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KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
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The net proceeds from this  transaction  were used to retire $325,000 of Shawmut
Term Debt, to make additional investments in Servicios WellTech of approximately
$1,000,000 and for additional vendor payments.

         Letter of Credit - In October,  November  and  December  1995,  Shawmut
issued,  under WellTech's  revolving credit facility,  an additional $300,000 in
letters of credit  making the total  outstanding  $1,380,000.  These  letters of
credit provide  collateral for the payment of the  self-insured  retention under
certain of WellTech's  liability insurance policies.  The additional $300,000 is
the complete collateral requirement for WellTech's 95-96 policy year.

         During  1995,  WellTech  was  not in  compliance  with  certain  of the
restrictive  covenants of its Loan Agreement  with Shawmut and received  waivers
for such events of non compliance.  On January 19, 1996, WellTech entered into a
credit  agreement with a new lender,  the CIT  Group/Credit  Finance  ("CIT") to
refinance  certain  existing  indebtedness,  which enabled WellTech to repay all
indebtedness to Shawmut  (approximately $5 million).  The new indebtedness is in
the form of a three year revolving credit arrangement and a three year term loan
and is cross guaranteed by Key and cross  collateralized  by their assets.  Upon
consummation of the merger,  the new indebtedness will be the obligation of Key,
as survivor of the merger.  There are no restrictive  financial  covenants until
the merger is completed.  However, failure to consummate the merger by April 30,
1996,  may,  at the option of CIT,  constitute  an event of default if  WellTech
fails to refinance  this credit  facility by July 31,  1996,  or if Key fails to
continue to operate WellTech pursuant to the Interim Operations  Agreement until
such refinancing is completed.

(3)  Equity Transactions

         On March 31,  1995,  WellTech  issued  5,470  shares of common stock in
exchange for certain  well  servicing  assets.  This  transaction  was valued at

(4)  Investments in Unconsolidated Well Servicing Operations

         Servicios WellTech - In April 1995,  Servicios  WellTech,  S.A. ("SWT")
was recapitalized and WellTech's  ownership  interest increased from 50% to 63%.
Consequently, effective April 1, 1995, WellTech changed its method of accounting
for SWT from the equity method to consolidation with a minority interest.