Document:

EX-10.3

 Exhibit 10.3 

TRANSITION SERVICES AGREEMENT 

BETWEEN 
 CHESAPEAKE ENERGY
CORPORATION 
 (as service provider) 

and 
 CHESAPEAKE OILFIELD
OPERATING, L.L.C. 
 (to be converted into SEVENTY SEVEN ENERGY INC.) 

(as service receiver) 
 Dated
June 25, 2014 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page No.	 
		
	 ARTICLE I DEFINITIONS
	  	 	1	  
	 Section 1.1
	 	 Definitions
	  	 	1	  
		
	 ARTICLE II SERVICES
	  	 	2	  
	 Section 2.1
	 	 Services
	  	 	2	  
	 Section 2.2
	 	 Service Coordinators
	  	 	3	  
	 Section 2.3
	 	 Additional Services
	  	 	3	  
	 Section 2.4
	 	 Third Party Services
	  	 	3	  
	 Section 2.5
	 	 Standard of Performance; Limitation of Liability
	  	 	3	  
	 Section 2.6
	 	 Service Boundaries and Scope
	  	 	4	  
	 Section 2.7
	 	 Cooperation
	  	 	5	  
	 Section 2.8
	 	 Transitional Nature of Services; Changes
	  	 	5	  
	 Section 2.9
	 	 Access
	  	 	5	  
		
	 ARTICLE III SERVICE CHARGES
	  	 	5	  
	 Section 3.1
	 	 Compensation
	  	 	5	  
		
	 ARTICLE IV PAYMENT
	  	 	5	  
	 Section 4.1
	 	 Payment
	  	 	5	  
	 Section 4.2
	 	 Payment Disputes
	  	 	6	  
	 Section 4.3
	 	 Review of Charges; Error Correction
	  	 	6	  
	 Section 4.4
	 	 Taxes
	  	 	6	  
	 Section 4.5
	 	 Records
	  	 	7	  
		
	 ARTICLE V TERM
	  	 	7	  
	 Section 5.1
	 	 Term
	  	 	7	  
		
	 ARTICLE VI DISCONTINUATION OF SERVICES
	  	 	7	  
	 Section 6.1
	 	 Discontinuation of Services
	  	 	7	  
	 Section 6.2
	 	 Procedures Upon Discontinuation or Termination of Services
	  	 	8	  
		
	 ARTICLE VII DEFAULT
	  	 	8	  
	 Section 7.1
	 	 Termination for Default
	  	 	8	  
		
	 ARTICLE VIII INDEMNIFICATION AND WAIVER
	  	 	8	  
	 Section 8.1
	 	 Waiver of Consequential Damages
	  	 	8	  
	 Section 8.2
	 	 Services Received
	  	 	9	  
	 Section 8.3
	 	 Express Negligence
	  	 	10	  
		
	 ARTICLE IX CONFIDENTIALITY
	  	 	10	  
	 Section 9.1
	 	 Confidentiality
	  	 	10	  
		
	 ARTICLE X FORCE MAJEURE
	  	 	10	  
	 Section 10.1
	 	 Performance Excused
	  	 	10	  
	 Section 10.2
	 	 Notice
	  	 	11	  
	 Section 10.3
	 	 Cooperation
	  	 	11	  

  
 i 

							
		
	 ARTICLE XI MISCELLANEOUS
	  	 	11	  
	 Section 11.1
	 	 Entire Agreement
	  	 	11	  
	 Section 11.2
	 	 Binding Effect; No Third-Party Beneficiaries; Assignment
	  	 	11	  
	 Section 11.3
	 	 Amendment; Waivers
	  	 	11	  
	 Section 11.4
	 	 Notices
	  	 	11	  
	 Section 11.5
	 	 Counterparts
	  	 	12	  
	 Section 11.6
	 	 Severability
	  	 	12	  
	 Section 11.7
	 	 Governing Law
	  	 	12	  
	 Section 11.8
	 	 Performance
	  	 	12	  
	 Section 11.9
	 	 Relationship of Parties
	  	 	12	  
	 Section 11.10
	 	 Regulations
	  	 	12	  
	 Section 11.11
	 	 Construction
	  	 	12	  
	 Section 11.12
	 	 Effect if Separation does not Occur
	  	 	13	  

 Schedule A - Schedule of Services and Fees 

Exhibit 4.1 - Payment Instructions 

  
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 TRANSITION SERVICES AGREEMENT 

This TRANSITION SERVICES AGREEMENT (together with the Schedule hereto, this “Agreement”) is entered into as of June 25, 2014,
by and between Chesapeake Energy Corporation, an Oklahoma corporation (“CHK”), and Chesapeake Oilfield Operating, L.L.C. (to be converted into Seventy Seven Energy Inc., an Oklahoma corporation) (“SSE”). 

WHEREAS, the Board of Directors of CHK has determined that it would be appropriate and desirable for CHK to distribute (the
“Distribution”) on a pro rata basis to the holders of outstanding shares of common stock, par value $0.01 per share, of CHK all of the outstanding shares of common stock, par value $0.01 per share, of SSE owned by CHK; 

WHEREAS, in order to effectuate the foregoing, CHK and SSE have entered into a Master Separation Agreement, dated as of the date hereof (the
“Master Separation Agreement”), which provides, among other things, upon the terms and subject to the conditions thereof, for the separation of the respective businesses of CHK and SSE and the Distribution, and the execution and delivery
of certain other agreements, including this Agreement, in order to facilitate and provide for the foregoing; and 
 WHEREAS, in order to
provide for an orderly transition under the Master Separation Agreement, it will be advisable for CHK to provide to SSE certain services described herein for a transitional period. 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 

ARTICLE I 
 DEFINITIONS 

Section 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings set forth below: 

“Additional Services” has the meaning set forth in Section 2.3. 

“Agreement” has the meaning set forth in the preamble. 

“CHK” has the meaning set forth in the preamble. 

“Distribution” has the meaning set forth in the recitals. 

“Force Majeure Event” has the meaning set forth in Section 10.1. 

“IT Guidelines” has the meaning set forth in Section 2.1(c). 

“Master Separation Agreement” has the meaning set forth in the recitals. 

  
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 “Schedule” means the Schedule attached hereto. 

“Service Coordinator” has the meaning set forth in Section 2.2. 

“Services” has the meaning set forth in Section 2.1(a). 

“SSE” has the meaning set forth in the preamble. 

“Tax” has the meaning set forth in Section 4.4. 

Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings assigned to such terms in the Master
Separation Agreement. 
 ARTICLE II 

SERVICES 
 Section 2.1
Services. (a) Upon the terms and subject to the conditions of this Agreement, CHK, acting directly and/or through its Affiliates and their respective employees, agents, contractors or independent third parties designated by any of them,
agrees to use commercially reasonable efforts to provide or to cause to be provided services to the SSE Group as set forth in Schedule A (including any Additional Services provided in accordance with Section 2.3 hereof, all such services are
collectively referred to herein as the “Services”). 
 (b) At all times during the performance of the Services, all Persons
performing such Services (including agents, temporary employees, independent third parties and consultants) shall be construed as being independent from the SSE Group, and such Persons shall not be considered or deemed to be employees of any member
of the SSE Group nor entitled to any employee benefits of SSE as a result of this Agreement. The responsibility of such Persons is to perform the Services in accordance with this Agreement and, as necessary, to advise the applicable member of the
SSE Group in connection therewith, and such Persons shall not be responsible for decision-making on behalf of any member of the SSE Group. Such Persons shall not be required to report to management of any member of the SSE Group nor be deemed to be
under the management or direction of any member of the SSE Group. SSE acknowledges and agrees that, except as may be expressly set forth herein as a Service (including any Additional Services provided in accordance with Section 2.3 hereof) or
otherwise expressly set forth in the Master Separation Agreement or an Ancillary Agreement, no member of the CHK Group shall be obligated to provide, or cause to be provided, any service or goods to any member of the SSE Group. 

(c) Notwithstanding anything to the contrary in this Agreement, CHK and members of the CHK Group shall not be required to perform Services
hereunder or take any actions relating thereto that conflict with or violate any applicable law, contract, license, authorization, certification or permit, CHK’s Code of Business Conduct or other corporate governance policies, or CHK’s
information technology security and data transfer guidelines (the “IT Guidelines”), as each may be amended from time to time. 

(d) SSE acknowledges and agrees to abide by the IT Guidelines during the Term of this Agreement. 

  
 2 

 Section 2.2 Service Coordinators. Each party will nominate in writing a
representative to act as the primary contact with respect to the provision of the Services and the resolution of disputes under this Agreement (each such person, a “Service Coordinator”). The initial Service Coordinators shall be Bryan
Lemmerman (for CHK) and Gino DeMarco (for SSE) (or their designated delegates) for each of CHK and SSE, respectively. The Service Coordinators shall meet as expeditiously as possible to resolve any dispute hereunder; and any dispute that is not
resolved by the Service Coordinators within 45 days shall be resolved in accordance with the dispute resolution procedures set forth in Article V of the Master Separation Agreement. Each party hereto may treat an act of a Service Coordinator of the
other party hereto which is consistent with the provisions of this Agreement as being authorized by such other party without inquiring behind such act or ascertaining whether such Service Coordinator had authority to so act; provided,
however, that no such Service Coordinator shall have authority to amend this Agreement. CHK and SSE shall advise each other promptly (in any case no more than three Business Days) in writing of any change in their respective Service
Coordinators, setting forth the name of the replacement, and stating that the replacement Service Coordinator is authorized to act for such party in accordance with this Section 2.2. 

Section 2.3 Additional Services. SSE may request additional Services (the “Additional Services”) from CHK by providing
written notice to CHK, which CHK in its sole discretion may decline to provide. If CHK undertakes to provide the Additional Services, upon the mutual written agreement as to the nature, cost, duration and scope of such Additional Services, CHK and
SSE shall supplement in writing the Schedule hereto to include such Additional Services. Except where the context otherwise indicates or requires, any such Additional Services shall be deemed to be “Services” under this Agreement. 

Section 2.4 Third Party Services. CHK shall have the right to hire third-party subcontractors to provide all or part of any
Service hereunder to the extent it reasonably determines it requires the use of third-party subcontractors in providing any such Service; provided, that CHK shall be responsible for the costs of such third-party contractor. If SSE requests services
outside the scope of this agreement, then CHK shall have the right to hire third-party subcontractors and SSE will be responsible for the costs of such third-party subcontractors. 

Section 2.5 Standard of Performance; Limitation of Liability. (a) The Services to be provided hereunder shall be performed with
the same general degree of care, at the same general level and at the same general degree of accuracy and responsiveness, as when performed within the CHK organization (including, for this purpose, SSE and its subsidiaries) prior to the date of this
Agreement. It is understood and agreed that CHK and the members of the CHK Group are not professional providers of the types of services included in the Services and that CHK personnel performing Services have other responsibilities and will not be
dedicated full-time to performing Services hereunder. 
 (b) In the event CHK or any member of the CHK Group fails to provide, or cause to
be provided, the Services in accordance with the standard of service set forth in Section 2.5(a) or Section 2.5(c), the sole and exclusive remedy of SSE shall be to object to any amounts invoiced for such Services in accordance with
Section 4.2; provided that in the event CHK defaults in the manner described in clause (ii) of Section 7.1, SSE shall have the further rights set forth in Article VII. 

  
 3 

 (c) EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2.5, NO REPRESENTATIONS OR WARRANTIES OF
ANY KIND, EXPRESSED OR IMPLIED (INCLUDING THE WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION), ARE MADE BY CHK OR ANY MEMBER OF THE CHK GROUP WITH RESPECT TO THE
SERVICES UNDER THIS AGREEMENT AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY WAIVED AND DISCLAIMED. SSE (ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER MEMBER OF THE SSE GROUP) HEREBY
EXPRESSLY WAIVES ANY RIGHT SSE OR ANY MEMBER OF THE SSE GROUP MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW OR IN EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE
PERFORMANCE, FAULTY PERFORMANCE OR OTHER FAILURE OR BREACH BY CHK OR ANY MEMBER OF THE CHK GROUP UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE NEGLIGENCE OR GROSS NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OF CHK
OR ANY MEMBER OF THE CHK GROUP OR ANY THIRD PARTY SERVICE PROVIDER AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT, UNDER FEDERAL, STATE OR NON U.S. LAWS OR OTHER STATUTE OR OTHERWISE; PROVIDED, HOWEVER, THAT THE FOREGOING WAIVER SHALL NOT
EXTEND TO COVER, AND CHK SHALL BE RESPONSIBLE FOR, SUCH LOSSES CAUSED BY THE WILLFUL MISCONDUCT OF CHK OR ANY MEMBER OF THE CHK GROUP. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE CHK GROUP BE LIABLE TO THE SSE
GROUP WITH RESPECT TO CLAIMS ARISING OUT OF THIS AGREEMENT FOR AMOUNTS IN THE AGGREGATE EXCEEDING THE AGGREGATE SERVICE CHARGES PAID HEREUNDER BY THE SSE GROUP. 

Section 2.6 Service Boundaries and Scope. (a) Except as provided in the Schedule for a specific Service: (i) CHK shall be
required to provide, or cause to be provided, the Services only at the locations such Services are being provided by any member of the CHK Group for any member of the SSE Group immediately prior to the Distribution Date; provided, however, that, to
the extent any such Service is to be provided by an employee of CHK who works in the corporate headquarters of CHK, such Service shall, to the extent feasible, only be provided by such employee from the corporate headquarters of CHK; and
(ii) the Services shall be available only for purposes of conducting the business of the SSE Group substantially in the manner it was conducted immediately prior to the Distribution Date. 

(b) In providing, or causing to be provided, the Services, CHK shall not be obligated to: (i) maintain the employment of any specific
employee or hire additional employees or third-party service providers; (ii) purchase, lease or license any additional equipment (including computer equipment, furniture, furnishings, fixtures, machinery, vehicles, tools and other tangible
personal property), software or other assets, rights or properties; (iii) make modifications to its existing systems or software, including renewing or extending any software license beyond its current term; (iv) provide any member of the
SSE Group with access to any systems or software other than those to which it has authorized access immediately prior to the 

  
 4 

 
Distribution Date and for which it is reasonably practical to segregate SSE Group data from CHK data; (v) pay any costs related to the transfer or conversion of data of any member of the SSE
Group; (vi) administer SSE Group benefit plans; or (vii) facilitate or conduct audits by or for any regulatory agency, including, but not limited to, the United States Department of Labor. For the avoidance of doubt, the Services do not
include any services required for or as the result of any business acquisitions, divestitures, start-ups or terminations by the SSE Group. 

Section 2.7 Cooperation. CHK and SSE shall cooperate with one another and provide such further assistance as the other party may
reasonably request in connection with the provision of Services hereunder. 
 Section 2.8 Transitional Nature of Services;
Changes. Subject to Sections 2.3 and 2.5, the parties acknowledge the transitional nature of the Services and that CHK may make changes from time to time in the manner of performing the Services. SSE acknowledges (on its own behalf and on behalf
of the other members of the SSE Group) that the employees of CHK or any other members of the CHK Group who may be assisting in the provision of Services hereunder are at-will employees and, as such, may terminate or be terminated from employment
with CHK or any of the other members of the CHK Group providing Services hereunder at any time for any reason. 
 Section 2.9
Access. During the term of this Agreement and for so long as any Services are being provided to SSE by CHK, SSE will provide CHK and its authorized representatives reasonable access, during regular business hours upon reasonable notice, to
SSE and its employees, representatives, facilities and books and records as CHK and its representatives may reasonably require in order to perform such Services. 

ARTICLE III 
 SERVICE CHARGES 

Section 3.1 Compensation. Subject to the specific terms of this Agreement, the compensation to be received by CHK for each Service
provided hereunder will include (i) a base fee of $310,000.00 monthly and (ii) the monthly fees set forth on the Schedule relating to the particular Service, subject to any escalation provided for on such Schedule. In consideration for the
provision of a Service, each member of the SSE Group receiving such Service shall pay to CHK or, at the election of CHK, the member of the CHK Group providing such Service, the applicable fee for such Service as set forth on the attached Schedule.

 ARTICLE IV 
 PAYMENT 

Section 4.1 Payment. Except as otherwise provided in the Schedule for a specific Service, charges for Services shall be invoiced
monthly by CHK or, at its option, the member of the CHK Group providing the Service. SSE shall make the corresponding payment no later than 60 days after receipt of the invoice. Unless otherwise provided in this Agreement, SSE shall remit funds in
payment of invoices provided hereunder either by wire transfer or ACH (Automated Clearing House) in accordance with the payment instructions set forth in Exhibit 4.1. Each invoice shall be directed to the SSE Service Coordinator or such other person

  
 5 

 
designated in writing from time to time by such Service Coordinator. The invoice shall set forth in reasonable detail the Services rendered and the invoice amount for the Services rendered for
the period covered by such invoice. Interest will accrue on any unpaid amounts at ten percent (10%) per annum (compounded monthly) or, if less, the maximum non-usurious rate of interest permitted by applicable law, until such amounts, together
with all accrued and unpaid interest thereon, are paid in full. All timely payments under this Agreement shall be made without early payment discount. Any preexisting obligation to make payment for Services provided hereunder shall survive the
termination of this Agreement. If CHK incurs any reasonable out-of-pocket expenses or remits funds to a third-party on behalf of SSE, in either case in connection with the rendering of Services, then CHK shall include such amount on its monthly
invoice to SSE, with reasonable supporting documentation, and SSE shall reimburse that amount to CHK pursuant to this Section 4.1 as part of its next monthly payment. 

Section 4.2 Payment Disputes. SSE may object to any invoiced amounts for any Service at any time before, at the time of, or after
payment is made, provided such objection is made in writing to CHK within 60 days following the date of the disputed invoice. SSE shall timely pay the disputed items in full while resolution of the dispute is pending; provided, however, that CHK
shall pay interest at a rate of five percent (5%) per annum (compounded monthly) on any amounts it is required to return to SSE upon resolution of the dispute. Payment of any amount shall not constitute approval thereof. The Service
Coordinators shall meet as expeditiously as possible to resolve any dispute. Any dispute that is not resolved by the Service Coordinators within 45 days shall be resolved in accordance with the dispute resolution and arbitration procedures set forth
in Article V of the Master Separation Agreement. Neither party (or any member of its respective Group) shall have a right of set-off against the other party (or any member of its respective Group) for billed amounts hereunder. Upon written
request, CHK will provide to SSE reasonable detail and support documentation to permit SSE to verify the accuracy of an invoice. 

Section 4.3 Review of Charges; Error Correction. CHK shall maintain accurate books and records (including invoices of third
parties) related to the Services sufficient to calculate, and allow SSE to verify, the amounts owed under this Agreement. From time to time until 120 days following the termination of this Agreement, SSE shall have the right to review, and CHK shall
provide access to, such books and records to verify the accuracy of such amounts, provided that such reviews shall not occur more frequently than once per calendar quarter. Each such review shall be conducted during normal business hours and in a
manner that does not unreasonably interfere with the operations of CHK. If, as a result of any such review, SSE determines that it overpaid any amount to CHK, then SSE may raise an objection pursuant to the provisions of Section 4.2. SSE shall
bear the cost and expense of any such review. CHK shall make adjustments to charges as required to reflect the discovery of errors or omissions in charges. 

Section 4.4 Taxes. All transfer taxes, excises, fees or other charges (including value added, sales, use or receipts taxes, but
not including a tax on or measured by the income, net or gross revenues, business activity or capital of a member of the CHK Group), or any increase therein, now or hereafter imposed directly or indirectly by law upon any fees paid hereunder for
Services, which a member of the CHK Group is required to pay or incur in connection with the provision of Services hereunder (“Tax”), shall be passed on to SSE as an explicit surcharge and 

  
 6 

 
shall be paid by SSE in addition to any Service fee payment, whether included in the applicable Service fee payment, or added retroactively. If SSE submits to CHK a timely and valid resale or
other exemption certificate acceptable to CHK and sufficient to support the exemption from Tax, then such Tax will not be added to the Service fee payable pursuant to Article III; provided, however, that if a member of the CHK Group is ever required
to pay such Tax, SSE will promptly reimburse CHK for such Tax, including any interest, penalties and attorney’s fees related thereto. The parties will cooperate to minimize the imposition of any Taxes. 

Section 4.5 Records. CHK shall maintain true and correct records of all receipts, invoices, reports and such other documents
relating to the Services hereunder in accordance with its standard accounting practices and procedures, consistently applied. CHK shall retain such accounting records and make them available to SSE’s authorized representatives and auditors for
a period of not less than one year from the close of each fiscal year of CHK; provided, however, that CHK may, at its option, transfer such accounting records to SSE upon termination of this Agreement. 

ARTICLE V 
 TERM 

Section 5.1 Term. Subject to Articles VI and VII, the CHK Group shall provide the specific Services to the SSE Group pursuant to
this Agreement for the time period set forth on the Schedule relating to the specific Service. In accordance with the Master Separation Agreement and Article VI of this Agreement, SSE shall undertake to provide to itself and members of the SSE
Group, and to terminate as soon as reasonably practicable, the Services provided to the SSE Group hereunder. The parties shall cooperate as reasonably required to effectuate an orderly and systematic transfer to the SSE Group or a third-party
service provider designated by SSE Group of all or any portion of the duties and obligations previously performed by CHK or a member of the CHK Group under this Agreement. Except as otherwise expressly agreed or unless sooner terminated, this
Agreement shall commence upon the Distribution Date and shall continue in full force and effect between the parties for so long as any Service set forth in the Schedule hereto is being provided to SSE or members of the SSE Group and this Agreement
shall terminate upon the cessation of all Services provided hereunder; provided that Articles I, IV, VIII, IX and XI and Section 2.5(c) will survive the termination of this Agreement and any such termination shall not affect any obligation for
the payment of Services rendered prior to termination. 
 ARTICLE VI 

DISCONTINUATION OF SERVICES 

Section 6.1 Discontinuation of Services. At any time after the Distribution Date, SSE may, without cause and in accordance with
the terms and conditions hereunder and the Master Separation Agreement, request the discontinuation of one or more specific Services by giving CHK at least 30 days’ prior written notice; provided, however, that any such discontinuation will not
affect the amounts payable to CHK hereunder unless the discontinued Services represent all of the remaining Services to be provided in the Schedule and then any amounts payable to CHK will be reduced only to the extent of the charges specifically
identified in the Schedule. SSE shall be liable to CHK for all costs and expenses CHK or any member of the CHK Group 

  
 7 

 
remains obligated to pay in connection with any discontinued Service or Services, except in the case of a Service terminated by SSE pursuant to clause (ii) of the first sentence of
Section 7.1 hereof. 
 Section 6.2 Procedures Upon Discontinuation or Termination of Services. Upon the discontinuation or
termination of a Service hereunder, this Agreement shall be of no further force and effect with respect to such Service, except as to obligations accrued prior to the date of discontinuation or termination; provided, however, that Articles I, IV,
VIII, IX and XI and Section 2.5(c) of this Agreement shall survive such discontinuation or termination and any such termination shall not affect any obligation for the payment of Services rendered prior to termination. Each party and the
applicable member(s) of its respective Group shall, within 60 days after discontinuation or termination of a Service, to the extent reasonably practicable, deliver to the other party and the applicable member(s) of its respective Group originals of
all books, records, contracts, receipts for deposits and all other papers or documents in its possession which pertain exclusively to the business of the other party and relate to such Service; provided that a party may retain copies of material
provided to the other party pursuant to this Section 6.2 as it deems necessary or appropriate in connection with its financial reporting obligations or internal control practices and policies. 

ARTICLE VII 
 DEFAULT 

Section 7.1 Termination for Default. In the event (i) of a failure of SSE to pay for Services in accordance with the terms of
this Agreement, or (ii) any party shall default, in any material respect, in the due performance or observance by it of any of the other terms, covenants or agreements contained in this Agreement, then (1) if the non-defaulting party is
CHK, CHK shall have the right, at its sole discretion, to immediately terminate the Service with respect to which the default occurred, and (2) if the non-defaulting party is SSE, SSE shall have the right, at its sole discretion, to immediately
terminate the Service with respect to which the default occurred, in either case if the defaulting party has failed to cure the default within 30 days of receipt of the written notice of such default. SSE’s right to terminate this Agreement
pursuant to this Article VII and the rights set forth in Section 2.5 shall constitute SSE’s sole and exclusive rights and remedies for a breach by CHK hereunder (including any breach caused by an Affiliate of CHK or other third party
providing a Service hereunder). 
 ARTICLE VIII 

INDEMNIFICATION AND WAIVER 

Section 8.1 Waiver of Consequential Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT FOR ANY
EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES OR ANY LOST PROFITS OR REVENUES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE OR GROSS NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN THIS
AGREEMENT, THE MASTER SEPARATION AGREEMENT OR ANY ANCILLARY AGREEMENT. 

  
 8 

 Section 8.2 Services Received. 

SSE hereby acknowledges and agrees that: 

(a) the Services to be provided hereunder are subject to and limited by the provisions of Section 2.5, Article VII and the other
provisions hereof, including the limitation of remedies available to SSE that restricts available remedies resulting from a Service not provided in accordance with the terms hereof to non-payment and, in certain limited circumstances, the right to
terminate this Agreement; 
 (b) the Services are being provided solely to facilitate the transition of SSE to a separate company as a
result of the Distribution, and CHK and its Affiliates do not provide any such Services to non-Affiliates; 
 (c) it is not the intent of
CHK and the other members of the CHK Group to render, nor of SSE and the other members of the SSE Group to receive from CHK and the other members of the CHK Group, professional advice or opinions, whether with regard to tax, legal, treasury,
finance, employment or other business and financial matters, or technical advice, whether with regard to information technology or other matters; SSE shall not rely on, or construe, any Service rendered by or on behalf of CHK as such professional
advice or opinions or technical advice; and SSE shall seek all third-party professional advice and opinions or technical advice as it may desire or need, and in any event SSE shall be responsible for and assume all risks associated with the
Services, except to the limited extent set forth in Section 2.5 and Article VII; 
 (d) with respect to any software or documentation
within the Services, SSE shall use such software and documentation internally and for their intended purpose only, shall not distribute, publish, transfer, sublicense or in any manner make such software or documentation available to other
organizations or persons, and shall not act as a service bureau or consultant in connection with such software; and 
 (e) a material
inducement to CHK’s agreement to provide the Services is the limitation of liability and the release provided by SSE in this Agreement. 

ACCORDINGLY, EXCEPT WITH REGARD TO THE LIMITED REMEDIES EXPRESSLY SET FORTH HEREIN, SSE SHALL ASSUME ALL LIABILITY FOR AND SHALL FURTHER
RELEASE, DEFEND, INDEMNIFY AND HOLD CHK, ANY MEMBER OF THE CHK GROUP AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS AND AGENTS (ALL AS INDEMNIFIED PARTIES) FREE AND HARMLESS FROM AND AGAINST ALL LOSSES RESULTING FROM, ARISING OUT OF OR RELATED
TO THE SERVICES, HOWSOEVER ARISING AND WHETHER OR NOT CAUSED BY THE NEGLIGENCE OR GROSS NEGLIGENCE OF CHK, ANY MEMBER OF THE CHK GROUP OR ANY THIRD PARTY SERVICE PROVIDER, OTHER THAN THOSE LOSSES CAUSED BY THE WILLFUL MISCONDUCT OF CHK OR ANY MEMBER
OF THE CHK GROUP. 

  
 9 

 Section 8.3 Express Negligence. THE INDEMNITY, RELEASES AND LIMITATIONS OF
LIABILITY IN THIS AGREEMENT (INCLUDING ARTICLES II AND VIII) ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD
PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE NEGLIGENCE OR GROSS NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES. 

ARTICLE IX 
 CONFIDENTIALITY 

Section 9.1 Confidentiality. SSE and CHK each acknowledge and agree that the terms of Section 6.11 of the Master Separation
Agreement shall apply to information, documents, plans and other data made available or disclosed by one party to the other in connection with this Agreement. SSE and CHK each acknowledge and agree that any third party Information (to the extent
such Information does not constitute CHK Books and Records) provided by any member of the SSE Group to any member of the CHK Group after the Distribution Date in connection with the provision of the Services by any member of the CHK Group, or
generated, maintained or held in connection with the provision of the Services by any member of the CHK Group after the Distribution Date, in each case that primarily relates to the SSE Business, the SSE Assets, or the SSE Liabilities, shall not be
considered Privileged Information of CHK or Confidential Information of CHK. 
 ARTICLE X 

FORCE MAJEURE 
 Section 10.1
Performance Excused. Continued performance of a Service may be suspended immediately to the extent caused by any event or condition beyond the reasonable control of the party suspending such performance (and not involving any willful
misconduct of such party), including acts of God, pandemics, floods, fire, earthquakes, labor or trade disturbances, strikes, war, acts of terrorism, civil commotion, electrical shortages or blackouts, breakdown or injury to computing facilities,
compliance in good faith with any Law (whether or not it later proves to be invalid), unavailability of materials or bad weather (a “Force Majeure Event”). SSE shall not be obligated to pay any amount for Services that it does not receive
as a result of a Force Majeure Event (and the parties hereto shall negotiate reasonably to determine the amount applicable to such Services not received). In addition to the reduction of any amounts owed by SSE hereunder, during the occurrence of a
Force Majeure Event, to the extent the provision of any Service has been disrupted or reduced, during such disruption or reduction, (a) SSE may replace any such affected Service by providing any such Service for itself or engaging one or more
third parties to provide such Service at the expense of SSE and (b) CHK shall cooperate with, provide such information to and take such other actions as may be reasonably required to assist such third parties to provide such substitute Service.

  
 10 

 Section 10.2 Notice. The party claiming suspension due to a Force Majeure Event will
give prompt notice to the other of the occurrence of the Force Majeure Event giving rise to the suspension and of its nature and anticipated duration. 

Section 10.3 Cooperation. Upon the occurrence of a Force Majeure Event, the parties shall cooperate with each other to find
alternative means and methods for the provision of the suspended Service. 
 ARTICLE XI 

MISCELLANEOUS 
 Section 11.1
Entire Agreement. This Agreement, together with the documents referenced herein (including the Master Separation Agreement), constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof. To the extent any provision of this Agreement conflicts with the provisions of the Master
Separation Agreement, the provisions of this Agreement shall be deemed to control with respect to the subject matter hereof. 

Section 11.2 Binding Effect; No Third-Party Beneficiaries; Assignment. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns; and nothing in this Agreement, express or implied, is intended to confer upon any other person or entity any rights, benefits or remedies of any nature whatsoever under
or by reason of this Agreement. This Agreement may not be assigned by either party hereto, except with the prior written consent of the other party hereto. 

Section 11.3 Amendment; Waivers. No change or amendment may be made to this Agreement except by an instrument in writing signed on
behalf of both of the parties hereto. Either party hereto may, at any time, (i) extend the time for the performance of any of the obligations or other acts of the other, (ii) waive any inaccuracies in the representations and warranties of
the other contained herein or in any document delivered pursuant hereto, and (iii) waive compliance by the other with any of the agreements, covenants or conditions contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party to be bound thereby. No failure or delay on the part of either party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement contained herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. 

Section 11.4 Notices. Unless otherwise expressly provided herein, all notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to be duly given (i) when personally delivered or (ii) if mailed by registered or certified mail, postage prepaid, return receipt requested, on the date the return receipt is
executed or the letter is refused by the addressee or its agent or (iii) if sent by overnight courier which delivers only upon the signed receipt of the addressee, on the date the receipt acknowledgment is executed or refused by the addressee
or its agent or (iv) if sent by facsimile or electronic mail, on the date confirmation of transmission is received (provided that a copy of any notice delivered 

  
 11 

 
pursuant to this clause (iv) shall also be sent pursuant to clause (i), (ii) or (iii)), addressed to the attention of the addressee’s General Counsel at the address of its
principal executive office or to such other address or facsimile number for a party hereto as it shall have specified by like notice. 

Section 11.5 Counterparts. This Agreement may be executed in counterparts and signature pages exchanged by facsimile, and each
counterpart shall be deemed an original, but all of which shall constitute the same agreement. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (.pdf) form, or by any
other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature. 

Section 11.6 Severability. If any term or other provision of this Agreement or the Schedule attached hereto is determined by a
nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 

Section 11.7 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive
laws of the State of Oklahoma, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction. 

Section 11.8 Performance. Each party hereto shall cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such party. 
 Section 11.9
Relationship of Parties. This Agreement does not create a fiduciary relationship, partnership, joint venture or relationship of trust or agency between the parties. The parties hereto agree that CHK (and any other member of the CHK Group
which performs Services hereunder) is an independent contractor in the performance of Services for the SSE Group under this Agreement. 

Section 11.10 Regulations. All employees of CHK and the members of the CHK Group shall, when on the property of SSE, conform to
the rules and regulations of SSE concerning safety, health and security which are made known to such employees in advance in writing. 

Section 11.11 Construction. This Agreement shall be construed as if jointly drafted by the parties hereto and no rule of
construction or strict interpretation shall be applied against 

  
 12 

 
either party. In this Agreement, unless the context clearly indicates otherwise, words used in the singular include the plural and words used in the plural include the singular; and if a word or
phrase is defined in this Agreement, its other grammatical forms, as used in this Agreement, shall have a corresponding meaning. Whenever the context requires, the gender of all words used in this Agreement includes the masculine, feminine and the
neuter. Unless the context otherwise requires, the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation,” and the word “or” shall have the
inclusive meaning represented by the phrase “and/or.” The words “shall” and “will” are used interchangeably in this Agreement and have the same meaning. Relative to the determination of any period of time hereunder,
“from” means “from and including,” “to” means “to but excluding” and “through” means “through and including.” All references herein to a specific time of day in this Agreement shall be
based upon Central Standard Time or Central Daylight Savings Time, as applicable, on the date in question. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. Any reference
herein to any Article, Section or Schedule means such Article or Section of, or such Schedule to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition. As used
in this Agreement, the words “this Agreement,” “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular
Section or other provision of this Agreement. The titles to Articles and headings of Sections contained in this Agreement, in any Schedule and in the table of contents to this Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of or to affect the meaning or interpretation of this Agreement. 
 Section 11.12 Effect if Separation
does not Occur. If the Distribution does not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of or following the Distribution Date, or otherwise in connection with the Distribution, shall not
be taken or occur except to the extent specifically agreed by the parties and neither party shall have any liability or further obligation to the other party under this Agreement. 

[Signature page follows.] 

  
 13 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written
above. 
  

					
	CHESAPEAKE ENERGY CORPORATION
		
	By:	 	 /s/ Domenic J. Dell’Osso, Jr.

		 	Name:	 	Domenic J. Dell’Osso, Jr.
		 	Title:	 	Executive Vice President and Chief Financial Officer
	
	CHESAPEAKE OILFIELD OPERATING, L.L.C. (to be converted into SEVENTY SEVEN ENERGY INC.)
		
	By:	 	 /s/ Cary D. Baetz

		 	Name:	 	Cary D. Baetz
		 	Title:	 	Chief Financial Officer

  
 14EX-10.4

 Exhibit 10.4 

SERVICES AGREEMENT 
 This
Services Agreement (this “Agreement”) is made and entered into this 25th day of June, 2014, by and between Chesapeake Operating, Inc., an Oklahoma corporation
(“Company”), and Performance Technologies, L.L.C., an Oklahoma limited liability company (“Contractor”). 

WHEREAS, Company and Contractor have entered into that certain Master Services Agreement, dated as of October 25, 2011 (the
“MSA”). 
 WHEREAS, the parties desire to set forth additional terms relating to Contractor’s performance of
services for Company in accordance with the terms and conditions of this Agreement. 
 NOW, THEREFORE, in consideration of the mutual
representations, warranties and covenants and agreements set forth in this Agreement, of the payments which may be made by Company to Contractor pursuant to the provisions hereof, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows: 
 1. Defined Terms. All capitalized terms used herein but not
otherwise defined herein that are defined in the MSA shall have the meaning assigned to such terms in the MSA. 
 2. Effective
Date. This Agreement shall become effective on July 1, 2014 (the “Effective Date”). 
 3.
Term. This Agreement shall be effective and shall continue in full force and effect for a term of three (3) years commencing on the Effective Date, unless extended under the provisions of Section 8.2.2 of this Agreement. 

 4. Minimum Crew Commitment.  

4.1 So long as Contractor is reasonably able to perform in accordance with the terms of this Agreement, Company (or an affiliate thereof) will
utilize the following minimum number of pressure pumping crews at oil and natural gas wells operated by Company (or its affiliates) (each crew, a “Committed Crew”, or when referred to collectively, the “Committed
Crews”): 
 4.1.1 From July 1, 2014 through June 30, 2015, Company shall utilize in accordance with the terms of this
Agreement, a minimum of (a) seven (7) of Contractor’s pressure pumping crews, or (b) that number of Contractor’s pressure pumping crews required to reach fifty percent (50%) of the total number of all pressure pumping
crews working for Company in all its operating regions, which ever is less (the “First Year Commitment”). 

4.1.2 From July 1, 2015 through June 30, 2016, Company shall utilize in accordance with the terms of this Agreement, a minimum of
(a) five (5) of Contractor’s pressure pumping crews, or (b) that number of Contractor’s pressure pumping crews required to reach fifty percent (50%) of the total number of all pressure pumping crews working for Company
in all its operating regions, which ever is less (the “Second Year Commitment”). 
 4.1.3 From July 1,
2016 through June 30, 2017, Company shall utilize in accordance with the terms of this Agreement, a minimum of (a) three (3) of Contractor’s pressure pumping crews, or (b) that number of Contractor’s pressure pumping
crews required to reach fifty percent (50%) of the total number of all pressure pumping crews working for Company in all its operating regions, which ever is less (the “Third Year Commitment”). 

 4.1.4 The First Year Commitment, Second Year Commitment, and Third Year Commitment are referred
to herein generically as the “Yearly Crew Commitment”. 
 4.2 Each Committed Crew will be assigned by mutual
agreement of Company and Contractor to an operating region prior to the outset of each Yearly Crew Commitment; provided, that, for the First Year Commitment, the operating region assignments for each Committed Crew are set forth on Exhibit B
hereto. 
 4.3 Contractor represents and warrants to Company that each Committed Crew shall perform in a good, safe, and workman like manner
and shall be capable of fracture stimulating wells drilled by Company to Company’s design criteria. 
 5. Minimum Stage
Commitment. The minimum number of pressure pumping stages per month by region for which the Committed Crews shall be utilized by Company during the First Year Commitment is set forth on Exhibit B hereto and the minimum number of
pressure pumping stages per month by region for each Committed Crew during the applicable Yearly Crew Commitment thereafter shall be equal to eighty percent (80%) of the operating region monthly stage assumptions contained on Exhibit A
hereto (each stage, a “Committed Stage”, or when referred to collectively the “Committed Stages”). 

6. Utilization Adjustments. 

6.1 In the event the Company fails to utilize Contractor (whether with a Committed Crew or an additional crew of Contractor in excess of the
minimum crew commitment) to perform the minimum number of Committed Stages during the First Year Commitment as set forth on Exhibit B (after any applicable adjustments under Sections 6, 7 and 8), then, the number of Committed Stages under the
Second Year Commitment shall be increased by the number of Committed Stages not performed by Contractor for the Company (or its affiliates) under the First Year Commitment. 

6.2 In the event the Company fails to utilize Contractor (whether with a Committed Crew or an additional crew of Contractor in excess of the
minimum crew commitment) to perform the minimum number of Committed Stages during the Second Year Commitment as calculated in accordance with Section 5.1 (after any applicable adjustments under Sections 6, 7 and ), then, the number of Committed
Stages under the Third Year Commitment shall be increased by the number of Committed Stages not performed in the applicable region by Contractor for the Company (or its affiliates) under the Second Year Commitment. 

6.3 In the event the Company fails to utilize Contractor to perform the minimum number of Committed Stages during the Third Year Commitment as
calculated in accordance with Section 5 (after any applicable adjustments under Sections 6 and 7), then, the Company shall pay Contractor the sum of $50,000.00 multiplied by the number of Committed Stage not performed in the Third Year
Commitment. Contractor shall invoice the Company for such amount within thirty (30) days of the end of the term hereof and Company shall pay such invoice within sixty (60) days of the receipt thereof. 

6.4 In addition to the number of Committed Crews to be contracted by Company from Contractor during the Second Year Commitment as set forth in
Section 4.1.2, and the number of Committed Crews to be contracted by Company from Contractor during the Third Year Commitment as set for in Section 4.1.3, Company shall have the right, at the outset of the Second Year Commitment and the
Third Year Commitment, to request from Contractor, and Contractor shall furnish to Company under the terms of this Agreement, up to but not more than a total of three (3) additional crews for the Second Year Commitment, and up to four
(4) additional crews for the Third Year Commitment, necessary for 

 
Company to satisfy any Committed Stages required for the Committed Crews (each such crew, an “Additional Crew”). For each Additional Crew that Contractor is unable or
unwilling to furnish to Company at the outset of the Second Year Commitment and Third Year Commitment, Company shall receive a credit against the remaining Committed Stages, utilizing the utilization stage assumptions in Exhibit A and the
applicable region to which that Additional Crew was requested to be deployed to calculate the credit. 
 6.5 For purposes of this Agreement,
“Force Majeure” shall be defined to mean acts of God, acts, orders, rules, decrees, instructions or other requirements of governmental authorities taking effect after the Effective Date, insurrections, riots, acts of terrorism, vandalism,
sabotage, quarantines, floods, storms, hurricanes, tornadoes, droughts or other adverse weather conditions, fires, explosions, embargoes, or other cause not reasonably foreseeable and/or outside the control of one or both parties. If either party
shall be unable because of any such Force Majeure, to carry out its obligations under this Agreement, performance hereunder for both parties shall be suspended for the duration of the Force Majeure, provided that the party asserting the occurrence
of Force Majeure shall first timely give written notice of Force Majeure, which notice shall set forth in reasonable detail a description of the Force Majeure event[s], and the date on which the event[s] of Force Majeure first occurred. Utilizing
the utilization stage assumptions set forth in Exhibit A to calculate the credit, any monthly stage commitments accruing during a Force Majeure event shall be credited against the then minimum stage commitments attributable to the Committed
Crew(s) impacted by Force Majeure and shall NEITHER increase or be added to Company’s stage commitments for any other subsequent year under Sections 6.1 and 6.2, NOR shall such stages be compensated for by Company under
Section 6.3 at the end of the term of this Agreement. 
 6.6 In the event there are instances in which Contractor is unable to timely
accept and supply pressure pumping services as ordered by Company during the Term of this Agreement (each such instance hereinafter referred to as a “Contractor Turndown”), then for each such Contractor Turndown resulting
from (1) a mechanical failure or breakdown for which a replacement cannot be provided promptly by Contractor, (2) lack of adequate staff to timely service, deliver, or supply pressure pumping services (after taking into account, where
appropriate, the lead time necessary for Contractor to move existing equipment from one region to the next), or (3) unavailability of existing equipment due to Contractor providing pressure pumping services to third parties, then, utilizing the
utilization stage assumptions set forth in Exhibit A to calculate the credit, Company shall receive a credit against the then minimum stage commitment in effect equal to the number of stages accruing between the date of the Contractor
Turndown and the date Contractor’s crew(s) become immediately available for use by Company. 
 7. Pricing, Material and Fuel
Requirements, Invoicing, Standby, KPIs, and Real Time. 
 7.1 For the First Year Commitment, the line item pricing upon which
Contractor will charge Company for each Committed Stage for each operating region is attached hereto as Exhibit C, and the total estimated rate per stage by operating region (based on Company’s current frac designs and the line
item pricing contained in Exhibit C) is set forth on Exhibit D. Thereafter, the line item pricing and total estimated rate for each Committed Stage (by operating region) for each succeeding Yearly Crew Commitment shall be determined as
follows: 
 7.1.1 On or before the beginning of the tenth (10th) month of each
Yearly Crew Commitment, management from both Contractor and Company shall meet and negotiate in good faith line item market pricing for the succeeding Yearly Crew Commitment, and a total estimated rate per stage by operation region (based on
Company’s planned frac designs and the negotiated line item pricing), to be mutually agreed upon by both parties. 

 7.1.2 If, by the end of the tenth
(10th) month, Contractor and Company are unable in good faith to mutually agree on market pricing for the succeeding Yearly Crew Commitment, the market pricing dispute will be submitted to a
pressure pumping and financial expert in the State of Oklahoma selected by Contractor and Company (a “Consultant”). If Contractor and Company are unable to agree on a Consultant, then within fifteen (15) days after the
end of the tenth (10th) month, Contractor, on one hand, and Company, on the other hand, will each appoint one Consultant and the two Consultants so appointed will appoint a third Consultant
within fifteen (15) days after the second Consultant was appointed and the three Consultants so appointed will resolve the pricing dispute for succeeding Yearly Crew Commitment. If the two Consultants are unable to agree on a third Consultant
within fifteen (15) days of the appointment of the second party-appointed Consultant, then a third Consultant will be selected by the American Arbitration Association (“AAA”) office in Dallas, Texas, within fifteen
(15) days with due regard given to the selection criteria herein and input from Contractor, Company, and the other Consultants. Any Consultant appointed pursuant to this paragraph will not have worked as an employee of or performed other
material work for Contractor or Company or any affiliate of Contractor or Company within the preceding 5-year period or have any financial interest in the dispute or Contractor, Company, or any affiliate of Contractor or Company (except publicly
traded securities with respect to Contractor, Company, or any affiliate of Contractor or Company). 
 7.1.3 The costs and expenses of each
Consultant and the AAA (if needed) will be paid 50% by Contractor and 50% by Company. 
 7.1.3 Contractor, on one hand, and Company, on the
other hand, will present to the Consultant(s), with a simultaneous copy to the other parties, a single written statement of their position on the pricing dispute in question, together with a copy of this Contract and any supporting material that
such parties desire to furnish, not later than ten (10) days after appointment of the Consultant(s). In making their determination, the Consultant(s) will be bound by the terms of this Agreement, the submittals by Contractor and Company, and
other legal and industry matters as in their opinion are necessary or appropriate to make a proper determination. Additionally, the Consultant(s) may consult with and engage disinterested third parties to advise them. No party will be entitled to
make any submittal to the Consultant(s) other than the submittal made by such party pursuant to this first sentence of this Section 7.1.4, unless requested by the Consultant(s). Within fifteen (15) days following the submission of such
written statements to the Consultant(s), applying the principles set forth herein, the Consultant(s) will make a determination of the fair market pricing for each operating region for the succeeding Yearly Crew Commitment. The decision of the
Consultant(s) will be in writing and conclusive and binding on the Contractor and Company, and will be enforceable against such parties in any court of competent jurisdiction, and will not be subject to appeal. 

7.1.4 To the extent the market pricing dispute is not resolved pursuant to the process outlined in this Section 7.1 by the beginning of
the succeeding Yearly Crew Commitment, the rates charged by Contractor for each Committed Stage shall remain at the rates established for the prior Yearly Crew Commitment, until such time as the market pricing dispute is resolved by the
Consultant(s). Once resolved by the Consultant(s), any underpayment to Contractor (resulting from the application of prior Yearly Crew Commitment pricing to the succeeding Yearly Crew Commitment) shall be paid by Company to Contractor, and any
overcharge to Company (resulting from the application of prior Yearly Crew Commitment pricing to the succeeding Yearly Crew Commitment) shall be refunded by Contractor to Company. 

7.2 Once rates are established in accordance with Section 7.1 above, Contractor’s pricing shall remain fixed for the Yearly Crew
Commitment, excluding pricing adjustments for changes in activity/scope of work; commodity cost increases; or as otherwise expressly provided herein. Any pricing adjustments shall be mutually agreed to in writing by Company and Contractor prior to
implementation by Contractor. Pricing changes due to minor commodity cost increases will only be 

 
negotiated and implemented, when appropriate, at the mid (or 6 month) mark of each Yearly Crew Commitment, and not otherwise. Pricing changes due to significant commodity cost increases will only
be negotiated and implemented, when appropriate, on a quarterly basis during each Yearly Crew Commitment, and not otherwise. Unless mutually agreed to in writing by the parties hereto, Contractor shall not charge, and Company shall have no
obligation to pay, any rate, rental charge, surcharge, or other cost not specifically set forth in this Agreement. 
 7.3 With respect to
fuel, if the price of fuel should increase or decrease by more than twenty percent 20% from base pricing as of the date it was set for the applicable Yearly Crew Commitment, then the parties agree to negotiate and in good faith for an increase or
decrease in the cost of services to offset the cost of fuel in accordance with Section 7.3. The adjustment will be determined based on the cost of diesel fuel on the starting date of the applicable Yearly Crew Commitment as established by the
US Energy Information Administration (EIA). The applicable website is: http://tonto.eia.doe.gov/oog/info/wohdp/diesel.asp, subject to change from time to time. 

7.4 If there is a material change in Company’s scope of work (such as, but not limited to, change in frac design, reduction in volume,
change in job type or mix, or substitution of materials), the parties will meet in good faith at the time of such material change with the objective of making the necessary adjustments to pricing for the Yearly Crew Commitment then in effect. 

7.5 Contractor shall supply all materials, including without limitation proppant, friction reducer, bactericide and scale inhibitor and the
like, required to provide the Services. If Company elects to provide or request Contractor to substitute any or all of these materials: 

7.5.1 Company will be responsible for any loss or damage to people or property which results from a defect in Company-supplied materials; 

7.5.2 Contractor reserves the right to decline using any Company supplied materials, that in its reasonable discretion, present a
hazard to people or property; and 
 7.5.3 Company is responsible for the removal and proper disposal of all excess Company supplied
materials. 
 7.6 For the term of this Agreement, Contractor shall comply with and be bound by the Material Requirements, Diesel Fuels
Consumption Requirements, Invoicing Requirements, Standby Provisions, KPI requirements and Real Time Data Requirements set forth on Exhibit E to this Agreement. 

8. Termination. 

8.1 In addition to all other rights Company may have by law and, subject to the procedures set forth in this Section 8, Company shall have
the right to terminate the Crew Commitment and stage commitments pursuant to this Agreement without penalty, payment, or liability to Contractor, if the overall quality of service provided by Contractor fails to materially comply with the overall
quality of service provided by similar service providers of Company. Quality of services shall include, but not be limited to: the performance of personnel, timely performance of services and delivery of equipment, quality of equipment, timely
availability of equipment, supplies, and personnel, and compliance with applicable regulatory, safety, and environmental rules and regulations. In the event Company reasonably believes Contractor’s services fail to comply with such standards,
Company shall provide written notice to Contractor describing with reasonable specificity the reasons for such belief (“Quality of Service Notice”). Within thirty (30) days after Contractor’s receipt of a Quality of
Service Notice, representatives of each of the parties’ executive management teams shall meet at a mutually agreeable time and location to discuss Contractor’s quality of service. In the event such representatives are unable to come to a

 
resolution of such quality of service issues at such meeting, Contractor shall have thirty (30) days from the date of such meeting to reasonably cure such quality of service issues. Within
fifteen (15) days after such cure period, such representatives shall meet at mutually agreeable time and location to discuss any changes or improvements to Contractor’s quality of service. If Company determines, in its reasonable
discretion, that Contractor’s overall quality of service has not improved or changed to materially comply with the overall quality of service provided by similar service providers of the Company and therefor desires to terminate the Crew
Commitment and applicable stage commitment under this Agreement, then Company shall provide, within five (5) days of such meeting, written notice to Contractor terminating the Crew Commitment and applicable stage commitment under this Agreement
(the “Termination Notice”) effective upon the fifteenth (15th) day after Contractor’s receipt of the Termination Notice. 

8.2 In the event there is a Contractor Stand Down (as defined in Section 8.3 of this Agreement) of a Committed Crew associated with a
Quality of Service Notice served by Company on Contractor, then, in such event, the Committed Stages accruing during the Contractor Stand Down period shall be allocated between Contractor and Company as follows: 

8.2.1 In the event the quality of service issue(s) associated with Company’s Quality of Service Notice is not cured by Contractor within
the time frames specified in Section 8.1 of this Agreement, in addition to the prospective termination of stage commitments associated with the termination of the Committed Crew, Company shall receive a credit against the remaining minimum
stage commitment then in effect equal to the number of Committed Stages accruing between the date of the Contractor Stand Down and the effective date of the Termination Notice (such credit to be calculated utilizing the applicable utilization stage
assumption set forth on Exhibit A). 
 8.2.2 In the event the quality of service issue(s) associated with Company’s Quality of
Service Notice is cured by Contractor within the time frames specified in Section 8.1 of this Agreement, then, with respect to the Committed Stages accruing during the Contractor Stand Down period. (to be calculated utilizing the applicable
utilization stage assumption set forth on Exhibit A) (the “Stand Down Accrual Stages”), one-half (1/2) of the Stand Down Accrual Stages will be credited against Company’s minimum stage commitment then in
effect, and Company shall have twelve (12) months from the end of the initial term of this Agreement to utilize Contractor for the remaining one-half (1/2) of the Stand Down Accrual Stages. If, at the end of such twelve (12) month
period, Company has not utilized Contractor for the required number of Stand Down Accrual Stages (after any credit to which Company may be entitled under the terms of this Agreement, including, and without limitation, those set forth in Sections 6.5
and 6.6., and Exhibit E), Company shall pay Contractor for the Stand Down Accrual Stages not performed, in accordance with the procedures set forth in Section 6.3 of this Agreement. 

8.3. For purposes of Section 8.2 of this Agreement, a “Contractor Stand Down” shall mean any instance where, as a
result of a good faith belief of a material safety or environmental issue surrounding Contractor’s performance under this Agreement which is not (or has not been) promptly curable by Contractor, Company issues a stop work and rig down order to
a Committed Crew of Contractor, 
 9. Committed Crew Removal by Contractor – Company Right of First Refusal. Contractor
may, at its election, remove one or more Committed Crews from this Agreement (but in no event leaving Company with less than three (3) Committed Crews committed under the terms of this Agreement), by giving Company (a) ninety
(90) days prior written notice of such removal, together with a first right of first refusal (“ROFR”) to match the rate or rates offered by another operator for the Committed Crew(s) for which removal from this Agreement
is sought by Contractor. Company shall have thirty (30) days from receipt of such notice to exercise its ROFR as to one or more or none of the Committed Crews for which removal from this Agreement is sought by Contractor. In the event Company
declines to exercise its ROFR rights in whole or in part, Company shall receive a credit against 

 
the minimum stage commitments in effect and attributable to Committed Crew(s) removed by Contractor from this Agreement. In the event Company elects to exercise its ROFR rights in whole or in
part, then the new rates for Committed Crew(s) upon which such election was exercised will take effect ninety (90) days from Company’s initial receipt of the removal notice and shall continue through the then Yearly Crew Commitment in
effect (at the time the new rates take effect). For each crew removed from this Agreement by Contractor, a corresponding reduction in Committed Crews will be made to each of Company’s Yearly Crew Commitments set forth in Section 4.1. 

10. General. 
 10.1
Governing Law. This Agreement will be governed and construed according to the laws of the State of Oklahoma, without regard to choice of law principles. 

10.2 Amendments. This Agreement may not be amended or modified except by a writing signed by an authorized officer of the parties
hereto. 
 10.3 Time of the Essence. Time is of the essence in the performance of this Agreement. 

10.4 Entire Agreement. This Agreement, together with the MSA, constitutes the entire agreement and understanding between the parties in
respect of its subject matter and supersedes all prior understandings, agreements or representations by or among the parties, written or oral, to the extent they relate in any way to the subject matter hereof. In the event of a conflict between the
terms of this Agreement and the MSA, the terms of this Agreement shall supersede and control. Furthermore, each party agrees that it will not terminate the MSA during the term hereof without the prior written consent of the other party. 

10.5 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, the portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision with a valid and
enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void, or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms. 

10.6 Assignments. Except to an affiliate, neither party may assign or otherwise directly or indirectly transfer this Agreement or any
sum that may accrue to it without the prior written consent of the other party, which shall not be unreasonably withheld, conditioned or delayed. 

10.7 Negation of Rights. Except as set forth in Section 8.6, the provisions of this Agreement are enforceable solely by the
parties, and no other person or entity shall have the right, separate and apart from the Company and Contractor, to enforce any provision of this Agreement or to compel any party to comply with the terms of this Agreement. 

10.8 Titles and Headings. Section titles and headings in this Agreement are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of, this Agreement. 
 10.9 Delay or Partial Exercise Not Waiver.
No failure or delay on the part of any party to exercise any right or remedy under this Agreement will operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy under this Agreement preclude any other or further
exercise thereof or the exercise of any other right or remedy granted hereby or any related document. 

 10.10 Waiver. No benefit or right accruing to either party under this Agreement shall be
deemed to be waived unless the waiver is reduced to writing, expressly refers to this Agreement by date and signatories, and is signed by both parties to this Agreement. The waiver, in one or more instances, of any act, condition or requirement
stipulated in this Agreement shall not constitute a continuing waiver or a waiver of any other act, condition or requirement or a waiver of the same act, condition or requirement in other instances, unless specifically so stated in such written
agreement. 
 10.11 Further Assurances. The parties shall execute such additional instruments, agreements and documents, and to take
such other actions, as may be necessary to effect the purposes of this Agreement. 
 10.12 No Partnership. It is not the purpose or
intention of this Agreement to create (and it shall not be construed as creating) a joint venture, partnership or any type of association or fiduciary relationship between the parties, and the parties are not authorized to act as agent or principal
for each other with respect to any matter related hereto. No employee shall be deemed to be an employee of any other party as a result of this Agreement. 

10.13 Not to be Construed Against Drafter. The parties agree that the rule of construction that a contract be construed against the
drafter, if any, shall not be applied in the interpretation and construction of this Agreement. 
 * * * * 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their authorized
representatives as of the date first set forth above. 
  

			
	COMPANY:
	
	CHESAPEAKE OPERATING, INC.
		
	By:	 	/s/ Richard McClanahan
	Name:	 	Richard McClanahan
	Title:	 	Vice President - Completion
	
	CONTRACTOR:
	
	PERFORMANCE TECHNOLOGIES, L.L.C.
		
	By:	 	/s/ Bill Stanger
	Name:	 	William Stanger
	Title:	 	President

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