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S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
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                           (iii) In case the Company shall fix a record date for
                  the making of a  distribution  to all holders of shares of its
                  Common  Stock (A) of shares of any class other than its Common
                  Stock or (B) of evidences of its indebtedness or (C) of assets
                  (excluding  cash  dividends  or   distributions   (other  than
                  extraordinary cash dividends or distributions),  and dividends
                  or distributions  referred to in Subsection 7(a)(i) hereof) or
                  (D)  of  rights,   options,   warrants   or   convertible   or
                  exchangeable  securities  (excluding  those  rights,  options,
                  warrants or convertible or exchangeable securities referred to
                  in  Section  7(a)(ii)  hereof),  then in each  such  case  the
                  Exercise  Price  in  effect  immediately  thereafter  shall be
                  determined  by  multiplying   the  Exercise  Price  in  effect
                  immediately  prior  thereto  by a  fraction,  of which (x) the
                  numerator  shall be the total number of shares of Common Stock
                  outstanding  on such  record  date  multiplied  by the Current
                  Market  Price (as such term is  defined  in  Section  7(a)(iv)
                  hereof) per share on such record date, less the aggregate fair
                  market  value as  determined  in good  faith  by the  Board of
                  Directors  of the  Company  of said  shares  or  evidences  of
                  indebtedness  or  assets  or  rights,  options,   warrants  or
                  convertible or exchangeable securities so distributed,  and of
                  which (y) the denominator  shall be the total number of shares
                  of Common Stock  outstanding on such record date multiplied by
                  such Current Market Price per share.  Such adjustment shall be
                  made successively whenever such a record date is fixed. In the
                  event  that such  distribution  is not so made,  the  Exercise
                  Price then in effect shall be readjusted to the Exercise Price
                  which would then be in effect if such record date had not been
                  fixed.

                           (iv) For the purpose of any computation under Section
                  7(a)(ii) or 7(a)(iii)  hereof,  the "Current Market Price" per
                  share at any date (the "Computation  Date") shall be deemed to
                  be the average of the daily Closing Prices of the Common Stock
                  for twenty (20)  consecutive  Trading  Days ending the Trading
                  Day  immediately  preceding the  Computation  Date;  provided,
                  however,  that if  there  shall  have  occurred  prior  to the
                  Computation  Date any event  described in Subsection  7(a)(i),
                  7(a)(ii) or 7(a)(iii)  which shall have become  effective with
                  respect to market transactions at any time (the "Market-Effect
                  Date") on or within such 20-day period,  the Closing Price for
                  each Trading Day  preceding  the  Market-Effect  Date shall be
                  adjusted,   for  purposes  of  calculating  such  average,  by
                  multiplying such Closing Price by a fraction, of which (A) the
                  numerator shall be the Exercise Price as in effect immediately
                  prior to the Computation Date and of which (B) the denominator
                  shall be the Exercise Price as in effect  immediately prior to
                  the  Market-Effect  Date, it being understood that the purpose
                  of this  proviso is to ensure that the effect of such event on
                  the  market  price of the  Common  Stock  shall,  as nearly as
                  possible,  be eliminated  in order that the  distortion in the
                  calculation of the Current Market Price may be minimized.

                  (b) No  Adjustments  to Exercise  Price.  No adjustment in the
         Exercise Price in accordance  with the  provisions of Section  7(a)(i),
         7(a)(ii) or 7(a)(iii)  hereof need be made unless such adjustment would
         amount to a change  of at least 1% in such  Exercise  Price;  provided,
         however,  that the amount by which any adjustment is not made by reason
         of the provisions of this Section 7(b) shall be carried forward and

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