Proration of Merger Consideration

I wanted to better understand the mechanics behind merger consideration proration. Saw an example below but need the original terms to make sure I fully understand it –

EXAMPLES OF PRORATION ADJUSTMENTS OF MERGER CONSIDERATION

Set forth below are illustrative calculations of the effect of the merger consideration proration provisions of the merger agreement. Defined terms used herein shall have the meanings ascribed to them in the merger agreement, as amended, and it is important that you refer to these defined terms when reviewing these examples. The examples below have assumed that up to a maximum of 42 million Precision trust units will be issuable in connection with the merger.

1) Prior to the amendment to the Merger Agreement, if all the Grey Wolf shareholders made a valid cash election, there were no dissenting shareholders and none of the Grey Wolf Convertible Notes converted, each Cash Election Share would have been entitled to the following:

• a cash amount equal to

— $9.02 (the Per Share Cash Consideration) multiplied by

— 0.6845, which is the resulting fraction with

• $1.115 billion as the numerator (the difference between the Available Cash Consideration and the Dissenting Cash Consideration) and

• $1.629 billion as the denominator (the Elected Cash Consideration),

meaning that each Cash Election Share would have been entitled to $6.17 in cash, and

• a number of Precision trust units equal to

— 0.4225, the Exchange Ratio, multiplied by

— 0.3155, which is 1 minus the fraction calculated above of 0.6845,

meaning that each Cash Election Share would have been entitled to 0.1333 of a Precision trust unit, for a total of $6.17 in cash plus 0.1333 of a Precision trust unit for each share of Grey Wolf common stock.

2) After the amendment to the Merger Agreement, if all the Grey Wolf shareholders make a valid cash election, there are no dissenting shareholders and none of the Grey Wolf Convertible Notes have converted, each Cash Election Share would be entitled to the following:

• a cash amount equal to

— $9.02 (the Per Share Cash Consideration) multiplied by

— 0.5543, which is the resulting fraction with

• $1.115 billion as the numerator (the difference between the Available Cash Consideration and the Dissenting Cash Consideration) and

• $2.0115 billion as the denominator (the Elected Cash Consideration),

meaning that each Cash Election Share would be entitled to $5.00 in cash, and

• a number of Precision trust units equal to

— 0.4225, the Exchange Ratio, multiplied by

— 0.4457, which is 1 minus the fraction calculated above of 0.5543,

meaning that each Cash Election Share would be entitled to 0.1883 of a Precision trust unit, for a total of $5.00 in cash plus 0.1883 of a Precision trust unit for each share of Grey Wolf common stock.

3) Prior to and after the amendment to the Merger Agreement, if all the Grey Wolf shareholders make a valid unit election, there are no dissenting shareholders and none of the Grey Wolf Convertible Notes have converted, each Unit Election Share would be entitled to the following:

• a cash amount equal to

— $732.55 million (the difference between the No Election Available Cash and the No Election Value) divided by

— 180.6 million (which would be the number of Unit Election Shares),

meaning that each Unit Election share would be entitled to $4.06 in cash, and

• a number of Precision trust units equal to

— 0.4225, the Exchange Ratio, multiplied by

— 0.5499, which is 1 minus the quotient obtained by dividing the amount of cash payable to each Unit Election Share, which would be $4.06, by the Per Share Cash Consideration, which would be $9.02,

meaning that each Unit Election Share would be entitled to 0.2323 of a Precision trust unit, for a total of $4.06 in cash plus 0.2323 of a Precision trust unit for each share of Grey Wolf common stock.

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