on Form S-3 (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended, on September 6, 2002, which includes the
prospectus (the "Prospectus"), with respect to the registration of up to
1,000,000 shares of common shares, par value US $.001 per share, of Nabors,
issuable upon exchange of exchangeable shares, without par value ("Exchangeable
Shares") of Nabors Exchangeco (Canada) Inc., a Canadian corporation
("Exchangeco"). This opinion is being furnished to you at your request.

                  In connection with this opinion, we have examined the
Registration Statement and such other documents and corporate records as we have
deemed necessary or appropriate in order to enable us to render the opinion
below. We have relied upon statements, representations, and covenants made by
Nabors, Exchangeco, 3064297 Nova Scotia Company, a Nova Scotia unlimited
liability company, and Ryan Energy Technologies Inc., a Canadian corporation,
and we have assumed that such statements and representations are true without
regard to any qualifications as to knowledge and belief. For purposes of this
opinion, we have assumed (i) the validity and accuracy of the documents and
corporate records that we have examined and the facts and representations


<PAGE>
Nabors Industries Ltd.
September 6, 2002
Page 2

concerning the Exchangeable Shares that have come to our attention during our
engagement and (ii) the genuineness of all signatures, the legal capacity of all
natural persons, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
documents. Our opinion is conditioned upon, among other things, the initial and
continuing truth, accuracy, and completeness of the items described above on
which we are relying.

                  In rendering our opinion, we have considered the applicable
provisions of the Internal Revenue Code of 1986, as amended, Treasury Department
regulations promulgated thereunder, pertinent judicial authorities, interpretive
rulings of the Internal Revenue Service (the "Service"), and such other
authorities as we have considered relevant. It should be noted that statutes,
regulations, judicial decisions, and administrative interpretations are subject
to change at any time (possibly with retroactive effect). In addition, it should
be noted that legislation has been introduced which, if enacted in its present
form, could materially change the opinion set forth below. Moreover, the United
States Treasury Department is currently studying transactions such as the
reorganization of Nabors and, as a result, changes in statutes, regulations,
judicial decisions, and administrative interpretations may occur, possibly with
retroactive effect, which could affect the opinion set forth below. A change in
the authorities or the truth, accuracy, or completeness of any of the facts,
information, documents, corporate records, covenants, statements,
representations, or assumptions on which our opinion is based could affect our
conclusions.

                  Although the discussion in the Prospectus under the caption
"Income Tax Considerations - Material United States Federal Income Tax
Considerations" (the "Discussion") does not purport to discuss all possible
United States federal income tax consequences of the ownership and disposition
of Exchangeable Shares, we are of the opinion that, based solely upon and
subject to the limitations, qualifications, exceptions, and assumptions set
forth herein and in the Discussion, such Discussion constitutes, in all material
respects, a fair and accurate summary under current law of the anticipated
material United States federal income tax consequences of the ownership and
disposition of Exchangeable Shares to certain holders generally.

                  Except as expressly set forth above, we express no other
opinion, including any opinion as to the United States federal, state, local,
foreign, or other tax consequences of the ownership and disposition of
Exchangeable Shares. Further, there




<PAGE>

Nabors Industries Ltd.
September 6, 2002
Page 3


can be no assurances that the opinion expressed herein will be accepted by the
Service or, if challenged, by a court. The opinion is expressed as of the date
hereof, and we are under no obligation to supplement or revise our opinion to
reflect any changes (including changes that have retroactive effect) (i) in
applicable law or (ii) in any fact, information, document, corporate record,
covenant, statement, representation, or assumption stated herein that becomes
untrue, incorrect, or incomplete.

                  This letter is furnished to you for use in connection with the
registration of the Exchangeable Shares, as described in the Registration
Statement, and is not to be used, circulated, quoted, or otherwise referred to
for any other purpose without our express written permission. We hereby consent
to the filing of this opinion as an exhibit to the Registration Statement and to
the use of our name under the captions "Income Tax Considerations - Material
United States Federal Income Tax Considerations" and "Legal Matters" in the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the SEC
thereunder.


                                    Very truly yours,

                                    /s/ Skadden, Arps, Slate, Meagher & Flom LLP


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.2
<SEQUENCE>6
<FILENAME>h99572exv8w2.txt
<DESCRIPTION>OPINION OF APPLEBY SPURLING & KEMPE - TAX MATTERS
<TEXT>
<PAGE>
                                                                     EXHIBIT 8.2

                    [Letterhead of Appleby Spurling & Kempe]


                                                              6th September 2002

Nabors Industries Ltd.
c/o The Corporate Secretary Limited
Whitepark House
White Park Road
Bridgetown, Barbados

Dear Sirs

NABORS INDUSTRIES LTD. (THE "COMPANY")

We have acted as legal counsel in Bermuda to the Company and this opinion is
addressed to you in connection with the filing by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
of a Registration Statement on Form S-3 on 6th September 2002 in relation to the
registration of up to 1,000,000 Common Shares of par value US$0.001 each (the
"Shares") in the share capital of the Company (the "Registration Statement").

For the purposes of this opinion we have examined and relied upon the documents
listed, and in some cases defined, in the Schedule to this opinion (the
"Documents").

Assumptions

In stating our opinion we have assumed:

(a)      the authenticity, accuracy and completeness of all Documents submitted
         to us, and such other documents examined by us, as originals, and the
         conformity to authentic original Documents of all Documents submitted
         to us, and such other documents examined by us, as certified,
         conformed, notarised, faxed or photostatic copies;

(b)      that each of the Documents and other such documentation which was
         received by electronic means is complete, intact and in conformity with
         the transmission as sent;

(c)      the genuineness of all signatures on the Documents;

(d)      the authority, capacity and power of each of the persons signing the
         Documents (other than the Company);

(e)      that any representation, warranty or statement of fact or law, other
         than as to the laws of Bermuda, made in any of the Documents is true,
         accurate and complete;




<PAGE>
Nabors Industries Ltd.                -2-                       6 September 2002



Opinion

Based upon and subject to the foregoing and subject to the reservations set out
below and to any matters not disclosed to us, we are of the opinion that the
statements in the Registration Statement under the caption "Bermuda Income Tax
Considerations" in so far as they purport to describe the provisions of the laws
of Bermuda referred to therein, are accurate and correct in all material
respects.

Reservation

We express no opinion as to any law other than Bermuda law and none of the
opinions expressed herein relates to compliance with or matters governed by the
laws of any jurisdiction except Bermuda. This opinion is limited to Bermuda law
as applied by the Courts of Bermuda at the date hereof.

Disclosure

This opinion is addressed to you solely for your benefit and is neither to be
transmitted to any other person, nor relied upon by any other person or for any
other purpose nor quoted or referred to in any public document nor filed with
any governmental agency or person, without our prior written consent. We consent
to the filing of this opinion as an exhibit to the Registration Statement.

This opinion speaks as of its date and is strictly limited to the matters stated
herein and we assume no obligation to review or update this opinion if
applicable law or the existing facts or circumstances should change.

Yours faithfully

/s/ APPLEBY SPURLING & KEMPE


<PAGE>


                                    SCHEDULE


1.       A copy of the Registration Statement on Form S-3, pursuant to which the
         Company will register up to 1,000,000 Common Shares of par value
         US$0.001 each in the share capital of the Company.

2.       Certified copies of the Certificate of Incorporation, Memorandum of
         Association and Bye-laws for the Company (collectively referred to as
         the "Constitutional Documents").

3.       Certified copy of the minutes of meetings of the Board of Directors of
         the Company held 17th July, 2002 (the "Resolutions").

4.       A certified copy of the "Foreign Exchange Letter", dated 11 December,
         2001 and a letter of permission dated 15 April, 2002, issued by the
         Bermuda Monetary Authority, Hamilton Bermuda in relation to the
         Company.

5.       A certified copy of the "Tax Assurance", dated 7 January, 2002 issued
         by the Registrar of Companies for the Minister of Finance in relation
         to the Company.

6.       A Certificate of Compliance, dated 3rd September, 2002 issued by the
         Ministry of Finance in respect of the Company.

7.       The entries and filings shown in respect of the Company on the file of
         the Company maintained in the Register of Companies at office of the
         Registrar of Companies in Hamilton, Bermuda, as revealed by a search on
         3rd September 2002 (the "Company Search").

8.       The entries and filings shown in respect of the Company in the Supreme
         Court Causes Book maintained at the Registry of the Supreme Court in
         Hamilton, Bermuda, as revealed by a search on 3rd September 2002 in
         respect of the Company (the "Litigation Search").



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.3
<SEQUENCE>7
<FILENAME>h99572exv8w3.txt
<DESCRIPTION>OPINION OF STIKEMAN ELLIOTT - TAX MATTERS
<TEXT>
<PAGE>
                                                                     EXHIBIT 8.3


                          [STIKEMAN ELLIOTT LETTERHEAD]


                                                               September 6, 2002

Nabors Industries Ltd.
c/o The Corporate Secretary Limited
Whitepark House
White Park Road
Bridgetown, Barbados



Ladies and Gentlemen:

         We have acted as Canadian tax counsel to Nabors Industries Ltd., a
Bermuda exempted company ("Nabors"), in connection with the registration of the
Shelf Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), on September 6, 2002, with respect
to the registration of up to 1,000,000 Nabors common shares par value US $.001
per share. In addition, Ryan Energy Technologies Inc. ("Ryan") has prepared, and
we have reviewed, a draft Management Information Circular and Proxy Statement
(the "Proxy Statement"), the final version of which is expected to be dated on
or about September 6, 2002. The Proxy Statement relates to the proposed
acquisition of Ryan by Nabors upon the terms and conditions set forth in the
Arrangement Agreement dated as of August 12, 2002, and the exhibits thereto (the
"Arrangement Agreement") implemented by means of an exchange of Ryan shares
(other than shares held by holders who perfected their dissent rights) for cash,
exchangeable shares of Nabors Exchangeco (Canada) Inc. ("Exchangeable Shares"),
or a combination of cash and Exchangeable Shares, pursuant to a plan of
arrangement in substantially the form set forth as Schedule B to the Arrangement
Agreement (the "Plan of Arrangement").

         In connection with this opinion, we have examined the Registration
Statement, the Proxy Statement, the Arrangement Agreement and such other
documents and corporate records as we have deemed necessary or appropriate in
order to enable us to render the opinion below, including a certificate of a
duly qualified officer of Nabors as to certain factual matters. For purposes of
this opinion, we have assumed (i) the validity and accuracy of the documents and
corporate records that we have examined and the facts and representations
concerning the registration of Nabors common shares that have come to our
attention during our engagement, (ii) the genuineness of all signatures, the
legal



<PAGE>
                                                                               2


capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such documents, (iii) that the final version of the Proxy Statement that is
mailed to Ryan shareholders and optionholders will be substantially the same as
the draft Proxy Statement that we have reviewed, and (iv) that the issuance of
Nabors common shares pursuant to the Registration Statement will be consummated
in the manner described in the Registration Statement.

         This opinion is based on the current provisions of the Income Tax Act
(Canada) and the regulations thereunder, the current provisions of the
Convention Between the United States of America and Canada with Respect to Taxes
on Income and on Capital, signed September 26, 1980, as amended, and our
understanding of the current published administrative practices of the Canada
Customs and Revenue Agency. This opinion takes into account all specific
proposals to amend the Income Tax Act (Canada) and the regulations that have
been publicly announced by the Minister of Finance (Canada) prior to the date
hereof and assumes that all of these proposed amendments will be enacted in
their present form. No assurances can be given that any proposed amendments will
be enacted in the form proposed, if at all. Except for the foregoing, this
opinion does not take into account or anticipate any changes in law, whether by
legislative, administrative or judicial decision or action, nor does it take
into account provincial, territorial or foreign income tax legislation or
considerations, which may differ from the Canadian federal income tax
considerations described in the Registration Statement. In addition, we have
assumed that all parties to the Arrangement Agreement have acted, and will act,
in accordance with the terms of such Arrangement Agreement and that the
Arrangement Agreement was consummated pursuant to the terms and conditions set
forth therein without the waiver or modification of any such terms and
conditions.

         Based upon and subject to the foregoing, the confirmation by Nabors of
the accuracy of certain assumptions and representations underlying this opinion,
and the qualifications, limitations and assumptions contained in the portion of
the Registration Statement captioned "Income Tax Considerations - Canadian
Federal Income Tax Considerations", we hereby confirm, as to matters of Canadian
federal income tax law, our opinion contained in the Registration Statement
under the caption "Income Tax Considerations - Canadian Federal Income Tax
Considerations".

         We have not considered and render no opinion on any aspect of law other
than as expressly set forth above.

         This opinion is furnished to you solely for use in connection with the
Registration Statement and may not be used for any other purpose without our
prior written consent. We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
captions "Income Tax Considerations - Canadian Federal Income Tax
Considerations" and "Legal Matters" in the Registration Statement. In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act.

                                                     Yours very truly,

                                                     /s/ Stikeman Elliott


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15.1
<SEQUENCE>8
<FILENAME>h99572exv15w1.txt
<DESCRIPTION>AWARENESS LETTER
<TEXT>
<PAGE>
                                                                    EXHIBIT 15.1







September 6, 2002

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Commissioners:

We are aware that our report dated April 17, 2002, except for Notes 1 and 2, as
to which the date is April 29, 2002, on our review of the interim consolidated
financial information of Nabors Industries, Inc. (Nabors Delaware) as of and for
the period ended March 31, 2002 and included in the Nabors Delaware's quarterly
report on Form 10-Q for the quarter then ended is incorporated by reference in
this Registration Statement.

We are also aware that our report dated July 17, 2002, except for Note 11, as to
which the date is August 8, 2002, on our review of the interim consolidated
financial information of Nabors Industries Ltd. (the Company) as of and for the
period ended June 30, 2002 included in the Company's quarterly report on Form
10-Q for the quarter then ended is incorporated by reference in this
Registration Statement.

Very truly yours,


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>9
<FILENAME>h99572exv23w1.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in this Registration on Form
S-3 of our report dated January 23, 2002, except for Note 16, as to which the
date is March 18, 2002, and Notes 1, 2, 7, 12 and 15, as to which the date is
August 20, 2002, relating to the consolidated financial statements, which is
included in Nabors Industries Ltd.'s Current Report on Form 8-K dated August 20,
2002. We also consent to the incorporation by reference of our report dated
January 23, 2002 relating to the financial statement schedule, which appears in
Nabors Industries, Inc.'s Annual Report on Form 10-K for the year ended December
31, 2001. We also consent to the reference to us under the "Independent
Accountants" in such Registration Statement.


/s/ PricewaterhouseCoopers LLP

Houston, Texas
September 6, 2002


</TEXT>
</DOCUMENT>
</SUBMISSION>
